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