Whitehorse, Yukon

Wednesday, December 22, 1993 - 1:30 p.m.


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



Speaker: We will proceed with the Order Paper.

Introduction of Visitors.

Are there any Returns or Documents for tabling?


Hon. Mr. Phillips: I have a legislative return.

Hon. Mr. Phelps: I have for tabling a legislative return.

Hon. Mr. Fisher: I have a legislative return for tabling.

Speaker: Are there any Reports of Committees?


Introductions 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?


Special winter caribou hunt

Hon. Mr. Brewster: I rise today to advise that a special permit hunt has been developed by the Department of Renewable Resources to allow for a modest harvest of the Nelchina caribou herd this winter.

This initiative is intended to help people who would normally harvest caribou from the Aishihik and Burwash areas.

You may recall that both areas have been closed to resident and non-resident caribou hunters as part of the effort to recover the Aishihik and Burwash herds.

The special hunt was developed following consultations with Alaska fish and game officials and requests from the Aishihik and Kluane caribou recovery steering group and the Yukon Fish and Wildlife Management Board.

As well as meeting a local need, the measure is another example of how the government is implementing the recommendations of the Yukon wolf conservation and management plan.

The specific recommendation is 9.3.7, which calls on the government to provide alternative hunting opportunities for First Nation and other subsistence hunters when an area is closed to hunting as part of a wolf control program.

The Nelchina herd numbers about 45,000 caribou and, according to Alaskan officials, can sustain a substantial harvest. Caribou from the herd have been wintering along the Yukon/Alaska border and many are presently in an area just east of Beaver Creek.

The permit hunt will otherwise be suspended when and if 150 caribou are harvested. The Yukon bag limit will be one bull caribou.

The permit hunt will begin January 3, and will be administered out of the Haines Junction office to allow for a quick response to any biological or social concerns that might arise.

Special arrangements are being made to allow Beaver Creek residents to obtain a permit without having to travel to Haines Junction.

The permit hunt system is open to all licensed hunters who already have, or are eligible for, a caribou seal. Hunters who have already harvested a caribou in the 1993-94 hunting season are not eligible for a permit.

I am proud to say that the department has responded quickly to an identified need and made the appropriate arrangements that make it possible for much needed food to be placed on some dinner tables this winter.

Mr. Harding: We rise today to say that we think this looks like a good initiative - that is two in a row, if the Minister is counting. On the face of the document, it appears that there has been some good consultation with the people like the representatives on the Yukon Fish and Wildlife Management Board. We think that is important, and we hope that others have not been left out.

One of the concerns that I immediately thought of was that there is a lot of debate going on about the wolf kill and a lot of the groups involved in it are taking some shots at the wolf kill program - the people involved in groups such as the Friends of Wolves, and whatnot, and now there are going to be hunting permits issued in one area of the Yukon, while right next to it there is a wolf kill program underway.

I think for those groups this is going to be particularly useful to them in terms of highlighting whether or not the YTG practices are sound. I hope that the Minister has his information, public relations and communications in order on exactly what this is so that we can explain to people, in the territory and outside, who are concerned exactly what we are up to, that it is an initiative that was started in conjunction with the Alaskan government.

I do believe that if there is 150 caribou that can be taken and it is a proven, sustainable harvest - from my understanding animals were set to be culled anyway - I think it is an important source of meat for Yukon families and I think it is a good idea to take them.

Mr. Cable: I, too, would like to extend my congratulations to the Minister of Renewable Resources for this initiative. I certainly agree that the opportunities for subsistence harvesting by First Nation people and others should be protected and encouraged. I note also that the Minister cites his government’s new wolf conservation and management plan. It is also encouraging to hear the Minister speak positively about the plan.

There are two questions that come to mind, though. The ministerial statement suggests that there is some sort of agreement with the State of Alaska. It would be useful to hear the Minister indicate whether that is, in fact, the case, and whether he is prepared to table it. The statement also indicates that the section of the wolf management plan being cited - which is section 9.3.7 - refers to subsistence hunting. The Minister speaks about a permit hunt system that is open to all licensed hunters who already have, or are eligible for, a caribou seal. It would be useful to hear the Minister indicate whether or not those licensed hunters will be restricted to subsistence hunting.

Hon. Mr. Brewster: As I have said before, there are 45,000 caribou in the herd. The Alaskans have harvested 2,000 - they wanted 5,000 removed, so it is quite apparent there will be an under harvest. Regarding the Member’s remarks about consultation with people, I can say that we spent a lot of time travelling up and down the highway consulting with First Nations and the other people in the area where this is of the greatest concern.

Our program is continuing and it is unfortunate that it comes at a time when there are some people here who disagree with it. We started this program in February last year and the program will continue until it is finished. I have no doubts about that. I will put the message out now: have no doubts that we will finish this program and we will do our best to accommodate everybody while we are doing it.

When one talks about subsistence hunting, are First Nations the only people who need subsistence hunting? Maybe we had better start looking at things. An awful lot of people in the Yukon - both white and First Nations - live off the wild meat they get from their areas. If Members go back and check, at the time of the select committee on  renewable resources, I made it very plain that subsistence hunting is not just for First Nations. There are other people - trappers and others - who are entitled to this. A great number of the people living in Yukon want to be able to hunt and be able to eat meat. I do not think there is a crime in that, and 150 caribou out of there is not going to hurt.

I will see if I am able to table the agreement.

Speaker: This then brings us to the Question Period.


Question re: Whitehorse General Hospital, design changes

Mr. Penikett: Concerning the Minister of Health’s announcement yesterday about the new hospital being completely redesigned, I would like to ask the Minister a couple of questions on that subject.

Yesterday, the Minister indicated that the first danger signals, or warning signs, that there was a problem with the design occurred back in June. He did not, however, tell us exactly what those warning signs or signals were. Could he advise the House now what those signals were?

Hon. Mr. Phelps: The first signals to me, personally, emanated from the newly established hospital board. The chair met with me and expressed concern about the design of the hospital. In the short time that they had been appointed and trained and were getting on top of the onerous responsibilities of managing the current hospital, the chair had attended several meetings - conventions or whatever you call them - of the various hospital boards, and she felt, and the board was feeling, that the hospital, as designed, simply was not in keeping with the way in which hospital chairs and experts in the field were talking. That was the first signal. At that time, I said, “Well, hey, it is too late”.

The second signal came some time shortly after that when a team of people from the British Columbia ministry came up to have a look at how the current hospital was being run. Again, without being entirely specific, similar concerns about the old hospital arose. From there, there were other things that started to click in, as well.

Mr. Penikett: The Minister has advised us that it was the chair of the board who first expressed concerns about the design, although, even today, he has not been very precise about the nature of those concerns. I believe he told us yesterday that in the operational review conducted by the British Columbians, the design questions were incidental to the principal purpose of that review.

I am bound to ask, in an effort to try and understand the chair’s concerns: what exactly did the Minister do when those concerns were first raised by the chair? What steps did he take to address the concerns presented to him by the chair of the board?

Hon. Mr. Phelps: I discussed the concerns to some extent with the department. I held to the position, as a result of those discussions, that it may not be trendy, but it is a good hospital and everyone involved felt it was functional. I discouraged the board from focusing on inadequacies in the design of the hospital to be built, but rather to get on with the job of running the current hospital. That was the situation; I took a position that was, in retrospect, entirely wrong.

Mr. Penikett: The Minister will forgive me for saying that even though he has described how the chair has travelled to conventions of hospital board chairs and advised him that the design that was being proposed was not current or trendy - to use his words - he was not in a position in June to respond in the way in which he did yesterday. He has said, as well, that the operational review sent out subsequent warnings. He has also indicated that he called in Alberta Public Works. We are, however, not sure about the time frame of some of these events. We are also not sure what the critical factor was that caused the Minister to decide that the old design was so fundamentally flawed that we could not proceed with construction.

Hon. Mr. Phelps: The critical time was at a point, I believe, in early September. At the request of the Department of Health and Social Services, and because of some various signals about operation and maintenance issues, which we just spoke about, the complexity of building the hospital and what was seen as some problems about how the project was progressing caused us to ask the Ministry of Health in British Columbia to send a senior architect to have a look at the plans and to generally advise us about the project and what might be done to improve the team that was working on it.

Question re: Whitehorse General Hospital, design changes

Mr. Penikett: First of all, let me say that I am sure all Members in the Opposition were grateful for the briefing with the planners that the Minister provided us this morning. We came away from that meeting with an appreciation  of the proposed new design concept of three shells: a high-tech shell, a medium-tech shell and a low-tech shell.

We are mindful of the observations made yesterday by the Minister that the design had to be consistent with new concepts in health care delivery, even though those concepts were not defined by the Minister.

Has the department, its planners or the hospital board established a new functional plan? I believe the Minister indicated yesterday that it was a functional plan, which was drafted some years ago by the federal government, that was the root cause of the design problem.

Hon. Mr. Phelps: No. My understanding is not that the functional plan was the problem. The footprint of the building that was established, which was the L shape, crowded onto the hospital site, was perhaps the primary factor in us ending up with a final hospital design that was not totally efficient.

With regard to the establishment of the programs, and so on, a lot of work has been ongoing in that regard as well. Essentially, the programs in the new building will not be different programs. There will be a lot of work, though, as to exactly what will be required in terms of space allocation and total space in the new design. That is going to be ongoing.

A tender will go out to the two or three private firms that are able to bid, and that will get going early in the new year.

It is not the programs that were the problem, in my view. The problem really resulted from whatever decisions were made regarding the footprint some time ago, and from that footprint, came some very real constraints on what could be fitted into a building - its height and so on.

Mr. Penikett: If the Minister will forgive me, in addition to the comments about the footprint - both yesterday and this morning - we heard observations to the effect that the functional design, which is some years old, was clearly out of date and that that was one of the triggers for this new design. We also heard this morning that, as the Minister just said, the hospital program design will not really get underway until January.

I want to ask the Minister this: it is my understanding that, in good architectural process, form usually follows function. Since we do not yet have a functional plan, does the Minister not agree that we may be in danger of putting the cart before the horse, since we are talking about design shell concepts but the detailed program design of what is going to go on is not yet ready, yet we are already committed to a very short redesign time frame in order to be ready for this year’s construction season?

Hon. Mr. Phelps: The Member raises a good point. Without trying to paint this in black or white terms, my understanding is that there has been a lot of work done with regard to the programs and so on, and the functional design of the previous hospital. A lot of that work will be utilized in the process that will commence in early January and go on for a few months before the size of the new shell is determined. It is a phased-in approach to the issue. As I said yesterday, the concept is somewhat akin to building a shopping mall. You build the size based on some fundamental concepts, and then you are able to put the shops and so on into that size, because the shell is built with that in mind. This is a fairly new concept, though not entirely new, I am told by people from B.C. - but fairly new in that regard. Certainly, there have got to be some concerns that it is not a really tight process that an extra year of planning would give us.

Mr. Penikett: I appreciate the Minister’s efforts to explain this, and I thank him again for using the shopping mall analogy. I wonder if he would not agree that the image presented to the public of empty storefronts waiting to be occupied - after budget and program design and staffing decisions are made - does not create the impression that, rather than having a new design, at this point in time we have no design at all about the things that really matter, which are the health services programs that go on within the walls of a hospital building.

Speaker: Very briefly, as I think the Minister has addressed part of that question in his previous remarks, so I would ask him to be brief in his response.

Hon. Mr. Phelps: We do have rough parameters now, given all the work that has been done - the programs and the functional design of the previous administration. We are able to talk in terms of finished program areas in the three buildings, give or take 10,000 square metres.

There is flexibility in the designing of the building, because they are built in sections on a grid. Therefore, the length of the two buildings side by side can be adjusted somewhat following the two-month process that was started in January. However, that does not mean that, because we have enough information to start with, we cannot begin with the design of the buildings. We are really talking in terms of how long. For example, would it be a 125-foot section extra on the two-storey part? It is the same thing with the low-tech building?

The way it is being done, I have confidence that we will be quite close to the required space.

Question re: Whitehorse General Hospital, design changes

Mr. Cable: I have some further questions on the hospital redesign for the Minister of Health and Social Services.

Yesterday, in his ministerial statement, the Minister gave two assurances that I would like to explore. One of them was that the total budget for this project has not changed. I gathered from the briefing this morning that this is so, because the planners and designers will be working to a fixed budget, rather than taking a plan and costing it out.

Can the Minister confirm that this is the reason that the total budget for the project has not changed?

Hon. Mr. Phelps: I think the way that it is expressed by the Member in his question is largely correct. In their rough costing out, they feel that there is room to manoeuver in the budget. Secondly, they are starting with certain required areas - the 10,000 square feet of program area that we spoke about in the last question. They are comfortable that it can be done, with room to spare - with what is left from the up-to-$47 million allocation from the Treasury Board.

Mr. Cable: The other major assurance that the Minister gave us yesterday is that the time line will not be changed. Has the Minister’s staff prepared any time line charts or critical path charts? If so, is he prepared to table them in this House?

Hon. Mr. Phelps: I am prepared to table that kind of information in the House. Some of it is relatively rough and it will be firmed up over the next few weeks. This is a concept that has had some work on it and has been discussed with various expert groups. As they move ahead and they refine those time lines I have no difficulty sharing them with the Member.

Mr. Cable: Has the Minister received a reaction to the redesign from the Yukon Medical Association? By the association, I mean the association itself. I do not mean the doctors who might be sitting on the board.

Hon. Mr. Phelps: The doctors sitting on the board are part of the association. The vice-president, Dr. Reddoch, was fully briefed with the hospital board yesterday morning. The president is away because it is Christmas time, but Dr. Reddoch and the other member, Dr. Anderson, have both been briefed.

Question re: Whitehorse General Hospital, design changes

Mr. Penikett: I would like to follow this question but pursue a different dimension.

The Minister has stated that one of the ways of reducing the O&M costs in the redesigned hospital is to reduce staffing at centralized nursing stations, for example. Yet, in other media reports this morning, I noticed that he has also stated there will not be a decline in the number of jobs but rather workers will simply be reassigned to other duties.

Can the Minister clarify for the House at this point, definitively, whether the redesigned hospital will mean fewer jobs within the plant, more jobs or approximately the same number as in the existing operation?

Hon. Mr. Phelps: I guess the simple answer would be no, not exactly. The commitment that we have made, though, is that if there were to be a surplus of nurses or other care givers in the hospital in 1997 as a result of this, when the doors are completely open, part of the package is to give other jobs to the hospital board. So we see them being active in providing additional services and some of those would include the outreach programs to patients who go home early and quite possibly - and this would require discussion - home care.

Certainly, the Health Act talks - as the Member knows full well because he was responsible for drafting it - in terms of preventive health and we feel that the board would be, by using some of these very capable staff, heavily involved in those kinds of things, which is, as I understand it - not being an expert myself - something on the cutting edge throughout Canada. More and more attention is being paid to disease prevention and encouraging people to live healthier lives, and that sort of thing. It is perhaps too late for some us older fellows around here, but for younger people, I am sure that it bodes well for the future of the country.

Mr. Penikett: Comments have been made to me that the Yukon Health Act is admired more outside of the territory than it is in the territory.

I have pursued the matter of staffing levels and levels of service to Yukoners for the very simple reason that it became clear again this morning that the most basic of decisions about the hospital design, mainly the number of beds to be contained in it, has not yet been decided. This leads me to ask the Minister exactly who he intends to consult about this basic design question, since there are 76 beds in the existing hospital, and the new hospital may have as few as 60 beds. On what time frame will the Minister be making a decision on that and with whom will he be discussing it?

Hon. Mr. Phelps: The conceptual design talks in terms of, give or take, 60 beds. The final number in the completed hospital will be determined by the consultation, discussion and joint planning that will be going on. This exercise will begin in January. The hospital board, the users, the Yukon Medical Association and others will have a very large say in what the final number of beds will be that will show up on the second floor of the high-tech building.

Mr. Penikett: The Yukon is unique in that, unlike most Canadian jurisdictions, a reduction in the level of staffing at the hospital or a reduction in the number of beds will not necessarily reduce health care costs to the taxpayer, because there are no alternate ways of delivering certain programs here.

What does the Minister plan to do by way of giving assurances to the general public that there will not be, in the forseeable future, the kind of reductions in service, such that there will be hospital waiting lists, reductions in the level of care and, if you like, rationing of certain hospital-based services of the kind that we have seen in other jurisdictions? Has he developed a hospital program?

Hon. Mr. Phelps: As I am sure the Member is well aware, that is a tough one to give complete assurances on, primarily because, in the end result, we are largely dependent on the kind of negotiations taking place right now between the premiers and the Prime Minister of Canada, and it will be ongoing between the finance ministers of the respective jurisdictions - i.e., we are not independent here and the future is largely dependent on us receiving transfer payments that will allow us to meet the very real needs of Yukoners. I cannot guarantee what is going to happen there, but it seems to me that ending up with a building that is cheaper to run and yet will provide the same service, in the opinion of the experts - that is not myself, because I do not know - we are taking precautions now to try to ensure that the assurances he seeks, if not given, at least will be met to the best of our ability.

