Whitehorse, Yukon

Thursday, April 21, 1994 - 1:30 p.m.

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I will now call the House to order. We will proceed at this time with silent Prayers.




We will proceed at this time with the Order Paper.

Introduction of Visitors.

Are there any Returns or Documents for tabling?


Hon. Mr. Phelps:

I have for tabling two legislative returns.

Mr. Penikett:

I have for tabling a transcript, approved by Dale Drown, of a CBC interview with the Deputy Minister of Finance, in which he says, "The territory is, for all practicable purposes, debt free."


Are there any Reports of Committees?

Are there any Petitions?

Introduction of Bills.


Bill No. 15: Introduction and First Reading

Hon. Mr. Ostashek:

I move that Bill No. 15, entitled Second Appropriation Act, 1994-95, be now introduced and read a first time.


It has been moved by the Hon. Government Leader that Bill No. 15, entitled Second Appropriation Act, 1994-95, be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 15 agreed to

Bill No. 14: Introduction and First Reading

Hon. Mr. Ostashek:

I move that Bill No. 14, entitled Interim Supply Appropriation Act, 1994-95, be now introduced and read a first time.


It has been moved by the Hon. Government Leader that Bill No. 14, entitled Interim Supply Appropriation Act, 1994-95, be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 14 agreed to

Bill No. 17: Introduction and First Reading

Hon. Mr. Ostashek:

I move that Bill No. 17, entitled Interim Supply Appropriation Act, 1994-95 (No. 2), be now introduced and read a first time.


It has been moved by the Hon. Government Leader that Bill No. 17, entitled Interim Supply Appropriation Act, 1994-95 (No. 2), be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 17 agreed to


Are there any further Bills for introduction?

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

Are there any Notices of Motion?

Are there any Statements by Ministers?


Non-Utility Generation Strategy

Hon. Mr. Phelps:

The Government of Yukon has approved a new non-utility generation strategy that will allow unregulated private electricity producers to sell power to single industrial customers or to franchised utilities. This strategy will create an open, competitive market for commercial-scale electrical generation and will present the Yukon business community with an opportunity to invest in the development of electrical infrastructure in the territory.

The underlying intent of the strategy is fairly simple. If a private producer can generate and sell electricity more cheaply than the Yukon Energy Corporation can with its own plant, then the utility is authorized to negotiate a purchase agreement. The strategy does not indicate a preference of one energy source over another. It does not include incentives to encourage private investment in non-utility generation. And it does not determine how prices will be set. Those matters will be left to the discretion of the Energy Corporation under the provision that purchase agreements with private producers must show cost benefits to Yukon ratepayers.

Cabinet has given its direction on non-utility generation to the Yukon Energy Corporation in the form of an order-in-council. Direction to the Yukon Utilities Board to allow the cost of purchase agreements with non-utility generators to be collected by the utilities through rates will be included in a revised rate design order-in-council which will replace OIC 1991/62.

Government will also introduce amendments to the Public Utilities Act to allow for non-utility generation. An amendment will be required to change the definition of a regulated utility so that independent producers can operate on a non-regulated basis and sell power to franchised utilities or single industrial customers. We anticipate that this amendment will be brought before the Legislature during the fall sitting.

This strategy is good news for mining companies with projects that are not close to the southern Yukon grid. In the past, mining developers were able to purchase power from independent producers as long as the generating plant could be set up within the mineral claim area. Now it will be possible for independent producers to set up plants at other locations and transmit to the mining site. This will increase planning options and will also increase the viability of using a range of energy sources, including microhydro, wind diesel hybrid, high efficiency coal as well as conventional diesel thermal generation.

It is anticipated that the Energy Corporation's interest in non-utility generation will be focused on its potential to displace diesel generation in off-grid communities. Due to the closure of the Faro mine, we currently have a seasonal hydro surplus and will not require additional generation on the southern Yukon grid until the industrial load returns. In all diesel communities, such as Dawson, Watson Lake, Pelly Crossing, Beaver Creek, Destruction Bay and Old Crow, there is still a great need for a cleaner, quieter and cheaper source of electrical generation. It is our hope that the Yukon's private sector will rise to the challenge presented by this new market opportunity.

Thank you.

Mr. Penikett:

I am pleased to respond to the ministerial statement on behalf of the Official Opposition.

We are glad to see the government recognizing the importance and potential of alternative energy sources, and we welcome the news that the government is taking action that it hopes will have the effect of reducing costs to some Yukon ratepayers. We would be particularly pleased if this announcement led to a new emphasis on non-consumptive and non-polluting sources of power.

Although the Minister has referred to hybrid systems such as combined wind and diesel generation, he has not made any specific reference to cleaner hybrids, such as wind and solar, which may have potential in some areas of the Yukon in years to come.

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While praising the announcement, I want to go on record though with a number of concerns about matters that are not addressed in this statement - and I concede immediately that they should not be, because it is a short statement - but they are matters we would like to debate further as the development of this program goes ahead.

We note that the Yukon Energy Corporation will be developing technical guidelines. Not mentioned in the ministerial statement is any process to deal with environmental concerns that may need to be addressed.

If the NUGs hook into the grids, we are interested in the question of how liability will be determined in the question of damage to publicly owned transmission facilities. I will explain the reason for that concern in a minute. We would like to know what guidelines, if any, there may be about the percentage of independent power production that can come from what people concerned about the environment call "dirty" sources of power, such as diesel, or coal, versus "clean" sources, such as wind - a matter we know the Liberal Leader is greatly interested in.

There is an issue in other places about who monitors safety standards when an independent power producer is providing power directly to an independent industrial consumer, as this strategy contemplates.

A central point in the policy is that these power producers will be unregulated. I understand, in some jurisdictions where legislatures have chosen to require the utilities to buy power from such sources, there have been significant problems with the utilities; one, being compelled to purchase power they do not need and, two, serious problems for the utility when they have to purchase, or are taking power, from potentially unreliable, or intermittent, sources. I have previously discussed this issue with the Liberal Leader, who has indicated that some of these things can be dealt with in the contracts between the utility and the supplier, but I think these are also matters of public policy.

The government is taking a free-market approach to what has long been the domain of public utilities, and I would be curious to know if they have any research, or background studies, that have indicated a rationale for this direction, or if it is simply a politically driven policy. I know it is something we were looking at during our time in government.

I also want to know how we will guarantee the savings will be passed on to ratepayers. As the Minister indicated a moment ago, he will be proceeding through OICs to allow the Yukon Energy Corporation to negotiate purchase agreements with NUGs and to collect the cost of those agreements through rates, although we are not clear about the role the Public Utilities Board will have in this process, if any. At a later date, I may want to ask some questions about that.

I also wonder whether there will be even a brief period of public consultation about the amendments to the Public Utilities Act before they are brought to the House.

Mr. Cable:

I, too, would like to congratulate the Minister and the government for moving one element of the energy policy forward. I am particularly interested in the aspect of the statement that deals with the clearing of the way for competition for mining properties. It will be interesting to see where that initiative goes in the context of privatization.

Having said that, my preference would have been that the non-utility generation policy had been developed as part of an overall energy policy so that the various elements of overall energy policy could have been integrated - the cost and environmental objectives and the flow out of the Yukon cash objectives.

The Minister has touched very briefly, in the last paragraph of the statement, on the environmental concerns when he spoke about the diesel units in certain areas in the Yukon. It will be interesting to see how the order-in-council deals with the encouragement of what I think is an environmental objective in those small centres.

One reservation that I have is that the policy appears on the surface - and we will know more when the order-in-council is issued - to be driven in part by the utilities, who are hardly disinterested parties, rather than by the Department of Economic Development. There appears to be a fair amount of discretion on the part of the utilities.

Perhaps after the order-in-council is issued, we will get a clearer view of who is actually in the driver's seat on these contracts between the non-utility generators and the utilities.

It is hoped that the order-in-council will give a clear direction on avoided cost, because there are many different views about what is an avoided cost. That allows the utilities much discretion, unless that discretion is limited. This will have a bearing on whether non-utility generators will be encouraged and whether there will be competition in the generation of electricity.

It is hoped that the order-in-council will also set out the rights of the non-utility generators to contest the decisions of utilities on the hook-ups that are being proposed, so that utility companies cannot simply reject proposals out of hand, without redress.

Hon. Mr. Phelps:

I thank the Members opposite for their comments and the constructive issues that they raise. In response, very briefly, I think that our primary goal is really to start reducing the cost of electricity to the ratepayers. Thus we really are looking at situations where non-utility companies or individuals can provide power at a more efficient cost to consumers than can the utility. We feel that the Energy Corporation will now be able to investigate a range of options for the smaller communities, one of which I think is a very realistic one, particularly in view of what seems to be some successful testing going on up on Haeckel Hill, with some kind of wind diesel generation for small communities.

The idea of solar generation is interesting, and we will be able to look into that, but the primary issue for us at this point in time, given the history of what has happened recently, is to try to bring costs down.

With regard to the other issues raised, certainly some of these things will be addressed in the OICs and some of them will be addressed by policies that we expect the Yukon Energy Corporation to develop on its own. Some of the other issues are certainly worthy of some debate.

