Whitehorse, Yukon

Wednesday, May 26, 1993 - 1:30 p.m.

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



Speaker: We will proceed with the Order Paper.

Introduction of Visitors.

Are there any Returns or Documents for tabling?


Hon. Mr. Ostashek: I have some legislative returns.

Hon. Mr. Fisher: I have two legislative returns.

Hon. Mr. Phillips: I have a protocol agreement to table.

Speaker: Are there any Reports of Committees?


Introduction of Bills.

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

Are there any Notices of Motion?

Are there any Statements by Ministers?


Protocol on client information exchange

Hon. Mr. Phillips: On behalf of my colleague, the Minister of Justice and of Health and Social Services, it is my pleasure today to announce the signing of a protocol by our three departments, that will in future considerably enhance the effectiveness and comprehensiveness of the service we provide to many of our clients.

I refer to an agreement on interdepartmental information exchange on children and their families, which was signed this week by the deputy ministers of the three departments involved. In their daily work, our professionals frequently find themselves dealing with common clients. To date, there has been no formal way of sharing information on these clients, while at the same time protecting the vital confidentiality of that information.

The purpose of the protocol is to ensure that our case workers, consultants, teachers and other professionals have access to all the relevant information they need on a particular client, so as to make the best possible decisions on program delivery for that client. With this in mind, the information exchange will be guided by four central principles: the exchange of information about an individual can only take place with that individual’s consent, except as otherwise provided by legislation; information exchange must be shown to be in the best interests of the client; protection of the client’s privacy and security of the information exchanged must be maintained by the departments involved; the protocol applies only where there are indeed shared clients between two or more of the departments.

The protocol goes into some detail, on exactly what kinds of information should be exchanged and with whom, and it is also careful to state that this information exchange should take place in as timely a manner as possible. All employees of all three departments are equally bound by the agreement, as is anyone contracted by us to provide related services.

In the future, First Nations, under self-government agreements or the umbrella final agreement, may well assume authority for the delivery of various social or educational services to children. In these cases they too will be encouraged to become signatories to the protocol.

This agreement goes into effect immediately. After two years, it will be reviewed to see how it has worked, and it will be amended and renewed as required. There is no doubt that this protocol in and of itself will not resolve all questions regarding shared clients and exchange of information. I hope, however, that this protocol will be a significant step forward in reducing red tape and increasing the efficiency of government, objectives all of us can wholeheartedly support.

Mr. McDonald: There are many, both within and outside government, who have expressed some frustration that government agencies are not more effective in carrying out their responsibilities because they do not collaborate enough. Certainly there have been many who, for the sake of efficiency and effectiveness, have called for the development of this sort of protocol between social service departments. How significant a step the protocol just announced is remains to be seen. We will have some questions about its effectiveness in Committee debate and I would congratulate the government on taking a step forward in this field and hope that there is some improved communication between departments.

Mr. Cable: I, too, would like to congratulate the government on attempting to balance the right to privacy with the safety of the public. I note in the protocol agreement - the draft agreement - that there is a reference to legislation; I would hope that the privacy provisions in the Public Government Act will, at some time, be revisited so this House can have some interchange of ideas on what should wind up as a final arrangement, balancing the right to privacy with the safety of the public.

Speaker: This then brings us to the Question Period.


Question re: Curragh Inc., Asian investors

Mr. Harding: I would like to ask the Government Leader a question today regarding the situation at the Faro and Watson Lake mines. Yesterday, the government stated, as did Curragh in their press release, that Curragh was continuing to try and raise $25 million from other sources in equity, and this could possibly be from foreigners. I have a question for the Government Leader regarding the Stronsay property. We were of the mind that Curragh was continuing to try and sell that property to raise some equity.

Could the Government Leader tell us his knowledge of the Stronsay property situation? Are they still trying to sell it?

Hon. Mr. Ostashek: I cannot definitely say whether or not the company is still trying to sell the Stronsay property. I know, from messages I received when I was in Korea, that the Stronsay property was part of the package for the $50 million. I do not know whether or not it is still for sale.

Mr. Harding: Perhaps I will have to ask that question again after the Minister has some discussion regarding that with Curragh.

Regarding the negotiations the Government Leader has given some indication may take place after June 2, at which time Curragh appears before the courts, regarding a loan or loan guarantee of some kind to provide some sort of assistance to the Grum stripping, has the government given some thought to these negotiations that will supposedly take place after June 2? Who will be doing the negotiating for the government? Will it be the government itself? Where will the negotiations be held?

Hon. Mr. Ostashek: I cannot give the Member a concrete answer on that. I can reiterate what I said in the House yesterday. The indications from Curragh were that the chief executive officer would be coming to Whitehorse sometime after June 2 to start discussions with me on the parameters of negotiations for a loan guarantee for the Grum stripping.

Mr. Harding: In an interview on the radio this morning, I heard the Government Leader talking about a loan guarantee and potential forms of financial assistance for the Grum stripping project in Faro. The Government Leader made the statement that they were subject to certain conditions that would be negotiated between Curragh and YTG. Could the Government Leader explain which conditions he is referring to, and could he tell the House what these conditions are? Are they the same 14 that were brought out on March 10, or others?

Hon. Mr. Ostashek: As the Member opposite is fully aware, there are two proposals on the table at this point for Curragh. One is for the $34 million loan guarantee; the other was for a $5 million loan guarantee to go on, on a month-to-month basis, with the Grum stripping while the company is under CCAA, to see if it could get its debt restructured. Both of those are still open to negotiations. I do not know what the conditions will be at this point.

Question re: Curragh Inc., power rates

Mr. Penikett: I would like to ask a question to the Minister responsible for the Yukon Energy Corporation. In answers to questions yesterday we were told that Mr. Frame would be coming to the Yukon shortly after June 2 to start negotiating. Can the Minister advise us with whom Mr. Frame will be negotiating power rates at that time. Will he be negotiating with the Minister responsible for the energy, directly with the Yukon Energy Corporation, or will be Burns Fry be representing the interests of Yukoners at the meetings in Whitehorse?

Hon. Mr. Phelps: The issue of energy rates is a fairly complex one, as I am sure the Member is aware. We operate in a rather arm’s-length relationship - for a change - with the Yukon Energy Corporation and the Yukon Development Corporation, on the one hand, and the Public Utilities Board, on the other. The issue of a subsidy for industrial rates for corporations such as Curragh is an issue that would have to be dealt with ultimately by Cabinet. It would be an issue that would look at the government subsidizing power, and not ratepayers.

There is a reason for this. The Members opposite are well aware that when ratepayers subsidize a corporation, they pay a -

Speaker: Order please. Will the Minister please conclude his answer.

Hon. Mr. Phelps: When government does it, 78 percent of the dollars are Canadian dollars - federal dollars.

Mr. Penikett: Given the blather, I guess we can assume that Burns Fry will be representing the people of the Yukon in the meetings in Whitehorse.

A government statement yesterday mentioned some concerns about union industrial relations and a stable labour situation at the Faro mine. In the interests of offering investors the stable labour situation, which they apparently seek, will the Minister responsible for labour be guaranteeing the involvement of the union - the bargaining agent - in the Curragh negotiations?

Hon. Mr. Phelps: At this time, we will have to see what the negotiation forum is and how things are going to proceed. Those are unknowns at this time.

Mr. Penikett: The Minister is a fount of information.

As the government knows, Yukon people have literally hundreds of unanswered questions about the future of the Faro mine and the nature of negotiations between the Yukon government and Curragh. I wonder if the Minister of Economic Development would be willing to commit the government to a public meeting with Mr. Frame and the Minister of Economic Development, when Mr. Frame is here in June. This would provide citizens a long overdue and direct opportunity for a public accounting on what is happening to Curragh, to power rates and to the Yukon economy.

Hon. Mr. Devries: I will take that question under advisement.

Question re: Land claims, umbrella final agreement concerns

Mr. Cable: My questions are for the Government Leader. While I appreciate that Faro is on everyone’s mind, there is another question that has arisen. This morning, the CBC reported that some Yukon First Nations are expressing concern over the way the umbrella final agreement is being turned into law. I assume this relates to the drafting of federal legislation. Is the Government Leader aware of this issue and since the news reports were somewhat vague, can he provide the House with more specific information?

Hon. Mr. Ostashek: I wish I could provide the House with more information, but it is my understanding that there are meetings taking place now between various First Nations and I have the same information as the Member opposite - I know that some First Nations are not completely satisfied with the arrangements for the finalization of the umbrella final agreement and the self-government agreements.

Mr. Cable: As the Government Leader will recollect, some considerable energy was spent a couple of weeks ago going to Ottawa to ensure that the land claims would be put on the federal legislative calender. Is the Government Leader of the opinion that whatever these problems are, will the very fact that there is a problem hold up the passage of these bills through the federal Parliament?

Hon. Mr. Ostashek: I would have great difficulty speculating on that at this point, since I am not aware of what is transpiring at the First Nations meetings. I hope that we will be receiving some word from them.

My officials have been in touch with federal officials on the negotiating team and we are very concerned with what is happening at this late stage in the game. I hope that it can be resolved to everyone’s satisfaction.

Speaker’s Statement

Speaker: I should warn the Member that asking for an opinion in his question is out of order. The question should seek a statement of government policy rather than an opinion on it.

Mr. Cable: The matter of the land claims is very important to all Yukoners and to all of the Members of this House. Having spent the amount of energy that we have spent on it, will the Government Leader undertake to contact the federal Minister responsible for land claims, Mr. Siddon, and determine whether in fact the legislative calender is going to be disrupted by the latest news that was reported upon this morning?

Hon. Mr. Ostashek: As the Member is probably aware, Mr. Siddon will be in Whitehorse within a couple of days, and I am sure we will be discussing the issue at that time.

Question re: Grum stripping, employment for Faroites

Mr. Harding: I have a question for the Minister responsible for Economic Development.

On April 14, 1993, in Hansard, the Minister committed the government to a policy that, whenever government assistance for the Grum stripping would be provided by the Government of Yukon, Faroites would be doing the work first and foremost. I have read some startling comments in the wake of this statement - some just as of yesterday - that have alarmed me. Could the Minister please tell me if they are still committed to this policy?

Hon. Mr. Devries: My understanding of the agreement that exists between Pelly Construction and Curragh Inc. is that exactly who is hired would be subject to negotiations between Curragh and Pelly, but since it is government money going into the project, we would do everything we possibly could to encourage Pelly to hire people from Faro.

Mr. Harding: The community of Faro and the people who live there are the people who have built that mine and the people who have worked in that mine, and the government has said that they are committed to developing economic development within the rural communities. Would the government take a hard position regarding the financial assistance for the Grum stripping and insist that, as a condition of extending the money, the people who live in Faro would be performing the work first and foremost because, after all, they built that mine?

Hon. Mr. Devries: I would not be prepared to make it a condition of whether the project went ahead or not, but I would certainly encourage Pelly to hire Faroites wherever possible.

Mr. Harding: In Hansard, the Minister had committed to the fact that he would, indeed, make it imperative that Faroites were hired for that project but now he seems to be backtracking, which is somewhat alarming. Why would the government not make it a condition when they have said that they are committed to economic development in the rural communities, and secondly, they said they support and recognize the fact that Faroites have contributed in a major degree to the building and the working of that mine, which has benefited the entire Yukon economy.

Hon. Mr. Devries: If it came to a point where the project would not go ahead, I would not be prepared to do that, but if the project goes ahead, we will do everything to ensure that the people hired will be people from Faro.

Question re: Economic forecast

Mr. Harding: I would like to point out to the Minister that the government has considerable say about whether or not it is possible, and I think they should be using that influence.

I would like to ask the Minister of Economic Development another question. The government has repeatedly confirmed that it has had officials prepare an analysis of the impacts on the economy of the continued closure of the Faro and Sa Dena Hes mines, but the Minister of Economic Development gave a flat “no” to the request that this document be tabled to assist Members and the public in assessing how their interests will be affected.

I would like to ask the Government Leader if his Minister’s response is also a response of the government and if the Government Leader will agree to table this important report.

Hon. Mr. Ostashek: We are tabling whatever information we feel that we can table in this Legislature. If there is another report that we can table we will certainly do so, but if the Member is asking for Cabinet documents, he knows they are not for tabling.

Mr. Harding: I fail to see why that information would have to be a Cabinet document. The government has produced winter forecasts for the economy that did not include a Faro shutdown in the equation, and I cannot see why they would not include a shutdown in the equation so people would know what is happening.

Is it going to be a new policy of this government to deny Members, and the public, access to the economic forecast information, which has been paid for by public funds, in light of the fact that the government has yet to produce a reason for the secrecy surrounding these documents?

Hon. Mr. Ostashek: As I just said, we will table whatever documents that we can. We are quite prepared to do that, and we are not trying to keep anything secret.

Mr. Harding: If the government has not produced the document and no one in the public knows exactly how the economic situation is going to affect them, which would have a bearing on whether or not they would support government assistance for the Faro and Sa Dena Hes mines, then I do believe that information is being kept secret.

If the Government Leader is not willing to table the report, which has been repeatedly referred to in this House, will the Government Leader agree to table all current and subsequent analysis and forecasts of the impact on the Yukon economy of the continuing mine closures?

Hon. Mr. Ostashek: We have said that we are quite prepared to share any documents we can table with the Opposition so that they know as much as we do about the situation.

Question re: Faro contingency plan

Ms. Moorcroft: The Minister of Economic Development responded to questions about the Faro contingency plan by saying that the Industrial Adjustment Services committee was going to make recommendations about community works projects. The IAS committee, which includes representation from federal and territorial governments, and from the community of Faro, has met and is recommending projects to put people back to work.

Is the Minister prepared to give his support for work projects on Fisheye Lake campground, sheep enhancement at Blind Creek and a 10 kilometre hiking trail along the Van Gorder Creek?

Hon. Mr. Devries: Right now, two of those projects are being discussed. My understanding is that the Fisheye Lake project is being questioned.

Ms. Moorcroft: The Minister has a responsibility to the portfolio he holds to provide some economic leadership in the face of devastating unemployment in the Town of Faro.

Will the Minister commit to proceed with those projects for much needed work, on the basis of recommendations from the community, and tell us when?

Hon. Mr. Devries: I will be discussing two of those projects in Cabinet tomorrow morning. If they get approval, we will fast-track them and get something on the way.

Ms. Moorcroft: The Minister said he has to have discussions with the Ross River First Nation regarding the sheep enhancement project at Blind Creek, which I fully understand and support, as it is on their traditional lands. Has the Minister had discussions with the Ross River First Nation, and if not, when is he scheduled to meet with them about this project proposed by the Faro IAS committee?

Hon. Mr. Devries: We have had brief discussions with the Ross River Dene people. If the decision is made to proceed with that project, discussions will take place next week.

Question re: Land claims, umbrella final agreement concerns

Ms. Joe: I have a question for the Minister responsible for constitutional development. The recent decisions made by the Government Leader’s Ministers regarding the Wildlife Management Advisory Board recommendations, consultation on the changes to the Yukon Development Corporation Act, land development on land selections and devolution of responsibility from the federal government have all raised very serious concerns with First Nations groups about the government’s commitment to fair and cooperative implementation of the UFA.

Since the Government Leader has been involved with negotiations overseas for the last while, can he assure the House that he has been thoroughly briefed about the concerns of the Yukon First Nations?

Hon. Mr. Ostashek: As the Member opposite is aware, I have just returned to the Yukon. To say that I have been fully briefed would be wrong. I have had an overview of what has transpired and I am continuing to keep updated on the issues.

Ms. Joe: The Government Leader should be aware that recent actions by his government have led some First Nations leaders to question the very fundamentals of the claims agreement that was passed by this House this session. Can the Government Leader offer any assurances that the series of decisions that have shut First Nations people out, despite their having a vested and legislated interest, have been accidental? Have they been mistakes or decisions made by new Ministers who do not completely understand the UFA?

Hon. Mr. Ostashek: I believe that Ministers on this side fully understand the UFA. I believe that we are living by the clauses within the UFA.

Some of the charges that are being leveled by the other side of the House about our not consulting with First Nations people were the responsibility of the previous administration; they were a part of the negotiations, and they were criticized and condemned for not negotiating and not keeping the First Nations fully informed. We are trying to overcome that problem and to get a mechanism set up by which we can keep First Nations people fully informed.

Ms. Joe: The chiefs have called an emergency meeting to talk about the problems that have arisen as a result of decisions made by Ministers on the other side of the House. They want some assurances that things are going to be done in a fair manner.

I would like to ask the Government Leader if he can assure this House and the First Nations people of the Yukon if he is going to make some serious decisions about the manner in which he is going to be dealing with them, and coming to fair decisions with regard to what his Ministers are doing on the consultations, in accordance to the UFA.

Hon. Mr. Ostashek: The Member and I could go on for a long time in debate on this subject. Question Period is not the place to be doing that; it is a place to get information out and I am quite happy to do that.

There is no doubt that some First Nations do not feel that they are being consulted to the full effect of the UFA. There is a different interpretation by this side. We are working to try to establish a good working relationship with the First Nations people, and we will continue in that direction.

Question re: Yukon Development Corporation, umbrella final agreement

Mr. McDonald: I have a question for the Minister responsible for the Yukon Development Corporation. Last week, the Minister responsible for the corporation introduced and then adjourned debate on the legislation that would change the mandate of the corporation. Discussions with CYI would suggest that this change would require further, more thorough consultation with them, as the Yukon Development Corporation is referenced in the umbrella final agreement. Can the Minister state whether CYI feels that it has now been sufficiently consulted, and whether he will reintroduce the bill in the Legislature for further debate in the next couple of weeks.

Hon. Mr. Phelps: It is amazing to me to hear Members from the side opposite suddenly accuse us of not consulting with First Nations. I just arrived back in town from Ross River. We signed two agreements with the Kaska Tribal Council and the Ross River First Nation. With respect to the Yukon Development Corporation, I will be having further discussions with CYI before I come back into this House.

Mr. McDonald: We can assume then that CYI does not feel that it was sufficiently consulted by the Minister. We wait for the Minister’s further efforts in this area, which clearly have been insufficient. Has the government defined more precisely what constitutes proper consultation with CYI under the UFA? Does it involved putting propositions before CYI in writing? I am asking the Minister responsible for the Yukon Development Corporation, or the Government Leader.

Hon. Mr. Phelps: The issue of what kind of consultation - when, where and so on - is something that we will be discussing. Sometimes that may happen on a case-by-case basis with CYI. We will establish that between the parties.

Mr. McDonald: I can guarantee the Minister that there are people at CYI who are looking forward to those discussions. I would like to ask the Minister whether or not he has consulted with the board of the Yukon Development Corporation about the proposed changes to the legislation, and whether he sought their advice before he introduced the legislation in the Legislature?

Hon. Mr. Phelps: We have had discussions with the board, in general terms, about what we intended to do in the House. As far as I am concerned, that type of consultation was adequate.

Question re: Curragh Inc., conditions on

Mrs. Firth: I have a question for the Government Leader regarding Curragh. We just heard three Ministers stand up this afternoon in response to questions about Curragh regarding the conditions, union involvement, electrical rates and public meetings. The Government Leader said that he did not know what conditions would be at this time; the Energy Minister said that energy rates were unknown and who would negotiate was unknown at this time; the Economic Development Minister said that he would have to get advice about having public meetings. What Yukoners would like to know is, what happens now? Who will be advising the government regarding things like what the conditions will be, whether there will be union involvement, what the energy rates are going to be and whether or not there will be public meetings?

Hon. Mr. Ostashek: Those questions that have been raised by the Member opposite are all questions that will be addressed when I meet with Curragh next week. Those are the questions that we will be dealing with. The issues we will dealing with are the Grum stripping loan and how we are going to go about negotiating power rates. As I said yesterday, when we look at power subsidies we cannot look at them in isolation for one corporation.

Mrs. Firth: I am trying to establish if there is a plan in place. I do not think there is because what the Government Leader has just said is that when he meets with Curragh, they are going to tell them what the conditions are going to be, whether there is union involvement, what the energy rates are going to be and whether or not they are going to have public meetings.