Question re: Whitehorse General Hospital, job opportunities

Ms. Moorcroft: I have a question for the Minister of Health and Social Services regarding hospital construction. I hope, if I make my question short, his answers might be short.

The Minister’s decision to redesign the new Whitehorse General Hospital creates a golden opportunity for him to do something right and to ensure local trades workers benefit from this large capital project. There are far more than 171 carpenters and 20 plumbers in the Yukon and, contrary to the Government Leader’s statements in this House, there are not more buildings going up than workers to work on them. Get real.

Is the Minister prepared to consider a concrete building for the hospital, which would ensure local labour is used on this project?

Hon. Mr. Phelps: If the Member wants a brief answer, I will do my best.

For the very reason that the new hospital is going to be a one-storey building, a two storey building and an existing building, it is my view that a much greater percentage of local trades jobs will be created. The issue of steel versus concrete versus other materials fades away because, when one talks about one-storey and two-storey buildings in the Yukon, many of the new buildings in Whitehorse are steel framed. So there are lots of contractors and lots of trades who have worked on steel-frame buildings, and I invite the Member to walk down Main Street and look at Shoppers Drug Mart or Hougen’s store, and the list goes on.

Ms. Moorcroft: A steel building has a shorter lifespan and a steel building conducts sound more, making it a noisier facility. It would have to be treated with fire retardant. Concrete buildings, like the new federal building, are quieter, safer and use local expertise and materials. Will the Minister talk to the local building trades people about how to ensure that a maximum of local material and local labour are used in the construction of the new hospital?

Hon. Mr. Phelps: That is certainly one of the key principles that has been given to the project manager with regard to how we proceed with the new concept. However, the other one is that we build the building on the time schedule we have and on budget. It must be a building that will, in the end result, achieve the kind of flexibility and suitability to the future trends in medicine that we have been talking about, which gave rise to this decision.

Ms. Moorcroft: The Yukon government spends millions of dollars training people in the building trades. We should support them by capital construction projects that use their skills. The Minister talked about a key principle, but he did not answer the question as to whether or not he would actually talk to the local building trades people.

Considering his comments yesterday about high technology construction and the need for top quality, does anything lead the Minister to believe that local people do not have the skills to build the hospital?

Hon. Mr. Phelps: I am not sure exactly why the Member is trying to quarrel with my previous answers. There is a common principle here for all Members. We want to see the maximum benefits from construction accrue to Yukoners. We will take whatever steps are necessary to ensure that that takes place; however, we will not do so to the extent of risking severe overruns in construction, compromising the characteristics of the new concept, which we have already given as the reason for our decision, or creating any undue delays in getting this thing going.

Question re: Whitehorse General Hospital, design changes

Mrs. Firth: I have had constituents - people who work there - call and tell me that the hospital is in an absolute turmoil today. I have individuals tell me that when they heard this announcement over the radio this morning, it caused them to sit bolt upright in bed. One would never know that by the exchange in the House this afternoon.

I want to follow up with the Minister of Health and Social Services about this particular issue. I am looking for information. Although we had a briefing this morning, all it did was raise more questions in my mind as to the exact facts, or how much factual information is available regarding this decision.

I have a written question on the Order Paper seeking information specifically regarding the information the Minister used to make this decision. At the briefing this morning, we were told that we could not have copies of the reports that were done. I would like to ask the Minister exactly what information he is going to present to us, as Members of the House, in response to the written questionnaire - information with respect to operation and maintenance, capital costs, and design or concept information.

Hon. Mr. Phelps: I am quite prepared to provide this type of information as we receive it. The Member is asking two different kinds of questions, though. One is the issue of whether or not I should be tabling the information. I take that to mean the reports I receive from the experts I referred to on which the opinion was based. Let me say that it was not just reports, but follow-up consultations and conversations with people who wrote the report that led to this decision. My concern with that issue is that this was done by the other ministries, as a gesture of good will, and they do not want their material to become a political issue at all, and I think that we have to respect that.

The other question that is being asked is about what information I am prepared to provide. I am prepared to provide everything within reason. I just do not think that when one gets this kind of cooperation from the other ministries, that we should do anything that would lead them to regret giving us that help, which was done at no cost to us. I am quite prepared to give what the consensus was, based on that kind of information. I am quite prepared, as details come out, to provide that information. I am not prepared to provide opinions from other ministries, which were given on the basis that they not be made political, and not be made public.

Mrs. Firth: Surely, the Minister has an appreciation of the position that we are in, as Members of the Legislature, and the public and the user groups are all in with respect to this announcement. People phone me and they want to know if it is a good idea. Right now, I cannot give them an answer, because I do not have any facts to substantiate any comment.

I heard the chair of the board on the radio this morning trying to leave the impression that this was going to be less expensive. Some people were concerned that there were going to be fewer jobs and fewer nurses working, but that is another issue. If I am to support this initiative or to debate it with any common sense or logic, I need to have some more information in order to do that.

I would like to ask the Minister if, prior to going into the capital budget debate on Health and Social Services, we could have some factual, conclusive evidence that the O&M costs are going to be less expensive and that they are going to be able to stay within the budget. We need some facts.

Hon. Mr. Phelps: I guess what I must say to the Member opposite is that we are going on the basis of the opinions of the experts. The design is conceptual. The costs are costs that are rule of thumb to people in the business of building and designing hospitals. The assurances we have from the best minds we can ask questions of are what we are dealing with right now. We will be coming out through the process of designing and moving ahead in the system, with more concrete numbers. I am not sure what the Member expects from us at this time. Anything that is said at this time is based on a rough estimate, without any detailed designing having been done.

Mrs. Firth: That is my concern. The Minister said that the decision is based on some opinions, but we cannot have those opinions.

The Minister said it is a conceptual design, but I have just been through a debate with the Minister of Community and Transportation Services about a conceptual design that is more than double what the conceptual design was, and that Minister kept using that as a defence. Surely, the Minister of Health and Social Services can see that standing up and saying it is a conceptual design is not going to satisfy our request for information.

What information can the Minister provide us, prior to the budget debate, so that we can feel comfortable in supporting the item in the budget? Why should we support that expenditure unless the Minister provides us with some facts and details, so that we can understand the government’s intentions?

It would be irresponsible of me to do anything other than request that kind of assistance in making a well-informed decision.

Hon. Mr. Phelps: All that I can provide to the Member is a written document that sets out the consensus of the experts on the issue. That may not be enough for the Member, and I appreciate that. However, that is certainly enough information for me to move in this direction, and I can understand that may not be enough information for the Member, but I cannot help that. I feel fairly strongly that we are acting in the best interest of Yukoners, and I regret that the Member does not share that feeling.

I arranged a briefing this morning, which I understand took approximately one hour to provide. I cannot provide the Member with information I do not have.

Question re: Curragh employees, wages owing

Mr. Harding: As much as I hate to do it, I also have a question for the Minister of Justice.

I received some information today from the Minister, which I thank him for, regarding the outstanding wages for former Curragh employees. I do have some questions about the information that he provided to me.

Some of my constituents are owed up to $14,000 from Curragh Inc., and I understand from the information that a hearing will be taking place regarding the receiver’s appeal of those certificate amounts, during the week of January 17, 1994.

Will the government continue to take the position that severance pay and pay in lieu of notice, will be argued by the receiver in the appeal before the courts?

Hon. Mr. Phelps: I have filed the legislative return. I do not have an earlier copy. I am looking at an earlier one that was filed. I also sent him my copy of the documentation so that he could get the information in a timely manner.

The department is currently proceeding on the basis of the original claims. The appeal has been filed by the receiver. As I understand it, they are trying to sort out the issues. I am not an expert on the procedures of appealing before the board, the law having changed since I used to do that sort of thing. My understanding is that they are going to bat and doing the best job they can for the people who are owed wages in Faro.

Mr. Harding: I see that the legislative return states that certificates that were appealed by the receiver have been dropped to the amount of $304,000 for former salaried employees from both the Watson Lake and Faro mines. It says that the certificates were issued on behalf of the Sa Dena Hes employees in the Supreme Court on December 17. Where does the process go from here on the filing against the liability fund of the board of directors for the $304,000?

Hon. Mr. Phelps: My understanding would be that they would proceed in the normal fashion, through the receiver, in the winding up and payment of all outstanding debts. One would have to have an outstanding amount that was not covered by the liquidation of the assets before one could proceed against directors. That is just the process.

Mr. Harding: It was my understanding that the directors’ liability fund was separate, because it was set up for this very specific purpose and was not directly related to the liquidation of the assets.

The legislative return also says that the 1992 proposed amendments to the Employment Standards Act, had they been proclaimed, would not have changed the process of enforcing certificates or the priority of wages vis-a-vis other creditors. However, the amendments did set out a clear definition of wages and severance pay under a definition of a contract of employment, and they did also specify notice provisions. It is my understanding that new certificates could have been issued on that basis.

Why is the Minister so confident that it would not help the chances of people trying to recoup the $2 million in wages?

Hon. Mr. Phelps: As Mr. Speaker well knows, Question Period is not the place for asking legal opinions from Ministers. With respect, that is exactly what the Member is asking me. When I practised law, there was an old saying that free legal advice was worth exactly what you had paid for it. I am afraid, if I were to respond with legal advice in this instance, it would be worth exactly what he is paying for it.

I am quite prepared to set up a briefing between the Member and departmental officials so he can explore these issues with the lawyers at his convenience.

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




Bill No. 103: Second Reading

Clerk: Second reading, Bill No. 103, standing in the name of Mr. Abel.

Mr. Abel: I move that Bill No. 103, entitled An Act to Amend the Interpretation Act, be now read a second time.

Speaker: It has been moved by the Member for Vuntut Gwich’in that Bill No. 103, entitled An Act to Amend the Interpretation Act, be now read a second time.

Mr. Abel: It is my pleasure to introduce Bill No. 103 for second reading. This bill contains only one clause, and that clause allows the term Vuntut Gwitchin to be substituted for the term Vuntut Gwich’in, in an enactment without affecting the meaning of the enactment.

At their annual general assembly held in 1992, the Vuntut Gwich’in discussed the spelling of their First Nation name, and that discussion resulted in the following resolution being moved and adopted:

“WHEREAS elders who read their language, such as Ellen Bruce and Charlie Peter Charlie, have said that the correct spelling of ”Gwitchin" is Gwitchin, and this is the correct pronunciation; and

WHEREAS we have often been spelling our name incorrectly as Gwich’in;

THEREFORE BE IT RESOLVED that we spell our name Gwitchin, and pronounce it that way from now on; and

BE IT FURTHER RESOLVED that it be taught this way to our successive generations."

By means of this bill, An Act to Amend the Interpretation Act, the wishes of the Vuntut Gwitchin will be respected and adopted by the Government of the Yukon. It is important to note that the Vuntut Gwitchin First Nation final agreement, and the Vuntut Gwitchin First Nation self-government agreement, published by both the Yukon government and the Government of Canada, spell Gwitchin with a “t”.

The people of Old Crow passed me the resolution and asked me if the spelling could be corrected. It is my intention, through this bill, to advance the wishes of the people of Old Crow to have Gwich’in spelled Gwitchin, and adopted for all government and other official uses.

Motion for second reading of Bill No. 103 agreed to

Speaker: Government Bills.


Bill No. 38: Second Reading

Clerk: Second reading, Bill No. 38, standing in the name of the Hon. Mr. Phelps.

Hon. Mr. Phelps: I move that Bill No. 38, entitled Yukon Family Services Association Rent Guarantee Act, be now read a second time.

Speaker: It has been moved by the Minister of Health and Social Services that Bill No. 38, entitled Yukon Family Services Association Rent Guarantee Act, be now read a second time.

Hon. Mr. Phelps: This bill is to authorize the Minister of Health and Social Services to guarantee the rent payable by Yukon Family Services Association for the premises it has just moved into. The Yukon Family Services Association is a non-profit agency incorporated pursuant to the Yukon Societies Act. This agency provides general counselling services to residents of the Yukon and receives core funding from an annual contribution agreement with the territorial government. The Yukon Family Services Association had outgrown the rental premises it had occupied for several years on the main floor of the CBC building.

The agency examined a number of accommodation options and chose to lease a purpose-built building. A condition of the lease agreement is the guarantee of the rent by the government during the 10-year term of the lease agreement. Section 61 of the Financial Administration Act places limitations on the provision of debt guarantees by the territorial government. No such guarantee may be given unless authorized by statute. This act would provide that statutory authorization.

The effect of the bill is that, in the event of an inability by Yukon Family Services Association to pay its rent under the current lease, the Yukon government would assume the lease and occupy the premises.

The Yukon Family Services Association provides an invaluable and fundamental service to our community. The demand for increased counselling services provided through this agency has been ongoing for many years and the agency has responded to that demand through increasing its counselling capabilities to the point where they needed to expand their physical space.

The choice the agency board made to go with a purpose-built building was one which made good business sense. I understand that the staff, board and clients are very pleased with the new premises they now occupy. This government supports the arrangement that the association has entered into with the owner of the premises and is responding to the requested condition of the contractor that this government guarantee the rent.

Mr. Penikett: We would concur with the Minister’s statement that Yukon Family Services Association is an important agency, and we would concur with the statement that this agency provides valuable services. I would like, by way of this second reading speech, to give notice to the Minister of some questions that I would like to ask when we get into Committee.

Yukon Family Services is, as the Minister says, a nonprofit agency. It is not, in any sense of the word, a department or branch of the Government of the Yukon. I would like the Minister, in Committee if he can, to confirm that a majority of the funding for Yukon Family Services comes from the Government of the Yukon, even though some funding for counselling comes from the Public Service Commission through the employee assistance program - the majority of that funding comes from his department, the Department of Health and Social Services.

I would like the Minister, in his capacity as Minister of Justice, to also confirm that it is generally the policy of the Government of Yukon that all office space has to be tendered, due to the large sums of money involved in rentals at public cost.

I would also like the Minister to comment on the complaint that the new Yukon Family Services building on Hanson and Fourth Avenue was sole-sourced to one designer and one contractor. I would like the Minister to confirm whether the people who were involved in receiving that sole-source contract have a long-term relationship with the Department of Health and Social Services.

I would also like the Minister to indicate to the House, in Committee, to what extent this business of guaranteeing rent may constitute a precedent. As I am sure he is aware, as he negotiates contribution agreements with various social services agencies - most of which are non-profit groups - many of these would like to occupy improved facilities, and they would need nothing more than a guarantee of rent from the government to be able to finance the construction of same, or have the ability to move up - if you like - into occupying improved quarters.

Finally, I would like to ask the general question whether the Minister believes that his government guaranteeing the rent compromises, in any way, either the association or the government in the negotiation of future contribution or service agreements. I am asking that question because organizations change over time; government’s needs change over time; the degree to which the government may want to avail itself of services from one agency as opposed to another may change over time. Indeed, the value that a department puts on a service provided by agency A, opposed to agency B, may change over time. If it is not too philosophical, I would appreciate the Minister joining the discussion in Committee on those points.

Mr. Cable: I, too, will have some questions and the Leader of the Official Opposition has touched on most of them. I would like to find out from the Minister what the current rental market was at the time the lease was negotiated, and whether giving a government guarantee, which assumedly increases the security, should have been used as a leverage to extract a rate of less-than-market rentals.

I would also like to ask the Minister a question relating to the additions that will be done to the premises, which I gather were part of the proposal documents that were circulated earlier.

Mrs. Firth: I am going to reserve my final position on this bill until after it has been through Committee of the Whole. I will make a final decision at third reading, whether or not I support this particular initiative.

I have some concerns, many of which have been expressed by the Leader of the Official Opposition and the previous speaker.

I took the liberty of writing to the Minister to obtain the lease agreement that is being referred to in this particular piece of legislation. I have had an opportunity to review the document fairly thoroughly and do some consultation with respect to the tendering of the project - I do not know if it was tendered - and the proposals that were developed, and I am going to have a number of questions for the Minister about that whole process.

I, like the Leader of the Official Opposition, want to give the Minister advance notice that he may have to make some advance inquiries exactly how this process took place.

I am also concerned about this being a precedent-setting initiative, and perhaps the Minister could come back and tell us whether or not there are similar agreements in existence in government, and, if so, which departments are using them.

I, too, am interested in the total allotment of money that comes from YTG and other departments - the Public Service Commission and Health and Social Services - to support the Yukon Family Services Association. I, too, agree, as other Members have, that this is an important agency and that it does provide an important service. With respect to this particular initiative, I think there are a lot of unanswered questions and I look forward to the Legislature going into Committee of the Whole, where I will have a better opportunity to ask the Minister questions. I will look forward to that part of the debate.

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

Hon. Mr. Phelps: I would like to thank the Members opposite for their comments and for signaling the issues that they would like to explore in Committee of the Whole. The only issue that gives me some concern has to do with the details of how the association went about the proposal. I have a general understanding, but the association did that on their own.