I think the one thing that we have to be clear on, though, is that right now perhaps the overriding concern with regard to any kind of substantial production of power is the whole issue surrounding risk analysis, which will have to be done very carefully by the utility company. In other words, in negotiating a contract for the generation of power from, say, a coal thermal plant or any kind of long-term power project, we have to be darn sure that the demand will be there, and that is always the real tricky issue, particularly when one is looking at perhaps one new, large industrial user coming on, such as was the mine at Faro, or such as might be if Casino were to go ahead. That kind of risk analysis is going to be really critical to success in the future, given the really small number of customers and the impact that one major industrial user can have on rates.

Thank you.


This then brings us to Question Period.


Question re: Energy policy

Mr. McDonald:

Two days ago, the Minister of Economic

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Development gave me a rather crafty response to my question about whether all the fundamental elements of the industrial support policy were in the document that they made public. The one-megawatt restriction for industrial consumers who want publicly funded electricity was in the policy the Minister protested. In fact, mention of a one-megawatt consumer was mentioned in the narrative and not in the policy.

However, if we take the narrative as a reflection of policy, can we then assume that the Curragh electricity deal, mentioned positively in the narrative, is the kind of electrical deal the government wants to promote?

Hon. Mr. Ostashek:

We have spoken before - and I have spoken in a public forum - about possibly entering into a plan where a company, such as whoever will be operating the Faro mine, could level out the cost of energy over the life of a project. The government is prepared to share some risk on that, subject to the approval of the Legislature.

That would be one of the options that would be available to us, with the broad, flexible policy that we are trying to develop - that we would be able to, say, tie the price of energy to the price of the commodity being produced - in Faro's case, it would be to the price of zinc and lead. When zinc and lead prices were low, the power rates would be low, and when the prices go up, we might recover more than the going rate of power at that time to recover the money we provided as subsidies when prices were low. That is one option that would be available to us.

Mr. McDonald:

Let me ask the question another way. I will focus in on it a bit. The policy narrative states that Curragh was provided with transmission and power supply at a reasonable price during its operation. That is what the policy narrative states. It is a quote.

The Minister responsible for the Yukon Energy Corporation stated about this time last year that if a couple of new mines were given the same broad and generous subsidies by ratepayers in the Yukon, it would pretty well have broken everybody in the Yukon.

Is the government's new policy designed to break the Yukon or was the Minister responsible for the Yukon Energy Corporation wrong?

Hon. Mr. Ostashek:

Neither one. First of all, this policy will take whatever help is being given to industrial users off the backs of the ratepayers in the Yukon, and whatever is going to be done will be voted through this Legislature so that everybody will know what the cost is going to be, what the risk is going to be to the taxpayers of the Yukon.

Mr. McDonald:

The policy cannot have provided Curragh with the reasonable rates and at the same time have broken the Yukon, according to two statements of government policy by two different Ministers.

The policy says a balance will be struck among the interests of taxpayers, ratepayers and industrial consumers - something the Minister has just indicated - but it has missed one critical element. It does not say how. Can the Minister tell us how that might be achieved?

Hon. Mr. Ostashek:

As we said in other parts of this document, I believe, and I have said publicly, it will depend on the economic benefits to the territory as to how the sharing will take place.

The Members opposite are always saying that we should do something for economic development in the territory. With this policy, we have the ability to do that. We have the ability to share in the upfront costs and the infrastructure costs. That will be negotiated with each individual user. As we said, it has broad principles as to how we can negotiate with individual users.

Question re: Teacher contract negotiations

Ms. Moorcroft:

At the request of the Yukon Teachers Association, the government and the teachers are now bargaining. Let me assure the Minister that this has nothing to do with the media blackout, but it has everything to do with the reason for going to the table in the first place, long before the media blackout was announced.

Will the Minister responsible for the Public Service Commission please tell the House how he defines free collective bargaining?

Hon. Mr. Nordling:

As the Member for Mount Lorne has said, there is a media blackout. I am not going to get into a discussion with the Member for Mount Lorne about the process of collective bargaining, or what is going on. It will have an affect on the teachers, and it will have an affect on our negotiators. They have asked for a media blackout and I would hope that the Members opposite would respect that.

Ms. Moorcroft:

It seems to me the Minister does not understand the fundamental principle of collective bargaining when he cannot even articulate it. Asking him to explain the principle of collective bargaining is not the same thing as participating in negotiations.

Last Monday, the new independent Yukon Party Minister responsible for the Public Service Commission stated, "We do not feel we can achieve the rollbacks within the collective bargaining process." Then yesterday, the government announced that collective bargaining will commence. When was this decision made?

Hon. Mr. Nordling:

I think the Member should look in Hansard tomorrow and she will see my answer to her previous question, and that stands.

Ms. Moorcroft:

Can the Minister tell the House when he expects to make a decision about whether the government will negotiate with the Yukon Employees Union?

Hon. Mr. Nordling:


Question re: Wolf control program

Mr. Cable:

I have some questions for the Minister of Renewable Resources about wolf control. This follows the government's release yesterday about the Aishihik wolf control program.

Since the government has now adopted the Yukon wolf management plan as official government policy, would the Minister update the House on implementation of the plan, since the information provided yesterday only addresses, generally, one aspect of the plan - wolf control.

In particular, the management plan calls upon the government to evaluate the potential for using non-lethal methods of wolf control. What kind of research is the government presently conducting in this regard?

Hon. Mr. Brewster:

We conducted research in two areas. In the Carcross area, we made arrangements with trappers to try to trap the wolves, which was completely unsuccessful and nothing happened. In the Aishihik area, we also had trappers trying to trap the wolves. The government people were able to capture six wolves with traps and the independent trappers were able to capture one wolf. I am not completely satisfied with those results, and if we look at doing this for another year, we may have to consider bringing someone to the territory who knows how to trap wolves, because we certainly have not been very successful when compared to the numbers trapped in Alaska.

Mr. Cable:

Section 7 of the wolf management plan contains a number of recommendations about moose and caribou management. Section 7(4) in particular calls for an increase in research, monitoring and the collection of harvest data respecting moose and caribou populations generally in the territory.

Will the Minister undertake to provide the House with a

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ministerial statement that would update Members and all Yukoners on the status of the section 7 recommendations?

Hon. Mr. Brewster:

Yes, I will.

Mr. Cable:

I hope that the ministerial statement will be provided in the very near future.

Section 9(3)(4) of the wolf management plan says, "If calf survival of the target ungulate species in the area has not increased significantly - at least doubled during the first two years of the wolf reduction - the program should be suspended and the situation re-evaluated."

This is the second year of the Aishihik wolf control program. Does the Minister intend to re-evaluate the whole Aishihik program according to the management plan?

Hon. Mr. Brewster:

Yes, we will be re-evaluating the program, but I must point out that the mothers have not had their little babies yet. Those calves will not be born until June or July so we will not be able to determine the survival rates until some time in the fall.

Question re: Wolf control program

Mr. Harding:

Now that the Minister is all warmed up, I have some questions for him pertaining to the wolf kill and the cost associated with it.

In 1992-93, the Minister told me that YTG was going to take 150 wolves in their program that year. They ended up taking 54. This year, 32 wolves were taken, all of this at a reported cost of roughly $800,000. This is a cost per wolf of over $9,000 in the last two years.

Does the Minister feel this is fiscally sound wildlife management?

Hon. Mr. Brewster:

They keep hedging all the time on this one project. I must point out that, in that situation, we are also including the surveys in the Mayo and Wolf Lake area to compare these with the Aishihik area, where the wolves are being taken. We also help the Kluane National Park radio-collar wolves. We have kept track of all these things, as well as counting the moose twice this year. All of this comes under this program.

Almost every move we make counting game works back into this. The Member seems to want to charge everything to the one program.

Mr. Harding:

The Minister has a convenient habit of playing with figures when it comes to accounting for this kill. Last year's kill cost taxpayers $600,000. That was $150,000 over budget. Just this January, the Minister told me he expected a 1993-94 cost of $289,000 for the 1993-94 kill. That is in Hansard.

However, yesterday, a miraculous cost accounting of $194,000 was tabled in the Legislature, which leaves out a lot of costs. Why did the Minister table this misleading and incomplete accounting of the wolf kill costs?

Hon. Mr. Brewster:

The Member must have a different bookkeeper than I do, because those are the figures they gave me. We may be a little over before it is finished, but those are the figures, and they will be very close.

Mr. Harding:

Just to refresh the Minister's memory, on January 27, 1994, the Minister said, "Our expenditures in 1992-93 were $600,000. In 1993-94, we are estimating $250,000, but we now think it may go to $289,000."

Is the Minister not the least bit concerned with the cost overruns, the cost per wolf, the fact that fewer wolves were in the area to begin with, and that scientific data to support the caribou recovery is still absent, after already spending $800,000 of taxpayers' money?

Hon. Mr. Brewster:

When we started this program, we said it would take at least two years, maybe longer, before we could confirm whether this was right or not. We have done our best to organize this thing. It takes time. We assured the Member it would be at least two years. The two years is not up until the spring calves are born. We continually looked at the wolf situation. That is not what we are really trying to do.

