Wednesday, December 1, 1993 - 1:30 p.m.
Speaker: I will now call the House to order. We will begin with Prayers.
World AIDS Day
Hon. Mr. Phelps: I would like to announce that December 1, today, marks the sixth annual World AIDS Day. The theme chosen this year by the World Health Organization, Time to Act, is the rallying call for collaborative action against the HIV AIDS pandemic. The theme is inspired by the work of dedicated people already working to slow the spread of HIV and caring for those with HIV and AIDS. The National AIDS Strategy, with all its departmental and national community partners, recognizes that the world must do more. Although we know how to prevent HIV transmission, many new infections are still occurring. If we want to alter the course of this disease, the time to act is now.
The theme also underlines the fact that it is urgent to provide as many resources as possible to fight the pandemic, both in terms of funds and of human resources.
The World Health Organization estimates that 13 million men, women and children already have been infected with HIV. Every day, an estimated 5,000 people are newly infected. Without urgent action, the current total may rise to 40 million by the end of the century. In Canada, one in 10,000 Canadians is currently living with AIDS, and one in 1,000 is infected with HIV.
One in seven Canadians knows someone with AIDS or HIV infection. I wear this red ribbon today, as many others here do, to commemorate this important day.
Speaker: We will proceed with the Order Paper.
Introduction of Visitors.
INTRODUCTION OF VISITORS
Ms. Moorcroft: I would like to introduce the coordinator for AIDS Yukon Alliance to the House today. Susan Beaver works with school classes, does community visits and helps individuals. Today is World AIDS day and I would like to encourage all Members to stop by the AIDS Yukon Alliance open house at their new location at 7221 Seventh Avenue. Please join me in thanking Susan Beaver for the work that she does with people living with HIV - human immuno-deficiency virus - and AIDS, and we welcome her to the House.
Speaker: Are there any Returns or Documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. Fisher: I have for tabling five legislative returns.
World AIDS Day
Ms. Moorcroft: As the Minister of Justice indicated, today is World AIDS day and we must not look for ways to denounce gays and lesbians for their sexual orientation by characterizing HIV/AIDS as a disease only gays can get. Therefore, I would like to table for each Member a package, Great Sex is Safe Sex, which includes the following useful information: People can get AIDS by having sex with someone who is infected with the AIDS virus. The AIDS virus enters the body through the bloodstream by contact with infected body fluids, such as blood, semen or vaginal secretions.
When used with a contraceptive foam, jelly, or sexual lubricant containing Nonoxyol-9, condoms offer the best protection available today against HIV infection and other sexually transmitted diseases.
The package includes a condom and as the Clerks table is unable to send out a page to the photocopy machine and reproduce a condom for each Member, I have for tabling a sufficient quantity. If any Member will not be using his or her condom, they might consider passing it to someone else who will.
Speaker: Are there any further returns or documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. Devries: I have a legislative return.
Speaker: Are there any Reports of Committees?
Introduction of Bills.
Are there any Notices of Motion for the Production of Papers?
Are there any Notices of Motion?
Are there any Statements by Ministers?
Competitive airfares between Frankfurt and Whitehorse for Yukon tour programs
Hon. Mr. Phillips: I rise today to report to the Members of this House that through the efforts of the Department of Tourism, working with Canadian Airlines International, and members of the European travel industry, Yukon will be able to benefit from new, competitive airfares being offered by European wholesalers for Yukon tour programs.
To offer some brief background information, the Department of Tourism and Yukon tourism industry partners have watched with concern the development over the past two years of lower priced charter flights from Europe into Anchorage, Alaska. There are two jumbo jet charter flights weekly, flying from Frankfurt to Anchorage, with passengers destined for Yukon and Alaska, but they use Anchorage as a point of entry. By not using Whitehorse as the Yukon gateway, our businesses and our economy are not able to benefit from the hundreds of visitors to the same extent as Alaska.
The economic potential of the European market for tourism is enormous. For example, in 1992, Yukon had more than 16,000 visitors from Europe, who spent approximately $6 million here. This year the number rose to 20,600, and it is estimated that they left nearly $7.5 million behind. Next year it is expected that more than 25,000 visitors will come here from points in Europe. By developing Whitehorse as a key point of entry for European visitors, we will have the opportunity to maximize the economic benefits even more.
The Department of Tourism, through negotiations with Canadian Airlines International, and in conjunction with this co-op European travel trade program implemented this fall, has been successful in seeing new competitive airfares between Frankfurt and Whitehorse being initiated by Canadian Airlines.
I can report that with these new lower airfares, several Yukon operators who deal with European wholesalers have indicated that advance bookings have already doubled in comparison to this time last year.
Canadian Airlines is to be congratulated for offering a competitive fare, which will lead to Whitehorse becoming a gateway for European travelers.
Mr. McDonald: We are, of course, happy to hear this news. We would also like to acknowledge the efforts of Canadian Airlines International and the Department of Tourism and the European travel trade co-op to get more German tourism trade in the Yukon. That is a wise move on the part of Canadian Airlines and it will help our tourism industry mature and grow.
Hon. Mr. Phillips: I would just like to respond to the Member briefly. I would like to thank the Member for his comments. What this will mean to the Yukon is that when these European travellers arrive in Whitehorse, they will be renting their motor homes, buying their groceries and supplies and then travelling to points throughout the Yukon.
I know that on my trip this past summer, I ran into many European visitors. Many of them had rented equipment and bought supplies in Anchorage, Alaska, because of these other flights. These new airfares will put us on an equal basis with the charter outfit coming into Anchorage. In fact, this winter, the Hardy Kruger film that was shot this summer in the Yukon will be played in Europe. Some of the travel writers will be doing stories this winter in Europe in major travel magazines. The combination of this work and cooperation from Canadian Airlines and our European partners and the Department of Tourism will lead to, I hope, many more visitors arriving in the Yukon and beginning their trips from here.
Speaker: This then brings us to Question Period.
Question re: Privatization of government services
Ms. Moorcroft: The government says it has no plans for, and I quote, large, massive scale privatization of the Yukon civil service. I would therefore like to ask today about its other privatization plans - the non-massive, not-so-large privatization plans this government has - that it is so reluctant to tell us about. Although there are many departments to choose from, my question today is for the Minister of Government Services about his plans to privatize the government fleet of vehicles.
When did the Minister direct his department to look into privatizing the governments vehicle fleet, and why?
Hon. Mr. Devries: The department was not directed.
Ms. Moorcroft: Perhaps the Minister should read his departments own strategic plan. This review will consider options to the current arrangement, including devolution to departments, privatization, and out-sourcing.
Will the Minister tell us when he directed his department to look into privatizing the governments vehicle fleet, and why?
Hon. Mr. Devries: I did not direct the department to privatize the government fleet.
Ms. Moorcroft: The government continues to deny its intentions to privatize, or out-source, or rationalize - whatever the secret word is today - yet document after memo after strategic plan mentions the P-word: privatization.
Can the Minister tell me what he, or his department, means when they are considering the option of out-sourcing the vehicle fleet maintenance?
Hon. Mr. Devries: The department may have looked at it, but it was proven it would not be in the best interests of the Yukon public.
Question re: Privatization of government services
Ms. Moorcroft: Privatizing the government fleet vehicles is a matter of no small consequence. We are talking about more than 250 vehicles, more than 1,000 contracts, and more than $1 million in expenditures. The Minister has just told us the department may have looked at it but are not going to do it, when the Government Services strategic plan, and the action plan arising from that, says they are going to conduct a review and finish investigation into privatizing the government vehicle fleet by April.
Can the Minister tell us which it is? Will this review be completed by April, or has it already been completed?
Hon. Mr. Devries: The managers were told to look at all the options, and it is an option that is not being considered.
Ms. Moorcroft: The Minister denies his intent to privatize portions of his department. Will the Minister state categorically, on the record, for the benefit of this House and the public, that he has absolutely no intention of privatizing any portion of his department, his strategic plan notwithstanding?
Hon. Mr. Devries: I have not given any direction to my department to privatize any part of my department.
Ms. Moorcroft: The Ministers refusal to say that he will not privatize parts of the Department of Government Services, leads to the logical conclusion that he will. This is a conclusion that is supported by the facts.
Why will the Minister not openly share his plans and philosophy about privatizing the Yukon civil service? What is he so afraid of?
Hon. Mr. Devries: The managers were told to look at whatever options were available to us, and I have been told that privatization has not proven to be a savings option.
Question re: Workers Compensation Board, staff unrest
Mr. Cable: I have a question for the Minister responsible for the Workers Compensation Board.
I am told that the director of finance and administration of the board has resigned, the director of policy and planning has resigned, and a senior secretary has resigned. I am also told that there is growing unrest at management levels.
Could the Minister confirm that my information is correct.
Hon. Mr. Brewster: The information about the resignations is correct, but the administration and the chairman of the board look after workers compensation, not the government.
Mr. Cable: Is the Minister indicating that he feels that there is no role whatsoever for the government to investigate what appears to be a management crisis?
Hon. Mr. Brewster: I am indicating that the chairman and the president are looking after the administration of the board, and I will not discuss administration or personnel matters in the Legislature. I have complete confidence in the chair and the president of the board.
Mr. Cable: There is authority under the Workers Compensation Act for the Minister, by written order, to require the board to investigate any matter under the boards jurisdiction. Is the Minister prepared to exercise that statutory authority and have the board report to this House as to whether or not there is a management crisis?
Hon. Mr. Brewster: I will take the Members question under advisement.
Question re: Wolf control program
Mr. Harding: I have a question for the same Minister but on the Renewable Resources front.
The Minister and his department have stated that they will not publicly discuss details of the wolf kill program. Yesterday in the Legislature I asked about wolf counts being done prior to the kill this year, because the 1992 surveys indicated a dramatic wolf population decrease. Will the Minister reconsider the decision to keep details secret and tell us the result of this survey and other information that the public wants to know?
Hon. Mr. Brewster: Yes, we certainly will. The only thing we want to keep secret at the present time is when the winter program starts, because of the fact that we have already had vandalism to our airplanes.
Mr. Harding: Reading from a news release yesterday, government officials were not even saying whether or not they would shoot wolves aerially this year or not. Can I ask the Minister, then, if he will give a commitment to let the people of the Yukon know how many wolves are found in the survey before they start the kill?
Hon. Mr. Brewster: No, I will not.
Mr. Harding: The public has a right to know. They have a lot of questions about the wolf kill and the elected Members of this Legislature have a duty to keep the government accountable. Why does the Minister think he is so over and above everyone else that he does not have to answer the questions of the public? Who does he think he is accountable to?
Hon. Mr. Brewster: I do not think I am not accountable to anybody. I am accountable to the people of the Yukon, but I must point out that after they have counted the wolves it takes a considerable amount of time to get all this together. When we get it together, we certainly will hand it out to the public.
Question re: Wolf control program
Mr. Harding: I guess we are going to have to look for that information. I may have to ask some questions later about that if it is not going to be forthcoming.
When I first asked the Minister about the wolf management plan being adopted last year, he said that once it was subjected to further consultation by CYI he would accept it. Now we find out that he was just using the consultation as a delaying tactic and he has rejected the CYI recommendations. Now he has come up with another set of excuses for not adopting the plan.
Given that many people, including the wolf planning group and the First Nations, dispute his new process excuses, will he now tell us why, in straightforward terms, he will not adopt the plan?
Hon. Mr. Brewster: I certainly have not rejected the recommendations of the First Nations. They have some very serious concerns, as do a large number of other groups, including the Fish andWildlife Management Board, that this should be used as a preliminary document until it has been reviewed again. That is what we will be doing.
Mr. Harding: I do not know where the Minister is getting his information. He says there is concern about it. My understanding is that the document was reviewed by CYI, and they released it. They thought the plan was good, based on their recommendations to the Minister.
Could the Minister tell us what specific areas of the plan, and CYIs recommendations, he is against?
Hon. Mr. Brewster: I am not against any of them. One of their concerns was that they would like it to be reopened. Quite frankly, I think I would be hypocritical to advance this, because of these concerns, then have to start all over again. Why not do it right, instead of doing little bits at a time?
Mr. Harding: Yesterday, when I brought it up, the Minister said that CYI had approved the plan, based on the recommendations. Now, he is saying that the First Nations are saying that the plan should not go ahead. That is not the information I am hearing on the radio or from people at CYI.
Could the Minister be more clear about his plan for this wolf kill? Is he stating unequivocally that First Nations people do not want to see the plan go ahead?
Hon. Mr. Brewster: No, we are using it as a guideline, at the present time. One of the First Nations requests from the CYI was that we review this in 1995, which is what we plan on doing.
Question re: Contract regulations
Mr. McDonald: In the last little while, we have learned that the government believes that Yukon contractors do not need any preference provisions for bidding on government contracts, and also that the governments top priority is to provide a bid preference for Yukon contractors.
We have learned that the government wants to reintroduce the principle that the low bidder will get the job, but that the Cabinet may, from time to time, bypass the process and the low bidder, if the low bidder is based outside the Yukon.
Now that we know the contract regulations, which were fine six months ago, are to be reviewed, can the Minister tell us what problems he has identified with the contracting regulations that he wishes to see rectified?
Hon. Mr. Devries: If my memory serves me correctly, I believe that six months ago, when I spoke about the contract regulations, I indicated there was a contract review committee that would look at various problems that arose from time to time and that, at a certain period, we would have to look at the contract regulations to try to incorporate some of the committees recommendations into the regulations.
Mr. McDonald: There are clearly contradictory principles being stated in the governments strategic plan with respect to contracting. Yesterday, the Minister led us to believe that the contract regulation review would address the contradictions.
Can the Minister indicate to us whether or not there are any basic principles in contracting that the Minister wants to address in a review of the contract regulations, and whether or not he is going to be proposing, for example, a bid-preference policy for Yukon contractors?
Hon. Mr. Devries: The contracts are tendered, and the document clearly states that any tender or the lowest tender will not necessarily be accepted. That single clause addresses that issue.
Mr. McDonald: I hate to contradict the Minister, but that is not the case at all. There is plenty of jurisprudence that suggests that the rejecting of a bid must be done on certain fair and known grounds. Simply to reject it arbitrarily is very problematic. Can the Minister indicate to us if he is going to inform contractors that are not based in the Yukon that they may have their bids arbitrarily bypassed in favour of a local bidder, as it suits the Cabinet?
Hon. Mr. Devries: I would have to take that under advisement.
Question re: Contract regulations
Mr. McDonald: Unfortunately, we have a situation here where there is a strategic plan that has adopted many contradictory principles. We have a Minister who has defended contradictory principles in this Legislature. All this leads to the potential for great chaos in the contracting industry, and people are very nervous. If people are not already nervous about their fate in the economy over the next six months, they are certainly going to be now.
What is the Minister going to do to reconcile the confusing directions stated in the strategic plan, and what direction has he given to the department, which has caused them to adopt such contradictory principles?
Hon. Mr. Devries: Our direction is to ensure that, wherever possible, Yukoners and Yukon contractors are awarded the contracts, and have the opportunity to work on Yukon projects.
Mr. McDonald: Could the Minister tell us what direction he has given to the department that has caused them to adopt contradictory principles within the strategic plan, and what he is going to do to eliminate those conflicting principles - to reconcile them?
Hon. Mr. Devries: I would have to take that under advisement. We have had some preliminary discussions about it, but a decision has not been made on it.
Mr. McDonald: This strategic plan was only tabled as a formal document and formally adopted by the Department of Government Services this week. Clearly, this is fresh in the Ministers mind. This is the governments statement from Government Services as to what it is going to do with respect to contracting.
There is a whole section here that talks about the Ministers priorities and the Minister is aware of this document. What direction has the Minister given to the department which has caused the department to adopt conflicting principles? What did he say to them to cause them to go in two different directions at once?
Hon. Mr. Devries: I still disagree with the Member that they are going in two directions at once. My feeling is still that, as much as this may appear contradictory, we can work within them in a fair and equitable manner with the contracting community.
Question re: Contract regulations
Mr. McDonald: Let me start again from where we began yesterday.
Does the government intend to give Yukon contractors bid preference when bidding on government contracts?
Hon. Mr. Devries: Again, at times we have to consider economic conditions in the Yukon. In those instances, that could possibly happen.
Mr. McDonald: Why did the Minister indicate that Yukon contractors did not need a bid preference? Why is the Government Leader going around the country and stating in this House that it is important that we break down interprovincial trade barriers? Why is the government adopting two contradictory positions?
Hon. Mr. Devries: The Government Leader is very aware of the clause in the interprovincial agreement that is under discussion right now. That clause gives us the option that in special economic circumstances and for First Nations, we have the ability to give preference.
Mr. McDonald: Why would the Minister indicate that Yukon contractors do not need bid preference at all and that unless economic circumstances changed, the government would not give them bid preference? At the same time, why would he direct his department, as a number one priority, to give Yukon contractors a bid preference?
Hon. Mr. Devries: I would like to ask the Member if he believes that we should not do everything we possibly can to ensure that Yukon contractors and Yukon workers get jobs on Yukon contracts?
Question re: Contract regulations
Mr. Penikett: Let me try to make it really plain and simple for the Minister. The world over there an economic policy debate going on among those who favour free trade and protection, free trade and local hire, free trade and business preference. Everyone in the world except the Minister understands that you cannot have both. What is the policy of the Minister on this question? Does he believe in interprovincial free trade or does he believe in local hire and business preference for Yukon workers and Yukon contractors? Which is the policy of the Department of Economic Development of the Government of Yukon?
Hon. Mr. Devries: I believe in doing everything we can to ensure that there is free trade within the country, as well as, under certain circumstances, protecting the local economy. In NAFTA, there are side agreements that also ensure that that possibility exists.
Mr. Penikett: The Ministers leader is down south right now, attacking interprovincial trade barriers, encouraging Edmonton contractors, Vancouver businesses and Toronto consultants to come up here to compete for scarce business opportunities, while the Minister stays at home here and says that while he believes in free trade he is going to have local hire and local preference. I want the Minister to come clean. You cannot have both. The rest of the world will not permit the Minister to have two policies on this - two completely incompatible, two completely contradictory policies.
Does he believe in free trade or does he believe in local hire and business preference? Which is it? You cannot have both.
Hon. Mr. Devries: I have seen the document that is being considered and it very clearly says that there are other options for special economic circumstances. If you do not agree with it, say so.
Mr. Penikett: The issue is not our position or our policy. Let us be clear. We are the ones who tried to protect the Yukon from the negative effects of free trade. The Members over there have said they support it.
What is the position of the Yukon government and the Department of Economic Development? Is it in favour of interprovincial free trade for the Yukon? Or is it just in favour of it for everyone else, while we have protectionism here? What is the policy of the department?
Hon. Mr. Devries: The policy of the department is very similar to what was stated on the radio the other day. The provincial premiers understand that northern circumstances can be different at times and that they are willing to compromise at certain points and ensure that the needs Yukoners are met as far as these contracts go.
Question re: Business loans, grants and handouts
Mrs. Firth: I want to follow up with the Minister of Economic Development about an issue that I raised with him yesterday, having had a chance to read the legislative return that he tabled today.
Yesterday, I asked the Minister why he hired a consultant to tell him how to direct his department to its job. Today, the Minister tabled a legislative return that says this is the first time that an advertising campaign has been undertaken in five years, and that this committee is supposed to meet annually to approve a communications plan.