It is not something that I can speak too much about, except my understanding of it. I understand we will be moving into Committee of the Whole this afternoon. We can start on these questions but the president and the executive director for the association would probably be prepared to appear before Committee of the Whole to answer these questions.

This was a transaction that was done by them. There were proposals out to a number of firms. My involvement was to look at the proposed lease and the drawings to check to see whether the cost was competitive - and it was, extremely - to what type of class A space was available at the time. I had to assure myself of the need, which had been impressed upon me in earlier meetings with the association with regard to the actual amount that we provide in core funding - that is in the O&M of last year. I can restate the amount, but it has not changed. With those comments, I urge everyone to support this bill in principle.

Motion for second reading of Bill No. 38 agreed to

Bill No. 65: Second Reading

Clerk: Second reading, Bill No. 65, standing in the name of the Hon. Mr. Phelps.

Hon. Mr. Phelps: I move that Bill No. 65, entitled An Act to Amend the Hospital Act and the Evidence Act, be now read a second time.

Speaker: It has been moved by the Minister of Justice that Bill No. 65, entitled An Act to Amend the Hospital Act and the Evidence Act, be now read a second time.

Hon. Mr. Phelps: At this time, it is my pleasure to introduce Bill No. 65 for second reading. This bill will do several things. One, it will serve to enhance the services of Whitehorse General Hospital and its board to First Nations patients by entrenching in legislation the delegation of powers to the First Nations health committee.

Two, it will clarify the relationship between medical staff and the Yukon Hospital Corporation board of directors and provide for an appeal process. Currently, there is no appeal process. Under federal administration, appeals were to the regional director of the medical services branch. These amendments will provide an avenue for appeal not present in the current legislation.

Three, it will do much to balance the authority and responsibility of the department and the Yukon Hospital Corporation.

Four, amending the Evidence Act will ensure that the quality assurance committees will continue to maintain the highest possible standards in the delivery of care.

Regarding the First Nations health committee, in the health transfer agreement signed last March, the Government of the Yukon committed to entrenching in legislation a delegation of powers to the First Nations health committee. In essence, this will ensure that First Nations will receive appropriate and effective health care services. The First Nations health care committee will have the authority to ensure that services within the hospital are provided in a culturally appropriate manner. Their responsibilities include a First Nations health liaison worker program, a First Nations child life worker program, First Nations employment equity, inservice training and interpretation services, as well as the introduction of First Nations traditional medicine and First Nations traditional diet.

The committee will be involved in determining the effect on First Nations citizens of any changes in health care programming and will carry out its responsibilities under this section of the act in a manner that will complement and enhance the delivery of diagnostic and clinical services.

The amendments that pertain to the First Nations health committee will go a long way toward ensuring that our First Nations citizens are comfortable with the health care service delivery system as it currently exists, both as consumers of the hospital services and as those providing that service.

The employment equity and training policy the committee will develop will remedy the underrepresentation of First Nations citizens in the delivery of health care services and will improve the quality of health care provided to all Yukon residents.

These amendments have met with the approval of the First Nations health committee and the Council for Yukon Indians. With the passage of these amendments, we have fulfilled the commitment made in the health transfer agreement and begun a new era that will increase the opportunities for native students to pursue careers within the health care system.

On medical staff appointments appeals, the bill brings clarity to the role and authority of the hospital board over appointments of positions to the medical staff and determining hospital privileges and credentialing.

As currently written, the Hospital Act provides a broad general power to the hospital corporation to establish the policy direction of the hospital. These amendments before us will make more explicit the authority of the hospital board to make decisions.

This change will ensure that the community’s board has authority over disciplinary proceedings within the hospital and can determine the labour force required to result in a mix of appropriate services.

The right to remove or deny hospital privileges is a very serious one, as a lack of privileges can deny a physician his or her livelihood. The creation of an appeal process will allow the establishment of an avenue of redress that is independent of the board and which conforms to the rules of natural justice.

The amendment to create an appeal process has received positive reaction from both the medical community and the board and will ensure a smoother working relationship between the two.

On the power of the Minister, the hospital is the major delivery agent for hospital services within the territory, so it is imperative that the Department of Health and Social Services and the hospital board have a clear definition of roles in order to work well together to provide the best possible level of service with the resources available. As the Minister delegates his authority to the board, and does not abrogate it, the Minister will still have the power to declare a change in the level of service as a matter of public interest. This will ensure that the necessary services will continue to be provided and that new services being considered will have to meet the needs of the general public. For example, a diabetic teaching clinic, which could train diabetics and their care givers to manage their disease, would increase the level of service and would decrease medical travel costs. Another example would be to bring in a specialist who could perform cataract surgery on Yukon patients who are currently having to leave the territory to have this procedure done. Again, this would increase the level of service in the Yukon and reduce medical travel costs and inconvenience to patients.

Under this act, another change that would be brought forward by the passage of this bill would be one to the Evidence Act to protect the quality assurance activities. Quality assurance activities ensure that the hospital meets accreditation standards, as offering the best possible standard of service to the public. Hospital personnel have stated that they are unwilling to actively participate in incident reviews and other quality assurance activities if they believe that the views expressed in these meetings may become public knowledge and compellable as evidence in a court of law. This protection is supported by a Canadian Bar Association resolution passed in 1985. This amendment will not remove the patient’s right to take legal action against the hospital, a physician or a health care worker.

These amendments, together, will ensure the accountability of government and the board of trustees on the use of public funds in health care. They will provide the framework for better fiscal management of the health care system, and they will ensure that the health care system is responsive to the needs of all Yukon residents. These amendments have received the approval of CYI, the First Nations health committee, the hospital board, and the Yukon Medical Association. We have also had discussions with the Law Society of the Yukon, and have not heard that they have any difficulties with the wording of these amendments.

Mr. Penikett:  Let me confess at the outset that I was a little disappointed that this bill was proceeding, and I would have preferred that it wait a few days, only because I have not yet completed my research on some points of principle contained in the bill. As the Minister knows, I am somewhat responsible for the Hospital Act, as it was passed in 1989. As any person who is involved in such processes, I have had some reason to have some questions, not second thoughts, about the wisdom of some of the provisions that we put into the act in 1989.

As the Minister has indicated, the purpose of that act was to provide the authority for an independent board to operate the hospital. It established the Yukon Hospital Corporation and the objects of the corporation, which were to provide hospital and medical services to meet the needs of Yukoners, and to have a board that was made up of a variety of Yukon interests. It was intended to represent a balance of those interests. I am glad we did build that into that legislation, because the government has not always followed that practice where they had an option in subsequent board appointments.

The act also gave the corporation fairly broad powers over policy and administration - powers that were formerly under the control of the appointed regional director. In law, the board has control over the establishment and maintenance of the hospital, the provision of assured services, the admission criteria and procedures, duties of officers, the undertaking of research and the establishment of programs for providing medical services.

I understand from talking to some of the people who were consulted by the department that there was a Cabinet submission that led to the drafting of this bill. This submission gave no clear indication of the pressures or problems that gave rise to the amendments not driven by the agreement with First Nations. On that list I include the question of hospital privileges, which I will talk more about later. I am not sure that it is a bad idea to have these amendments, making the general powers of the board more explicit. Obviously, they restrict the flexibility of the board, but it may also assist in clarifying its mandate, especially for a new board with a new institution.

Essentially, this will be a new institution, as it is operated under our control, and that may be a good thing.

The Minister listed the people who were consulted. It is interesting that we have talked to some of the people on that list, and I do not get the same flavour from them as is represented in the Minister’s remarks. I would like to say something about that later on.

I understand the key changes in the legislation are, as the Minister said, under section 3 of the act, the powers of the corporation - “the board has general powers over procedures for admission and discharge by patients, by medical practitioners and others to provide medical services.” The changes clarify this section by explicitly stating the powers of the hospital board regarding admissions, discharges, organizing membership and work of medical staff, appointing persons to the medical staff, determining qualifications for, and privileges attached to, medical appointments, and determining necessary special qualifications for hospital privileges, and of course the revoking, suspending and renewing of hospital privileges, which is probably the most controversial question here.

In looking at other hospital acts in the country, it is clear that hospital privileges are usually the subject of bylaws of the hospital. Because the bylaws in most hospital acts are subject to the approval of the Minister, there is, at least in a secondary way, some control by the Minister that can be exercised in this area.

The amendments we have here today entrench control over hospital privileges with the board, essential removing the possibility of ministerial direction in the matter. Although I am sure the Minister would recognize that it may seem a bit odd to some people that there is the ability to exercise control of costs through the limiting of the level of services, but, ironically, the Minister will not have the ability to limit who can deliver those services.

I understand that everybody in both the government and the hospital board understands that neither the board nor the department can control admissions or treatment decisions over individual patients, because if the government or the board attempt to do that, they run afoul of the Canada Health Act. I think that is as it should be, because one of the things that make our system of medicare in this country the superior creation that it is, is the fact that there is universality of coverages.

This is not a trivial point. Some jurisdictions of Canada have tried to put a cap on their health insurance expenditures by limiting the number of doctors who could be licensed. We tried it in a modest way when I was Minister by limiting the number of doctors for whom we pay liability insurance. Since each doctor generates - at least when I was Minister - something like $1 million of cost, directly and indirectly, for the system, this did not seem to be such a bad control measure.

If you live in a rural community without a doctor you have a somewhat different perspective on that question than do people who live in a place like Whitehorse. You may even, if you are a person in Whitehorse who has to wait for some time or cannot get into a medical clinic, have a different view about that. There is a link between the question of the numbers of people who are given hospital privileges and health care costs, which is a reasonable concern of the Minister.

The question of hospital privileges here has been controversial for a long time. I recall, in my youth - which is getting to be longer and longer ago - there was a medical practitioner who moved here from another jurisdiction and who stayed here and had become quite prominent who was denied hospital privileges. It was widely believed in town to be because there was one clinic that controlled those decisions locally and it was widely believed by this physician’s supporters that he was able to break what was believed to be a cartel by establishing his own clinic and by obtaining political intervention to allow him hospital privileges in the federal hospital.

I am not suggesting that we need to rigidly follow historical practices here. What I am suggesting is that we need to learn from the experience and recognize that this is a small community; it is even a small community in terms of its professionals.

On matters on discipline, we have had some difficulty getting disinterested parties within our community to make judgments about professional questions. I do not think that the decision that is proposed to be made in these amendments will satisfactorily address everyone’s concerns on that point. This remains a small community, the board will be a very small group and the decisions about who makes the decisions about who will have privileges in the hospital is going to be subject to some controversy in years to come, whether we are talking about granting privileges or removing them.

Let me just say, en passant, that I am certain that whether the Minister has removed himself from the chain of accountability on those questions, no Minister of Health will be able to do that completely because there will inevitably be invitations to involve him or her politically. That is to say nothing more than that remains a difficult question.

The other change the Minister made is the section added to the legislation allowing the Minister to declare an increase or decrease in the levels of services. The introduction or the cessation of a service or the alteration, acquisition, or disposal of equipment or building or other property are to be a matter of general public interest that must not be done or continued, except by the Minister’s approval.

As I mentioned earlier, this is the kind of section that occurs, as I understand it, in most hospital acts, to some degree or other, and there is no requirement in this amendment for any consultation, either with the public or the hospital board, before increasing or decreasing services. However, I do know that, from time to time, this power of the Minister has been the matter Iof controversy in a number of places.

I was persuaded to include it in the act originally because it was felt that, if it was not included, there were some problems for the government with a hospital board making decisions that, for example, produced huge costs for the territory, and which the Minister would be obliged to carry out, without having had any input in the decision.

For example, I was told by one premier of a jurisdiction about a hospital in his own constituency where the board had decided to add a service - I think it was an orthopedic surgeon, in this case. The addition of that service by the local hospital board led to increased charges to the provincial health insurance program, numbering in the hundreds of thousands of dollars annually. This premier was making the appropriate point that, as the people who were going to have to cover these costs, the Minister and the government had absolutely no say in the decision whatsoever. Such is the way our health insurance program works, and such is the power of a board to add high-cost technologies or services, or new treatment programs, in a way that obviously has to be of concern to the government.

For that reason, it is good for the Minister to have the right to approve bylaws governing levels of service.

However, there is a problem on the other side. In British Columbia, for example, it was believed that Premier Vander Zalm was predisposed to use such provisions in the B.C. hospital act to stop or prevent therapeutic abortion programs being delivered in the hospitals - whether or not the board approved of that, or whether or not the public in the area, by any expression of democratic will, thought it was a good idea or not. I am acquainted with this Minister’s views on the question, as I have been with previous Ministers, but I do not think we should discount the future possibility of some Minister entering this office who has, perhaps, minority or exotic views on the question. There would be a legitimate public concern if that Minister’s views were being imposed on the public by way of this provision.

I have said that, notwithstanding the question of the integrity of doctor/patient relationships, and notwithstanding the desirability of proper autonomy for the board, I think the question of spiralling costs does somehow require that the Minister have a role in decisions about the level of service.

The Minister also pointed out that the act will allow medical staff to appeal suspensions, denial or termination of hospital privileges to the Supreme Court of the Yukon. I must tell the Minister that this is an area where I not only have some qualms myself, but about which our consultations do not square completely with what the Minister told the House a few minutes ago.

The proposal that such appeals go to the Supreme Court of the Yukon is different from the provisions contained in the Northwest Territories, Alberta, Saskatchewan or British Columbia legislation - all of which provide that such appeals go to an administrative tribunal.

I am not a lawyer. There are lawyers on both sides of the House. The Minister is a lawyer, and I understand their respect for court-based processes. However, let me express my concerns about the courts. My inclination, notwithstanding some of the problems about disinterested bodies that I already mentioned, is toward administrative tribunals. As a general rule, I think they are less costly and time consuming than court-based procedures. I think that is especially important to a physician who may be appealing a decision about privileges. Physicians are relatively well off, but if the physician is prevented from carrying out their occupation and earning their income, for example, if they are a surgeon and cannot function effectively outside the hospital, the fact that they are limited to a court-based appeal seems to be a bit of a problem. They not only have the cost of that appeal, but it might be very time consuming. They may be unable to work for months until the issue is resolved.

I know that even when we were dealing with the question of the Medical Profession Act here, the question was asked about who the people were who would decide these disciplinary matters. I raised concerns then about whether there was anyone who would be truly disinterested and objective in dealing with a tiny, professional community. I think my concerns were quite valid, in the light of subsequent events, where we have had to go to adjudicators or arbitrators from outside the territory to settle most of the difficult questions.

Nonetheless, on some technical points, an administrative tribunal, like the medical council, on issues that are not of earth-shattering importance but may affect the right of a practitioner to continue to operate and earn an income, is an option that should have been left alive in this legislation. I would like to debate that a bit with the Minister in Committee.

The legislation, as proposed, will require the courts to establish when breaches of hospital or medical policy have taken place. On the whole, notwithstanding the concerns just expressed, I am still a bit more comfortable with the idea of an administrative body with peer group representation. There may be reasons why the Minister has considered that option and rejected it. I would like to hear them. I am told that even some people in Justice liked that option better than a court-based one, but that may not be correct.

The other changes that the Minister has talked about here deal with the First Nations health services agreement. As the Minister responsible for land claims, I was peripherally involved in those negotiations and I am reasonably well acquainted with that agreement. I understand that the reasons for the provisions arise from annex one of the health transfer agreement, which requires that a First Nations health committee be established in legislation and that there by delegated powers to govern First Nation health services. Those services include liaison work, child life workers, traditional medicine, traditional diet, First Nation employment equity and training programs and interpretation services. They do not include clinical or diagnostic services. The First Nation health committee, pursuant to that agreement, consists of the chair of the hospital board, two Yukon First Nations representatives and a representative nominated by CYI.

For the record, I have no problem with the legislative expression of that agreement.

Another area of concern is with the consequential amendments that are being made to the Evidence Act to make proceedings and documentation of quality assurance activities in the health care facilities inadmissible in legal proceedings. I understand this is to encourage hospital personnel to participate in medical incident reviews and other quality assurance meetings without fear that they will subsequently be called to repeat that information or evidence before a court in some other matter.

As the Minister said, this is consistent with the trend elsewhere, and it is consistent with a resolution of the Canadian Bar Association, of which I have obtained a copy and which is supported by the Yukon Medical Association.

I am a little curious about how lawyers feel about this. I understand the Minister said that the Law Society has been consulted. I have been told that we ought to be extremely cautious about amending the Evidence Act, as the effect could be to deprive a court of relevant evidence in the determination of an injury or a malpractice case.

I recognize that I am not a lawyer and I am not competent to assess these questions in a legal sense, but I do appreciate that there is a fine balancing act here. On one hand, we want to encourage quality assurance activities but, on the other hand, we do not want to do that at the expense of free-flowing information that may be needed by a patient who is involved in some malpractice suit.