Does the government have a specific plan, and can the Government Leader outline the details of that plan for us?

Hon. Mr. Ostashek: The Member opposite is quite aware that the plan is under CCAA. That is what is affecting the Curragh issue. It is a bigger issue than just the Yukon government and Curragh negotiating. We will see what comes out of that and then see where we can assist.

Mrs. Firth: From where is the government going to get its advice regarding how to proceed? We have been through the Department of Economic Development. They have given advice; that did not work out. We tried the Burns Fry route in Toronto and that did not work out. What Yukoners want to know now is, what is the government going to do and who are they going to be seeking counsel and advice from on this urgent matter?

Hon. Mr. Ostashek: The Member opposite is saying that the advice we are getting has not worked, which is her opinion; it is not our opinion. We will use the best advice that is available to us.

Question re: Curragh Inc., conditions on

Mrs. Firth: I would like to follow up with the same Minister regarding the same matter. The Government Leader has just stood up and said, “We will get the best advice that is available to us.” Where will that advice be coming from? Yukoners have a right to know who or where this advice is coming from.

Hon. Mr. Ostashek: Until we know what we need advice on, I cannot answer that question for the Member opposite. There are two proposals on the table - we have said that time and time again. If we had a plan, if we knew what we were going to do, if we had all the answers, we would not be in this problem today.

Mrs. Firth: This is bordering on absolute incompetence.

Yukoners are looking for some leadership; they are looking to find out what the government’s plan is. The questions that are left unanswered are all the questions that the three Ministers, half of the Cabinet, could not answer this afternoon.

Speaker: Order please. I would like the Member now to ask her question.

Mrs. Firth: I will, Mr. Speaker. I would like to ask the Government Leader who is going to determine what the conditions are in response to his comment, “We do not know what the conditions will be at this point in time.” Who is going to develop those conditions?

Hon. Mr. Ostashek: I find this line of questioning very interesting from a Member who, a year ago, said she would not give Curragh anything. I find this very interesting - a real about-face.

The conditions will be determined by the Cabinet.

Mrs. Firth: Now the truth comes out. What the Government Leader is telling Yukoners and us, as Members of the Legislature, is that we should all just go home and leave it up to the Government Leader, the Minister of Economic Development and the Minister of Energy, who could not answer one question this afternoon.

Some Hon. Member: (Inaudible)

Mrs. Firth: I am not prepared to do that. I am not prepared to do that as a representative of Yukon people. I want to ask the Government Leader who will be advising the Cabinet regarding conditions, energy rates, public meetings and union involvement? Who will the Cabinet get their advice from?

Hon. Mr. Ostashek: It certainly will not be from the Member for Riverdale South, I can tell you that.

When we have something that requires approval of this Legislature, it will be brought back to this Legislature.

Question re: Stevens subdivision

Mr. Penikett: Clearly, we are pumping a dry well on that question.

I have a question for the Minister of Community and Transportation Services. A December 1992 letter to the Minister of Community and Transportation Services outlined problems with the greenbelt around the proposed Stevens subdivision, such as problems with buffers, protection of well water, school accommodations.

At a meeting with area residents on January 13, the Minister made commitments to consult with residents before any work on the area development scheme and subdivision was completed.

Has the Minister or any of his officials met with area residents since January 13, as the Minister promised?

Hon. Mr. Fisher: No, the department has not met with area residents as of this date.

Mr. Penikett: Letters to the Minister have gone unanswered, and there have been repeated attempts to find out what is happening to the designs and the area plans.

Can the Minister tell us, for the record, if there is a schedule for the development of this area?

Hon. Mr. Fisher: No, as of this date, there is no schedule.

Mr. Penikett: We have been told that the government is planning a review of the Municipal Act as well as researching structural options for both local and regional government. There have been several previous commitments to consult with neighbourhoods, communities and people affected; however, none of this has happened yet.

Can the Minister describe what his plans are to meet the requirements to consult with people affected before going ahead with any development in any area?

Hon. Mr. Fisher: I am not exactly sure if the Member opposite is asking about a general consultation strategy that we have, or whether he is talking about the Stevens subdivision, but consultation for any particular subdivision will be dealt with individually with the people in that specific area. Some consultation may be in a different manner from others.

Question re: Yukon Fish and Wildlife Management Board, recommendations

Ms. Moorcroft: In a series of recent comments, both in and out of the House, the Minister of Renewable Resources has attempted to suggest that his rejection of Fish and Wildlife Management Board recommendations is no big deal, and that it is really just a conflict between a couple of individuals - himself and the co-chair of the board.

Since several members of the Fish and Wildlife Management Board met with the media this morning to reiterate their concerns about the Minister’s position, and to emphasize that it raises real concerns about the future of cooperative wildlife management in the Yukon, is the Minister now prepared to give more weight to their recommendations and reconsider his rejection of them?

Hon. Mr. Brewster: It is quite apparent that I must have been fair to everybody, because the outfitters are very upset and the other side is upset. It is quite apparent that I must have been fair, because nobody agrees with me, except for me.

Ms. Moorcroft: The board based its recommendations on a very balanced consideration of the comments and advice provided by biologists, hunters, First Nations people, outfitters, and others who overwhelmingly expressed the view that moose numbers in the Aishihik area have continued to decline and are at the point where every animal counts, despite four years of voluntary hunting restraint by the Champagne/Aishihik First Nation.

In the interest of wildlife, will the Minister rescind his decision to issue 15 moose hunting permits for this area?

Hon. Mr. Brewster: Issuing 15 permits only means that 10 animals will be taken from there; let us get the facts straight. Also, the biological situation is that if one percent were taken out of there it would not hurt the herd at all. That is the advice of the biologists.

Ms. Moorcroft: As I just said, the board made its recommendation based on the advice of biologists. The Yukon Fish and Wildlife Board again this morning restated its commitment to cooperative wildlife management in the spirit of the umbrella final agreement which, as the Minister knows, puts conservation of wildlife as its top priority.

Will the Minister not reconsider his rejection of board recommendations, bow to thoughtful and carefully considered public pressure, and agree to a total ban on hunting in the wolf control area?

Hon. Mr. Brewster: It states in the terms of reference that we have, and this includes the UFA, that they have 30 days to reply to me. They have not even had the decency to tell me that they had meetings today, nor did they invite me.

Question re: Faro residents, prospects

Mr. Cable: I have some questions for the Government Leader again on Curragh. Yesterday the Curragh announcement raised some hopes that the package would come together. The Government Leader’s comments in the House yesterday and on the radio this morning put a less optimistic gloss on the deal coming together. Can the Government Leader indicate for the benefit of the people from Faro who have to get their lives together whether, in his view, he is sufficiently optimistic that a deal will come together and that they should retain their residency in Faro?

Hon. Mr. Ostashek: I do not want to be negative on the situation. I said in the House yesterday in the ministerial statement that this is a very positive first step. As the Member opposite is fully aware, Curragh has a tremendous debtload that they must restructure. They must get the cooperation of the bank, the note holders and the creditors before they can succeed.

Mr. Cable: The people of Faro and Watson Lake have decisions to make on a personal basis, and so does the government. Could I ask the Government Leader to tell us what level of government services the people of Faro and Watson Lake can expect in the fall? For example, will the Faro school remain open?

Hon. Mr. Phillips: I thank the Member for the question. The Department of Education will be doing an evaluation of the number of people who will be staying in Faro. Upon looking at the evaluation and determining how many students will be there, the school will be open. As far as we know right now, the indications are that the school will be open. What grades are going to be offered will depend on what students are left to attend that school.

Mr. Cable: I understand that the majority of teachers in Faro have already been re-assigned. Could the Minister of Education confirm this?

Hon. Mr. Phillips: I cannot confirm that the majority of teachers have been re-assigned. It is my understanding that all the teachers in Faro put in for a transfer. I can confirm that for the Member. I think that out of respect for the teachers involved, when there is uncertainty, they cannot afford to wait until the fall to make sure that they have employment for next year. They have taken the opportunity at this time of the year, when we assign teachers or hire teachers, to submit their names for other areas in the territory.

Speaker: Time for Question Period has now elapsed. We will proceed to Orders of the Day.



Bill No. 9: Second Reading

Clerk: Second reading, Bill No. 9, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek: I move that Bill No. 9, entitled Interim Supply Appropriation Act, 1993-94 (No. 3), be now read a second time.

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

Hon. Mr. Ostashek: I do not know if this Legislature has ever before had to approve three appropriation bills in one sitting, but that is the situation we are in today. That is what this bill will do; it will provide the government with spending and commitment authority for the month of June 1993.

The sum of this bill far exceeds one-twelfth of our annual expenditures. It is apparent that the government will not spend anywhere near this sum of money, but it is necessary for the departments to have the appropriation authority in order to commit themselves to multi-month contracts.

June will be a time when many of the year’s contracts are let and the funds provided by this bill will permit these commitments to be made. Any sum not spent by June 30 will lapse on that date, as was the case with the previous two interim supply bills that we passed this sitting.

Mr. McDonald: For the third consecutive time, we will be giving support to this measure. We have approved, in the past couple of months, $60 million-plus for the month of April, $60 million-plus for the month of May, and now $82 million for the month of June.

The Government Leader has indicated that the departments will not spend anywhere near this amount of money. We are used to debating bills where the government is asking for much more money than they know they will spend; that is not new for us, and we are prepared to support this measure, as well.

It is important to point out that fully $32 million is approved to meet capital requirements, which will ensure that the summer commitments in the capital area can go ahead unhindered.

Once again, I would ask the Government Leader to state, for the record, as he has in the past, that the ongoing and necessary scrutiny of the budget is not holding up the capital and O&M program in any way.

I suppose the main estimates themselves will pass. It is quite obvious that an arrangement with you, Mr. Speaker, has been made. We are wondering what the terms of that arrangement are, but we will be putting some time and effort into finding out.

We support this measure, and we will continue our general scrutiny of the main estimates budget.

Speaker: The Hon. Government Leader will close debate if he now speaks. Does any other Member wish to be heard?

Hon. Mr. Ostashek: Before I get into closing debate I should maybe just say for the record that there has been no arrangement made with anybody to pass the main estimates. The Member is quite correct, technically, that by passing these interim supply bills everything should go ahead as normal and there should not be any holdup on the issuing of contracts or any such thing; there should be no delay. But the Member opposite, having been a Member of government for many, many years, knows the hesitancy within the bureaucracy to approve things if they know the main estimates have not been approved. So the direction is given, and I am hoping it is not holding anything up. We get complaints all the time that the people in the general public would like to see the main estimates passed.

With that, I have nothing further to say.

Motion for second reading of Bill No. 9 agreed to

Bill No. 56: Second Reading

Clerk: Second reading, Bill No. 56, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek: I move that Bill No. 56, entitled Public Sector Compensation Restraint Act, be now read for a second time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 56, entitled Public Sector Compensation Restraint Act, be now read a second time.

Hon. Mr. Ostashek: Today, I rise to speak on Bill No. 56, the Public Sector Compensation Restraint Act.

As all Members of this House know, governments across this country are struggling with the management of escalating costs of government and crippling deficits. This government has mentioned time and time again our resolve to manage our spending wisely and to avoid a trend toward deficit financing. We believe that all Yukoners support this goal; however, both the public and the private sector must work together collectively in order for our mutual goal to be realized.

One spending restraint measure that the government announced on January 29, 1993, was to reduce the salaries of all MLAs, including Cabinet Ministers, political support staff and all managers in government.

The bill before Members today contains the necessary provisions to effect these reductions. Bill No. 56 provides for the reduction of five percent of salaries and additional duty salaries for all Members of the Legislature, including Cabinet Ministers.

The bill also provides that all government managers will have their salaries reduced by two percent and performance pay and cash gratuities for managers will be frozen. The reduction of two percent will also apply to judges.

The government wants, and is encouraging, managers to be creative and innovative in developing methods that will improve government efficiency and cost-effective delivery of government services.

Bill No. 56 allows for an incentive system to be developed that will apply to managers whose performance helps us achieve these goals.

The cost-savings realized through the implementation of Bill No. 56 are expected to be in the order of $800,000. I am sure all Members of this House support these expenditure reductions in an effort to bring government spending under control.

Ms. Moorcroft: I rise to express our general support for this bill. You will find Members on this side of the House willing to participate in ways to decrease our deficit, if there is one.

However, I am very concerned about the mixed message the Government Leader is sending. This message, as we see it, is clear that he does not believe in the collective bargaining process and that he has committed his government to legislating the wages of these managers.

I trust that this is not leading up to a legislative public sector wage freeze as part of the negotiating mandate in the current contract talks between the Public Service Alliance of Canada and the Government of Yukon as an employer.

There are 195 managerial positions that this legislation will affect. Although there are 22 of these positions currently vacant, this is a large group of people who will be affected by these proposed cuts.

The pay range for these positions is from $45,436 to $122,065. These wages will be cut by two percent and the MLA’s wages will be cut by a full five percent.

Again, I would like to unequivocally state that we are not opposing this bill, but we would like to make sure that the message the government is sending is straightforward. If this is a pattern of the way government is sharing the burden by bargaining through legislation, then we would like to have that made clear.

I would also like to point out that this suspicion is fueled by the fact that there was no consultation with the Official Opposition about the cuts to the MLA wages, although there was plenty of consultation with the Liberal and Independent Members.

There is another issue that I would like to bring up at this time. In our view, it is unconscionable that a government that instigates a wage cut to deputy heads, managers of departments, the president of the Workers’ Compensation Board, board members, judges, legal officers and MLAs should not include their own political staff.

Therefore, I will be proposing an amendment to the Public Sector Compensation Restraint Act in Committee to include people employed under the Cabinet and Caucus Employees Act. To our minds, if the deputy ministers, managers and MLAs are to take a cut in pay, then it should only be in keeping that the salaries of their political staff and other assistants to MLAs should also be cut.

Mr. Cable: I would also like to express considerable reservation about the statutorily mandated pay decrease for managerial persons. The management has no bargaining power and no collective organizational strength. If I understand the process properly, it is usual that tough bargaining is done with the party with equal bargaining power, and that is the union. Later on, the managerial salaries are put in sync.

I have no problem whatsoever with supporting the provision of the bill relating to the reduction of MLA salaries. I do have considerable reservation about supporting the managerial cutback but, in view of what I understand is a serious financial problem, I am, with great reservation, going to support the bill.

Mrs. Firth: I rise to give support to this initiative, although it is a reserved support. Number one, I do not think we have a crippling deficit here in the Yukon, and I do not think the government has been able to establish that we do. Secondly, the debate on the question about whether we are deficit financing or not is still open.

I found it interesting when the Government Leader stood up and said that the government was going to work together with the private sector to help combat crippling deficits and deficit financing, when it was his announcement that the government was broke, and his imposition of the biggest personal and business taxes on Yukoners. Then, there was the shutting down of Curragh. These have not exactly been activities that demonstrate that this government is working with the private sector.

I found the Minister’s comments interesting this afternoon, because he made reference to an incentive system being developed, and that this legislation was going to allow that to happen. I have just done a quick read of the bill, and I do not see where this particular piece of legislation is going to allow the government to develop any incentive system for managers who come forward with creative ways to cut costs. Perhaps he could clear up that specific issue when he gives his final comments.

I simply see this as some kind of trendy gesture that politicians across the country are making - taking pay cuts to demonstrate that they are prepared to share in the hardships.

To address the comment of the Member of the Official Opposition, I can appreciate the fact they were not consulted. I know that for a fact, and I do not think that was right. The comment was made that there was plenty of consultation with me as an Independent, and the Liberal Member, and you, Mr. Speaker, as part of the Independent Alliance. There was not plenty of consultation. We were simply told that this initiative was going to be taken by the government, and it was not exactly as if we were asked our opinion about it, or whether or not we wanted to make any contribution.

I remember the discussion fairly well, because at the time I had asked the Government Leader whether or not they had addressed the issue of the COLA clause, which gave us an instant increase of 4.5 percent in the next year. The government had not considered it at that time, so that was the extent of the input I had into the whole process. There was not a lot of consultation. I was simply told about it and I know that the Official Opposition was not told or consulted about it.

I will support this initiative. I would have preferred some demonstration of some policy to come, but obviously that has not been the case. It is simply a five-percent pay cut for managerial and political appointments and politicians. That is about all I have to say.

Mr. Penikett: I just want to say briefly that I agree with the Member for Riverdale South that this is a political, not a financial initiative. I want to comment though that there is one particular clause in this bill that I find offensive and, indeed, when Members opposite were on this side of the House, they used to describe it as arrogant, and that is the extremely dubious parliamentary practice of making legislation retroactive.

I can recall the one time in which we tried to make a financial matter retroactive to April 1. The then-Leader of the Official Opposition, the Member for Ross River-Southern Lakes, described it as an extremely scandalous situation and was so eloquent and so persuasive in the wrongness of this, according to every parliamentary tradition, that the government-of-the-day changed the proclamation date to have that particular financial measure come into effect upon passage in the House.

I will, therefore, on behalf of some Members in this House, be showing respect for parliamentary tradition by moving an amendment of that kind, with the help of the Clerk, when we get into Committee. I will be also quoting in Committee the words of the Member for Ross-River Southern Lakes on this matter.

Speaker: If the Hon. Government Leader now speaks he will close debate. Does any other Member wish to be heard?

Hon. Mr. Ostashek: I will try to be brief. I am somewhat startled by some of the comments from the other side of the House. The Member for Mount Lorne says she is going to support this bill but she is going to propose an amendment so that it covers political staff. We do not need an amendment to this bill. Our staff has already taken its cut, as of April 1. If the Members opposite would like, we will be prepared to enforce that cut on their staff as well. We can certainly do that. We have no problem with it at all.

As far as the union negotiations go, that is exactly what they are: union negotiations. We are hoping to achieve a negotiated settlement.

I am a little bit amazed by the comments by the Member for Riverdale South. She also said that she was not consulted. I asked her into my office and asked her what she thought of it and if she would agree with it. She did agree with it. She did suggest a clause that we had overlooked; we took that advice. But she certainly was consulted. I do not know what more she wanted. She did not offer any more and she said that she agreed with the initiative to cut wages. We felt that was sufficient consultation.

The Member for Whitehorse Centre is laughing. Maybe when I get done with the next part of my debate here, she will not be laughing so much.

There has now been, from three Members opposite, concern that we are not in a deficit position and that our supplementary estimates were grossly overestimated. The Member for Riverside, the Member for Riverdale South and the Member for Mount Lorne have all been asking for updated figures. Today, I have figures that I feel comfortable with tabling in this House. I will caution the Members that they are not the final figures, but they are getting very, very close to the final figures.

I am sad to report to this House that the deficit is going to be much larger than even what we estimated. I will be tabling this document now as I am going through it.

Some Hon. Member: You must have gone on a spending spree in that latter part of the year.

Hon. Mr. Ostashek: We must have really gone on a tremendous spending spree. The figures that I am going to read into the record today are qualified by the fact that Yukon Housing actuals are not incorporated. Supplementary No.  1 figures, modified to know the impact of the extended care facility, have been used. Past experience would indicate that the actuals will be more favourable than the supplementary figures.

Yukon Liquor Corporation revenues are recorded at budget for Supplementary No. 1 and there will be some variation from these figures, once the actual figures are known, but the impact of our deficit should be fairly minimal.

Recoverable loan payments and recoveries from the Department of Economic Development will result in adjustments, once a full analysis of the accounts has been completed. The same is true of land development transactions in the Department of Community and Transportation Services.

These entries could result in substantial revisions; in the past such final adjustments have changed our surplus deficit by as much as $1 million.

The calculations of the transfer payments from Canada are subject to revision. Some distillation  of our own revenue figures from volume and rate change remains to be completed.

Most important, revisions of the provincial tax effort calculations, which impact upon the keep-up factor of the Formula Financing Agreement received in the past week, remain to be confirmed. We have received confirmation of those figures verbally, but not in writing.

These significant upward revisions have had a major impact upon our transfer payment. The attached figures that I will be reading into the record shortly do not - and I state again, do not - include any provisions for the apparent shortfall of about $600,000 in the MLA pension fund.

