Monday, January 9, 1995 - 1:30 p.m.
Speaker: I will now call the House to order. We will proceed at this time with
Speaker: We will proceed with the Order Paper.
Introduction of Visitors.
Are there any Returns or Documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. Brewster: I have a legislative return for tabling.
Speaker: Are there any Reports of Committees?
Are there any Petitions?
Are there any Bills to be introduced?
Are there any Notices of Motion for the Production of Papers?
Are there any Notices of Motion?
NOTICES OF MOTION
Mr. McDonald: I give notice of the following motion:
THAT it is the opinion of the House that the Yukon Legislative Assembly should have at
least two sittings in each year to provide a reasonable opportunity for elected Members to
raise matters that are important to their constituents and to hold the government
accountable for its policies, programs and expenditures.
Mr. Penikett: I give notice of the following motion:
THAT the Standing Committee on Rules, Elections and Privileges review the times of sittings set out in the Standing Orders of the Yukon Legislative Assembly and report to the Assembly any changes to those times it may consider advisable, and
THAT the Standing Committee on Rules, Elections and Privileges, in the course of its
deliberations on this matter, give consideration to setting the times of the sittings on
Monday through Thursday in such a manner as to allow the House to cover the daily routine
between 11:00 a.m. and 12:00 noon and to take up business under Orders of the Day between
1:30 and 5:30 p.m.
Speaker: Are there any Statements by Ministers?
This then brings us to the Question Period.
Question re: Industrial support policy
Mr. McDonald: I have a question for the Minister of Economic Development. The government told anyone who asked, including Members of the Legislature, that if we wanted to know what position the government was taking in negotiating the infrastructure needs of any particular resource development, we should wait to see if the industrial support policy could sustain it. Now that that policy has been made public, I feel that we are none the wiser about the nature of negotiations currently under way. Can the Minister tell us precisely how the Cabinet will decide how much public investment will be made in each case in return for what public benefit?
Hon. Mr. Fisher: The Department of Economic Development will do an analysis of any proponent's request for assistance under the industrial support policy and the results of that analysis will be provided to Cabinet and/or to the Legislative Assembly.
Mr. McDonald: I am thankful that the Department of Economic Development has a job to do under the auspices of this policy but this does not answer the question. I will ask the Minister again: can he tell us precisely how Cabinet will decide how much public investment will be made in each negotiating situation in return for what public benefit? How do they measure it?
Hon. Mr. Fisher: I think what the Member is getting at is that there is no cap on the amount of money that could be made available; therefore, the amount that can be made available will depend on the benefit to Yukoners. Again, until we have an actual case scenario to measure, I cannot give a definitive answer as to how many jobs or how much monies will accrue to the Yukon Territory for any particular project.
Mr. McDonald: There is a serious concern expressed by a number of people that the government is not going to be able to provide assurances that there is a level playing field for all industry proponents. In addition, if there are no guidelines - no minimum or maximum amount in terms of providing public support - can the Minister tell us how the benefit to the public is measured?
Hon. Mr. Fisher: The public benefit, in general terms, would include the number of jobs created, the length of time those jobs would last and the spinoff benefits. Those types of things would be how the total economic benefit to the territory would be measured.
Question re: Industrial support policy
Mr. McDonald: I have trouble understanding why the government would table this policy at this time, when they have not worked out the most significant details. It leaves one with the impression that anything goes, and that as long as you are able to negotiate well with the Department of Economic Development, you can get a large public investment, and you can minimize the amount of public return that you are prepared to provide.
What assurances can the Minister give us that the rules will be clear for all industry proponents and that we are not simply giving sanction to a policy that says, essentially, that anything goes?
Hon. Mr. Fisher: The previous government entered into all sorts of arrangements with different companies in the past, with no guidelines whatsoever. With our industrial support policy, we have set out some guidelines. We will enter into a development agreement with a company, and that agreement will be debated in the Legislature. If, periodically, an agreement comes to the forefront when the Legislature is not in session - and I do not see this happening very often - then Cabinet would approve the agreement, and it would be tabled in the Legislature to allow input from the public.
Mr. McDonald: I would like to point out to the Minister that this policy, announced over and over and over again, is the underpinning and only feature of the government's economic vision. It is the only part of the government's economic plan. This is it. This is all of it. This is all there is. I would point out, too, that the NDP government two years into their mandate had a Yukon economic strategy, as Members will remember.
Can the Minister tell us precisely what limitations they are providing to their negotiators in negotiating with Loki Gold and Anvil Range - people they have said they are negotiating with currently and have been for some time - so that they can be assured that whatever is determined through those negotiations is acceptable, generally speaking, to the Cabinet, if not to the Legislature?