To state the obvious, in my view, patients are already at a disadvantage, given the solidarity of the medical community and the difficulty of getting professionals to testify against each other. It seems to me that, while these cases would be few and far between in our country - relative to the United States - we should proceed fairly carefully and cautiously in this matter.

For the reasons I have given, I want to give tentative support to this bill. As I have indicated, I do have some questions about the consultations that have taken place with the various groups. I am curious about the YMA position on the question of appeals to the courts, because I think that my office may have been given slightly different information than the Minister provided today. Of course, I will have some questions in Committee, where I will have to complete my research, since I had not had time to do it before I entered the debate today.

Mrs. Firth: I will be brief. I must say that I can hardly wait until the Leader of the Official Opposition finishes his research. I look forward to that discussion.

I will be supporting this piece of legislation. I will have a few questions for the Minister during Committee. I guess the clause that I found most interesting when I first read through the legislation was the clause that sort of says that the Minister can do anything and everything whenever he wants to do it. My immediate reaction was to wonder why we need a board. I understand that this has always been the case, but it is just now being clearly put into legislation.

I would like to know, however, what the relationship of that clause is with respect to the First Nations health committee. Does that jurisdiction and authority of the Minister also apply to the First Nations committee? Perhaps the Minister could be prepared to address that issue when we go into Committee, or this afternoon at second reading.

With respect to the other principles that the Minister went into great detail explaining, I have consulted with people in the medical community and everyone I consulted with had been aware of the legislation and were in general agreement with it. I do not anticipate any great controversy in passing this through the Legislature.

Speaker: If the Minister now speaks, he will close debate. Does any other Member wish to be heard? Minister of Justice.

Hon. Mr. Phelps: I would like to thank the Members opposite for their observations and for the issues they have raised. I am quite prepared to delay having this discussion in Committee until the new year, if that would be suitable to the critic, the Leader of the Official Opposition.

The points he raises are, of course, interesting ones. To start at the end of his comments and work toward the front, with respect to the Evidence Act, certainly the solidarity of the medical community imposes quite a bar to any suspected victim of negligence ever successfully prosecuting such a case in court. I have been up against that stone wall myself in the past, and I know numerous lawyers who have. The intention here is that, in the absence of the type of hearings that would be held with respect to how things were being carried out in the hospital and how specific doctors, for example, were practising in the hospital - in the absence of those kinds of hearings - all the evidence that would be otherwise available would continue to be available to a patient who wished to pursue that type of act. It is just that the kind of evidence - and a lot of it would be opinion evidence - that is heard in the quality assurance hearings, would not be. It leaves a person in the same position as he or she would be in in prosecuting a case, whether or not those hearings were going on. All the medical records and other things would still be compellable evidence in court.

The issue, then, is just how important is it to have professionals freely involved in those kinds of hearings - quality assurance hearings - in the hospital. I think that outweighs the fact that the new evidence would not be compellable in a subsequent trial, and that seems to be the position taken by the Canadian Bar Association, as the Member has mentioned.

Just very briefly, on the issue surrounding the appeal, on whether it should be to the court or to a tribunal composed of peers, I must confess that I am quite open on that issue. The points raised by the Member opposite are interesting ones and I am quite prepared to entertain and even try to think of amendments in that regard. I agree with the points made.

This was a fairly simple way of doing it. I will have some discussions with members of the YMA and I am sure the Member opposite will. That is not something about which my mind is set in stone.

With respect to the issues of the bylaws that the hospital board would set in dealing with the accreditation and with the powers of the Minister, that the Member for Riverdale South has brought out quite clearly, one of the features of the act itself that really provides a great deal of political safeguard into the issue of political interference by a Minister, such as the days of Vander Zalm in B.C., is the fact that this is truly a board, by the way in which it is appointed, that will be apolitical, in my view. Only two of the 12 members are selected by the Minister. The rest are from nominations from a broad variety of groups.

We get into the kinds of arguments we used to have when I was involved in land claims about what is the power of an advisory board to a Minister in land claims if the Minister can overrule it.

I think when you have a board that must broadly represent a broad range of interest groups in society, and that board comes forward in a strong way with bylaws, with decisions surrounding the quality of care in the hospital, and that sort of thing, it would be a rare occasion indeed that a Minister would overrule it because of some personal bias or even on some religious ground.

My view is that in a community such as ours that would be akin to committing political suicide. I will leave with the Member that I think that that is one aspect of the equation - the makeup of the board. I think that is an important thing to keep in mind.

With those comments, I look forward to the support of Members in second reading, and I will be asking that the House Leaders agree upon a later date to discuss this in Committee of the Whole.

Motion for second reading of Bill No. 38 agreed to

Hon. Mr. Phillips: I request unanimous consent for Bill No. 103, to be called in Committee of the Whole today.

Speaker: Is there unanimous consent?

All Hon. Members: Agreed.

Speaker: There is unanimous consent.

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

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

Motion agreed to


Chair: I will now call the Committee of the Whole to order. Is it the wish of the Members to take a brief recess at this time?

Some Hon. Members: Agreed.


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

Bill No. 103 - An Act to Amend the Interpretation Act

On Clause 1

Clause 1 agreed to

On Title

Title agreed to

Mr. Abel: Mr. Chair, I move that you report Bill No. 103 without amendment.

Motion agreed to

Bill No. 38 - Yukon Family Services Association Guarantee Act

Hon. Mr. Phelps: Members opposite advised me of some of the issues they wanted to discuss during our time in Committee with this bill. I thought I would try to cover at least some of the issues in introductory remarks commencing general debate.

The issue was raised whether it is true that this association is not in any way a branch or department of YTG and that the majority of the funding comes from YTG, and that is quite true. Funding is as set out in the O&M mains. I am sorry that I neglected to pick my copy up, but that is the bulk of the funding the association relies on. However, they have gone through their fee for services and those fees were reviewed and increased about a year ago. They do work for some of the larger corporations and they do have a revenue from the private sector, I guess one would say. As well, the new location, they tell me, has resulted in a lot more retail business off the street, whereas before, in the old, old liquor store, they were not as noticeable to potential clients.

The previous office space was not suitable. I went there early on in my capacity as Minister and toured the office space with them. There were, of course, the problems one hears about in old buildings, not unique with that building, with regard to lack of sound barriers and lack of confidentiality in dealing with clients in crisis. That was a major problem they faced. As well, they were growing at a rate by which they were pretty well forced to either find separate offices and move some staff into those separate offices or find a large enough building for them to occupy.

They came to me with the contract - essentially the contract I provided to Members quite early on, after tabling the bill - and I discussed the need and the cost of the premises with them. I reviewed my understanding of the fair rental rates being charged in town and, in view of the fact that there has been some dropping off in commercial rents in certain categories, given the shutdown of the two mines, I can tell the Members that the so-called triple net base lease cost for class A accommodation, which I am sure this would be, is in the $17 to $17.90 per square foot range.

The cost of the triple net side of things, depending on whom you talk to, varies from $5.50 to $6.50 per square foot. For used class A space, such as what you would find in the building where Yukon Energy is, they are demanding and getting in the $17.20 to $17.90 triple net range. This space, working backward from the cost and the lease, works out to $16.50. It was agreed upon that that is what the net figure is. It carries an advantage with it, in my view, in that the risk of increases due to things like heat and light, for the first five years, is borne by the landlord. Working backward on this principle, it is attractive for the landlord to provide first-class mechanical. If they skimp on the mechanical or the insulation or that sort of thing, then they bear the cost of that; it hits them in the pocket book.

I am sure Members know that they built it with extra space, and they are sub-leasing part of it to another society - Hospice - and that space sits there for additional expansion in the future, should it be required. A question was asked about whether this is a unique situation, and I believe that it is. I think this is the first time that this approach has been used.

I have some general comments on it. My experience regarding the provision of this type of space has been that often the private sector can provide it much more cheaply than government can. I have seen examples of first-class buildings on long-term leases, such as one in Carcross - Community and Transportation Services - where the per-square-foot cost is amazingly low. It is a first-class building.

The approach taken, and the way in which proposals were sought, was entirely in the hands of the association. When I was asked to do this, my question was simply, “Did you approach more than one or two potential landlords?”, and they told me that they had.

Subsequently, I gather that issue has been raised by some people who were not approached, because queries were made to my colleague’s office, the Minister of Government Services, about this, which is understandable because contractors are looking for work. This is some time after the building was almost completed, and I had agreed to seek this permission to guarantee this lease.

My subsequent conversations with Mr. Findlater and the president revealed that a person was engaged with a local architectural firm to help the board of directors to request proposals and set up the documents. I believe that seven different contractors were invited to submit proposals - which ones I do not know and I do not have the list.

Of the seven contractors, I think I am correct that four or five entered proposals and this is the one that won out. As to the relationship between the architectural or designing firm and the now-landlord, I was simply advised by the board that they had no difficulty in that subsequent arrangement being made. They felt it was squeaky clean, but certainly if there is sufficient concern about the principle of this, I have no difficulty going along with Members talking to them or asking if they would be willing to appear and answer questions.

I was asked if the designer/architect had a long-standing affiliation with the Department of Health and Social Services, and this person did work with that department on the Thomson Centre. This person has also been under contract with the hospital board and user groups of the hospital.

From where I stand, I think the building is an extremely good one and beneficial to the community. The building certainly provided a lot of jobs during construction and, given that it was built to suit, the rent ought to be favourably compared to what is known as class A leases.

I know, because my department is trying to renew a lease in a building in town, and they are asking more than this lease per year. The negotiations on that particular lease are for a five-year term. That is something under negotiation and I have asked for the other prices on that score, not on this score.

The issue was raised about the kind of impact our guaranteeing this lease has on our negotiations with regard to the core funding; what kind of potential negative impact would it have on future governments over the course of the life of this term regarding wanting to downgrade this agency, vis-a-vis others, or change their method of service.

The first point I would like to make is that, generally speaking, in this big Department of Health and Social Services, there is a heavy demand for counselling services for people who are victims of sexual assault - victim counselling, problems of all sorts with dysfunctional families. The absence of denial in many of the First Nation communities about all the atrocities that they have suffered through and the urge for healing that we are seeing in virtually every First Nation community has given rise to a very steep demand for counselling of kinds.

Given the financial restraints that we are under, we are having a great deal of difficulty trying to keep up. There is no doubt in my mind that this type of service is in demand and will continue to be beyond the life of the lease.

The issue of whether or not one wants to get into having non-government agencies bid to provide services to clients, and that sort of thing, could have an impact on this kind of arrangement. I would agree with that, but I do not really see it as being entirely different from other situations - for example, the Child Development Centre, which lease was for $1.00 a year, and we are arguing about the operation and maintenance, or a case like the ARC, which is owned by the Salvation Army. One of the key things in providing office space is to try and get the best deal for the dollar. This system goes a long way in that regard.

I do not think this is something that would be extended because of precedential value to each and any NGO that receives financial assistance from any of our departments. The case could be made that Yukon Family Services and the kind of services they provide is unique in certain ways. One is that it is definitely going to be the priority of any government in power to provide a lot of counselling, and a lot more than is provided now, but not necessarily solely through that agency. We are going to have to look at other ways of having NGOs or government provide appropriate counselling to all the communities that require healing in the Yukon.

With respect to the general policy of YTG that office space is tendered, that is the case but, in extraordinary circumstances, we do bypass that requirement. We did, when we took over the family violence centre premises on what was left of a short-term lease from the federal government, because we felt that it was extremely and exclusively suitable to our purposes at the price. However, that was not done without some very hard-nosed negotiations with the federal government, which brought down what they got for each square foot to what they are paying for each square foot by some three or four dollars.

In the event that, for some reason, Yukon Family Services goes out of business, disappears, or does not pay its lease, there is a provision in this act that we would step in and assume the premises. They are suitable for the counselling services, and I am convinced that we, or some non-governmental agency, are going to have to provide those services, because the problems are not going to go away.

Those are my opening comments.

Mr. Penikett: Let me make it quite clear at the outset that we have no question about the value or the importance of the counselling service, or any deep anxiety about the work of the agency. We have some questions about why this arrangement was made for this group, and not another, and what the sequence of events was that caused this particular transaction to take place.

I will put my cards on the table. I am not sure I completely understand what has gone on here. It seems to be absolutely clear that if Yukon Family Services were a government agency, even if it were a slightly arm’s-length agency, it could not have done this transaction with the government. It could not have proceeded to acquire space in this way. It would have had to tender and do a whole series of things that the Auditor General would have required of a public agency, consistent with his requirement that you follow a dollar’s expenditure to the final expenditure, in terms of tendering proposal calls, and so on.

I do not know exactly what went on. I am confessing that. I gather a number of us are getting calls from citizens who are concerned about the appearances here. The question at issue is one about the relationship between this agency, its landlord and the government and between this agency, the contractor and the government.

As the Minister will understand, the director of this agency is a former long-time employee of YTG who went to the agency on a secondment arrangement, which was reasonably generous and part of YTG’s contribution to the agency.

Our contributions even today are multiple. They are not just this guarantee that the Minister has a bill about, but there are also funding arrangements by Health and Social Services, funding arrangements by the Public Service Commission, which, even when I was Minister, were being charged, I think, $85 an hour for counselling services under the employee assistance program. So, the sources of funding from YTG are quite significant. Even if there are now private sector clients, I would suspect that the money that comes from YTG is not just the majority but the vast majority of funds going to this agency.

It is also fair to say it is not an impoverished agency. It is not one that is really a hand-to-mouth operation. It is not one that is really a shoestring operation. It is, of all the agencies, fairly well established and has a fairly large budget. I am not complaining about that. I am just stating it as a fact.

We have people - and I will say this to the Minister: I do not represent myself completely with these concerns, I want to make representations from constituents at this point - who are concerned about the fact that the designer of the facility - and as I understand it, there were no proposal calls, and I do not how it transpired - is someone - and there is nothing wrong with this - who has a longstanding relationship with the department and is even now involved in working for the department on other projects. That company is also involved in the construction company that built it, I understand. According to complaints from these people, other people who are directly involved in the company have a close relative inside the department. That may mean absolutely nothing but it is obviously a concern to some citizens.

To say the least, there seems to be a complex relationship between the department and the agency. Questions about the relationship between the department, the agency, the landlord, the planner and the contractor are questions that, as awkward and as difficult as they may be, we must ask, given the novelty of the arrangement that is being proposed to be legislated here.

I will make a representation of my own. Had the Public Government Act been proclaimed, I would have been quite happy to have said to any citizen who had complaints of these kinds, “Look, the Public Government Act establishes an office of a conflicts commissioner; if you think there is a problem of this kind, let’s have the conflicts commissioner have a look at all the transactions among all of the parties and all of the players to see if there is even the appearance of a problem here.” But we cannot do that because that law has not been proclaimed.

Unfortunately, we are left with the less desirable option, which is to raise the questions on the floor of the House.

I understand the Minister’s quandary, because the Minister has said that he is not in a position to be able to answer for these private agencies and their dealings. However, to put it bluntly, we are now being asked to pass legislation that will essentially finance these arrangements.

Therefore, I think that it is incumbent upon us - as awkward as it is - to ask the questions and try and see if we can establish some answers.

It may be that the Minister’s proposal to invite representatives of the recipient, or the beneficiary organization here to answer these questions may be the appropriate method.

Again, I am going to confess that I feel extremely uncomfortable asking these questions, but we have constituents who are asking these questions, and I cannot, in conscience, simply rubber stamp this legislation without receiving some satisfaction on the questions about the relationships between the players and the people who will directly or indirectly benefit from this legislation that is now before us.

Hon. Mr. Phelps: I can tell the Member that I did not know who the company was when I was asked to look at the lease and check the values. There was some urgency in saying I would or would not, and I asked questions about proposals. I was more concerned about the building itself. They had gone through some kind of proposals and that is not unusual. Again, the complex at Carcross was proposed about three years ago. The liquor store was done in that manner and it is not an unusual process.

This issue aside, I think it is a great way for government to get value for their money through proposals to lease, and proposals to build, tending to get away from architect and high design fees. You have contractors coming in with a better bang for the dollar, because they have an obvious interest in providing the building in the best way they can. That is an argument for another day with a different Minister.

After the questions started coming in, I had conversations with an executive member of the association and he advised me that the board of directors had engaged this company - the individual who had worked for Government Services and is on contract to the hospital board - to help them design the proposals and make up rough drawings of what was required.

Some Hon. Member: (Inaudible)

Hon. Mr. Phelps: At least, it was that information. I understand it was that limited company.

Then the proposals went out, came back and were reviewed by the board of directors. Subsequently, the tender that was selected - my understanding is that Form to Function went to the board of directors and asked if it was okay to get involved with the contractor in building it. Subsequently, they built it under the company name on the lease document. That is my understanding of the steps. I am told that the board of directors are comfortable with the way it went through, and that is all I know.

Mr. Penikett: Since the Minister is the Minister of Justice and also the Minister involved in dealing with conflict of interest policy, would it concern the Minister if it transpired that another participant in the construction company that had the job was not only the person who had planned it but was also a close relative of an employee of the department? Would that bother the Minister at all, at least at the level of appearances?