Is the Minister saying that for five years these people have not been doing their job, and that annually they have not been approving the communications plan?
Can the Minister tell us today why he hired a consultant to tell him to direct his department to do their job?
Hon. Mr. Devries: The department did not hire a consultant to tell us how to do our job.
A management committee, which administers the small business program, was concerned about the uptake of the program and it wanted an unbiased opinion about what the real problems were.
With regard to advertising, initially, when the program was approved, there was a small advertising campaign.
Mrs. Firth: The subagreements of the Economic Development Agreement say that a communications strategy should be implemented and that they should encourage public awareness of the activities.
The consultants contract said, . . . marketing strategy aimed at generating prospects, clarify who is responsible for building awareness and should incorporate awareness-building in its client-driven philosophy. The two items say exactly the same thing. Can the Minister tell us whose idea it was to have this consulting contract?
Hon. Mr. Devries: The recommendation was made by the management committee, which is made up of a wide range of business people in Whitehorse.
Mrs. Firth: So, the people who are supposed to be doing the job, recommended to the Minister that he get a consultant to tell the department that they should be doing their job. Why did the Minister not read the subagreement to see that it was their job, tell them it was their job and to do their job instead of paying $11,680 of taxpayers money to get this report?
Hon. Mr. Devries: The Member is just being - I do not even want to say it. Basically, the amount of money that was spent on trying to promote this awareness campaign was 0.338 percent, I believe, of the total budget in the small business EDA, and we are now monitoring it to see how successful it was. We have had a considerable increase in the uptake in the last year, so what we have done up to this point has been very successful. It is not a matter of whether it was being advertised properly in the first place.
Question re: Business loans, grants and handouts
Mrs. Firth: I want to follow up with the same Minister regarding the same issue.
In response to his preamble, I know what I am doing. I am doing my job, and I am trying to find out what the Minister is doing. He is not doing his job.
This Minister authorized an expenditure of almost $12,000 of taxpayers money to get someone to give us this document that he was keeping from us, because it was a big secret, to tell the management committee - which, in the subagreement, is supposed to be doing a job - that they should be doing that job. I want to ask the Minister why he authorized that expenditure when it was not necessary.
Hon. Mr. Devries: Again, the management committee was concerned about the uptake on the program and they came up with the suggestion that perhaps we should have an unbiased consultant determine what the problems were. That is what this person did.
Mrs. Firth: If I was on the management committee and I was not doing my job, I would certainly not be recommending to the Minister to get someone to say I was not doing my job.
The Minister is supposed to know what is in these subagreements and he is supposed to know what his department officials are responsible for. Why does he not know that they are responsible for doing that, without having had to ask a consultant to tell him what they are responsible for?
Hon. Mr. Devries: This committee is not made up of only government people. It is made up of many people outside of government. The management committee, again, did not feel that the uptake was proper, that perhaps there was a problem somewhere and they recommended we go to an unbiased consultant to try and determine what the problems were in the program.
Mrs. Firth: The Minister has a responsibility to protect the public purse, not to abuse it. I would like to ask the Minister when he is going to familiarize himself with the terms of the subagreements so that he will know what his officials and his department are supposed to be doing. When is he going to do that on behalf of the Yukon taxpayers? When is he going to learn something about his department and the responsibilities he has?
Hon. Mr. Devries: I have read the document. I am very familiar with what the department should be doing and I think they are doing a fine job.
Question re: Yukon Development Corporation assets
Mr. Cable: The old Yukon College building is rented by the government from the Yukon Development Corporation for use by the Department of Education for several hundred thousand dollars in rent each year. Would the Minister responsible for the Yukon Development Corporation confirm that this lease yields many thousands of dollars in profits each year for the Yukon Development Corporation?
Hon. Mr. Phelps: Yes.
Mr. Cable: The Minister has been beating the drum for many years that energy profits should not be used for financing non-energy related investments by the Yukon Development Corporation. Does the Minister agree with the converse, that the Education budget and the rent from the Child Development Centre should not be used to finance energy-related projects?
Hon. Mr. Phelps: No.
Mr. Cable: The Minister brought in legislation in the spring, restricting the Yukon Development Corporations mandate to energy-related objectives. Does the Minister intend to issue a directive to the corporation, requesting it to divest itself of assets, like the old Yukon College building - assets that are not related to energy objectives?
Hon. Mr. Phelps: The directive I have given to the board of directors of the Yukon Development Corporation is that we would like to divest ourselves of these investments as soon as possible, bearing in mind that we have an obligation to get the best possible return. The Yukon College situation is the only investment that is relatively risk-free, which is because the government is paying for it, unlike virtually every other investment made by the Yukon Development Corporation under the side opposite. They were horrible investments that were politically driven. The financing arrangement for Yukon College, in terms of return to the Yukon Development Corporation, is relatively stable.
At the same time, let me say that the cost of rebuilding Yukon College under the scheme that was forced upon the Yukon Development Corporation by the political people, over the objection of some of their directors, is a scheme that cost the taxpayer twice as much as it should have for the office space being used.
Question re: Young offenders open custody facility/501 Taylor
Ms. Commodore: My question is for the Minister of Health and Human Resources and Justice. It is in follow-up to 501 Taylor. On November 18, the Minister told this House that he was closing down 501 Taylor as an open custody facility that is required by law, under the Young Offenders Act, because it was no longer needed there, and that the youth services program was going to be moving into 501 Taylor. This is recorded in Hansard.
On November 23, he said that was not the case at all and that discussions were ongoing about the future of 501 Taylor as an open custody facility. People who are working within the system with these young offenders are very concerned about what is going to be taking place. They do not know if it is going to close; they do not know what is happening. I would like the Minister to tell not only this House, but also the people of the Yukon and those concerned about it, whether or not he is going to close 501 Taylor. People want to know what is happening.
Hon. Mr. Phelps: I bet they do.
The issue, very simply put, is that there is a lack of young people in the open custody program. That has been our experience for several months now. The department is looking at all of its youth programs to try to ensure that the money going to these programs is effectively spent. It is not if we have a house with no young offenders in it and the staff is sitting around doing nothing. We are working together with the people in the department to try and find solutions to ensure that the way in which we deliver programs is more efficient and effective. That way, we can use extra money to further progress with some of the very important problems facing youth and society today, such as victims of sexual abuse and so on.
Ms. Commodore: The Minister has still not answered my question. He has told me all of that stuff before. I understand that the crime rate is no lower than it was in previous years, so I do not understand what the situation is there.
In another legislative return, the Minister mentioned that they are looking at the parent-model foster care-style home for young offenders. I am told that one or two of those homes is already in operation. I would like the Minister to tell this House if that is the case and, if so, where are they?
Hon. Mr. Phelps: I am not aware of that being the case for open custody for young offenders, but I will get back to my department and see if I am right on that score and advise my good friend, the Member opposite, accordingly.
Ms. Commodore: If he could bring that information back, I would appreciate it.
Among the Yukon Partys election promises was one to lobby the federal government to amend the Young Offenders Act so that young offenders can be named. I know that the Member is not a member of that party, and whether he will follow through on their election promises, no one knows.
I would like to ask him if he, or the Members of his happy coalition, have done anything with regard to lobbying the federal government to change the act to name young offenders, and if they have had any discussions regarding that. I know positive things are happening. I want to know if they have had any discussions with other people, for example, parents or relatives of the young offenders, whose names would be made public. Have they done any lobbying, or any consulting with local people?
Hon. Mr. Phelps: We consult with local people all the time; it is an ongoing part of the job. With respect to the federal government, and the actual act, which is a federal act, the act is under review by Ministers of Justice across the country. My deputy minister has attended meetings of deputy ministers where the issue has been on the agenda, and it is on the next agenda for the next Justice Ministers meeting as well. We look forward to exchanging views with our contemporaries from across Canada.
Question re: Family violence services
Ms. Commodore: The Minister has still not answered my question, so I will have to ask him again. Yesterday the Minister responsible for Justice tabled a legislative return pertaining to the family violence prevention unit. In it, he made reference to the operational review that is taking place, and the results of this review are of great interest to the people who use these kinds of services. I would like to ask him if this review is a general review, or a review specific to family violence services, and if it ties in with the review of the transition home that is taking place right now.
Hon. Mr. Phelps: The transition home is in a different department - the Department of Health and Social Services. The family violence unit, as I am sure the Member is aware, is in the Justice department. We are going through all of the programs in Justice, and trying to find ways of improving delivery, and placing emphasis on such things as community-based justice, so there is obviously an operational review going on. We have limited resources and we want to get the best possible results for the money being spent.
Ms. Commodore: I would like to ask the Minister if he would tell me who is conducting the operational reviews of both the Justice department and the transition home and when they will be completed, and when he will make the findings available.
Hon. Mr. Phelps: This is not some grandiose exercise to bring in all kinds of consultants; it is an incremental process whereby we are talking to clients of the department, users and other groups directly involved with our officials to try to find better ways to deliver services.
I intend from time to time to make ministerial statements about changes as we make them, but there is a lot of work going into some modest changes to program delivery. We are not looking at putting new and more money in; we are trying to make that department more efficient and effective.
Ms. Commodore: One of the reasons that we ask a lot of questions in this House is that we are very concerned and sincerely interested about what is happening in these different departments.
The Minister spoke about a working committee to deal with sexual offenders of children, and he named four First Nations people who are on this committee in his legislative return. I would also like to have him tell me who the other committee members are.
Hon. Mr. Phelps: I will get back to the Member with that information.
Speaker: The time for Question Period has now lapsed.
INTRODUCTION OF VISITORS
Mr. Abel: I would like to draw the Members attention to the gallery and recognize students from the Old Crow school and their chaperone.
Mr. Joe: I would like to introduce the Chief of the Na-cho Nyak Dun First Nation, Chief Robert Hager. He is here today to keep an eye on all of us and to make sure that we keep doing things right.
Speaker: We will proceed to Orders of the Day, Opposition Private Members Business, Motions Other than Government Motions.
ORDERS OF THE DAY
OPPOSITION PRIVATE MEMBERS BUSINESS
MOTIONS OTHER THAN GOVERNMENT MOTIONS
Motion No. 50
Clerk: Motion No. 50, standing in the name of Mr. Penikett; adjourned debate, the Honourable Mr. Phelps.
Speaker: The motion is
THAT it is the opinion of this House that the profit guaranteed by the Public Utilities Board and Cabinet for both Yukon Electrical Co. Ltd. and the Yukon Energy Corporation should be set at no more than five percent for the duration of the current recession so as to reduce the burden of rising electrical costs for both businesses and the residential consumers.
Hon. Mr. Phelps: That certainly sounds like the motion I was speaking in opposition to when we adjourned a couple of weeks ago. I was making the point at that critical time of 5:30 p.m. that this motion has a good many flaws. The first flaw that I was discussing was the potential for this action, if followed, to be seen as changing the ground rules upon which investments were made in the Yukon utilities.
I was making the point that the mover of the motion had already said that a healthy rate of return was needed if a utility company was going to be able to go to the money market to borrow money, when money is needed, for new generation capacity. As many Yukoners know, the time frame for installing any significant hydro power site is a minimum of seven years, from start to finish.
The time frame for installing a coal-fired thermal plant is half that time, depending upon the nuances of an environmental review panel project. A short-term and modest decline in the economy certainly does not place us in a position to completely ignore the potential for increased demand for power in the future - quite the contrary. We are aware of a number of projects that could be approaching production in the next few years. I named a few of them when I was speaking on this motion and they include the Brewery Creek project, near Dawson City, the Western Copper project at Williams Creek, just north of Carmacks, as well several other smaller mining ventures, such as Brew Creek, near Ross River, and the Ketza mine.
Therefore, the investment climate for Yukon is critical to the utilitys future, and the investment climate and the rules surrounding projects and investments in the Yukon are critical to us if we are going to entice investors to invest in mining properties, tourism and ventures in the Yukon.
For us to change the very system by imposing a five percent profit rate in place of the system whereby the rate of return is to be set by an independent public utility board and to be similar to the rate of return allowed in other regions of Canada, is to make a fundamental change in the rules. It is, in my view, akin to what one might expect of Haiti or some other banana republic. It would immediately frighten away serious investors in the Yukon and, of course, for that reason, I call this the Papa Doc motion.
Here we have a situation where one of the Members of the caucus, the mover of the motion, represents Faro and is very keen to see new investment come along and invest in the mine at Faro. I suspect that a move such as supporting this motion would frighten away - and I seriously mean this - investors such as the Koreans, from conversations I have had with them, and certainly Cominco, which is looking at this prospect, and other companies. There would be a shockwave throughout the investment community, and not only of Canada. It is a small community, and the word would go out that Yukon is a place that changes the ground rules on investors.
I seriously say that that is one of the key factors that mining companies look at. If they think that, for modest political gain, MLAs in a small House such as this would simply change the ground rules for some votes, then I suspect - in fact, I am veritably certain - that they would shy away from really seriously considering investments in such mines and ventures as Faro.
It is a bad signal. The Papa Doc motion, it seems to me, is one that would really be negative, in terms of the investment community and their outlook with respect to investments in the Yukon.
We have had a look at the impact of reducing the rate of return from what has been allowed by the Utilities Board, namely 11 percent for YECL and 10.5 percent on equity for Yukon Energy Corporation.
If that was simply done, the amount saved in terms of the Yukon Energy Corporations rate of return would amount, in 1993, mid-year to mid-year, to $2,507,000. That is less, of course, than the money we are putting into the targeted groups from the profit allowed, which is some $4.6 million.
However, since that $2.5 million would be spread across all consumers, including government, for the consumer in the Yukon, the net result for 1993 would be a saving of 7.14 percent. In other words, instead of the rates jumping by eight percent, effective this month, they would jump under the Oppositions Papa Doc motion by 16.86 percent.
The savings for the Yukon Energy Corporation for 1994, mid-year to mid-year, would be $2.575 million, and the net impact of the reduction on both the Yukon Energy Corporation and the Yukon Electrical Company Ltd. would result in an across-the-board reduction for that year of 7.74 percent, so the Papa Doc motion espoused by the Members opposite would result in an immediate jump of 15.26 percent for the next year, rather than the eight percent jump that our rebate plan allows.
This would be inimical to investors, and I can tell you that the word would be out immediately. I know there are Yukoners on such boards as Cominco, which is looking at Faro; the Koreans would know about it right away. Not only would it be a disaster in its impact on investor confidence, but it would not really resolve anything for residents and small businesses in terms of what they pay for electricity, because they would be paying more.
Of course the argument can be made that the reduction then could simply be targeted at residents and small business, and leave government alone.
If that is what is done, they are really only, in effect, coming up with the same kind of rebate that we are. There is no benefit to the ratepayers in this. The simplistic motion was put forward by the proponents of the Papa Doc dictatorship in the banana republic country, simply because they had a Manchurian religious outlook: good and evil; the devil is business and the socialists are good and there is no in between. It is an ill-thought-out solution. It strips away the arms-length relationships between the utilities, the Public Utilities Board and government. It is a gesture that simply reinforces the clumsy, daily, hands-on management that was the signature of the manner in which the utilities were managed under the former administration. It simply places in the minds of Yukoners, and reinforces the notion, that the NDP view Yukon Energy Corporation as their own private toy that can be used to bypass the Legislature and make silly investments in all kinds of uneconomic ventures. That kind of management does a disservice to the ratepayers and to the mining and tourism industries in the Yukon.
I would like to go back to the day in this House that the then Government Leader - later to be styled Premier by himself - made the announcement that the assets of the Northern Canada Power Commission were being purchased by this government.
At that time, the then Government Leader made it clear as to how, in principle, the utility was to be managed; it was to be policed by an independent public utility board.
It was to be managed by the Yukon Electrical Company Ltd., owned by Alberta Power, and now the devil in the strange theology of the socialists. At that time, they did not attach the devil description to YECL.
When one looks at Hansard for February 5, 1987, page 635, we find in Question Period a question from the then leader of the Liberal Party, Mr. McLachlan, who said, Basically Yukon Electrical is not in it for their health. There is a profit motive in there, and there is a fee for service. Certainly the cost of the entire transfer and its subsequent operation is based upon what we are going to be paying the company for their management.
Can the Government Leader indicate whether it is $100,000, $250,000 or $1 million a year? Is it small or large? What is the cost?"
The Government Leader answered, The Member opposite is quite right. Neither Yukon Electrical nor its parent company are registered charities. They will be looking to make a profit on their business transactions in the Yukon Territory. I will assume we will have an arrangement with them that is good for them from that point of view, but, more important, for us, it is the desire for us, in a small territory, with a small plant and a small population with a large piece of geography to serve, to have a very confident management managing both utilities, achieving the economies of scale from that and the presumed virtues of private-sector management, making money, not only for themselves, but also this utility, while serving the customer here by providing them with power at the best possible rates.
Well, I do not know what has happened since then. Perhaps after the election the then Government Leader climbed up on a mountain and pondered for awhile, and found this new religion whereby there is a complete flip-flop in attitude with respect to managing this utility, a complete flip-flop with respect to the profit motive and whether it lends itself to a more economical management by a managing company, and a complete flip-flop with respect to the very important role of the Public Utilities Board to police both utilities, and in particular the management of both utilities, to be the protector of ratepayers in the Yukon, while maintaining ground rules that, in his own words, enhanced the marketability of shares or debt in the utilities to large investors in Canada and elsewhere. It is a complete flip-flop.
I understand, of course, the relative attractiveness of this kind of politics. I very much doubt, and I say this very sincerely, that this motion would be supported by that party, were it on this side of the House at this time. I very much think that, were they on this side of this House at this time, they would be equally concerned about the investment climate and future investments in the territory, utility and non-utility. I think that the answers would be far more consistent with the answers we received, time after time, from the former Government Leader and the former Minister responsible for energy, when we discussed the utility and the Yukon Development Corporation in this House. At that time, while they were here, they certainly paid lip service to arms-length management; they certainly paid lip service to the value of the Public Utilities Board setting the rates; they certainly paid lip service to not interfering with the management of the Yukon Energy Corporation or of the Yukon Development Corporation.
As we all know, their actions belied their words. Their actions were to run the Yukon Development Corporation and the Yukon Energy Corporation as though there was no independent board, and they coerced the board of directors into making investments in very unprofitable and very unwise enterprises.
I do not think that I need say very much in these Chambers in order to remind Yukoners about the investment in the Watson Lake sawmill. I do not think that it would take much for the people in Watson Lake to recall what happened then. I remember that after the first year, when the operation was going into the hole, the Government Leader taking two plane-loads of reporters down to Watson Lake to announce that they had changed management and that things were going to be better from that time on. Even as they spoke, they knew that the real losses of the Watson Lake sawmill were mounting - getting worse, not better, on an incremental basis. I also recall speaking to the manager of the Watson Lake sawmill in the early days, who was totally frustrated with the interference at a political level from the politicians in Whitehorse.
I am sure Yukoners can remember that just before the election in 1989, they announced that they had sold the sawmill, and that they had sold it to some hustlers from Howe Street - trying to get rid of it so that it would not cast a shadow on their chances during the election.
