Whitehorse, Yukon

Monday, November 22, 1993 - 1:30 p.m.

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

Prayers

DAILY ROUTINE

Speaker: We will now proceed with the Order Paper.

Introduction of Visitors.

INTRODUCTION OF VISITORS

Mr. Cable: I would like to introduce Chris Meyer. She is the local president of the Amnesty International organization. Chris has given me a handout produced by that organization, with the names of nine political prisoners on it, which I will circulate to the Members. The handout suggests that people write to these people in prison and elicit responses, and then forward them on to Amnesty International. In that way, that international organization can get information on the whereabouts and the status of these prisoners. I will circulate that document later.

Mr. Harding: I would like to introduce my father, who is here with us today. It is his first time in the Yukon, the first time he has been up to visit me in the eight years I have lived here in the Yukon. My father, much as I hate to admit it, is a lifelong Conservative -

Applause

Mr. Harding: Do not make it worse. I do not know which side he is going to be hoping for today, but I am sure he will enjoy the enlightened debate and I know you will join me in welcoming him.

Applause

Speaker: Are there any Returns or Documents for tabling?

TABLING RETURNS AND DOCUMENTS

Hon. Mr. Ostashek: I have an annual report for tabling.

Hon. Mr. Phelps: I have for tabling some legislative returns for the Department of Health and Social Services as well as one for the Department of Justice.

Hon. Mr. Devries: I have two legislative returns from the Department of Economic Development.

Speaker: Are there any Reports of Committees?

Petitions.

Introduction of Bills.

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

NOTICES OF MOTION FOR THE PRODUCTION OF PAPERS

Motion for Production of Papers No. 4

Mr. Penikett: I give notice of the following motion:

THAT the House do issue an order for the return of:

1. Any papers drawn up for the Yukon Energy Corporation and/or the Yukon Development Corporation boards which deal with, directly or peripherally, the privatization of some or all of Yukon Energy Corporation’s assets;

2. All correspondence with Yukon First Nations, the Yukon Electrical Co. Ltd., Alberta Power, Canadian Utilities, Intergroup, Yukon Electrical Co. Ltd. Board Members and any other relevant or individual/organizations pertaining to the feasibility of, or plans for, the privatizating some, if not all, of the assets of Yukon Energy Corporation; and

3. All telephone logs of conversations with Yukon First Nations, the Yukon Electrical Co. Ltd., Alberta Power, Canadian Utilities, Intergroup, Yukon Electrical Co. Ltd. Board Members and any other relevant individual/organization pertaining to the feasibility of or plans for privatizing some, if not all, of the assets of the Yukon Energy Corporation.

Speaker: Are there any Notices of Motion?

Are there any Statements by Ministers?

This then brings us to the Question Period.

QUESTION PERIOD

Question re: Yukon Energy Corporation, privatization of

Mr. Penikett: On March 22, 1993, the Minister of Energy for the Yukon government assured this Legislature that the hydro assets belonging to the people of the Yukon would not be privatized to the old Phelps’ family business, Yukon Electrical, or any other private interests, and we now have reason to ask what the Minister’s assurances are worth. What I want to know today is: when did the Minister begin the secret negotiations toward privatization?

Hon. Mr. Phelps: I guess the answer is never, since no negotiations have commenced as of this date. I was asked, in this House on sitting day, whether or not we were looking at the issue of privatization, and it is an issue that is of interest to me, the Minister. It is an issue about which I have had some informal discussions with various people. When, and if, my conclusion is that we ought to look seriously at such a move, I would be preparing a document to take to Cabinet, setting out the issues as I see them, and the form that such negotiations might take.

Mr. Penikett: The Minister’s pronouncements are in the form of statements of government policy and since the takeover bids by Yukon Electrical Company Ltd. are not new - they tried it when the NDP was in power - I would like to ask the Minister who initiated the secret but informal discussions he mentioned moments ago, to transfer control of public property, worth hundreds of millions of dollars, to these private interests?

Hon. Mr. Phelps: In the first place, the statements by the hon. Member across from me and the former Minister responsible for Yukon Energy Corporation are so misleading as to be almost shocking in their nature. The hon. Member seems to be suffering from lapses in memory. That is understandable; it happens when you get to a certain age - you forget certain things.

At the time he announced the actual purchase of the Yukon Energy Corporation he stated quite plainly, for the record, that they will be looking at rationalizing those assets between the Yukon Electrical Company Ltd. and Yukon Energy Corporation. With respect, those are the kinds of things that we are looking at now. In addition, however, we have made it very clear that we would like to see First Nations involved as partners in the delivery and development of energy in the Yukon.

I guess I am not altogether surprised by the violent reaction against this by the Member opposite. I heard that he was against it when he was the responsible Minister. I feel the First Nations ought to be partners in the provision of that energy, and I think that Yukoners ought to have a chance to be partners as well.

Mr. Penikett: We know the Minister is in trouble when we get the patronizing bafflegab that we just heard.

I was the Minister who not only negotiated, but provided for First Nation partnerships in the UFA. Of course, the Member opposite is talking complete nonsense on that score. We know that the First Nations element of his proposal is probably just a ruse, a blind.

I would like to ask the Minister this: when the federal government wrote off $47 million in debt at the time of the transfer of NCPC assets to the people of Yukon, does the Minister believe that the federal government intended that a few wealthy individuals would benefit from this gift, rather than the people of the Yukon as a whole?

Hon. Mr. Phelps: The apparent bias in the question should not be allowed to go by without some comment. At no time have I suggested that a few wealthy people should be purchasing the assets of the Yukon Energy Corporation.

I am sure that the hon. Member has not forgotten - or perhaps he will remember if he tries hard - that in the Northwest Territories, for example, similar concessions were made in the transfer of NCPC assets to that territory. That territory has progressed a long way toward the privatization of their electric company.

Question Re: Yukon Energy Corporation, privatization of

Mr. Penikett: For the record, my bias is in favour of northern people owning the electrical utility, rather than a “Southern” corporation.

My question is for the Government Leader.

The replacement value of the Yukon Energy Corporation hydro assets may be as high as half a billion dollars. Since the Yukon Party has no mandate whatsoever for giving away control of this valuable public property, and certainly not to a Calgary multi-millionaire, will the Government Leader assure this House that the Yukon Energy Corporation’s assets will not be privatized without the Yukon Party first having received either a mandate from Yukoners, by way of an election, or at least a referendum on the question?

Hon. Mr. Ostashek: It is easy to see the bias in the Member’s questions. The Minister responsible for the Energy Corporation stated quite clearly that what is happening is very preliminary discussions. We are looking at ways to reduce energy costs for Yukoners. We are going to continue to explore those ways.

Hon. Mr. Penikett: The Government Leader did not answer the question. We are going to be very suspicious as to why not.

Given the direct contradictions in the Minister’s public statements and the statements he made in this House on March 22 of this year, and given that that Minister responsible for the Energy Corporation, while Minister, owned shares in Yukon Electrical Company, a private Alberta company, founded by the Phelps family, to which we are now involved in informal discussions to turn over control of hundreds of millions of dollars worth of public property-

Point of Order

Speaker: Point of order.

Hon. Mr. Phelps: The hon. Member surely should not be allowed to stand in this House and make completely untrue statements with respect to what this Member did or did not hold at any given time. What he is saying is false.

Speaker:   On the point of order.

Mr. Penikett: On the point of order, the Minister has admitted publicly that he was in a conflict-of-interest situation at the beginning of his term as a Minister. That is the issue.

Speaker:    Order please. I find that there is no point of order and that there is obviously a disagreement between the Members. Name calling is not acceptable conduct in this House. The two Members can do this outside of this Chamber.

Mr. Penikett: We would be pleased to invite you as referee.

I would like to ask, given the assets involved, which are worth hundreds of millions of dollars, and given the Minister’s association or dealings on this question with a former family business, does the Government Leader not recognize that there is at least the appearance of an enormous conflict of interest for both the Minister and potentially the government?

Hon. Mr. Ostashek: As I said, the accusations that are being made by the Member opposite are simply not true. Also, as I said in my first answer, this is in a very preliminary stage, and this government will consult with the people of the Yukon, if and when we get to that point.

Mr. Penikett: I am pleased that we have extracted that small concession from the Government Leader. I would like to ask him this: James Smith, a respected citizen and former commissioner and former chair of the Northern Canada Power Commission has argued that before disposing of such valuable public property there should be a public inquiry; will the Government Leader consent to a public inquiry into the government’s dealings on this question?

Mr. Ostashek: At this point I would not consent to a public inquiry, because we have had no dealings on this issue. As the Minister has said, time and time again, and as I have said, these are very preliminary talks to explore the options available to this government.

Question Re: Yukon Energy Corporation, privatization of

Mr. Cable: I have some further questions for the Minister responsible for the Yukon Energy Corporation on privatization.

The Minister was interviewed last week by the press and he was reported as saying that private corporations are often more efficient than government-run corporations in the utility field. Would the Minister confirm to the House that one of the reasons for this privatization thrust is efficiency and, as the Government Leader just mentioned, the potential reduction in energy rates?

Mr. Phelps: Well, I would not confirm that is one of the reasons; those are two good reasons - as I am sure the Member can count - and there are other reasons as well. There is the whole issue of political interference in the running of the utility company. When the side opposite was in charge of the public utility, it had this milk cow and they could not draw themselves away from the milking stool. That always raises very grave issues with respect to the ratepayers’ money being spent appropriately. That is a very fundamental reason for considering privatization, and there are other good reasons as well.

Mr. Cable: The Yukon Energy Corporation’s assets have been managed for several years by one of the proposed partners in the privatization plan that I heard reported on, and that is the private corporation, Yukon Electrical Company Ltd. Is the Minister suggesting to this House that the management of the Yukon Energy Corporation’s assets by Yukon Electrical Company Ltd. has been inefficient?

Hon. Mr. Phelps: Of course not. I think that is an issue that bears some investigation and is continuously under scrutiny by the Yukon Public Utilities Board, by the officials who work for YEC and others. It will be the subject of a good hard look by the Auditor General of Canada.

The point I would like to make is that we may very well, in our talks, not look at amalgamating forces with Yukon Electrical Company Ltd. We may look at selling some of Yukon Energy Corporation’s interests to First Nations and to other Yukoners without looking at the need to have Yukon Electrical Company Ltd. join forces. They are two different issues. The issue with respect to Yukon Electrical Corporation Ltd. is simply that if they put their assets in with ours then they would be one of the shareholders.

Mr. Cable: The Minister just mentioned the Auditor General. The Yukon Development Corporation Act sets out that the Minister may request the Auditor General to make such other report - other than financial reports - as the Minister may require.

Is the Minister prepared to ask the auditor general to do an operational audit of the management agreement between the Yukon Development Corporation’s subsidy, Yukon Energy Corporation, and this private corporation, Yukon Electrical Company Ltd.?

Hon. Mr. Phelps: I understand that such an audit has been asked for by the previous administration and we have a great deal of interest in seeing it proceed.

Question re: Yukon Energy Corporation, privatization of

Mr. Penikett: I have a question for the Government Leader on the same subject. The flooding rights contained in the Yukon land claims umbrella final agreement are based on the assumption that the people of the Yukon own the hydro utility. Has the Government Leader obtained legal opinion, other than that of the Minister of Justice, as to whether turning over control of Yukon’s hydro resources to a Calgary-based, multi-national corporation would be consistent with YTG’s legal obligations to First Nations?