The figures that the department has tabulated as of today are as follows: we started the year with $50,846,000 surplus; the 1992-93 deficit at year-end is forecast at $57,895,000. The figure we have today is $71,588,000.

We estimated in the supplementaries an accumulated deficit of $7,049,000. The actual deficit reflected by the figures as of today will be $20,742,000.

As I said, there are some items that have be recovered, but it would be difficult to believe that any of the foregoing figures would result in adjustments sufficient to bring the 1992-93 annual deficit to that projected for the supplementaries. We expect it will come in higher.

I would just like to say, for the record, that the day after I assumed office and talked to Finance, the figure they gave me as the deficit at that point, prior to our hiring anyone to verify it, was between $62 and $64 million. That was the figure they gave us in November of last year.

I have tabled the documents. That is the reason we need the cuts in wages that we have proposed, as well as the tax increases. The best I can see coming out of this will be a deficit of about $12 million, even with all these adjustments taken into consideration.

Motion for second reading of Bill No. 56 agreed to

Bill No. 89: Second Reading

Clerk: Second reading, Bill No. 89, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek: I move that Bill No. 89, entitled An Act to Amend the Fuel Oil Tax Act, be now read a second time.

Speaker: It has been moved by the Hon. Government Leader that Bill No. 89, entitled An Act to Amend the Fuel Oil Tax Act, be now read a second time.

Hon. Mr. Ostashek: The purpose of this bill is to increase the rate of taxation on diesel fuel, gasoline and aviation fuel. Both diesel and gasoline taxes will increase by two cents a litre. The diesel fuel tax will rise from 5.2 cents to 7.2 cents a litre. Gasoline taxes will go from 4.2 cents to 6.2 cents per litre. Aviation fuel will increase by four-tenths of one cent. In other words, it will increase from seven-tenths of a cent a litre to 1.1 cents a litre.

We currently raise $4.5 million a year in fuel oil taxes. The proposed amendments will raise an additional $1,720,000 per annum. The demand for these products is expected to decline approximately five percent as a result of these increases, as people take measures to use motor fuels more efficiently in response to price increases. This decline is factored into the yield figure I have mentioned.

It, of course, remains to be seen what real decline in consumption will materialize as a result of this bill. It is apparent that tax increases will never be popular, but analyses carried out by the Department of Economic Development has determined that the impact on the economy of this increase will be minimal.

Even with these increases, we still have the lowest diesel and gasoline taxes in the country.

Aviation fuel tax will be in the mid to low range. We obviously dislike having to raise taxes, but the alternative would have been for some public sector layoffs and/or a decline in services provided to the public. Many decisions require the choice of the lesser of two evils and this is one of those cases.

Mr. Penikett: The question of fuel taxes is an extremely important one in the Yukon Territory. We are a territory with great distances between our communities. We are a territory that suffers extremes in climatic change. People are more dependent here on their cars and trucks and air transport than almost anyone else in the country. In fact, the ratio of ownership of vehicles-to-citizens is much higher here than everywhere else.

As we were reminded last week in our meeting with some representatives of the mining industry, one of the few competitive advantages this territory had in a very high operating cost area was that our tax rates - gasoline and fuel - were low, and anybody who had any respect for the situation of small business people, people working in small communities, people who regularly have to commute great distances between Whitehorse and their home would know that fuel price is an extremely critical issue. They would know also that one of the unfortunate realities of the Yukon is that, according to the Petroleum Communication Foundation of Calgary, this jurisdiction has a higher dealer markup on fuels than any province in Canada, any centre, and it is interesting that when the previous government tried to do something about that, they were  opposed by the Members opposite, which we regard as evidence of their disinterest in the situation of ordinary consumers.

It is quite clear from the information we have from talking to people around this territory that the vast majority of Yukoners oppose this measure. MLAs who are representing the wishes of their constituents would have no choice but to oppose this measure.

We have discovered today what we suspected for some time, that there was really never any possibility that this bill would be defeated, that the government clearly expected and clearly knew, and has communicated to people that it knew before this session even began, that its tax measures were going to pass.

We have learned today one dimension of an understanding that obviously exists to secure passage of this legislation. Members in this party, the Official Opposition, are quite appalled and scandalized by those arrangements.

In March, before the session even began, the Member for Porter Creek South advised a Member of our caucus that he would be going on a parliamentary exchange to Cyprus, even though the practice in this House for the past several years has been that such honours are shared equally and evenly among this House by the very fair practice of drawing names from a hat, a practice that is paired with the principle of having previous delegates to these meetings disqualified.

The issue of a special consideration for the Speaker, once in this session, was faced by the Members of this House, in conversations with the Clerk’s office, in 1989. At that time, we reconfirmed the rule that all Members should be entitled to represent this Legislature, whether they are in government or in Opposition.

In Committee, the Government Leader was asked, for the record, whether there was any change in the policy that had existed the last few years. He was asked not once, but twice - once during the supplementaries and once during the mains. He told the House there had been no change. He did not mention that there had been some other considerations and some other discussions, and that he at least had agreed to some other arrangement, other than the one I asked him questions about.

At the Commonwealth Parliamentary Association annual meeting, in this House, the Member for McIntyre-Takhini asked in open session about the arrangement that existed previously. The Government Leader was at that meeting and did not indicate that some other arrangement might be in operation at that time, nor did he indicate that when we asked about it in the House.

This morning we discovered that whatever intervention the Official Opposition might wish to make in that question, either as the Official Opposition or as individual MLAs, was meaningless because the matter has essentially already been decided - perhaps a long time ago.

The Government Leader is a new Member in this House and cannot be expected to be fully informed about all the practices here, but I will say this to the Government Leader: when I ask him questions about a matter of policy and when my intent for asking the questions is perfectly clear and he equivocates by indicating to me that there has been no change in policy and I subsequently discover that the contrary is the case, I take a very dim view.

The Government Leader told us today that there were no deals to guarantee the passage of his budget and I am going to stand here on my feet in this House and say that I find that statement incredible.

What has transpired, Mr. Speaker, I want to say frankly, dishonours this House, dishonours all Members of this House and demeans the budget debate. It is no secret that we will be opposing this measure - we have made that clear - but I now, based on the discussions that we heard a few minutes ago, have further reason to doubt the confidence of the government itself.

During the debate on the supplementaries we learned of massive lapses in many departments. We also learned of spending sprees, such as the year-end acquisition of hundreds of thousands of dollars worth of computers. We have listened ad nauseum to the Government Leader talk about how awful things were where he came into office and how he repeatedly blamed the previous administration.

We have learned in the budget discussion so far about the incredible padding that has gone on in some budgets: $14 million for a hospital on which there will be no work done this year; $20 million for the land that we will not need. We have learned something about this government’s budgeting. We have also learned to conclude that the fiscal year for which we shared responsibility - with us in Opposition now having been the previous government - that in the six months for which they were responsible they did nothing whatsoever to control expenditures effectively. I now believe that that is because they never had any interest in doing so.

They are interested in smoke and mirrors. They are interested in tax increases, they are interested in pay cuts and they are interested in cosmetic changes. Given the padding that we have discovered, the lapses we have discovered and the spending sprees we have unearthed, it is now apparent that while senior bureaucrats may have been in charge of the expenditures of this government, there is no meaningful sense in which the Cabinet across the way was ever in control.

We do not have confidence in this government. We do not have confidence in this budget. We will not support this taxing initiative.

Mr. Cable: I had not intended to speak, but I cannot believe my ears. The word “scandalous” was used. The suggestion that a Member of this House would trade off some travel budget for support of a bill I think is in fact scandalous. If in fact I have appreciated those allegations correctly, they should either be proven or withdrawn in order that the Speaker’s position can be protected.

Mrs. Firth: I am not quite sure what we are debating: some scandalous actions or this tax initiative. I am going to keep my comments to the tax initiative - am I correct that we are debating the fuel tax initiative here? The Speaker is nodding his head “yes”.

I want my position put on the record very clearly to state that I do not support this initiative. I have never supported an increase in fuel taxes and in fact have appealed to the Government Leader not to increase the fuel taxes. That is another whole story about being willing to negotiate and being flexible enough to accept others’ ideas. Unfortunately, there was not a willingness or any flexibility.

What I find more astonishing this afternoon is the Minister of Finance’s comments about the deficit and how it is going to be much more than even they had anticipated. That is the comment that I find so astonishing, unbelievable and inconsistent. When we first started debating this whole budgetary initiative, I was trying to keep an open mind and keep some hope that maybe this government knew where it was going.

I had been told by the Minister of Finance that there were going to be some tough cuts, that they had control of things, and that they were getting all these constructive recommendations from the senior public servants about cost-cutting initiatives. During budget debates, we exposed many inconsistencies in the claims the government was making. Most of them have been enunciated by the Leader of the Official Opposition, but I want to say them again. I want to put them on the record again.

We found money in the supplementary budget that the government knew they were not going to be spending in that year, yet it had been removed from the main O&M budget for the next year. The 911 number was just one example. Then, we continued to identify lapses in the supplementary budget. Minister after Minister stood up and said they would not be spending all this money. We have found it is impossible for them to spend the $14 million on the hospital that has been identified for it. For land development, there was $20 million that the government has admitted they will not be able to spend.

Regarding cost-cutting initiatives - the government was so eager to jump in there and raise taxes. People soon grew weary of this constant rhyme that we had to raise taxes, Yukoners were not paying their fair share. People were wanting to see where the government was going to take cost-cutting initiatives.

I have personally asked about the community development fund of almost $3.5 million. The government is not prepared to cut that. They cut $100,000 off that. Attrition was going to be a big cost-saving initiative. Then, we find out that they are hiring $75,000-a-year intergovernmental relations officers in the Executive Council Office, when there is already two of them. We have to have three.

They continue to buy furniture to refurnish offices, because they have a revolving furniture program. They go on a spending spree and buy a bunch of computers and software for $500,000. Nothing is being done about reducing the costs of boards and committees. The travel freeze is off; the hiring freeze is off. The Department of Health and Social Services is going to get a tight grip on that budget. I heard a bureaucrat interviewed on the radio the other morning about the social assistance costs, saying no, they were not going to have any cost-cutting measures.

Then the Minister of Economic Development comes forward and he has some idea for this $10 million grant program - they are going to get this extra money. We have a plethora of ADMs, policy analysts, communications advisors, money going to special interest groups - almost half a million dollars - like the Polarettes Gymnastic Club. I asked the Government Leader to reconsider a tax rebate initiative that he announced for recreational vehicle users, which is a loss of revenue; he completely dismissed it out of hand even though most Yukoners think that it is a ridiculous, poorly thought out initiative - if any thought did go into it - an administrative nightmare that is probably going to end up costing us more and more money.

The Minister of Finance refuses to address that; in fact he not only has the Department of Finance working on it, he also gets the Department of Community and Transportation Services to spend time, energy and money working on it as well.

How does this Minister expect, as the Minister of Finance and as the Government Leader, his government to have any credibility with the track record I have just cited. I just sat here for five minutes and thought of what this government has been doing. These are concerns that are coming forward to me from my constituents. The longer this goes on, the longer that we are sitting in the Legislature, the more they are finding out about the government, the worse the government looks and the worse their personal situations are because they are paying more money in personal income tax, they are paying more money in fuel tax and they are paying more for income tax.

It never fails that every time I run into a constituent or other Yukoners who are passing me on the street and want to talk to me, they are talking about how they are being affected personally by what this government is doing. With the government’s track record so far, I think it would be in their best interest to perhaps look at some of the options or the ideas or the initiatives that have been presented by Members in the Opposition, because there does not seem to be any demonstration of vision, of leadership, of a plan for anything. I think that was obvious in Question Period today. There never has been a plan for how to deal with Curragh and it does not seem like there ever will be a plan. This government is going to move from one crisis to the next, and we - all Yukoners - are going to end up paying for it. I completely oppose that kind of administrative policy. I just cannot bring myself to even consider supporting this tax initiative; therefore, I will be voting against it.

Hon. Mr. Phelps: I was not really going to rise to speak to this bill, but I have been provoked into it somewhat like the Member for Riverside, and I do want to be on the record as supporting this very important bill.

I am concerned about the use of misleading numbers by the side opposite in attacking the budget. For example, two of the speakers have insisted that if we do not spend the full $14 million this year on the hospital, somehow or other that equates to a change in the deficit or surplus of the government. Of course, it does not. This is all money that comes to us 100 percent from Ottawa. The issue is how much we will be able to spend in the fiscal year. Once we start, the hospital will continue; the amount we have been guaranteed by the Treasury Board in Ottawa remains the same, and whether we spend $14 million or $7 million or $5 million or $8 million has no impact on the issue of whether or not the deficit is going to be XYZ or if we are going to have a balanced budget.

Those kinds of suggestions from the side opposite, I submit with the greatest of respect, mislead the public of the Yukon.

I have had to suffer through all the allegations of the person who spoke just before me and is, unfortunately, perhaps not listening to my comments right now. I have heard her call every Minister on this side “incompetent”. I can go back into the record and show that she called every single Minister in the previous government “incompetent” many times. She talks about incompetency and she talks about no plans or policy. The record is clear. In the history of the Yukon, three Ministers have been fired. She is one.

I am just sick and tired of all these allegations. Let us look at the attack on the Speaker by the Leader of the Official Opposition. In my view, that was unparliamentary. Attacking the Chair, as he has during this session, is unparliamentary. Attacking the officials of this Legislature is unparliamentary. There are other forums in which to discuss these things. They should not be brought out here in the first instance. That is simply my position.

I have been a Member here for eight years. I have never once attacked the Speaker; I have never once attacked the Chair - they can look it up. I think it is absolutely incredible. I understand that emotions run high at times and that this is an important vote; it is a vote of confidence or non-confidence, as the case may be, on the budget; however, that is no excuse.

I get a little tired of name-calling by the Member for Riverdale South. I have said that. I understand, again, that these things happen from time to time. I am no angel when it comes to debate back and forth and kibitzing. In fact, most of the time, I enjoy it; however, I feel that I have to stand and make these points. We had better get our acts together in this Legislature and treat the officials of this House with respect and treat the office of Chair and the office of Speaker with dignity and respect. Otherwise, we should not even be here.

I am pleased to say that I will be supporting this bill.

Mr. McDonald: As we are all joining the debate, I think it would only be appropriate for the critic for Finance to participate.

I have quite a bit to say, not only about this tax measure, but about the supplementary estimates that the government has tabled, and about the main estimates that the government has presented. I think the one issue that comes forward more than anything else is the issue of the budgeting credibility.

It is my submission that the government has no credibility when it comes to budgeting. They submitted the first financial statement to this Legislature, calling it the Consulting and Audit Canada report; they made headlines and then the government simply refused to explain what was meant by any of the sections in the Consulting and Audit Canada report.

The government backed off and hid from debate; they would not participate in the debate and then they tabled supplementary estimates.

Minister after Minister, during that period - in all of the time that they were debating the supplementary estimates and complaining that we should not be spending time in this House discussing those estimates - announced that there is not only funding in the budget that they had no intention of spending and knew that they were not going to spend, they also announced that there was going to be massive lapses, money that could not be booked into the 1992-93 fiscal year - millions and millions of dollars.

Now we have a situation where the Government Leader stands up and makes yet another financial statement and says that, for the last fiscal year, their projections were out by another $20 million. Add that figure to the lapses and the padding that we have already identified, you would probably be out something close to $35 million or $40 million in projections. This is enormous incompetence.

We have Members opposite standing up and self-righteously saying that the best thing that we could do is simply accept their financial leadership and all the while complaining day after day that we are spending too much time in this Legislature, scrutinizing their budgets.

The Member for Ross River-Southern Lakes stands up and takes issue with the comments made by the Member for Riverdale South for criticizing the Members opposite for being incompetent. She may well have criticized others in the NDP government for being incompetent, but I must say that I do agree with her about the Members opposite being incompetent.

The Member for Ross River-Southern Lakes responds in kind by attacking that Member. When the Minister is making his grand statement of principle defending the proprieties of this House, what does he do? He personally attacks the Member, and he is very credible on this point.

I can assure you that there are some sensitive and touchy subjects here about who supports what and who has declared themselves in favour of the tax measures in this budget. The more this Legislature refuses to talk about where people stand and refuses to speak honestly about matters that affect the public in such an incredibly important way, that is the time this Legislature has taken a severe drop in credibility. If this Legislature does not have credibility, it has nothing.

I will say a lot more about the supplementary estimates and the main estimates in third reading, and also about the main estimates during the Committee stage. However, I can tell you one thing. If the Members are pleading that they should be given credibility, then they have a lot of explaining to do. There is nothing they have done on the financial side to demonstrate that they are at all credible.

Hon. Mr. Phillips: I intend to be rather brief on this issue, but I do feel it is important to stand up and lend my support to the bill that is before us. It is one of those situations where you are damned if you do and damned if you do not. The Member for Riverdale South has risen in the House several times during the past few weeks at Question Period and during budget debate and insisted we bring out the final figures as soon as we know them. The second we bring out the final figures, that Member is all upset about them.

I have to wonder if the Member would be just as upset over those figures if they showed less of a deficit than they do now, showing more than what we thought it would be. We always told that Member, and other Members of this House, that those figures could be higher, give or take one percent. We always mentioned that before, but perhaps it is painful for some Members who opposed the initiatives this government has taken to actually see that we have been dealing with a rather serious problem and that we are trying to solve that problem.

The issue has also come up where one Member attacked the Speaker today in the House. I am disappointed about that. I am not going to say much more than that. That particular Member has taken leave of the standard rules of this House and consistently attacked the Speaker, Table officials, government officials and others in here. That is sad for our House, and it really lowers the level of debate in our Legislature. It is unfortunate that that is happening. I would ask the Member, in the heat of the debate, to cool his thoughts and comments on those officials, because those people cannot defend themselves, and it is not fair for any Member to do that. I know that if I were taking that approach, that particular Member would be the first Member to stand in his place and chastise me for attacking people who cannot defend themselves. I would beg that Member to heed the concerns that have been issued from this side of this House, and even from others in his own party, who have suggested that he not take that approach and perhaps cool it a bit. It is certainly lowering the level of debate in this House.

I am not going to comment any more on the bill, other than to say that we are attempting to balance our budget. This is one of the initiatives that we hope will allow us to do that. I will be supporting the bill that is before us.

Mr. Harding: I would feel remiss not to join in this debate that has picked up along the way regarding this bill and comments that have been made in the Legislature today. I have to say that I am absolutely flabbergasted with what I have heard from the government today regarding their position and opinions on this matter, and the matters that we have talked about in this bill. I have actually heard the independent Member for Ross River-Southern Lakes stand up and say that he will not stand any more for the criticism that he is getting.

In their seven months in power, we have seen misleading statements given to the public, which have created a gloom-and-doom recession in this territory. This has raised unemployment from eight percent to 16.4 percent. We have seen broken promises on raising taxes, higher phone bills, higher power bills and, today, the most pathetic and ludicrous performance by the government in Question Period. When pointed questions were put to them regarding their plan for dealing with this crisis, there was not one Minister who had one firm answer on how they were going to deal with it.

Speaker’s Statement

Speaker: I would caution the Member to avoid abusive and insulting language and to try to keep his remarks to the bill at hand, which is an amendment to the Fuel Oil Tax Act. I know that other Members have strayed. I would like to remind all Members, and those who are to speak, that we are addressing an amendment to the Fuel Oil Tax Act.

Mr. Harding: They most certainly have strayed. The finances of this government are in terrible shape due to the handling of our financial situation in this territory. It is only going to get worse. Only by the saving grace, ironically enough, of the perversity factor will the territorial government remain unscathed by the recession that is hitting the people of this territory. Today, we get the astounding announcement, with no information, cutely put at the end of the bill, where the Government Leader closed debate, that their projections regarding their supposed deficit are actually going to be $20 million more. What kind of credibility does this government have? On a daily basis, it gets less and less. Do they expect to us to idly sit by and leave the reins of this territory in their hands without asking questions? I suggest to you, Mr. Speaker, that we will not do that. We will watch them. We will ask questions, and we will try to pressure them into doing the right thing for a change.