Hon. Mr. Fisher: On the Loki Gold property, Loki has asked the Yukon government
for certain matters to do with the Old Ditch Road. What they have asked for is some help
with the reconstruction of the road and with its ongoing maintenance. We have basically
agreed, in Cabinet, that our negotiator can determine what this would actually cost and
enter into a development agreement with Loki for this particular item. Then, that will be
tabled in the Legislature before we end the sitting, unless it ends very, very quickly,
which I do not presume it will.
Mr. McDonald: We know that the Minister has indicated that the Cabinet has given the negotiators a blank cheque, and that if Loki asks for a certain amount for the Old Ditch Road, it will be granted them, whatever it has to be. We therefore know what the financial limitations will be; they will be the costs of rebuilding the road, whatever they are.
Can the Minister tell us what the negotiators have been mandated to achieve through these negotiations, other than the ability to write the cheque? Is there a public benefit or anything else in return, such as some of the things the Minister mentioned in his answer in terms of providing training opportunities, business opportunities or job opportunities? What are they seeking through these negotiations?
Hon. Mr. Fisher: We have only been discussing the road infrastructure portion of their overall project with Loki; however, before we enter into a development agreement, the department will be doing an analysis of the project and its benefits to Yukoners.
Question re: YEC/YECL, audit of management agreement
Mr. Cable: I have some questions for the Government Leader as the Minister responsible for the Yukon Energy Corporation. The president of the Yukon Energy Corporation was quoted on Friday as saying that the Auditor General had begun an audit of the management agreement between the Yukon Energy Corporation and the Yukon Electrical Company Limited, who is the manager. The president stated that the audit would tell Yukon Energy if it is getting good value for its money under the agreement. Does the Government Leader have the terms of reference of the audit? Is he prepared to table it?
Hon. Mr. Ostashek: I do not have the terms of reference for the audit with me today, but I will see if I can obtain it and table it for the Member opposite. I do not see any reason why I could not do so.
Mr. Cable: The president of the Yukon Energy Corporation went on to say that the board of the corporation will decide whether or not to make the report public when it is finished. This suggests to me that the public's right to know about the affairs of the corporation will depend on what the report says.
Is the Government Leader, as the Minister responsible for the corporation, prepared to
make the report public when it is received from the Auditor General?
Hon. Mr. Ostashek: I have not had the opportunity to speak with the president since he made his comments on Friday, I believe it was, and I do not know what the rationale was for him saying that the board would decide. I will check into that, and get an answer for the Member.
Mr. Cable: The information that will come out of the audit will be relevant to many of the energy issues that are current in the territory, such as privatization and the recent large rate increases. In the event that the board decides not to make the report public, is the Minister prepared to amend the regulations to force this information to be made public?
Hon. Mr. Ostashek: I do not believe the question is in order; it is a hypothetical question. As I said, I cannot make any comments until I sit down and discuss with the president what the basis of his statements were.
Question re: Industrial support policy
Mr. McDonald: Back to the Minister of Economic Development. The Minister has indicated to us that they have only discussed the provision of road funding - whatever that happens to be - to Loki Gold, and the discussion regarding public benefits will come later.
Can the Minister tell us whether or not the government has any notion of what the public should achieve in the negotiations by way of public benefit in return for what might be millions and millions and millions of dollars for the Old Ditch Road, and can he tell us whether or not that public funding would be contingent on receiving some action from the proponent in achieving those public benefits?
Hon. Mr. Fisher: I am a little bit unclear about the actual question. The reconstruction of the Old Ditch Road could be, as the Member said, millions and millions and millions of dollars, depending on to what level one wants to reconstruct the road, but we're not anticipating costs of that magnitude. The actual benefits to the territory will be jobs and spinoffs for Dawson City and for other areas of the territory. I am not quite sure what the Member is trying to get at.
Mr. McDonald: It is actually a pretty simple notion. I understood that the policy says that, if there is going to be public investment, there should be public benefit. Presumably, one would identify that public benefit through negotiations prior to expending the money. Once the money is expended, of course, there is no way to go back to the proponent to ask them to fulfill their obligations to provide that benefit. Is the Minister saying, therefore, that public benefit is assumed any time that a mining company opens and the level of funding that is provided for a particular project really does not necessarily have any relationship with any predetermined public benefits?
Hon. Mr. Fisher: No, I am not trying to say that at all. I suppose that, as I mentioned earlier, public benefit will be measured in the number of jobs and the spinoffs to Yukon.
Mr. McDonald: If the public benefit is determined by the number of jobs, does the government have a notion, during negotiations, of what the acceptable number of jobs or public return will be prior to making the final commitment to actually release public funds to support this, or any, particular project?