Hon. Mr. Phelps: I guess my response to the Minister is: of course not. There has never been any discussion or intention of turning control of Yukon Energy Corporation assets over to a firm or interests outside the Yukon.

Mr. Penikett: The Minister certainly created a contrary impression in his public statements in the House and, of course, that is what has led to these questions.

I would like to ask the Government Leader again, because he is the Minister responsible for land claims, if he has examined how the Government of Yukon can live up to its obligations under the UFA in respect to guarantees of First Nation participation on the boards of the energy and the development corporations if those same corporations privatize?

Speaker: Before the Minister answers, I think we are bordering on the hypothetical here, and hypothetical questions are not allowed. I will allow the Minister to attempt an answer.

Hon. Mr. Phelps: What has happened here is that I stood in this House and said we were looking at the various issues. I am looking at them to see whether or not it is worth taking to Cabinet to explore in some detail the benefits of privatization. I have raised this in response to questions from the Member opposite, the Member for Riverside, because he became aware that I had had discussions with First Nations on this issue - the day before he asked the questions, as I understand it. It is important that people understand that it is a logical thing for the Minister responsible for energy to do. It is logical, surely, for me to take an interest in what is happening in other jurisdictions and to ask questions of various experts about what the benefits might be. That is a stage that falls a great deal ahead of me taking any kind of paper to Cabinet with respect to setting up some kind of negotiating structure to look at privatization.

Speaker: Would the Minister please conclude his answer.

Hon. Mr. Phelps: If my good friend, the Leader of the Opposition, remains the Don Quixote tilting at the demons - free enterprise, the windmills - that is his prerogative but he really should not try to make inflammatory accusations that simply are totally unbased.

Hon. Mr. Penikett: I am happy to play Don Quixote to the Member’s windmill.

I remind the Member that he was the Minister who stood on the floor of this House on March 22 of this year and gave us his assurance that the assets would not be sold. I therefore want to ask the Member, given the contradiction between his statements over the last few days and those he made on March 22, when did the first meeting take place in which this matter was discussed with either First Nations or Yukon Electrical Company representatives?

Hon. Mr. Phelps: The first public utterance I made about looking for ways to have First Nations involved as partners in the delivery of energy was made shortly after I became Minister. I have made it several times since then.

I would remind the Member opposite that it was only this summer that information became public to us in the Yukon with respect to the actions being taken by the Northwest Territories government in privatizing the NCPC assets that they acquired a short time ago.

We are interested in what our sister jurisdiction is doing. It is only appropriate that we look at the rationale behind it and see if there are benefits that could accrue to Yukon ratepayers, as well as Yukoners, in exploring privatization - if he wants to call it that - or broadening the ownership within Yukon of the assets here.

Question re: Yukon Electrical Company Ltd., Minister’s private interest

Hon. Mr. Harding: I have a question for the Minister responsible for Yukon Energy Corporation. Given that this Minister has a history of conflict-of-interest involvement, we feel that we should give the Minister an opportunity to clear the record regarding these privatization discussions.

The Minister had interests in the companies that owned Yukon Electrical. I would like to ask the Minister if he has sold these interests.

Hon. Mr. Phelps: Of course. I would remind my good friend across the way that the nature of the ownership was in a large utility company called Canadian Utilities. Yukon Electrical is a mere speck in the order of things. The shares involved were some 200 shares worth about $19 each at the time.

The issue before us is whether or not there would be benefit to Yukoners in bringing First Nations in as partners and giving other Yukoners the opportunity to purchase. This could be done without the issue of rationalizing assets of the Yukon Electrical Company.

Even I, knowing the bias of the side opposite against First Nations being full partners in our economy, am somewhat surprised by the severe emotional attack being voiced in the concept by the Members opposite.

Mr. Harding: The government’s commitment to partnerships with First Nations’ business was clearly demonstrated with the Taga Ku fiasco.

As I see it, the issue is not quite as the Minister sees it. I want a clear answer to the question I previously asked. From past discussions and comments in the media, and from disclosure statements filed, it was clear that the Minister had interests in companies that own Yukon Electrical.

Did the Minister sell those interests and, if he did, to whom? If they were not sold, were there any trusts created?

Hon. Mr. Phelps: Those interests were sold the next day on the private market.

Mr. Harding: We have a major problem here. I certainly fear that the fox has been placed in charge of the hen house. Given the Member’s responsibility for conflict-of-interest legislation, his dealings as a Minister with energy interests, while he was clearly a shareholder of these interests, and the Minister’s track record, is the reason that the Minister has refused to proclaim tough new conflict-of-interest legislation - namely, the Public Government Act - due to his personal interests?

Hon. Mr. Phelps: I wonder if that is a question directed at me. The problem with the Public Government Act, which took the side opposite some seven years to develop, is that it is a very cumbersome and costly act that is not really appropriate to Yukon circumstances in many respects.

Question re: Conflict-of-interest legislation

Mr. McDonald: I have a question for the same Minister on the same subject, particularly with respect to the Public Government Act and to his own interests in Canadian Utilities Limited. The Minister has indicated in his typical, moral relativist way that he only stood to gain a small amount, if anything, through his ownership of shares of Canadian Utilities.

The Minister went on to say today that he sold his shares in Canadian Utilities the next day. Can the Minister indicate precisely when that day was, and what he means when referring to the next day - after what?

Hon. Mr. Phelps: I can certainly look back and get the actual date that the shares were sold on the market.

Mr. McDonald: The Minister has just indicated, with some precision, that he made the decision to sell, or that he sold his Canadian Utilities shares, the day after some event. I am not certain what the event may have been. Could the Minister tell us what month of the year, and in what year, he sold his shares?

Hon. Mr. Phelps: I will, with more precision, once I have had a chance to look it up. My best recollection is late December, or early January of this year.

Mr. McDonald: It certainly was not in early January, because he had been asked by the media in the middle of January whether or not he had sold his shares, and he indicated, at that time, that he recognized it as being a problem, and that he should get down to selling his shares at some point.

Can the Minister indicate whether or not he had any conversations with anyone associated with the companies with whom he owned shares about any matter that might help determine the future of Yukon Energy Corporation assets - any conversations whatsoever?

Hon. Mr. Phelps: I had no conversations with those people or with people who were in any way employed by, or directors of, or whatever, of Canadian Utilities or its subsidiary companies prior to selling the shares.

Question re: Conflict-of-interest legislation

Mr. McDonald: The Minister, as we discovered the other day, is the Minister responsible for the Public Government Act, because the Minister was the one, presumably designated by the Government Leader, to answer questions on the subject. The Public Government Act goes into some significant detail about ensuring that there is no conflict of interest by any Member, particularly Executive Council Members, in this Legislature. It even goes to the extent of anticipating the appointment of a conflicts commissioner, who will analyze the matter to make judgment as to the perceived conflict that a Member may have in the undertaking of public duties. The Minister has said that the act itself is too cumbersome to proclaim.

Can he tell us whether or not it is too cumbersome for the public, or too cumbersome for the Cabinet, who has this position about conflicts? Who is it too cumbersome for?

Hon. Mr. Phelps: Apparently it was too cumbersome for the side opposite, because not only did it take them almost their full mandate to come forward with a new law - some seven and one-half half years - but they never got around to proclaiming it.

Mr. McDonald: All it takes is 15 seconds in a Cabinet meeting to decide to proclaim this particular piece of legislation, and it would take another 15 seconds in the Commissioner’s office to actually sign the legislation. Is the government committed to the provisions in the Public Government Act with respect to conflicts, or are they going to continue with this absolutely outrageous moral relativist position about whether or not they are making big bucks or only small bucks from actions that they take in public office?

Hon. Mr. Phelps: I never, in my time on the benches opposite, made these kinds of accusations of that Member or of his cohorts while they were in office and while they were not bothering to deal with new or any conflict-of-interest legislation. The good Member stood up and said, in his posture of moral indignation, it was inexcusable that someone would not have the Public Government Act proclaimed because it only took a matter of a few seconds to sign the order and a few seconds to have the Commissioner conclude the arrangements. I wish he would not be so critical of himself and his cohorts over there. I understand that they were busy and probably never got around to it because of all the good work they were doing, spending money from YDC, that properly was money that should have been held in trust for the ratepayers of the Yukon, on such things as Totem Oil loans. I do not think I mentioned in this exchange that the former Minister is, of course, working for that company and he talks about conflicts of interest. It is amazing.

Mr. McDonald: That Member, for Ross River-Southern Lakes, the Member who had shares in the company -

Speaker: Order please. I would like to warn the Member questioning and Members answering that a question must adhere to the proprieties of the House. It must not cast aspersions. It must not attack the reputation or integrity of other Members, so I would ask the Members to be aware of that order in their questions and in responses.

Mr. McDonald: We are trying to find out information from this practitioner of the most slippery answers. The issue here is to try to understand what conflict there was - and clearly there was some conflict - and how serious it was. It is very difficult, and I am not even at the stage where I can make a clear accusation because the Minister is slipping and sliding all over the place.

Speaker: Question.

Mr. McDonald: When will the government proclaim the Public Government Act, which will require absolutely no energy nor effort whatsoever to proclaim, so that they can put to rest very legitimate concerns by a large number of people about that particular Member’s perceived conflict of interest; and when will they set to rest any concerns they may have with that particular Member because that Member has a history of problems with conflicts of interest in the past?

Hon. Mr. Phelps: Once again, this is the basest type of accusation I have ever listened to. I am rather disappointed in the integrity of the Member opposite, because he has gone into something that I think is rather disgraceful.

I will stand on my reputation any time against his, when it comes to honesty.

The Member is trying to raise fears in the public. The simple fact is that that party is against the First Nations being partners in the provision and development of electrical energy. The First Nations know that, and they are simply reinforcing something that a good many on this side were suspicious about for some period of time.

Question re: Yukon Energy Corporation, privatization of

Mrs. Firth: It is interesting to hear the Government Leader saying this afternoon that they are simply in the preliminary stages to privatize publicly owned utilities, when I heard the Minister responsible for the Yukon Development Corporation on the radio this morning sounding quite convincing that he thought it was going to be better for Yukoners, that he would also involve the Yukon First Nations in this initiative, and that he had had various discussions with various parties, particularly that he had talked to tax experts. Although he will not explain to us what the tax implications are, because they are too complicated for us to understand, could the Minister tell us who the tax experts are he has spoken to?

Hon. Mr. Phelps: I have had preliminary discussions with some solicitors in Vancouver and with an investment firm in Toronto, but they are very preliminary.

Mrs. Firth: Could the Minister tell us whether these discussions have been casual conversations, or if they have been in a contract form? Could he please give the names of the firms to the Members of the Legislature and to the public?

Hon. Mr. Phelps: On one occasion, I was approached by the same investment firm - I have forgotten which name it is, but I can have it looked up - that had done work for the Northwest Territories. A phone call came from that firm in Toronto, and they were interested in knowing whether we would be interested in privatization, as they had done some work for the Northwest Territories. We then had a discussion about the privatization, generally. Again, the conversation was not a contract, or anything else. The other conversations I have had have all been simply in the nature of casual conversations. I do not put too much on it because, at this point in time, I do not have a mandate to pursue privatization on behalf of government.