The Leader of the Official Opposition was chastised for raising questions. I suggest that if the integrity of this House is as it should be, raising the questions will certainly not lead to misleading the public. The questions should be raised. If in fact the questions were unjustified, then the public will determine that based on the evidence that is put forth to them by the Members of this House. That is not diminishing the integrity of this House in any way, shape or form.

The Speaker and the other people involved in this will have ample opportunity to do this. The question has been raised and, when we stop raising questions in this House, then we are in real trouble because then the democratic process in this territory is severely flawed.

I was shocked at the comments of the Government House Leader who on a periodic basis determines that he is in charge of this Legislature. The Government House Leader often yells out for Members on this side of the House to behave as he thinks things should be. He often interferes with the Speaker when he is making rulings because he believes it should be so. The Government House Leader has no credibility in any way, shape or form on that subject and very little on any other, and as he continues to make such sanctimonious comments, that credibility is lessened.

This tax bill is ludicrous. We have proven time and time again that it is not needed. The government said that it had no choice but to raise taxes to produce the revenues to balance the budget but yet they managed to find $1.8 million for the Dawson sewer and water system and, in one department alone, $400,000 in cuts, totalling $2.2 million, which is fully one-quarter of the tax increases proposed for this year - this in a budget that was presented to the people of the Yukon as one where there was no choice but to raise taxes. I say that the people of the Yukon know what the real score is and they will not buy the arguments put forward by the Members opposite in the government. I will not support this tax bill and I am shocked at some of the comments that have come forth from the government today.

Ms. Joe: I want to rise on behalf of the constituents in Whitehorse Centre who oppose this tax increase. I have to tell this House that there are many. I talk to people all the time in Whitehorse Centre. They hear on the radio that the Ministers on the side opposite are announcing to the public that we have a budget here that is the largest budget ever in the history of the Yukon. Not only that - they hear Ministers saying that we have lots of money in this budget, we know that hundreds of thousands of dollars are going to lapse and that has been indicated over and over again. Every time we sit down and every time we question the budget we question whether or not the budget is real and we deal with amendments that are changes to the budget.

I have to tell this House that people in my riding do not believe what is happening any more. They do not believe what is happening because they do not understand the inconsistencies in the information that is coming from the Ministers on that side of the House. On one hand, they stand there and they talk about tons of money that they are giving to people and communities for things that were not budgeted for in the budget. On the other hand, they hear the Minister of Finance saying that we need this money because we do not have enough. I really question the very fact that we have to deal with a bill in this House that is not needed. It is not needed. The Members on that side of the House will never convince some 75 percent of Yukoners that that is the case, because it is not.

I want to follow up a bit more on comments that we made in regard to what the Member for Whitehorse West was saying about negotiations and deals that might have been made. As I listened to him speak, he was talking about inconsistencies from the Government Leader in regard to policies that have been set down. If you cannot believe what the Government Leader is saying in regard to policies in this House, or if he turns around and changes his mind every time it strikes him to, then what are Yukoners are going to believe if they cannot believe what the Government Leader is saying?

I would like to believe in this House that they do have policies. We found out that, if they have, they do not know what they are.

We can understand that, if he stands up in this House and says one thing, then turns around and does something else. What is a policy, if the Government Leader does not know what it is? The Member for Whitehorse West was criticizing the inconsistencies of the Government Leader. Yukoners are really starting to question what that government is all about. I have to say once more, on behalf of the people from Whitehorse Centre, who disagree with this bill, that I will not support the bill.

Speaker: If the Hon. Government Leader now speaks, he will close debate. Does any other Member wish to be heard?

Hon. Mr. Ostashek: I will try to be brief, but I must get on the record with my closing remarks after the level of debate that has taken place on this piece of legislation.

I am going to try and confine my remarks to the bill, because two of the Members on this side of the House have already voiced issues that I was going to mention with regard to the remarks of the Leader of the Official Opposition. I do not need to put those remarks on the record again, except to say that I fully support both those Members and the comments that they made about the actions of the Leader of the Official Opposition.

We have Members sitting on the side opposite that have been hammering at me in my capacity as Minister of Finance, since April 10, to come into this House with a wrap-up of the year-end. When that information is tabled in the House, I am accused of misleading the Members of the House. I find that very disheartening.

We have qualified the figures since day one, stating that the year-end supplementaries that balanced the deficit as of March 31 would be plus or minus $5 million, on either side of zero.

In our supplementaries, we forecast a $7 million deficit. We are then accused of making misleading statements, and the Member for Faro gets up and says that we underestimated by $20 million - we did no such thing. We estimated a $7 million deficit. Consulting and Audit Canada, which the Member for McIntyre-Takhini condemns bitterly, was a little more generous to him than what the final figures are. They came in with $5 million.

When I presented these figures to the House, I said that they were within a couple of million dollars of what was given to me by the Finance department on or about the second week in October last year, when we took office. Those were the calculations they had, and were based on the money that was already spent by the Members opposite and not on the money we were going to spend.

They talk about credibility. They went to the public and called an election without telling the public the disaster they had made of the finances of the Yukon. That is what they did.

Certainly, we had to raise some taxes. We said we were going to bring in a balanced budget, and we did.

They raised all kinds of issues, saying the supplementaries were padded. If we had spent all the money in the supplementaries, what would this figure be? There were a few computers bought, but there is $700,000 of MLA pensions that have not yet been accounted for in this.

If we are going to talk about a credibility problem, we should look at the previous administration and how they misled the public.

This tax bill was necessary, as are the other tax bills that were presented to go with this budget. This is a balanced budget.

The Member for Whitehorse Centre says that we say there is all kinds of money in the budget. We can be thankful in the Yukon that there were a lot of capital projects being funded by the federal and American governments or we would be in very serious shape, based on the figures that were left for us to deal with.

If we still had the $50 million surplus, the decision on Curragh would be very easy; even if we had the $30 million surplus that was forecast in their main estimates, it would be easy - that is the surplus they had forecast.

It was gone, wiped out and gone.

They talk about a credibility problem. This tax bill is needed with the other tax bills, as I said, to bring in a balanced budget and I urge the Members of this Legislature to support this measure.

Some Hon. Members: Agree.

Some Hon. Members: Division.


Speaker:  Division has been called.

Mr. Clerk, would you kindly poll the House.

Hon. Mr. Ostashek: Agreed.

Hon. Mr. Phillips: Agreed.

Hon. Mr. Brewster: Agreed.

Hon. Mr. Phelps: Agreed.

Hon. Mr. Fisher: Agreed.

Hon. Mr. Devries: Agreed.

Mr. Abel: Agreed.

Mr. Millar: Agreed.

Mr. Penikett: Disagreed.

Mr. McDonald: Disagreed.

Ms. Joe: Disagreed.

Mr. Joe: Disagreed.

Ms. Moorcroft: Disagreed.

Mr. Harding: Disagreed.

Mr. Cable: Disagreed.

Mrs. Firth: Disagreed.

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

Speaker: As the vote is tied, pursuant to Standing Order 4(2), I must cast the deciding vote. Voting for a bill at second reading provides the House another opportunity to decide the question. I therefore vote for the motion and declare the motion for second reading of this bill carried.

Motion for second reading of Bill No. 89 agreed to

Bill No. 29: Second Reading

Clerk: Second reading, Bill No. 29, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek: I move that Bill No. 29, entitled An Act to Amend the Tobacco Tax Act, be now read for the second time.

Speaker: It has been moved by the Government Leader that Bill No. 29, entitled An Act to Amend the Tobacco Tax Act, be now read a second time.

Hon. Mr. Ostashek: I will be brief on this bill. The bill will increase taxes levied on tobacco products. The rate of taxation for cigarettes will rise from 3.2 cents per cigarette to 8.2 cents per cigarette. Prior to the implementation of this increase, the Yukon had, by far, the lowest tobacco tax in Canada. Our rate was less than one-half of the next lowest provincial tax. The increase will bring our rates to about the middle of the range of Canadian tobacco taxes.

It is apparent that no government enjoys the prospect of increasing taxes but, on occasion, it is necessary. We have found this to be one of those occasions and, given our low existing rates of taxation on tobacco products, we have chosen this as an area where the government will be raising more revenue. It is, of course, apparent that an increase of this magnitude will have some impact on consumption, but it is almost impossible to determine that impact with any certainty.

Tobacco taxes were last increased in 1986. It appears that there was little, if any, change in the consumption patterns at that time; however, the increase was proportionately less on that occasion than is the present increase.

For purposes of our revenue estimates, we are assuming that there will be a 20-percent decline in the consumption of tobacco products. Only time will tell us if this proves to be a reliable estimate. Our current yield from these taxes is approximately $2.4 million per year. This proposed rate increase, combined with the expected decline in sales, is expected to bring that figure to $4.9 million per annum. These monies are essential if we are to maintain service to the public at more or less the current levels and to avoid public sector layoffs.

In this regard, I am looking forward to the support of the Members for the measures encompassed by this bill.

Motion for second reading of Bill No. 29 agreed to

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

Speaker: It has been moved by the Government House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Motion agreed to


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? We will take a brief recess.


Chair: I will now call Committee of the Whole to order. We will be discussing Bill No. 9. Is there any general debate?

Bill No. 9 - Interim Supply Appropriation Act, 1993-94 (No. 3)

Hon. Mr. Ostashek: There probably is not that much more that needs to be explained on this bill. We have already passed two of them during this sitting and Members will know their purpose. The sum of $82,049,000 being requested is much more than will be spent during the month. It will permit departments to commit funds for contracts they let in June, which will be preformed over a number of months. The monies identified in this bill have been derived from a canvas of the departments and will, as with all interim supply, lapse at the end of the month.

Mr. McDonald: Once again the Official Opposition supports this measure. I would like to ask for an explicit statement from the Government Leader about the need for capital works to proceed unhindered. I would like him to give us some indication as to what kinds of measures the Ministers are taking to exert their will on their departments, to ensure that the capital works are proceeding, the program is intact and what jobs associated with the capital budget will see the light of day. What is the government doing?

Hon. Mr. Ostashek: I assure the Member opposite that, with these interim supplies, the capital projects will be going ahead. The contracts are being let as quickly as possible, putting as many people to work as we possibly can. The Ministers are in constant touch with their departments and urging them to get the contracts out so the work can be accomplished. We know and realize, as the Member opposite does, in this time of the Curragh shutdown, that we have to put as many people to work as we possibly can this summer, and we are urging the departments to do their work as quickly as possible and get the contracts out so we can get the people working.

On Schedule A

Schedule A agreed to

On Schedule B

Schedule B agreed to

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Title

Title agreed to

Hon. Mr. Ostashek: Mr. Speaker, I move you report Bill No. 9 out of Committee without amendment.

Motion agreed to

Chair: We will be go on to Bill No. 56, the Public Sector Compensation Restraint Act.

Bill No. 56 -Public Sector Compensation Restraint Act

Chair: Is there any general debate?

Hon. Mr. Ostashek: I do not have much to say in general debate on this bill at this time. The purpose of the bill is to roll back the wages of managerial staff in government. As I indicated to the Member for Mount Lorne, who was indicating to me that she was going to be moving an amendment to cover the political staff, our political staff has already been rolled back. If the Members opposite wish to have their staff cut back, we will be happy to accommodate them in that respect.

The Member for Whitehorse West indicated that he would be proposing an amendment, as he was concerned about the bill being retroactive. Managers were advised before the end of January that these actions would be taken. All managers, even those away on leave, were advised in writing that, as of April 1, the wages would be rolled back. I do not believe that the amendment is necessary. I believe the managers were well informed of the decision with adequate time for them to get their financial affairs in order.

Mr. Penikett: On the question of the retroactivity, it is interesting that the managers were informed in January, but it is not relevant to the point that I made, which is the point that has been made before by the Minister of Justice - at least, when he sat on this side of the House - that it is fundamentally problematic for a parliament to present retroactive legislation. The executive of government in our system does not have the right to assume legislation will be passed as of a certain date.

The tradition in our system is that the executive proposes and the Legislature disposes. The idea that a law can come into effect retroactively has always been considered to be extremely dubious in our parliamentary and legal traditions. I am not saying that it has not happened in the past - this is a point that is different from the point the Government Leader was making. It is one thing for an employer to inform employees that something is going to happen, but the ultimate decision-maker here is the Legislature, and the Legislature would be quite within its rights to insist that no law take effect until it has actually passed the Legislature.

That is why, when we get to the relevant clause, I will be moving that amendment. It does not change the substance or the intent of the bill, but it simply makes - and this is a procedural point - the effective date one of the passage of the bill rather than a decision chosen by the executive.

Hon. Mr. Ostashek: I find it quite interesting that the Member is coming forward at this time with this concern. While I am a new Member to this Legislature, I am sure that this is not the first time that a bill has been passed in this Legislature that included a retroactive clause.

I would say to the Member opposite that I can appreciate his concern, but I believe that, while he may not agree, we did notify everyone. They were fully aware of what was going to happen. There will be a cost involved if the amendment is passed.

Mr. Penikett: I understand that, but that cannot be the responsibility of the Legislature because, without being picky about this, it was quite within the realm of possibility for the government to have introduced this legislation earlier. If, in fact, they wanted to have it passed it by April 1, they could have moved heaven and earth, or done whatever was necessary, to have achieved that.

The point I make is essentially the same. I do not want to waste time by dragging out Hansard and quoting, ad nauseum, the speeches of the former Minister of Justice, but he certainly told us, on the one occasion when I tried to move a bill with a retroactive effective date - it so happened, on this occasion, that it was April 1 - he mounted vigorous parliamentary opposition. I would not say they were stalling tactics, but it was vigorous opposition. He managed to persuade the government of the day that it was appropriate to change the effective date of the legislation - in that case, a tax measure - and delay it until the Legislature had actually dealt with it.

I was persuaded by what the Minister of Justice, in his capacity as the Leader of the Official Opposition, had to say then, and have tried to be mindful of his advice ever since.

I do not want to spend an excessive amount of time on this, but I think the point is that if you get into presuming that you can change the law and have it come into effect retroactively, it raises a number of quite serious potential problems - I know the Government Leader is not doing this - if he considered the possibility of a government presenting a bill with a proclamation date a year previous. If the bill had some offence sections in it, you could have something quite Draconian, which I am sure the Government Leader would recognize. People could become guilty of an offence in a previous year, or a previous month, without them ever knowing it. In fact, they could not have known it because the law had not passed.

This issue is not one that is unique to this bill or this parliament. This is an issue that is raised every time a government anywhere proposes to make a measure retroactive. All I would say to the Government Leader is that every time a government does it, it is controversial. The whole point of parliamentary systems is that, while the government has proposed to do something, the Legislature has the right to debate it, it has the right to amend it if it wishes, and to make a decision about when the law should come into effect. It is not a decision that can be made by the executive branch or by the Cabinet alone.

Hon. Mr. Ostashek: I do not intend to get into a long debate on this. If the Member does present an amendment, we certainly will not be supporting it. We will see what happens. I just want to point out to the Member opposite that had he made it known that he felt so strongly about this issue, we probably would have pushed the bill through in March to accommodate his wishes. That was not the case. It was announced in this sitting of the Legislature in plenty of time for everybody to know. Nobody made any representation prior to April 1, so I ask the Member to take that into consideration.

Mr. Penikett: I take the Government Leader’s point, but I hope that he would also understand that, in our system, what opportunities there may be for private representations or private consultations are not relevant. The Legislature can only deal with a matter once it has been tabled in the House. I can actually only respond to concerns - such as the one I have heard from constituents, including public employees - on the floor of the House once it has been brought to my attention. That is what I am doing and that is the way I am supposed to do it.

Hon. Mr. Ostashek: I will not continue debate on this any longer. I will just say that I do not consider this precedent-setting.

Ms. Moorcroft: The Government Leader said during second reading that his political staff took a pay cut. How much was the cut: two percent or five percent?

Hon. Mr. Ostashek: It is the same as what is in the bill - two percent plus the four percent, which makes it about six percent.

Ms. Moorcroft: It is the same as was in the bill but there is a five percent pay cut for MLAs and a two percent pay cut for managers. When did this pay cut for political staff actually take place?

Hon. Mr. Ostashek: The information I have is that it started as of April 1.

Ms. Moorcroft: Was the cut made retroactive or was it announced and made effective immediately on April 1?

Hon. Mr. Ostashek: The announcement went out on January 29, 1993. They had 60 days notice that the cut was going to start on April 1.

Ms. Moorcroft: Was it a voluntary cut or was it imposed?

Hon. Mr. Ostashek: It was a cut that was imposed by government. This is what we were recommending and our staff certainly did not complain bitterly about it. They understood the financial constraints the government was in and they were prepared to do their part.

Ms. Moorcroft: How about the merit increases? Were they affected?

Hon. Mr. Ostashek: Yes, they will be as they come up.

Ms. Moorcroft: How much will the cutback on merit increases be?

Hon. Mr. Ostashek: It is about four percent.

Ms. Moorcroft: Are these permanent cuts to the base salary or are they just for the present Yukon Party support staff?

Hon. Mr. Ostashek: Could I just ask the Member to repeat that question?

Ms. Moorcroft: Are these permanent cuts to the base salary or are they just for the present Yukon Party support staff?

Hon. Mr. Ostashek: It would also apply to any other staff that we hired. The wages have been rolled back two percent - the categories have been rolled back two percent.

Ms. Moorcroft: What is the duration of the cuts? Are they for one year?

Hon. Mr. Ostashek: The two-percent cut is a permanent cut.

Ms. Moorcroft: What about the additional four percent?

Hon. Mr. Ostashek: At this time the four percent is for one year; we will assess our position a year from now to see what the financial resources of the government are. We may have to bring in other measures - we do not know. The merit pay will be rolled back for one year - the COLA clause, as the Member from Riverdale calls it.

Ms. Moorcroft: What about benefits such as the Yukon bonus, dental plan and leave in lieu of overtime. Have any of these been affected by those cuts?

Hon. Mr. Ostashek: No, they have not.

Ms. Moorcroft: There seems to be a great deal of activity going on, which few people outside the inner sanctum of the executive offices have access to. Had the Government Leader not mentioned it here, in a fit of anger, we might never have known what happened. Are there any other wage cuts that the government has imposed on staff?

Hon. Mr. Ostashek: I am not sure what the Member is saying. We announced this many months ago; the original press release was dated January 29. It said that political support staff and Cabinet Ministers who are order-in-council appointments will have their salaries reduced by two percent. Also, all government managers will have their salaries reduced by two percent and performance pay and cash gratuities for managers would be withheld. For managers the changes will amount to about a five-percent reduction. The measures were to take effect April 1, 1993.

Ms. Moorcroft: Why then did he not include the pay cuts for the political staff in the Public Sector Compensation Restraint Act?

Hon. Mr. Ostashek: Our understanding is that it is not necessary.

Mr. Cable: Perhaps we are tilling old ground here but if the Government Leader will be patient, what does the two percent, referred to under section 5 of the act, amount to in total for all management categories referred to in that section?

Hon. Mr. Ostashek: The total savings, as I said during second reading, is around $800,000.

Mr. Cable: Is that for management categories or the total savings for all three elements: the MLAs, management and the judges?

Hon. Mr. Ostashek: For the managers, it would be $369,773.

Mr. Cable: What is the total number of management persons involved under section 5?

Hon. Mr. Ostashek: As of May 12, there were 195 managerial positions. Included in these 195 positions are the deputy minister and legal officer categories. Of these positions, 173 are filled and 22 are vacant.

As the Member opposite is aware, I have made statements in this House many times about how we are going to reduce the size of government by attrition. Of those 22 vacant positions, we are not sure how many we will be filling.

Mr. Cable: Does that total of approximately $800,000 include benefits that are associated with, or related to, salary levels?

Hon. Mr. Ostashek: It does not relate to the benefits, just the actual salary.

Mr. Cable: Correct me if I am wrong. When was the next pay raise for the managerial people to have gone into effect?

Hon. Mr. Ostashek: It is my understanding that the pay raise comes in after the bargaining with the public sector employees.