I can recall how the operation was managed by the Howe Street boys, TF Properties. I can recall how the losses mounted, and how, at one point in time, the total losses, borne on the backs of the ratepayers of the Yukon, on the backs of small business throughout the Yukon - particularly in Watson Lake - and on the backs of other investors, amounted to some $20 million.
I can also recall - this being the privileged toy of the party in power - when they announced just before the election in January 1989 they were doing to reduce the rates, to take effect just after the election.
I believe there is a message here for Mr. Phillips - I always get upset when we are confused.
The Member for McIntyre-Takhini says so does he.
That was a blatant case of political interference and done at a time when the profits were being siphoned away into the black hole known as the Watson Lake sawmill.
The hasty sale was done for political motives. The people on Howe Street recognized that and took full advantage of it - here were some suckers ready to be sheared and they got sheared all right. The assets have all been written off and we are simply left trying to clean up what is left of the lawsuits of this very sordid affair.
It was the Minister of Economic Development at the time who strong-armed the board for YDC into lending the second $1 million to Taga Ku Corporation. It is rather amazing, when one hears about conflicts and such in this House, that that same Deputy Minister for Economic Development then left the government and immediately was working for whom? He was working as a consultant for Taga Ku. No conflict there, of course.
That money has, of course, been written off; again, it was coercion, exercised by the political muscle of the then party in power that got us into that mess. Likewise, we have the old Yukon College - as was raised today by the good Member for Riverdale South. A committee of the board of directors of Yukon Development Corporation looked into the feasibility of remodelling the old Yukon College for the Education department. They recommended against it. The government said, Do it anyway. They did it anyway. For 30,000 square feet of office space, it cost $6 million. Any good contractor in this city, in the Yukon, in western Canada, can tell us that they could have built a brand-new office building on that land for $100 or less a square foot - $3 million.
It is very difficult to get the public to fully appreciate the magnitude of this bad decision, but it is simply a case of, once again, the taxpayers of the Yukon paying more than double what they should for infrastructure.
We have the chipper - the venture where people who pay their electrical bills are paying for chipping waste products and shipping them god-knows-where - another great investment by the Yukon Development Corporation under the former administration. Again, this is an illustration of not treating the corporation in an arms-length fashion. It is an illustration of the then administration seeing this as their own private experimental toy. That investment got us - and by us I mean the ratepayers of the Yukon - into debt to the tune of $700,000. We are very unlikely to get much of that back. We will try, as we get out of this deal.
What do we have? We have, at the very least, $12 million of Yukon Development Corporation money lost in the sawmill and a whole bunch of small businesses taken for the ride. We have $2 million on a political investment for Taga Ku, which had been transferred from the corporation to the government in exchange for a reduction of debt. We have $700,000 blown on the chipper. There are other smaller investments.
When we see the kind of impact $3.5 million in one year can make to electrical rates and the urgent need for continuous upgrading of the assets of the Yukon Energy Corporation, it certainly does not take a genius to appreciate just how great the benefits of having that money to spend now - the millions and millions of dollars that went on the socialist experiments - would have been to ratepayers and to the system.
What we have done is taken steps to ensure that that will no longer happen. The directive from Cabinet is that all money earned by the Yukon Energy Corporation will be used to develop new assets, replace old assets and be used as rebates back to the customers of the system. That, in my view, was an extremely important first step.
We come to this House on private Members day and we find ourselves faced with a motion put forward by the very same gentleman responsible for the squandering of all of this money, who really has to take the blame for the horribly high rates that Yukoners are forced to cope with. I suppose it is an attempt to take some kind of short-term political advantage of the fact that everybody is unhappy with the rate increase.
We come to this House on private Members day to be faced with a motion that is calculated to glean support from those Yukoners who really do not understand why the rates are up, at the expense of the very system that was set up to run and police these utilities, at the expense of the credibility of the Government of Yukon in terms of how it treats investors of large sums of money in the Yukon. It is a motion that is poorly thought out, and it does not come close to producing the rate-shock relief that has been engendered by the plan put in motion by the current government and the current board of directors of the corporation.
We have talked a bit in this House about the possibility of privatization and our strong desire to see First Nations as partners investing in the energy companies, namely Yukon Energy Corporation and possibly Yukon Electrical Company Limited. We have indicated our desire to see some shares made available for Yukoners to buy.
We have also spoken in this House, although it is a somewhat different issue, about the possibility of joining forces with Yukon Electrical Company Limited and them owning part of the new company, but that it is a separate issue.
This government is committed to seeing First Nations involved as investors, and to see other Yukoners have the opportunity of owning shares in this important utility that really will be in the forefront of the advancement and growth of the Yukon over the years.
This motion that we are speaking to is one that I suspect is calculated to prevent and to sway First Nations from investing in Yukon Energy Corporation. This is a motion that I suspect is calculated to dissuade small, everyday Yukoners - residents from every walk of life - from ever investing in the Yukon Energy Corporation. I am saying this because that is what the impact would be. Surely, First Nations would not want to invest their land claims money into a corporation whose profits will not be policed in the manner that utility companies are policed across the nation, but merely policed by the whims of government - knee-jerk reactions to unpopular things, a spike in interest rates caused by the shutdown of Faro to some degree.
This motion, taken at its face value, I suspect is really being put forward to thwart the ambition of First Nations in respect of being full partners in the future of Yukon and to thwart any plans we might develop to sell part of the corporation to Yukoners.
I have said that my preliminary discussions with experts indicate to me that the privatization, if that is what it is to be called, of YEC would result in a major decrease of energy rates in the Yukon, and that is the foremost goal I have. It would also result in a broadly based, broadly owned corporation, broadly enough owned so that the shareholders - the real shareholders - would then prevent any future government from using the profits to invest in such silly enterprises as the Watson Lake sawmill or the chipper or any of these other hare brained schemes that so many millions of dollars have been wasted on.
That is what this motion is really about. That is the message to First Nations. They already had the message that the mover of this motion, the then Leader of the Government, did not want them as investors in YEC. He threw them a carrot. The carrot was the clause in the final agreement that says that they can have a crack at future investments. That is the message, and that is the message that I will carry throughout the Yukon, because I fundamentally believe that it is important that First Nations have a stake in this vehicle, that First Nations will obtain a true benefit from reasonable development, that the equity of First Nations will grow, not shrink, and as this great territory is developed that the true potential of this land and its people is realized throughout the ensuing generations.
I suspect that that is what really lies behind this motion. I must admit, it is diabolically clever.
I must admit that I am somewhat astounded by the brazen way it is put forward by the persons really responsible for the problems that the Yukon Energy Corporation is in.
I will admit that we have before us some complicated issues, and that it is going to be difficult to explain to Yukoners, certainly in a paragraph or a sentence or two, or in a 15-second sound bite, just why this motion is so bad.
On the issue of privatization, I would like to talk a bit about possible tax benefits to investors, and the kind of scheme that we will ask the experts to enlarge upon. The idea is that whatever part of the Yukon Energy Corporation is sold to private interests would command a premium price, because the assets would carry with them a tax shelter - significant tax write-offs. So the private investor, the wage earner in the Yukon, who wants to make an investment in the utility - a very sound investment - would be required to pay some premium to reflect part of the value of the tax write-off.
In addition, those Yukoners who so chose to invest would be able to put their shares into an RRSP, thus having a further write-off of their income tax by simply making the investment. The rate of return on utilities is somewhat higher than the return one would get from fixed instruments, such as Canada savings bonds, or long-term Canada bonds or, indeed, debentures in large corporations, but that rate of return is set within the industry and investment standards in Canada.
The primary investors in utility companies are generally seniors, pension plans and mutual funds. When they make those investments, those people expect a rate of return that is at a premium to bonds and to debentures, but less, of course, than the kind of return that can be anticipated from a normal company in good times.
That rate of return is one that is of interest to First Nations. That rate of return is one that could be enjoyed by a great many Yukoners in their RRSPs or where they invest. That rate of return is critical to our being able to raise money for electrical infrastructure, power dams and transmission lines in the future. If that rate of return is artificially tinkered with for crass political purposes, during a time when the economy is truly not in a depression - there is a downturn, but it is very modest - at a time when retail sales are up over last year on a month-by-month basis throughout the Yukon and at a time when there are more jobs, month by month, from May until September, than there was for those months in the year before. If the side opposite is truly calling this a recession then we have before us a strange creator, partially Papa Doc and partially Chicken Little.
My respectful submission to each and every Member in this House is that when considering this motion, do not play minute to minute politics. I really urge each person to consider the seriousness of putting this Papa Doc motion into effect, and to consider the impact on investor confidence, to consider the impact on the potential investors for the mine at Faro, and to consider the impact on those institutions that would invest here and those institutions that are looking now at the possibility of providing power for sale to the Energy Corporation.
To reduce the rate of return at this time would, if the honourable Member, the introducer of this motion, is completely straight forward, would have a compounding effect should we ever go back to industry standards. Should we ever say okay, we are out of the recession - we are out of the down dip, because it is not really a recession - we can go back now to the Public Utilities Board to set the rates.
The jump in my submission, from five percent back up to 11, 12 or 13 percent, depending upon the rate of inflation in Canada, would indeed produce rate shock. The reduction, as we have already shown in the rate of return, from 11 percent and 10.5 percent down to five percent, does not produce the desired results in terms of what private consumers - residents and small businesses - actually pay.
I remember the Northern Canada Power Commission and I remember travelling to Ottawa many years ago with a delegation of Yukoners - I think it was 1974 - to give evidence in the Parliament buildings in Ottawa with respect to the way in which NCPC was being managed. I remember then the strong interests that the government of the day - Liberal; interventionists though - had in trying to ensure that they controlled power in the Yukon. I remember just how poorly NCPC was run.
I remember when the then mayor, in 1975 or 1976, determined that the city should take over the franchise for supplying power to the City of Whitehorse from Yukon Electrical Company. There was a debate and a vote - a referendum. I remember it was turned down by 84 percent of the Whitehorse residents who voted. I remember a gentleman who said during one of the many debates that took place during the run up to the plebiscite being called, When it is 40 degrees below zero out there in the middle of the night, who do you want to come up the power pole and try and fix the line - Bill Kerr of Yukon Electrical or Frank Mooney? The obvious answer was, of course, Bill Kerr. In fact, 84 percent of the people agreed with that.
I remember, too, that shortly after that disastrous setback for NCPC, the first senator of the Yukon was named. Lo and behold, it was our mayor. He became our senator just after this attempt to front NCPCs takeover of Yukon Electrical. He is still our Senator and, at times, he does a very good job.
The public ownership of the assets of NCPC proved to be a disaster. Costs shot up back then. The assets themselves were allowed to deteriorate. They were not kept up or maintained on any kind of reasonable schedule. When they were purchased by the Government of the Yukon, they were in a very deplorable state.
It is really important that we do not allow that to happen again. It is critical that we ensure that the utility company be healthy, that the assets be kept up and the required amounts of money be spent, because once things are allowed to deteriorate and once a public corporation starts bowing entirely to the political wind, doing only what is best for vote-getting rather than what is best for the future of the Yukon and the utility company, it is like the national debt - it gets out of control and is very hard to rectify. I do not want to see that happen.
For those reasons, I firmly believe that the best way to manage the utility and have it policed is the situation we currently have.
I firmly believe that it is our responsibility to make a share of the Yukon Energy Corporation an attractive investment for First Nations, and because I believe that we have a responsibility to allow Yukoners to own a share of the corporation, I will be moving an amendment very soon.
Before I do, though, I would like to say that there are examples of utility companies owned partly by government, partly by a private sector company and partly by the public - one of those companies that is owned in thirds is Alberta Energy.
Therefore, in order to try and preserve the health of this utility, and to try to maintain a climate where, finally, the utility is being managed in an arms-length fashion, I wish to move the following motion:
THAT Motion No. 50 be amended by deleting all the words after the word House and substituting for them the following:
that the allowable rate of return on equity for both Yukon Electrical Co. Ltd. and the Yukon Energy Corporation should be set on the recommendation of Ithe Yukon Utilities Board and should be comparable to the rate of return allowed on utilities in other regions of Canada.
Speaker: It has been moved by the Minister responsible for the Yukon Energy Corporation
THAT Motion No. 50 be amended by deleting all the words after the word House and substituting for them the following:
that the allowable rate of return on equity for both Yukon Electrical Co. Ltd. and the Yukon Energy Corporation should be set on the recommendation of the Yukon Utilities Board and should be comparable to the rate of return allowed on utilities in other regions of Canada.
Hon. Mr. Phelps: I understand that I only have 40 minutes to speak to this motion, so I will speak rather quickly so I can say everything in the limited time that I have.
I would like the Members opposite to consider what has occurred with respect to the manner in which rate shock has been handled in the current system.
When Curragh shut down, the utility companies presented to the Yukon Public Utilities Board their request for a rate increase. That request, including a rider of some 15 percent, amounted to an excess of a 58-percent increase for the first year.
The next thing that occurred was that the Government of Yukon entered into an arrangement with Curragh whereby it lent $2.4 million to that corporation. That $2.4 million was to enable the corporation to continue to pay its electrical bill - the demand charge, the smallest amount it was allowed to pay under the Public Utilities Board ruling - for the period from April through August.
That $2.4 million was paid directly to the Yukon Energy Corporation by the Government of Yukon, not to Curragh. It was not tied up in assets, as the previous loan was, that everybody said good-bye to, that it belongs to Skagway. We did not have to wave goodbye to this money, because it actually went into the Yukon Energy Corporation for the current year, and that resulted in the rider being brought down so that the actual application was reduced to about 43 percent.
The government did not intrude upon the quasi-judicial nature of the proceeding that is the Yukon Public Utilities Board hearing. Instead, we let them do their job. The Public Utilities Board then made its rulings, one of which was to increase the rates by 6.75 percent on an interim basis and, later, to roll back the money to be collected from ratepayers by some $10 million. This, in turn, led to the asked-for increase to total 30 percent, rather than the original 58 percent. The increase that was to take effect in November was 23 percent plus a bit.
We, as a government, said that we would kickback out of the rate of return, and allow the Yukon Energy Corporation $3.5 million to targeted groups - those being residents of the Yukon Territory and small business, not government, although there is a small, modest amount going to alleviate the situation with municipalities in the Yukon, to remove a 5.7 percent rider from what they have to pay.
We end up, then, with a situation where the jump was eight percent, rather than 23 percent; the actual total increase was 15 percent, and was to take effect over a three-year period.
This is to be contrasted to what the NDP have been saying all along, that they would just like to punish anyone who dares to earn any money at all, just reduce it to five-percent return, with the end result being that the increase would not be a mere eight percent, but would be 15.86 percent for this year, and 15.26 percent for the year after.
I submit that this is the best possible way to address the current situation. I firmly believe that the manner in which utilities are to be governed and managed here ought to be as similar as possible to the industry norm in other parts of Canada, particularly those parts of Canada, where, by all accounts, the utilities are managed efficiently. I would submit that Alberta is one of those jurisdictions in which utility companies are managed efficiently and that the end result for ratepayers is extremely beneficial. I would submit that in jurisdictions such as Ontario, where government has totally interfered with the management of Ontario Hydro, the end result has been disastrous for consumers in that jurisdiction.
I would submit that it is important that utilities be arms-length from government, and I submit that for the reason that government ought not to be in business.
Can you imagine what would happen to General Motors of Canada if it was owned by government? Can you imagine reading in the paper that they have laid off 5,000 people here, 8,000 people there, because there are too many cars in Canada - can you imagine government ever doing that? Can you imagine if government ran General Motors of Canada, where that company would be today? Or if they ran Ford, or Chrysler?
The nature of managing business is that hard decisions have to be made, decisions that are certainly not always agreed with by the voting public. The advantage of arms-length businesses being run by the private sector is that they are not subject to the whims and fancies of politicians playing games with the economic future of the industry or the individual company. That is why those utilities that are arms-length from government in their day-to-day management, that are privately owned - or a mix of private and public - are, by all accounts, much better managed, and in the long run provide far more benefits to the consumer.
I have related in a very brief fashion the manner in which, on innumerable occasions, the management of Yukon Development Corporation and Yukon Energy Corporation was interfered with by the politicians for purely political reasons.
I have explained, in a shorthand way, how millions and millions and millions of dollars were lost, dollars that really came from ratepayers in the Yukon and dollars that are needed now by the utility company.
I have, I think, showed the very clear potential for conflict in terms of people in government directing investments by Yukon Development Corporation and then directly working for the very people who benefited from those investments. I speak of the former Minister and I speak of the former Deputy Minister of Economic Development.
I think that I have pointed out how it has taken years of mismanagement and years of interference for us to come to the situation where the kind of rate relief that we put forward was made necessary. I really, truly, firmly believe that the only way that we can ensure that these corporations will have minimal interference from the politicians in the future is to go to a system that uses the public utility board concept as the police, to go to a system whereby some of the assets are sold to First Nations in a partnership and some of the assets are sold to other Yukoners in a partnership, so that government cannot aggressively interfere in the proper management of these corporations, as it has done so glaringly and obviously, over the past number of years.
I firmly believe that if we are ever to get the cost of power on a downward trend, we are going to have to look at the private sector to provide energy to Yukoners. We are going to have to look at very skilled, lean, mean management of our utility companies and the suppliers of energy to those companies. All of these things are entirely antithetical to the concept of public ownership that the side opposite is so zealously trying to guard by putting this motion forward - a motion that would, at the very least, result in a lack of investor confidence and First Nations not being willing to put their money into the partners.
I understand that the Hon. Member for Whitehorse South Centre has a few words to say, and I will take my seat.
Some Hon. Member: (Inaudible)
Hon. Mr. Phelps: I am being interrupted.
Speaker: The Minister responsible for the Yukon Energy Corporation may continue on his amendment.
Hon. Mr. Phelps: Thank you, Mr. Speaker. I understand that it is very difficult for the doctrinaire socialists to listen to the truth about the history of the Yukon Development Corporation. I understand that they know they have been caught out in their attempt to eradicate any chance of First Nations being partners in the Development Corporation. They are being caught out in their attempt to thwart any kind of privatization of the utility through their very poorly thought-out motion. I understand how frustrating that must be. That is the nature of democracy - other people are allowed to speak.
The side opposite has the choice of listening or not listening, as they prefer.
I, therefore, want to underline just how important the role of the Yukon Public Utilities Board is. The only way one can really police monopolies is through that kind of a system. A good deal of expertise is required in order to go through the management of companies and, in administrative law in Canada, a good deal of expertise has been built up over the years - for example, in the video and telecommunication industry, we have the CRTC, a very high-powered board that understands the intricacies of management of utility companies. It has to deal with the rapid change in industry standards, technological advances, and it has to understand and fully appreciate the requirements for investing in new facilities and new technologies, and the important role they play in ensuring that the profit margin allowed in their decisions will not have a detrimental effect on investment in Canada in that field.
That is an area that is highly contested. It is an area where we have giants in industry fighting and scrapping for the right, for example, to provide television signals to households throughout southern Canada. Right now, we have the telephone companies battling with the old cable companies. Large changes are taking place throughout North America and, in the field of power and in the field of other utilities, as I have said, we have people with a lot of training and background regulating the industries involved full-time.
This is what we need in Yukon. This expertise is an important asset that we must develop here. We should not be left out of all these important advantages and all these important changes in direction that we read about daily in the newspaper because we are a remote region of Canada. I think the development of expertise in Yukon is critical to our future.