Mrs. Firth: It is interesting that the Minister has many casual conversations and a very selective memory.

The Minister also talked about assembling a team of experts to address this issue - I heard him on the radio this morning - to address this issue. Will the Minister stand up this afternoon and tell us who is going to be on this team of experts?

Hon. Mr. Phelps: Once again, what I said this morning was that, if I were to take - and I probably will - an options paper to Cabinet, those are the kinds of issues I would be seeking Cabinet guidance on. At that stage, there is no question we would be looking for a mandate to negotiate and to engage the appropriate expertise.

Question re: Energy privatization

Mrs. Firth: I want to follow up with a question about the process. I am sure the Minister of the Energy Corporation is purposely trying to confuse the issue. He sounded very convincing this morning in saying that privatization was the way to go. I have a question that I would like to direct to the Government Leader about the process.

The Government Leader is indicating that this is in the preliminary stages. Does the Minister of the Energy Corporation have a mandate from Cabinet to examine privatization? Could he share with all Yukoners some of the specifics of that mandate?

Hon. Mr. Ostashek: I believe the Minister answered that question when he said that he has not come to Cabinet with anything yet. As I said, this is very preliminary. We are just as concerned as the Members opposite are about the tremendous increase in power rates in the Yukon. The Minister, in his capacity as Minister, is exploring all options available to him, and I think that is his duty as Minister. He has not come to Cabinet for a mandate to privatize the Energy Corporation.

Mrs. Firth: Let us understand this. There is no public mandate to review privatization, there is no Cabinet mandate to review privatization of public utilities, it is just one of those spontaneous announcements that the Minister made in the House - like the Minister of Education with his announcement of the education review at the Chamber luncheon, which exploded in his face. What is the position of the Government Leader regarding privatization of public utilities?

Hon. Mr. Ostashek: As the Minister and I have said, we are very concerned with the tremendous increase that was asked for in power rates in the Yukon this year. We have looked at other jurisdictions. I have spoken with the Government Leader of the NWT in Halifax this summer about her endeavours to privatize the NWT’s energy corporation. I asked how it was going, and she said it was going well.

I came back and asked the Minister to draw whatever information he could from the NWT and see if it would be of any benefit to the Yukon. This is strictly in the exploratory stage, and he is doing his job as Minister to bring back some options to Cabinet.

Hon. Mrs. Firth: This is what the day has shown us: no public mandate for privatization, no Cabinet mandate, and no policy. The Minister of the Energy Corporation says he was approached by some bigwig somewhere and asked if they wanted to privatize. The Government Leader is saying that, perhaps, we gave him a mandate and told him to check it out.

Will the Government Leader bring back to this House some written documentation outlining exactly what the process is? I want him to outline for us what their policy is, when the discussions started, what the mandate is, what the time frame is, when they expect to have a decision regarding this, and when they plan to make the announcement.

Hon. Mr. Phelps: This is the most absurd line of questioning I think I have ever been subjected to in some time. Surely, the public will recognize that part of my mandate, as Minister of the Yukon Energy Corporation, is to try and find ways to bring down the cost of energy to Yukoners. Surely, they will realize that it is quite in keeping for me to ask questions and try and look at what is happening in other jurisdictions in pursuing what I see as my broad mandate. Surely, it is appropriate for me to have conversations with First Nations and other individuals about the subject, long before I ever get to the stage of going to Cabinet with the concept and options in a formal way.

I have been having those kinds of discussions. They primarily arose once we heard about what was happening in the NWT. Those kinds of discussions have been ongoing. I knew, of course, they would not be private discussions, and that, in the fullness of time, there would be gossip on the street that I had been talking this way. When I have been asked in the House, I answered that I had been looking at it.

Some Hon. Member: (Inaudible)

Hon. Mr. Phelps: I have been on radio because the mere mention of having these kinds of discussions really upset the socialists on the other side. I am simply saying that these are the kinds of things I am looking at before I decide to come to Cabinet with a paper outlining the possibilities of privatization.

I am really shocked that anybody, especially someone who was once a former Minister, would suggest that Ministers are not supposed to do anything unless there is a policy paper. I have never heard of such a thing.

Speaker: The time for Question Period has now lapsed. We will proceed to Orders of the Day.

ORDERS OF THE DAY

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

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

Motion agreed to

Speaker leaves the Chair

COMMITTEE OF THE WHOLE

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

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

Some Hon. Members: Agreed.

Chair: We will take a brief recess.

Recess

Bill No. 11 - Second Appropriation, 1993-94 - continued

Chair: I will now call Committee of the Whole to order. We will be discussing Bill No. 11, Second Appropriation Act, 1993-94.

Is there any further general debate?

Mr. Harding: In the budget lockup, we requested a document pertaining to the effect of the Curragh and Sa Dena Hes mines shutdowns on the economy, as it pertains to the 1994-95 capital estimates and the 1993-94 supplementary estimates. We requested that document on November 10, 1993, and it is now November 22, 1993. We have a letter from the Government Leader dated November 15, 1993, that we have received from the Government Leader stating, “...not included in this package is the information requested regarding the financial impact of the Curragh Mine shutdown on the Yukon government. This information will be provided to you under separate cover.”

We feel that it is very important that we have this information, and perhaps the Government Leader can tell us when we can expect to receive this information.

Hon. Mr. Ostashek: I have that information with me today, and I will table it for the Members opposite. My reason for not sending out an advance copy of the information is that it is probably going to raise more questions than it answers. If you look at the face of this document, it tells you that because the mine has increased, we have gained a million dollars and that is not really the case, because there are so many things to be taken into consideration.

I will table the documents now and as we go through them we can explain the position.

The bottom line is that it has very little impact on the supplementaries or the 1994-95 budget. The effect of the closure will not take place until two or three years down the road, due to the ups and downs of the population and other things that the formula is based on. The immediate effect is minimal.

Mr. Harding: I certainly will enjoy going into it in a bit more detail. I am not only interested in the effect on the coffers of the Yukon government, I am concerned about the effect on the people it influences. I do believe that although the numbers may come out to be relatively the same as the estimates, it is going to be interesting to see where there have been changes in areas such as recoveries and taxation revenues.

I say that because when the government came out with the capital budget 1994-95, we were told that the budget had been calculated with an anticipated startup in July of the Curragh operations, at least in Faro if not Watson Lake.

We have certainly not seen that take place. Therefore, one would think that, given that there are 2,000 or 3,000 jobs involving a spinoff, including taxation revenues, personal income tax revenues and the like, it would have a significant impact on the economic situation.

Perhaps the Government Leader could explain, in a little detail, when the budget was calculated with the July startup in mind and such a major change was undertaken in the Yukon economy with the continued shut downs, why that would not have more of an impact on the supplementaries.

Hon. Mr. Ostashek: I believe the Member opposite must have meant July, 1993, not 1994-95. The reason why it will not have an immediate effect is that, because of the small jurisdiction we have, on which the federal government calculates the income tax, to be current with it is not possible. That effect will not be felt until further down the road.

Also, while territorial revenues will be down, the fact remains that, because of the perversity factor, our transfer payments will be up. That is the perversity in the damned thing. That is why there will not be an immediate spinoff.

If we start to lose some population down the road, and that catches up, that will have some effect on us.

Mrs. Firth: I want to follow up on something that has just come to my attention in the House this afternoon. I had discussions this morning with representatives from the Government Leader’s office - an executive assistant, I believe - about information I had requested. I see my name on the piece of correspondence that the Member for Faro has raised this afternoon, but I have never received this piece of correspondence. It is entitled, “Additional Information, 1994-95 Capital Budget”. Perhaps the Government Leader could check into that. The individual I spoke with this morning did not say a word about it. She did not seem to be familiar with it at all.

Perhaps the Government Leader would like to get a copy of that information to me. It is dated November 15, 1993, and it says copies went to Mr. Cable, Bea Firth, Piers Mcdonald, Trevor Harding and Lois Moorcroft. I have not received this information package at all.

Hon. Mr. Ostashek:   I am sorry if the Member has not. There must have been some mix-up somewhere because you should have received it. I will check on it and get it to you immediately.

Mrs. Firth: I want to follow up, then, on the impact on YTG of the Faro and Sa Dena Hes closures. I can remember quite distinctly, in the budget lockup, the Department of Finance officials telling us that they had taken into account, in both the supplementary budget and the new capital budget, the closure of the mines.

I expected a data sheet listing all of the areas where revenue was down and revenues that should have been up because of the perversity factor, and also any job impact that it may have had - whether they had done any analyses of the number of people who were out of jobs because of the mine closures - what impact that was having on us in the area of social assistance and in lost revenues due to income tax revenue loss and so on. The Finance officials sounded confident that they had all of this information, that they just had to go back to the department and pull it all together for us and get the Minister’s approval to give us the information. I had expected to get a data sheet with all of that information included. Then, this morning, when I spoke to the Government Leader’s executive assistant, she indicated to me that the Government Leader would answer questions for me regarding the impact of the Curragh closure. Now, I find that there is a letter of communication I have not received. There is another two-page document that the Minister has tabled this afternoon with a vague answer about the impact.

Could the Minister give us a clearly defined answer about whether they have this information in the Department of Finance, and whether or not we can have that information as soon as possible?

Hon. Mr. Ostashek: I can, and I will, but the basis of it is here. It is in the bottom line of the first page. The expected loss of revenue for the current fiscal year due to Curragh’s demise, as compared to revenues in the main estimate, is $2,469,000. If the Member wants a lot more figures about what has gone down and what has gone up, we can do that.

Mrs. Firth: That was the point of the whole exercise: to see what the trends were. It is fine to give us a lump figure. We could all say that it is down by $2.5 million. How did you arrive at that figure of $2,469,000? They have listed in the tabled documents some assumed population impact and so on. It says that under the Formula Financing Agreement it does not come fully into play for three years because the formula’s indicator is based upon a three-year moving average of the Canadian GDP, provincial, local expenditures and population growth factors. It would be much more comprehensive if we could see the way the Department of Finance arrived at these conclusions and how they compiled the figures to arrive at that.

Hon. Mr. Ostashek: We certainly have no problem getting the rest of the information for the Member opposite. I thought the paper would have addressed these issues, in that it is a three-year moving average. The ramifications of the Curragh shutdown will not be felt in the Yukon, or may never be felt in the Yukon, depending upon what else starts up. As the Member is aware, even with the shutdown of Curragh and Sa Dena Hes, there are only a hundred fewer people employed in the Yukon than there were a year ago in October. Therefore, it is really hard to tell what the true spinoff of it is. We will get the figures for the Member opposite.

Mrs. Firth: There were two other outstanding requests I had for information that the Government Leader had indicated to me that I would have prior to debating these supplementary estimates. One was the information regarding the trades breakdown. I believe the Minister of Economic Development told me in the House Thursday that, “Those figures were also originally given to the Department of Finance when they developed the budget. That is what some of the budget was based on. They should be readily available”.

The executive assistant of the Government Leader told me today that it was going to take the Department of Economic Development three days to compile those figures. Could I ask why there is a great inconsistency - one Minister is saying they are ready and another person is saying it is going to take three days to get them ready?

Hon. Mr. Ostashek: I believe there has been a bit of a misunderstanding, either of what the executive assistant told the Member or what the Member assumes she heard. We do have the figures, but I am not prepared to table them at this time until they have been double-checked by the departments because of the nit-picking that goes on by the other side if our figures are out. So, we are taking them back to the departments to double-check them again to make sure we are confident in these figures before we table them in the House.