Mr. Cable: According to the management grid, when was the next pay raise for management persons anticipated, as referred to under section 5 of the act?

Hon. Mr. Ostashek: There had been nothing scheduled or planned.

Mr. McDonald: I would like to clarify one point. The Minister indicated that the savings for the managers was $369,000. Is that correct?

Hon. Mr. Ostashek: Yes, under section 5, that is the figure that we have - $369,773 - and that is for salaries only.

Mr. McDonald: What is the total savings realized for managers?

Hon. Mr. Ostashek: I can get back to the Member with the exact figure, but it is approximately $750,000.

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Clause 3

Clause 3 agreed to

Amendment proposed

Ms. Moorcroft: I move

THAT Bill No. 56, entitled Public Sector Compensation Restraint Act, be amended in clause 3 by adding the following new section:

3.1 For the year April 1, 1993, to March 31, 1994, the pay or remuneration of persons employed under Part 1 of the Cabinet and Caucus Employees Act are reduced to an amount that is five percent less than the amount payable on March 31, 1993.

Chair: The amendment reads as follows:

THAT Bill No. 56, entitled Public Sector Compensation Restraint Act, be amended in clause 3 by adding the following new section:

“3.1 For the area April 1, 1993 to March 31, 1994, the pay or remuneration of persons employed under Part 1 of the Cabinet and Caucus Employees Act are reduced to an amount that is five percent less than the amount payable on March 31, 1993.”

Is there any debate on the amendment?

Ms. Moorcroft: I rise to move this amendment on a matter of principle and a matter of ethics. It is our view that a government that instigates a wage cut to deputy heads, managers of departments, the president of the Workers Compensation Board, board members, judges and legal officers, as well as MLAs, should also include their own political staff. It begs the question as to where the government places its priority and what really are the real objectives of the bill before us.

To our minds, if the deputy Ministers, managers and MLAs are to take a cut in pay, then it should only be in keeping that the political staff covered under the Cabinet and Caucus Employees Act, should also be cut. The message that this relays is that what is good for the goose, is not so good for the goslings. Staff are very important, but if it is the political will of the government to lessen government spending through these measures, then surely their political will should extend to the political employees.

This is the year of contract negotiations with the Public Service Alliance of Canada. Right now there seems to be an impasse in these talks. What we see in here, in between the lines, is the government setting an example of the kinds of cuts and concessions that they will be asking of the union. It is not that we wish to devalue the work of the staff, but we feel that it is only fitting that if restraint is the opening posture of the government, and if they will be expecting wage concessions from the union, then it should apply straight across the political board to include political staff.

We have already seen evidence of thousands of dollars going to outside consultants in the executive offices. Political appointees - Dale Drown and Merv Miller - have pulled down handsome contracts for their part in the transition. These people do not even live here in the Yukon and yet they were paid enormous amounts of money for their services.

I see the Government Leader laughing and shaking his head. Perhaps he does not agree that they were paid enormous amounts of money for their services, but that is a matter of public record. Considering the fruits of their labours, the obviously flawed financial review and the poor selling job the government has done on its budget, we think that there are people here who could have done a much better job and certainly not at these inflated rates of pay. We see a government that preaches restraint and practices extravagance. We believe that everyone in the executive offices should take the same cuts, if it is the political will of the government, and therefore I would urge Members to support this amendment to reduce the remuneration of persons employed under the Cabinet and Caucus Employees Act to an amount that is five percent less than the amount payable on March 31, 1993. That is the same amount as has been put in this act for the MLAs.

Hon. Mr. Ostashek: I am going to need some clarification here, because our political staff has taken a cut already. Is the Member saying that, by her amendment, it is going to carry over to the Opposition’s political staff as well? Is that what the Member is saying?

Ms. Moorcroft: The Minister has his answer in the language of the amendment, which is the people employed under Part 1 of the Cabinet and Caucus Employees Act. The Minister has said that he has unilaterally made a pay cut, but he could reverse that at any time; it is not in legislation. However, there is legislation before us that puts the restraint package for MLAs, for managers, for judges, for the president of the Workers Compensation Board, legal officers, deputy heads, into legislation. What is his objection to putting into legislation the pay cuts to the political staff as well?

Hon. Mr. Ostashek: I have no problem putting it into legislation, but I do have some problem with the extent to which the Member wants to take it. That would amount to a nine-percent cut for the staff - the four-percent decrease they have had, plus the five percent off the base pay, amounts to nine percent - and that is excessive compared to what the other people in government have taken. If we could pass another amendment to the amendment to reduce that to two percent, then we will support it.

Mrs. Firth: I am going to make two comments. This amendment that the Member is proposing is somewhat inconsistent with the amendment that her colleague, the Leader of the Official Opposition, is proposing in that something should not be retroactive. I believe this amendment is asking for a retroactive deduction.

That is the first point I want to make. The second is a question for the Government Leader. Why did he not just do what this amendment recommends? Why did he not just make the change so that the political staff also took a five percent pay cut, just like the management and politicians were doing? Why did everyone across the board not take a five percent pay cut? Why did he do this two percent, the two percent on the ranges, and then the merit increases? What was the rationale for doing it that way.

Hon. Mr. Ostashek: The rationale was to have it in line with the managers. The Member opposite should know that the MLA cut is only for one year, then it will revert back. These will not. They are decreased from now on by a range of two percent. It is not just for one year.

Mrs. Firth: That is not the question. Answer the question. Why did the Minister do it this way?

Hon. Mr. Ostashek: We did it that way to bring the political staff in line with the managers.

Mrs. Firth: Why did the government do it that way with the managers? Why did everyone not just get a five percent pay cut, period?

Hon. Mr. Ostashek: I guess that is another way we could have handled it: a straight five percent pay cut, and give them the merit increase. However, we were getting rid of the merit increase for managers at the same time. We were trying to equalize this out between all people employed by government.

Mrs. Firth: It still does not make sense to me, but I want to follow up on a comment the Minister of Finance made about it being forever. I heard him say, this afternoon, that the two percent was forever. Now, he is saying that again.

When I read the legislation, I interpreted it as not being forever. I interpreted it as saying that it shall not be increased before April 1, 1994. To me, that means that it is discretionary. That is entirely different to what the Minister of Finance is saying. He is saying that this legislation means that it is forever. It is not. When one reads the clause, it means that it is discretionary and can be increased, but not until after April, 1994.

Hon. Mr. Ostashek: I disagree with the Member on her interpretation. If one looks at section 5 - and I am sure that is the clause she is reading - it says, “(2) The pay or other remuneration established by subsection (1) shall not be increased before April 1, 1994.” That means that the two-percent cut is in there. We may increase it after April 1, 1994, but it will not be reinstated and then increased. The two-percent cut is there. There is nothing to say that after April 1, 1994, if the finances of the government are such that we can put raises in place for people, it would be raised from that base. We would not be putting the base back up to the categories they are in right now.

We would not be reinstituting the two percent and then raising the pay, so the cut is there forever. We are lowering the salary base rate.

Mrs. Firth: It has to be a conscious decision to change it; it is not automatic. If that was the government’s intention, why did they not leave out the date and put “the pay or remuneration established by this section shall not be increased”?

Hon. Mr. Ostashek: One of the reasons was that we wanted to confirm that there would not be anything happening before April 1, 1994. Maybe that is why, in the legal drafting, they put the April 1, 1994 date in the document.

Mrs. Firth: That does not make sense to me. If it was the government’s intention to make this a two-percent cut forever, as the Minister has said, it should have been put in the bill. It should say that the pay or remuneration established by subsection 1 shall not be increased - period.

If the bill had stated that, it would mean that it was not ever going to be increased. By saying “before April 1, 1994,” it gives the government the option to raise pay after the year.

Does the government want the option to raise the pay? I do not get the impression from the Minister of Finance that they want the option to raise pay if he is saying it is a two-percent cut forever.

I do not think it is a complicated point. If it is the government’s intention not to reinstitute that two percent again, and that it is gone forever, that is what the clause should say.

Hon. Mr. Ostashek: From my interpretation, I think that is what the clause says. I am sure that the Member does not want us to have legislation that says we can never raise managerial salaries again.

We are lowering the base rates of salaries by two percent at this time. Any other raises that take effect will take effect from the lowered base rate.

Mrs. Firth: I have one final point. The Minister should not say that it is two percent forever, then.

Hon. Mr. Ostashek: It is that the base is being lowered by two percent. There could be increases in the future.

Mr. Cable: Just to clear my head, because we seem to be getting into a lot of pettifoggery here, in speaking to the amendment, I think it is clear on the facts that the government has in fact reduced in a less-than-formal manner the pay of the Cabinet and caucus employees. From what I have heard from the Government Leader he is prepared to put that informal reduction into statute form, which would appear to meet the requirement of the mover of the amendment. Unfortunately, the way the amendment is written it appears to me that there is going to be a double hit on these people - compounding. I was just wondering if that was the intention of the Member who moved the motion. If it is not, perhaps we can redraft the amendment to accommodate their wishes?

Ms. Moorcroft: There are a couple of points of clarification. The Member for Riverdale South was saying that using the date April 1, 1993, was inconsistent with the amendment moved by my colleague. However the date of April 1, 1993, is already used twice in this act, so if both of these amendments are carried then it would agree with the retroactive principle.

I am not proposing a double decrease. The amendment simply calls for a five percent wage cut. I do not know how to clarify that any further; I thought it seemed straightforward.

Hon. Mr. Ostashek: We may have to get some rulings on this; we seem to be getting bogged down. I want to put the government’s position quite clearly on the record. Our staff have taken a pay cut already, as of April 1. They are not political people, in the sense that they are not elected to office, and I believe that a decrease of this magnitude is far too much. I will support the amendment if the Member will go for a two-percent cut plus the rollback of four percent COLA clause for all the caucus staff. To take a nine percent cut, when no one else is taking anything to that effect, except the MLAs - which is only for one year, at which time it will be reinstituted - whereas the political staff’s it is not, I think is inequitable.

Ms. Moorcroft: I am not comfortable drafting amendments to the amendments, on my feet. What I would like to suggest is that we stand aside this clause, and then discuss that issue to clarify it.

Chair: Are the Members agreed to stand over the amendment?

Motion to stand over the amendment inserting clause 3.1 agreed to

On Clause 4

Chair: Is there any debate on clause 4?

Clause 4 agreed to

On Clause 5

Clause 5 agreed to

On Clause 6

Mr. Cable: I am just wondering what it adds to the preamble of subsection 5(1) and the subsection (2). Perhaps I am just not seeing it, but it appears to be redundant. Am I missing something?

Hon. Mr. Ostashek: Maybe I can clarify it for the Member for Riverside, who has a legal background that I do not. Section 5 refers to the people themselves and the salaries they are getting. Section 6 refers to the pay ranges.

Clause 6 agreed to

On Clause 7

Clause 7 agreed to

On Clause 8

Clause 8 agreed to

On Clause 9

Clause 9 agreed to

On Clause 10

Amendment proposed

Mr. Penikett: For reasons that I have already made clear, I move

THAT Bill No. 56, entitled Public Sector Compensation Restraint Act, be amended in clause 10 at page 3 by deleting the clause and substituting for it the following:

“10. Notwithstanding any reference to April 1, 1993, in this act, this act and every provision in it shall come into force on the date of Assent.”

Chair: Do the Members wish the Chair to read the amendment? The amendment reads:

THAT Bill No. 56, entitled Public Sector Compensation Restraint Act, be amended in clause 10 at page 3 by deleting the clause and substituting for it the following:

“10. Notwithstanding any reference to April 1, 1993, in this act, this act and every provision in it shall come into force on the date of Assent.”

This was moved by the Hon. Mr. Penikett, Leader of the Official Opposition. Is there any debate?

Hon. Mr. Phelps: The Leader of the Official Opposition made comments about remarks of mine in Hansard. I have not had time to really go through Hansard thoroughly. I have been browsing through the debate in 1986 on the tobacco tax. I do not know if that is the one that he is talking about.

The case there was fairly specific, in that there was an act that did have a retroactive clause, with regard to the increase in the tax on tobacco products. It claimed to be retroactive, and the government issued instructions to retailers on the basis of the original bill. Subsequently, the bill was amended with respect to the rates of increase of tax on various kinds of tobacco products.

The concern that I raised there had to do with the fact that, by increasing the taxes on an unfair basis, and making it retroactive, then later amending the bill, what happened was that retailers obtained a lot of extra money that they should not have obtained. That was the significance of the retroactivity. Perhaps I am not referring to the right debate. I would be quite happy to review that carefully, in consideration of the Member’s comments.

Mr. Penikett: I have no knowledge of this. It may be that, in law school, there was a course in teaching advocates to artfully argue either side of a question.

As I recall the debate, the Minister of Finance at the time tried to pass the bill before April 1. The vigour, energy, wit and eloquence of the Minister of Justice rendered that effort ineffective. Debate on the bill made the April 1 date retroactive. It is true that we then amended the bill. If I remember correctly, the only difference that I would have with the Minister of Justice is that the retailers were inconvenienced much more by the amendment than they would have been by the April 1 tax. The Member is quite right that there would have been people collecting taxes before the bill had passed the Legislature, and that is wrong, but I also think it is wrong for something like a pay cut, or other reductions, to go into effect before the Legislature passes the bill. This is different than the situation where a Minister or manager decides to spend less than they have allocated in the budget.

This is different, because the pay, with respect to some of the people affected here, has a statutory base. Having made my point, I do not want to prolong the debate, unless the Minister of Justice wants to spend some time on it, in which case I will be happy to join him.

Hon. Mr. Phillips: I am going to have a hard time supporting this amendment, basically on the principle that we knew two or three months ahead of time that the government was going to do this. Although we did not bring the legislation in before April 1, the Leader of the Official Opposition knew that it was coming. He never mentioned it, at that particular time.

We know the financial position of the Government of the Yukon. It is not going to impose a financial hardship for me to give up the three months’ cut I received. I am not prepared to do that. I am prepared to accept the three months’ cut, as an MLA. Because of the salary range I am in, it is fairly significant to me, but I feel a responsibility to do my part. I have not heard a hue and cry from all the managers out there. Most of them also know that the Government of the Yukon is not in great financial shape.

Personally, I am going to vote against this amendment. I am not going to accept that money. I believe that I should do my part. It is a small part, and I am prepared to do it.

Mrs. Firth: That is not really the issue, as I see it, but to each his own in the way they interpret the issue.

I agree with the principle that we should not be retroactively doing something. I think it would have been better if the Leader of the Official Opposition could have brought it to our attention before April 1 and we could have proceeded with it then. We may have been able to make some changes at that time.

However, as the old saying goes, we have made our bed and we have to lie in it. I know for myself and my colleague that, when we were first alerted about this issue, we agreed with the issue and the principle. I believe all MLAs did. The Liberal Leader also agreed with it. We accepted it as an unusual occurrence. I believe the comment that was publicly made was that all the MLAs were agreeing with the principle.

We also agree with the initiative. We all agreed that, as of April 1, we would take a pay cut. It did not seem that anyone was debating, at that time, about whether or not it was going to pass. Everyone agreed with it, and the assumption was made that it was going to pass.

I have some concerns about the whole thing. It is a trendy political initiative. How are politicians going to stand up and disagree with taking a pay cut - no one is going to do that. We all bought into it. If we can say to ourselves, as I am saying, that we are not going to set a precedent, because we are not going to let this kind of thing happen again - and it is entirely different from raising taxes - and that, before we take any pay cuts, we will not let it happen like this again. That way, we will not have to be concerned about the principle of retroactivity.

I do not think that it is in our best interests to put Finance through the administrative task of trying to give two months’ salary back to everybody now. I am not prepared, as a Member, to ask them to do that.

I think that we have to recognize that we could have done this a little better and more efficiently so that we were not raising concerns about setting precedents, disrupting principles and retroactivity, so I am going to disagree with the amendment and go on the basis that we have made the decision and let us get on with business.

I appreciate the point that the Leader of the Official Opposition is making and I am prepared to make a commitment that I will try my best not to let it happen again; I cannot say that I am absolutely 100-percent sure, because I am just a human being.

We will not let it happen again.

Hon. Mr. Ostashek: I will not be very long on this, but I want to go on record that we on this side of the House do not see this as precedent setting. Had the Leader of the Official Opposition brought this to my attention, we would have done everything in our power to have this bill passed before the end of March.

As the Member for Riverdale South has said, I think it would be irresponsible of us now to ask the Department of Finance to try to pay back the money that has already been deducted on the assumption that this legislation would take effect on April 1.

Everybody has agreed to this and I do not believe that there is anyone on this side of the House that sees this as precedent-setting legislation. The Member for Riverdale South has said that she does not see this legislation as precedent setting and I can assure the Member for Whitehorse West that in future I will watch very closely to see that we do not have to pass legislation that is going to be retroactive.

I wanted to debate this before but it is a matter of record that the bill was tabled March 30. I am not sure what I could have done about the proclamation date, which I would not normally look at until I saw the bill in the House. I could not have done much about it between March 30 and April 1, but let me just call the question. I have made the point.

Amendment to Clause 10 negatived

Clause 10 agreed to

On Clause 3 - previously stood over

Chair: Ms. Moorcroft, are you prepared to go with your amendment to clause 3?

Ms. Moorcroft: It is my understanding from the Government Leader that they are prepared to support this amendment if the figure of “five percent” is changed to “two percent” - that they have already implemented a two percent pay cut to the political staff. Is that correct?

The Government Leader is nodding his head.

I move

THAT Bill No. 56, entitled Public Sector Compensation-

Chair: Order please. There was already an amendment on the floor. Is the Member proposing another amendment?

Ms. Moorcroft: I move an amendment to the amendment

THAT Bill No. 56, entitled Public Sector Compensation Restraint Act, be amended in clause 3 by adding the following new section:

“3.2 -”

I have just received counsel from my colleague that, as the mover of the amendment, I cannot amend the amendment, and so I withdraw the amendment.

Chair:   Is there unanimous consent to withdraw the amendment.

All Hon. Members: Agreed.

Chair: There is unanimous consent. Ms. Moorcroft, you may propose another amendment.

Ms. Moorcroft: I move

THAT Bill No. 56, entitled Public Sector Compensation Restraint Act, be amended in clause 3 by adding the following new clause:

“3.1 For the year April 1, 1993, to March 31, 1994, the pay or remuneration of persons employed under Part 1 of the Cabinet and Caucus Employees Act are reduced to an amount that is two percent less than the amount payable on March 31, 1993.”

Chair: Do the Members wish the Chair to read the amendment? Are you agreed to the amendment?

Amendment adding Clause 3.1 agreed to

On Title

Title agreed to

Hon. Mr. Ostashek: I move that you report Bill No. 56, entitled Public Sector Compensation Restraint Act, with amendment.

Motion agreed to

Bill No. 89 - An Act to Amend the Fuel Oil Tax Act

Chair: Now we will move on to Bill 89, entitled An Act to Amend the Fuel Oil Tax Act. Is there any general debate?

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Title

Title agreed to

Hon. Mr. Ostashek: I move that you report Bill No. 89, entitled An Act to Amend the Fuel Oil Tax Act without amendment.

Motion agreed to

Bill No. 29 - An Act to Amend the Tobacco Tax Act

Chair: We will now discuss Bill No. 29 entitled, An Act to Amend the Tobacco Tax Act. Is there any general debate?

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Title

Title agreed to

Hon. Mr. Ostashek: I move that you report Bill no. 29 entitled, An Act to Amend the Tobacco Tax Act, without amendment.

Motion agreed to

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

Executive Council Office - continued

Chair: We will move on to Bill No. 6, entitled First Appropriation Act, 1993-94. We will be discussing Executive Council Office. Is there any general debate?

Mr. Penikett: Before we move into line-by-line debate, I wonder if the government would be prepared to use this occasion to elaborate in greater detail than has been done in Question Period and by way of a ministerial statement on the dealings between the government, Curragh Inc., and the potential Asian investors in that mine.

The Government Leader has told us that the question of arrangements for Grum stripping were the subject of some discussion, as was the desire of the company to have competitive power rates, and that the $50 million that the Asians propose to invest is conditional upon satisfactory arrangements being made on those matters and other matters, including, which I think Mr. Frame’s press release referred to as “the fundamentals” of the company’s operations.