I would be quite happy if there were no wolves in the area. Then I would not have to go through this. We are looking at the number of calves we can bring back. The moose have already increased by eight percent. The mortality rate of the caribou has dropped from 44 percent to 10 percent. The caribou from the Kluane-Burwash area, which were in an area not controlled by us last year, came into our area this year. Out of the 12 collared caribou, we have not lost one.

Question re: Game farming

Mr. Harding:

I think it is obvious to Yukoners that the Minister would be happy if there were no wolves in the area. However, I want to move on to another subject: the issue of game farming and the new game farming policies and regulations.

The Yukon Fish and Wildlife Management Board, the Yukon Fish and Game Association, the Dawson First Nation and the Council for Yukon Indians have all raised serious concerns about YTG's new game farming policy. So far, I have only the game farmers in favour of it. People have said that the consultation took a pro-game farming approach and did not look at whether or not game farming was wanted in the territory. Is the Minister going to listen to the pleas of these people for further in-depth review on this issue - the whole issue?

Hon. Mr. Brewster:

The game regulations are now released for review. We certainly will listen to any input.

Mr. Harding:

The Minister has announced the policy as adopted. Does the Minister not understand? He is totally missing the point. Does the Minister not realize that the consultation was held from a pro-game farming approach right from the beginning, and that Yukoners never had the opportunity to discuss whether or not they wanted the industry?

Why is the Minister just listening to one side of the issue and not looking at the whole issue, in the face of all these serious concerns raised by many Yukoners over the past week?

Hon. Mr. Brewster:

I find this rather funny. The fact is that the former government started this process. They established interim laws that we were to follow until we got the regulations made. It was begun by them two years before we were even in government.

Mr. Harding:

I do not find anything funny about it. When the industry started in the territory and problems arose across the country, a moratorium was placed on it in order to further evaluate it. That is what was done; it was done for a reason.

The Yukon Council on the Economy and the Environment has a mandate to look at this type of issue. This exercise would be of great benefit to Yukoners, certainly more so than the recent gambling exercise with which they were charged.

Will the Minister reinstate the moratorium and have the Yukon Council on the Economy and the Environment, under the provisions of the Environment Act, look at the entire issue from a neutral perspective?

Hon. Mr. Brewster:


Question re: Environment Act

Mr. Harding:

I would like to move on to another issue. I am just surveying the Minister today on a few issues.

I would like to ask the Minister about the Environment Act. He has recently stated that he would like to gut that particular piece of legislation.

The Minister has stated that he would like to see more balance between the economy and the environment - a frightening

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prospect coming from this government, given its dismal economic record. Does this statement mean that this government is equally bent on destroying the environment as it was on destroying our economy?

Hon. Mr. Brewster:

I would like to see the statement where I said I was going to gut the Environment Act.

Mr. Harding:

The Minister was on the radio saying that he wanted to make some changes to the Environment Act, in secret. He was not even going to bring it to a full public consultative review because he and the boys around the Cabinet table had a few changes they wanted to make that they thought were best for Yukoners. That is contrary to his position last March, in the Legislature, where he spoke in great favour of the provisions of the act.

So, can I ask the Minister, since he voted for it when he was in Opposition and stated support for it just last year, what circumstances have changed in the last couple of years to cause this sudden flip-flop on something he previously supported?

Hon. Mr. Brewster:

I wish he would quit putting words in my mouth. I have a bad enough time speaking without him saying things that I did not say.

There are a number of things that seem to be wrong with it. Some have been brought to us by private people, and the department has also found some problems that they have to work with the Department of Justice on. We are simply looking at these things to try to bring in a better act. If we can improve it, why should we not?

Mr. Harding:

I know the Minister does not like it when I read his comments in Hansard back to him, but I will do it anyway.

The Minister said, on March 18, 1993, "I would like to point out to the Member for Faro that we voted for the Environment Act when we were in Opposition". That is pretty clear in terms of his support for it. Specifically - I do not want to hear a bunch of gobbledegook - what problems have surfaced since he made that statement last year that he wants to now gut the Environment Act?

Hon. Mr. Brewster:

I never said, at any time, that I was going to gut or scrap the Environment Act.

Question re: Environment Act

Mr. Harding:

It is word game day again. Yesterday it was "look at" and "study"; now it is "scrap" and "gut".

He said he is going to make some changes, and the way I have seen this government make legislation, that means one of two things: they are either going to scrap it or gut it. So, I am saying that to the Minister.

Can he tell me, specifically, what changes he wants to make to the Environment Act with the Cabinet, in secrecy?

Hon. Mr. Brewster:

I have not even brought any into Cabinet, period. The department is looking at a few things that bother them and they are now talking with the justice department.

Mr. Harding:

We know that one special interest group asked for a review of the Environment Act - the Whitehorse Chamber of Commerce. Have lots of other Yukoners asked to have the act reviewed, or is the Minister just marching to the chamber's drum?

Hon. Mr. Brewster:

I do not march to anybody's drum and I might point out at this time that I have never been to a Whitehorse Chamber of Commerce meeting. I do not know most of them - I see the Member for Riverdale South has to get her little word in her - I know them to meet them as gentlemen on the street but I resent the fact that the Member thinks I would go to any lobby group. I will match my credibility against any individual here at trying to be honest and fair.

Mr. Harding:

I caution the Minister, given that government's record for honesty, to not be too sanctimonious in that area where I ask him questions about where lobbies are coming from. We know the type of influence the chamber has had over this bunch opposite.

He also said on the radio that he was not going to undertake a public review in the context of what the chamber wanted specifically. He and the boys had a few changes they wanted to make to the Environment Act and they really did not feel there was any need for public consultation.

Can he tell us who they are talking to, if they are not talking to the chamber who is requesting this, and what changes they are going to make to the Environment Act that they are not going to tell anybody about?

Hon. Mr. Brewster:

I have already said that. The department is looking at some areas where they have some problems. They are now talking with the justice department. When they have come up with an answer, I will tell the Members. I am not telling them all the business that goes on in the department.

Question re: Industrial support policy

Mrs. Firth:

I have kind of a friendly question here for the Minister responsible for Economic Development. It is about the government's Yukon industrial support policy, the draft policy the Minister has just released.

In a letter the Minister sent me, he outlined kind of a process for seeking consultation and input on this policy. He indicated that they would be seeking input from non-governmental organizations, companies and individuals until May 31, 1994. Can the Minister tell us who that includes and how that process is supposed to work?

Hon. Mr. Ostashek:

I would be happy to get a list for the Member of all the organizations that were contacted. I do know, off the top of my head, that there were the Chamber of Commerce, the Chamber of Mines, AYC, First Nation communities - those are a few I can think of - and the Conservation Society, I am not sure. I will check and get her a list of the mailings that went out.

Mrs. Firth:

I would appreciate that as well as the companies and individuals who were contacted. I gather, from what the Minister said, that they mailed out copies of the policy, so they will be waiting for responses.

In the second paragraph, he goes on to say they have had an opportunity to hear from a wide range of interests through various Yukon Utilities Board hearings and other consultations. Could the Minister tell me what "other consultations" means, and does he have documentation to table to support that?

Hon. Mr. Ostashek:

I will see what documentation is available, but we have had one-on-one discussions with different mining companies that are talking about coming to the Yukon, about what their power requirement needs are, and how they feel they could be assisted in an industrial support policy. We have had quite a few one-on-one discussions. I do not know how much documentation there is on that, but I will see what I can get for the Member.

Mrs. Firth:

See, I told you it would be friendly.

I would like to ask the Minister what happens once all the information is compiled. Could the Minister tell us how the policy is going to be developed, after he has all this information gathered together?

Hon. Mr. Ostashek:

We set out in the policy a broad range of principles, under which we would enter into negotiations with individual industrial users about how we could assist them to put their project into effect in the Yukon - to create jobs in the Yukon. We will listen to whatever input we get, we will weigh the pros and cons of it, and if there is anything there we feel can be incorporated, then we will incorporate it into the policy and take it back out again to see if it is approved.

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Question re: Hazardous-waste facility site

Mr. Penikett:

I, too, have a friendly question, even though today we have heard that the definition of collective bargaining is secret and the date a decision will be made by the government on that question is secret.

I want to ask, if the Minister of Community and Transportation Services does not mind, if he could tell us, in connection with the fenced box that the Minister wants to install in my constituency as a substitute for a secure hazardous-waste site, if the Minister, or anybody in the department, consulted first with MacRae area residents about this decision.

Hon. Mr. Fisher:

The previous government consulted at great length with the residents in the area for a special-waste storage facility. The facility we are currently purchasing is an approved facility, double walled and has a built-in storage container for spills, but I would also like to point out the facility will only be used for those commodities that may turn up for which there is no ownership.

Mr. Penikett:

I want to make it perfectly clear that I am talking about Community and Transportation Services, not the government. Community and Transportation Services did not even consult me, even when I was Government Leader. I would like to ask this: did it occur to the Minister, his executive assistant, or anybody in the department, to consult with the MLA before announcing the decision?