Hon. Mr. Phelps: I must admit that I was not aware of that until the Member raised it this afternoon. At that level, there is certainly an issue of appearance. The request came from the association; it was not driven by the department in any way. I got the request by letter from Yukon Family Services. I got a follow-up call, and there was some urgency about getting the funding in place to start construction. I asked that the materials I have given to the Member be sent to me, which they were, which were the lease and the proposal documents, and so on.

It is not my impression that the department was involved in that process at all. If they were, the matter would become more serious. Let me say quite candidly that, at the time, I was trying to think of ways of finding alternate space for Yukon Family Services. I had said that if certain things were to be moved around, and so forth, perhaps we could get them some space and move somebody else into their premises. They could lease some alternate space that we have. We have numerous buildings like that in the department, such as the one on Lambert street, the group home, and the ones up on Fifth Avenue.

I was not aware and I asked some people to come back with some options for moving people around to try and deal with their issue. The letter that I received came as a bit of a surprise.

Mr. Penikett: I have a two-part question. I would be interested in knowing if the Minister would be able, just for the benefit of the House, to  document the sequence of events in terms of this dialogue that went on. The second question would be that if, upon reflection, it is established that this arrangement is coloured by the apparent involvement of a number of people in different ways from the department, does the Minister not think it would have been better - even given the commendable objective of trying to find new quarters for this agency - if the activity of doing that had actually been carried out by the Minister of Government Services or the branch of the government that is more directly responsible for property management and development?

I am only asking this because I do not know what the facts are. All we have is people calling us and saying that they do not like the look of what is going on. We are stuck, in the absence of any facts, with asking these questions. It seems to me that, if I were the Minister, I would be feeling damned uncomfortable if I were feeling that this was not simple involvement, but a  complex of relationships. There may be some people who will directly or indirectly benefit from this measure we are now doing in the House, either as landlords, contractors or whatever, who were pretty close to the funding agency.

Even though there may be nothing legally or morally wrong, as the Minister well knows, private citizens get skeptical and irritated at the appearances of the sense that there was no tendering, other people may not have had the option for the same benefit and why are we doing it for this one organization and not for others? These are a whole set of questions that I am sure the Minister could write himself.

Hon. Mr. Phelps: To make this perfectly clear, in circumstances where it is a critically needed and long-term service, and where the NGO has a good track record, the idea of proposals by an NGO for getting space and receiving marginal, limited assistance from government - an agreement to take to the House a bill to guarantee the lease, after having looked at it and seeing that it is a good deal and meets the NGO’s needs - is a good one. I see nothing wrong with that at all. I can even see that as being one possible solution to the seniors needing a new place. They could enter into some kind of an arrangement where someone could build them a place. If the limit of our involvement was to guarantee something, and we were comfortable it was the best deal they could get, I see nothing wrong with that.

I am convinced that, through proposals, particularly now with a lot of contractors looking for work, you can get better value for the dollar. That is the first point.

The second point is that I do not want the Member to get the wrong impression about what I said on looking for space for Yukon Family Services. In talking about moving players around in our department on the social services side, part of the equation was that, perhaps, we could move them into that building and move our counselling services for alcohol and drug into that location. It would be better for our purposes. However, it was just at the discussion stage. It was not me saying that we were taking on the task of Government Services in that context. That was not my intention at all.

I had not had any discussions with Yukon Family Services from the time that we went over and viewed the building, until I got this communication asking for the lease.

What it boils down to is what role, if any, the department played, vis a vis this proposal and tendering process.

I have no evidence that would lead me to believe that it played any role. Whether or not I am right on that would be something that the Member would have to judge for himself. Then at the tail end of this, after they had selected what they wanted and asked the Minister for what I consider fairly minimal support, given that we could use the building if they no longer require it, we need that kind of service.

I think it is a good lease, a good building and good value for the dollar. If the department had no role, then I really do not feel that the transaction is coloured.

There is an entirely different issue here and that has to do with the brief that some contractors may carry against the association for the way the proposal took place; that is a different issue.

If the department had nothing to do with the proposal call, surely the fact that somebody in Cardinal Construction is related to someone in the department would not be an issue. I really feel that there is no conflict there. I can understand the concern about partnership at the landlord level, but I do not think that impinges on this issue before us.

Mr. Penikett: I would like to briefly reiterate my hope that the Minister, at some point, will be able to come back to us and document the sequence of events, because I am not entirely clear at what point the Minister made the commitment to the group. I do not know if the commitment was made at the design stage or the construction stage, and that may have some bearing.

I am also curious about the courage of the Minister, in making such a commitment without the involvement of his department. Perhaps he is a man of supreme self-confidence in these questions - that is another issue, as he says.

Surely, by guaranteeing the rent, the government is, indirectly, guaranteeing the financing of the whole transaction; therefore, who benefits from those transactions will be of interest to the taxpayer.

We are therefore obliged to ask those questions. I am saying that as a comment.

Hon. Mr. Phelps: I have no problem with the line of questioning, particularly in light of the obvious dismay of some contractors in the community. I was made aware of that long after this happened.

To be clear, the request came to me after the selection had occurred, upon and after the new landlord was determined, and it was a request of the bank. They would provide financing if the government would guarantee it. My letter says that I would try to guarantee it. That was after all that was done.

When I got the letter, I am sure I forwarded it to the department, and I am sure I had a conversation with the deputy minister, because I was phoned. I said to draw up a letter.

First of all, I got the documentation. It was fairly quick, because there was not much time. They were quite desperate to get something, so they could get moving on it, and it was a requirement of the bank. It was long after all these things had happened, and they awarded it to the people who built the place, the landlord.

Mrs. Firth: I want to ask a question before I express my concerns for the record and have the Minister address them. This afternoon, he has indicated that the Yukon Family Services Association hired the architectural firm, Form to Function, to help the board to set up the proposals. He said that the board of directors reviewed the proposals. Did Form to Function act in an advisory capacity to the board in the review of the proposals?

Hon. Mr. Phelps: I hesitate to answer that. That is my understanding. It is something we would have to ask the players. Once people were raising the question with Government Services about tenders and proposals - we did not know - I said I was sure there were and to have them phone Yukon Family Services.

Mrs. Firth: Yes, that is the view that was expressed to me. When this was brought to my attention, I of course was aware that this piece of legislation was on our agenda for this session and obviously the two went together. Immediately after it was being brought to my attention, I wrote a letter to the Minister asking for a copy of the lease agreement. When I got the copy of the lease agreement from the Minister, it was between a company called 11005 Yukon Limited and the Yukon Family Services Association. When I researched who the 11005 Yukon Limited was, through Consumer and Corporate Affairs, I was told that the secretary was, in fact, an individual who is the major owner or architect in Form to Function and the president is an individual who is the principal player in Cardinal Contracting.

The concerns that were being expressed to me were that Form to Function was hired by Yukon Family Services Association to develop the proposals and then was involved in the decision to accept the proposal, while ending up being a partner on the lease agreement. I share the concern of the individuals who brought this to my attention because of the appearance of it and the appearance of unfairness and there not being a level playing field.

I would like to ask the Minister to cast his memory back to an issue that was raised in the House here when he was the Leader of the Official Opposition. It was an issue in the Department of Tourism where a consulting company had been involved in the development of some kind of tourism strategy and had participated with the board in reviewing the proposals that had come forward and, in fact, had ended up in some way being the successful consultant. We, as Opposition Members at that time, had raised that as a concern - about conflict and about unfairness and there not being a level playing field. I do not know if the Minister remembers the particular issue but when this issue was brought to my attention it immediately reminded me of that previous issue with a previous government and with another department. We, at that time, had raised a great deal of concern about that whole process.

My concern is that the Minister be fully aware of what has gone on here, particularly before we appear to sanction any action like that - the Minister in bringing the legislation forward and us, as Members of the Legislature, agreeing to this kind of arrangement. I have some concerns about the principle of this rental agreement, but I would like to get cleared off the plate the matter of the level playing field, the perceptions, the appearances and ask the Minister how he is proposing to deal with that particular issue, or is he going to be dealing with it?

Hon. Mr. Phelps: Let me just go through the principle once again. The Yukon Family Services Association went out for this proposal with this outfit. They asked seven contractors to respond. Some did. I think it was five, but I could be wrong on that. A selection process was undertaken, and my understanding is that the same company was advising the board at that point, but I could be wrong. I believe that is the situation.

One proposal was selected. The advisor asked the blessing of board - was it okay if I get involved with the successful applicant. They felt that there was nothing wrong with that under the circumstances, which I do not know much about.

This new company was formed, everything gets going. They get to the bank, the banks need something more than the word of the Yukon Family Services Association; they need a guarantee. I get a letter and the guarantee was then offered. I can understand that contractors, on various grounds, could have some complaints with the way the board of directors handled this. It is up to them to defend themselves. Certainly, it was not a situation where government was involved at all, except when the association came to us, more or less at the last minute, to try and get a guarantee to satisfy the bank.

I am not here to defend what the board did or what the individual or the advisory company did. All the time, there are complaints about how businesses, independent of government, put proposals out. You hear about how Northwestel, Yukon Electrical and almost any large corporation in town go about doing it.

I do not think how they go about doing these things, in a similar situation, gives rise to a conflict of the sort that people here are speaking of. There could be the appearance of something wrong, and it could be a legitimate complaint. For instance, this person is advising you, but he ends up the partner of the successful bidder. I understand that complaint.

Not knowing anything about the history, my concern was to review this and ensure that it was a good deal from what I knew. We had been doing some work with Government Services on negotiating the rent for the family violence unit. It was a good deal and I had no problem in helping the Yukon Family Services Association at that point. That is really all that there is to this.

I can honestly tell you that I did not know who won. I had not met the person in Cardinal Construction until much later, and I was not aware that a principal of Form to Function was involved until much later.

Mrs. Firth: By his comments, is the Minister saying that this does not cause him concern? I can see it fairly clearly, but perhaps I am seeing something the Minister is not.

The complaint from the people in the contracting industry who made representations to me, and who felt they had not been fairly dealt with, was that an architectural company had been contracted to set up proposals. The proposals had been reviewed by that company in an advisory capacity, choices had been made, and then that company just happened to end up being a partner of the piece of legislation that the Minister is bringing to the House. I see the Minister shaking his head, but that is what happened.

The lease agreement and this rent guarantee act involve the company that was involved in the development of the proposals. The Minister may not feel that there is a conflict, but that is where the appearance comes of a conflict, or of something that has been unfairly done, or that someone has had some advantage that some other contractor did not, or that perhaps some company or someone had been involved in some capacity that was to their benefit, and they perhaps should not have been.

I asked the Minister to again go back to the tourism issue because, as Members of the Opposition, we all felt very strongly about that when it occurred.

This has not begun to touch on the concerns that I have about the principles of the legislation. Perhaps the Minister could respond to that concern first.

I have two issues that I want to take up with the Minister: the legislation - the principle and the precedent - and the issue about proposals and whether proposals are better than tenders. I also have some comments about that.

Hon. Mr. Phelps: I understand exactly what you are saying with respect to the appearance of conflict in the case of Yukon Family Services using this firm, or if this firm allowed them to be partners later. That is clear. However, as government, if anyone on the side opposite was the Minister of the funding department - in this case, Health and Social Services - and they found out that they had moved offices, and later there was this hullabaloo about how it was done, and they were not asked for a guarantee, what would they do about what they had done?

Chair: Please do not use the word “you”, Mr. Phelps.

Hon. Mr. Phelps: What would the rhetorical person, you, the Minister, do about it? Would one deny the agency core funding because of the way they had obtained the lease?

Some people did not like the way the agency got it, but it is a great building; it is extremely competitive - and that can be shown - it is a good thing for the people who use the service. Surely the funding agency would not be taking some kind of remedial action in the circumstances, because this, after all, is an independent society that was doing what they thought was the best thing.

If that is the case, I would ask the Members opposite to then take the additional step. Why, if they are going to continue to fund the agency, is the provision of the guarantee such an issue? It seems to me that we are talking about two different issues here. One is whether or not the agency went about things in a way that was to everyone’s taste. There was no real conflict that they will have to explain themselves, but some appearance of it.

The other issue is, if an agency has gone through a process and gotten a good deal for itself, and it needed those premises, do we continue to give them assistance? That is really the way I see it.

Mr. Penikett: I know the Minister was asking the question rhetorically. Let me suggest to him the way that I would have responded, had I been in the Minister’s position - and I was the Minister of that department for a while. I would have responded with a number of questions. One of the things I Ithink I would have done was to ask the bank, in the face of this request for a guarantee, if they understood that the ongoing funding of many years’ standing of this organization by YTG, in itself, already constituted a guarantee of rent. In effect, we have been guaranteeing their rent for all the time that the organization has been in existence.

I have enough experience with bank managers to know that they find the ways of government and NGOs often mysterious. I might have put some energy and effort into trying to explain to the bank manager that this was not a fly-by-night outfit, nor a one-time organization, but it is an organization that has had its rent guaranteed by YTG for a long time.

As a Minister, having been burned in this House by some of the Members who are still here, I would have asked certain questions; for example, if I am going to be asked to guarantee the rent, who owns this building? Are they an employee of the department, because someone is going to ask questions, if they are. Are they an employee of the agency? Are they someone who has contracts, or any financial relationships, with either the agency or the government?

That is the link there. I say, with respect to the Minister, given the fact that the government is now going the added step of specifically guaranteeing the rent, which is, in effect, guaranteeing the financing for the whole transaction - the building, the lease, and the operation in that facility - we are inevitably going to have questions about every single beneficiary of that arrangement.

Is there a clean, or objective, relationship with the government on this? The Member for Riverdale South asked if there were tenders, did other people have an opportunity, was there fair dealing? I am not asking the Minister to answer all these questions today. However, I would ask him two things.

I would be interested in trying to document the sequence of events. Would the Minister be willing, on the question of the appearance of conflict - let me define it that way - to have representatives of Yukon Family Services appear before the bar of the House to answer these questions, rather than have the Minister try and do it? It seems to me we cannot deal adequately with the other questions here about the precedent, or the appropriateness of this particular arrangement, until we have cleared the brush away around the issues of appearance of conflict, and until we can see the rest of the proposition clearly. It seems to me that we are going to have problems dealing with it as it should be dealt with.

Does he not see that the issue of the guarantee is a side issue? The government provides core money to an independent organization, an NGO, independent in every respect except for this money. If they never came to me and asked for a guarantee, and moved into the new premises and negotiations every year go on about their budget, would I be in some way compelled to say, “Hey, I just heard such and such” - and then bring up all the stuff we have heard here - “and therefore we are not going to give you the money for the rent.”

There is an implied guarantee. It is simply assisting that organization in the same way, in my view, as giving them core funding, and so on. It is not being suggested that they somehow be penalized because of how they went about securing what, on an objective basis, is a good deal. I see the guarantee issue as a completely different issue.

If there is some kind of departmental culpability because of some relationship or something, that is a different issue, too.

I do not see that saying, “Okay, we will help you get into these premises by way of a guarantee,” makes a difference.

Let me try to explain it this way. Even if there were no guarantee legislation before us, if any of us who have ever served on the Public Accounts Committee and listened to the Auditor General explain that we are accountable for money spent, not only directly by the government, but money spent by agencies, that comes to those agencies by way of a contribution agreement or some other contract with the government, and if it is spent improperly or if it is spent contrary to the intent for which the Legislature approved the money, then we would have a right to ask for the representatives of that agency to come before the Bar of the House or to come before the Public Accounts Committee and defend those expenditures.

It so happens there is a transaction here that some citizens - I do not think they were originally legislators - are anxious about. Apart from the question of the guarantee, we might well ask for representatives of that organization to come here and explain themselves.

I make that case.

The second case, though is this: the reason why the guarantee is important is that, for the first time that I can remember, we are having a piece of legislation before the House that asks us not only to legitimize the guarantee of the rent but, in effect - and this is the important point - to sanction arrangements attached to that guarantee about which some of our constituents have concerns. There are appearances of conflict.

We are not asking the Minister to satisfy the House himself about all the appearances that arrive from private transactions, but we are dealing with following the trail of an indirect public expenditure. I am sure the Auditor General would make the argument that a guarantee is the same as a loan in terms of financial responsibility and financial accountability, because we are prospectively or potentially liable for some expenditure.

To the Minister, I am not trying to make a case. I am not even arguing, at this stage, against the guarantee. I am not arguing against the organization.

I am really making a petition for accountability. That is why I am asking for the representatives to be called here.

Hon. Mr. Phelps: I am in complete agreement with what the Member is saying. My point is that they could be asked before this House whether or not we are being asked for a guarantee through this act because we fund that organization and because of its appearance. The issue is not the guarantee. The issue is whether or not the things that lead up to the agreement, even before they asked for the guarantee, gives rise to an apparent conflict. I have no problem with that. What I am trying to say is that all the guarantee has done is focus everyone’s attention on the complaints of constituents about Yukon Family Services, an organization funded by government, going out and doing it in this way.