I note that the Government Leader has said that their position in respect to arrangements with the Grum stripping has not changed. I note also that the Government Leader has indicated that the Asians have requested a particular industrial power rate, but he has not felt free to share that information with us. Could I ask him, as a general question, whether there was any other information pertaining to the discussions that took place in Seoul, or the negotiations that may take place in the first week in June in this town. Is there any additional information about those matters that he may be able to give the House now?

Hon. Mr. Ostashek: I will try to share with the Members opposite as much information as I possibly can, being bound by the fact that some documents I know are not public information yet. I would not feel very comfortable discussing those details. I would hope that those documents will be public in the near future, so we could have a better debate on some of the issues. As I stated, there was an agreement reached between Curragh officials and Korean Zinc and Samsung, and I just want to state for the record that I was not part of those negotiations. I did not sit in on those meetings. They were direct negotiations between the principals in the agreement.

I had a private meeting with the chief executive officer of Korean Zinc. There was a very nice dinner that was put on by the Canada Council on my behalf. They invited about a dozen very high profile business people in the Korean community. I had the opportunity to meet some very high officials in Hyundai, Lucky Goldstar, and Mitsubishi. Several different companies were represented.

My understanding is that Korean Zinc officials will be in Whitehorse sometime within the next 10 days, around the first week in June, to do a due-diligence study on the Curragh operation in the Yukon.

I do not know how long they will be here. However, as I stated to the Members opposite in my ministerial statement, I believe that the schedule that is being put forward by Curragh is very optimistic.

I was not aware, until I got to Korea, that the company or investors were going to be looking for concessions on power rates. I know Mr. Frame has always had great difficulty with the power rates that were being charged to the Faro operation. At no point was I told that they were going to be looking for concessions on that, until I was informed of it in Korea.

The Grum stripping is something that is outstanding, and it is an issue that Mr. Frame and I will be addressing when he comes to Whitehorse. However, as I said in my ministerial statement, there are other issues that I believe the company must resolve before we get to the stage of the Grum stripping, and that is to get the cooperation of their note holders, of the Bank of Nova Scotia and of the creditors, in order to restructure the outstanding debt of the company.

I think that is a major hurdle facing the company. Those are issues that are going to have to be dealt with before there is any light at the end of the tunnel for the company.

I hope that the positive response of the stock market to the possible $50 million of equity by foreign investors will continue, and that the company will be successful in raising the additional equity that they feel they are going to need to restructure their debt.

I think a major issue facing the company, before we can get into discussions about Grum stripping, is being able to obtain the consent of note holders, creditors and banks to restructure the debt of the company.

Mr. Penikett:   I thank the Government Leader for his answer. I would like to comment that I am puzzled by his observation on power rates, since power rates were mentioned before he left for Korea. I do not remember who first raised the matter and, unless my memory has completely failed me, I recall asking the Government Leader a question about whether he had a mandate to negotiate power rates before he left for Korea - someone had indicated that power rates were an issue.

Let me ask the Government Leader a two-part question: in the meetings that will be taking place in June - at which we understand Mr. Frame will be present, and I gather from the Government Leader’s statement a moment ago, they may include Korean officials, who are here to look at Curragh’s property - who will be representing the people of the Yukon in discussions about power rates and arrangements to strip the Grum ore body?

Hon. Mr. Ostashek: As I said in the House yesterday, these are issues I will be dealing with when I meet with Mr. Frame. Mr. Frame and I will be meeting ourselves - and perhaps with Cabinet, as well - to set some parameters out for negotiations on the Grum stripping and to see what issues can be resolved.

As to who will be doing the actual negotiations on the Grum stripping, once we get to that stage, I cannot say at this time. I believe that Mr. Frame has indicated to me that they are first going to talk to the Yukon Energy Corporation in order to see what they could accomplish at that level. The Member knows the mandates of the Yukon Energy Corporation and how restrictive they are, and I have no doubt that we will have to deal with it at a higher level than that.

Mr. Penikett: Again, I thank the Government Leader for his answer on that question. Today, I got the impression in Question Period that, in fact, the questions on energy were going to be Cabinet decisions. They may inevitably have to be so, even if early negotiations went on with the Yukon Energy Corporation. We would all be interested in knowing who will actually be dealing with Curragh and the Koreans on that question.

Can I ask the Government Leader this question: in respect to the Grum stripping and the restructuring, are we likely to be represented by Burns Fry or, at this stage, are we more likely to be having discussions among principals or policy makers regarding decisions that are necessary to restart the Grum stripping and reopen the mines at Faro and Watson Lake?

Hon. Mr. Ostashek: As I indicated to the Member opposite, the first meetings will be between me and the principals of Curragh Inc. As I said, the Koreans are coming to the Yukon to do their due-diligence study. I am not aware that they are going to be part of the negotiations for the Grum stripping. I have not been led to believe that, at this point.

Once we and the Curragh officials have met and when it gets down to getting the legal text of the agreement and everything established, I am not sure whether Burns Fry will be retained to see to it or some legal firm.

Mr. Penikett: Clearly, the Koreans have stated an interest in the arrangements for the Grum stripping and, indeed, they have made their investment, I gather, contingent on some successful arrangements being worked out, so we will obviously be very interested in the progress of those negotiations and the question of who is representing our interests. In a number of statements, not just in the last couple of days but also previously, the Government Leader has indicated that the collective agreement at Faro - or at least the question of industrial peace at Faro - has been a subject of concern to the Koreans and, indeed, to this government.

Could I ask the Government Leader if he will assure the House that if discussions affecting the union and their collective agreement with the company are commenced, that the union will be brought to the table to represent their own interests.

Hon. Mr. Ostashek: I believe that the questions about the collective bargaining agreement between the unions and Curragh is an issue that will be dealt with between the unions and Curragh, not at the bargaining table with the territorial government. I expect that they will have their own vehicle and format for looking after those negotiations.

Mr. Penikett: I appreciate that. It recognizes the obvious point that a collective agreement has two parties: the management party and the employee party. In the past, some statements about the union’s contribution to a solution have been made without involving the union in the discussions. I know of the smelter company’s concerns about the security of supply; I understand that very well. We do have a different cultural and legal context for labour relations in this country than they do in Japan or Korea. I would only want to express the hope that nobody other than the elected leadership, the legitimate representatives of the union, are presuming to make arrangements or decisions for the employees without fully involving them in those decisions.

Hon. Mr. Ostashek: It is certainly not my nor this government’s intention to do that. I was just stating one of the issues that was raised by the chief executive officer of Korean Zinc when I met with him. This was a concern of theirs.

I have not entered into any agreement to be involved in that part of the negotiations. That is an issue that will have to be settled directly between the company and the union.

Mr. Penikett: It may well be that the senior executives of Korea Zinc, most of whom are educated in the United States, may have a better appreciation of the collective bargaining environment in North America than some Japanese executives who are usually educated in Japan, and have an entirely different tradition in their country.

May I ask the Government Leader if he has any appetite for a public meeting, either in Whitehorse or in Faro, with or without Mr. Frame, as a way of satisfying some of the public hunger for information about the negotiations and about the prospects for the reopening of the mines at Faro and Watson Lake and, more immediately, the potential for having the Grum stripping underway again?

Hon. Mr. Ostashek: I certainly would entertain that thought if we felt that it would be of some benefit to the players involved. I do not know what good it would be to have a public meeting unless the Curragh officials were prepared to participate.

They are the ones who are in the process of restructuring the company and have all the information at their fingertips that would be required at such a public forum. It is something that would have to be discussed with officials from Curragh Inc.

Mr. Penikett: Some unkind things have been said about Curragh Inc. and its officers. Indeed, it may facilitate some progress toward successful negotiations were that company to hold some public information sessions. That is obviously not a decision for us. However, I would like to ask the Government Leader, should the company indicate some willingness to participate in such sessions, would the government be part of them?

Hon. Mr. Ostashek: I would certainly have no hesitation in being a part of such a forum. If the company was willing to appear in public and answer questions, I am sure that we would, as a government, be represented there.

Mr. Harding: The Government Leader stated today that there have been some major hurdles in the path of getting the mines reopened under the auspices of Curragh Inc. He said that it would take the cooperation of the note holders, the banks and the creditors. We have never disagreed with that statement. We have always known that YTG was one part of the equation. However, they are certainly a major part, as indicated by the press statement released by Curragh. I believe we are starting to see some indication, at least to some degree, from the ministerial statement, that the Government Leader also sees that, when he made reference to negotiating with Curragh for the continued support of the Grum stripping. This is quite different from his ministerial statement of April 5 or 6 - the day before or after the court protection - where the loan guarantee discussions were not related to this latest announcement.

I believe, and I know our caucus believes, that they are, because it is becoming more and more apparent that there are a number of factors and pieces of the puzzle that have to fit together. Recognizing that the note holders, the banks, creditors, YTG and, possibly, the federal government are going to have to come onside, are there any plans for anything other than unilateral talks with Curragh on this? Are there any plans of the government to try and facilitate some kind of forum for the players to come together in - not just for an air clearing, but to work toward some common problem-solving approach to this.

Hon. Mr. Ostashek: I wish that I had the influence that the Member opposite seems to think that I have as the leader of the territorial government. We are a pretty small player in this game. There is a lot of money out there - a couple hundred million dollars worth. We do not have the resources to be a major player in it, and we have stated that over and over again. To this day, we do not know who the note holders are. We have no idea what their addresses or phone numbers are. Curragh has chosen to deal with each one of these entities on a one-to-one basis, not in a group.

If the Member opposite is asking me if I would be adverse to an arrangement such as that, I certainly would not, but I do not think I have the ability to put together that kind of forum, when I do not even now who all the players are. That is why we are represented at each one of the court hearings that are in Toronto, so that we know what is going on. The only approach that I see we have to facilitate this agreement now is through the CCAA. We are going to continue to be one of the players, at the table, at any CCAA hearings that go on.

Mr. Harding: The Government Leader knows - well, maybe he does not know who the note holders are - who the bank is, he knows who some of the major creditors are, he knows who the federal government is and these have all been identified by the Government Leader as major players, so I would just like to ask the Government Leader this: he says he does not have much influence and that he is just a small player, but has he made requests of any of these groups, other than the federal government, which basically said no in the past to this situation, for some kind of a way to facilitate discussion with these people? He has said that he does not think it would happen, but has he asked?

Hon. Mr. Ostashek: No, we have not asked because I do not think we are in any position to ask for that kind of a forum. The fact remains that, as I say, this is under the jurisdiction of the courts now and anything that transpires will be settled by courts. No matter what happens with the company now, they need approval of the courts and, when they go back to the courts on June 2, one of the issues the company has to deal with is to get approval for operating capital for the month of June. We will be represented at that court hearing on June 2, but we get our information about what is going on through Burns Fry, who, along with Fraser & Beatty in Toronto, represents us at the hearings. Until all the players are ready to put together a package to rescue Curragh, that cannot happen.

Chair: Order please. The time being 5:30, we will recess until 7:30 this evening.


Chair: I will now call the House to order.

We are dealing with Bill No. 6. Is there any further debate on Executive Council Office?

Mr. Harding: I hope the Member for Riverdale North will permit me to engage in some questioning.

Before the recess, I was asking the Government Leader about his plans to facilitate some kind of a forum for the major players in this situation to have an exchange. There was some regret expressed by the Government Leader. He did not feel that they had enough stroke to pull this off, even if they wanted to. Also, the Government Leader said that he had not asked for it, but did not think that was possible, seeing that things were in the hands of the courts. They were represented in CCAA hearings, as a creditor, I assume, for the $5 million loan in Toronto by Fraser & Beatty and Burns Fry.

Could the Government Leader share with us some of the advice that these organizations have provided to the government, or some indication as to what is on the minds of the banks and the creditors who show up at those meetings? What is the Government Leader’s feeling regarding obtaining some kind of a positive reaction from the stakeholders at the June 2 meeting, and what would give them enough positive signals to want to see the mines continue to operate, in the hope that they would regain their investment?

Hon. Mr. Ostashek:  The Member opposite is asking me to speculate and it is very difficult for me to do that. The company is under CCAA, during which they have the ability and the time to restructure their debt to the satisfaction of the note holders, the banks and the creditors. Alternatively, they can be petitioned into bankruptcy.

It is basically in the hands of the creditors, the banks and the note holders.

Mr. Harding: Surely, the people that the government has working for them, Burns Fry and Fraser & Beatty, have made some representations to the government. I am not asking the Government Leader to speculate, I am asking what indication they may have given the Government Leader regarding the feeling of those players I would assume that they all had representatives at the CCAA meetings last month and probably will this month.

Hon. Mr. Ostashek: There is no doubt that they all have representatives at the meeting, but most of those representatives are lawyers. That is why we do not know who the note holders are at this point. Everyone is trying to protect their own interests while waiting for Curragh to come up with a restructuring plan so that they can come to some decision.

Mr. Harding: Would the Government Leader agree that the $50 million equity injection is at least a major part of a positive signal that would allow the creditors, note holders and the bank, who are creditors, to be on side and continue the process of restructuring?

Hon. Mr. Ostashek: As I said, I guess we will know that on June 2, when they present this to the courts. The Member is fully aware that they have an agreement for a $50 million equity investment in the company. The fact remains that that only covers about 25 percent of their debt.

Mr. Harding: Let us talk a little bit about that debt. When he was in Korea, were there some discussions with Korean investors about the debt load? What is Curragh’s current asset value?

Hon. Mr. Ostashek: I do not have that figure in my head. I am not sure that I know exactly, but I could probably find out for the Member opposite and give him a best guesstimate of what people think the asset value is. I believe, from the tone of the press release that was put out by the Curragh officials, that restructuring is part of the terms and conditions attached to the $50 million equity.

Mr. Harding: The Government Leader can see, then, that, while it is one thing to talk about the debt load, it is also important to compare the relative asset value of the corporation. In terms of whether or not they are going to be solvent or insolvent, when one talks about debt load it makes a big difference what their asset value is.

Hon. Mr. Ostashek: There is no doubt, but I am sure the Member opposite is fully aware that their asset value is nowhere near the debt load.

Mr. Harding: That is one of my concerns. I am trying to understand the exact value of their assets because it does make a big difference.

Have there been any discussions with the Korean people or with Curragh that the Minister could make us aware of regarding the worry that the sale of the Stronsay project may have a severe impact on the asset value that Curragh Inc. has? To me, it would seem that one of the reasons they would be hanging on to that asset as long as possible would be to keep their asset value up, which, if they did not, could probably push them closer to an insolvency situation.

Hon. Mr. Ostashek: I have no idea on that. The Member is fully aware that the asset value of an ore body is something that is open to question. As to how much value there is in an ore body, different figures are put on it by different people.

Mr. Harding: Correct me if I am wrong, but I think I can remember at one time the government making a statement regarding their value or their perceived value, their best guess, on the Stronsay project. Could he tell us what that value is?

Hon. Mr. Ostashek: I do not believe we have ever quoted what we feel it is. We have repeated what we have been told different individuals say they would be able to get for it - it runs anywhere, I believe, from $10 million to $75 million.

Mr. Harding: I am looking at the ministerial statement where he mentions negotiating with Curragh and at the press release. I get the impression from the government that they feel they are a small player. There was a metals analyst interviewed on the radio today who discussed the feeling within the industry regarding the situation affecting Curragh as a result of yesterday’s release. He seemed to feel that the Yukon government’s participation was critical in resolving this, both for restructuring the company and getting other parties on side, such as banks, note holders and creditors. How important do they feel, having been in Korea, government support is for power rates and Grum stripping? What is the priority in terms of the conditions laid down by the Korean company?

Hon. Mr. Ostashek: I have no idea what the priority is.

Mr. Harding: How could the Government Leader, who went over and met with these officials and issued a press release on it, say that he did not discuss these conditions with the Korean company? Did he not discuss with the company about the power rates or the level of support for the Grum stripping?

Hon. Mr. Ostashek: I have been repeating myself time and time again on the Curragh issue. We are now on the Executive Council debate and we are talking about a matter that is under CCAA protection and the Member is asking me to speculate. I am not in a position to do that. We have covered all the bases and I do not know what more the Member wants me to say about Curragh as it pertains to the Executive Council Office.

Mr. Harding: How was the trip to Korea financed? From what department was it funded?

Hon. Mr. Ostashek: If we want to talk about the financing of the trip, we can certainly talk about that.

Mr. Harding: Was the Korean trip funded by the Executive Council? If so, I think that we have every right to ask questions about the purpose, the results, what was learned, what position the government took, and was it a worthwhile expenditure - I think those are fair questions.

Hon. Mr. Ostashek: I made a report to the Legislature. Let us get going.

Mr. Harding: My goodness. I am asking questions because our time in this Legislature -

Some Hon. Member: (Inaudible)

Chair: Order please.

Mr. Harding: I am really sorry I am getting under the skin of the Government Leader and the Government House Leader, the Member for Klondike and Members opposite. It is really unfortunate that the government does not feel that an expenditure for a trip of this nature, paid for by this department, does not deserve some questioning. These are not the same questions. I am asking them in relation to the expenditure made for the trip to Korea.

I just asked the Government Leader if, in his discussions with the Koreans on the trip he took, paid for through the Executive Council Office funding, there were no discussions with the Koreans regarding the Grum stripping or the power rates. Is that what he is saying to me?

Hon. Mr. Ostashek: I have reported on my trip to Korea to this House. The Member keeps asking the same questions, over and over again. I said the discussions that were entered into in Korea were of a very general nature. There were no negotiations going on in Korea.

Mr. Harding: Of a general nature, what priority does the Government Leader feel the Grum stripping conditions and the powerage conditions have to the successful conclusion of securing an equity injection?

Hon. Mr. Ostashek: I believe there are other issues that are of a far higher priority.

Mr. Harding: I know, from the government’s action so far - their inaction, fumbling, bumbling and messing up of this entire situation - that a 16.4 percent unemployment rate in a community that has been devastated, and a territory that is taking an unprecedented kicking is not that important. I know the Government Leader obviously does not feel it is that important, otherwise he would not mind answering some questions. Our time in this Legislature is running out. When we get a chance to ask these questions before we adjourn for a long summer, we, on this side of the House, in our caucus, want to have a clear feeling that we are leaving this problem in the hands of people who are committed to seeing it through and getting a deal, if there is a deal to be done. So far, I cannot speak for this entire side, but for our caucus, we really question that that is the case.

I do not think the Government Leader is being fair or reasonable by saying there are other more important issues to be dealt with.

It is certainly a serious issue with this side. This expenditure and trip to Korea was something that we felt was a very positive step. We applauded the action. We thought it was good of the government to make this trip. We were a little worried about the position they took. We did not mind the expense because we thought it was worthwhile if it would be productive in getting the mines open again.

Now we would like to ask a few questions about it, and we go into another one of these evenings where the Government Leader will not answer the question, so then I will get up and I will ask it again, and then the Government Leader will stand up and he will not answer the question, and I will get up and ask it again. I will, because I am just trying to find the answers. I will not be bullied. I am here; I was elected by my constituents to ask questions. This is a Korean trip paid for by the Executive Council Office. I want to know what went on. I am asking questions about it, and I will continue to do so. If the Government Leader chooses not to answer, that will be his prerogative, but this will be a long evening.

I would like to ask the Government Leader which questions were put to him, or what representations were made to him, regarding the priority of the power rates - “competitive” was the word that was used - and what priority was given, in some respect, to the Grum stripping by the Koreans as a condition of their $50 million equity injection.

Hon. Mr. Ostashek: I already answered the question. They did not priorize them for me.

Mr. Harding: Based on his feeling of the discussions, what was his feeling of the priority that was attached to them?

Hon. Mr. Ostashek: That is a hypothetical question. I have already answered it. I said that I felt that there were more important issues than power and Grum stripping at this point.

Mr. Harding: Can the Government Leader tell me what those are?

Hon. Mr. Ostashek: If I have said it once in this House, I have said it 100 times - it is the CCAA.