What do we then do to the board and its integrity if we do not support it and its decision making in this House? What are the ramifications of our imposing an unrealistically low rate of return on that board? The board has, in its deliberations, operated on the same principles as those that are followed by similar boards across the nation. They take a long-range view of the utility companies. They take into consideration risk, management, investment needs and they, like the other boards that set rates for, and police, utilities across the nation have one eye on the investment community and the other on the very real future needs of the Yukon.
Why would we interfere with that process and, suddenly, in a knee-jerk reaction, pull the carpet out from under the utility board and from the system? If it is only to try and curry favour with those who are upset by the rates proposed in the application, and if it is only to try to sway some voters today, not mindful of the real issues that are facing us in future years, then we are and would be - if we support the Papa Doc motion in its original form - doing a grave disservice to those who have elected us.
It is my profound belief that we have to march into the future with a healthy utility company, with other Yukoners as partners in future enterprises. We should not be playing the role of tin pot dictators in banana republics.
For all of those reasons, I strongly recommend that all Members here support this very responsible, reasonable amendment that I have just put forward.
Mr. McDonald: I would like to thank the Member for Ross River-Southern Lakes for making the governments position known very clearly, at least 17 times since he began his speech. I think that anyone who sat in on the speech for 15 minutes would not have missed anything. They would have clearly heard that the government is opposed to the main principle of the motion and, through the amendment, they considerably changed the intent of the original motion. I suppose there a procedural point that one would want to make, but I do not think that we should be wasting our time on that issue.
It is interesting, as an aside, that as long as the NDP Opposition has been in this Legislature, the government side has not allowed an NDP motion to come to a vote, even once. It suggests that perhaps the motions are a little tough minded and perhaps potentially embarrassing to the government. They have honed their skills on the filibuster and consequently have been able to prevent tough decisions being made by all Members of this House, wanting to reserve all decisions for Cabinet alone.
The Minister began by wanting to label the debate. He felt he needed, at some point, to have that 15-second sound bite so he could explain to people what his basic theme was. The basic theme was that he wanted to attract big investors and he wanted Yukoners to lay themselves open to accept and embrace those investors, whether we need the investment at this time or not. He decided to label the debate the Papa Doc motion - clever.
However, just before the Minister made that statement, I was thinking about the small business out there that is probably thinking about this debate - or may be thinking about the debate - and is certainly thinking about the energy prices - the Mom and Pop operation. It is an operation that is not guaranteed any rate of return. It does not operate a monopoly. It is a business that is probably having trouble getting by at this time. I thought to myself that when the Minister referred to this motion as being the Papa Doc motion, the governments position whould be better characterized as the Dock a Mom and Pop. That probably characterizes, to a large extent, the diverging opinions expressed by the Yukon Party government and the NDP Opposition.
The Minister tried valiantly to slip, slide, wriggle, squirm and shift his position in order to avoid some fundamental questions that are being presented in this debate. He has decided that he should refer to the initiative being proposed today on the main motion as one that simply caters to the interests of the electorate. What a base motive. What a base objective.
How could elected politicians dare to step on the floor of this Legislature and think to speak for the interests of their constituents? What a novel approach. He would blame the supporters of this motion for listening to the public will, and he acknowledged that their position would be difficult to explain. Well, it was difficult to explain. In fact, despite the fact that we have been entertained by a few hours of debate from the Member, I am still not entirely clear about his position.
We were treated to a number of different arguments. A few of them were on the point or actually hit the dartboard. Most of the darts actually flew off behind the thrower and landed all over. There were valiant attempts to deflect the debate into whether or not the NDP were anti-corporation or whether the NDP were anti-profit - failing to mention, of course, that when the NDP were in power in the territory, corporations and businesses - including the Yukon Electrical Company - did extremely well. While the economy was doing extremely well, the Cabinet, as was its right and duty and obligation, insisted that the utilities get a rate of return equivalent to the market rate.
The Minister, when he was particularly desperate, simply said the word, socialist - simply thought he could raise fears about the motive behind the motion by raising the spectre that there may be a socialist involved in this motion - spitting it out thinking that, once he had said it, it was case closed. It is not case closed at all. He raised the issue of the Education building; he raised Watson Lake Forest Products a dozen or so times, and Taga Ku, the Envirochip waste-wood chipper and other projects associated with the Yukon Development Corporation, but clearly had difficulty returning to the basic issue at hand.
The basic issue here is whether or not a company operating in a monopoly environment and providing a service that is essential to everyone in the territory - everyone must do business with them to survive and prosper - should be guaranteed a rate of return on this equity that is superior to every other business in this territory. That is the crux of the issue. Everything else is superfluous.
Despite the fact that he had a few hours, the Minister did not once mention that the reason that we are engaged in debating these high energy rate hikes is because the Curragh mine failed. He did not spend any time defending his governments track record in trying to either save, preserve, or resurrect the Curragh mine, because their record on that score was poor.
Even that is water under the bridge. What we are referring to now is whether or not a regulated company operating as a monopoly should be afforded a rate of return that is guaranteed - which no other business has - and which is more than most other businesses can possibly hope to expect in the foreseeable future.
The Minister has said that a respectable rate of return on equity is required by the Yukon Energy Corporation and by the Yukon Electrical Company. The Yukon Energy Corporation, for its part, is not going to enjoy that rate of return, because the Minister has already decided, for some acceptable reasons, in my view, that this rate of return will now be ploughed back into a rate relief program. However, it is the Yukon Energy Corporation, not the Yukon Electrical Company, that is responsible for the high cost and high risk investments that he insists require the outside investor and, consequently, necessitate investor confidence.
The rate of return that he is now saying should be afforded the Yukon Energy Corporation is not going to be seen by investors in the future, because it is going to have to go back into the rate-relief program that the Minister has invented.
The Yukon Electrical Company, for its part, which is not responsible for the high cost, high risk investments, in terms of the construction of energy generating plants, is being afforded this guaranteed rate of return.
The Yukon Electrical Company receives a management fee and some rate of return on equity, as it should. The question is this: what is the appropriate size for this company operating in a monopoly environment? The Minister said that in the current circumstances that would only amount to $500,000, and what is $500,000?
Well, $500,000 is a lot of money; that is what $500,000 is. This is the same argument that the Minister used when they were justifying the big tax increases. What is $8 million? After all, we are high flyers, we are spending hundreds of millions of dollars, so what is $7 million or $8 million? What is a half-million dollars?
For many businesses, and certainly for some consumers that I know personally, the fact that they are going to be facing these rate increases is going to be a major event in their lives. To say that they are resentful that some company is going to get a guaranteed rate of return on equity of 10 or 11 percent, while they themselves operate in a highly competitive environment - not a monopoly environment for they get no guarantees and they may not be looking at a profit - is something that they resent, and you cannot blame them.
Some of these companies provide services that feed Yukoners. Some companies have stores that clothe Yukoners. Some companies are involved in building houses for Yukoners. None of them operate in an environment where they have any guarantees - they have no guarantees.
Incredibly, the Minister protested that the economic circumstances in the territory were not depressed at all. He argued that the territory was not in a down time, no one was hurting and that there was only a modest decrease of activity in certain areas but, after all, some things were way up. Who are the Members on the governments side talking to?
I have had many discussions with individuals, fellow business owners and others who are saying that business is down and that they are hurting. I represent, in my constituency, hundreds of people who are unemployed. The unemployment rate in this territory is higher. The amount of spending on UI has almost doubled in the last year.
If only the Ministers on the government benches would simply leave their offices for a moment and talk to Yukoners, they would understand that things are a little different from what they imagine them to be and they would not make blind statements that things are okay out there. Ultimately, it leads to the impression that people can be taxed more. It was the impression that people could be taxed last spring that was mistaken, in our view. Now, there is a feeling that higher energy rates should be easy to bear, whether they are necessary or not. We should acknowledge that it is not easy for them to bear these rates. If they are somewhat resentful that someone is guaranteed a profit greater than they could possibly hope for, in their wildest dreams, we should not simply dismiss that as pandering to the base instincts of the electorate. This is wrong.
The Minister claims that the Yukon Public Utilities Board held hearings and came to some conclusions that we should not dispute. We should just permit them to operate independently and accept their conclusions. That is true to a certain extent; however, there must be limitations to that line of reasoning. It brings to mind the closing stages of my presentation before the Yukon Public Utilities Board last summer. After I finished my presentation, the Chair of the board said, Are you aware, Mr. McDonald, that we are limited by an order-in-council that sets the basic parameters for the rate of return and that we cannot breach that order-in-council? We are bound by it. An order-in-council, for the Members who do not know, is a Cabinet order - an order made by politicians in the government. What the Chair was saying, with some frustration, was that regardless of whatever arguments I was making about the rate of return, they were bound by the Cabinet order.
The Cabinet order was passed at a time when the economy was experiencing unprecedented growth. Even the economic winter forecast for this year refers to a period from 1987 to 1992 - that five-year period - as a period of significant, sustained, solid growth. As the winter forecast also said, we are experiencing a period of economic downturn. Consequently, the context in which the Utilities Board was operating was changing. The Members opposite choose not to do anything about that, but the Utilities Board is still bound by the order-in-council. As long as the Cabinet Ministers choose not to act, the Utilities Boards hands are tied.
When it comes to laying the whole issue into the lap of the Yukon Public Utilities Board, we have understand that they do operate with some restrictions, restrictions that are laid upon them by government.
The Minister spent some time trying to promote his Papa Doc image, as opposed to the Dock a Mom and Pop image, trying to paint Yukon as a potential banana republic if we did not create an investment climate through a particular utility with a company that would show a high rate of return on investment. He tried to make it sound as if getting a guaranteed rate of return is a sign of a civilized or a mature economy.
When the savings and loans companies failed in the USA, I do not think anyone referred to the U.S. economy as being a banana republic. If the people who invested billions of dollars in those companies did not receive the rate of return they expected, I do not think that anyone would have suggested at that time that the U.S. economy had now become a banana republic.
When the real estate and banking industries suffered, after over building a few years ago, causing spinoffs that reached even the territory, effects that rippled throughout the corners of the world, but were most heavily felt in many of the larger cities in countries such as the U.S., Canada and Great Britain, no one then said that those economies were slipping into the classification of a banana republic.
If IBM is not the true blue-chip investment that it once was, it is not a signal that somehow that is a reflection that that company is operating in an economy that is slipping into the category of a banana republic.
Economies suffer and, increasingly, there are no guarantees for those who made investments. You cannot depend on IBM the way you could 10 years ago. You cannot depend on the big telephone companies that now face competition as you could 10 years ago.
The fact that there are no investments out there any more that are absolutely guaranteed for all time is not a reflection of the fact that economies are now becoming immature, losing stability and, consequently, should be classified as a banana republic. Economies do suffer and ours is suffering, but if we want to make the Yukon into a banana republic - a true banana republic - we will try to attract an investment at a cost that will break the backs of some of our citizens. What is one of the characteristics of a banana republic? A company like Standard Brands go into a Central American country and takes over. They are getting a pretty good rate of return on their investment, no question about that, but at whose expense are they getting that return? Is it the local population who live in poverty and work long hours? No, it is not. The banana republic argument must be rethought.
The Minister has indicated that we need an investment climate that will attract investors who invest in utilities. Which utility is he talking about? Is he talking about Yukon Energy Corporation, or is he talking about Yukon Electrical Company? If he is talking about Yukon Electrical Company, we have to understand that, at least under the present circumstances, that company is largely in charge of distribution of energy. The Yukon Energy Corporation is largely responsible for generation. If we are looking to attract investments in generating the high-cost projects, it is the Yukon Energy Corporation we should be thinking about most of all - currently, a public company. But dividends from that public company are being put into rate relief, which may never end.
One has to ask this question: if we are going to say to the businesses in this territory that there is a privileged business, it operates as a monopoly, gets a guaranteed rate of return, will always be there, is an essential service - if we say that such a business is operating and if we are going to say to other businesses that they are simply going to have to pay even though they have no guarantees - and they are just trying to keep their heads above water - we should be saying, Okay, we are going to be investing your hard-earned monies. We are going to be taxing you more and maybe putting your nose under water a few times, but we are going to be taxing you because we are going to be investing in a particular project. But there is no project. We are operating in an environment right now that has surplus energy.
The mines that have been referred to in the Legislature, and at various mining forums, are perhaps going to start up in 1995 - more likely around 1998 or the year 2000. There has been no talk or deals struck. There have been no commitments at all made for establishment of any development in terms of new generating capacity. You cannot even refer to a particular project that would be funded through the energy increase or through the rate of return on equity. There would be no project funded that we know is going to take place.
We have a major problem facing us. The government wants to set one company apart from all others; the government wants to guarantee its future; the government wants to guarantee its profits and wants to do that on the backs of virtually everyone else. They do not even have a plan yet, as to precisely what they want to invest in.
There are businesses now that are wondering if they will make it over the winter - I know that. They are worried that the actions taken here - the actions taken by the government with respect to securing a particular rate of return - are going to make life extraordinarily difficult for them.
The Minister decided that he was going to embark on the subject of privatization. This motion was tabled before the Ministers announcement that he is intending to privatize the corporation. I should say that the announcement did not say he was intending to privatize; it said he was intending to explore the options. Ever since he has talked about exploring the options, including privatization, he has been doing nothing but defending privatization. So, if the Members opposite are saying that they have not made a decision with respect to this matter, you could have fooled me. It seems pretty clear that at least one Minister has made up his mind and decided to defend the whole concept.
The point of the matter is that this is not a motion about privatization, unless the intent is to make the Yukon Energy Corporation such an attractive investment that somebody will want to buy the Energy Corporations assets. If that is the real intent, then somebody will have to come clean on that point.
When the Minister particularly talks about wanting to offer an investment opportunity to Yukoners as private individuals, so that they can invest in the energy company that they already own, and then at the same time and in the same breath wants to stick it to people through a repeal of the Employment Standards Act, the people who really need the help - the chambermaids, the people who work in the low wage industries, and when he wants to send them a Christmas present like that, one has to wonder if the Minister is really sincere about wanting to support the average Yukoner, the powerless Yukoner or the hard-working Yukoner who is trying to make a living on $1,500 per month. I am sure that person who is making $1500 per month is going to regard the opportunity to purchase $10,000 shares in the Yukon Energy Corporation to be a real steal - from a corporation that he already indirectly owns.
This is not about privatization; this about the ability to pay; this about the survival of our economy, not just one element of it; this is about businesses and individuals making it over the wintertime, particularly during a period when they need power.
The Minister made the statement that there will be a few businesses in Dawson and Watson Lake that will actually receive lower bills. That is great; I am glad to hear that, but there will be a lot of other businesses who will not receive lower bills - they will get higher bills. Some of the businesses are already operating pretty close to the line, and some of those businesses do not go before the Public Utilities Board and say, listen, jeez, clothing sales have gone down, it was not my fault that Curragh closed. People from Faro and Yukon Alaska Transport are not coming into my shop any more; but people have to be clothed, so where is the Yukon Clothing Standards Board, that regulates their industry, which ensures that the people who operate the Saan store, the Woolco store and all of the other stores can survive. Where is that board? Who cares about them? They use power; they were taxed in the spring; some of those businesses are suffering, but they do not have the board; they are not the only business in town; they operate with no guarantees. They think that what they are doing is pretty darn important, and so do the people who work for them. They think that if there is a utility that is owned by the public, this utility should not be gouging them, and the people that they elect should not be directing the utility to gouge them on the grounds that sometime in the future there may be some big investment company, based in New York, that would only look at the Yukon if they can get the high rate of return that they cannot get because the blue-chip stocks that they once depended on are no longer secure investments.
These people think about this kind of question every day. That is the reason 5,000 people signed a petition. They signed it during less than a week. The Minister opposite will say that lots of people sign petitions, that it is easy to get people to sign a petition. That is true, to an extent.
However, when people start looking for the petition to sign it, that is a different story. People start saying, I heard about this petition; where can I go to sign this thing? It was not something being shoved in your face at Super Valu. People are saying they want to get in their car, go across town and sign a petition. It means they care about this, and all the rest of the stuff the Minister raised is irrelevant.
If we are going to think about doing the publics bidding, we will think seriously now about what sort of rate of return ought to be provided to a company, in general terms, working in a monopoly situation. It was a PC Yukon party government, prior to 1985, that changed the law to ensure that Cabinets could give direction to the Public Utilities Board. The argument of the day was that the people who live and work in this Legislature are responsible to the public, so they should be providing general policy guidelines to the board.
Presumably, we agreed with that. Presumably, these Ministers chose not to repeal that law, but have chosen to repeal other laws, such as laws that support hardworking people who live in trailers. The point of the matter is that people who are working, or who operate a small business, are not now being afforded protection and are not now being respected, as they should be, by the people they elect.
I tell you that they will not take kindly to the concept that the Minister promoted that people who support this particular motion are simply pandering to the public. It suggests that the public does not know what it is talking about and that this is far too complex an issue for the public to address.
Kim Campbell got into trouble over making a statement such as that, suggesting during the election that there were questions that were far too complex for the public to address. The public resents that.
I do not think this subject is too complex. Once one gets down to crunching numbers and gets down to how certain figures are factored in, if one were to make a numerical calculation, it might seem complex, but the principles are pretty basic. The fundamental argument the Minister has made to defend this is to create an appropriate investment climate for some project in the future. It is the one argument that addresses the issue.
I promised I would be short, and I have made the basic points I wanted to make. I feel that the amendment before us is perhaps the opposite to the basic motion. I have said enough to suggest that one might interpret my remarks as being in opposition to the amendment. Consequently, if anyone took that interpretation, they would be right. I am opposed to the amendment. I will ultimately be in favour of the main motion.
Hon. Mr. Devries: I speak in support of the amendment. The way the motion was worded, I was amazed that the person who put it forward would actually come up with one like that when we look at the history of the Yukon Development Corporation and what had happened over the previous years.
At first glance, the motion did seem to have some merit. None of us like to pay any more for anything than we have to; however, when we look at the motion in an in-depth way, it sends a much more serious message. The message sent by this motion is that business should be limited to a five-percent profit.
After the Member for Ross River-Southern Lakes had spoken, it seemed obvious that the Member for McIntyre-Takhini chose not to listen to the majority of the important statements that the Member for Ross River made. He laid it out very clearly that, in a scenario where the Yukon Public Utilities Board had been limited to a five percent profit margin, rather than only seeing the present increases, we would also have an additional eight-percent increase. It seems like the Members opposite have chosen not to get that message and chosen not to believe it. The Minister clearly indicated that there would actually be another eight-percent increase over and above what is happening today.
I know that Members opposite are going to disagree with me on this issue. However, let us take a step back from partisan politics for a moment and look at what recent history has taught us. Over the past 10 years, a lot of work and money was spent on a project called Windy Craggy. As we all know, that project is tucked away in the northwestern section of British Columbia. It had the potential to be a world-class mine, with an environmental process in place to examine those issues. Unfortunately, all this potential was sacrificed for political expedience. The Government of B.C. was in a bind with environmentalists over logging issues and offered up Windy Craggy as a sacrificial goat to buy off that constituency. Not only did this not work, to buy off the environmental groups, but the cancellation of that project sent a shock wave throughout the worlds mining community.