Hon. Mr. Fisher: Every proposal that comes in is going to be different. For instance, if the Tag property near Finlayson Lake goes ahead and becomes a mine, the financial implications to the Yukon government could be massive. Regardless of whether the ore is taken south through Watson Lake or north through Faro, it could cost up to $50 million to upgrade the Campbell Highway to provide road service sufficient for ore haul similar to what is at Anvil Range in Faro right now. That kind of an expenditure will certainly have to come to the House and be debated. The expenditures on the Old Ditch Road required by Loki Gold will not be anywhere near that magnitude, and the benefits to Yukon may very well be significant. The Department of Economic Development will be outlining those benefits for the benefit of this House.
Question re: Industrial support policy
Mr. McDonald: The problem I have is - and I think it is pretty obvious - that every time, in answer to a question about whether or not there is any identifiable public return for a particular level of public investment, the Minister replies by saying that the deal will come back to the House, either before or after the fact. All that suggests to me is that they are looking to the Members on the Opposition benches, as the only gatekeepers of good sense, to tell them whether or not they have a good deal, either before or after the fact.
I would like to know whether or not the government has any notion that the level of public benefit should correspond to the level of public funding. If that is the case, how do they measure both, so one can determine whether or not the public expenditure is justified in return for the public benefit?
Hon. Mr. Fisher: To measure the public benefit, one has to look at each project in isolation. One project may very well have a benefit in its training component; another project may result in an electrical grid extension; another project may end up requiring a surfaced road that may be required at some point in the future.
At this time, I cannot stand here and say that we have to have an X number of points to reach the overall economic benefit. Each project has to be looked at individually.
Mr. McDonald: Of course it does. Every project is going to be different. Some projects will have a very long access road; some may have very short access roads; some may need electrical grid extensions, while others may need an independent power plant. Some projects may be close to a community, while others may not. Each project is different, but that is not the question I am asking.
I am asking about measuring public benefit and tying that to public investment, and whether the government has given that some consideration, and what they are doing in negotiations to pursue that objective. The Minister is not able to answer a single thing about that particular element of what would normally be part of this policy.
Speaker: Order. Would the Member please ask the question.
Mr. McDonald: Why is that the case?
Hon. Mr. Fisher: The policy outlines some very broad guidelines that give us the ability to enter into negotiations with mining companies. The previous government entered into all types of these. What about Canamax? What about Mount Skookum? What about Anvil Range? There were all sorts of arrangements made with various companies where there was absolutely no policy behind them whatsoever. What we have done is to create a policy that provides the company with the encouragement of knowing that the Yukon government will support their project. It allows the people in the department to negotiate with those mining companies and then it allows us to come back to the House to debate the amount of support that we do provide.
Mr. McDonald: The problem that I have is that the whole Yukon Party economic agenda hinges on this particular program. They had two years to provide some new thinking in this particular area. They indicated that this was a priority for them. This policy says, essentially, that anything goes in negotiations. It has advanced us not one iota from five years ago, 10 years ago, or 20 years ago. Incidentally, the NDP government did measure the public benefits as a postscript.
Nevertheless, I would like to ask the Minister whether or not, in the current negotiations with Anvil Range or Loki Gold or any of the other mines that he has cited, the government is going to be attaching some notion of public benefit to the public investment prior to expending the funds and making that money contingent upon the private company receiving the funds.
Hon. Mr. Fisher: There is no question that we will be requiring a public benefit
analysis prior to spending funds. I am not going to try to put a number on it or assign a
point system to it during Question Period. It is not possible for me to do that. There
will be public benefit studies and, again, this Legislature will have the opportunity to
question the amount of public benefit that we indicate when we bring the issue forward.
Question re: Industrial support policy
Mr. McDonald: The ability of the Opposition to ask questions in the Legislature has never been limited in the past, and will not be limited in the future, despite the government's policies, or even because of the government's policies. I have a question to ask the Minister about this policy, and I am sure we will be following up on his answers later.
The guidelines say that a project must be economically viable in order to be eligible under the policy. Can the Minister state whether the project should be economically viable with, or without, public support?
Hon. Mr. Fisher: If the project is not viable without public support, it is highly unlikely that we would enter into any sort of an agreement with them.
Mr. McDonald: I could not quite hear that answer. Did the Minister say that the project must be economically viable without public support in order to receive public support?
Hon. Mr. Fisher: Yes.
Mr. McDonald: Can this Minister tell us what incentive there is for the proponent to come forward seeking public funds, when the project is economically viable without any public assistance?
Hon. Mr. Fisher: In order for a company to be interested in coming to the territory, they need to obtain investment dollars. We have had several requests inquiring about the amount of support we will provide, whether the support is financial or verbal. If a company needs some help with the start-up, we are quite willing to give them some assistance. If we did not go in, the project could likely carry on anyhow, but perhaps not at that time. If it is not a viable project, we do not want our assistance determining whether or not it goes ahead.