I have no quarrel with the Auditor General’s position that if we are going to be giving these people money that they have to perform up to certain standards in the way that the money is spent. We have every right to call them before this House to raise that issue. I have no problem with that at all. The other branch of issues is whether this is a good way to go about doing things, the conflict potential aside.

Mr. Penikett: I will make my final word on the subject of appearance before the House. I want to make this case to the Minister. I think the guarantee is different. If the guarantee were simply between the Minister within some statutory authority that already existed or it was a guarantee issued by some senior official, there would obviously be questions about it. Once you ask for statutory sanctions for the guarantee, every single Member of this House, all 17 Members, are somehow tied to this financial transaction and are in a sense being asked to sanction arrangements made by this independent but government-funded organization - arrangements about which we may have some doubts. I am making it no stronger than by saying by the virtue of coming before this House and asking for statutory approval of it, we all become accountable. It is not simply a question of asking the Minister to be accountable for something he has done. He is asking all of us to share responsibility for this and that is fine, but before we do that, we have some questions we want to ask and we want to get them answered.

Hon. Mr. Phelps: Any guarantees made by officials or not, under the Financial Administration Act have to come here for all of us to approve, and that includes Curragh, et cetera.

This is no different from the Curragh guarantee that was proposed. We would have had to come here with legislation, had it gone through.

I submit, with the greatest respect to the Member, that I come before the House as the Minister, on behalf of government, for the core funding. I will be doing this again in the spring for whatever it is - $650,000 or so - for the main office in Whitehorse. The same arguments apply. By voting for that core funding, the Member is part of the whole thing. I have no quarrel with that. I do not see the guarantee as different in kind; that is the point.

Mr. Cable: I should indicate to the House that I had the opportunity to interview a couple of the members. I believe they were directors of the Yukon Family Services Association. Some, not all, of the very points that are being raised here were raised in our conversations. I would most heartily agree with the Leader of the Official Opposition that these people could give us information that would point to the role of the consultant in reviewing the proposals that would be useful in making decisions.

There are also a couple of other points on which I think the members of the association could give us information. This lease is a $1 million commercial lease, hand drafted, I gather, without legal advice. It would be useful to confirm that. It would also be useful to get the opinion of Department of Justice solicitors as to whether this is a litigation lawyer’s Christmas present, and what is down the road in the way of exposure for the government.

I should point out to the Minister - and I am sure he appreciates this - that the guarantee and the proposal is an alternative to the absorption by the Yukon Family Services Association of the leasehold improvements. It would be useful to hear from them what these leasehold improvements and their costs are, so that we can analyze the risk involved in giving a guarantee to this $1 million lease versus the cost of these leasehold improvements. I heartily back the Leader of the Official Opposition in calling for these people to appear before the House and give evidence.

Before I suggest that we adjourn debate on the bill, I have no problem with asking them to appear to make their case. My commitment was to bring this bill to the House. If people do not want to pass the bill, the bill will not be passed. I am sure it will not be the end of the world.

This is a minority government and it was understood by all that I would have to bring this through the House. That is the law, and if it is the decision of the Members to vote against this bill, it will not go through.

As far as I am concerned, the questions that are being raised deserve answers and the concern being expressed does not come as a total surprise to me. Unfortunately, many of the issues were ex post facto to my initially saying that I would try to guarantee the loan pursuant to the Financial Administration Act.

I am going to recommend that we adjourn debate.

Mrs. Firth: I can adjourn the debate on the motion for the Minister if he wishes. I just want to make a couple of comments before we do that.

I can appreciate the Minister’s concern about tying one issue to the other issue. I just want to explain to the Minister exactly where I am coming from and which issue was of concern to me first.

My primary concern is with the principle of the bill. When I saw this legislation I was immediately concerned about the concept, because I knew it was precedent setting and I had some concerns about doing this and about whether or not it was going to be perceived to be fair and whether it was a wise move for the government to make.

When I started examining the issue, because of comments that were brought to my attention, the issue that we have been debating all afternoon arose as a second issue.

I found the concept in this piece of legislation somewhat questionable. When all of this other information came forward about the direction this government was taking, it made it even more unpalatable because of all of the extenuating circumstances, or whatever one might call them.

This compounded my concern, because the government was going to be asking us to sanction this bill, and the Minister was agreeing to it. I had some concerns about the principle that was also in some way going to have me sanction what had gone on and what had happened between the parties involved as the end result, which is the lease agreement and the guarantee of the lease agreement.

I do not want the Minister to think that, because of this issue, that is why I do not agree with his legislation. I had some concern about the legislation before I even knew any of the other details that have been revealed here this afternoon. I agree with the other Members that we should have Family Services here, although the Minister has kind of indicated the sequence of events I was concerned about, before I was even prepared to mention any of the details here in the House. I had to have the questions answered and the Minister has answered them, but we may have more information come forward from the Family Services Association.

Those are my concerns on the record, and I know there are other Members who want to get some final points on the record so I will not adjourn debate.

Mr. Penikett: Very briefly, for the record, just so that the Minister understands the Official Opposition position, I want to be very clear. I am not looking for an excuse to vote against this bill. I would like to vote for Family Services, but I want to feel good about doing it.

Hon. Mr. Phelps: I appreciate the position both Members have taken and I fully understand it. I would agree that the next step is to give Members the opportunity to ask questions of the association. Once that issue is resolved to the best of our ability, we can move on to the issue of the policy question, as to whether or not this kind of thing is a good thing. I see I am in for a fight about policy with the Member for Riverdale South on that issue.

I move, Mr. Chair, that you move progress on Bill No. 38.

Motion agreed to

Chair: Is it the wish of the Members to adjourn until 7:30?

Some Hon. Members: Agreed.


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

Bill No. 12 - First Appropriation Act, 1994-95 - continued

Department of Government Services - continued

Mr. Harding: I do have a few more questions for the Minister. Many of them have arisen from discussions we have had in the Legislature over the last month or so. Many of them have arisen out of the government’s strategic plan, which was headed for the shredder but, on its way, managed to find its way into the Opposition’s hands. As a result of that, we certainly have some questions to ask on the precise direction the department wants to take.

I see the Government Leader is back. One of my questions tonight is regarding the announcement on the news today that First Ministers have agreed to reduce and eliminate inter-provincial trade barriers. Perhaps the Government Leader wants to answer it, or perhaps the Minister of Economic Development will.

What resulted from the discussions at the First Ministers conference on inter-provincial trade barriers?

Hon. Mr. Devries: I have not been briefed on it, but my understanding is that the Northwest Territories and the Yukon still have the option of a certain degree of protection to ensure that their economic needs are met.

Mr. Harding: Can the Minister be more specific about that? This is very, very important. For him to say that as far as he understands it, there are certain restrictions and certain exemptions, seems to me to be pretty fluffy. I think that it is an incredibly important question and it has a lot to do with what is going to happen in the contract regulation review and policies for the business incentive program. Can the Minister give us some more specifics about precisely where we stand with interprovincial free trade, in light of what has happened at the First Ministers conference and the previous conferences and agreements?

Hon. Mr. Devries: I do not have a copy of the agreement here, but the Yukon and Northwest Territories are exempt from provisions of the IAGP, which relates to open tendering. They are not exempt from the reporting provisions. Both governments have also agreed to provide notification and tender documents of any intention to apply local preferences to goods contracts over the threshold, when those contracts are advertised outside the territory. If we advertise outside the territory, we have to ensure that if we are going to use a preferential process of some type it be made very clear in the process.

Mr. Harding: So there is nothing new arising out of what has taken place in Ottawa over the last few days. We are still given that exemption as far as the Minister is aware.

Hon. Mr. Devries: It is my understanding that there are no changes in the existing agreements as they stand up to this point.

Mr. Harding: Essentially, the Yukon government supports free trade as long as we retain the option to protect ourselves. Is that correct?

Hon. Mr. Devries: My understanding under the NAFTA and the free trade agreement is that, on contracts of $6 million or less, we have a certain degree of flexibility, and on purchase contracts of $50,000, we have a degree of flexibility.

Mr. Harding: To what section of the clause is he referring? That seems to be a bit puzzling. Is the Minister sure that we have flexibility on $6 million or less? What reasoning is given for that flexibility? Does that apply to all jurisdictions or just to the Yukon and Northwest Territories?

Hon. Mr. Devries: I believe that it applies to any jurisdiction within Canada as far as NAFTA goes, if it meets some criteria surrounding the economic conditions in the area at the time as well as anything pertaining to First Nations.

Mr. Harding: From what the Minister is saying, then, any government in Canada could deny the awarding of bids to the United States or Mexico under NAFTA as long as the contracts are less than $6 million - is that what the Minister is saying?

Hon. Mr. Devries: I stand to be corrected, but that is my understanding of it. Other certain criteria have to be met in regard to economic circumstances, et cetera. Many people feel that the free trade agreement is exactly a free trade agreement. Actually, it is just a whole bunch of agreements with certain clauses, et cetera; it is a whole bunch of trading - what is the proper terminology-

Some Hon. Member: (Inaudible)

Hon. Mr. Devries: Yes, controlled trade.

Mr. Harding: If the Minister does not have the information, I can appreciate it.

Some Hon. Member: (Inaudible)

Mr. Harding: If the House Leader or the government really wanted a Merry Christmas, we would not be here right now.

Some Hon. Member: (Inaudible)

Mr. Harding: I move that the House do now adjourn until January 5 at 1:30 p.m.


Chair: Is there further general debate?

Mr. Harding: I guess maybe we could bring the Speaker back and entertain that motion. The Government House Leader says it is his call.

I would like to ask the Minister about the certain criteria he has identified. He says that as long as certain economic criteria are met in any contract under $6 million, any government or any jurisdiction in Canada could remain exempt from bidding from the United States and Mexico. Can he be more specific about what the certain criteria is? What would prevent-

Some Hon. Member: (Inaudible)

Mr. Harding: Well, I will have some questions for Senator Cable at some other point, but not this evening. Tonight I am in Government Services general debate and it pertains primarily to the Department of Government Services in light of the statements we have heard from the government regarding their positioning on the North American Free Trade Agreement and free trade in general. As a matter of fact, I can remember listening to a debate with the Minister of Tourism on free trade, where some of the standard lines were espoused by the Minister about the benefits of the free trade agreement. It did not seem like he had much of a grasp on it. I was listening intently trying to understand specifically where he was coming from as a Yukon representative, but he did not really seem to have much of a grasp on some of the finer points, so tonight I am really trying to get into the head of the government to ascertain exactly what the economic criteria are that allow us to break contracts down so that as long as they are under $6 million, we can exempt other jurisdictions from bidding on them.

What certain economic criteria would we have to meet in order to be able to refuse to award contracts to other jurisdictions on the basis of them being less than $6 million?

Hon. Mr. Devries: As I mentioned earlier, there is a process in place - for instance the NWT now has a 10-percent bid preference. They have to put in an annual report to the internal trade review people. We do not have that, nor do we have any intention of doing anything like this at this point or in the future. My understanding is that it is dependent on the unemployment in the area and other various economic circumstances. The leading criteria would be the degree of unemployment in the area.

As far as the specific details, if the Member wishes, I could give him a copy of the internal trade agreement we have.

Mr. McDonald: I would like to follow up on an issue that has been raised in the Legislature in the last few weeks that I think we have been unsuccessful in resolving and that is the conflicting objectives in the strategic plan. There are two that concern me the most. The first is to give Yukon contractors a preference and the second one is to reintroduce the principle that the low bidder will be awarded government contracts.

The Minister has not been able to resolve this in Question Period, at least to my satisfaction. I would like the Minister to explain whether or not the government is intending to provide a bid preference for Yukon contractors? Is the government proceeding along that route? A number of contractors have come to speak with me since the matter was first raised. They are unaware of the government’s intentions in this matter and the government owes it to them to explain their position.

Hon. Mr. Devries: It is one of the issues that will be addressed in the contract regulations review that we will be starting tomorrow. It is one of the issues that will be discussed with the contractors. We have no intention of coming up with a 10-percent bid preference, or anything like that, because our understanding is that the contractors are happy with what we have in place right now. I find it interesting that the Member seems to indicate that the contractors have indicated to him that it is an issue, because none of them have come to me to say it is an issue.

Mr. McDonald: That is precisely my point. The problem is that the Government Services strategic plan has made it an issue. No one has expressed concerns to me about the existing contract regulations or the business incentive policy, or anything else. They have all indicated to me that things are fine. The Minister gave us to believe, last May, that things were fine and that any changes to the contract regulations would be minor in nature and would be the result of the contract review committee testing the new regulations and fine tuning them. What was surprising, when the strategic plan became public, was that the government had decided that they were going to give Yukon contractors a preference. That is what is new.

So far, the Minister has not disassociated himself from his department’s strategic plan. What is remarkable about this particular provision is that they have chosen, in all the print in this entire document, to put in bold face the lines “give Yukon contractors a preference” - on page 10 of this document. There is no other section that I can identify that is quite so remarkable, in terms of wanting this particular provision to stand out. Clearly, if Government Services publishes a document, the Minister adopts the document and the Minister does not attempt to disassociate himself from the document, and the document says “give Yukon contractors a preference”, then that is what people start believing. That is why it is an issue. The Minister should not be surprised and think that I have made it an issue; I have not made it an issue. He and his department have made it an issue and that is the reason why I ask him about the provision.

The Minister said that they are not intending to give Yukon contractors a preference. What does he have to say about the strategic plan, in that case?

Is the strategic plan in error in this particular respect?

Hon. Mr. Devries: Perhaps that wording was not wisely chosen, but the thought behind it is to ensure that contracts are awarded in such a way to ensure that Yukoners are given the greatest advantage.

We know that Yukon contracting companies are not as large as outside companies, and contracts can be written up and developed in such a way that - we know the specifics of a majority of the Yukon contractors - they do have the advantage. They understand northern building practices better than some of the southern contractors.

As far as actual preference, maybe that was not the best choice of words. We Idefinitely want to do everything that we possibly can to ensure that Yukon contractors at least have the opportunity to bid on these contracts.

We are not necessarily saying that has not happened in the past, but we are reinforcing our commitment to ensure that they have a certain degree of advantage, whether it be their knowledge of northern conditions or other factors.

Mr. McDonald: I think that it goes without saying that resident Yukon contractors who have been around for awhile, bidding on government projects, would have some specialized knowledge that may not be the domain of outside contractors. In that respect, they may have some knowledge giving them a competitive advantage.

The problem remains that the wording in the strategic plan does not leave much to the imagination, nor does it leave much open to interpretation. This is not the case of a typographical error.

The Minister made reference to the splitting of government contracts. That is something that the government intends to do and I understand their objective, but that is a different objective in the strategic plan.

I think the problem is that, frankly, what the department has done is taken the Yukon Party’s plan and decided to adopt that plan. They are good public servants and they want to adopt the party’s plan, no matter how inconsistent it may seem.

Before all of the politicians in this room decide to cut the bureaucrats loose and make them feel responsible for some kind of typo, we should understand that the Yukon Party plans number two objective in promoting small business is to develop fair and realistic contract regulations that give Yukon contractors a preference when bidding on government contracts.

That language does not leave much to the imagination. It is very clear that they want to give the contractors a preference.

The Minister is saying that he has no intention of giving Yukon contractors a bid preference. Is the Minister now saying, in conclusion, that the Yukon Party plan - the number two recommendation under promoting small business - was ill conceived?

Hon. Mr. Devries: Our feeling is that if we see a trend developing where a number of outside contractors are starting to get the majority of the contracts in the Yukon, this leaves us with an option. At this point, it is certainly not our intention to go to a preferential bidding process, such as a 10-percent preference, or something like that. My understanding is that Yukon contractors were not happy with it before. It was abused by companies that were setting up offices when they did not really have branches in the Yukon, and various things like that. We are hoping to present the contracts in such a way that Yukoners have an advantage, but perhaps using that term was not the best choice of words.

Mr. McDonald: I opened my mailbox the other day. I had a newsletter from the Government Leader, who also happens to be the MLA who represents the street on which I live. The Government Leader chose to give an accounting of the Yukon Party’s four-year plan for change. The author of this particular document decided to give the constituents an update on how well the government was doing on the Yukon Party’s platform. I failed to recognize any mention of the Government Leader’s admission - my MLA - that there were a number of recommendations or commitments that were considered to be ill-conceived.

This clearly appears to be one, and the government is not saying anything about it. There are a number of others I would like to go through, but I would like to put this one to bed.

The Minister has indicated that if economic conditions change, or become substantially different, the government might move to a bid preference. This four-year plan was designed for our times. It was considered current last year, so much so that it showed up in the Government Services strategic plan last month. Are conditions sufficient to warrant giving Yukon contractors a preference? Alternatively, is it the case, as the Minister has also stated, that Yukon contractors do not need a preference because they are in a good competitive situation as it is and can compete both within the Yukon and outside? What is the final conclusion to which the Minister has come?