The message to the mining community was that the environmental process meant nothing in British Columbia. The message sent out was that the environmental process meant nothing in Canada. This decision affected all Canadian mining companies and their ability to raise capital around the world.
My department has been having to deal with this ever since that happened. The international financial community looks at the Windy Craggy decision as an indication of Canadian policy and capital, and, as we all know, migrates to where it is wanted.
As a result of that ill-conceived move, all jurisdictions, including the Yukon, have to go that extra mile to have mining companies consider the territory as an area in which to invest their capital.
The message of this motion, although limited to utilities at the present time, is very clear to the investment community. If we, as the NDP, do not like what you, as a business, are doing, we will legislate your profits. If we, as the NDP, feel you are making a profit that we think is more than you deserve, we, the NDP, will take the profit from you by legislation or limit that profit, as we see fit.
This concept, as we know it, which the side opposite is advocating in this motion, was at one time popular over a lot of what was called the eastern bloc.
The concept was popular in Italy, Sweden and other western bloc countries as well. History has, of course, shown us that state-controlled profits and state-controlled economies were a disaster. Those same countries that controlled profits and investments by legislation are now out in the international marketplace seeking those same companies to come back and rebuild their shattered economies.
Sweden is an interesting example. I remember that when the Members opposite were in power, Yukoners spent thousands of dollars to send their self-proclaimed premier and some of his favourite figurative sons and daughters on pilgrimages to that country. We sent them over to examine the so-called Swedish model. We sent them over on taxpayers money to the mecca of state-controlled economies, and what does history tell us about that mecca? History shows us that that grand experiment, the great leap forward, was in fact a disaster. The Swedish economy ground to a halt. It was not due to a lack of natural resources nor a lack of hard work, but due to interventionist policies and meddling in the economy by social mechanics.
This motion sends the same message - the message that today we are willing to legislate the profits of a public utility and tomorrow or next week or next year we can and will look at other industries. That is not the message that this side wants to send to the world.
At the present time, we have a possibility of private companies and private investors developing projects in the Yukon. These property developments are not contingent upon the people paying to develop them. These property developments are not contingent upon the people of the Yukon finding markets for the ore. These properties, when proven to satisfaction, will do their own work. They will follow all environmental guidelines. They will develop with their own money. They will participate with First Nations by forming partnerships and they will make a profit.
I know this is a concept many Members opposite are not comfortable with. I would like all Members to take a moment and reflect on our future if the message went across the country and throughout the international financial community that the legislators in the Yukon are fully prepared to limit their profits. Yes, I know we are here today only talking about a public utility. However, the message that goes out will concentrate on the dangerous precedent set and not on the fact that a public utility was involved.
It was interesting, a little over two weeks ago, when the Geoscience Forum was taking place, some of the potential investors had seen one of the articles in the newspapers about this motion and already they seemed to have alarm bells ringing in their heads that this could possibly happen in the Yukon.
If this message goes out, we can kiss the resurrection of Faro goodbye. It is a fact, because one of the companies that mentioned that was one of the companies that was interested in investing in Faro.
We can kiss the possibility of any new mines goodbye. We can kiss investment in our placer industry goodbye, and for what? Political expedience; a knee-jerk reaction by people who claimed that they could plan by the year 2000.
Yes, power rates have gone up. However, we must examine the past if we are to understand where we are today.
I want to briefly reflect on some of the things we saw happening in Watson Lake. I saw the profits from the Yukon Development Corporation and the Yukon Energy Corporation poured into a pit of incompetence and mismanagement when many of the Members opposite were in power. I personally witnessed conflicting instructions and directions coming from Whitehorse that set the stage for Yukon taxpayers to lose approximately $15 million to $20 million. I was working there for a short time, and I did not stick around for very long.
I personally witnessed the misleading statements of the government of the day. On one occasion, the self-styled premier flew down with a load of media to announce the $1.8 million loss, as was stated earlier. We workers in the crowd were shocked, not by the announcement of the loss, but by the misleading figures used. We had a pretty good idea that the loss would already be in the $4 million range at the time that that statement was made about $1.8 million.
Does the Member for Whitehorse Centre want to speak?
Speaker: I would ask Members to allow the Minister to make his speech. They will get their chance soon enough.
Hon. Mr. Devries: I know it is a sore point, and it is like digging into an old wound, but it has to be said. This is why I find it simply amazing that the Members chose to bring this motion forward when they are one of the leading causes of the latest power rate increase.
The workers at the government-operated sawmill had front row seats. You could say we had deck chairs on the Titanic.
Some Hon. Member: (Inaudible)
Hon. Mr. Devries: I told the Members earlier that I quit after six months. I was not there.
Like the Titanic, the sawmill was going down. It had its own iceberg, and that was an interventionist government.
The Leader of the Official Opposition was the Minister responsible for the Yukon Development Corporation. I find it ironic that he was the Minister responsible for the Yukon Development Corporation when they fired the manager of the sawmill for building a $300,000 or $400,000 chipper. Here, four years later, the then Government Leader approved the purchase of a $500,000 chipper. It is totally ironic. That is why the people lost confidence in their ability.
Point of Order
Mr. Penikett: Point of order.
Speaker: The Leader of the Official Opposition, on a point of order.
Mr. Penikett: The Member is misleading the House. I did not fire the manager; I did not buy a chipper. I ask him to correct the record, or I challenge him on his facts.
Speaker: Before the Minister responds on the point of order, it is unparliamentary to accuse another Member of misleading the House. The Leader of the Official Opposition may have a complaint against what the Member is saying, but I do not want to hear unparliamentary language with respect to that complaint.
Mr. Penikett: I accept your ruling, Mr. Speaker, but it is also unparliamentary to state falsehoods on the floor of the House.
Speaker: The Minister of Government Services, on the point of order.
Hon. Mr. Devries: I am willing to retract the statement; I will re-word it. The Yukon Development Corporation fired the manager of the sawmill, and one of the main issues at the time was the fact that he had built a chipper that was worth in the neighbourhood of $200,000 to $300,000, possibly without the permission of the board - or so they claim, and the thing was completed.
Speaker: The Hon. Minister may continue.
Hon. Mr. Devries: Four years later, the same Yukon Development Corporation purchased a chipper for $500,000 - and people wonder why their power bills are going up. It does not make sense. What kind of management was there in the Yukon Development Corporation that they would make those kinds of decisions? It is just unbelievable.
We need to lower the cost of power - we all know that. As the Member for Ross River-Southern Lakes made very clear, a five-percent rate of return on investment could very well be counter productive to lowering the rates. We only have to look at the infrastructure that we have today. We realize that, for a short term, the rebates are going back to the consumers, but it is important that we build on that infrastructure. I believe that right now we have a 130,000 volt line pushing the power form Aishihik Lake to Whitehorse, and from Whitehorse to Faro, and I believe that up to 30 percent of the load is lost in the transmission of that power. Those lines will have to be upgraded to 250,000 volts at some point, so that they can operate in the way that they were meant to operate. The whole thing has been a completely mismanaged fiasco, right from the time NCPC had it to the time the Yukon Development Corporation took over.
I feel that it was made very clear that, with the Public Utilities Board limiting the profits on equity to five percent, this would actually mean an immediate eight percent power rate increase. That was made very clear, and it seems to me that the Members opposite do not wish to acknowledge that very important fact.
I support the amendment, and I urge all other Members to support the amendment that was put forward by the Member for Ross River-Southern Lakes.
Mr. Harding: We, on this side of the Legislature, are often criticized by the government for not putting forward enough alternatives. Very rarely do I accept that criticism, and it is becoming particularly apparent through this debate today, and the obvious decision by the Government Leader, the Member for Ross River-Southern Lakes, that the government did not want to see the democratic process enacted here today. That was apparent from the beginning of the Ministers speech and the long-winded talk of the Watson Lake sawmill, referred to 18,000 times, and it was apparent from the amendment that was put forward that this motion was not going to a vote, which I think says something about the priorities and the way in which this minority government conducts itself.
I do not think that this government enjoys hearing from the people. On and on we hear continuous rants from them about how we are totally out of touch with people, because we know people who have businesses that are failing and because we know people who are out of work. For some reason, the government seems to feel that we must be talking to people who are not Yukoners. They seem to feel that we are not reflecting the true views of our constituents, and that, in actual fact, things are wonderful out there. The Members opposite would have us believe that the situation has improved, even though taxes are higher, the number of unemployed is higher, we have had massive electrical rate increases, and our mines are shut down. Yet, through all of that, the economy is stronger, according to the government, in terms of the number of jobs.
The Minister of Justice, who is responsible for the Yukon Development Corporation, goes one step further and talks about retail sales being up. The Minister may have statistics from somewhere, and I know that governments often use statistics to try and make an argument, as does the Opposition, but I would ask the Minister not to lay his hat on those statistics alone, and to look at what is happening in the Yukon economy. It is not a depression yet, but the signs and the indices point to a very sad situation.
In this debate, we have tried to present a positive alternative. It is obvious that the Members opposite do not agree with us. However, in the wake of what we are seeing in terms of increases, and the anger in the public, evidenced by a tremendously popular petition with 5,000 names, started by a Yukoner who had a real concern, and people coming forward to sign this petition, we felt that we had to look at alternatives. We really believe - and would believe, even without the petition - that this was a seriously jeopardizing position for the people of the Yukon that was taken by the Government of Yukon.
When we bring up this positive suggestion and we want to debate the merits of the decision to give the rebate to consumers as opposed to limiting the power of one corporation operating a monopoly to make a guaranteed profit, we get the Watson Lake sawmill speech 18,000 times from the Members opposite. That is not the issue here.
The clear issue, no matter how many times they want to deflect the debate, is: should the Yukon ratepayers and taxpayers subsidize that corporation in the form of rate rebates. Secondly, should we, as taxpayers and ratepayers, allow a corporation operating a monopoly to make a guaranteed rate of return with no risk, when we have people in the communities who are working and operating business who feel the pinch of this recession. That is the issue. We are talking about the best way to address that issue, yet the debate is continuously deflected.
The point made by the last Member who spoke on the government side that we are trying to say that business should be limited to a five-percent profit is absolutely not the case. In a general sense, we want to see profitable corporations. There is no doubt about that. This is a particularly unique situation where we have a public utility operating a monopoly in a time of recession, getting a guaranteed no-risk profit similar to the one they they received through the good times. In 1992, the rate of return was 14.8 percent; 1991 was 12.4 percent; and this year it is over 11 percent. The rest of the people in the communities and Whitehorse are not making this kind of a profit or return.
The Members opposite would have us believe - if you can believe this one - that if we drop the rate of return the corporation will increase the power rates and we will see higher power rates. I suggest to them that they should rethink this one. I think it is a pretty tough sell to say that if we drop the rate of return that the corporation receives, we will increase the power rates. I think they have had their spin doctors going overtime up there and the radiators have boiled over. They are desperate and that is why they do not want to bring this to a vote - it is obvious.
We even got talking about Windy Craggy today.
Some Hon. Member: (Inaudible)
Mr. Harding: They could have worked in Faro, too, if the government had done something about the situation; they did not have to work at Windy Craggy.
The Minister of Economic Development made the comment that it was sacrifice for political gain, that the B.C. government made the heinous decision to create a park.
What a disgraceful thing. What a disgraceful thing that was - make a park. Those evil socialists. That decision was supported by the Liberals in British Columbia. It was even supported by the former Prime Minister of Canada who lost her seat in the last election.
This is by way of an aside - I often enjoy the Minister of Justice when he talks about the Ontario NDP government and, when we ask questions about how they are handling and mismanaging their own employees, how he always accuses us of toadying to the unions. I would not expect such a cocky reaction from a member of a party that was reduced to two seats in the last election and who lost their leader, the former Prime Minister of this country. But I should not get side-tracked into that - the Member for Riverdale South, too, but she is not as cocky about it as the Minister of Justice.
We have never agreed with the B.C. decision to usurp the environmental review process, and we have made that clear. We think the process could have gone through and we have to believe in the process. We have stated that. What more would Members like? But I do not consider it to be such a heinous crime as the Members opposite do, and I do not, for a minute, want to suggest that I feel this mine represented what it was billed as, for political gain in the election.
If I was as soft-skinned as the Members opposite, I might sit down right now and stop talking, but I can take a little bit of heckling. It does not really bother me. I am not going to act so childishly.
Mr. Harding: It is about time I got the recognition I deserve from the Members opposite.
That mine was billed as the be-all/end-all - another part of the mother-lode mentality of this government opposite - I will get to that in a few minutes - their mother-lode mentality and their talk of the big investors, the big wheels coming in to build huge power dams, because we need the power dams for these projects we have no commitments on thus far, unless, of course, there is something they know that we do not in terms of little deals they have made, and we are going to be asking some questions about that as well.
I found it interesting when the Minister of Economic Development spoke about a shattered economy. I think he has contributed immensely to the condition of the economy and its shattered state. He is no one to take the kind of position he took in that last speech of his about shattered economies. He even took the trip to Sweden in his speech, which has a conservative-liberal coalition for a government, which will go to the polls shortly. It was largely responsible for the situation there.
I do not think the Minister who spoke about Sweden has a clue what is going on there. I do not think he has one iota of an idea of what he is talking about. I do not think he has ever read the Economist, or any other important magazine or article that analyzes situations like what is happening in Sweden, South America and the rest of Scandinavia, or articles written by authors from all sides of the spectrum, so they gain from some form of debate about what is happening over there. He just blurts it out. He does not know what percentage of the GDP accumulated is debt there; he does not know what percentage of the current years debt is a percentage of the GDP accumulated. It is obvious he does not have a clue as to what he is talking about, but someone wrote that in his speech, so he said it.
That is the kind of debate we have to stay away from. We are here to talk about this motion and to present a positive alternative, yet they want to deflect it and filibuster it out, which was obvious from the very first speaker.
How dare they discuss partnerships with First Nations? It is the same kind of smokescreen as was used for the wolf management plan that was brought up in Question Period today. First, they said they had to talk with CYI before adopting the plan, because they felt they had to get CYIs input. CYI made input; they rejected it, at least in part. It was a smokescreen, a delay, a ruse.
The people on this side of the House, in the Official Opposition, are quite prepared to have the First Nations as partners in business, and I think we Idemonstrated that with the Taga Ku project.
What happened to the Taga Ku? Why is the Taga Ku no longer being built in this territory to provide a facility? Why is that? Why is there an empty yard across from the strip mall? Why? When some little business person looks out the window of the Subway restaurant, and looks across for some convention centre, or some activity that is going to create wealth for the people in the area, there is nothing.
That is because the Members opposite obviously do not believe in First Nations partnerships, and do not respect First Nations partnerships in business. They are not prepared to put their money where their mouths are.
They may say that, and they may try to offer some little cookies, so they can stand up and say they are doing that but, when it comes to real investment, and real partnerships, with the First Nations, what do they do? They kill it; they axe it; it is history.
What is going to happen to that land claims money now? They talk about investors being scared off. What makes them think that the First Nations people are going to want to invest their money from the land claims settlements in the Yukon, whether it is money from Yukon land claims settlements, or organizations like the Inuvialuit Corporation. Those people are afraid of this government. They are not going to go near this government any more because they know what kind of business partners they would make and they know how this government feels about First Nations being in business. Talk about scaring investors. There are no guarantees that the First Nations are going to invest all of that land claims money, which would be really beneficial to the Yukon economy, here in the Yukon, especially when there is a government in power like the one now. When the First Nations were contemplating a very big project, this government pulled the rug out from underneath them.
I would not say that they talk out of both sides of their mouths, because that may be bordering on unparliamentary speech, but I would say that they certainly have not demonstrated, through their actions, any real commitment to partnerships with First Nations.
If the Minister responsible for the Yukon Energy Corporation continues down the path toward privatization, I guess we will see what the real commitment is. Incidently, we are still trying to figure out whether he is on that path, whether the rest of his Cabinet is marching along that path with him, or if he is, once again, off on some tangent away from them. We hear talk that there has been no real sincere discussion about the Yukon Energy Corporation being privatized, but every sign points to it. The Minister responsible for energy stands up and espouses the virtues of the privatization theory, so one is led to believe from that that the decision has already been made. I think that, for a minority government with absolutely no mandate to do this, without the proper form of consultation and debate or bringing it to the Legislature for consultation with the MLAs, is ludicrous.
The other ruse in this little game played by the Minister of Energy is about average, working Yukoners running out and buying shares and owning a part of this company. Well it is a public asset right now and they already own a part of it. At the same time that the Minister is talking about average, working Yukoners, he is pulling the rug out from under these average, working Yukoners - the people who work in the hotels, the people who work in the grocery stores, cashiers, whatever. I do not really know how these people are going to run out and buy these shares. With higher taxes and energy rates, I do not think they will be able to afford them. I am sure we will see the local five-and-dime cashier on the board of the Energy Corporation once it is privatized. That fits quite snugly with the direction of the government thus far.
We have also been treated today to fear-mongering about mining companies being terrified and moving away if this motion is passed. Yet, the government has produced nothing concrete or substantial to back up that idea in any way, shape or form.
All we have is fear-mongering.
I think that the government should call the Chamber of Mines, because they certainly did not call them about their 21st Century document that they espouse as one of the saving graces of the Yukon.
I do not know what the $2 million that we received from the federal government is going to build in that document. We might get a couple of tracks down on the railroad to Carmacks, but I am not sure how far it will go. I expect that the Minister of Tourism will be out there on the tracks as a flag man or something, now that his painting career is over. One has to remember I only have 40 minutes.
I am interested in the comments of the Members. As the MLA for Faro, a community that desperately needs to see that operation restarted, I hear their comments, and I would like the government to produce some real reasons, and not just fear-mongering. I did not hear anything in the debate. I only heard that the investors will not come, but I did not hear any nuts and bolts to their argument, only fear-mongering.
I would like to hear, from the next Members who speak, the precise reasons as to why the government is so afraid of this motion.
When you get to the nuts and bolts of the issue, that issue is simply whether or not we are going to allow this corporation, operating a monopoly, to maintain a no-risk, high level of return. Why would you want to do that? Well, the government of the day has produced two reasons for that. One is, if they adopt the motion that we have presented, it would scare off investment. They have to have a high level of return to encourage investment, in case they go to the markets. The second reason for the high level rate of return might have something to do with privatizing the operation.
We have many questions for the Minister responsible for the Yukon Energy Corporation about that side of this equation, and we will continue to ask those questions.
One would hope that the Minister would draw down the veil and let us know what his real plans are because, in Question Period, we seem to get a lot of bafflegab from the Minister. The Minister is quite adept at standing up during Question Period and talking for two minutes without saying anything, but I guess that is a skill that the Minister perceives he has.
We are going to keep asking questions, pulling back the veil and finding out what is behind it.
There was also criticism of the hands-on management of the previous government. I do not think there was any dispute that there were some decisions made by political people. I do not agree with the contention that they were all politically motivated. I think they were trying to work in the best interests of Yukoners. To me, it seems somewhat backwards to take that position of negativity toward hands-on management and then give a rebate back of over $3 million to subsidize the Energy Corporation. It is taking out of the pockets of Yukon people. In a way, it is intervention in this entire affair but just in a different manner.