Mr. Harding: Specifically, with regard to the CCAA, what does he feel are the more important issues to overcome?

Hon. Mr. Ostashek: The Member is asking me to speculate and I am not about to do that.

Mr. Harding: That is ridiculous. He just made the statement, but he is not prepared to back it up. When he gets into those situations, he says that it is hypothetical. Perhaps the Minister should grab a dictionary and look up what “hypothetical” and “speculation” mean. He obviously does not know.

Some Hon. Member: (Inaudible)

Mr. Harding: The Member for Riverdale North says that he is going to leave because he does not want to sit here and listen to this. That is really too bad, Mr. Chair, I will miss him.

With regard to the discussions that took place with the Koreans, was there any discussion between the Government Leader and the Koreans about stripping of the Grum deposit or a timetable?

Hon. Mr. Ostashek: No, there was not.

Mr. Harding: There were some issues raised today during Question Period that caused me major concern. They were regarding the fact that the government had made a commitment that the people who live in Faro and who have worked hard in building up the mine possibly may not be working on the Grum stripping project. Could the Government Leader tell us his position on that?

Before the Government Leader answers that question, I would ask him to consider that there are some people in Faro who have been laid off for six months, and if people from outside of Faro come first and foremost, while Faroites who live in the community are still laid off and have no jobs, I would ask him to consider the effect on the community. What is his position on that at this time?

Hon. Mr. Ostashek: That is an issue that will be worked out between Curragh Inc., the union and the contractors.

Mr. Harding: Does the Minister understand the feelings that would create in the community? Is the Minister aware that situation would create a tremendous amount of tension and probably would not be a very good situation, and would lead to severe, high emotions?

There are hundreds of people, even considering the number of people who have left Faro, who are really hoping to work on the Grum stripping project. If people from outside of the community come in and go to work, it would create a lot of torment within the community.

I know that the Government Leader has told me that will be worked out among the union, the contractors and the company, but does the government not feel that should be an area that they should consider when they negotiate with Curragh?

Hon. Mr. Ostashek: It may be. We will look at it when we are negotiating with Curragh.

Mr. Harding: I have made those representations to the government. They do not appear to be overly fond of the union local in Faro, but there is more to it than that. There are families and people there who are off work. They are used to working for months and months. I would like to make the representation to the government that they consider that in their negotiations.

They said today that they would encourage the hiring of Faroites, but it will be an explosive situation if, first of all, the employees are not doing the work and, secondly, if there are people brought in from outside Faro first, while there are still people on layoff. Certainly, no one minds other Yukoners working at the Faro mine, but when there are still people in the direct community not recalled when there is work, it will present a very volatile situation.

There were some comments made in Question Period by the Government Leader, as well as on the radio this morning, regarding the labour union in Faro and the Korean companies worrying that they would really loathe the thought of investing in a company that would be hit by a labour dispute. Could the Government Leader tell me a bit more about the context of the discussion that went on, and exactly what the feelings of the Koreans and the government are on that?

Hon. Mr. Ostashek: That is another one of their concerns.

Mr. Harding: What exactly concerns them about it? Do they feel that Curragh has a very poor labour relations record? Do they blame it all on the workers? What is the context of the discussion that went on? It is fine to say that it is one of their concerns, but what are they looking for? Are they looking for long-term stability in the labour force? Did they indicate what length of a collective agreement they might like?

Could the Government Leader be a little bit more specific?

Hon. Mr. Ostashek: As I have told the House, I was not party to the negotiations between Curragh and the investors. It was an issue that was made known to me in a private meeting with the chief executive officer.

Mr. Harding: The CEO of Curragh or Korea Zinc? Did the Government Leader sound out concerns about prioritizing or ask about concerns about prioritizing  what conditions are important? The Government Leader has told me that he could not tell me what priority the Grum stripping and the power rates are other than to say that he felt there were other, higher priorities, like the CCAA. Was there any indication as to what priority this corporation would give long-term labour stability?

Hon. Mr. Ostashek: It was a major concern of theirs.

Mr. Harding: He has just characterized this as a major concern. Would he characterize the request for power rates and some kind of financial support for the Grum stripping from YTG as a major concern?

Hon. Mr. Ostashek: I think all their concerns are of equal weight and value.

Mr. Harding: That is interesting. I do have a major concern about that. Some negotiations went on between the company and the union prior to the March 4 announcement to extend the loan guarantee. They were quite combative. It did not work out very well. Things were moving toward an agreement and going fairly well, but they kind of broke down abruptly. I stayed in close communication with the company and representatives of the local union, trying to facilitate, as best I could - on thin ice basically - some kind of an agreement. I was not particularly successful because there were strong feelings on both sides about issues such as job security, contracting out and, not so much wages, but job security and protection from layoffs and that type of thing.

I feel there was a bit of a lesson to be learned there and, if we all want the same thing and the Government Leader feels there it is a major concern of these investors to have some long-term labour stability, I suggest we take a look, collectively, as government and as a union and as a company, at the way the last situation went and try to come up with a solution to that problem.

I would suggest to the government that one of the reasons the last attempt at an agreement failed was because there was a lot of unilateral discussion. As the Minister is well aware - and he said this of his own volition - Curragh has chosen to negotiate unilaterally with the different parties. He said today that he did not feel the union would be privy to any of the discussions surrounding the loan guarantee.

I would suggest that, as the government would be concerned about their loan guarantee, they would want to know what the note holders are going to put up, what the banks would put up and what the other creditors would put up, and the union would want to know what the government was doing, what Curragh was doing, and what everybody else was doing.

Has there been any further thought given to that by the government as a way of looking at a situation where we could have some helpful impact on the outcome of a more stable labour force, with a lack of labour disruption in Faro?

Hon. Mr. Ostashek: At this point, no, there has not.

Mr. Harding: Let me just say, by way of a representation to the government, that I find the hostility I face with this questioning very disappointing. I do not think it is justified. I am trying to make some representations. I know I am a young upstart and whipper-snapper and do not know what I am talking about, but I am trying to say a few things to the government. I hope they are listening and not just being so hostile that they do not even pay any mind to it.

I think it is really important. If it is a major concern of the Koreans, it is a major concern of mine. If it is a major concern of the government, it is a major concern of mine. If there is a way I could help to try to facilitate this, I would be more than glad to do it, but if I do not get any cooperation from the government, or if they have no respect for any of my views, it does not make it possible to have any input. I do have a fairly good working relationship with both the company and the union, and I think I could be of some use there. It is a tough problem. That is what I am trying to tell the government.

When we first started this situation, way back when, I can remember the Government Leader asking me if I had any connections within the union that could possibly lead to helping to come up with an agreement there. Another Minister also asked me. I had the Member for Riverside ask me. I said, yes, I do, and I have talked to them and I have tried to be a facilitator.

The Member for Riverdale North is accusing me of filibustering. Why on earth would I be filibustering? It is 24 degrees out there. There are a lot of places that I would rather be than here in this Legislature tonight. Unfortunately, I have a duty to my constituents and to the Yukon. Fortunately, I have the opportunity to ask questions on their behalf. I will continue to do that. The Members can accuse me of filibustering all they want, but I do not think it is. I will stand here, and I will ask these questions. I would rather be on my verandah enjoying a barbecue right now, and perhaps a couple of ales, but I am not there, because I am in here asking questions, because I think that it is my job.

Some Hon. Member: Try and ask something about the ECO, because that is what we are on.

Mr. Harding: I am asking questions about the Executive Council Office. I am asking about the problems that we are having with the deliberations made by the government regarding its return from the trip to Korea and trying to sort out the pieces. It has certainly been a fairly difficult task. This is the first opportunity that we have had in the ECO to really explore it, other than in Question Period. Question Period is not really a good forum for getting to the bottom of things, because you only have a limited amount of time to do it. You get a set of three questions, and it is quite difficult at times to explore the depths and the annals of the thinking of the government. Today, we -

Some Hon. Member: (Inaudible)

Mr. Harding: It may be August, if the Member for Riverdale North keeps interrupting my train of thought.

I can assure the Member for Riverdale North that, whether or not I had constituents in the gallery or not, I would be asking these questions, because it is my job as the elected representative of Faro.

Some Hon. Member: (Inaudible)

Mr. Harding:  I do not know about nausea. Sometimes I get nausea when I hear the Member for Riverdale North speak, but that is another subject.

The Government Leader does not seem too fond of discussing the subject of unions with me, and the relationship with the workers in Faro. He does not seem interested in talking about the contracting-out situation in Faro. Also, since he does not seem too interested in telling me about what happened in discussions with the Korean group, I will move onto this subject.

The ministerial statement said that, “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,” and so on.

Could the Minister tell me something more about the $25 million? He said foreign companies. I read today in the paper that it was perhaps an American company. Can the Minister tell us who told him about this $25 million, and where it would be coming from?

Hon. Mr. Ostashek: The Member opposite seems to be a little perturbed in saying that Members on this side of the House are not paying attention to him. If the Member had anything new to offer to the debate, after three months of the same repetitive questions that he is asking again tonight, maybe we would pay a little more attention to what he has to say. We have heard everything that he has had to say before - time and time again - and he has added nothing new to the debate. The Member is filibustering; that is all he is doing.

The Member knows as much about the $25 million as I do.

Mr. Harding: I am not even going to respond to the filibustering accusation; we have gone back and forth on that subject in the supplementaries, the main budget and in everything else that we have tried to do.

It seems funny, whenever we ask questions of this government, they accuse us of filibustering. You know what happens when we ask questions of this government - we find big problems in what they have said; we find big problems in their policy - whether it is a lack of policy, too much of it, or the wrong policy - so we will continue to ask questions.

It is not filibustering; I have nothing to gain by what is commonly referred to as “filibustering”.

I am sorry that I do not have a lot of new questions for the Government Leader. I wish to God that I did; I really do. I wish to God that I was asking whether there was going to be new mine opening in the Yukon along with Faro and Sa Dena Hes, and I wish I could ask questions about mineral development and exploration. I wish I could ask about renewable resources and all kinds of other questions, but unfortunately I cannot because I have not received any new answers. When I do not get any new answers, then I have to keep asking the same questions again. I do not think they are the same questions; basically, they are the same questions with a new twist to them - there is a new twist because we have new information.

The Government Leader has jaunted off to Korea and spent some time with some wealthy investors and spent some time in discussions with Curragh Inc. - high-level discussions about the future of the mines in the territory.

I think that it is imperative that we seek answers, given the new information. It is unfortunate that questions have to be the same sometimes, but as I said before, no new answers means no new questions.

The same problems still exist, the mines are still shut down, my community is still devastated and tormented. There is no real hope and it is imperative for the people who do have some hope, as a result of the announcement yesterday, that we engage in some good exchange and find out some of the thinking and reasons behind the trip and what went on during the trip.

That is an important aspect of what we are doing here tonight.

The Minister has said that I know no more than he does about the $25 million, yet he has made the statement that the $25 million is from foreign investors, which could present a problem with the federal government. He has also indicated a problem with the Free Trade Agreement. Could he go into a little bit of detail as to what the reasons are? I do not know that there was a $25 million investment from foreign investors. Could he tell us how he knows it comes from foreign investors? Is it Korean, American or from some other Asian country? Also, how is the Free Trade Agreement going to impact the situation between Curragh and YTG? Could he give us a rundown on that situation?

Hon. Mr. Ostashek: The Member opposite said that he read the paper tonight and saw it there. It states that the CEO of Curragh said that he was looking for $25 million in the United States.

Mr. Harding: I thank the Member for his detailed answer on that.

Since he did not see fit to answer my last question, could he tell us exactly how he feels that the Free Trade Agreement could impact on this problem? I did not read that in the paper today.

Hon. Mr. Ostashek: I have already stated in this House - and the Member opposite should be aware of it - that any investment of over 50-percent control has to go through the Foreign Investment Review Agency.

Mr. Harding: There have been two problems outlined: one on foreign investment and one on the Free Trade Agreement. Are the concerns there one and the same, or are they two separate concerns? If so, could he tell us how they differentiate?

Hon. Mr. Ostashek: If there is foreign investment by the United States, it would have to do with the Free Trade Agreement.

Mr. Harding: Perhaps the Government Leader could explain that. It is my understanding that the Free Trade Agreement allows for the free flow of capital between countries. Is that not the Government Leader’s understanding of this aspect of the Free Trade Agreement?

Hon. Mr. Ostashek: The Member is right and I am sure that the Member opposite is also fully aware that if a company is subsidized there could be countervailing duties on ore going to the United States; it would cause a problem.

Mr. Harding: This is a different can of worms than capital investment and the Foreign Investment Review Agency. This is a discussion on subsidies, which is something quite different. I can see clearly now how it would probably have some impact on the Free Trade Agreement. Could the Minister elaborate on which subsidy he is referring to? Would it be some sort of government assistance for the Grum stripping, a power rate subsidy or would it be a combination of both?

Hon. Mr. Ostashek: Both.

Mr. Harding: Has the Minister sought out any advice as to whether or not we have the potential for a doable deal and, if he has received advice on it, could he tell us what that advice was?

Hon. Mr. Ostashek: No, I have not.

Mr. Harding: I can appreciate that the government has said that they plan to wait until June 2 before they do anything but - I certainly feel they have been waiting a long time to do a lot of the things that need to be done - in the meantime, regarding subsidies and foreign investment, is the Government Leader saying now that they will not be doing anything to seek the potential to proceed with arrangements until after the court dates? Is that what he is saying?

Hon. Mr. Ostashek: The Member is putting forward a hypothetical question again.

Mr. Harding: It is only hypothetical in the sense that I am asking the government what they plan to do. Certainly, in light of the evidence and in terms of the action they have put forward, that could very well be a hypothetical question but in this case I do not believe it is. We want to explore what the plan of the government is about this, in light of the trip to Korea and the new information that has been brought forward. We are extremely interested in the planning process that is underway right now upstairs as the brain trust devises their strategy and their game plan and get around the chalkboard and decide what is going to be done next in this situation. Will the government be having any discussions with the federal government regarding this foreign investment, and will they be having any discussions with the federal government regarding potential violations of the Free Trade Agreement if indeed this Grum stripping assistance comes through?

Hon. Mr. Ostashek: If and when the situation arises, we will deal with it.

Chair: Order please. I am getting signals from both sides of the House that we should take a brief recess at this time. Are you agreed?

Some Hon. Members: Agreed.

Chair: We will take a brief recess.


Chair: I now call Committee of the Whole back to order. We are on the Executive Council Office.

Mr. Harding: I have a couple of questions for the Government Leader regarding the trip to Korea.

Since Question Period today, he has had some time to think about some of the questions asked by the Member for Riverdale South, which I thought were very good questions regarding planning if there is an extension granted on June 2. I also think it probably would be interesting to note what the government’s planning is for a worst case scenario if there is no favourable extension given on June 2. What is the government planning specifically with regard to the power rates situation in either scenario - whether an extension is given or is not given?

Hon. Mr. Ostashek: That is up to the Public Utilities Board.

Mr. Harding: I find that interesting, after the government said today it was going to be a decision of Cabinet. Is the Government Leader now saying the decision will not be made by Cabinet?

Hon. Mr. Ostashek: We will deal with that issue when we are approached.

Mr. Harding: Approached by whom? It is my understanding that the Korean company made some representation to the Government Leader. Is that not true?

Hon. Mr. Ostashek: No, that is not true. They just said it was a concern of theirs.

Mr. Harding: Correct me if I am wrong, but the Government Leader said they identified a specific number for what would be considered competitive. Is that not true?

Hon. Mr. Ostashek: The number has been talked about between Curragh and Korean Zinc.

Mr. Harding: I have the benefit of having a couple of copies of the Watson Lake News in front of me, and a couple of articles by the MLA for Watson Lake regarding the Curragh situation. One is an attack on the NDP Opposition for questioning the conditions and first charge on security, which I would dearly love to go through, item by item. Depending on what I hear from the government, I will make the decision on whether or not I do that.

Regarding first charge on security, what went on in Korea in discussions with the Korean companies and the comments by the Government Leader that he felt that they were not a major player in this or, at least, that there were other more important priorities by the Koreans than their support on the power rates and Grum stripping, could he tell us how the government feels? If they are not that important to the situation, could he tell us why they would be likely to receive a first charge on security?

Hon. Mr. Ostashek: We will deal with those issues when we are negotiating with Curragh.

Mr. Harding: Since we are not getting anywhere this evening, it is tough for me to resist the temptation to go through each of these on a one-by-one basis. I may have to do it at some later point in this session - in July, or something. I will forego my questioning this evening. The hostility I face from the government is disconcerting. I hope they will see their way through the fog and come to some resolution on this issue.

I have no more questions on general debate.

Mr. Penikett: I am not particularly well-connected in these quarters, but I believe that the Member for Faro’s place in heaven is assured by the fact that he has resisted temptation.

Can I just say to the Government Leader that I am grateful for the detailed responses that he has tabled to the questions that I asked on May 17. For the record, I want to say that I do not agree with all the answers, but I am grateful for them. Having said that, I would like to move that the line-by-line debate on the Executive Council Office be deemed to be read.

Chair: Is there unanimous consent?

All Hon. Members: Agreed.

On Executive Council Office line items

On Federal Relations Office

Amendment proposed

Hon. Mr. Ostashek: We have an amendment to the line by line. We have one amendment to the operation and maintenance estimates and that is:

“THAT the estimates pertaining to Bill No. 6, entitled First Appropriation Act, 1993-94, be amended in Vote 02, Executive Council Office, by reducing the line item Federal Relations Office, on page 26 in the operations and maintenance estimates by $31,000; and

THAT the clauses and schedules of the bill be amended accordingly.

Amendment agreed to

Federal Relations Office in the amount of $131,000 agreed to as amended

Chair: It is my understanding that Members have agreed to carry all lines, sub-totals and totals in Executive Council Office capital estimates, operation and maintenance estimates.

Executive Council Office agreed to as amended

Department of Finance

Chair: We will continue with general debate on finance.

Mr. McDonald: There are probably a fair number of things that I would like to discuss in Finance, although I will limit myself to a few topics.

What I would dearly love to talk about are some of the questions respecting the financial position that the Minister tabled today regarding last year; of course, that is not in order at this point. However, I will not let this session pass without asking a lot of questions about that.

There are a number of questions that were outstanding from the previous discussions that we have had in Finance.

I would like to ask the Minister a number of questions about the calculation of the operating grant for 1993-94. I regret that I was unable to have a meeting with the deputy minister but I do have questions about it. I will ask the Minister now, on the record, what his thoughts are.

First of all, could the Minister indicate why, in the calculation of the operating grant, the worst case and best case scenarios listed in the handout the Minister has tabled in the past - or as were provided by the deputy minister - why the main estimate projections do not rank in between the best and worst case scenario? For example, for the income tax revenues and for revenues and recoveries under unadjusted revenues, why do these calculations not rank between the best and worst case scenarios?

Hon. Mr. Ostashek: I will try to clarify that. Is the Member opposite asking why the main estimates do not rank between the worst case and best case scenario in the paper that was handed out? Is that the question?

Mr. McDonald: That is correct.

Hon. Mr. Ostashek: I do not know if I am referring to the same paper as the Member opposite, but the one I have shows worst case main estimates and best case - the main estimates being at $278,401,000, the worst case being at $256,299,000 and the best case being $339,401,000. The mains seem to fall in between the worst case and best case.

Mr. McDonald: I would ask the Minister to let his eyes glide up the paper; when they reach income tax revenues, for example, which is about mid-way up, the Minister will see that the worst case scenario is $30,538,000, the best case is $26,838,000 and the main estimates show a projection of $31,898,000.

Hon. Mr. Ostashek: My understanding is that it is because of the way the formula works. The best case would show a lower income tax revenue. The less income tax we make, the more we get in transfer payments from Ottawa, is my understanding.

Mr. McDonald: No, I understand that. Even though it is not perfectly consistent with the Conservative ideology, I understand why one might characterize that as the best case. What I do not understand is why the main estimates do not fall within the worst and best case.

If one looks at the income tax revenue as the worst case, it is $30,538,000. Presumably that is the worst case, because the more money we get, the less we get in terms of the transfer payment. The best case is the less money we get, the more we get in terms of the transfer payment.