Mrs. Firth: Just to make one thing clear, I did not misunderstand the individual’s comments. I was told that it was going to take three days before those figures could be presented to us. The Government Leader is waving them around at me - do not wave them at me, give them to me. It does not do any good to wave them at me here in the Legislature, and that presented a great inconsistency from what the Minister had said in the House last Thursday. I had expected that we would have received the information almost immediately.

I suppose we will have to wait for three days for that information, so that they can check it again.

The other outstanding matter was the matter of the written questions. A couple of them are going to be responded to - the recommendations of the survey are, I am told, going to be presented. The community development fund and economic development fund grants and loans will be coming tomorrow. The outstanding issue of the 700 jobs that were created in the capital budget - a breakdown of how they arrived at 700 jobs will be supplied. The Department of Finance promised in the lockup that they would enquire - oh, is that in the package?

I did not get it. I had five written questions on the Order Paper. Could the Government Leader’s executive assistant check the outstanding one about the Development Corporation? Could I have that information, as committed by the Government Leader, before he goes away and we want to debate his departments.

Hon. Mr. Ostashek: We are working on getting the information. We will have the detail for the Member opposite on the jobs in the capital budget before we get into the capital budget.

She has asked for some information out of PSC that is going to take a considerable amount of time to pull together. The departments are working on it so as soon as that is ready, it will be tabled for the Member opposite.

Regarding the other ones, as she said, she has been assured she will get that information forthwith; I hope that will satisfy her requests at this point.

Mrs. Firth: I have received the information from the Public Service Commission regarding the FTEs and the changes in personnel. It was tabled in the form of a legislative return and I do not imagine it would be fair to ask the Minister a question about the Public Service Commission when he has the Deputy Minister of Finance here. Perhaps I could ask him a policy question instead of specific numbers. What is the government’s policy with respect to attrition? Is that policy still in effect?

Hon. Mr. Ostashek: Before I answer that question, the breakdown of the 700 jobs is in the November 15 letter that the Member did not get, so that will be coming forthwith.

On our policy regarding attrition - yes, it still is in effect if a person has left a job that we feel is no longer required. However, if the department feels that they need to fill that job, the first step is to try and fill that position from within the system and if that is not possible, then we go to competition.

Mrs. Firth: Can the Minister tell us how many jobs have been eliminated through attrition?

Hon. Mr. Ostashek: I am not exactly certain of the number. I would have to provide that information for the Member, because there are jobs that have been eliminated through attrition and also vacancies that were not filled, so I guess they could be called attrition also. There were many positions that were eliminated completely. I will try and get that information for the Member opposite.

Mr. Harding: I have some questions about the budgeting process and what led to the supplementary estimates 1993-94 document that is now before us. I am trying to reconcile what I have just learned about the impact of the Faro and Sa Dena Hes mine situations on the economy and how it is reflected in the government’s figures for this year.

I do not want to sound like a nit-picker, but there are certainly some questions that I have a lot of interest in, including this 3,700 person weeks jobs list that we received last week, which I understand is being checked and double-checked.

When the 1993-94 capital estimates budget was given to us, we were told that it had taken into account that the mine would be operating, and that, to me, was a fairly significant premise to work under in the development of a budget.

I have not had the good fortune of being the Minister of Finance of this territory, so I would have to admit that my knowledge is not as detailed as the gentleman sitting beside the Government Leader, and probably would never be as detailed if I was Minister of Finance, but I would like to know, now that we have the supplementary estimates brought in for the 1993-94 year, exactly how the two differences could be reconciled.

On the one hand, we have the government saying that the situation was an assumption, that the government was going to be working under the premise that the mine was open, and in the supplementary estimates it is not open.

In the development of the budget, we had the government saying that, in the 1993-94 estimates, they were working under the premise that the mine was indeed open, but in areas such as social assistance costs the Minister responsible for that department stated that those costs had been absorbed in the development of the budget.

Maybe the Government Leader could explain the differences there and under which auspices was each department working?

Hon. Mr. Ostashek: I will certainly have to leave the question of the social services and how it is absorbed by the departments to the Minister responsible for it. I believe what the Minister stated in this House, based on the first-quarter figures, was that social assistance for this fiscal year was down at that point. He also qualified that by saying that he did not know what it would be like by March 31, but in the first-quarter statistics - the last that we have - overall social service payments in the Yukon were down.

I would like to try to clarify for the Member opposite the ramifications of Curragh operating or not operating. Due to the Formula Financing Agreement and the perversity factor, for every million dollars we do not collect in taxes this year, we get $1.56 million from the federal government. It is offset and does not have that much of an effect on our bottom line. As the Leader of the Official Opposition said in the debate on Curragh last spring in the House, the reality of the foolishness of the perversity factor is that the government could, in fact, end up having more money with Curragh shut down than it would if it were operating.

Mr. Harding: I understand that, but I am not really asking how the government gets the square pegs in the round holes and ends up with the number in the end. What I want to know are some of the specific, key elements of the difference.

The bottom line may be that if one says there are going to be 700 jobs and the hospital construction is stopped and there is not as much land development, Ibut you still have 700 jobs, to me it is not the same 700 jobs that were originally planned for. This impact is what I am trying to find out about in terms of the budgeting process.

We have a significant reduction in the royalties in this supplementary budget. We could start in the recoveries of $21,999,000 or, essentially, $22 million dollars. Has the shutdown of the mine operations had any impact on that expected amount? We voted $129 million and have revised the vote to $107 million.

Hon. Mr. Ostashek: Not really. The major portion of that is from the Alaska Highway work and the hospital.

Mr. Harding: So there was no impact. Was there any specific impact with regard to the shutdowns in the area of the housing mortgage arrangement that we had with the mine situation?

Hon. Mr. Ostashek: Is the Member asking about the arrangement with Faro Realty? I will leave that until we get into discussion on a department-by-department basis. I am not sure where we are at with that. The Minister responsible for the Yukon Housing Corporation can answer that better than I can.

Mr. Harding: Okay, we will talk about that when we get to the Minister responsible for the Housing Corporation. Another issue I am interested in is in the area of road maintenance. One would think that when we had 30 fifty-ton loads being hauled over the road every day, the road maintenance costs would have been a lot higher. We no longer have 30 fifty-ton loads rambling over the highway, so have there been any impacts on the budget in that area?

Hon. Mr. Ostashek: Yes, there most certainly have. Our road maintenance will be substantially less this year than what it was in previous years.

Mr. Harding: Can I get the specifics for that?

Hon. Mr. Ostashek: My deputy will try and dig it out, but if we do not, we will get it when we get to the department.

Mr. Harding: One of the key areas - it should be a key area to the Members opposite, given their conservative philosophy - is the concept, or the idea, of supporting self-sufficiency. It is certainly something that I support for this territory. One of the key things to that end is the ability to pay our own way in terms of personal income taxes, wages, and the elements that contribute to having consumers with disposable income as well as a good strong taxation base as a result of that. That means that we have to have people working and making wages that are not in the lower echelons of the taxation bracket, which usually places them outside of the realm of taxed people. I would like to ask the Minister of Finance if he could tell me, specifically, what the impact of the Curragh mine shutdown was in terms of lost income tax.

Hon. Mr. Ostashek: There are none so far but, ultimately, it will be about $2.9 million for this year.

Mr. Harding: Could the Minister give me some detail as to how that estimate is arrived at?

Hon. Mr. Ostashek: I would probably have to bring a written reply for that question.

Mr. Harding: I would appreciate it.

The other area I am particularly concerned about is the impact of the loss of the corporate or business taxes that we otherwise would have received as a territory. Could I get a breakdown of the expected impact there and how that figure was arrived at?

Hon. Mr. Ostashek: That figure was included in the $2.9 million I gave to the Member.

Ms. Moorcroft: Could the Minister explain the $2.9 million figure he just gave us, and compare it with this document on the impact of the Faro and Sa Dena Hes closures, which gives an expected loss of revenue of $2,469,000?

Hon. Mr. Ostashek: I would suggest the Member opposite wait for the written reply to that, because it gets pretty complicated.

Ms. Moorcroft: I will just pursue another question the Minister may want to include in the written reply. The second last paragraph of the document talks about calculating the impact of the closures on our revenues on an entitlement basis, rather than the cash basis that they actually use. Could he explain the difference there? Is that to do with the entitlement and the Formula Financing Agreement funding?

Hon. Mr. Ostashek: I will try to explain it, but we will bring that back in a written reply.

Basically, it means that Curragh is going to actually cost us money in income tax this year. That is the cash basis. On the entitlement basis, because of the delay in collecting it, it really does not take effect now.

Ms. Moorcroft:  Would that also explain the difference between the $2.5 million and the $2.9 million and the final figure used here in the penultimate paragraph of the impact document, which gives $6,161,000?

Hon. Mr. Ostashek: Rather than confuse the issue further, we had better wait until we get our documented written reply from Finance. How all this is calculated under the formula and so on is a very complicated process.

Ms. Commodore: I stood up just so that I could hear the Chair say “Ms. Commodore”.

I have a couple of questions of the Government Leader regarding statements made in the House and the manner in which they are made and how changes are made after the statements have taken place. I speak specifically about a ministerial statement by the Minister responsible for Social Services in regard to the Alcohol and Drug Strategy. During the ministerial statement, he mentioned that he was going to be building a detox centre when funds became available. He was very specific about what he was going to do with that facility and what was going to be included in it. Then, during this session, we find out that that is not the case at all.

The other issue is in regard to the privatization of the Energy Corporation. Although that was not in a ministerial statement, he made a statement in the House that he is not going to do it, and then we find out, not only through the House but on the radio, that he is going to.

My concern is in regard to making those statements, especially a ministerial statement where something is approved by the Cabinet and it comes into this House; the House is told that these things are going to take place and then a change is made. Does that change also go back to Cabinet for a decision to be made - “Gee, I changed my mind about what I said in the ministerial statement. How do I deal with it” - because there was no ministerial statement saying that they had withdrawn that commitment by this government.

I am a little bit concerned about those kinds of statements being made over and over again and then changes being made and not being announced. I know there are some individuals out there who have been working in the system for a long time, who were really looking forward to a new detox centre.

I might add that we talked about a new detox centre when I was the Minister and when the Leader of the Opposition was a Minister, but it has not taken place. I do not think we ever stood up during a ministerial statement and said, “This is going to take place”, but it happened with this government and then they changed their minds. Did Cabinet make the decision that they were not going to do it? That appears to be the case right now.

Hon. Mr. Ostashek: I will answer the question to the best of my ability on part of it, but the Minister of Health and Social Services should answer the question on how that came about. There was never a decision made that I can recall, and I am speaking from memory, by Cabinet to go ahead and build the detox centre. It is one of the requests from the five-year capital plan of the department but, because of other priorities within the budget and the financial constraints we are under, I do remember it got cut last year.

I will have to let the Minister answer the question on the ministerial statement, but to give a short answer, it did not come back to Cabinet, because it had never been approved by Cabinet in the first place. It was in the five-year capital plan, because the department wanted it. Now, because of the priorities for money, we have to allocate funding in various areas. The Minister is looking at a non-government organization possibly fulfilling that function for government. It is one of the other areas we are exploring at this point. I do not believe any final decision has been made on it.