Hon. Mr. Fisher:

I am not aware that the former Government Leader was not consulted. I was quite sure that he was consulted, because I do recall reading some comments long before my time.

The site for the facility had been chosen by the previous government in approximately 1991.

Mr. Penikett:

Not that facility. The Minister of Tourism says that Community and Transportation Services did not know who the MLA was. The problem with Community and Transportation Services is that the department occasionally sees Whitehorse as an amorphous blob. I am being very vague about constituency boundaries.

I want to ask the Minister - and again, this is an entirely friendly, good-natured, camaraderie-type question. Would the Minister commit to attending a public meeting in the area, chaired by non-government representatives, a person such as myself, before finally implementing this decision?

Hon. Mr. Fisher:

I have a bit of a problem with the previous Government Leader calling down one of the departments in the government, but I would be perfectly willing to have the department explain, if the Member of the Opposition wishes, the facility to them.

Question re: Industry support policy

Mr. Cable:

Yesterday, we debated very briefly the document that the mean-spirited - not I - might say was a pretty miserable attempt at a blueprint for social assistance reform.

Some Hon. Member:


Mr. Cable:

Did I say that? Today I would like to ask the Minister for Economic Development about another document that might come under that same rubric, the Yukon industrial support policy.

Who prepared this document? Was the document prepared by political staff in the Minister's office, or was the document prepared by professionals in the public service?

Hon. Mr. Ostashek:

I can understand the Leader of the Liberal Party having great difficulty with a document that size, because their philosophy is that it has to be piled this high or you cannot get anything done.

This document was prepared by the officials in Economic Development.

Mr. Cable:

Could the Minister tell us what the terms of reference were for the authors of this policy? Did the Minister ask them to prepare something light and fluffy, or a master plan for moving the Yukon into the 21st century?

Hon. Mr. Ostashek:

If the direction the Liberal Leader is going is that we should strike another committee, I am going to be very sorry to disappoint him. This is part of the energy policy, along with the ministerial statement made by the Minister responsible for the Yukon Energy Corporation today, along with what we are doing on the oil and gas accord. This will all be put together for a very comprehensive energy policy for the Yukon.

Mr. Cable:

I was asking about terms of reference. Were there terms of reference given to the authors of this document? Is the Minister prepared to table those terms of reference?

Hon. Mr. Ostashek:

I would have to check with the department about tabling the terms of reference for it, but there certainly were terms of reference given for it. I have no difficulty in telling the Member opposite that, when we started out, I would have very much liked to have been able to come out with a policy that said we could give industrial users electrical power for X number of cents per kilowatt. However, we found that would have been a very difficult task, and one that neither the Yukon Energy Corporation nor this territory could afford. That is why we set out the broad principles under which we are prepared to sit down and negotiate an industrial support policy to help the companies that are coming to the Yukon to begin development.

Question re: Highway maintenance privatization

Mr. Penikett:

I have another straightforward question for the Minister of Community and Transportation Services. We were all fascinated yesterday when we heard the brief description of how the Yukon Party makes policy in the statement by the Minister that he had looked at the question of privatizing highway maintenance. For most of us, looking at a question would have involved studies, research, analysis, debate and background documents, but the Minister seemed to indicate there were none of those.

Could the Minister tell us what he meant by the statement that they had looked at privatization of highway maintenance, which he made both in Ross River and here, yesterday, in the House?

Hon. Mr. Fisher:

The Member opposite is trying to make this into something that it is definitely not. One of our officials at Ross River took notes. I was hoping that the Member opposite would accuse me of saying that we did a study, because it is very clear in the notes that I did not say any such thing.

The subject of the privatization of the highways is a question I posed to the deputy minister quite some time ago. I asked him what would happen if we privatized some of the smaller camps, such as Tuchitua. I think his response was that it would probably cost us more. He said that we would probably have trouble with the Public Service Commission, because of the collective agreement.

I then asked the Public Service Commission about what would happen if we were to privatize one of the camps. The Public Service Commissioner said something to the effect that if we did that we would have to create whatever number of jobs are there as new jobs within the government.

I believe the next step in this review was when one of my Cabinet colleagues asked me if we had looked at privatizing some of the camps. I told him that I thought it would cost too much and would cause trouble with the union. That is the total story on the privatization of the highway department.

Mr. Penikett:

The Queens University School of Public Administration is going to be absolutely fascinated with that description of policy making. To be clear, the Minister, given a choice between privatizing the Tuchitua camp and maintaining it in the

Page Number 2241

public sector, chose to shut it down. This is interesting.

I wrote down carefully what the Minister said in Ross River. He said that on the question of costs, the costs of maintaining the roads in the Yukon with government crews was cheaper than it was in northern B.C. with the private sector. Given that the Minister has said that there are no papers, research documents or background information, could I ask him what the source of that information was? If it is in document form, can it be tabled in this House?

Hon. Mr. Fisher:

Some time ago, I understand - but I have not seen any documentation, and this was a few years ago - the highways department actually checked the cost per kilometre in northern British Columbia as compared to in the Yukon. In northern British Columbia, as I think most of us are aware, it is done by private contractor. At that time, the Yukon government was maintaining highways at a lower cost than a contractor in northern British Columbia.

Mr. Penikett:

So, the information given at the public meeting in Ross River was, indeed, just old news. There was no new information there.

Can I ask the Minister exactly what he meant when he told that meeting that the unions would not let the government do it? Was he referring to these replacement jobs that he says the government would have to find if they shut down part of the highway system - something we have been indicated by employer organizations is not the case. Apart from his reference to his conversation with the Public Service Commissioner, does he have any documentation for that view?

Hon. Mr. Fisher:

I can check with the Public Service Commission to find out the section of the collective bargaining agreement, or whatever it is, that actually references that conversation I had with the Public Service Commissioner, and I will provide it for the Member opposite.

Question re: Custodial service, contracting out

Ms. Moorcroft:

Yesterday, the Government Leader said he did not know about any contracting out of custodial service in government buildings. Perhaps he should get onto speaking terms with the independent Minister in charge of the Public Service Commission, who is also Minister of Government Services.

My question is for the independent Minister. Did the Minister have his department officials meet with custodial staff this week to inform them about his plans to contract out custodial work in the education building?

Hon. Mr. Nordling:

I am not sure what meetings took place between the department and the custodial workers, but what we are trying to do is increase the custodial workers so that we can more properly clean this building and other buildings for which we are responsible.

Ms. Moorcroft:

Are we supposed to believe that the Government Leader had no prior knowledge of this meeting to inform the custodial staff of what was going on and of the Minister's departmental initiatives? This is why people cannot believe anything this government says. It sounds like the right hand not knowing what the far right hand is doing.

Can the Minister assure this House that his imminent plans to contract custodial work at the education building have now been put on hold and that scheduled advertisements for contracts have been cancelled?

Hon. Mr. Nordling:


Ms. Moorcroft:

Given that the Government Leader claims to recognize the union's role as bargaining agent for all employees - although we are still not sure what the independent Minister believes since he refuses to tell us what he thinks collective bargaining is, perhaps that is because he does not know - I am going to ask the Minister in any case: will the Minister assure employees that their legal representatives will not only be talked to, but bargained with before this government contracts out custodial work or any other public sector jobs?

Hon. Mr. Nordling:

There are no plans that affect the jobs of any of our janitorial staff by laying anyone off or anything like that. If that were the case, we certainly would discuss the situation with the union.


The time for Question Period has now elapsed.

We will proceed with Orders of the Day.



Bill No. 15: Second Reading


Second reading, Bill No. 15, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek:

I move that Bill No. 15, entitled Second Appropriation Act, 1994-95, be now read a second time.


It has been moved by the Government Leader that Bill No. 15, entitled Second Appropriation Act, 1994-95, be now read a second time.

Budget Address

Hon. Mr. Ostashek:

I am privileged to be able to table the Government of Yukon's operation and maintenance budget for the 1994-95 fiscal year totalling $346.2 million.

I am very happy to report that there are no tax increases, and once again we are presenting a balanced budget.

We are projecting a $5.6 million surplus for the 1994-95 fiscal year, which will leave us with an estimated accumulated deficit of $6.2 million on March 31, 1995.

Our combined capital, operation and maintenance budgets will total more than $467 million for this fiscal year.

Our commitment to responsible fiscal management fashioned the first budget that we presented to this House. The same commitment is embodied in this budget as well. My colleagues, our deputy ministers and departmental officials have worked extremely hard to make this commitment a reality. I want to take this opportunity to thank them for a job well done.

Of 16 government departments or agencies reported in the operation and maintenance budget, 13 of them have no increase or reduced their expenditures in relation to the 1993-94 fiscal year forecast. The overall decrease of expenditures in this budget is three percent. By any measure, this is a tremendous accomplishment.

We are very proud of this achievement. We have clearly reversed the trend in government toward ever-increasing operation and maintenance expenditures.