Mr. McDonald: I am really confused. If the proponent comes forward with a proposal, we cannot tell them how much money we are going to give them, because that is a matter for negotiation, but the project has to be viable, even though public funding should not be a major determinate in whether or not the proponent gets any money.
I have a quick question about loans and grants, because that is related to this. Now that we have seen the policy, it appears that the government's schizophreni, about whether or not it believes in grants to the private sector, appears to be severe. The Minister said that the program will be largely a grant program, but one of the sub-programs that falls under the policy, the energy infrastructure loans for resource development program, will provide only loans. Why is that?
Hon. Mr. Fisher: The difference between a grant and a contribution, in my mind, is that there would be no conditions on an outright grant, whereas we will provide contributions that will have conditions. The energy infrastucture loans for resource development program that the Member refers to is available now for small operations. I think the maximum allowable is $3 million under that program, and it is a loan program with a sort of preferred rate of interest.
Speaker: Order. Would the Member please conclude his answer.
Hon. Mr. Fisher: That program does fit under the umbrella of the Yukon industrial support policy.
Question re: Industrial support policy
Ms. Moorcroft: I have a question for the Minister of Economic Development. The industrial support policy makes the statement that the Yukon government will place a high priority on education and training to meet the challenges of competing in a global economy, which is increasingly knowledge based. It is certainly worthwhile to recognize that there are economic opportunities in the information field. However, the government cannot just make the statement that something is of a high priority without saying how they will do it. How is Economic Development planning to meet this particular principle of its industrial support policy?
Hon. Mr. Fisher: We may very well be interested in providing a contribution toward training such as, for instance, under the apprenticeship program, and that could be the example that the Member is questioning.
Ms. Moorcroft: The government has always funded the apprenticeship program.
The Minister just made the statement to earlier questions that he is not going to try
to put a number on the public benefit of programs. I would like to ask the Minister to put
a specific number on this question: what level of financial investment will Economic
Development be making in improving the Yukon government's role in creating a
Hon. Mr. Fisher: I cannot put a number on that.
Ms. Moorcroft: Can the Minister tell me whether there are going to be any benefits or an advancement to having a knowledge-based economy by bringing forward this industrial support policy? How will the Yukon infrastructures policy support a knowledge-based economy?
Hon. Mr. Fisher: Through various training and through industry.
Question re: Industrial support policy
Mr. Harding: I have a question for the same Minister regarding the industrial support policy. The government has stated that it is currently negotiating with Loki Gold and Anvil Range Mining Corporation on energy and other infrastructure needs. However, on the issue of energy charges, it has stated in Question Period that it will accept the existing regulatory regime. The Yukon Utilities Board will set a rate and Yukon territorial government will kick in its industrial support grant program, if requested.
I would like to ask the Minister when the government, which is supposed to be currently negotiating these issues, expects to have definitive energy prices for these companies.
Hon. Mr. Fisher: I do not believe that the government has actually been in negotiations with Anvil Range at all. I attended a meeting before Christmas with the president of Anvil Range. At that time, he said he would be coming to us to talk about power rates and also about the bulk haul rates that we currently have in force, but that he would not be doing that for some time. In the meantime, we have had people from Economic Development and the Energy Corporation in Faro looking at the use of energy at the current site.
Mr. Harding: The range of answers we are getting today is absolutely phenomenal. The Minister just stood up and said that he does not believe that we have actually been negotiating with Anvil Range. Yet, the throne speech that kicked off this legislative session said that mining companies, such as Anvil Range, are currently discussing their transportation, energy and other infrastructure needs under the auspices of this policy - referring to the industrial support policy. So what is the answer? What exactly is this government doing on these energy matters?
Hon. Mr. Fisher: There is a difference between discussions and negotiations. The Department of Economic Development has not entered into actual negotiations with Anvil Range that I am aware of. They are discussing the cost of service and the use of power at the site, but there have been no negotiations to this point.
Mr. Harding: The Minister has said in the past in this Legislature that the government is negotiating with Anvil Range. It has been mentioned in the Speech from the Throne and in Question Period. I am quite confused about exactly what is going to happen with companies such as Anvil Range and Loki Gold when they discuss these infrastructure needs under the policy that seems to be so vague.
When a company, such as Anvil Range, does go to the government, after the Utilities Board makes its ruling, what will the Minister present to them in the context of this policy? What will he tell them and what will their next step be?
Hon. Mr. Fisher: That will depend on what Anvil Range will be asking for from the Yukon government.
Question re: Contract regulations
Mrs. Firth: I have a question for the Government Leader. It has come to my attention that the word within the contracting industry is that, after tender documents are out and public, and before bids have closed, if one wants changes made, call Johnny O. and those changes will be made in the tender specifications.