Ms. Commodore: I had always thought, in the past, that when a ministerial statement is announced in this House, it carried a lot of weight, and it would have been approved by Cabinet prior to it being introduced. Is that not government policy? The Minister is making a statement that surely should be approved by Cabinet before it comes to the House. If a ministerial statement is introduced in this House and it says something and does not have the approval of Cabinet, does it really mean anything? If not, should we even have them?

Hon. Mr. Ostashek: The Minister will have to answer that question himself when we get to his department. I do not have a copy of the statement in front of me, and I do not recall the wording of the statement.

Ms. Commodore: I am talking about a government responsibility, not a ministerial responsibility. The Government Leader is the leader of the government. He is responsible for a lot of things that happen within his Cabinet. Every single Minister does not come in here, I am sure, and make ministerial statements on their own without the approval of Cabinet. If that is the case, there is something wrong.

Hon. Mr. Ostashek: I did not say that at all. I just said that I cannot recall the wording of the ministerial statement, so it is difficult for me to give the Member hard and fast answers here.

I do know what transpired with the building the Minister wanted to put up. It was cut from last year’s budget because of priorities. We know it is not in the capital budget for this year either, because of the priorities for the money we have to spend. However, I do not remember exactly what was in the ministerial statement, so it is hard for me to comment on it.

Ms. Commodore: I have another question with regard to the mandate by this government. It is about privatization. I do not know whether or not we have a Minister responsible for privatization - it appears that we do - but there has been a lot of talk about privatizing social services programs. I have heard discussions in the past about ideas people have had regarding where they would like to go to improve the services that are available to the public.

If there is a change as drastic as taking the young offenders facility out of the hands of the government - an open-custody facility is required by law and the Government Leader knows that - and there is now talk about a big change, is there a mandate that came from Cabinet to give the Minister the authorization to go ahead to look at these changes that we keep hearing about?

Hon. Mr. Ostashek: I am not really sure what this had to do with general debate on the supplementaries, but I would ask the Member to question the Minister on that topic when we get to the department.

Ms. Commodore: I am talking about the responsibilities of the person who is the Government Leader in the Yukon, and what his Cabinet’s responsibilities are. That is what I am talking about.

When we get to the debate on the Department of Justice I will be asking many questions of the Minister responsible for Health and Social Services.

Right now, I am asking the Government Leader whether or not it is the responsibility of the Cabinet to give a mandate to a Minister to change policy or drastically change the system within government. I would assume that it is.

Hon. Mr. Ostashek: Certainly it is. No one is trying to shirk his responsibility. The fact is, I do not believe that request has come to Cabinet yet. I believe that the Member opposite is speculating to some extent as to what may happen. When those requests come to Cabinet they will be dealt with.

Ms. Commodore: I have a legislative return on my desk, and so does the Government Leader, that says that many changes are going to be taking place, so I intend to ask further questions.

I am asking where the direction came from? Did it come from Cabinet or is the Minister, once again, working on his own?

Hon. Mr. Ostashek: Again, I will repeat that a Minister is responsible for his department, and if that Minister sees ways to run the department better, he comes before Cabinet to obtain direction to utilize ways to make the department run better. Until such time as a Minister comes before Cabinet and makes a request, I believe that a Minister has the right to explore any possibilities to streamline government and to provide better service delivery to the people.

Mr. Harding: I have a few questions for the Government Leader regarding the miraculous $7 million found in savings through more efficient government and the 3,700 person weeks in jobs. When we last left this continuing story, we were discussing the employment task force capital works projects and we were trying to identify exactly what was behind the numbers - what was leading the Yukon government to the conclusions that were reached in the employment task force capital works projects.

Of particular concern were comments made by the Economic Development Minister, who stated that more benefit was to be received from highway projects, that they were, on a cost per job basis, cheaper and had a very important effect on indirect person weeks of employment. There were also comments that the housing aspect or building trades aspect had a higher cost-per-job basis and that the spinoff from these were indirect person weeks, to use the terminology of the employment task force capital works projects list, were not as significant.

First of all, let me state that I am disappointed that I do not have a further revised, double-checked list of these 3,700 person weeks. We find it very frustrating in Opposition and maybe it is designed so by the Members opposite - those sneaky luggers.

We get somewhat confused when we get copies of the press releases that outline these magnificent statements about magical money that appears out of more efficient government and more efficient contracting procedures, but they are not accompanied by a breakdown. Then we ask for the breakdown, when we are nit-picking in our Committee debate, and we get admissions from the government that perhaps the numbers are not subjected to the scrutiny that they should be.

My question, after that long preamble, is where is the new list and when can we expect it?

Hon. Mr. Ostashek: I do not remember the Member opposite being promised a new list. We have a breakdown of every job, the amount of money that is being spent, where the money came from and the rest is in the supplementaries. We have said time and time again that a best guess estimate is 3,700 person weeks of work. Maybe we should just table this here and say we created $7 million worth of work and not even take a guess at it. We made an educated calculation of the number of jobs that we think is going to be derived from the $7 million investment into job creation this winter. We have tried to do that to the best of our ability.

Mr. Moorcroft: The Member for Faro was referring to the $7 million in savings that was found in this 1993-94 budget, not to the breakdown of the 700 jobs that has been provided.

Can I get a breakdown of that $7 million saving? Looking at 3,700 person weeks of employment, if you divide that by 52 weeks to a year, it comes up with jobs in the range of $98,000 a year, which is certainly more than the Government Leader has been indicating they think are fair wages for public service employees. Could we get a breakdown and an explanation of that?

Hon. Mr. Ostashek: I wish it was all going to wages and that people in the Yukon were making that. It would have a good spinoff effect on the economy of the Yukon. The fact remains that there is a substantial amount of material included in the $7 million. As for the breakdown, if the Member will just turn to the back page, it is all there for her.

Mr. Harding: In talking to the House Leader this morning, we expected to get a new version of this list. Perhaps there is some misunderstanding there, and I apologize if the Government Leader misunderstood me, but I felt we had asked for that commitment and we expected to receive it.

Perhaps we could start on another basis. This breakdown identifies the expenditures, for a total of $7,304,000. It shows recoveries of $5.5 million. How could that be identified as a saving, when you are actually dealing with recoveries? The press release clearly indicated that $7 million had been wrestled from this budget. Actually, we are looking at $5.5 million in recoveries.

Hon. Mr. Ostashek: The Member opposite was in the House the other night when we went through the same exchange that he is going through again - with the Member for McIntyre-Takhini.  We broke that down. That is the trouble with the word “savings”. When we defer money from one project to another in a department, it could be considered as a savings. It is something that is not going ahead at this point. Perhaps the term was used loosely, but the fact remains that money was reallocated through the department, as well as positions that were not refilled. The departments had extra money, so they picked up every extra $1,000 they had and put it into this job creation program that we are putting on for the next three or four months over the winter season.

Mr. Harding: I would certainly concur that the term “savings” was used loosely. I would like to know how the Government Leader expects us, as the Official Opposition, to accept this list - I know he calls it nit-picking. When there are statements made that are so bold - when we make claims that, in the capital budget, there was too much concentration on highways and not enough on the building trades, and then get responses from the government stating that it is because it is more conducive to employment to concentrate on highways and not the building trades, and then we get sheets from the government that say that the building trades, as opposed to highways, spin off much more work, which according to this list do not spin off the kind of work that they claim, how do they expect us to do our job? How do they expect us to ask the questions that we have been elected to ask in this Legislature? I really thought that we would have a new list today that would be a more succinct breakdown - and I know that it is not a fine science. However, for example, there is nothing whatever identified in terms of indirect jobs for an expenditure of $2.3 million on this capital works projects list. So how do we do our job?

Hon. Mr. Ostashek: The Members opposite seem to be doing a very good job of running the government; I do not think that they are having any difficulty there at all, and they are nit-picking.

Again, we are trying to compare apples and oranges because, when we were talking about the amount of money it takes to create a job in highway construction compared to the building trade, that was a straight dollar-value formula that the government uses. I believe it is $130,000 to $160,000, or something like that, without spinoffs being taken into consideration. We did identify the other night that there were some spinoff jobs on the housing project that may have been included - I am not sure. I think that was a clarification that was asked for, and I will probably come back with it. I am not aware of any commitment to redefine this list because we will do that as we go line by line in the supplementaries.

Mr. Harding: Perhaps the Government Leader would explain this to me, then. On the Shakwak project, identified on the list, we have got 470 person-weeks for a $2 million expenditure. Under the Yukon Housing Corporation list we have got 936 person-weeks of employment for the building of 19 new social housing units, with a $2 million expenditure. Could the Minister explain the difference there and, also, perhaps illuminate me as to why the housing units would create 520 person weeks of employment, as opposed to the Shakwak’s 470?

Hon. Mr. Ostashek: Well I certainly cannot explain it to the Member opposite, but I am sure that when we get into the line-by-line debate on a department-by-department basis, the Ministers will have some answers for him.

Mr. Cable: Some information was requested last week from the Economic Development Minister relating to the multiplier effects, which I think proceeds along from what the Member for Faro was talking about. Has the Minister had a chance to get that information together yet, together with the backup documents that were requested?

Hon. Mr. Devries: Unfortunately, the economist who was doing that has not been overly well lately - he had been overworked, putting in a tremendous number of hours. As well, the other economist had a sickness in the family and just recently returned from India. Basically, they have been working on putting it together and we hope to have the information on the multiplier within the next day or so. Apparently, they also have to go back to the various departments because some departments had chosen to use experience from last year’s project to arrive at the multiplier. Others used a formula, so we want to make sure we are giving accurate figures so that we do not get nit-picked to death.

Mr. Harding: I do not know if that is the right word.

Under the Government of Yukon job creation issue sources of financing, I would ask the Economic Development Minister this: EDA reduced funding to period 5 to the tune of $225,000. Could he explain that to me?

Hon. Mr. Devries: I would prefer to do that when we get to line-by-line debate on my budget, when I have my assistant here.

Mr. Harding: Then perhaps I could ask the Government Leader a broad philosophical question that I think is important. I am staring across the Legislature at what is supposed to be a conservative government. On my left is the only true Conservative left in the Legislature - that is what one newspaper writer once wrote about her.

Some Hon. Member: (Inaudible)

Mr. Harding: Yes, he is not even here; I drove him out of here, too.

I see under item (c) in the job creation issue sources financing document, $699.5 thousand as a source of financing for job creation. Essentially what we have is the use of this year’s deficit for the funding of job creation. I may be wrong, so please correct me if so, but that does not seem consistent with the philosophy espoused by the Members opposite in the election campaign and, since they have been elected, in their budget speeches they put out. Perhaps the Government Leader could tell me why a supposedly conservative government would finance job creation through deficit growth.

Hon. Mr. Ostashek: I hope the questions do not get any more difficult than that, because I do not think we will have any difficulty answering this one.

The Members opposite accused us time and time again all summer of not doing anything and being responsible for the unemployment situation in the Yukon. They have accused us of taking a hands-off attitude toward helping the people of the Yukon obtain employment this winter.

We did this very consciously. We increased the deficit by $699,000, but we still believe that on March 31 we will have a balanced budget because, as I said, there are lapses every year. There are lapses in O&M and capital. We believe that it will all work out, and I have said that time and time again; it will be plus or minus $5 million.