In a previous budget address, I noted that the path leading to balanced budgets and economic self-sufficiency would not be an easy one to follow and that there would be a price to pay. We believe, however, that the course we have chosen is the right one, because the more travelled paths lead to debt, dependency and deficit financing, and in the final analysis would have cost Yukoners far more in terms of both employment and government services than the route we have chosen.

We recently completed a community tour of the Yukon. Our purpose was three-fold: to explain directly to Yukoners the state of our government finances, to outline our economic initiatives and to listen to what Yukoners had to say about these issues and any other issues they wished to raise. We were extremely pleased by the reception we received in all of the communities that we visited, and I would personally like to thank the Members opposite

Page Number 2242

who chaired some of those meetings in their respective ridings.

Utilizing our previous budget, I showed Yukoners where our total revenues came from. Yukoners were somewhat surprised to learn that the Yukon government only raised 13 cents in taxation revenue for every dollar it receives, and that the bulk of our money, about 80 cents out of every dollar, comes from the federal government by way of formula financing grants, through established program financing or other federal transfers. This information is important, because it gives Yukoners a better understanding of how cutbacks at the federal level could impact upon Yukon government revenues.

I also gave Yukoners an accounting of our previous year's operation and maintenance expenditures by category. They learned that 43 cents of every dollar we spend in operation and maintenance is for personnel costs, our largest single expenditure.

Accordingly, it is obvious that, if we are going to reduce the cost of government, we must reduce our payroll costs. I will reserve comment on that issue for a little later in my address.

I went on to show the breakdown of our overall operation and maintenance and capital expenditures on a service basis. Two departments, Health and Social Services and Education, account for 41 cents out of every dollar we spent in 1993-94. I pointed out that, if we wished to increase our spending in any one departmental area, of necessity, we must cut our spending in another area. There is no magic pool of money.

One of the charts I referred to in my community presentations showed Yukon government annual surplus and deficits, as of March 31 of each year, from 1986 to 1994. It was very easy for Yukoners to see that government spending started to get out of control in 1991-92, and was completely out of control in 1992-93, with a $64 million overexpenditure in one year.

This is a financial situation we inherited. The harsh measures we were forced to take in our 1993-94 budget have proven to be effective. Our first budget is a financial footing upon which we will now build toward economic self-sufficiency and prosperity.

However, we found that many Yukoners do not understand our financial situation, largely because of what, on the surface, appears to be conflicting information. For the record, our unconsolidated accumulated deficit, as of March 31, 1993, was $13.3 million. This deficit resulted from an overexpenditure of $64 million in the 1992-93 fiscal year. These figures have been confirmed by the Auditor General of Canada.

Recently, Statistics Canada released data that indicates that the Yukon had no net debt as of March 31, 1992. This data showed Yukoners having a net worth of $159 million - the highest in the country. All other jurisdictions are shown as having net debt, except the Northwest Territories, which had a net worth of $151 million.

Some Yukoners have interpreted this information to mean that the Yukon government did not have a $13.3 million deficit as of March 31, 1993. That interpretation is wrong. In calculating the Yukon's net worth statistics, Canada included certain assets, such as the Yukon's $84 million workers' compensation, health and safety fund, which could never be sold or used to finance Yukon's day-to-day operations. This fund is to take care of workers who are accidentally injured on the job. That Statistics Canada report also included the financial assets of the Yukon Development Corporation, the Yukon Energy Corporation and Lottery Corporation. This means that these corporations would have to be liquidated, as well, to realize the $159 million net worth figure.

What the Statistics Canada comparison does show is that the Yukon was in the best financial condition of any jurisdiction in Canada, as of March 31, 1992 - two years ago. However, it did not take into account the $64 million deficit in 1992-93 that can be attributed to the previous administration. Were Statistics Canada to do a similar report, using data as of March 31, 1994, the fiscal year just ended, they would find that our net worth would have declined somewhere in the neighbourhood of $50 million from the $159 million figure as of March 31, 1992.

Some public confusion has also been created by federal estimates, which show different values for the grant for the Yukon than do the supplementaries and estimates tabled by the Government of Yukon in this Legislature. The federal government shows the grant as $18.5 million less than we do in 1993-94 and they show more than we show in the 1994-95 year.

The federal government is using obsolete data to calculate the grant. The different accounting systems used by both governments, and other factors such as population adjustments, new estimates for Yukon income tax and formula financing adjustments, are responsible for the different grant figures. As a result, the federal grant is understated, on an accrual basis, in 1993-94 - the year just past - and it is overstated for the coming 1994-95 fiscal year.

Because they overstated it in 1994-95, they will have the vote authority to pay us for the understatement they showed us last year.

The basic point I am trying to make by putting these figures forward is that, as of March 31, 1993, the Yukon did have a $13.3 million deficit.

If the Statistics Canada report and the federal estimates are creating confusion about the true state of the Yukon government's finances, so too is our formula financing agreement with the Government of Canada. In particular, many Yukoners do not understand what we call the perversity factor under our formula financing agreement with Ottawa. Yukoners currently enjoy one of the lowest rates of taxation in the country, despite the tax increases that were in the 1993-94 budget. In fact, the gap in the tax rate between Yukon and most other jurisdictions in Canada has increased in the last year.

Because of this situation, the Government of Canada is imposing a penalty of approximately $1.56 for every $1.00 we raise in taxes. They do this because they do not believe that the Yukon is using its tax capacity to the same extent as other jurisdictions in Canada. What they are basically saying is that they will not subsidize our low tax rates.

We have a further problem with our formula financing agreement, in that a cap was put on the formula to ensure that the federal transfer payments to Yukon could not rise faster than the rate of growth of the Canadian economy. The perversity factor and the cap have cost Yukoners dearly over the life of this agreement.

We have obtained some small relief from the factor for the last two years of the existing formula financing agreement via the introduction of a risk-sharing element into the formula. Our responsible fiscal management, evidenced by this budget and our previous budget, should stand us in good stead in our negotiations with the federal government for the next formula financing agreement.

In some of the meetings we recently completed on our community tour, several Yukoners, in view of our financial situation being better than most provinces, questioned why it was so necessary for the Yukon government to control its operation and maintenance expenditures.

When we announced wage restraint initiatives, the same question was raised by the Yukon Teachers Association and the Yukon Employees Union. In a few instances, it was suggested that we wanted to reduce government expenditures because of some perverse, philosophical reason other than necessity. I would like to take this time to explain the reasons for our actions.

The three fundamental facts that face any government in the Yukon are, first, we have a very small population base of only 32,000 people. Second, we encompass a very large land mass, an

Page Number 2243

area almost the size of France and, third, for the most part, our government must provide the same range of services and responsibilities that the provinces do.

With our small population base, it also means we have a very limited tax base, and it lacks the economies of scale. Any government activity or program we provide involves large fixed costs, spread over a very limited number of people. This drives up the costs of the service per person.

Our large land mass and harsh climate also contribute to the high cost per Yukoner served because of travel, communications, heating and other costs. In 1993-94, provincial local expenditures, on a per capita basis in the Yukon, were $18,857, compared to $7,718 per capita in the rest of Canada. We need more than double the money per capita in the Yukon to provide the same range of services provided by governments in the rest of Canada.

Unfortunately, many Yukoners have become accustomed to hearing large numbers. We recently heard, for example, that Canada's debt has blossomed to over $600 billion. We hear of aid programs costing billions of dollars, or natural disasters costing tens of billions of dollars in damages. I believe these large numbers make us forget that we, in the Yukon, on a per capita basis, incur world-class expenditures.

If Canada had a per capita deficit equivalent to our 1992-93 $64 million deficit, its deficit would have amounted to some $57 billion, or over $10 billion more than what the federal government actually incurred in the same year. This clearly shows how serious our situation is.

We still have a $13.3 million accumulated deficit to deal with. While we are projecting that this deficit will be reduced to $6.2 million by March 31, 1995, we have no reserve fund to meet any emergencies should there be a requirement for the infusion of government monies.

To be on the safe side, we require a small operating reserve. At the same time, we have been advised that the federal government is going to be cutting back its transfer payments to the provinces in areas of health, social services and education. A cut of any magnitude is bound to have repercussions on our transfer payments from Ottawa.

To summarize, it costs us more per capita to provide services in the Yukon. We still have a $13.3 million accumulated deficit to deal with. We have no operating reserve, no funds to meet emergencies and federal transfer payments may be frozen or reduced. These are some of the reasons it is imperative that we put our financial house in order now to reduce government expenditures.

There is another reason. Primarily, it has to do with our capital budget, which creates many jobs in the private sector. By reducing our operation and maintenance expenditures, we hope to be able to have more money available for discretionary capital projects in order to create more private sector jobs. We are indeed fortunate to have a $122 million capital budget in the 1994-95 fiscal year.

The $47 million Whitehorse General Hospital project and the South Alaska Highway project are both being built with non-discretionary federal money. Similarly, the Shakwak project on the North Alaska Highway is being built with money from the United States government.

We cannot take the money from these projects and use it to build schools, child care facilities and the like. Neither the Government of Canada nor the Government of the United States are going to build these facilities for us, yet we know that we are going to need more schools, tourist attractions, et cetera, as we continue to grow.