Hon. Mr. Devries: The last year shows that Yukon contractors have been very competitive and I believe that 88 percent of all government spending has been with Yukon companies or Yukon contractors. That indicates that things are fine. If we should see a trend where that deteriorates considerably and we have the same economic conditions we have now, we want to make sure that we leave our options open.

Mr. McDonald: If the conditions change dramatically, I hope the Minister and the government do decide to react to those changing circumstances. He has not been able to identify anything that would suggest that the government should introduce a bid preference for Yukon contractors. They have gone to great lengths to justify the opposite.

In conclusion, even if the Minister does not want to state it in bold terms, the first priority for the Yukon Party in promoting small business is no longer operative.

I would like to ask the Minister about the second priority in the Government Services strategic plan and that is the concept of introducing the principle that the low bidder will be awarded government contracts. What conditions were in existence when the department put this recommendation into the strategic plan that justified this particular call for action?

Are there problems that the government has perceived with the contract regulations or with the practice of those regulations that would suggest the government should reintroducing the principle of low bidder getting the contract?

Hon. Mr. Devries: What we have observed is that more attention was paid to the evaluation process and not enough to the price. We will be discussing this with the various contractors and people in the contract review to come up with a system that gives a little more weight to price than it does to the evaluation. We still want to ensure that we get a good quality product for our dollar. We would not award a job to the lowest bidder when it appears, in the evaluation process, that the person is incapable of doing the job. We have to come up with something that is fair. We have already had discussions with some of the services in regard to that, so we are working on it.

Mr. McDonald: Is the Minister saying that the current system, therefore, is not considered fair - that the existing contract regulations do not promote a fair system?

Hon. Mr. Devries: I would not say it is not fair. Our feeling is that we may not be getting the best value for our dollar in the end product, and this is what we are trying to determine. We are not convinced about it ourselves, but this is why we want discussions with the contractors on that matter.

Mr. McDonald: That does not explain why it is the number two priority of the government to reintroduce the concept that the low bidder will be awarded the government contract when the Minister is not sure whether or not the system is fair.

What I would like to ask him is how this principle is reconciled with his belief that the low bidder may be bypassed, based on whatever the thinking is of the Cabinet at any particular time when, for example, a contractor from outside the territory bids on a government contract. The Minister has said that, if the bid price is close, it may turn out to be a situation where the Cabinet will simply overturn the low bidder and go to a higher bidder if the Cabinet just happens to believe at the time that there would be more economic spinoffs from the local bidder’s bid.

How does the Minister reconcile those positions?

Hon. Mr. Devries: Again, as I mentioned earlier to the question from, I believe, the Member for Faro - and I thought I made it fairly clear then - that under the procedure we choose that option when the tender goes out. We do not have any discretion if it is not mentioned in the tender that we reserve that option.

My understanding is that there are some terms we could possibly be using. I believe the Member brought it up here a few weeks ago and since then I have reviewed it and I understand there have been some legal cases where there have been some arguments. My understanding is that the term “lowest tender not necessarily accepted” perhaps would not stand up in court and that there are better terms that could be used.

Again, if we see a trend develop where a great number of contracts are being awarded to outside firms, we hope to ensure that we do have the option within our strategic plan to perhaps come up with some terminology on tenders that go outside of the Yukon to ensure that we have an option, if a bid was very close, of perhaps choosing the second tender on the list.

Mr. McDonald: There are a whole series of issues here that have to be addressed before the Minister can reasonably say that the Cabinet will consider bypassing a low bid, simply because the Cabinet at that particular time feels that there may be greater economic spinoffs as a result of a local bidder getting the job.

The Minister did raise the issue of the legal implications of simply bypassing the low bid using existing contract language.

My understanding is that there are some municipalities in British Columbia that have paid a very severe price for bypassing the low bid and taking a local bid trying to use that language. That severe price has cost them millions of dollars.

Clearly, existing language cannot be used. Other language has to be used and it usually involves identifying very specifically the criteria that may be used by Cabinet, in the government’s mind, through which the low bid may be set aside. Now, what are those criteria?

Obviously, the Cabinet has set aside the low bid on a couple of occasions that we have raised in the Legislature - or perhaps Management Board has chosen to set aside the low bid. What are the specific criteria that would cause the government to set aside a low bid from outside of the territory? I would also like to know whether or not the Minister is communicating this change in the rules to persons who may want to bid from a base that is not in the Yukon?

Hon. Mr. Devries: Again, I believe I answered the question earlier. If this were the case we would have to come with some terminology to make it very clear in the bidding process. If there is no terminology that we can come up with, I guess it just would not happen.

Mr. McDonald: That is it? The Minister said in the Legislature that the Cabinet, from time to time, may simply bypass a low bid based on their interpretation of the economic consequences of one bid versus another.

Some contractors have taken that at face value and have suggested that they would really like to know what those criteria are. The thought of five or six politicians sitting around trying to determine who is the low bidder, based on whatever criteria they dream up, is frankly a very frightening prospect to them. Whether they support this government, the NDP government or the Liberal government, they are quite frightened by that prospect.

When the government introduces a subject by talking about wanting to reintroduce the principle that low bidder will be awarded the government contracts, every contractor’s ears perk up. What do they mean? What is wrong with the existing system? What new criteria are going to be used by the evaluators? What do they mean by reintroducing the principle that low bidder will be awarded government contracts?

We were under the impression that the low bidder currently got the government contracts, unless the low bidder’s history of performance was not acceptable. So they are wondering precisely what that means. The problem is that this language in the Government Services strategic plan is bread and butter to literally hundreds of people in this territory and the fact that it came from the Yukon Party’s four-year plan is irrelevant. Suddenly it moves from being a political document to being an administrative document. Suddenly it is an action plan. Suddenly it is going to happen and they are puzzled as to what all of this means - and I am puzzled, too.

Has the government started the process of developing criteria that would allow the Cabinet - and the Minister should explain why it is Cabinet and not Management Board, incidentally - to bypass an outside bidder? Has that process started? Has there been any consultation undertaken? Have the policy people been working on this particular item? When can we see results of this initiative?

Hon. Mr. Devries: I believe I made it clear yesterday that we are starting a contract regulation review process and many of those issues will be dealt with in that process. Presently, depending upon which contract the Member is talking about, there are contracts that have an evaluation process, especially when it comes to engineering and architecture and things like that. Then there are just the regular work contracts. Basically, any way those contracts have been coming in is the way they have been awarded, in the majority of cases.

Mr. McDonald: There have been some noteworthy cases recently where the low bidder was apparently not accepted. I am fascinated by the government’s intentions in this particular area.

Can the Minister tell us whether or not these new contract regulations are intended to be in place by the spring or summer? When is this consultative process going to develop new regulations?

Hon. Mr. Devries: We hope to have them in place at the end of March or beginning of April. I believe there are two steps to the review process. The document must be sent out to the various stakeholders and then we wait several weeks for input. A second document is then prepared with the various recommendations developed from the input. We then go back to the stakeholders to determine what the regulations will actually contain when completed.

Mr. McDonald: Will the Minister commit to sending both documents he refers to - the preliminary one and the one that incorporates the initial comments - to Members in the Legislature at the same time that he is sending the document out to stakeholder groups?

Hon. Mr. Devries: The Members will be getting a copy of the first document tomorrow, when I do the ministerial statement.

Mr. McDonald: The Minister seems to be indicating that things may be changing for people who bid from outside of the territory. Is it, as an operating principle, important for the department to inform prospective bidders and contracting associations, who have historically had an interest in work in the territory, that conditions may change in the upcoming year? Certainly conditions may change for specific contracts.

Hon. Mr. Devries: First, we would have to try and determine which changes emanate from the review process, so it would be a little premature to do that right away. If we see the local contractors making suggestions where we have to pursue one of these two initiatives in earnest, we would certainly have to consider that.

Mr. McDonald: As much as I like to promote work for local contractors, I hope that the Minister’s department is not intending to ambush people who may be submitting a bid from outside of the territory or surprising them at the last second with some newly discovered rules that the government may adopt in the interim period between now and March or April.

Can the Minister indicate to us whether or not the supplementary conditions that were attached to contracts last year and the year before are intended to be continued, or are they still operative now - the supplementary conditions that were intended to promote use of local labour?

Hon. Mr. Devries: My understanding is that they are still in force at this time.

Mr. McDonald: The Minister has now told us that there is going to be a review and that he is going to announce the initiation of that review tomorrow. At the same time I got the impression that the Yukon Party Cabinet may overturn the low bidder if they felt that there was some economic advantage to the Yukon in doing so. Can the Minister just confirm, once and for all for the record, that nothing is going to change? Can he confirm that the Cabinet is not going to do anything outside the intent or spirit of the contract regulations, until such time as the review is complete and decisions are made for changing or maintaining the status quo?

Hon. Mr. Devries: We do want to reserve our option of going with the lowest bidder, as long as it fits within the legal wording of the way in which the contract was tendered. If it does not fit within the legal wording, we certainly would not do something that would be illegal, as far as the tender document goes, when it goes out for tender.

The Member looks puzzled. Philosophically, we want to go with the lowest bid wherever possible, but in the evaluation process there are certain criteria that have to be followed. If one tries to, to use the term loosely, “pull a fast one” or something, they will get caught, so it cannot be done. They are legal documents and they have to be followed very closely. We do not want to end up in court or anything like that, on these various cases, so we are following the contract regulations very closely.

Mrs. Firth: Why is it that I do not feel reassured when the Minister says they would not do anything illegal.

Can the Minister tell me this - I want to pursue this business about regulations. After having been a Member of the House for over 10 years, I cannot remember quite how many Ministers of Government Services there have been, but they all seem to want to change the contract regulations - adjust the contract regulations and make amendments to them. What exactly is the Minister doing to the contract regulations, and why?

Hon. Mr. Devries: The Member obviously has not read the contract regulations, because the existing contract regulations very clearly indicate that, after they have been in effect for one year, a review would be done. That is what we are following through with.

Mrs. Firth: Can the Minister tell us what is wrong with them after a year, that they have to review them?

Some Hon. Member: (Inaudible)

Mrs. Firth: Can the Minister tell us what is wrong, that they have to be changed or reviewed? Instead of giving chippy answers about whether or not I have read the regulations and whether there needs to be a review or not, maybe he could just stand up and tell us what he is doing and why it is being done, other than because there was going to be a review?

Hon. Mr. Devries: They were very new regulations. When they were introduced it was made very clear that there was going to be a contract review committee. In the last year or so there have been several instances where there have been complaints about the awarding of certain contracts.

These have gone before the contract review committee, and they made recommendations where they felt that certain items of the existing contract regulations should be clarified. The recommended changes will be going through the consultation process to see if the contractors agree with it. We want them to be full participants in this review.

Mrs. Firth: The Minister is telling us that the regulations are not working and that there are several instances of complaints. Could he tell us what some of the complaints are?

Hon. Mr. Devries: Some of them are listed in the document that the Members will be getting tomorrow. Some of the recommended changes that were put forward by the contract review committee will be included in that document.

Most of the contract regulations changes are minor. My feeling is that there will never be perfect contract regulations. There will always be changes in economic circumstances that will lead to changes in their interpretation.

Mrs. Firth: I do not want to preempt the Minister’s announcement, but to ensure useful debate tonight, I would like to have some idea of what the Minister is talking about. It is fine for him to say there were several instances of complaints, and that they will clarify things and recommend some changes, and then finish it up by saying it was all very minor.

Perhaps he could list for us several instances of complaints and how they are being handled. This would give us some idea of how the regulations are working.

Hon. Mr. Devries: I would have to bring one of the documents into the House. They are in legalistic terms, and I cannot explain these off the top of my head. I am aware of the issues, but to explain the legal terms of the contract regulations in the House this evening would be quite difficult.

Mrs. Firth: I am prepared to have the Minister bring that information back after the break, but perhaps I could give the Minister some advice. I do not need to have all of the legal terms. I am trying to establish if the Minister has a grasp of what is going on in his department. I would expect him to explain to me in layman’s terms - I am not a lawyer, I do not need legal terms - the straight goods. I would like him to tell me what the problems and solutions are in layman’s terms.

I guess I will wait until after the break so the Minister can give us something in writing.

I want to ask the Minister about another policy that is sort of associated with contract regulations and bidding preference. It is the business incentive policy, which gives rebates to contractors for certain things. Can the Minister tell us if the government is going to continue with the business incentive policy?

Hon. Mr. Devries: Yes, it is in our budget for $535,000 for 1994-95.

Mrs. Firth: I see it in the budget and I thank the Minister for pointing that out to me. Is this policy going to be changed in connection with contracting regulations and with the whole concept of bid preferences? Are they going to be reviewing this policy, or is the government going to carry on with it forever?

Hon. Mr. Devries: I understand that there may be a few questions asked about it in the review, but we have no intention of changing the policy at this point.

Mrs. Firth: Obviously, the Minister and his government support this concept if they are not going to be changing the policy.

Does the $535,000 in the budget this year for expenditures come from general revenues?

Hon. Mr. Devries: Yes, and it is 1.2 percent of the total capital budget for the projects to which it applies. We cannot use this for the Shakwak project, because of the agreement with the United States, unless there is a specific agreement made with some other government or the Government of Canada.

Mrs. Firth: Of the allotment in the budget, is all of that for payment to contractors who apply for rebates under this policy?

Hon. Mr. Devries: Yes, it is 1.2 percent of the total project estimate. It is all in the capital so, yes, it is all refunded to the contractors.

Mrs. Firth: So none of it is used for administrative purposes? That is what I am getting at.

Hon. Mr. Devries: That is correct.

Mrs. Firth: Since the Minister has made the decision to carry on with this policy and not discontinue it, can he tell me if the effectiveness of the policy has been evaluated?

Hon. Mr. Devries: My understanding is that some work has been done on that. We certainly feel that it has been very effective in encouraging people. Even when a contract did go to an outside company, it has encouraged them to hire Yukon labour, so it definitely has been effective. It has also encouraged contractors to hire apprentices and purchase Yukon products.

Mrs. Firth: The Minister said that some work had been done on evaluating it. Can he tell me what work has been done on evaluating it?

Hon. Mr. Devries: We have determined that not much of the funding has gone toward the rebates on the purchase of goods. We have had discussions with various companies on why they were not hiring more apprentices, and things like that. I guess if the Member was asking if we have done a complete evaluation, we certainly have not. We are in the preliminary stages.

We discovered that the uptake was not very good and there were no promising results. We managed to reduce the paperwork that was necessary for people to make the application. Since then, we have discovered that it has been more effective. My understanding is that many people felt that the paperwork associated with the program was not worth the trouble.

Mrs. Firth: There is a lot there to ask questions about.

The Minister said that some work has been done on it. Perhaps not very much was done; they have only determined a couple of things. Perhaps they are just in the preliminary stages.

Has there been an evaluation done or are these just comments and observations that people have made? Has an evaluation been done of the business incentive policy?

Hon. Mr. Devries: It came into effect in 1990 and was implemented in stages. Evaluations of the first three years of applications - 1990-91, 1991-92 and 1992-93 - have been carried out to a certain extent. Our feeling is that it has been successful. However, if the Member wants me to stand here and tell her to what degree it has been successful, I would not be able to give her specifics or exact figures.

Mrs. Firth: I would just like the Minister to tell me whether or not an evaluation was done.

I have just repeated my previous question. He said that some work had been done in the preliminary stages and they had determined some things. Now he is saying it is “to a certain extent”. I just want to know if they have evaluated the program. If they have not, and it does not sound to me like they have, I think it is time they did evaluate the program.

Hon. Mr. Devries: Again, as I indicated, an evaluation was carried out initially and it was determined that basically the paperwork was very bureaucratic. Once we managed to get it into a more acceptable form - and this was in discussions with the construction people - we determined that the program is reasonably successful. My feeling is that the next question the Member will ask me is how many people do I feel it has encouraged contractors to hire. We do not have those figures, but we certainly do have figures that indicate that it has encouraged contractors to hire more Yukon people, but I do not have specific numbers.

Mrs. Firth: Perhaps I measure programs in other terms than by the number of people utilizing the programs or getting the rebate. Maybe I just evaluate programs differently from the Minister.

Perhaps we could take it one detail at a time. The Minister has said that they did some evaluation about the paperwork. The uptake was not good; they did not see promising results until they reduced the paperwork and now it is more effective. It used to be a lot of trouble; he said it was not worth the trouble for contractors to fill out all the paperwork. What exactly did they do to the paperwork to change it, to make it easier for contractors to apply?

Hon. Mr. Devries: These changes were done around the time when I took office, so to actually get into specifics of what they did to the paperwork, I do not know.

Mrs. Firth: Perhaps the Minister could find out so that when he stands up in the House and uses it as an excuse he can defend it - so that he knows something about it. I look forward to him bringing that back to me.

Since the change in the paperwork, did the Minister notice a substantial amount of money being claimed and being paid out to contractors as a result of it?