Mr. Harding: I want to ask the Government Leader one simple question. He can answer this one yes or no: did the Minister of Finance ever hear the Official Opposition stand up and ask that a job creation program be financed through deficit expenditure increases?

Hon. Mr. Ostashek: I am not sure what was requested from the other side of the House, because they seem to change their direction all the time.

We felt it was essential to put Yukoners to work over the next three or four months. That is why we took this initiative to find whatever money we could from our 1993-94 capital and O&M budgets for any programs we could advance. That is what the deficit is; it is programs that are advanced and would have been done next year anyway.

Mr. Harding: I am not going to play a cat and mouse game on that. I would submit to the Government Leader that the Official Opposition never made a formal request in this Legislature, in writing or orally, for job creation through growth in deficit. We never requested that. That was an initiative solely undertaken by the Members opposite.

He is right, however, that we have accused them of doing very little to lead this economy back onto its feet. We will stand by those criticisms and continue to present alternatives, as we have done with the 1994-95 capital budget and as we have done with motions concerning electrical power rates or requests of settlements of very important issues such as the labour negotiations currently underway between the public service and the government. I could go on and on about ways we think the government could be brought back on its feet. Last, but certainly not least, are the Faro and Sa Dena Hes mines.

I know the previous administration often used lapses to balance the budget at the end of the year, but now we seem to find, and it is my understanding, that the Yukon Party government was quite critical of that manner of budgeting. Would that not be a fair statement?

Hon. Mr. Ostashek: What this party was critical of, when we were in Opposition, was the totally unrealistic main estimates that were put forward each year and the huge supplementaries that came in to balance them out. That is the point that we consistently made.

Mr. Harding: Can I ask the Government Leader this: in the Yukon Party’s opinion, was the budgeting process, with the consideration of potential and expected lapses taken into consideration, a fair and correct process in the mind of the government? Let me clarify that question for the Government Leader.

The previous administration often budgeted with forecasted deficits, because they knew there were going to be lapsed funds. It is my understanding, from reading Hansard and from discussions that I have had, that that budgeting method was often criticized, as well as what the Government Leader has just stood up and said.

Can I take it from the government’s actions and what they are now doing, that this has always been considered a reasonable practice in terms of the budgeting process?

Hon. Mr. Ostashek:  I believe our 1993-94 operation and maintenance budget and our small supplementaries that are now coming in answer the Member’s question for him.

We have put together what we feel were realistic operation and maintenance estimates. There will always be lapses; it is not possible to run a government this size and come in right on the money every time. It is just not something that can be accomplished. The reality is that there will be lapsed funds every year. How much those funds will be depends on how successful we are in getting our capital budget going, but I believe that the operation and maintenance lapsed funds will not be that big and we certainly have not come in with large supplementaries to supplement the operation and maintenance budget.

Mr. Harding: I agree with the Minister. No doubt there will often be supplementaries. I am asking for a general acceptance that the government’s policy will be to forecast deficits, as they have done with these supplementaries, and we will hope to pick them up at the end of the year with lapses.

Hon. Mr. Ostashek: No, definitely not. That is not our policy. We are aiming for balanced budgets and we will, to the best of our ability, come in with balanced budgets.

Mr. Harding: I am looking at a forecasted deficit in the supplementary estimate for 1993-94 - forecasted and budgeted by the Yukon Party government, for $3,658,000. Yet, I see in the jobs list for the same year, a budgeted expenditure, through deficit increasing, of $699,000. One can only assume that they do think it is proper practice to forecast a deficit through expenditures and hope to pick it up at the end of the year in lapses. Is that not what they are doing? If it is, do they not think it is fair and reasonable?

Hon. Mr. Ostashek: I guess the Members opposite are saying we should have said that we are not worried about Yukoners, and that we do not need to put them to work, that we will just go ahead and pay off the $13 million, which was left for us by the previous administration.

We have chosen to take this route to put Yukoners to work this winter.

Mr. Harding: We all know where that $13 million came from. I think the deficit is more in the heads of the Members opposite than it is on the paper we are looking at right now.

I am asking the Minister for a simple policy statement of the government, because it is very important for the record. I do not want to get off on a tangent about what the Auditor General’s report said last year. I am asking this government about a policy they have, and it is a simple one.

In the supplementary estimates for 1993-94, we have a forecasted deficit of $3,658,000. We have job creation funded through an increase of deficit for roughly $700,000.

Is it going to be a policy of this government, and do they think it is a reasonable and fair practice, to forecast a deficit through expenditures, and pick it up at the end of the year to produce a balanced budget through lapses?

Hon. Mr. Ostashek: Certainly, it is not. He is after a simple answer. I have just told him. It is not a policy of ours to deficit finance. I have said that time and time again, and I continue to stand by that.

These supplementaries are based on what is known as of the time the figures were gathered to make them up. We believe that, at the end of the year, it will all balance out.

Mr. Harding: So, does the Government Leader think that what they are up to in this particular year is a fair and reasonable practice?

The Minister can understand what I am getting at here. If they listen, as I am sure they do, to the ringing throughout the Legislature of the chastising they are taking from the Member for Riverdale South, it is for a reason. She always objected to the financing of forecasted deficits through expected lapses at the end of the year.

I am not saying it is an evil thing, and I am not taking the position that that Member is. However, I do find it interesting that, from the Members opposite, we do get that kind of a stance.

Perhaps I am missing something. The Government Leader is shaking his head.

Could the Government Leader tell me what I am missing?

Hon. Mr. Ostashek: I have said time and time again that we will have a balanced budget, plus or minus $5 million. That is within the range that I have been saying.

Mr. Harding: If it is a balanced budget, plus or minus $5 million, you still have a deficit or surplus of $5 million. It is still a deficit whether it is $5 million, $2 million or $1 million. Do they plan on picking up the slack through lapses?

Hon. Mr. Ostashek: The government will find out on March 31.

Mr. Harding: I certainly compliment the Minister of Fiance on his planning. It is obvious that we are going around in circles on this one. I do feel very strongly, and I guess it is read into the record several times this afternoon, that the actions of this government certainly do not match the rhetoric of this government when it comes to deficit financing and the use of lapses to make up the slack. I try to nail them down on this and because it is in Committee he wants to go around and around with it, but I think it is clearly on the record as to what they are going to do now. When we do get into government after the next election we certainly will be able to pull these Hansard comments out forever and ever.

The next question I want to ask pertains to the contracts list. We would like to get a commitment for a list of all the contracts entered into between April 1 of this fiscal year and November 1, and to get a commitment to table these contracts.

Hon. Mr. Ostashek: I can only promise to get the Member what is available. I do not know if we can do it up to November 1.

Mr. Penikett: I have a couple of general policy questions to ask of the Government Leader in his capacity of Minister of Finance. Some of them I may want to pursue later - perhaps, in his absence, with individual Ministers.

The Government Leader is both the Minister of Finance and the Minister responsible for the Public Service Commission and I have been reading the legislative return, addressed to my colleague, Ms. Moorcroft, about the possibility of a strike.

I know that the Department of Finance or PSC, or both, must have done some calculation of the potential impact on the government’s expenditure patterns in the event that there was a labour dispute. Can the Government Leader indicate to the Committee the order of magnitudes on the personnel budget of a shutdown, even if it is brief, and even taking into account the large number of people who are providing essential services.

Hon. Mr. Ostashek: Surely the Member does not think that I could provide him with that when that would certainly depend if - and I state if, as there is no certainty that it will happen - on how long they were out before we could project what impact there would be.

Mr. Penikett: From his answers, obviously the Government Leader has thought about this question. My question is very generally put. I am not asking if he can tell me in precise numbers based on a certain assumption that the employees were out, but the employees were out for a few days or a few weeks. Has he estimated the savings to the government if they are out for a day or on a daily basis, or on a weekly basis or a monthly basis? Can he provide the House with the estimates he will have available in his ministry of those calculations?

Hon. Mr. Ostashek: I believe the Member opposite and I differ because I do not believe there are any savings for anybody in a labour dispute. I really do not think there are any savings for anybody and it is something we do not have calculated at this point. What savings we would derive from a labour strike certainly has not been taken into effect in calculating our budget, because I do not believe there is any saving.

Mr. Penikett: In my view, we could even go further than that. I would argue that, in fact, there are very significant costs, but certain statements of the Members opposite, both to constituents over the course of the summer and some in communications with the employees, have led me to believe that the government had made a calculation of savings; however, the Government Leader says that is not the case.

Let me ask the Government Leader these questions, which he may wish to defer to the Executive Council Office estimate. They are very general anyway and they affect Finance. What has been the implication, cost wise, of the relatively modest progress in land claims negotiations in the last few months - a progress that has been, I gather, somewhat slowed by the pending federal election and then during the federal election period. We note that there seems to have been a period of some months when there have not been very many active negotiations in very many First Nations. Can the government indicate if there have been any financial implications as a result of that?

Hon. Mr. Ostashek: I may be able to answer better when I have my deputy here. To the best of my knowledge, there certainly has not. What the Member opposite perceives as a slowdown in negotiations is simply not the case. The land claims committee is working full out to try and resolve the differences  with the various bands and the ones they are negotiating with. They are taking on more as time goes on. They are starting to move into Kluane and some of the other bands very shortly here. I do not believe - and I ask the Member to forgive me if I do not give the right answer - there are any financial savings for us at this point.

Mr. Penikett: I may want to pursue that when we get into the department. I am just mindful of the fact that the Government Leader will be absent for some time. I wanted to ask the questions while he is still here, unless he would prefer the Deputy Government Leader answer them while he is gone. We would find that quite interesting.

The Government Leader, at some point in the budget debate in the last sitting, indicated that the decentralization policy pursued by the previous government was quite costly, in his view, and has been essentially put on hold. We have observed, over the summer months, that there seems to be a program of recentralization going on in some cases. In some cases, positions are being moved back to Whitehorse.

I would like to ask the Government Leader, in his capacity as Minister of Finance, if there have been any conscious financial calculations involved in those decisions.

Hon. Mr. Ostashek: As an overall policy of decentralization, or, as the Member says, recentralization, certainly not, but when a position has been vacated in a rural community, the opportunity arises for the departments to visit the issue and consider whether or not it makes sense to keep it there. These things are taken into consideration at that point.

Mr. Penikett: I believe I am quoting the Government Leader correctly when he said, in the last budget, round that there was not yet a new decentralization policy in his party as government, but that the old program was on hold. I would like to ask him if, to date, his government, after one year in office, has developed a new decentralization policy. Is it likely to be aired in the Legislature soon?

Hon. Mr. Ostashek: No, we have not developed a concrete decentralization policy. We are dealing with decentralization in several ways with forestry transfer. There will be more positions created in some of the communities - Dawson City for one, as well as Watson Lake. We will be going into regional offices for Renewable Resources at that point. On that side, we are doing a little bit on decentralization. We are also looking at community-based services in Health and Social Services and creating some positions in that aspect, which I am sure the Minister will be able to answer when we get into his department.

We have not developed a hard and fast policy to make some big, bold initiatives to decentralize a substantial portion of the government in Yukon from Whitehorse at this point because of the financial ramifications associated with such a policy.

Mr. Penikett: The Government Leader just mentioned the forestry transfer. Would he be open to my asking him some questions about that transfer in this general debate?

Hon. Mr. Ostashek: As long as the questions are very general.