Where is that money going to come from? Yukoners have told us that they do not want to pay more taxes. The only other option that we have is to reduce the cost of government so that we can free up some money to improve our education, justice and health and social service facilities. And, we are endeavoring to achieve savings in personnel costs over the next three years of between $13 and $18 million.

I encourage every Yukoner to watch the national news every night; they will soon discover that the Yukon Territory is one of the best places in Canada to live right now. We enjoy the highest wages of any place in the country and we have one of the lowest tax rates of anywhere in Canada. And while our cost of living is somewhat higher than most places in Canada, that cost is mitigated by our northern tax benefit allowance. To make matters even better, the Yukon is about to begin a decade of economic prosperity.

I will now be pleased to provide certain departmental highlights of the 1994-95 operational and maintenance budget. The Executive Council Office has maintained consistent services to its clients, while reducing its expenditures by more than $1 million since 1992-93. Proposed spending for the current year is $8.7 million, down slightly from 1993-94. Cost recoverable funds, however, make up a large portion of this department's spending. One million, four hundred thousand dollars has been allocated for land claim negotiations and implementation this year, reflecting the high priority placed on the settlement and implementation of land claims with the Yukon's 14 First Nations. This year's budget also includes $100,000 to fund the government's direct implementation obligations under the First Nation land claim and self-government agreements.

Community and Transportation Services. Overall, the department has reduced its expenditures by three percent from the previous year's forecast. It is $1.8 million under the 1993-94 forecasted year-end expenditures. The restructuring of the transportation division has reduced administration costs by about $300,000 or 20 percent. The phased closure of the Cassiar and Haines Junction weigh scales, and replacing them with mobile safety officers in each community, will also result in cost savings. There is an overall reduction of $287,000, or one percent, in Municipal and Community Affairs, while maintaining our major grant and contribution programs to municipalities and community groups at a constant level.

The Department of Economic Development is one of the few departments to show an increase in the operation and maintenance budget. Spending has increased by two percent from the previous year's forecast, showing the priority that we accord this department.

A past president of the Yukon Chamber of Mines has been hired for the position of mining facilitator to assist the mining industry with all aspects of government regulations, assistance and other programs in the Yukon.

A northern oil and gas accord office has been established within the department to implement the devolution of federal oil and gas responsibilities to the Yukon pursuant to the Northern Accord agreement and to manage the oil and gas reserves on an ongoing basis. Royalties of $1.7 million are being held pending passage of our oil and gas legislation.

While the Department of Education's 1994-95 estimates show a decrease of five percent from the 1993-94 forecast, this decrease is fully accounted for by the payment of $2.4 million to the land claims trust fund in March of 1994, from wage restraints and personnel savings in headquarters and further savings occur in contracts and administrative travel.

Funding for Yukon College will be maintained and the current levels of usage of the student financial assistance will be accommodated. Core funding for the First Nations education commission and the Yukon native teachers education program will also be maintained. Funding to the native language centre, however, will be increased to improve our level of service in this vital area.

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The budget for training programs has been increased by 17 percent. This reflects our commitment to ensuring that the Yukon education system prepares our young people adequately for the current labour market.

Also, in the area of grants, we will be providing $60,000 in core funding as well as considerable logistic support to the Yukon Science Institute for staging the 1995 Canada-wide science fair, one of the largest educational gatherings ever held north of 60.

O&M funding to the special programs branch of the public schools has been increased by 14 percent. This will significantly improve our level of service to more than 400 Yukon students identified as having special education needs and to teachers who work with them on a daily basis.

In the Department of Finance, the results of the two-year review of the perversity factor and the recent signing of a modification to the formula financing agreement has introduced some relief from that factor in our formula financing arrangements.

The Department of Government Services has undergone an overall cutback of two percent from the 1993-94 forecast, for a reduction of $504,000. Personnel costs are reduced by seven percent overall by way of attrition and consolidation of positions. The Department of Government Services is continuing to show leadership in containing and reducing costs of government. O&M recoveries are up 43 percent - $263,000 - reflecting our commitment to operate government in a more businesslike fashion. For example, the property management branch was recently reorganized into multi-disciplinary account-based teams as a means of increasing client service.

In Health and Social Services, the department is promoting social assistance reform. The 1994-95 budget reflects a decrease in overall funding for social assistance payments to individuals of $1.3 million over 1993-94. The proposed 1994-95 budget is based on the expected actual expenditures for 1993-94, which is about 11 percent lower than was originally anticipated. The decrease is the result of a number of factors, including a levelling off of the volume and savings that have been realized over the past year due to initial reforms of the social assistance system. Contributions to social assistance recipients, through the SARs agreement program, have been increased in 1994-95 from $200,000 to $300,000 to reflect the social assistance reform emphasis on enhancing programs and services aimed at increasing employability for social assistance recipients. A detailed announcement by the Minister of Health and Social Services on the complete social assistance reform package will be forthcoming during this sitting of the Legislature.

The demand for child care spaces has continued to grow. An increase to the child care subsidy program is included in the 1994-95 budget. The amount budgeted for subsidy payments to assist low-income families with their child care costs will increase considerably over expected 1993-94 actuals to reflect growth in that area.

During the fall of 1993, the department visited all communities to get feedback on what government could do to help contain the growth in health care costs, while ensuring that the quality of services are maintained.

Specific health reform announcements will be made during this sitting by the Minister of Health and Social Services. The reforms that will be announced are anticipated to significantly reduce health care insurance costs.

Other health-related highlights include increased funding to the Second Opinion Society to support mental health crisis prevention, a revamping of ambulance services that will better support the training needs of rural volunteers and the Whitehorse Ambulance staff, and an increase in funding to continuing care to support the first full year of operation of the Thomson Centre and other program initiatives.

The Department of Justice has undergone a reorganization in some key functional areas. A new branch, called community development and policing, has been created to focus on local community justice initiatives and their relationship to community-based policing. Its budget, which includes responsibility for the RCMP contract, is $10.7 million.

Similarly, with the building of the Teslin community correctional centre, and its emphasis on local-offender programming, corrections is now known as the community and corrections services branch. There has been $7.8 million allocated to this branch for the 1994-95 fiscal year.

This community approach to corrections is best seen in the new 25-bed Teslin community correctional centre. It is a unique facility, designed to offer programming that helps offenders recognize their own self-worth and the contribution that they can make to society.

Recruitment is currently underway, and staff should be hired in the next few weeks. Training will commence in mid-May, with the building expected to be open in June. It is anticipated that 15 minimum security offenders will be placed in this facility during the first year of its operation. Operation and maintenance costs are projected to be approximately $1.4 million.

Recognizing the freeze the federal government has put on the cost-sharing agreement for legal aid in the Yukon, this year's budget has been reduced to match the federal contribution. The Yukon government can no longer continue to absorb additional costs above the 50/50 agreement. Consequently, $428,000 has been allocated in the 1994-95 budget, with the federal government contributing a further $428,000, for a total of $856,000.

I can also state that the 911 emergency answering centre will be located in the RCMP telecommunications unit, and will operate on a 24-hour, seven-day-a-week, basis. In preparation for this very important public service, the Department of Justice is working with the RCMP and the Department of Community and Transportation Services toward filling the two 911 positions, as well as the maintenance of the telephone and communications equipment. To accommodate this, a total of $117,000 has been added to the 1994-95 budget base for the Department of Justice.

The Public Service Commission has budgeted funds to allow for an investigation into the repatriation of the superannuation plan from the federal government. The first step in this process is to determine the amount of past service contributions the Government of Yukon has made on behalf of employees who have since terminated. This information will be used to assess the viability of having the pension plan administered by the Government of the Yukon.

The Department of Renewable Resources is continuing to work toward the transfer of the jurisdiction for forest resources from the federal to the territorial government and, once that is achieved, to consult with Yukoners to develop a made-in-Yukon forest policy and legislation.

The department is working to complete the consolidation of our land application review and environmental assessment processes to improve the program and to streamline administration for the benefit of all Yukoners.

The Department of Renewable Resources will continue to work with affected Yukon First Nations, the Yukon Fish and Wildlife Management Board and interested Yukoners to ensure that the objective of the Aishihik caribou recovery program are achieved in a manner that is fully consistent with the wolf conservation and management plan.

In recognition of the importance of the tourism sector to our local economy, the Department of Tourism's overall budget has been increased by three percent over last year's forecast expenditures.

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In particular, I am pleased to note that within the budget the amount of money set aside for tourism development now exceeds $500,000. Funding for tourism marketing is up by 7 percent to $3.7 million.

We are also aware that, unlike other government departments, the budget for tourism is subject to fluctuations in the exchange rate on the Canadian dollar, as compared to the U.S. dollar, as well as an increase in U.S. postal rates. Therefore, the Department of Tourism will be monitoring any such changes carefully to ensure that we are able to maintain our buying power in the tourism marketplace.

It is also important to note that the department is providing $300,000 in funding for the anniversaries enhancement program. The decade of anniversaries, including the centennial next year, will provide our territory with a once-in-a-lifetime opportunity to use the heritage of the Yukon's past as a platform for economic and cultural growth. The goals of the new program will be outlined in the final section of the budget address.