I would like to ask the Government Leader why he is interfering with the contracting process.
Speaker: Order please. In future, will the Member please refer to the Government Leader by his title.
Mrs. Firth: On a point of order, I was concerned that the Speaker would have that ruling. However, I want my information to be accurate. People are not saying to me "call the Government Leader", but are saying "call Johnny O.". I appreciate your ruling, and I will not make that reference again, but I want to be accurate in my question.
Hon. Mr. Ostashek: Clearly, we are not - and I am not - interfering in the tendering process.
Mrs. Firth: It has also come to my attention that other Ministers have been called regarding contracts and the tendering procedures and have been taking actions at the political level. Since it is clearly not in the best interests of the public to have this kind of interference in the tendering process, I would like to ask the Government Leader what his policy is regarding Ministers' involvement and actions in the process after tender documents are distributed.
Hon. Mr. Ostashek: The process that is in place, and what we wanted to see in place, is a fair tendering process. If some Minister, as the MLA, is approached by a concerned company that felt that something was wrong with the tendering process, I think that is a legitimate concern to raise with the Minister, and the Minister can send it back down to the department.
Mrs. Firth: So, we do know that the Government Leader and other Ministers have been called, and that there is nothing in place, except to send it back down to the department. I do not think Ministers should be getting involved once the tender documents have been made public and before the bids are even in.
Obviously, there is no policy in place, and it is a free-for-all. You just phone whichever Minister you happen to be best friends with and talk to them.
Speaker: Order please. This is a supplementary question. I would like the question, please.
Mrs. Firth: Could the Government Leader tell us when they are going to have a policy in place to discontinue this political interference in the tendering process?
Hon. Mr. Ostashek: The Member opposite has great difficulty understanding anything we say on this side of the House. I stated quite clearly that there is no political interference. I think it is quite legitimate for someone to approach an elected official if they have some concerns. We have it happen on a daily basis. The Member opposite has people approaching her. What is wrong with calling a Minister to say you have some concerns, and with the Minister passing it on to a department? That is not political interference. We are not giving directions to change the system. We are just asking why it is being done this way, and why it cannot be done differently.
Question re: Contract regulations
Mrs. Firth: I would like to follow up with the Government Leader with respect to the issue of contract regulations.
Policy brings me to my next question, which is about contract regulation review and changes to the rules. Presently, there are rules in place governing sole-sourcing of contracts. They are quite tough rules, and rightfully so. Now, this government wants to change that so it will say that Ministers will be given the authority to approve the sole-sourcing of contracts. That is quite interesting.
In light of the interference that has been going on, is the Government Leader prepared to remove this clause to open up the sole-sourcing of contracts to Ministers having the authority to approve them, instead of a set of rules?
Hon. Mr. Ostashek: I continually have to keep correcting the Member opposite. There has been no political interference in the contracting process. Some recommendations have come forward for changes to the level of sole-sourcing, and Cabinet has considered them.
Mrs. Firth: There are no illegal write-offs, there are no conflicts now, and there is no interference. What I am concerned about is maintaining the integrity of the contracting process and that there be a level playing field for all Yukon contractors - fairness, consistency and predictability. Now, the new rules are going to say that sole-sourced contracts that have been approved by the Minister and which have been extended past the sole-sourcing threshold,shall be...
Speaker: Order. Would the Member please ask the question.
Mrs. Firth: ...periodically identified to the public. I would like to ask the Government Leader if he will take that clause out of his new contract regulations.
Hon. Mr. Ostashek: Clearly, the Member should be asking the Minister of Government Services about the contract regulations because he is the Minister responsible for their overhaul.
Mrs. Firth: I do not see him jumping to the defence of the Government Leader. This one was a pet peeve of the Government Leader. He was the one who said that he was against the sole-sourcing limits being increased from $10,000 to $25,000, yet that is what is going to be done. As an example of how this is going to work, let us take the Boylan contract. Now, the Minister is able to decide if he wants to give it out for $25,000, or he can extend it past the $25,000 -
Speaker: Order. Would the Member please ask the question.
Mrs. Firth: I sure will. - and then let us know when he feels like letting us know. I would like to ask the Government Leader if he will go back to the principle of having some rules in place in order that all Yukoners are treated fairly and that the integrity of the contracting process can be maintained without political interference.
Hon. Mr. Ostashek: Once again, there is no political interference, and I will keep correcting the Member each time she gets up and makes those irresponsible statements. For the most part, the changes to the contract regulations - and even the particular one the Member spoke about - have come from the contractors themselves.
Speaker: The time for Question Period has elapsed. We will proceed to Orders of the Day.
ORDERS OF THE DAY
Bill No. 4: Second Reading - adjourned debate
Clerk: Second reading, Bill No. 4, standing in the name of the Hon. Mr. Ostashek, adjourned debate. Mrs. Firth.