I get particularly offended when the Minister stands up and says, You are going to scare away the investors with this motion. If we have to go to market, we are going to need a high rate of return. I do not know what the heck the Minister and the Energy Corporation have to go to market for. We do not have a mine operating. They continue to hold up this facade that, in another year or two, there are going to be mines sprouting up all over the place. They bill it in their capital budget as Jobs for Yukoners, yet we do not have any. For example, the Casino project - I would dearly love to see it go ahead. We do not have any capitalization for the project, we need roads, a hundred miles of road -
Some Hon. Member: (Inaudible)
Mr. Harding: Yes, we need power, definitely power, and we are going to be asking some questions about that. That is right, we are going to need power. Not only that, they do not even have a feasibility study done yet and will not be doing one for a year. A feasibility study will be done next year, and what does a feasibility study do. It tells whether the mine will be feasible or not. Yet, a year before the feasibility study is put forward, what is going on? The government is billing it as Jobs for Yukoners - not maybe or could be, but will be.
Some Hon. Member: (Inaudible)
Mr. Harding: The Member for Klondike says is.
Some Hon. Member: (Inaudible)
Mr. Harding: Yes, on the drilling; that is right, I know some of them. I am enjoying this, Mr. Speaker.
The Members opposite suggest that I do not think drilling is a good job. I certainly think drilling is a good job, but what has been billed by the government is that the mine is going to open up. Not the drilling. They did not say in their capital budget that there is drilling going on, meaning jobs for Yukoners. They said they were expecting the opening of mines and that would mean jobs.
To say, for example that we need this mine or this outstanding rate of return guaranteed with no risk is absolutely preposterous. There is no project, there is no pot of gold at the end of the rainbow that these Members want to see. There is no magic mother lode - nothing. We are looking at 1998 at best and we may see some smaller operations before that. But even for the smaller operations, the Geoscience Forum stated they need massive increases in the copper price.
Some Hon. Member: (Inaudible)
Mr. Harding: Copper is not $1.00 per pound right now. The Minister of Economic Development should have gone to the Geoscience Forum. He would have saved himself a lot of misery.
These projects are good projects for government to have in its sights, but it should not be billed as the mother lode. They are not there yet. There is nothing there yet. They need incredible increases in the price of the metal.
The mines in Faro and Watson Lake will see the kind of prices they need, I believe, long before the copper prices get to the price that the bigger properties are seeking - for example, Casino - to justify the infrastructure expenditure.
What are we going to do? Are we going to build a big dam and hope that Casino opens up? Then the ratepayers would really be stuck. I do not think there will be a private investor stupid enough to build one in the hope that a mine is going to come along. It is just simply not going to happen. The Members opposite are living in the 1950s. Disciples of Dief.
Now, Mr. Diefenbaker did some good things; I do not want to cast him in too negative a light - my grandfather did work with him - but his ideas were then and this is now. We do not need the kinds of investments right now that the Members are saying we are going to scare away. Those investors would know what the Government of the Yukon was up to if they adopted this motion, the motion for the rate of return to drop to five percent. They would know what the Yukon government was doing; they would know why they were doing it simply because anybody with sharp enough eyes and a clear enough head can see that the reason they are doing it was to bring the monopoly - the corporation that operates a monopoly - down to a level that is reasonable during the time of recession that we have right now. That is easily explainable.
When things were good in the Yukon, as according to the figures for the rate of return that the Yukon Energy Corporation previously had, they received a very good rate of return.
I have difficulty accepting the argument of the Members opposite on the fear-mongering of investors. Firstly, because I do not know what project we need to have invested in right now - the hollering from the other side about Casino power will certainly inspire some questions from me about the governments plans for that operation - that is the number-one reason. Secondly, I do not see the need for the high rate of return right now, unless we are looking to make it so attractive and so incredibly juicy for someone in the private sector to grab it.
You talk about mortgaging the future of the Yukon - what is going to be the future of rate rebates in a privatization situation? Why would the Yukon government sacrifice the pockets of the people for the corporations pockets? It does not make any sense whatsoever.
The Minister talks about banana republics and he has his cute little words for describing this debate...
Some Hon. Member: (Inaudible)
Mr. Harding: That is the one. What the Minister fails to see is what banana republics are all about - they give big profits to corporations and let everyone else fend for themselves. That is why those economies sometimes have very high GDPs, like Chile is experiencing right now, but the overall standard of living in the country is very poor.
Some Hon. Member: (Inaudible)
Mr. Harding: Well, if the decision-making processes of the Yukon Party government keep up, I expect that this economy will, at some time, resemble Nicaraguas. The problem is, however, this government is going to take it from a strong economy - they even admitted that in the Yukon winter forecast of 1993. The current administration said that the Yukon has seen a period of strong economy from 1987, but things may change in 1993. They should have been saying that during the election campaign.
The government said that we had a strong economy from 1987 on. Is that not amazing? God, the NDP did a good job.
In the debate today, the Minister responsible for energy droned on about privitization. He raised some interesting questions that we are going to have to ask about that. I am sure he is quite prepared for them as he always is. What he said that was disconcerting to us was that he appeared to be clouding the real issue. The real issue is, is that what the people of the Yukon want?
Does the Yukon Party government have a mandate for that. Is that going to be a good or bad thing for the Yukon? Why would they make such a decision? Perhaps the Member is acting in pure isolation. He has been known to do that in the past. Sometimes that happy coalition has its problems. Sometimes there are two people who want to be Government Leader. Sometimes there is just one. There is one person in the happy coalition who used to be Government Leader.
One thing I find particularly distasteful, all joking aside, is that in the rhetoric about the sawmill and Yukon Development Corporation there is talk about the loan that Yukon Development Corporation gave to Totem Oil. There is a Member of the Legislature with what I consider to be a checkered past, as a Member of the Legislature, throwing out barbs at someone who is no longer here.
I guess he could maintain that that is fair game, but I find it particularly distasteful. I would think that someone who had never been involved in a serious situation, such as he has been in in the past, would have more credibility on that issue and would have more of a right to stand up and speak of conflict of interest.
When that Minister, who is no longer an elected Member, did what he did, it was the subject of much controversy and could have meant the loss of the seat in the election to the Member who is now sitting for Riverdale South. I know, from personal knowledge, that that Member campaigned hard and wanted to win and thought they had a chance of winning that seat. I know this argument will not wash with the public because they are prepared to accept that all politicians are crooked, but I, for one, know that that Member tried hard to win the election.
I would just say once again that I think it is particularly distasteful for a Member of this Legislature to throw out such sniping barbs at someone who is no longer here, especially about an issue that can be so discrediting, especially when that particular Member has a concrete history of involvement in it, whereas the former Member he is talking about does not.
We do not need investors at this point. If we do, then the government is not giving us all the information we need to know. We are relying on bits and scraps they throw at us when it seems necessary for them in debate. We would like to know more. We would like to know more about why we need this investment. We would like to know more about the concrete feasibility of these projects. That, perhaps, could change the argument, but right now it does not. We have not heard it. All we have is the mother-lode mentality that the pot of gold is at the end of the rainbow; if we just stick with them, they are going to turn the economy around, and retail sales are up.
Some Hon. Member: (Inaudible)
Mr. Harding: The Minister of Economic Development asked me if Faro was feasible. I certainly think it is, and I know we operated for the last seven years on the power that we had. One of the things that mining companies are concerned about is power rates. I do not know how this motion for the reduction of the rate of return to five percent would negatively affect that equation. I have not had an explanation from the Members opposite. All they have told us is that if it is adopted, mining companies will back off the Yukon. But there have been no nuts and bolts - nothing; just fear-mongering.
If I knew we had to go to the financial market, it might influence this. It is also fair to look at the rate of return they had in the past compared to now, what the rate of inflation is and what is an acceptable rate of return. We are looking at a consumer price index of about two percent right now. It has been maintained at that level now for almost two years, thanks to John Crow and his interest-rate bashing. We paid an awful price for it, but that is where it lies.
If we knew more about the investments they talk of, we might be inclined to take another look at this, but they are not there right now. I cannot bring myself to think for a second that what they are saying can be substantiated because they have not thrown it across at me, and I have listened. I have actually sat and listened to the almost unbearable diatribe by the Minister responsible for Yukon Energy. He went on and on and on about everything but the issue.
We are talking about whether the Yukon people should allow a corporation that operates in a monopoly to get a guaranteed, no-risk rate of return. That is the issue. We got off on all kinds of tangents because they filibustered. We knew that we would have. We had to engage in this debate and respond to some of the more contentious points they raised in their debate. Nonetheless, we feel that this amendment they have proposed is not a good amendment; it is not a good motion; it is not one I will support.
They are missing the point on this entire exercise. We have put forward a positive suggestion to the government, one that has some support from the public. We believe their amendment contravenes the intent of our motion and, consequently, I will not be supporting it.
Hon. Mr. Fisher: I would like to speak briefly on this motion and the subsequent amendment. I applaud what I believe is the intent of the motion, which is to reduce electrical costs for all consumers. I believe that if the original motion were to pass and then be carried out, the cost to consumers would be greater than what is currently being charged. If I may, I would like to explain this.
The approved rate of return is 10.5 percent. The equity to which that rate of return applies is $45.6 million. The return amounts to $4,786,000. However, if the rate of return is reduced to five percent, the savings to be applied would only be somewhat less than $2.3 million, which is about $1.2 million less than the $3.5 million currently being provided by the government.
Besides having less money under that particular motion to distribute to the consumer, the Members motion would cause equal distribution of the savings among residential, commercial and government customers. Currently, the $3.5 million subsidy that is being applied is not - I repeat, is not - applied to government, which is a very large user of the electrical utility.
Therefore, for the two reasons stated, the Members motion would reverse what I believe was the intent of the motion in the first place. Commercial and residential users would be paying much more than they currently are under the subsidy system.
I fully agree with my colleague from Ross River-Southern Lakes with respect to an arms-length approach to the management of the utility, and that the Yukon Public Utilities Board should be the watchdog charged with the responsibility of policing the utility to ensure management efficiencies and to control profits.
I also believe that all earnings of the Yukon Energy Corporation should be directed back to the consumer, either through rebates such as we are doing now, or by funding improvements to the distribution and generation system. Had the previous administration applied those principles and followed that initiative, we might now be enjoying some alternate and cheaper source of energy, or be in a position to provide more of a rebate to our consumers.
Going back to the rate of return and the rebate as it compares to what is currently being subsidized and what would happen under the motion, I did some calculations with my own power bill. My power bill has increased by just somewhat more than $7 per month. I use around 1,250 kilowatthours of electricity, so my bill will go from $120 to $127 per month, but the Members motion would increase the increase by about another $9.00 to a $17 per month increase, not $7.
While any increase in electrical rates is onerous, especially at this time of year, I believe our initiative is simply more acceptable to consumers than what the NDPs motion would provide. It just does not make any sense.
It appears that, while this motion might appear to be championing the common good, the facts are that the resultant electrical rates would be much more costly for Yukon people.
In view of the facts, I would like the mover of the motion to reconsider his position, and voluntarily withdraw the motion.
Some Hon. Member: (Inaudible)
Hon. Mr. Fisher: My colleague just told me that we could not withdraw the motion, because of the amendment.
I would ask that the mover of the original motion support the amendment we now have on the table.
When the Official Opposition was in power, they used profits from the corporation for projects. There is no need to repeat them; they have been mentioned today. However, those projects had no relationship to energy generation or distribution. They quite readily used those profits and made no attempt, at that time, to reduce profits, or to invest in cheaper forms of generation.
The Member for McIntyre-Takhini went after us about the order-in-council. It seems somewhat ironic that an order-in-council that set the limits of the rate of return was approved by the previous government and is now being attacked by those same Members, who are now on the other side of the House. I do not understand it.
I suggest that the Members opposite must accept a huge responsibility for the rate increases we have experienced in the past few years.
Their investments were irresponsible, to say the very least. Why did the previous government not use those profits to at least pay down the debt to Canada? I believe that we owe something like $47 million. When the money was there, when we had lots of money, why did we not try to pay down that debt?
If the previous government did not want to invest in other forms of electrical generation, or investigate alternate forms of generation, they could have at least paid down the debt.
It appears that the investments that were made generally failed. Why would a government consistently invest in failures and not invest in something that was going to mean the future for Yukoners?
I support the amendment, and I think that I could have supported the original motion, if the original motion actually would have done what I believe, I really hope to believe, that the Member intended when he moved that motion. Maybe when the motion was moved, the Member opposite had not done his homework and actually figured out what it would mean to Yukon people, mainly residential and small business.
I am going to believe that the Member opposite did not do his homework, because I do not think that the Member opposite would play politics with something like the monthly cost of electricity.
There is no doubt that, if we were to support the original motion, we would be in a situation of causing higher electrical costs for residential and small business in Yukon.
I worked for Yukon Electrical for 10 years. As a company, it was probably the best company I ever worked for. I fell down a few poles; I froze my feet. As employees of the company, we were able to buy shares in Yukon Electrical, which is part of Alberta Power, which is essentially owned by Canadian Utilities. I think it is the 92nd-largest company in the world. We were allowed to buy shares, which I sold some time before I got elected - unlike my colleague.
There were nice dividends paid from the few shares that I did have. I think my colleagues idea to allow the Energy Corporation to sell shares to the Yukon people - and perhaps through employee-buy programs - is an excellent idea.
If one owns shares in something, one seems to have a better feeling about it. One feels one owns part of it. My few shares, when I was climbing poles for Yukon Electrical, certainly would not have paid for the box on the pickup I had, but somehow or other, one feels part of the company. It is an initiative that I certainly would support, as I support the amendment to the original motion.
Speaker: Order please. The time being 5:30 p.m., we will recess until 7:30 p.m.
Speaker: I will now call the House to order.
I would like to draw Members attention to the presence in the gallery of the Fourth Whitehorse Cub Pack and their leaders. They are here to see their Yukon government in action. I would like to welcome them this evening.
Mr. McDonald: I move that the Speaker do now leave the Chair and the House resolve into Committee of the Whole.
Speaker: It has been moved by the Opposition House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair: I will now call Committee of the Whole to order. We were dealing with Bill No. 11.
Motion re appearance of witnesses
Hon. Mr. Phelps: I would like to move
THAT, at 4:00 p.m. until 5:25 p.m. on Thursday, December 9, 1993, Ms. Debra Fendrick, Chair of the Human Rights Commission, Mr. Jon Breen, Commissioner, and Ms. Margaret McCullough, Executive Director, appear as witnesses before the Committee of the Whole to discuss race relations in the Yukon.
Chair: Are you agreed?
Some Hon. Member: Agreed.
Motion agreed to
Chair: We are continuing with Bill No. 11.
Bill No. 11 - Second Appropriation Act, 1993-94 - continued
Community and Transportation Services - continued
9-1-1 implementation - previously stood over
Chair: Is there further debate?
Mrs. Firth: Clear, clear, clear - not quite yet, Mr. Chair.
Today, we received from the Minister the rest of the information that he had promised to bring forward about the 911 number. He provided me with two proposals that may be charged to Yukoners, one was a 50-cent price option and the other a 58-cent price option. I noticed that there has been no explanation about the question that we had asked the Minister - why is the government going to continue to collect this money for the 10-year period. We have received no explanation on the legislative return to justify them collecting that amount of money for that length of time.
For the first year the capital distribution is $200,000, with the third year as the net present value of $200,623. At this 50-cent price option over the 10-year life, they would end up collecting $600,000 from telephone users. Is that what the intention is here?
It is actually even more than $600,000 - the quick calculation I made yesterday afternoon was based on 10,000 subscribers; I notice this is based on 15,000 subscribers, so it would be an even greater amount of money. Will the Yukon telephone consumer have to pay three or four times the actual capital value of the 911 service?
Hon. Mr. Fisher: First off, these are merely estimates. There are two scenarios there. One is at a rate of return of 13.3 percent; the other at 20 percent. We were using estimations. The House should be aware that, until very recently, we did not have much cooperation at all from Northwestel to do estimations so these are basically done by an independent person we hired to do them. I believe the Member is right, essentially, because 15,000 lines at 50 cents times 12 months comes to $90,000. Then, if the estimated annual maintenance and the depreciation and taxes are subtracted, that leaves an annual cash flow of approximately $37,000 that would be applied each year over a period of 10 years. We have been given information to permit us to be able to review the application that is going to CRTC. We will be able to review it, I believe, early in the new year. Once we see that application, we will see what they have actually applied for but, again, both of these scenarios are merely estimates, done by ourselves. They were estimated relatively high specifically because when we went out to the public with the survey, we wanted to make sure it covered the cost. We said up to 60 cents per month; if we had said 50 cents and it came in at 53 or 58 or some number like that, we could have been criticized, so we wanted to make sure that we covered at least as much as Northwestel had told us the cost would be.
Mrs. Firth: When the government did the survey, they did not tell people that it was going to be for 10 years. That is where the outrageousness of it comes into play. We are asking for a 911 system. It is supposed to cost $200,000. The government has had somebody do projections here that show that this system is going to end up costing us $900,000 - almost $1 million. It does not make any sense to me. I can see the government being a little generous and approving up to 60 cents, but not for 10 years for a system that should cost $200,000. In this information it is indicated that it is going to cost almost $1 million.
Perhaps the Minister could tell us who the independent person was who got these figures for the government.
Hon. Mr. Fisher: The person who did the estimation for us was Ross Perkins. He works with an accounting firm, but I am not sure of its name.
Mrs. Firth: I am familiar with the accounting firm. I want to ask the Minister what kind of direction they gave him. Did they tell him to do it for a 10-year period? Why was it done for a 10-year period?
Hon. Mr. Fisher: Northwestel has advised us that the expected life of the system is 10 years.
Mrs. Firth: Did the government question Northwestel on whether we were going to have to continue paying for it for the next 10 years?
Hon. Mr. Fisher: It is felt that the price will likely carry on, because the expected life is 10 years, and it will then have to be replaced. It is probably ongoing.
In Ontario and Quebec, Bell Canada actually provides this same system, and the cost there is 31 cents per line, because of the thousands and thousands of lines they have. Essentially, that 31 cents will carry on forever.
Mrs. Firth: I do not understand why the government is doing this - why they are not just getting the money out of their general revenue and paying for the establishment of this system. Why would they expect Yukoners to pay almost $1 million for a $200,000 system?
The annual maintenance costs are less than $5,000, according to these projections. It is $4,356 per year.
Why did the Cabinet make the decision that they were going to have Yukoners pay for this, instead of it coming out of general revenue?
Hon. Mr. Fisher: From the outset and before I was elected to this office, the idea was always that it would be a shared cost between the people who benefit from the service and the Yukon government.
Because the operation of it is run by a third party, I do not believe that we would be able to charge the $112,000 to $120,000 for operation and maintenance costs back to the users. The other method was to charge the capital costs back to the users as is similar in Ontario and Quebec.
Mrs. Firth: The previous government made the decision to provide this service and to provide the money for the capital costs. That was the announcement that was made.
The previous Minister in the previous government said that the 911 system was going to go ahead and the government was going to completely pay for the system.
I want to know why, when this government came into office, they could not find the money and had to reverse that decision. Why did they make the decision that they could not find the money within the capital or general revenues of this government?
Hon. Mr. Fisher: As I said before, we wanted it to be a partnership between the Yukon government and the people who benefit from the system. It was not possible to charge the operating costs, so the next best thing was to charge the capital costs. That does make it a partnership between the people who benefit and the Yukon government.