Hon. Mr. Devries: From the figures that I have here, I would say that the uptake has more that doubled in the last year and a half.

Mrs. Firth: I would like to ask the Minister this then: when he does the evaluation of this program, which I think he might want to do now - and I mean evaluating it to see whether we are getting our money’s worth with this program and whether it is really effective considering we are now paying out an increased amount of money in the form of rebates to contractors - can the Minister come back to the Legislature after the evaluation has been done and report as to whether or not we are getting our money’s worth for those increased costs? Is the Minister prepared to do that?

Hon. Mr. Devries: Yes, I will do that.

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

Some Hon. Members: Agreed.

Chair: We will take a brief recess at this time.


Chair: I will now call the Committee of the Whole to order. Is there further general debate?

Mr. Harding: I have some questions about the business incentive policy. The Minister has indicated that he seems to be quite supportive of the business incentive policy, although I do believe that it is somewhat inconsistent with the conservative philosophy. Could the Minister espouse a little bit of his feelings about that? Could he tell us how the business incentive policy fits into the Yukon Party’s four-year plan and their professed conservative philosophy?

Hon. Mr. Devries: We support Yukoners getting Yukon jobs. We want to ensure that everything possible is done to ensure that Yukoners are given opportunities to work on Yukon contracts.

Mr. Harding: Even if it is not consistent with the professed belief in the free trade system?

Hon. Mr. Devries: The free trade system gives us some of these options. It recognizes some of the unique circumstances in the north and gives us some flexibility. It is simply a trade agreement.

Mr. Harding: The Government Leader is going through some antics. He feels that the business incentive policy is consistent with free trade. I would like to engage in that debate with him when we get into - oh, we have unfortunately cleared all of his areas in both the supplementaries and the capital.

The Member for Riverdale South reminded me that we might have some opportunity to discuss that with them in the supplementaries. I will have to check the Hansard and see if that is the case. I look forward to the opportunity to debate that in greater detail with him, because I, for one, do not believe it is. It is a unique way around free trade, but I do not think it is ideologically or philosophically consistent with the principle of free trade.

I am not saying for one second that I do not support local procurement and the use of local labour, but I am wondering about the rhetorical statements made in the context of the philosophy that the Members opposite claim to espouse. Since the Minister mentioned once again that the Yukon government had some exemptions based on certain economic conditions, I feel duty bound to ask the Minister more about these conditions.

The Minister told me earlier that unemployment was one of the conditions that would allow an exemption from NAFTA or the free trade agreement. Would that mean that a province like Newfoundland, which has chronic high unemployment, would be exempt from provisions of the free trade agreement?

Hon. Mr. Devries: In the wording of contracts, yes.

Mr. Harding: It is hard to concentrate with the outrageous heckling from the Members opposite; it is disturbing my concentration; it is just terrible. I cannot get a word in edgewise.

I want to ask the Minister a little bit about bid preference. Earlier on, there was some debate from the Member for Riverdale South and the Member for McIntyre-Takhini about bid preference. The Minister said that there was not going to be bid preference, even though it is in the four-year plan and in the Government Services strategic plan. That is in light of statements made by the Government Leader and other MLAs of the Yukon Party, that they were well on their way to implementing all of the provisions of the Yukon Party plan in their newsletter and did not mention anything about parts of the plan that are no longer going to be applicable.

The Minister said that 88 percent of contracts went to Yukoners and therefore there was no need for a bid preference. What percentage of these bids are going to have to be reached before a bid preference kicks in?

Hon. Mr. Devries: That would be considered if we were to see a whole string of contracts going to outside contractors. It is not necessarily the case that we have a particular figure in place.

Mr. Harding: Why, then, does the strategic plan not say, “When we have a whole string of contracts going outside, we will give Yukon contractors preference”? Why does it not say that?

Hon. Mr. Devries: This was taken from the four-year plan, which is a generalized document. If the Member is suggesting that we have to make a bunch of regulations pertaining to these strategies, then perhaps we will have to do that. That is not the plan at this point.

Some Hon. Member: (Inaudible)

Mr. Harding: The Member for Riverdale North is shouting that it is a silly question. I have a document that sets out the priorities of the Government Services department - government goals and objectives. One point says, “Develop fair and realistic contract regulations which give Yukon contractors a preference in bidding on Yukon contracts.” Right below that it says, “Reintroduce the principle that the low bidder will be awarded government contracts”. The Member from Riverdale North shouts out that it is a silly question I am asking about when the bid preference kicks in. When there are such totally inconsistent positions contained in the government’s strategic plan, I have to ask questions about the direction of the government. It is not a silly question. This may be a silly document. The Yukon Party’s promises in the four-year plan may be silly statements, but it is not a silly question. There is a big difference there.

In the interest of moving this debate along - I know the Member for Riverdale North is interested in doing that - I will refrain from engaging in more general debate. I have a lot more questions, but there will be ample opportunity in the supplementaries to go through Hansard and come back with more questions when we have gotten things clarified, and where we have identified inconsistencies. I, as well as my researchers, will be looking for those inconsistencies so that we can ask some more questions in the supplementaries. Unless there is someone else in Opposition who has some questions in general debate, I am prepared to move to the lines.

On Corporate Services

Mr. Harding: Is the Minister going to give an explanation for this?

Hon. Mr. Devries: There is the business incentive policy. I do not believe there is much that has not been said about it.

There are office facilities and equipment for the corporate services branch for $68,000. The office facilities and equipment and furniture replacement comes in at $17,000. Workstations are $35,000, which includes three replacement printers, one new printer, one replacement workstation and one new workstation. Systems development amounts to $15,000. The total is $68,000.

Mr. McDonald: In the systems development, can the Minister explain what the project is and whether or not there are long-term costs associated with this particular project. Is this the total cost of the systems work that is being proposed? What systems work is being proposed?

Hon. Mr. Devries: The $15,000 is government-wide. It is just small miscellaneous projects to be done here and there. I do not have a dollar-by-dollar breakdown. It just says “miscellaneous” in my book.

Mr. McDonald: It does not say anything in my book. I was under the impression that the systems projects had been decentralized to the line departments. What is the Minister referring to when he says that the systems work is for government-wide purposes?

Hon. Mr. Devries: As this is the Department of Government Services, it would be for the system between the departments and the mainframe. That is all Government Services’ responsibility.

Mr. McDonald: Can the Minister come back with some explanation? He may not know it now but I do not understand a single thing he said about the $15,000. If he just wants to explain what the system’s work is, I would appreciate it. He can come back at some future time if he wishes.

Hon. Mr. Devries: Agreed.

Mr. Cable: On a point of clarification, I do not think we cleared the business under policy yet, did we, because I do have some questions on that.

Chair: We are on corporate services.

Mr. Cable: Corporate services - general debate, I assume?

Let me ask some questions on the business incentive policy anyway.

The Member for Riverdale South asked some questions on the effectiveness of this program. The answers that came across this way were not totally convincing. Is there anything that the Minister can tell us that would increase our confidence that this program should be continued? Have there been any checks whatsoever on the numbers of jobs or the amount of material that is purchased locally?

Hon. Mr. Devries: I believe I mentioned it earlier. There has been an ongoing evaluation of the process. There was one done in 1990-91, when it was initiated by the former administration. At that time, the uptake was kind of low so an evaluation was done. It was determined that the paperwork was too cumbersome. Presently, one of the evaluations that is being done is to determine how successfully it pertains to the purchase of Yukon products, because the uptake on that has been very, very low and we are just trying to determine whether we should continue with it or whether we have to change it, or something like that. The evaluations indicate that, as far as hiring Yukon personnel and apprentices is concerned, it has been very successful.

Mr. Cable: I did not get that. Did the Minister say it has been successful?

Hon. Mr. Devries: From the information we have up to this point, it is showing that it is successful.

Mr. Cable: How would the Minister’s department determine whether a job was created as a result of the business incentive policy or simply as a result of people being available here in the Yukon and most economically hired here?

Hon. Mr. Devries: The department has had discussions with various contractors and they have taken into consideration whether they should bring an operator in from B.C. or hire a local operator. To that extent it has proven to be successful. It would be very difficult to determine actual numbers on how successful it is. We have determined that we are getting value for our dollar.

Mr. Cable: The Minister indicated that he has some reservations about whether it is creating a local materials supply business. Did I hear him correctly on that? Is he less convinced that the policy is working in relation to materials than in relation to jobs?

Hon. Mr. Devries: The success of the portion of the business incentive policy pertaining to the promotion of materials to replace imported materials is questionable. It is partly because the forest industry has been very flat. The materials do not seem to be available.

On Business Incentive Policy

Business Incentive Policy in the amount of $535,000 agreed to

On Office Facilities and Equipment

Office Facilities and Equipment in the amount of $68,000 agreed to

Corporate Services in the amount of $603,000 agreed to

On Information Systems

Hon. Mr. Devries: The central facility will cost $753,000; communications network, $169,000; corporate data administration, $300,000; corporate systems development, $368,000; research and specialized equipment, $76,000; training facilities and equipment, $70,000; record services, $90,000; and department impacts, $237,000.

Mr. Harding: I see the note ont page 61. Is that the reason for the 67 percent increase in this line item? What is the major reason for that change?

Hon. Mr. Devries: I believe there used to be a line item that said computers and system development. That is no longer there and that is what that note is referring to. I believe that is what it is.

Mr. Harding: So, there have been no major new purchases and the line has increased by 67 percent on the basis of almost an accounting change - is that correct?

Hon. Mr. Devries: Not necessarily. There are capital upgrades that have to be made to the mainframe and there are several initiatives under way on development projects, and that is what it is related to.

Mr. Harding: It is a fairly extensive vote. Has the Minister done a lot of scrutinizing of the requests? Is he absolutely confident that what is being asked for is needed?

Hon. Mr. Devries: I could try to provide further detail. For the central facility, the 1994-95 estimate represents the purchase of additional disc capacity, ASA400 upgrades and software for IBM 9121 mainframe computer and the capital infrastructure required by the information services branch to provide services to the government. The requirements indicate that a further upgrade to disc drives and communications controllers is required to accommodate user growth and to avoid technical obsolescence.

I believe that the mainframe has been operating at about 90 percent capacity. I do not know if any of the Members have noticed, but they will find when they come to work first thing in the morning and turn the computer on one can get information very quickly. If one turns on the computer at 10:00 a.m. one will find that there is quite a delay, because the mainframe is operating over capacity.

Mrs. Firth: I would like to ask the Minister a couple of questions about this. In the last three years, there has been over $5 million spent on information systems. Can the Minister tell us how long this is going to go on? How long are we going to continue spending millions of dollars on this program?

Hon. Mr. Devries: As long as information systems are required, it will continue. There will be ups and downs, but it is a reality of today.

Mrs. Firth: Is it not possible to defer spending in this area in a time of restraint and pick it up when government revenues are better? We are talking about a service that is government serving government, not the public.

Hon. Mr. Devries: As far as the central facility goes, we are playing catch up this year. It was deferred last year. We are at the point now where the mainframe could crash. It cannot accept any further information without an additional disc drive.

Mrs. Firth: I would like to ask the Minister this: the population of the Yukon is not expanding in leaps and bounds. There is some question about that, of course. Some Members on this side are saying it is shrinking. Others, on the other side, are saying that the population has grown by five percent.

This program has grown by 100 percent. This gives me a great deal of concern. The government keeps saying that we have no money and that we are in tight fiscal times. There is no money to build schools or provide services. Everyone is being asked to cut back in the departments; however, we continue to spend millions of dollars on this information system.

The Minister said they are playing catchup this year. What is the long-term plan for this? Just how much is the government prepared to spend in this area over the term of its office, which would ordinarily be four years?

I will give them the benefit of the doubt and say they should pretend they are going to be here for four years. What amount of money is the government prepared to spend in this through their four-year plan?

Hon. Mr. Ostashek: If the Member opposite recalls a debate the Member for McIntyre-Takhini and I had the other day, I said that this whole computer area of government has got me baffled. If the Member over there has some good ideas, I would like to hear them.

I suggested I might even spend $150,000 to $200,000 to have an analysis of it and she said not to do that, because they would just say that they need more computers. Unless we can get this intelligent information, how can we deal with it? I am not a computer nut who knows everything about computers. I do not think anybody in this House is, but, like the Member opposite, I am getting very concerned about it.

Every time I go out and talk to different people, I try to pick up names and phone numbers of experts I can call. At some point, I know I am going to hire somebody to come in here and do a complete analysis of our computer system, so that at least I can feel comfortable when my Ministers stand up in this House and try to defend these purchases. Right now, we are having difficulty doing that.

Mrs. Firth: The Government Leader was away when his Minister of Government Services told the House that he was the computer expert on that side.

I can see the Government Leader is just as concerned as we are. He said he was the computer expert on that side of the House. He had had a course and was the person most familiar with computers.

Hon. Mr. Devries: I had indicated that I did know something about them, but I certainly did not say that I was an expert. I have a certain understanding of the repair of computers and I have a little bit of knowledge on programming, but I can assure the Members that I am not an expert.

Mrs. Firth: I think that the Member was saying in the context of his other colleagues that he was the expert, because he had more education and knowledge about it than the rest of his colleagues did.

Nevertheless, I would like to ask the Government Leader if he receives an evaluation or interim report with respect to this particular program, and when it comes to budget time, what kind of information is presented to justify this expenditure? Is there any kind of analysis done at that time?

Hon. Mr. Devries: The experts can prove beyond a doubt that the mainframe is operating at roughly 90 percent capacity, and I believe it is as high as 108 percent. When that type of activity begins taking place, it creates all kinds of warning bells, because if the mainframe system goes down due to being over utilized, any time the Members ask for information in this House everything would come to a standstill and everything would have to be done manually. Much of that information is now stored on computer tapes in the basement, and another building in town for security purposes.

Mr. Harding: I know that the previous government spent quite a bit on computers as well, but we are talking about millions and millions of dollars here, in a time of supposed fiscal restraint as declared by the government - even though our revenues are higher that they have ever been. The thing that is bothering me is this: what difference does it make to the public in the end, whether our profs take a few seconds more to be delivered - they are there instantaneously now. What real difference does that make? What justifies the expenditure? What is the cost equation here?

Hon. Mr. Devries: If the Member looks at the information systems page he will see that in 1992-93 there was a spending of $2,170,000. I believe it was the year prior to that when they purchased the mainframe, and the expenditure was higher yet. As I mentioned earlier, last year some of this was deferred. I am assured by our people that this cannot continue. We also have to recognize that during the past year, Health and Social Services has gone on line with several different billing systems, and that all goes through the central processing facility. When a computer purchase is made, all of this is taken into consideration - how it affects the mainframe. When the forestry transfer takes place, we will be getting additional monies from the federal government to do an even further upgrade to the mainframe, because there are going to be another 30 or 40 computers hooked up to it, which means that we probably have to seek additional disk capacity next year.

Mr. Harding: What is the cost-benefit analysis? The Minister said he has been assured by his department that it cannot continue. I think that the Minister should be assuring his department it cannot continue. We are spending millions of dollars. I am not saying that the previous government did not spend millions of dollars, but it seems to me that it just keeps going on and on.

The Minister is now telling us that we will soon have a forestry transfer that may mean spending even more money on computers.

The Minister talked about profs and how in the morning they are immediate and at 10 a.m. they take five seconds. How does it help my constituents?

Hon. Mr. Devries: This is an information age. We are all very conscious of that. Any business in town, even grocery stores, is hooked up to a central mainframe. Department stores might have their own central systems and grocery stores might have a central system somewhere in Alberta. In some southern areas, people are doing away with mainframes, although this is proving to be not very successful. Often, a central processing facility is in a city and takes on a contract to gather the information. At this point, we cannot do that because the telephone lines are not available, so we have to maintain this system.

When one of the Member’s constituents comes to Whitehorse and wants some information from the government, it is often not immediately available at the information desk. When the constituent goes to the department, usually that information can be found in the mainframe.

Mr. Harding: Mr. Chair, I move that you report progress on Bill No. 12.

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 considered Bill No. 103, entitled An Act to Amend the Interpretation Act and directed me to report it without amendment. Further, Committee of the Whole has considered Bill No. 38, entitled Yukon Family Services Association Rent Guarantee Act, and Bill No. 12, entitled First Appropriation Act, 1994-95, 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 Government House Leader that the House do now adjourn.

Motion agreed to

Speaker: This House stands adjourned to 1:30 p.m. Thursday.

The House adjourned at 9:27 p.m.

The following Legislative Returns were tabled December 22, 1993:


Letter of Understanding between the Department of Education, Government of Yukon, and Yukon College, singed July, 1993 (Phillips)

Oral, Hansard, p. 1755


Curragh employees wage claims: status of (Phelps)

Discussion, Hansard, p. 1767 and 1766


Municipal Engineering staff development initiative: three day seminar on “Concurrent Engineering Project Management” (Fisher)

Discussion, Hansard, p. 1693