Mr. Penikett: I will ask the Government Leader this general question. He indicated in answer to a question from our friend the Liberal Leader a few days ago, that the transfer was pending, and that it was on the Minister’s desk waiting to be signed.

I am aware that the federal employees’ meeting to discuss an offer from YTG on Friday voted overwhelmingly to reject any potential offer, because they are entirely dissatisfied with the terms and conditions being offered by the territorial government. I am told that, in their view, the territorial government has indicated no serious intention whatsoever to conclude a memorandum of understanding with those employees; something which I, in my previous capacity as the Minister responsible for the Public Service Commission, had certainly promised would happen prior to a transfer.

As a matter of policy, can the Government Leader indicate why no memorandum of understanding has been reached with the employees, and also indicate why he believes they appear to be so dissatisfied with the arrangements being offered by YTG?

Hon. Mr. Ostashek: I am afraid I cannot give the Member a detailed answer on that, but if I recall rightly the transfer will take place six months from a date. We were aiming for a takeover date of April 1, which is not possible any more, at this point, because of the fire season coming up and the complexity of trying to transfer in the middle of the season. We will have to look very carefully at the transfer to see if we should wait until after the fire season next year before we conclude the transfer.

I cannot say what has happened with the government forestry employees at this time, but I do know that that was one of the things taken into consideration. I was told at that time that offers were going to be made to those employees.

Mr. Penikett: As the Government Leader knows, some First Nations, including the CYI itself, have expressed a serious concern about the failure of the territorial government to consult about various aspects of the forestry transfer, according to the requirements of consultation as laid out in the umbrella final agreement.

Has the Government Leader been notified that some First Nations are contemplating legal action in an effort to delay the proposed devolution of the forestry program until such time as satisfactory consultation has taken place?

Hon. Mr. Ostashek: No, I certainly have not been notified of that at all.

Mr. Penikett: In the face of considerable frustration and opposition from the prospective employees and, indeed, in the face of some serious concerns from First Nations about lack of consultation, would it be the intention of the Government Leader to proceed, notwithstanding the concerns from those two important constituencies?

Hon. Mr. Ostashek: It is certainly this government’s intention to proceed. The document is on the Minister’s desk in Ottawa. It has already been signed by me. We had a letter of commitment from the previous Minister that she was going to sign it, but that did not happen. We certainly are not contravening the umbrella final agreement in this transfer in consultations with First Nations.

Mr. Penikett: The Government Leader says he would proceed even in the face of opposition from the potential employees and objections from First Nations, who believe they have not been adequately consulted about matters over which they may have jurisdiction and which may have implications for their First Nations in terms of forest management, forest fire protection, employment provisions and other matters in which they regard they have a legitimate interest. I must say to the Government Leader that I would think it most unwise to proceed and, indeed, the decision to proceed in the face of a court injunction or given the prospect of a court injunction concerns me greatly.

The Government Leader mentioned that the timing is a concern for them because of next year’s forest season.

I understand that there is considerable concern among the employees potentially coming to YTG because they, the rank-and-file employees, have not been consulted at all about the organization of the fire service. Only the senior people have been consulted. Indeed, they have expressed to some of us on this side of the House, the very strong feeling that a wrong-headed organization that existed under the federal system is being transferred intact to this government, and that we will suffer from a problem that exists there of a separation of policy makers and operations people in the field.

Let me ask the Government Leader this question, since he has mentioned the next fire season: the employees believe that YTG is offering them, for example tower workers, a 37.5-hour week, whereas right now the employees get a 70-hour week and then are taken out of the fire towers at the end of the 70 hours. I understand that YTG is offering only a 37-hour week, and the proposal from the Government of the Yukon is that the employees take their time off in the bush - they have been told they can pick berries on their time off if they want to - and worse than that, the fire season, as proposed by YTG will only be four, not six, months. So, even though the rate of pay for the prospective employees may be marginally higher, the hours of work under the YTG arrangement will be considerably less and a very large number of the employees will suffer a reduction in real income as a result of the transfer. I would like to ask the Government Leader if he is aware of that and, secondly, if he is concerned.

Hon. Mr. Ostashek: I am going to go back a bit before I address that issue, because some statements were made by the Member opposite that simply are not true. It is not true that the First Nations will not have any input into the policy of the management of the forests in the Yukon. They certainly will. The next step in the process is to get together and draw up regulations and policies for the management of the forestry resources in the Yukon, and the First Nations people will be full participants in that.

I am not familiar with the details of the dealings of the unions. I know there have been some discussions and I will follow up on that. I am not exactly certain what is, and what is not, being offered at this point.

Mr. Penikett:   I would like to ask the Government Leader, since he is insisting that First Nations will be involved in forestry policy - and I certainly hope so - if he can tell us, since it has been a subject of some public dispute, what exactly is the policy of this territorial government in respect to First Nations involvement in a program slated for devolution, like the forestry program, a program in which there are obvious First Nation interests?

Hon. Mr. Ostashek: The Member opposite knows that the problem of First Nations involvement in devolution is not a problem that started with this government. This is a problem that goes back to the middle of the 1970s. It is a political issue that the First Nations are taking a stand on. It is an issue that will have to be resolved at some point.

We have followed what is laid out in the umbrella final agreement and kept the First Nations fully informed about what is going on. They have been invited to participate in all the negotiations, and they have chosen not to. The previous federal Minister stated quite emphatically that he was not prepared to give the First Nations a de facto veto by not participating. That was a statement he made. We are prepared to involve them on the basis of the hospital transfer, which they asked for at one point. They have not replied to that, but they are now making their case to the federal Minister to slow down the devolution process. That is their decision.

Mr. Penikett: The Government Leader has conceded that there are First Nations interests, but he has said they are not at the table; therefore, those interests have clearly not been addressed. I have provided some information this afternoon to the effect that the employees slated for the transfer are unhappy, not only with what they hear about the length of the season and the hours of work, but they are also unhappy with the job security arrangements.

We have continually heard references made to the Northwest Territories’ situation, where the government took the money for the forestry transfer and then, in fairly short order, contracted out the jobs. The employees ended up with no job security. As a matter of fact, they ended up with no jobs.

If they had known that was the intention of the Northwest Territories  government at the time of the transfer, they would have taken the options that were open to them to transfer elsewhere in the federal system.

These questions about hours of work, length of season, job security, and so forth, are very significant.

Given that, as the Government Leader has just said, we have the First Nations on the doorstep of the federal Minister, trying to frustrate the transfer, and given that the employees are sending signals that they are deeply unhappy, including a vote they took on Friday, why does the Government Leader not indicate to the federal Minister that, even though he has already signed the document, that he would like to take some time to try and work out these problems with the First Nations and the employees before pressing on?

It seems to me that we are just building ourselves a pile of trouble if we press on with the transfer in the face of resistance from the First Nations and the potential employees. Why inherit a system with unhappy employees?

Hon. Mr. Ostashek: Just as a matter of principle, I believe it is important that when the federal government wants to devolve responsibility for these areas to the territorial government, we be prepared to accept them. The Member opposite is fully aware that the federal government is in a downsizing mode. If we wait and allow the federal government to downsize the forestry management in the Yukon, transfer a bunch of employees out, lay some off, when we go to transfer it a year or two down the road when all the outstanding issues are resolved, we may not be getting the type of financial resources we feel are required. That is one of the issues facing this administration at this point. Do we stop and wait and allow the federal government to downsize it to where we do not have enough financial resources to manage our forestry resources in the Yukon?

The previous federal government was in that mode. From the comments made by the new Prime Minister in Yellowknife, the Liberal government is in the same mode. They want to devolve those responsibilities from the federal government to the territorial government.

Back to the labour issue, the six-month surplus notices have not gone out to the forestry employees at this point. There are talks going on, but the union is attempting to turn consultation into negotiations. That is not acceptable at this point. The fact remains that two different processes  have to be carried out. There have been no notices issued at this point.

Mr. Penikett: I think the problem is that the Government Leader has a different definition of “consultation” than do other people. The consultation, for example, where the First Nations were kept informed is nothing like the standard of consultation required in the umbrella final agreement.

Some Hon. Member: (Inaudible)

Mr. Penikett: Can one of my colleagues get me a copy of the umbrella final agreement? I was looking at it this morning. As it turns out, I have it with me. I know what it says. The Government Leader says that consultation consists of keeping them informed. He says that the union is trying not to consult but to negotiate. The union is trying to do what it is supposed to do, and that is to protect the interests of the employees.

The Government Leader is quite right, the federal government has always had a two-pronged agenda with devolution: they genuinely want to devolve provincial-type programs to the territories and they want to cut the deficit in the course of doing those devolutions. If they can do program dumping and offloading, if they can give us only fifty cents on the dollar for the cost of running a program, they will do it.

The Government Leader says he is concerned about the employees, but I am asking the Government Leader to understand that if the potential for the employee is that they may come to YTG only to discover soon after that the jobs are all going to be contracted out - and there seems to be a wave of that type of thinking on that side of the House - they will not come to work for us. They have every right in the world to ask that question before they make the decision.

What does “consultation” mean according to the UFA? Consult or consultation means, “to provide a) to the party to be consulted, notice of a matter to be decided in sufficient form and detail to allow that party to prepare its view on the matter; b) a reasonable period of time in which the party to be consulted may prepare its view on the matter and an opportunity to present such views to the party obliged to consult; (c) full and fair consideration by the party obliged to consult on any views presented.”

If you go on and look at the implications of the forestry transfer to the UFA, you have to recognize that in chapter 12, on the development assessment process, which recognizes and enhances to the extent practical, the traditional economy of the Yukon Indian people and their special relationship with the wilderness environment. It provides for guaranteed participation by Yukon Indian people and utilizes the knowledge and experience of the Yukon Indian people in the development assessment process, protects and promotes the well-being of Indian people in their communities and other Yukon residents in the interests of other Canadians. It provides for comprehensive and timely review of the environmental and socio-economic impacts of any project.

There are sections in the agreement with respect to relationships to land use planning. Obviously, that is closely related to the whole question of forestry. The obligations laid out there clearly anticipate the high level involvement for the First Nations.

In chapter 17, on forest resources, under the heading of general provisions, it says, “Subject to the settlement agreement, each Yukon First Nation shall own, manage, allocate and protect the forest resources on the settlement land.” It goes on to say that the Minister shall consult with the Renewable Resources Council prior to establishing a new policy, which will likely significantly affect forest resources management and allocation of forestry practices prior to recommending to Parliament or the Legislative Assembly, as the case may be, legislation concerning forest resources in the Yukon. I would argue that these devolution discussions have a very significant impact on these questions.

On the question of the Renewable Resources Council, which will also deal with questions of forestry, there is in the umbrella final agreement, an anticipated high level of First Nation involvement in this question.

I am not going to argue with the Government Leader that the previous administration had a perfect record on this score, it certainly did not. However, whether we are talking about forest resources management or forest resources protection, or whether we are talking about protected lands, lands adjacent to settlement lands, training opportunities, the obligations of the government in terms of employment, there are numerous references in the umbrella final agreement that would oblige YTG to make First Nations a partner.

What I am submitting to the Government Leader is: does he not consider it unwise to press ahead with the devolution, when neither the First Nations, nor the employees, are satisfied that they have been sufficiently consulted, nor are the First Nations or the employees satisfied that their needs and concerns have been properly addressed by the territorial government?