During the spring session, the Minister responsible for the Status of Women will be reinstating the Yukon Advisory Council on Women's issues. This council represents the interests of, and provides a forum for, First Nations and non-aboriginal urban and rural Yukon women.

As a result of the findings of a territorial-wide survey of Yukon women, the directorate will be working with the government departments to develop a government-wide action plan and to implement initiatives that address Yukon women's concerns and priorities.

One of the major concerns of Yukon women is violence against women and children. Throughout the survey, women expressed the need for more public awareness to address this issue. Over the next year, the components of the Women's Directorate public awareness strategy are a focus on youth, reducing women's vulnerability to violence and beginning the healing process. May is sexual assault prevention month and many community groups and organizations are working with the directorate to sponsor a variety of events and activities. In support of the healing project being carried out by the Yukon Indian Women's Association, the Yukon government seconded the head of the directorate to the project for one year, beginning in January of 1994. This position is fully funded by the Women's Directorate.

In 1994-95, the Yukon Housing Corporation, for the first time, is projecting that program costs will be offset by program revenues. Residential construction is a key to a healthy economy in the Yukon. Our 1994-95 capital budget will create jobs. When the jobs are created, wages filter through the economy. Local businesses and all Yukoners benefit from these activities.

Just recently, the Minister responsible for the Housing Corporation and Community and Transportation Services announced that the land-financing function of the Department of Community and Transportation Services will be transferred to the Housing Corporation. The transfer of responsibilities will improve the quality of service to customers, while at the same time eliminating duplication in government. The Housing Corporation already carries out loan portfolio management through their other programs, and this transfer will add to this portfolio, therefore, amalgamating similar activities.

Within the Yukon Liquor Corporation's social responsibility budget, the corporation will continue with several past initiatives, as well as undertake new ones. An example of a continuing initiative, is the corporation's radio campaign program that promotes various facets of responsible drinking, such as the FAS/FAE awareness and the safe operation of snowmobiles. A new initiative that will be introduced to the public soon will be the corporation's BARS program, be a responsible server program. As part of the corporation's change toward pro-active approach to inspections and enforcement, this program will educate lounge and bar operators on their responsibilities respecting the serving of alcohol. Over the course of 1994/95 fiscal year the BARS program will be delivered throughout Yukon with the cooperation and assistance of the BC/Yukon Hotel Association and others.

I would just like to speak a little about keeping our promises. Our government is continuing to meet the commitments to Yukoners that we outlined in our four-year plan. The settlement and implementation of the Yukon land claim is one of the major commitments in our four-year plan and a top priority of this government. Members will recall that historic day, March 17, 1993, when this House passed two bills giving effect to the land claims umbrella final agreement and the self-government agreement.

We now await the passage of the Yukon Indian land claims legislation by the Parliament of Canada. Pieces are falling into place for the federal legislation to go into Parliament this spring. The technical work that requires the input of all three parties is complete on the comprehensive claims and self-government legislation. The federal government has scheduled public consultation sessions on draft surface rights legislation for the last week of April. The Yukon government is gearing up for the implementation. It has now made another contribution of $2.4 million to the training trust fund. This will be matched later by the contribution from the federal government. Workshops are being held in all departments to orient staff toward implementation activities that will be required by the agreements.

Negotiations are continuing with five Yukon First Nations - the Kwanlin Dun, the Ta'an Kwach'an, Little Salmon-Carmacks, Selkirk and Dawson - and we hope to start negotiations later this summer or early fall with Kluane and Carcross First Nations.

Land selections for the Ta'an Kwach'an have been interim protected and the Yukon government has implemented a specific agreement with the Ta'an that makes available the land required for the new Whitehorse sewage treatment facility.

The Yukon government will work to build regular contact with the AYC, municipalities and other groups as negotiations continue in communities throughout the Yukon.

The Government of Yukon has devoted considerable time, energy and money to negotiating the transfer of forestry from the federal government. To say that we are disappointed that the transfer did not take place as planned at the beginning of this month would be an understatement.

There is clearly a void in the forestry policy at the present time, as has been witnessed by the controversy surrounding the issue of raw-log exports from the territory. Yukoners are demanding more local control of this important resource. The forestry transfer would have filled that policy void and would have given Yukoners the involvement they were seeking. The people of Watson Lake and other communities were looking forward to the job opportunities and other economic benefits resulting from the transfer. We know they are frustrated and disappointed by the delay.

We still hope that once the Yukon Indian land claims legislation is passed by Parliament, the Minister of Indian Affairs and Northern Development will see fit to expedite the forestry transfer under the same terms and conditions as were previously agreed to.

Of even greater importance is that our government will be attempting to reach a memorandum of understanding on the devolution framework for the transfer of Yukon land and resources to this government. The memorandum is in keeping with the election commitments on northern devolution contained in the federal government's red book. It is also consistent with the personal commitment made by the Prime Minister in Yellowknife on the occasion of the opening of the new Northwest Territories

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Legislature, when he stated that devolution should be completed within his present term of office and at a pace set by northerners. The Hon. Ron Irwin endorsed these commitments at the same session and it is our intention to remind him of these undertakings when he visits the Yukon next month.

Another major commitment in the four-year plan concerns protecting the environment, in relation to sewage treatment problems in areas such as the Southern Lakes, Whitehorse and Dawson City. We are well advanced to meeting that commitment.

On March 8, 1994, the Government of Yukon and the Ta'an Kwach'an Council reached an agreement on the land needed for the Whitehorse sewage treatment system. As a result, the process of transferring the land to the city by the territorial government can now occur.

Our government and the city reached an agreement last year that will result in the Yukon government providing the city with $18.3 million over the next four years for this project. The Government of Yukon's contribution works out to about 85 percent of the total cost, while the City of Whitehorse will fund the balance.

Members will note the $6.4 million sewer main replacement for Dawson City, the $2.2 million wetlands sewage treatment for Ross River and the $1.9 million sewage treatment disposal for Carcross, which have all been identified as multi-year capital projects in our 1994-95 budget, in addition to the Whitehorse sewage treatment project.

I would now like to update Members of the House on the recent developments with the planning of the Whitehorse General Hospital. On March 7, 1994, the schematics for the hospital were released and members of the public were invited to view the plans. The plans appeared to receive favourable reception. The new $47 million hospital, in addition to meeting the needs of the residents of the City of Whitehorse, must also meet the needs of the residents of the territory. The facility will be planned in a manner that ensures flexibility, is functional to operate and is cognizant of the changes in health care needs and trends. The new hospital must be adaptable to new technologies that will facilitate the repatriation of programs and services, which are now being provided on a fee-for-service basis in the south. We are fulfilling this commitment with deep pride.

Our promise to review the Yukon's education system is well underway. Students, parents, First Nations, students, teachers, department staff and members of the public were all given an opportunity to fill out the educational review questionnaire. The response has been overwhelming. Those people who protested against conducting such a democratic review have been silenced by the general public's right to have a say in the curriculum being taught in Yukon schools, and about the effectiveness of mainstreaming special needs children. The results of the questionnaire are currently being evaluated and will be of tremendous benefit to the Educational Review Steering Committee in their deliberations.

The review committee has announced the dates that it will be touring the Yukon communities and I encourage all Yukoners to attend those meetings and express their views.

One of the charts that we used at the community tours showed a comparison of power bills in North America based on 1,000 kilowatt hours. The chart took into consideration the GST, riders, franchise rates, income tax rebates, rate relief. All of these comparisons were in Canadian dollars. The chart compared power bills from Winnipeg, Edmonton, Vancouver, Regina, Grande Prairie, Halifax, Niagara Falls, Fairbanks, Charlottetown, Yellowknife, Haines and Inuvik. Yukoners were surprised to discover that their power bills fell in the mid-range and were lower than some users in other jurisdictions in Canada.

Having said that, our government continues to look for ways to lower our energy costs. Currently, the Minister responsible for the Yukon Development Corporation is holding exploratory talks with the Yukon First Nations to discuss ways they could acquire an equity interest in the Yukon Energy Corporation.

Other Yukon residents, possibly municipalities, may also be given the opportunity to acquire a portion of the equity interest through the purchase of shares in a publicly traded corporation.

A majority equity interest in the Yukon Energy Corporation shares will be retained by the Yukon Development Corporation, as well as the ultimate control over management, capital expenditures and policy related operational matters with regard to the generation and delivery of power in the Yukon.

Since ratepayer savings are essential to the feasibility of any restructuring proposal, any sale of equity interests in the Yukon Energy Corporation must achieve a result in savings. This is a fundamental goal of reducing power costs that will guide all future discussions in this regard.

I want to reiterate that discussions are only at the exploratory stage. Nothing has been presented to Cabinet. Our four-year plan commits government to seeking out new and innovative ways to lower energy costs to consumers, and we intend to fulfill that commitment.

Our search for new and innovative ways of improving service to the general public is not limited to the provision of energy. We now have a service improvement program resulting from the commitment in our four-year plan to encourage members of the public and employees of government to make suggestions on more effective ways to deliver Yukon government programs.