Speaker: I will remind the Hon. Member for Riverdale South that she has about 15 minutes.
Mrs. Firth: I am just trying to refresh my memory as to where I was in that debate. I believe I was at the Canada grants portion of my presentation.
We are hearing all these admirable things from the Government Leader about how he is opposed to grants, but what did we find out when we started discussing the industrial support policy with the Minister of Economic Development, who tried to defend it in Question Period, but continued to fumble? We find out that an unlimited amount of money is going to be dedicated to grants. I see the next speaker going off with one of his colleagues to write their -
Speaker: Order. I would remind the Member that she is not allowed to refer to someone leaving or someone being present. This is unparliamentary.
Mrs. Firth: I did not refer to who the person was; unless the public knows who the next speaker is, I do not think they know who just left the House. Somebody just left the House. I never referred to him as the Minister, his name, or anything.
Speaker: Order. I believe the Member also knows that it is unparliamentary to argue with the Speaker.
Mrs. Firth: I will continue on with my debate while the other two fellows are writing a speech here.
The Government Leader constantly stands up and tells us he is in opposition to grants. Yet this government is giving out more money than any other government has in the form of grants. We have grants in the Economic Development department, we have grants in the Housing Corporation, we have grants with this new industrial support policy, grants in tourism with the centennial program - millions and millions of dollars going out in the form of grants.
I know there was a time when I was a Cabinet Minister and previous governments had to give out grants, and my agitating about grants with that government was probably partially responsible for me being removed from Cabinet, and that is fine. That is just fine. At least I had some principles and stood up for what I believed in - unlike this government, the members of which constantly say they are against grants yet come into this Legislature with more money than ever identified in the form of grants to hand out to people.
What should we do with the grant money if we do not hand it out in the form of grants?
My preference would be to give it back to the Yukon taxpayers, to those individuals who had their taxes increased by this government. This government, which is a so-called conservative government, is supposed to believe that the money is better left in the hands of the taxpayers so that they can spend the money, instead of taking it away from them and then handing it out to people they think should have it.
I remember the present government Members, who were the previous Opposition Members, accusing the NDP government of the day of redistributing wealth and how that was a socialist policy. Yet they are giving out more money than any other government in the Yukon has ever given out in the form of grants. They do not even have policies, or guidelines, or parameters or anything in place, except some umbrella policy, as to how the money is going to be given out. Who is going to get it? How do they have to become eligible for it? They are going to ask us to approve that in the Legislature - without a $1.00 line item - by an amendment they are going to make to the budget. It just goes to show that this government does not have any principles and does not stand for anything. It confirms the concerns my constituents and I have with respect to the budget: that the government does not know what they are doing with this budget. My constituents do not have confidence in them, they do not trust them and they do not believe their budget. I share those concerns.
We really have the government on the defensive because they have not come here able to defend any of their positions, or their policies or their statements. When they have an opportunity to promote the good things they are doing and to promote what good government they think they are giving Yukoners, they spend their time thinking of measures and ways to keep information from us and the public so that they need not be fully accountable to the public. Let us have some examples. Just today I was informed by the Government House Leader that we are no longer going to debate each budget item and each budget separately. We are not going to debate the supplementaries and get them cleaned off, and then move on to the operation and maintenance and finish it and then move on to the capital and finish it. I am told that now we have got to line up the supplementary budget, the capital budget, the operation and maintenance budget here and we have to open them all to the respective page. When we go through each department, we can do all three of them at one time.
We all know why the government is doing that. They are doing it because they think it is going to save them time and stop repetitive debate. They think that they are being very clever, and that it will cut down the amount of time that they will have to spend in here. They have already made the decision that we are going to have one sitting of the Legislature, and then the Minister of Economic Development has the audacity to stand up and say that, as Opposition Members, we are going to have an opportunity to debate and participate in some of these infrastructure programs that are going to take place.
Any clear-thinking, logical person knows that is absolutely not true, that we will not have that opportunity. Instead, the documents will be brought in here after the fact for us to rubber stamp, just like the special warrants that the government had the Commissioner sign - the millions and millions of dollars of special warrant money.
That is going to happen more and more if we have only one sitting of the Legislature. Soon, half of the budget will be by special warrant and those Members will still be standing up and saying, "Well, the Opposition has a chance to ask us questions." It just happens to be after the fact, after all the money is spent, and after all of the decisions have been made.
I want to put the government Members on notice that it does not matter how they change things around, or how they try to gerrymander the debate, they are still going to get the same tough questions. They will still be made to be accountable by us, as Opposition Members. We are still going to ask for just as much information. However, this time the information will have to be forthcoming because, as a Member of this Legislature, I am not prepared to say to the Minister, "Okay, you just bring back a legislative return. You bring back that information when you get it", and then wait for the information to come back. They are calling the shots and writing the rules, and they had better be able to provide the information, provide the answers, and perform under their own new set of rules.