Mrs. Firth: Surely, the Minister does not think that it is a partnership to charge Yukoners almost a million dollars for a capital system that should cost $200,000. What kind of partnership is that?
Hon. Mr. Fisher: As I said before, the $37,000 per year is an estimate and it may not be that much money; I am not sure. Again, the government will pay ongoing operation and maintenance costs and the users of the system will pay the capital replacement costs.
Mrs. Firth: Did Cabinet have this information when they made the decision to have Yukoners pay for this service?
Hon. Mr. Fisher: Yes, they did.
Mrs. Firth: Does the Minister think it fair to Yukoners that they should have to pay almost $900,000 for a $200,000 emergency 911 system?
Hon. Mr. Fisher: As I said before, these are only estimates and the CRTC will determine what the actual charges are.
Mrs. Firth: That was not my question. I want the Minister to answer the question I asked him.
Hon. Mr. Fisher: I am not sure what the actual amount will be over a 10-year period, but we feel that the people benefiting from the service should pay either the O&M or the capital cost.
Mrs. Firth: Is the Minister saying that the Cabinet and the Minister did not know how much people were going to pay? They could be paying up to $900,000 over 10 years; they could be paying even more than that - it could be in excess of $1 million if it is 58 cents or 60 cents - and he thought it was all right for Yukoners to pay five times what the capital cost of the system should be?
Hon. Mr. Fisher: We knew that at 60 cents it would pay for the capital costs. What we wanted to do was find out if the people were willing to pay that 60 cents, and they indicated quite strongly that they were willing to pay it.
Mrs. Firth: The questionnaire never once indicated to people that they would have to pay for this service for 10 years. The public information, given by this Minister, was that it was going to cost about $200,000 and that they may be required to pay as much as 60 cents a month for the system. I do not know of any Yukoner who answered the questionnaire thought who they were going to have to pay that for 10 years and that, effectively, it would cost probably $1 million or more. I bet there is not one Yukoner who knew that and agreed to that. Why did the Minister not have the fact that it was going to be spread over 10 years included in the questionnaire?
Hon. Mr. Fisher: The question was, would you be prepared to pay a monthly charge of up to 60 cents per line? We did not say for one year, for 10 years or forevermore. We left it open. I would like to point out that other provinces have it exactly the same way. In Ontario and Quebec, they continue to pay about 31 cents a month.
Mrs. Firth: Why did they not put in the questionnaire that it could be for as long as 10 years?
Hon. Mr. Fisher: We do not know how long it will be. It will be up to the CRTC to make that decision.
Mrs. Firth: What is the acceptable level that the government is going to require Yukoners to pay for this system?
Hon. Mr. Fisher: I do not see how it can be more than 60 cents a month as that is what we based the questionnaire on. We said up to 60 cents per month, so I would assume that we could not. If for some reason it came in higher than that, we would have to re-evaluate the program.
Mrs. Firth: For 10 years?
Hon. Mr. Fisher: It would be up to the CRTC to determine the payback period.
Mrs. Firth: I am asking the Minister the same question I asked about the monthly rate. What is he prepared to accept on behalf of Yukoners as the term - 10 years?
Hon. Mr. Fisher: I think I indicated earlier that, because the life expectancy of the equipment is 10 years, if the equipment were in good working order and lasted longer, I would expect that 60 cents would come off the bill. If the equipment needs to be replaced at the end of a 10-year period, then I would expect that the charge to Yukoners would continue.
Mrs. Firth: Perhaps the Minister could tell me why it is going to take 10 years and $900,000-plus to pay for $200,000 worth of equipment?
Hon. Mr. Fisher: I did indicate before that we had a lot of difficulty getting information out of Northwestel. We do not know how long the equipment will last and we do not know if, in four or five years, they will be able to attach the equipment for the automatic location identification. I cannot say how long it will be.
Mrs. Firth: What the Minister is saying is that these figures do not mean anything.
Hon. Mr. Fisher: The Member asked what the figures meant. I believe I explained that before. This is an estimate, based on capital cost, an estimated number, an estimated annual maintenance, an estimated depreciation and estimated taxes. Using that formula, and those numbers, the estimated cost would be as the Member has pointed out.
Ms. Commodore: I had a couple of questions I was going to ask last night, but we ran out of time. The Minister had mentioned that the RCMP was going to do the hiring of people to work the 911 line. Could he tell us how many people that would include? Where will the money come from for their salaries?
Hon. Mr. Fisher: It is 24-hour a day service, seven days a week. From what I understand, the RCMP will be using some of their own people as part of it, and they then have to fill either three or four more positions.
The money will be coming out of the governments annual operation and maintenance budget.
Ms. Commodore: Will they then be employees of this government or of the federal government?
Hon. Mr. Fisher: They will be employees of the RCMP.
Ms. Commodore: We will pay them?
The Minister said yes.
I have another question in regard to the response in the communities from the RCMP. I was talking to somebody over the weekend at the housing conference, and he mentioned to me that, very often, it is difficult to get in touch with the RCMP, if they are not in their detachment or their home. Sometimes, they have not even been able to get through on the number that is available to call Whitehorse to find out where they are. It has been a problem for years. I got the complaint when I was the Minister of Justice.
Has that improved? A fellow from Teslin was talking to me about it this past weekend, so it still appears to be a problem. If it has not improved, is there some way that it can be improved? If the 911 system is going to tie into that, then it would have to improve.
Hon. Mr. Fisher: I would hope that, with the inclusion of the 911, that problem would be improved. Someone said it would just be in Whitehorse, but there is an 800 number in Ross River, for instance, for when the members are out of the detachment. The 800 number goes into Whitehorse.
That is something the Minister of Justice may want to follow up on.
Ms. Commodore: Getting back to the person years that the RCMP will be hiring, what does the Minister expect the budget will be for additional employees that the RCMP will be using?
Hon. Mr. Fisher: It is between $112,000 and $120,000. We had estimated $120,000, and then some further information we received from the RCMP indicated that it would be $112,000.
Ms. Commodore: Would that be included in the O&M budget each year?
Hon. Mr. Fisher: Yes, it would.
Ms. Moorcroft: Yesterday I asked the Minister to provide some information regarding the automatic number identification and the automatic location identification. Going back over Hansard I realize that I did not have an undertaking for that, so I am going back to it.
I am sorry to hear that the Minister had a lot of difficulty getting information from Northwestel. I would like to ask the Minister if he can provide me with the information I was requesting yesterday.
Hon. Mr. Fisher: I believe that the Member was asking for information on the automatic location identification, but I do not have Hansard here. Perhaps the Member could refresh my memory.
Ms. Moorcroft: The questions that I would like answered are: will Northwestel update its address system so it gives a better location than, for example, house by game farm; can Northwestel make the present address system that they use available to the RCMP for 911; will Northwestel make that present address system available; what address system will the government recommend that Northwestel implement? Will they, for example, recommend that an automatic location identification system be implemented within two years of the 911 system going into effect?
Hon. Mr. Fisher: On the first question, about the upgrade for Northwestel, the indication that we received from Northwestel is yes, but it would be three years. They will make their address system available to 911 right now. The third question was whether or not the government would be recommending automatic location information. That ties back to the upgrade of the Northwestel system, which will be in two or three years, and we will likely be recommending an upgrade.
Ms. Moorcroft: Would Northwestel upgrade its present address system, prior to purchasing the technology for an automatic location identification - whatever system they may presently use, if it is a paper system - will they improve the records in that?
Hon. Mr. Fisher: My information is that they will.
Ms. Moorcroft: Will the Yukon government participate in the CRTC hearing on the rates and service?
Hon. Mr. Fisher: Yes, we will.
Ms. Moorcroft: The Minister has given the figure of $900,000 for implementation of the 911 service and we were inquiring yesterday about the 911 service in the communities. Would it be $900,000 times 12 for that service to be offered in the communities?
Hon. Mr. Fisher: We certainly do not have that information and I could not hazard a guess what it would cost to implement the system in the communities.
Mr. Penikett: When the Yukon Party government intervenes in the CRTC hearing, will it be supporting the right of the telephone public utility to make a huge profit, or will it be taking the side of the Yukon consumers in that hearing?
Hon. Mr. Fisher: Most certainly, we will be taking the side of the consumers.
Mrs. Firth: First I want to tell the Minister something, and then I want to ask him a question.
It has been a long time that I have been fighting for this service for Yukoners - three years or more, now - and I want the Minister to know that I found Northwestel always very cooperative when I called and asked for information. I can remember a time when Northwestel said they were quite prepared to provide the service. The cost projections they were giving were quite reasonable. The RCMP was very enthusiastic about it, and the story from Northwestel was that the officials in the department could not seem to make up their mind what kind of system they wanted and would not give them specific direction.
I just want the Minister to know that I know where the obstruction has been. He may not, but I do, and I want him and his deputy and their officials to know that I know and I understand completely what is going on. Absolutely, I understand what is happening.
If Northwestel was being so uncooperative, as he stood up and said this evening, did he at any time get in touch with Northwestel himself, ask to sit down and speak to them about the delivery of the service, and give any specific direction to them as to what kind of service he was looking at? Did he do that? Did he talk to them? I would like the Minister to answer this question, please.
Hon. Mr. Fisher: Yes, I had a meeting with Mr. Dunbar. I cannot recall the exact date - it was some time either late last winter or very early this spring - but his advice at that time was not to carry on with the 911, or request it from them, immediately. The reason was something to do with equipment - they needed the tie-in equipment between what we are purchasing now and what they have in their offices.
I am getting in way beyond my technical ability here but, in answer to the Members question, yes, I did have a discussion with Mr. Dunbar, and that was essentially his recommendation.
Mrs. Firth: What kind of service was the Minister asking for? Was he asking for the ANI/ALI, the whole nine yards, the whole system - is that what he was asking Northwestel for at that time?
Hon. Mr. Fisher: At the time I did not. We did discuss ALI and the equipment would not be available for at least three years. All we were asking for was the ANI.
Mrs. Firth: Did Northwestel indicate at that time that they could proceed with the ANI portion of it?
Hon. Mr. Fisher: We were told the price would be anywhere from 30 cents to $1.00. That was the best information they had at the time. It was going to take some time before they could get the equipment in place. They had not done any great amount of research into the cost of the system. That was late winter or early spring of this year.
Mrs. Firth: I do not have my 911 file here with me tonight - it is about six or eight inches thick. I am almost positive that there was a study done by the Community and Transportation Services department some time around 1988, with all kinds of prices and quotes in it. That study was shelved. So Northwestel had done some work on costs. The Minister has not been specific. Is he telling me that Northwestel told him at that time - that Mr. Dunbar told him - that it was going to cost between 30 cents and $1.00 in order to implement the ANI portion of the 911?
Hon. Mr. Fisher: Yes, that is exactly what we were told.
Mrs. Firth: Could the Minister tell us when that meeting took place?
Hon. Mr. Fisher: I do not recall the exact time, but as I said before, it was either late winter or early spring. It was this year, but very early on.
Mrs. Firth: Did the Minister question Mr. Dunbar at the time, because Northwestel already has in place a system that identifies the number that you are calling from. If you call the operator, they know which number you are calling from. Northwestel already has an automatic identification system in place.
Who else was at this meeting with the Minister and Mr. Dunbar? The Ministers memory seems a bit foggy about the meeting.
Hon. Mr. Fisher: As I said, the meeting was many, many months ago. I believe that Mr. Cormie attended the meeting with me, but I may very well be somewhat fuzzy about the meeting - there is no doubt about that. The meeting happened some time last spring. I am sorry that I cannot remember every minute of every day over the past year.
Mrs. Firth: I am trying to establish some facts to substantiate a comment the Minister made in the House this evening.
The Minister said, very clearly and uncategorically, that Northwestel was very uncooperative. I asked the Minister about personal discussions that he had with Northwestel. He told us about this one meeting with Mr. Dunbar that he cannot really remember too much about. Is this meeting with Mr. Dunbar what the Minister based the comment that Northwestel was very uncooperative on?
Hon. Mr. Fisher: The staff of Community and Transportation Services and the staff of Northwestel had numerous meetings. The numbers they were given were between 30 cents and $1.00. That is the reason we had to do our own study on it and hire Mr. Perkins, so we could come up with something a little more accurate than 30 cents to $1.00. We did not want to go out on a survey with those kinds of numbers.
Mrs. Firth: I am trying to establish one thing. The Minister stood up and said that Northwestel was very uncooperative. I want him to substantiate that. He has now just stood up and contradicted himself again. Was the staff told it would be 30 cents to $1.00, or was the Minister told that by Mr. Dunbar? Now, he is standing up and saying that the staff was told that.
Some Hon. Member: (Inaudible)
Mrs. Firth: The Minister is saying they were both told that. Would the Minister like to stand up and tell us exactly what happened? I want him to substantiate his charge that Northwestel was very uncooperative. On what does he base that?
Hon. Mr. Fisher: I base it on the fact that we asked how much it would approximately cost per month per customer, and we were told it would be somewhere between 30 cents and $1.00. I was told that personally and the staff was told it many times by the staff of Northwestel. That is the best substantiation I can come up with.
Mrs. Firth: That means they were uncooperative - is that what the Minister is saying?
Hon. Mr. Fisher: As I said before, there were numerous meetings between our staff and the staff of Northwestel. Because they could not, or would not, come up with a better number than the 30 cents to $1.00, we hired someone to do a study to try to determine a better number than that. In that respect, because they would not come up with a number, and we were forced into doing the study, I would say, yes, they were uncooperative.
Hon. Mr. Phelps: As the independent MLA for Ross River, I have one or two questions for the Minister about Northwestel. The Minister is undoubtedly familiar with the Papa Doc motion that was being discussed in these Chambers this afternoon. I am wondering whether or not any Member of the NDP caucus has ever suggested to him that the guaranteed profit of Northwestel, because it is a monopoly, because it is again gleaned from in the Yukon and because it is awarded by a board very similar to the Public Utilities Board, that its profit be rolled back to five percent, as they suggest should be done to the Yukon Energy Corporation and the Yukon Electrical Company Limited?
Hon. Mr. Fisher: I really do not know where this line of questioning is going. In answer to my colleagues question, no, the NDP caucus has never approached me with the principle of having the rate of return for Northwestel rolled back.
Hon. Mr. Phelps: Perhaps they will pay attention and make the appropriate moves in due course.
Mr. Penikett: I wonder if, as a matter of policy, the Minister responsible for regulating telephone rates agrees with the practice of Northwestel to divert a significant portion of their profits toward the development and fostering of arts and culture in the Yukon Territory - a purpose which has very little to do with operating a telephone company?
9-1-1 Implementation in the amount of $70,000 agreed to
Office of the Deputy Minister in the amount of $269,000 agreed to
Transportation Division in the amount of an underexpenditure of $759,000 agreed to
Department of Community and Transportation Services agreed to
Chair: Is it the wish of the Members to take a break at this time?
Some Hon. Member: Agreed.
Chair: We will take a brief recess.
Chair: I will now call Committee of the Whole to order.
We are dealing with Bill No. 11, and we are on Economic Development. Is there any general debate?
Department of Economic Development
Hon. Mr. Devries: I am pleased to introduce the 1993-94 supplementary budget for the Department of Economic Development. While I am speaking, Members will be receiving handouts containing information that I am sure everyone will be requesting.
The supplementary for operation and maintenance expenses reflects this departments commitment to sound fiscal management and to diversifying and strengthening the Yukons economy. An additional $479,000 is being requested for the 1993-94 budget of $2.57 million.
Additional funds are being sought to hire a mining facilitator who will report to the deputy minister. As well, $159,000 is requested by the energy and mines branch, primarily for the additional costs in evaluating the technical and financial considerations of providing a loan to Curragh Inc.
Additional capital funds are being requested by the economic policy, planning and research branch to establish the Northern Accord office.
There has also been a $1.1 million increase to the base funding from Ottawa for implementing the Northern Accord. The Northern Accord will receive $375,000 this year - 1993-94 - and the same amount for next year, 1994-95, in one-time funding for startup costs, as the legislative regime is being developed.
The annual royalties from the Northern Accord are estimated to be $1.7 million to the Yukon, to be shared with First Nations in accordance with the umbrella final agreement.
Some funds will be available for Council for Yukon Indians for consultation on the implementation of the Northern Accord.
There is a reduction in funds for the business and community development funds within the economic programs branch. These funds have been transferred to the Department of Education for the new gymnastics facility at Jeckell Junior Secondary School.
Capital expenditures have also decreased in the Canada-Yukon economic development agreement as applications have been low this year. There is an advertising campaign to increase private sector applications to the EDA.
In closing, this supplementary for O&M expenses reflects this departments commitment to sound fiscal management and to diversification of the Yukons economy.
Mr. McDonald: I have a few questions just to begin. The contracts list the Minister tabled - is that complete? What are the restrictions on the items that he has provided? Are there any? Are these all the contracts that have been let?
Hon. Mr. Devries: My understanding is that those on the list are all the contracts to October 31, 1993.
Mr. McDonald: Could the Minister provide us with an identification of the revotes before we get started, so that we do not run into them on an ongoing basis?
Hon. Mr. Devries: My understanding is that there are no revotes.
Mr. McDonald: That is fine, then.
Typically, departments have a strategy, and the Minister knows well about the strategy for Government Services, the strategic plan. Could he tell us whether or not he has a strategy for Economic Development?
Hon. Mr. Devries: Basically, our strategy is to try and create economic diversification within the territory. All the strategies all the other departments had have been shredded in the last few days, I am certain. All kidding aside, no, we have a direction we are trying to head in.
The direction we are headed in is that we believe in our strengths and our natural resources and our people and our ability to make things happen, and we believe that a healthy and active mining sector is still the surest way to achieve a healthy, active and diversified Yukon economy.
We have vigorously pursued the strengthening and diversification of the mineral sector and just a few of the specific initiatives have been maintaining the Yukon mining incentive program and working with the various individuals who apply to it.
We have also revised the guidelines for the YMIP in consultation with industry, to make sure that there are more effective program expenditures. We are in the process of establishing the position of the mining facilitator. We launched the electrical infrastructure for resources loan program a few months ago.
I have also met individually with many companies with strong mine development plans for their Yukon properties and have indicated our keen interest in helping them move ahead. We negotiated a $20 million transportation infrastructure agreement with the federal government, for which mining will also be a major beneficiary. We have raised the Yukons profile in the industry nationally and internationally through a full supplement in the Mining Journal, based in London, England, and also placed several ads in the Northern Miner.
We played an active role in the pursuit of the orderly wind-down of the Curragh operations, and we are also actively involved in the pursuit of new buyers.
I know that the exploration expenditures in 1993 were double those of 1992, and the industry is looking at a wider area of minerals, including copper, lead, zinc, silver, gold and coal. By diversifying our mineral industry into different base metals and precious metals, we can then create a mineral industry that is not dependent on just one type of ore, which has been a major problem. We are seeing the effects of that now.
Simply put, we will have more eggs in more baskets.