Hon. Mr. Ostashek: Here we go again. The Member opposite, who should well know the umbrella final agreement by heart, goes along and very selectively quotes areas of consultation. All of those that he addressed are the ones that will be addressed in the development of policy and management for forest resources - that includes the developmental assessment process.

What the Member opposite did not quote is chapter 23 of the umbrella final agreement, which states quite clearly that Canada and Yukon are negotiating agreements with respect to the devolution of resources - in brackets, it specifically includes the Northern Accord.

Section 23.32 states that CYI may participate in the development of the government of the Yukon’s negotiating position. Section 23.3 acknowledges that the government of the Yukon represents the interests of all Yukon residents in negotiations. Chapter 24.3 states that the government of the Yukon and First Nations may negotiate a devolution of programs and services related to specific areas, such as education, health, social services, justice and employment opportunities and so on.

This devolution is between the government, which will most often be the Yukon government, and the individuals and First Nations in matters such as aboriginal justice. This does not relate to the devolution between the federal and the territorial governments. The Member opposite selectively quoted from the umbrella final agreement to leave the wrong impression with the public.

Mr. Penikett: Far from it. This umbrella final agreement, which I had a lot more to putting together than the Government Leader opposite, clearly anticipated that First Nations are going to be heavily involved in the business of forest management and forest protection. They are going to be involved because the lands they have selected include those forest resources. It was clearly intended that they be consulted on matters affecting those interests.

I want to ask the Government Leader a two-part question. If he is advised that a First Nation or the CYI intends to go to court to seek an injunction against the government of Yukon proceeding or if he is advised that the forestry employees affected have voted not to accept an offer from YTG - if either of those or both of those situations pertain -  will he still persist in pushing ahead with the transfer?

Hon. Mr. Ostashek: The Member is stating a speculative and hypothetical situation at this point. We will deal with that issue when it arises.

Chair: Is is the wish of the Committee to take a brief recess at this time?

Some Hon. Member: Agreed.

Chair: We will take a brief recess.

Recess

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

Some Hon. Members: We will take a brief recess.

Recess

Chair: I will now call the Committee to order. Is there further general debate on Bill No. 11?

Mr. McDonald: Earlier this afternoon, my colleagues raised the matter once again of the projection of the number of jobs associated with the capital works program developed by the industry-government committee that the government established. As I understand the conversation, the government was going to get back with some new figures. Is that correct and, if so, can they tell us when we can expect to see those figures for the projected number of person weeks.

Hon. Mr. Devries: The department is working on that. As I mentioned earlier, it has been a little slower than we anticipated and, by the same token, we had to go back to the various departments to ascertain whether they were using past experience figures from last year to determine more accurately this year what the figures would be. We hope to have that compiled by Wednesday at the latest. It may come in tomorrow, but Wednesday at the latest.

Mr. McDonald: Okay, I will leave it until the Economic Eevelopment estimates, and then perhaps have a discussion about all the job creation projections for all the departments at that time rather than in general debate.

There was also a conversation with respect to the impact on the government finances of the Faro mine closure. The Government Leader made reference to a document that was tabled today on the impact of Faro and Sa Dena Hes closures on YTG. Did the Government Leader give a commitment to provide a very specific breakdown of the financial implications, including implications with respect to the reduction in road maintenance costs, income taxes, business taxes, revenues, housing mortgages and other costs at some point? Was there a commitment to do that?

Hon. Mr. Ostashek: Yes, we will try and obtain a breakdown so that the Members will have better figures.

Mr. McDonald: At what time would the Minister prefer us to discuss this matter? I am prepared to discuss this matter at any time, except after the House is adjourned for this sitting. Would it be during Economic Development estimates, Finance estimates? When can we expect to have the information available to us so that we can have a reasonable discussion about the matter?

Hon. Mr. Ostashek: I am informed that we could probably have the information for the Member by tomorrow.

Mr. Cable: I have some follow-up questions relating to the forestry transfer. I am told that one of the problems that the employees are having relates to the change in status from seasonal indeterminate, for some of those employees who are hired under that category, to the status of auxiliary. The job security relating to those with auxiliary status is markedly less than what is attached by the federal government to seasonal indeterminate employment.

Is that a view the Government Leader shares?

Hon. Mr. Ostashek: I do not know the details of what is going on in negotiations with employees, because that was one of the areas I have not concerned myself with, with the delay in the forestry transfer agreement with the federal government.

Mr. Cable: I am told that that is one of the significant objections. Is the Government Leader prepared to investigate that problem and see if some accommodation can be made to the employees on the turnover?

Hon. Mr. Ostashek: One thing I am not prepared to do is to get into negotiations of employee and management problems on the floor of the Legislature.

Mr. Cable: That was not the question. I am not asking whether, in the final analysis, the Government Leader is going to adopt a position. I am alerting him to the fact that there is a very significant problem, as articulated by a couple of employees to me.

Is the Government Leader prepared to investigate the problem?

Hon. Mr. Ostashek: When I have more information, I may be prepared to investigate it. The Member opposite is saying this is what was alluded to him by a couple of employees, but I am not so sure the Member opposite knows the other side of the case.

For me to speculate on what I am going to do with it, at this point, I cannot.

Mr. Cable: All I am asking the Government Leader to do is listen. I am not asking him to come up with a position. I have been told this is a very significant problem. Is the Government Leader prepared to listen to the employees to find out what that problem is?

Hon. Mr. Ostashek: Is the Member asking me to personally meet with the employees? We have people looking after the negotiations process with the union.

Mr. Cable: It is obvious that the Government Leader is not informed on this issue. I do not pose as any expert on the issue, either. However, is the Government Leader prepared to listen to the point where he understands the issue? It seems to be deeply troubling a fairly significant number of these seasonal, indeterminate employees.

Hon. Mr. Ostashek: If the people we have working on it raise those concerns, we will listen to what the concerns are and take into consideration all the ramifications of what we do.

Mr. Cable: Another concern that was expressed to me was the changing of the seasonal period - a reduction from six to four months. Assuming I have the correct information, is the Minister also prepared to listen to that problem?

Hon. Mr. Ostashek: I believe that the Minister of Renewable Resources met with the union almost a year ago and listened to their concerns. I did not meet with the union personally at that time, but they have also met with some other people in government. These are issues that will be addressed through our and their bargaining bodies.

Mr. Cable: The Minister of Renewable Resources is here with the Government Leader’s acquiescence. Could he indicate what the problems are?

Hon. Mr. Ostashek: It is in the hands of the PSC at this point. I think it is best left there to enable them to do the negotiations.

Ms. Moorcroft: The Government Leader has just alleged that this side of the House does not understand the other side of the case, when we are raising these questions about the employees’ concerns. Would the Government Leader care to elaborate on what the other side of the case is, as he understands it?

Hon. Mr. Ostashek: Certainly not. I am not going to get into those types of negotiations in the House.

Mr. McDonald: Before we get into general debate, I would like to tie down a couple of commitments so we know whether or not these commitments have been made. With respect to the $1 million in savings that the government says it has been able to extract, through wise management, from the $7 million total for their jobs plan, will the Ministers be volunteering, on a department-by-department basis, and will they be prepared to answer questions on precisely where those savings have been made? I am referring specifically to the fact that $5.5 million of the $7 million is clearly in recoveries, and $700,000 is to be funded through the debt.

Hon. Mr. Ostashek: I am quite certain the Ministers will be able to answer those questions in line-by-line debate.

Mr. McDonald: That is good. With respect to the contracts, just before the break, the question was asked whether or not the government would be prepared to provide lists of contracts that had been entered into between the beginning of the fiscal year and now. I do not know if the Government Leader actually made a commitment to table those contracts, or a list of those contracts. Is he saying that he can, or that he cannot?

Hon. Mr. Ostashek: I will check on it. My understanding is that it was always done in April, but I will check. If possible, we will certainly do it.

Mr. McDonald: I will refresh the Minister’s memory. In March or April, the government tables a total list of contracts. When it came to supplementary time, there was always a commitment requested and a commitment granted to table lists of contracts entered into for that department. I remember - and it will be verified in tabled returns and documents or at least documents filed with the Clerk - that I regularly tabled contracts that the department had entered into between the beginning of the fiscal year and the time we were debating the supplementary.

I do know that departments are able to provide the information. I want to know if the government is prepared to table the information?

Hon. Mr. Ostashek: If that has been the standard procedure in the House in the past, I am certain we will continue to follow that procedure.

Mr. McDonald: When we get to the departments, the Ministers should expect the questions and I will expect to receive the answers.

The Minister mentioned in his opening remarks that, as a result of the transfer of onshore oil and gas, the government in the current year expected to receive $850,000 worth of revenue and that revenue was being placed in a trust. Could he indicate the terms of that trust fund and what kind of fund it is. Is it a savings account or is it a formal trust? What is the money going to be used for? I will ask other questions after that.

Hon. Mr. Ostashek: I am not certain of that. The Minister of Economic Development will be able to answer that when we get to his department.

Mr. McDonald: I will put the Minister on notice that there will be some detailed questions about this. I guess the words used were “trust fund”, so I will want to know precisely what the trust fund is all about and the terms of the trust itself. I would also like to know, on the same subject, whether or not the trust fund or the funds that are being extracted for oil and gas are to be used for funding the administrative costs associated with the administration of oil or gas or whether or not it is separate from other funds that are being transferred from the federal government. If it is separate from the other funds being transferred from the federal government, I would like to know more details about those funds that are being transferred over.

Can the Government Leader give us the assurances that we can talk about that or does he know the answer right now?

Hon. Mr. Ostashek: I do not know the answer right now. I know there is a revenue-sharing agreement with the First Nations people, where I believe they are eligible for 50 percent up to the first $2 million. When we get to his department, I am sure the Minister will have all that information for the Member opposite.

Mr. McDonald: I will ask for all that information. Can the Minister just give me a general sense of the agreement and its effect on the Formula Financing Agreement - as to whether or not the funding is offset from the transfers, or whether it is in addition to the transfers that are received? Is it failsafe for any particular term? Can he give us any information there?

Hon. Mr. Ostashek: My understanding is that the agreement is totally outside the Formula Financing Agreement.

Mr. McDonald: For the supplementary agreement - the agreement dealing with oil and gas - what is the term the revenue arrangements would be considered outside the formula financing agreement? For how long will that take place?

Hon. Mr. Ostashek: Our understanding right now is that it is forever but, as the Member opposite knows, those things can change.

Mr. McDonald: Even in the last six months, I know that almost absolute commitments can change dramatically, so I understand precisely what the Minister is saying.

I have a number of other questions about things that could probably be relegated to the Executive Council Office, and it might be better to have a different deputy sitting in the chair beside the Government Leader. I am sure there may be a few other questions, so I will leave my questions for now.

Mr. Cable: I just have some general questions. On the process relating to the preparation of the supplemental estimate, when did the call go out, if that is the verbiage used, for the data for the supplemental estimate? It bears the date of November, 1993.

Hon. Mr. Ostashek: The supplementaries are based on period 5 variances, which take us up until the end of August.

Mr. Cable: So, that variance is from the period of April 1, 1993, to August 31, 1993, which, if I can just take my shoes off here, is six months. There is an 11- or 12-percent variation in the gross budgetary expenditures over a period of six months in the capital portion of the budget. Is the Minister satisfied with the budget process, in view of that fairly larg