I have consistently asked governments - it does not matter which government is in power - for two major items that I like to use during budget debate. One is a list of all of the contracts that have been issued - I have asked for interim lists, and not just lists from the end of the year - and, secondly, a list of all of the grants and loans that are made, on an annual basis.
We have been given the contracts. The Minister of Government Services was good enough to provide us with a list of the contracts. However, I have been told by the Minister responsible for Economic Development that I will get the list of loans and grants when we come to that item in the budget debate. He gave absolutely no reason why he cannot provide it now, but he is going to wait until we get to that item in the budget debate.
I have one more outstanding issue - information I requested - and I requested it during budget debate from the Government Leader. It was information with respect to people who are delinquent in repaying their loans to this government. This government wrote off over $800,000 worth of bad debts in loans that had been given to people and were never repaid. I asked the Government Leader for that information during the last session and the one before that.
The Government Leader kept saying "next time, next time". I have a bevy of letters that exchanged hands between me, the Government Leader, the Minister of Economic Development, the new Minister of Economic Development - since the Government Leader is no longer the Minister of Economic Development - and I still do not have that information. I was supposed to have had it by the fall. We still do not have that information.
I suppose we will now get that information when the Minister's budget is up for debate - maybe. However, I will tell the House what will be different this time: it will be no more of this, "Okay, I will bring it back for the next session," or "Next time; next time". There will be no next session. There will be no next time. If this government wants to operate under these rules, they had better be prepared to have all the information that we ask for here, now, in the next two or three months. We want all of it; there must be no more holding over of information.
We have a government that used to espouse some principles when they first came to office. The Government Leader stood up and, I believe, he was going to reform the whole structure of government based on some book he had read: Reinventing Government was, I believe, the book's title. We had a lot of debate about that.
What have we seen in the last two and one-half years in the performance of this government? Just based on budget matters, we have seen a government that has become more secretive, less forthcoming with information, less prepared to stand before the public and defend their record and one that has become very arrogant. This group of individuals who are the government think, now, that they can do this action that I am going to describe and get away with it: when they cannot stand up and defend what they are doing, be accountable for or justify what they are doing, they just sit down in their chairs or simply do not call the House into session again.
They then do not have to answer the questions.
Speaker: Order please. The Member has three minutes to conclude her debate.
Mrs. Firth: Thank you, Mr. Speaker.
The Minister responsible for Government Services was a perfect example when he was the Minister responsible for the Public Service Commission. He could not defend his position with the wage restraint, so he just sat in his chair and refused to answer questions. That is what this government is doing. They are sitting in their chairs, not here before the public, up in their offices, with the doors closed, with their ears closed, refusing to defend their position or answer any questions.
There are going to be a lot of questions about this budget - line by line, item by
item, minute by minute, day by day, hours, weeks, months, if we have to - until we get all
the answers. Do you know what? I am looking forward to that detailed examination, and I
cannot wait to get started in Committee of the Whole.
Hon. Mr. Fisher: I am pleased to speak in support of the 1995-96 budget. Last week, we heard Members of the Opposition criticize us, firstly for tabling the biggest budget we have ever seen in this Legislature, and secondly for not spending enough on nearly every program. To use the phrase of my friend, the Minister of Justice, you cannot have it both ways.
During debate, I have heard some fairly bizarre statements. For instance, the Member for Faro advised the public that "they have sucked back another $1.5 billion from the federal government". I am not sure whether that Member intended to mislead anyone, or whether he was just not able to provide better criticism. Nevertheless, the statement is just plain silly.
After the budget was tabled, I heard a former NDP minister on CBC Radio actually supporting many of our initiatives. In the same interview, I believe the president of the Liberal Party stated, "I just do not find that much in there, frankly, to be critical about."
Possibly, the Opposition Members secretly support our budget and merely provides opposing rhetoric because they feel it is their responsibility.
The Member for McIntyre-Tahkini took the opportunity to berate us for our legislative calendar, stating something to the effect that the only legislation we bring forward are amendments to NDP legislation. Yes, some of our legislation is amending legislation, brought in because the NDP acts were bad in the first place.
The other day, a friend of mine said that we should set up a process that requires the Legislature to rescind an act each time a new or amended act is passed. Besides that, he said that, in the event the NDP ever gets back into power, we should put into place a process that would require a complete review of all legislation prior to bringing in any new act to the House. That way, he said, we would spend all our time reviewing legislation and would never be able to implement any new laws or regulations.