This is not to suggest that we are turning our backs on other important components of the Yukons economy, or other important opportunities. We participated with the tourism summit that was held in early November. We were involved with the home-based business workshops and seminars that were held the same weekend. We have been active in the employment task force, which has looked at ways to optimize employment from the capital budget. On top of recommending the allocation of $7 million in capital spending, which generated the 3,000 person weeks of employment, they are also looking at home-improvement tourism, and other initiatives, with the private sector, as well as ways to maximize the economic spinoffs of the forestry sector. They have also been working with the Canadian Environmental Strategy in trying to get that group to come forward with some money.
The Department of Economic Development worked with the Yukon Energy Corporation on a program of electrical rate relief to reduce costs to residential and business customers. We have the Yukon Council on the Economy and the Environment, which will work with Yukoners to host an economic summit to examine further options for developing our economy. We are working very closely with them on that.
Meanwhile, we have been maintaining our active support of the economic development agreement and business development fund business promotion initiatives, including the recent promotional campaigns underway for each of these. Something like 330 EDA applications have been processed to date this year.
Through the EDA small business support program, in cooperation with the Yukon Chamber of Commerce, we participated in a trade mission to Alaska, which we believe will result in very positive export opportunities for Yukon business. Just recently, we wrote a letter to the Yukon Chamber supporting their attempt to have the Alaska Chamber annual meeting in the Yukon in 1995. We have worked with the Yukon Chamber on an energetic Buy Yukon program to strengthen awareness and benefits of local purchase, and prevent leakage. Basically, it is to keep more money spent on goods and services in the Yukon economy.
In a short year, and with limited resources, we have taken an aggressive role in the development of the Yukons economy, and in establishing our image of being open for business. I think that the business community, both in and outside of the Yukon, is very aware of this. I get many phone calls, and we have seen a great deal of interest by investors in the Yukon.
Mr. McDonald: I would like to ask the Minister a general question about his vision of the role of the Department of Economic Development. The activities that the Minister cited as being activities that the department has been involved in, seem to be ancillary to the initiatives that are being taken by other departments and by non-profit private sector groups, but there is never a pivotal role, never a role that tries to draw things together and give the territory a sense of coherence in terms of its economic strategy. Why does the Minister feel that he should be on the sidelines and not centre stage?
Hon. Mr. Devries: I certainly do not think that we have been on the sidelines. By the same token, what we are trying to do now is look at the various initiatives that have been taken by Tourism - because economic development is the big picture of the economy - and the Yukon housing conference, et cetera. We want to look at some of the recommendations that come out of those, and then Economic Development will take those various recommendations and work with the Yukon Council on the Economy and the Environment. We are still not certain whether we are going to put on a separate forum or whether we will work with them and put on a forum that will be sponsored by both YCEE and the Department of Economic Development. That is basically where we are right now. This should happen before March.
Mr. McDonald: If something happens in or around March, that would have given the Minister approximately 16 months to get started in terms of conducting public discussion about the general direction the government should be taking, the role of government in the economy, and the role of the department in terms of promoting economic development in various sectors.
One problem that people have determined is that without some sort of strategic thinking, one does not know if they are putting their resources to best use. Certainly, the community gets the impression that the government is without direction.
It took very little time for some ministries to engage in public discussion, and it is not all that complicated; it has been done before. The Department of Economic Development has led some very significant public discussions on the matter of the economy.
One might argue that in the last 12 months or so, conditions warranted a thorough discussion on the future of the territorys economic fortunes and there certainly have been enough people expressing a desire to talk about the economy, that would have suggested that perhaps the Minister, the ministry or the department should have led some kind of discussion think tank between interests in the private sector and the government. Those discussions would have helped bring some sense of coherence to the economic strategic planning that the government has undertaken.
I am still puzzled as to why the Minister feels that his role is secondary, and that he is happy to watch others initiate various sectoral strategies, without any sense that the government needs any sense of general direction or strategic thinking, which is something that really is mandated to the Department of Economic Development. Why did the government wait so long to appoint or restructure the YCEE if they are going to use that as the major engine of public discussion?
Hon. Mr. Devries: Again, I do not think that we have been taking a back seat. We were involved in - I hate to mention it because the Members opposite seem to think that it is a terrible document - the drafting of the document entitled Toward Self-Sufficiency by the 21st Century, and much of our energies have been focused toward developing a strategy and a direction to make the Yukon more self-sufficient. Naturally, much of this was through infrastructure development. I think that everybody here knows that if you can get mining and infrastructure development moving along, most of the other businesses pick up on that.
Unfortunately, we have had the Curragh shutdown and much of our time has been taken up in trying to deal with the various problems that came along with the shutdown, and also trying to deal with the various people and businesses that have suffered from the Curragh shutdown - the refinancing and things like that.
Mr. McDonald: If the Minister is worried about the horsepower in his department, he will remember that 1985-86, a period the same as what the Minister has experienced himself, the Department of Economic Development was involved in the shutdown of the Cyprus Anvil property and the opening of the Curragh property and the initiation of the Yukon 2000 process. That was all within a very short period of time.
Put to the test, there is the potential for Economic Development to do things. If there was ever a time for Economic Development to be front and centre and to be active, aggressive and facilitate discussion about the roles and responsibilities in the various sectors and to coordinate activities between sectors, the time would be now.
The Minister indicated that the department was involved in the construction of the 21st century document. That document has a fairly limited range of sectoral activities in terms of identifying economic opportunities in mining and the development of infrastructure for mining.
The vast majority of businesses in the territory owe their existence, and will owe their existence over the next couple of years, to what is happening in the territory right now and what is going to happen in the short term. The perspective of businesses is both long term and short term. Many of them see a need for some discussion.
When the Minister attended the think tank organized by Roland McCaffery, the one lasting impression I got from the meeting was that people really wanted to talk. If there was ever a signal or a hint that it might be wise to facilitate some general discussion and involve people, it would have come after this type of meeting. I have always been puzzled by the roles the Minister has cut for his department.
In helping us to understand the Ministers thinking, could he tell us if he has decided to use the Council on the Economy and the Environment as the liaison for managing public discussion and not the department officials?
Can he tell us why they waited until September to do appointments, and till October to have meetings? We may be into March 1994 before there will be any general discussions about the economic fortunes of the territory. What was the thinking behind that? Clearly, if the government had thought that it was a high priority it could have, as other Ministers have done in other departments, acted immediately. In Health and Social Services, there was a public consultation. Someone instructed somebody to consult with the public on social services costs, as it was perceived to be a problem.
Although ill-fated, there were attempts made in the education sphere to engage in public discussion immediately. Yukon Housing had its conference last weekend, but long before last weekend, they had published some lengthy discussion documents that people could use to understand the economic sector better and to facilitate discussions, or to be more informed.
I remember those coming out some considerable time ago; certainly, they were sent to me a long time ago.
Can the Minister explain what the government is thinking, what the rationale was, for wanting to engage in public debate or encourage or facilitate public discussion so late in the game, in comparison to so many other initiatives in the government, when clearly most people are thinking about the economy these days.
Hon. Mr. Devries: Again, I do not know what the Member opposite thinks the housing conference was. That is part of the economy, the tourism thing is part of the economy. Basically, as much as I had considered late last summer something for this fall, when I heard these other initiatives were taking place, I thought we would be much better off to have the various sectoral meetings and, from those, try and put it all together and see where Economic Development could fill in the voids and try to pull the whole thing together, which is going to be, I would say, before spring. By that time, we should have a very clear picture of where this government wants to go.
Meanwhile, last summer we were also very involved in the preparation of the capital budget. This budget was very successful in meeting the objectives of the employment it was supposed to create, et cetera. Also, we were very happy to see the involvement of the department in the $7 million works program for this winter. It all leads to economic development and trying to get people back to work.
I am not certain I answered all the questions, or did I?
Mr. McDonald: I am still puzzled at the role the Minister has designed for the department. There is no question that tourism is important to the economy, or that housing is important to the economy. Even the art sector is important to the economy, but how are these sectors to be coordinated? What sort of cross-sectoral planning, or discussion, could there be among the sectors if the sectors have discussion only within the framework of their own specific parameters?
People in the tourism industry were talking about wanting to take advantage of some things that were happening in the mining industry, and they were talking about some of the infrastructure associated with the mining industry and wondering whether or not it was going to come into the stream to be taken advantage of by the tourism sector. That is the kind of discussion and the kind of cross-fertilization of ideas you can get when you have a conference that involves all the sectors. Then, once there is cross-fertilization taking place, and a general picture of the situation, the sectoral strategies can be developed more clearly, understanding what advantages that might be gained from alliances with business activities in the other sectors.
To have the forestry sector, the housing sector and the tourism sector all go off and do their own thing, and then try to pull them in together once they are headed off in their own directions, would seem to be problematic. That is not the normal way organizations operate. The Government of Yukon, when doing strategic planning, the Ministers do not all sit down and say they will have the departments go off and all develop strategic plans and, once they have all done so, they will try to pull them all together and give them a sense of general direction.
The Government of Yukon does not do that, because it does not make any sense. I am not saying that one has to necessarily go before the other, and everything has to be lock-stepped and perfectly ordered. Life is not like that at all. However, from the conversations I know the Minister has had with people in the private sector in the conferences we have been to together, you would have to be deaf, dumb and blind not to get input from people, saying let us talk; we want to be able to know what role the government is taking in a particular area; is it going to play hands-off; will there be a role for the private sector?
A lot of people wanted to talk, because they wanted to find out what was going on. They felt helpless, that they lacked the knowledge to feel confident. There was continually the message that if we talked and bred a sense of confidence that we are all trying to be constructive and build the economy together, then that momentum will carry forward, build upon itself and will ultimately lift us out of the economic troubles we are facing.
In terms of the role of government, how much of a role the Department of Economic Development feels that the government should have in the economy is an important discussion. Typically, that would be part of a strategic plan, too. It helps us understand, when we come into the Legislature, how far the Minister feels the Department of Economic Development should be when it comes to loaning funds to the EDA, or granting monies to one organization and not another. It helps us understand what sectors of the economy, in terms of the business sectors, the government wants to promote, what is the governments highest priority, and what are the reasons for spending in one area and not another. All these things are essential, and they are usually found in a document like a strategic plan.
The Minister wants to scrap strategic plans because sometimes they contain inconsistencies, but to be serious, strategic plans are designed so that they will force people to about the inconsistencies, resolve the inconsistencies and have some coherence. So, when you pull everything together and you have all of these different activities going on, and you have seemingly inconsistent activities, the strategic planning process - the development of those strategic objectives - will identify those inconsistencies. Someone is going to say that you cannot have local bid preference and promote free trade too, or if you do, you are going to have to look at the question in different ways. The previous government did that. They said, Look, we cannot be living in a world where trade barriers are being broken down, or whether there may be a constitutional challenge to our local bid preference, so we had better not depend on local bid preference in order to get maximum use of local materials and labour. So the business incentive policy was developed, which is not a bid-preference policy; it is a policy that provides financial encouragement or enticement to businesses to use local materials and labour. So there was a way around it, but it was identified through the strategic planning process.
That is the kind of thing that would happen in Economic Development, too. It would give us a sense of direction. It would give the government a sense of direction, and consequently the people would have a sense that the government had a direction and was not just trying to do all kinds of things furiously - giving a grant to so-and-so, and then the Minister saying that they are opposed to grants, and then interfering in the marketplace by providing one competitor with some funds and their direct competition with nothing. Then standing in the Legislature saying, We do not want to interfere in the marketplace. People want a sense that there is consistency between actions and words. The department needs that kind of direction too, otherwise it just simply limps along.
In terms of the Council on the Economy and the Environment - let us just stop there for a second - did the Minister feel that the Council on the Economy and the Environment, in the summer of 1992, was going to be the lead agent in terms of public debate on economic matters? Did they believe in it at that time?
Hon. Mr. Devries: I always followed the minutes very closely, and it seemed like they were more involved in special projects at that time. Again, as I mentioned earlier, right now I am looking at the different possibilities of whether we go alone on a circuit of all the Yukon communities, and then put it all together into a forum of some type later, but I am also trying to determine first exactly in what direction the Council on the Economy and the Environment is going, as they are in the process of getting their feet wet, I guess one could say. I hope to meet with them very shortly to ensure that we are not playing duplicating roles and processes, et cetera.
I still feel that, overall, basically the strategy we have been following is within this governments four-year plan and within the Toward Self-Sufficiency by the 21st Century document, where much of our focus has been on infrastructure development and trying to create a friendly investment climate, so that businesses have a renewed confidence in seeing that the economy is going to grow and will plan toward meeting the challenges that will be faced when these new resource industries, whether in forestry or mining, get up and going.
I am quite excited about this coming year, because I think we are going to see the economy picking up this summer already, as some of the mining properties are getting into the permiting stage. If everything goes well, we could see some activity starting as early as this fall, and the latest would be in the spring of 1995.
I can see the business community gearing up toward trying to meet the various needs because, naturally, when one starts to look at heap leaching, and so on, there will be different services required than the conventional mining methods.
During these meetings, et cetera, with the various businesses, possibly at a forum, some time in March, we hope to set that direction to ensure that people do not have to be brought in from outside to meet the working needs, as far as training goes. I hope that the Department of Education will be involved in this forum.
If you refer back to the 1992 study that was completed on trades and other vocations, it indicated that there were skill shortages in some areas. That study was not followed up on, and we hope to do that.
I think it is all coming together very well. I find it interesting that the Member keeps saying that the business community is asking all these questions, because I have made myself very available to the business community, even when I walk down the street in town. I have dropped in on some businesses, and I always try to speak to the manager, ask how things are going, and see if there is anything that the government can do for them, whether they have had problems with Government Services as far as purchasing goes, or Economic Development in obtaining financial assistance, or some assistance on other economic matters, such as research and development, or whatever. I have been very open to this.
Maybe we have not held a big forum, like the Member thinks we should have, but I certainly do not agree with him that the whole business community is asking where this government is going, because that is not the message that I have been getting.
I should mention that I do not only visit friends or people I know. I have met managers whose names I did not know when I visited their businesses.
Mr. McDonald: I guess I am very disappointed, but the government Ministers frequently insist that there is nothing wrong with the economy, and any downturns that we see right now are a temporary aberration, minor in nature, seasonal - or whatever; there is always some kind of excuse. Obviously, we are talking to different people. Even though I am talking to a lot of people and my colleagues are talking to a lot of people and attending meetings where people make reference to the state of the economy in public and in workshops, they obviously are not saying the same thing to the Minister, because the Minister, in his walks down the street, does not get the same picture. Maybe we are representing different territories, different constituencies, different people altogether.
Hon. Mr. Devries: The Member is jumping to conclusions. I did not say that all the businesses said that everything was hunky-dory and going fine. I did not say anything like that. Some of the businesses that I talked to were definitely experiencing problems.
Mr. McDonald: Breakthrough. I am glad to hear that the Minister has acknowledged that there is some difficulty out there. Certainly, all the plywood on the windows of the Klondike Inn might send some kind of signal to someone.
I am going to get to the Toward Self-Sufficiency by the 21st Century document later. I would like to talk about the governments planning now. Between the budget that they tabled and the capital budget estimates that they have on the table, they will have spent more than $600 million. The smallest fraction of that will have gone to any of the projects listed in the Toward Self-Sufficiency by the 21st Century document - even some of the programs we had identified in the past that were specifically identified to support mining projects at their various stages of development have been cut - RTAP for example.
Given the fact that the government is going to be spending hundreds of millions of dollars and, presumably by the time their mandate is up, they will have spent $2 billion, does that not suggest to the Minister that there is a need to talk about the general direction and have some kind of coherent statement? I am not suggesting to the Minister that he hold a flashy conference and then go home and say he has done everything. What I am suggesting to the Minister is that he should be doing that and more.
It does take more work. There are some significant responsibilities, but there are a lot of people depending on it. If the government has passed estimates for in the neighbourhood of $600 million, and they have an infrastructure document, which is their blueprint for economic recovery, and the money is not directed, should there not be some suggestion that, for the $600 million that is on the table, there should be some sense of direction. I am not saying that the Minister is not doing anything and that he and his colleagues are not involved in building roads. I am suggesting that the Minister needs to develop strategic priorities, a sense of direction and communicate that direction.
I am not talking about the infrastructure document, because the infrastructure document is not supported financially by the government - at least not yet - except through the Yukon mining incentive program or something like that. Projects are not being identified as funding priorities. Does the Minister see any need for that, or does he just think it is superfluous bureaucratic BS? What is his vision of that? Does he see that kind of thing as important?
Hon. Mr. Devries: Sure, I certainly see it as important but, again, every time the Member talks he tends to make me a little defensive. As to the infrastructure document, the work that happened on the Campbell Highway between Watson Lake and Sa Dena Hes was part of the infrastructure to improve the Campbell Highway, to give us better access to the resources there. Some of the surveying work that was done on the Freegold Road was to prepare for some of the work that is going to happen this summer on the Freegold Road. Even rebuilding the Alaska Highway between Watson Lake and Whitehorse is all part of developing infrastructure. Down the road, it is all going to assist and make it cheaper to transport concentrates, et cetera, from mines to Skagway.
The Member has given me some unjustified criticism in that respect. By the same token, I appreciate some of his comments and I will take them seriously and consider them. As I mentioned earlier, I am seriously considering holding some type of economic forum, I would say, no later than the end of March. We still have not fully determined exactly what format it will take.
Mr. McDonald: I do not think that there is any doubt that highway construction may help industry, but it is probably debatable whether or not it helps the tourism industry or the mining industry more. I would hazard a guess that repaving the Alaska Highway will have zero effect on making the mines that the Minister has identified more economical. It may make it easier for tourists to travel down the highway, and that may be good.
The Minister must realize that a good gravel road between Cassino and Skagway is all that is required to provide a mine with a good transportation corridor; the road does not have to be paved.
I know that we are going to have a lot of opportunity to discuss this issue, and I would move that you report progress on this bill.
Motion agreed to
Hon. Mr. Phillips: I move that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order.
May the House have a report from the Chair of Committee of the Whole?
Mr. Abel: The Committee of the Whole has passed the following motion:
THAT, at 4:00 p.m. until 5:25 p.m. on Thursday, December 9, 1993, Ms. Debra Fendrick, Chair of the Human Rights Commission, Mr. Jon Breen, Commissioner and Ms. Margaret McCullough, Executive Director, appear as witnesses before Committee of the Whole to discuss race relations in the Yukon.
Further, Committee of the Whole considered Bill No. 11, entitled Second Appropriation Act, 1993-94, and directed me to report progress on it.
Speaker: You have heard the report of the Chair of Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. Phillips: I move that the House do now adjourn.
Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker: This House stands adjourned until 1:30 tomorrow afternoon.
The House adjourned at 9:30 p.m.
The following Sessional Paper was tabled December 1, 1993:
Waste oil disposal plan (news release dated December 1, 1993) (Fisher)
The following Legislative Returns were tabled December 1, 1993:
Highways: unutilized project funding in 1993-94 (Fisher)
Discussion, Hansard, p. 1428
Land Development Committee: Minutes of meetings of February and May, 1993 (Fisher)
Discussion, Hansard, p. 1413
Canada/Yukon Transportation Infrastructure Program (CYTIP) Agreement: expenditure schedule (Fisher)
Oral, Hansard, p. 1424
9-1-1 emergency service: miscellaneous issues (Fisher)
Discussion, Hansard, p. 1453-1456
Economic Development Agreement: cost of ad campaign to promote and encourage applications (Devries)
Oral, Hansard, p. 1473