While there is no direct monetary reward for suggestions implemented, everyone, and especially the Yukon public, will benefit from government services being provided more effectively.

Every suggestion submitted will be responded to and I am very pleased to report that suggestions are already coming in. We received approximately 60 suggestions during the first month of operation.

I predict the territory is about to enter a period of prosperity, provided that we in government are able to keep our financial house in order and prepare ourselves for the economic opportunities that lie ahead.

During this same period of time, the transfer payments from Canada to the Yukon can be expected to be constrained, as the Government of Canada is forced to deal with the country's excessive national debt.

The Government of the Yukon, for its part, must spend its money wisely and put into place the necessary infrastructure, programs and policies to promote the development of the Yukon's economy. The Yukon has a strong global advantage with its abundant endowment of natural resources.

We believe in working with our strengths, our people, and our ability to make things happen. Our two traditional strengths - mining and tourism - appear to be getting stronger. We believe that having healthy and active mining and tourism sectors are the surest way of achieving a healthy, active and diversified Yukon economy.

An economy cannot be dynamic and sustainable without a vigorous, diversified and highly competitive private sector. The main role of government in the economy should be to create the conditions that allow and encourage the private sector to invest in and operate businesses.

One of the keys to economic diversification in the Yukon lies in diversifying our mineral industry into different metals - base metals and precious metals. We can thereby create an industry that is not dependent on only one type of ore. We have vigorously pursued the strengthening and diversification of the mineral sector.

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The placer mining industry provides a degree of stability and diversification apart from the base metals mining sector. In 1993, placer production increased around three percent to over 105,000 crude ounces. Gold prices surged in 1993 and have hovered near the $380 US per ounce in recent months. Yukon placer miners should have a very good season this year.

Base metal prices are currently the biggest factor affecting the health of the Yukon's mining sector. The price of the Yukon's most important commodity, zinc, has fallen to around 43 cents US per pound and is forecast to only improve slowly through 1994.

It is true that, while the Government of the Yukon has been active in the pursuit of buyers for the mine at Faro, and assisted in the sale of Sa Dena Hes, it is not realistic for us to expect either of these mines to be reopened prior to 1996. Despite the current situation with our lead-zinc mines, there are encouraging signs for mining in the next few years.

Presently, there are five mines in the territory that are in the permitting stage with the federal government, and each company is conducting financial and mining feasibility studies. Each of these mines has the possibility of going into production in the next 12 to 18 months, and each would employ between 50 and 100 workers.

It is worthy to note that the Yukon has more mines in the permitting stage this year than we have had in the last decade. This is a very encouraging sign.

There are other encouraging signs. Exploration spending in 1993 in the Yukon doubled from 1992 levels to around $20 million. Much of the activity involved Casino, Williams Creek and Brewery Creek properties, and further work is anticipated at those locations this year. Investor inquiries are on the rise. Indications suggest exploration spending in 1994 will be between $20 million and $25 million. Moreover, mining companies are looking at a wider array of minerals, including copper, lead, zinc, gold and coal.

Casino, which has the potential of becoming a world-class mine, larger than Faro, is spending another $3 million to $4 million this year on exploration alone. Further, the Elsa-Keno Hill is in the exploration and development phase, and is applying for a class B water licence. Once world metal prices for zinc and lead recover, I am confident that the mines at Faro and Watson Lake will again reopen.

I believe the actions taken by our government have contributed to this rejuvenation of our mining industry. The Government of the Yukon has maintained a robust Yukon mining incentives program, as well as revised the guidelines with industry to achieve more effective program expenditures. We have established a position of a mining facilitator; we have launched the electrical infrastructure for a resource development loan program; we have negotiated a $20 million transportation infrastructure agreement with the federal government, which will benefit both mining and tourism.

The Canada-Yukon geoscience office in Whitehorse provides geoscience information and helps fund technical research and development, as well as distributing the information. In addition, regional mapping is being conducted throughout the Yukon, including areas around Dawson City and Mayo.

Our government's active promotion of the mining industry at the Cordilleran Roundup has sent a message to the world mining community that the Yukon is open for business, not like some other areas of Canada that I know of.

Investment in infrastructure is an essential component, leading to the development of our resource-based industries. Our transportation and energy infrastructure is of particular importance.

Just recently, our government released a draft Yukon industrial support policy. This policy indicates our willingness to invest in new infrastructure, which encourages the development of the mining industry, tourism, oil and gas and our emerging forestry industry. The draft policy deals with road access improvement for construction, energy supply, grid connections, supplemental community infrastructure and other strategic infrastructure.

The draft policy shows that Yukon is open for business and is ready to put together development packages with industrial investors. We will work on a case-by-case basis with companies to try to support them in any way we can, in order to help defray the high costs of setting up business in the north. We will involve key groups in forming strategic partnerships that would include First Nations, communities and related industries.

In addition to the Yukon industrial support policy, the Government of Yukon has recently approved the non-utility generation strategy, about which the Minister gave a ministerial statement today. The non-utility generators are unregulated, privately owned companies that would produce power for sale on a commercial basis. The Government of Yukon will work with the private sector to develop non-utility generation plants, capable of producing cheaper electricity for major industrial projects or for Yukon ratepayers.

Private investment in non-utility generation will be encouraged through deregulation and negotiating power purchase agreements.

The utilities will be authorized to review the proposals and negotiate short- and long-term purchase agreements with the NUGs, which can reduce costs to the Yukon ratepayers. The Government of Yukon will deregulate NUGs producing electricity for sale to a regulated utility and/or to a single industrial customer. This strategy is consistent with the Yukon government's commitment to encourage private sector investment in energy generation and to support the production of cheaper electricity.

I noted earlier that the Department of Tourism is establishing an anniversaries enhancement program as part of its marketing program. The goals of this new program are to raise the awareness of the territory's decade of anniversaries within prospective and appropriate tourism markets in Canada, the United States and internationally, and to convert this awareness, and those markets already aware, into tourism traffic and new revenues that continue beyond the decade of anniversaries. The Yukon Anniversaries Commission has a very important role in this plan, and will continue to be funded for $285,000 at the 1993-94 contribution level.

As the custodians of the Yukon's commemorations and the developers of local sponsorship in public relations, the commission has the jurisdiction over special attractions that Tourism Yukon will use to capture the attention of the international marketplace.

It has been estimated that the anniversaries have the potential of generating $70 million in tourism spending over and above the normal tourism dollars, because of increased visitation.

Last year's 249,000 visitors entered the Yukon, spending an estimated $55 million while they were here. Tourism created an estimated 3,900 jobs in the Yukon. With continued marketing by Tourism Yukon of our "Decade of Anniversaries", and the ever-increasing potential of the European and other markets, the number of tourists should continue to rise, creating many more jobs and economic opportunities for Yukoners.

The economy of the Yukon today is already performing better than expected, in view of the closure of our two hardrock mines. Numbers released by Statistics Canada show that there are 700 more people working in the Yukon this March than in March of last year.

In the monthly survey, Statistics Canada says that 12,400 people in the Yukon were working in March of 1994, compared

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to 11,700 in March of 1993. It is interesting to note that, two years ago, in March of 1992, when both the Faro and Sa Dena Hes mine were operating, there were 1,000 less people working than there are today in the Yukon. I believe that this shows our economic initiatives are working. I will ask the Member for McIntyre-Takhini, as he seems to have some doubt about that.

This is a significant indicator that the Yukon economy is growing stronger, and is shows the positive impact of the government's employment initiatives - such as the employment task force that we created last winter - and our budgets are having on the Yukon economy. We believe people who are unemployed will find more hope in the future, given the economic opportunities that I have spoken about here today.

As we approach a settlement of the Yukon land claims, First Nations are going to have an even greater impact on our Yukon economy. We are currently experiencing this impact due to the settlement of the Tetlit Gwitchin claim in the Northwest Territories, who are spending lots of money in Whitehorse these days.

Retail trade in the Yukon grew by 10.4 percent in 1993 - a notable achievement.

The future of the Yukon economy looks very good. The budget I have tabled here today, in combination with our 1993-94 budget and our 1994-95 capital budget, has set our future course. It is a course that leads to prosperity and a brighter future for all Yukoners.

I commend this budget to this House.


Mr. McDonald:

I move that debate be now adjourned.


It has been moved by the Hon. Member for McIntyre-Takhini that debate be now adjourned. Are you agreed?

Some Hon. Members:



I declare the motion carried.

Motion to adjourn debate on second reading of Bill No. 15 agreed to

Hon. Mr. Phillips:

I move the House do now adjourn.


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

Motion agreed to


This House now stands adjourned until 1:30 p.m. Monday next.

The House adjourned at 3:33 p.m.

The following Legislative Returns were tabled April 21, 1994:


Sex Offenders: training session on counselling (Phelps)

Oral, Hansard, p. 2113


Children in care: departmental policy on unauthorized absence (Phelps)

Oral, Hansard, p. 2121

The following Document was filed April 21, 1994:


Interview transcripts dated April 21, 1994, from a CBC interview with the Deputy Minister of Finance (Penikett)