Why is the main estimates figure not between the worst and best case?

Hon. Mr. Ostashek: It is because the best case is being calculated on the total grant, not just the individual revenues.

Mr. McDonald: That does not clarify anything for me. I do not understand what the Minister is saying. Could he please explain it a little more clearly?

Hon. Mr. Ostashek: Perhaps I can explain it to the Member this way. The document that he is referring to shows the best case and the worst case based upon the grant. It has nothing to do with the individual figures in between.

Mr. McDonald: I am sorry, that does not help me. I understand what the worst case and best case scenario refer to. I understand why they are calculated in a particular way. Presumably, when one refers to worst and best case, they make it clear that that is the spread of possibilities. On a number of the projections in the main estimates, the figure does not fall within the spread between worst and best case.

What the Minister has indicated to me does not explain anything. I really regret that I did not have the meeting with the deputy minister. I will ask a couple more questions, but we may have to fall back on the meeting with the deputy minister. Could the Minister give it another shot, please?

Hon. Mr. Ostashek: We will try one more time. The reason that they do not match is because, in the main estimates, we have the taxes calculated with the new rate increases we put in in the Yukon. Where they are not in this figure they were doing the grant adjustment for, it shows you where the total grant fell in between the best case and worst case scenario.

If that is not clear to the Member opposite, perhaps we can ask him to meet with the deputy minister and, at the same time, he may be able to answer questions on the paper that was issued this afternoon. I am certain he would be happy to answer any questions that the Member opposite would have on that paper.

Mr. McDonald: I do have an fair number of questions on that paper, and I will certainly put those questions to the deputy minister. I have a whole series of questions and, rather than go down the list, as I do not think it will be a particularly productive expenditure of time, I will just ask about a couple of things.

Firstly, the census and undercount adjustment for September 1993 shows a projection of $5.9 million - this is the bottom line, just above the grant calculations. The worst case scenario shows a reduction of $3.3 million, and the best case scenario shows an increase of $21 million. The deputy minister, during the Public Accounts Committee hearings on Consulting and Audit Canada, suggested that we could expect something between $7 million and $15 million in this fiscal year. This appears to be a fairly pessimistic projection of the grant calculation. Can the Minister indicate what the rationale is for the pessimism on this line item?

Hon. Mr. Ostashek: Once again, this is a technical question that the Member opposite has asked me. My understanding is that it is because of the way that the undercounts will be calculated. Apparently in 1986, they did not have an undercount. There is some leeway in how they are going to address it. That is why there is the wide discrepancy in the range of figures.

Mr. McDonald: I think that I do understand, to an extent, the discrepancy in the way that people count population here. I understand that what matters is not how many people are actually here, but the changes in the numbers as they were calculated a number of years ago, and how they are calculated now. As long as the methodology is the same, it is the change that counts.

I am just wondering, given that reality, why the fluctuation runs in the neighbourhood of around $23 million, and why we are particularly pessimistic on that point. If the Minister cannot answer that, I will reserve the question for later.

There is a line item just above that called “Budget Adjustments”. This has been fondly referred to in negotiating years as the negotiating reserve, meaning if you do not get what you think you can get through negotiations, you reserve a little bit of money in order to account for failure to live up to your expectations through negotiations. Given that this is not a negotiating year, what is the rationale for an almost $5 million reserve?

Hon. Mr. Ostashek: It has nothing to do with negotiations. It is just money that is held back in case the escalators vary. The Member is right; it is just a little reserve to cover ourselves in that instance.

Mr. McDonald: I know that it is not a negotiating year, but I am aware that this figure is a very subjective figure. I am wondering why it is this high. I will ask the question later.

I will get into something that is probably a little more general. That will allow us to participate a little more on a politician-to-politician level. Can the Minister indicate what happened to the amount of money that was booked to pay for hospital charges that the federal government was levying on the Yukon, which were held in abeyance pending the final approval of the hospital transfer negotiations. The Minister of Health and Social Services indicated that at one point he thought that it would be written off. Can the Minister indicate what his understanding of the situation is?

Hon. Mr. Ostashek: I understand that it is still sitting on our books as a liability.

I just want to add, for the Member’s interest, that the $4.5 million reserve that the Member sees as excessive has already been used up because of the tax effort factor.

Mr. McDonald: I was going to ask about the tax effort factor, as a matter of fact, because I see that the worst case scenario for the tax effort shows it at 1.48; the main estimates show it at 1.48; we have just raised taxes and there is no change, so I am wondering what the rationale for that is.

Hon. Mr. Ostashek: My understanding is that, when we raise taxes, it does not affect the tax effort factor because that is on a provincial basis.

Mr. McDonald: I do not understand the answer. I will have to ask the deputy minister.

Mr. Cable: I just have a few questions. The Public Sector Compensation Restraint Act we passed this afternoon, with the $800,000 - is that found somewhere in these estimates?

Hon. Mr. Ostashek: That will not show up as one figure. It will be what was budgeted in each department.

Mr. Cable: But the budget did, in fact, reflect the savings that were contemplated by the Public Sector Compensation Restraint Act, is that not correct?

Hon. Mr. Ostashek: Yes, that is correct.

Mr. Cable: The Government Leader was good enough to provide me with a series of calculations relating to best case and worst case scenarios that were referred to by the previous Member who spoke; they relate to revenues. Over the course of the last six or eight or 10 or 12 or 14 weeks, whatever it has been, we have talked about a number of lapses and changes in the budget on the expenditure side. Has the Government Leader, with his Finance Minister’s hat on - along with his department officials - worked up a best case and worst case scenario on the expenditure side?

Hon. Mr. Ostashek: My understanding is that there have been some done, but only in relation to the mine at Faro closing.

Mr. Cable: There have been a number of questions asked over the last few weeks about changes in the budget. I have not seen a consolidated figure that reflects all of what I assume are the admitted changes or admitted lapses. I think we have had some admissions to the effect that there will be very substantial changes in the Community and Transportation Services budget, for example. Have those been compiled somewhere, so that they can be tabulated and released to the Members for review?

Hon. Mr. Ostashek: If I understand the question correctly, that would pertain to the supplementaries. They will be wrapped up in the document that I tabled in the Legislature this afternoon. All the lapses that have come back in have been calculated and accounted for. They would have been in the document I tabled this afternoon during debate.

Mr. Cable: These, with respect, were changes that have come out of debate and relate to the current fiscal year. I think there have been some changes. The hospital is one. That, of course, zeroed itself out. However, I think some changes have arisen as a result of questions that were put to the Community and Transportation Services Minister on, for example, subdivision development.

Hon. Mr. Ostashek: None of those have been taken out of the main estimates. They are still there. I am not sure what figures the Member opposite is referring to. The only changes to the main estimates will be the amendments that we are bringing forward during the line-by-line debate to offset the phasing in of the new taxes.

Mr. Cable: Perhaps I am ploughing some pretty difficult ground, but it is my recollection - and, oh, to have a photographic memory, I suppose - that there have been anticipated lapses admitted to by the Minister of Community and Transportation Services, for example.

Hon. Mr. Fisher: I believe what the Member opposite is referring to is the land development budget, where there is something like $21 million budgeted for land development. On the other side of the budget will be the same amount of money budgeted as a recovery.

We have talked about reducing the amount of land development that we need to do. In fact, it may be that at the end of the year we will have only completed, for instance, $10 million. As a result, the recovery will also show $10 million.

Unfortunately, in the land development budget, there are huge lapses every year. However, it does not actually show up as surplus monies or anything else, because it is on both the expenditure side and the recoveries side.

Whatever we expend in lands, we also put in as a recovery.

Mr. Cable: Perhaps it is no more serious than the 911 number, which we have addressed fairly extensively. I thought there were a number of those items, similar to the 911 budget item, that did not have an entry on both sides of the statement.

Let me ask the question: are these unbalanced changes - those are changes that do not have a corresponding recovery item - minor in nature, or are they fairly significant?

Hon. Mr. Fisher: There are two that we are aware of at this time in Community and Transportation Services budgets, one being the 911 number, where there will likely be some expenditure this year. There will also be some monies carried forward, so I am not sure if we are going to be short there or not. There was supposed to be $200,000 budgeted, and that was missed in the main estimates.

The other major one is the Dawson City water and sewer. That was budgeted as $1.00 and, after negotiations, it looks like we are going to have to come up with $1.8 million. That will show up in the supplementary budget as new money.

Mr. Cable: I would like to go over this document, which was given to the House this afternoon, on last year’s financial statements, not with a view of revisiting the supplementary estimates, but with a view to determining our opening balance sheet for the present year. That opening balance would tell us how much surplus is available to dig into, in lieu of tax increases, or how much has to be made up at some juncture in the future.

On the first page, the bottom paragraph starts by saying that the projected deficit currently on our books of account is subject to change for a number of reasons, and it outlines five reasons.

I wonder if the Government Leader could indicate a range of numbers, best case and worse case scenarios, that would play on that $20 million shown as the balance sheet deficit, and indicate whether or not that $20 million is close to the worst case scenario or the best case scenario.

Hon. Mr. Ostashek: I believe the Member has the document that has “draft” stamped all over it. These are based on the best figures we have available to us today. That is why these qualifiers were put on the bottom.

My understanding is that this could change somewhat, but we do not expect that it will get down to the $57,895,000 deficit that we projected in the supplementaries. We expect that the best case scenario would probably be somewhere around $61 million, which would put our accumulated deficit in the $11 million to $12 million range. This would be the best case scenario that we perceive at this time.

Mr. Cable: Shooting these five reasons through the deputy minister’s computer, what is the worst case scenario? I take it $71 million is the best guess at the present time. What is the worst case scenario?

Hon. Mr. Ostashek: Based on the raw data we have now, the $20 million accumulated deficit, as of March 31, would be the worst case scenario right now. We expect some recoveries there yet. The only outstanding issue that is not accounted for here is if the Auditor General was to make us write off the Curragh debt.

Mr. McDonald: I did not think we were going to be able to get into this document tonight. Since we are there, we may as well continue.

The Minister indicated this was the worst case scenario, but he has also shown the extended care facility as being fully booked in this particular year. Can the Minister explain the financing arrangements? I noticed in the legislative return he tabled that he indicated there may be some questions about whether this extended care facility should be a 1993-94 entry.

Can the Minister explain the financing arrangements and indicate why there was not an attempt to amortize the cost over a number of years?

Hon. Mr. Ostashek: I was talking to my assistant, and I missed the last part of the question. I will answer the first part, and the Member may want to ask the second part again.

I do not think, at any point, we indicated that any of the extended care would be written off in 1993-94. We just talked about the loan amortization on it. The facility itself had to be written off in the 1992-93 year.

Mr. McDonald: I do not understand the answer, I guess. The full cost is shown as being expended, as I understand it, in 1992-93. Is that not the case?

Hon. Mr. Ostashek: Yes, that is the case, but my understanding is that it has nothing to do with the loan transactions.

Mr. McDonald: In terms of an expenditure by the government for the extended care facility, perhaps the Minister could just simply explain it so that I will not have to fumble here, because I do not understand the financing arrangement. The government seems to have made the decision. Perhaps the Minister could explain the decision to me.

Hon. Mr. Ostashek: I will try to explain it to the Member opposite but, no matter what the financing arrangement is, it will have no impact on the surplus or deficit. It has to be written off this way. The only thing that will be different is that we would loan the money to Yukon Housing; Yukon Housing would loan the money back to Health and Social Services; Health and Social Services would make the payments on it.

Mr. McDonald: In the schedule of expenditures for the year ending March 31, 1993, it shows $11.2 million as an expenditure in capital for the Yukon Housing Corporation. That is calculated into what is shown as the actual capital expenditures for that particular year and in turn is factored into the cover sheets that project a $20 million deficit. I am still not clear on what the Minister is saying. Is he saying that there is no impact on the surplus deficit, because there are a series of loan transactions between corporations and departments? Yet, it appears very much that it is indeed written as an expenditure and calculated into the accumulated deficit for this particular year.

Hon. Mr. Ostashek: Maybe I can clarify it for the Member. It has to be put into the deficit for that year. No matter what the financing arrangements are, it will not impact on the deficit.

Mr. McDonald: I think the agenda with the deputy minister is getting longer.

Is there anything else the Minister would like to say to supplement that answer? I really do not understand the answer.

Hon. Mr. Ostashek: The only thing I can add to it is that if one were to use one’s own money, or borrowed money, it would not have an impact on the deficit. That is basically what we are talking about here.

Mr. McDonald: It is not booked at zero when lending oneself money and spending it. It is booked as an expenditure and calculated into the accumulated deficit for that particular year. It is all part of the calculations.

I do not understand the Minister’s explanation.

Hon. Mr. Ostashek: Whether we were to borrow money or not, we would still have to bill it there. That is where it has to be accounted for.

Mr. McDonald: The Minister indicated that it would not have an impact on the surplus deficit. I just do not understand what the Minister is saying to me.

Hon. Mr. Ostashek: What I said is that the financing of it does not impact upon the deficit. It is calculated in the 1992-93 year and that is where it has to be accounted for. No matter how it is financed, it still has to be accounted for there.

Mr. McDonald: I will have to ask some questions of the deputy minister. Perhaps the Minister could indicate why the option to book it into the 1992-93 year and not amortize it over a number of years was made?

Hon. Mr. Ostashek: I guess the question is how can we amortize it over a number of years when the money is already spent and gone?

Mr. McDonald: My understanding was that one of the financing options was that the funding would be booked over a number of years in order to secure CMHC participation in the principal payments. Can the Minister clarify this for me?

Hon. Mr. Ostashek: That is exactly why we are making the loan, and we will be taking advantage of that amount of money through CMHC. That is the reason for the loan situation, back and forth, as to how it is cost shared and paid back. The fact remains that it had to be booked into the 1992-93 year.

Mr. McDonald: I am still not convinced of it, and perhaps I will be asking some more questions later.

There appears to be in the statement a very significant collapse of territorial revenues. Could the Minister explain what the revenue is, because he did not give us Schedule A, and he did not tell us why, how or where?

Can the Minister indicate where the expected collapse is coming from?

Hon. Mr. Ostashek: If the Member would look at his copy there, it is on the grant. He has the figures voted to date in the amount of $244,317,000 actual; $233 million, $378 million, and $276 million, with a variance of almost $11 million.

Mr. McDonald: Would the Minister mind pointing that out to me in the document?

Hon. Mr. Ostashek: On about the fourth page, where it is titled “Schedule of Revenues for the Year Ended March 31, 1993, Schedule A”. Are you missing a copy?

Mr. McDonald: I have a document that is five pages in total, including the two cover pages.

Hon. Mr. Ostashek: I am sorry, we will get a copy of this for you.

Mr. McDonald: That would be very helpful, particularly since the big changes do not seem to be on the expenditure side, but seem to be on the revenue recovery side.

The Minister indicated that there was a reduction in the federal transfer. Can the Minister indicate why that reduction is?

Hon. Mr. Ostashek: It is my understanding that it is because the keep-up factor has been changed for the three years.

Mr. McDonald: Is the Minister saying that, between the time they calculated the supplementary estimate - the keep-up factor and now - they have determined that the provincial tax rates have increased by that much to cause a reduction in the federal transfer by this amount of money?

Hon. Mr. Ostashek: Yes, I am afraid that is correct. My understanding is that we have been notified by telephone of that, but have not got it yet in writing from the federal government. That is one of the qualifiers, but it seems to be that that is what has happened.

Mr. McDonald: The reduction in the keep-up factor accounts for the $8.3 million, is that right?

Hon. Mr. Ostashek: Yes, that is right, but it is actually an increase in the keep-up factor and it is also why the $4.5 million we have in reserve for 1993-94, as I indicated to Members, is used up already.

Mr. McDonald: I do not understand that. I was talking about two different fiscal years. I understand that what we are talking about here is the 1992-93 fiscal year, and I was asking a question about the operating reserve for 1993-94. Can the Minister explain what he is talking about?

Hon. Mr. Ostashek: Unfortunately, it also flows forward to this year’s calculations.

Mr. McDonald: I do not quite understand the answer, but I will ask the deputy.

The Minister has indicated that their knowledge of the change in the keep-up factor took place when, precisely?

Hon. Mr. Ostashek: That took place last week in Ottawa. The deputy has informed me that we do have written confirmation of it.

Mr. McDonald: This position by the federal government is not under dispute by the Yukon government. Is that right?

Hon. Mr. Ostashek: No, it is not under dispute. It is not a position, it is a calculation.

Mr. McDonald: Does the Yukon government agree with the calculation?

Hon. Mr. Ostashek: Yes, I am afraid that we do.

Mr. McDonald: The recoveries also show a very significant reduction beyond what was calculated in the first supplementary for 1992-93. Can the Minister explain that?

Hon. Mr. Ostashek: A large part of it is because the Yukon Housing Corporation is netted out. That is one of the main reasons for it. I think the Member opposite is aware of that. I understand that it was during their administration that they changed the way that they calculated the recoveries on the Yukon Housing Corporation.

Mr. McDonald: I am not quite sure that I understand the answer. In the schedule of recoveries, which we did get, the Yukon Housing Corporation is not even listed in either the operations or capital recoveries.

Hon. Mr. Ostashek: Our recoveries are down, because our expenditures were down in recoverable programs.

Mr. McDonald: The Minister is indicating that the expenditures are down in recoverable programs to the tune of $12 million.

Was there no monitoring to try to expend funds in those particular areas? Was the government aware of it? Were the Ministers taking care to make expenditures in those areas? What was the reason for this fairly significant reduction?

Hon. Mr. Ostashek: We just took a beating in here for projecting high expenditures in land development. I do not know how we are supposed to deal with this issue.

Mr. McDonald: When the Government of Canada agrees to cost share programs or provide expenditures for programs - for example, in Education there is a $340,000 variance on a $2.5 million expected recovery - that is a very significant event. As Minister of Education, I would have known about it. That is the reason why I asked the question.

I see that there are fairly significant ones throughout. Is there any pattern to the changes? This seems to be a fairly significant variance, in that this is better than 10 percent.

Is there any other rationale for this being the case, other than what the Minister has provided already?

Hon. Mr. Ostashek: I am told that, while we do not know for sure right now - but we can it get it from the Minister - we believe this to be about average.

Mr. McDonald: I would like confirmation of that. The MLA pension plan shows a shortfall. Is the Minister convinced that there is no shortfall?

Hon. Mr. Ostashek: We have a material evaluation that says we are short this amount of money, and we may have to get another opinion on it. I am not sure at this point.

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

Motion agreed to

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

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

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

Mr. Abel: The Committee of the Whole has considered Bill No. 9, entitled Interim Supply Appropriation Act, 1993-94 (No. 3), Bill No. 89, entitled An Act to Amend the Fuel Oil Tax Act, and Bill No. 29, entitled An Act to Amend the Tobacco Tax Act, and directed me to report them without amendment.

Further, the Committee of the Whole has considered Bill No. 56, entitled Public Sector Compensation Restraint Act and directed me to report the bill with amendment.

Further, the Committee of the Whole has considered Bill No. 6, entitled First Appropriation Act, 1993-94, and directed me to report progress on it.

Speaker: You have heard the report from the chair of the Committee of the Whole. Are you agreed?

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

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

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

Motion agreed to

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

The House adjourned at 9:30 p.m.

The following Sessional Papers were tabled May 26, 1993:


Protocol Agreement between the Departments of Education, Health and Social Services, and Justice re interdepartmental information exchange on children and their families (Phillips)


Notes to draft unconsolidated Financial Statements dated May 26, 1993 (Ostashek)

The following Legislative Returns were tabled May 26, 1993:


Managerial wage cuts: two months’ notice given (Ostashek)

Oral, Hansard, p. 954


MLAs and Cabinet staff wage restraint measures (Ostashek)

Discussion, Hansard, p. 953


Purchase price and appraised value of property purchased for Two Mile Hill reconstruction (Fisher)

Oral, Hansard, p. 689


Whitehorse sewage system: job creation generated for 1993-94 (Fisher)

Discussion, Hansard, p. 853