We do not necessarily fully agree with my friend, nor with this action, but we do believe that less government is better government. I cannot remember the person who first stated this, but it is something to the effect that we know that our business is government and not the government of business.
The Opposition has accused us, in the past couple of days, of having no vision and having no initiatives, and it cannot figure out what our intentions might be. In my response to the throne speech, I outlined several initiatives - such as agricultural support, the state of the environment report, salvage of merchantable timber from the Whitehorse sewage lagoon, which, I would like to remind Members opposite, we funded when the previous government would not, an examination of the beverage container program, special waste collection program, a $20 million transportation infrastructure agreement with the federal government, the Yukon mining incentive program for approximately $800,000 annually, jointly with the federal government, the administration of mineral development office, and the centennial anniversaries $9.5 million program - to name just a few.
On Thursday, we tabled the Yukon industrial support policy. The Yukon Oil and Gas Act, which is scheduled for the fall of 1995, and transfers legislative authority and control over onshore gas and oil resources to the Yukon government, was signed on May 17, 1993. Implementation activities are well underway in preparation for the transfer. A framework of the Yukon Oil and Gas Act is being developed for Cabinet consideration and public discussion over the coming months. As federal amending legislation must precede the Yukon Oil and Gas Act, we anticipate tabling it in this Legislature in 1995.
The small business red tape review and reduction initiative has been identified as one of the major issues facing small business in Canada today. We are consulting with the Chamber of Commerce and the Tourism Industry Association of Yukon to identify the specifics of regulatory problems or paper burden. Based on the outcome of consultations, an action plan will be developed in cooperation with the private sector. The Department of Economic Development is assessing the need, focus and structure of a small business conference, which may form one element of the action plan.
We are reviewing and analyzing the existing economic development programs, the economic development agreement and the business development fund. The framework agreement for the 1995-96 Canada/Yukon economic development agreement requires that an evaluation be completed by March 31, 1995. An evaluation committee has been established to steer the evaluation. The evaluation is being designed to save money by using in-house expertise for project management and breaking the project into smaller pieces in order to use local contractors and to provide the views of many researchers, rather than the opinion of one large firm.
An evaluation of the rationale of the business development fund is underway and is to be completed by mid-February 1995. The evaluation will provide us with information concerning what types of government assistance, if any, are needed by Yukon small business. It will also tell us whether the kind of assistance that the business development fund has been providing is still needed. If the evaluation indicates that the program, or elements of it, are still needed, we will then determine what changes should be made to the existing program.
The new electrical rate design is a response to past Yukon Utilities Board's cost-of-service, capital-plan and general-rate-application hearing recommendations. We are responding to the extensive public input involved in these hearings. The directive is an indication of the government's continued commitment to independent regulation.
Then there is the centennial anniversaries program, for $9 million over five years, and the centennial events program, for another $500,000, which I referred to previously.
The Yukon Chamber of Commerce is the successful bidder to host the Alaska State Chamber of Commerce general meeting and trade show convention here in Whitehorse. The Yukon government has provided support for this initiative. The opportunity to host the convention is evidence that strong ties are being developed between Yukon and Alaska. This is the first time ever that the event has been held outside Alaska.
One other successful initiative was the establishment of the mining facilitator. In addition to that, the Yukon government sponsored a trade show of services that are provided to business. The project was held in the Gold Rush Inn on October 19, and 10 government departments and agencies participated. The initiative was very well received and suggestions have been made to make this an annual event in conjunction with Small Business Month.
The Yukon government has supported, through the Canada/Yukon economic development agreement, a Yukon trade delegation to Alaska State Chamber's annual trade show.
I have asked the Department of Economic Development to undertake a full program review
leading to the preparation of a three-year business plan for the department. The business
plan will review, and perhaps change, the mission of the department, and will include
operating principles, goals and objectives, and strategies for reaching those goals. It
will identify our key customers and the core businesses we should be in. The business plan
will also identify the resources required to implement the plan. For each year of the
business plan, an annual operating budget will also be prepared, and at the end of each
year an evaluation will be conducted.
The side opposite has gone on at length about our lack of support to the mining industry, and then complimented their B.C. counterparts for the fantastic increases in exploration activity in that province. I had a different perspective about what is happening in British Columbia, so I had one of the executive assistants do a bit of research.
I will give you the sources of the information. In the November issue of The Claim Post, which is a publication of the Yukon Chamber of Mines, it states, "It is clear that the next year will see remarkable growth in expenditure in hard rock mining. The Yukon territorial government has taken the first step toward doing this with the appointment of Jesse Duke as the new mining facilitator, but much of this is federal. When will we see an equal demonstration of commitment from Canada, instead of more regulations and bright, gleaming environmental assessment processes?"
In the November 1994 issue of George Cross newsletter, put out by Western Canada Investments, it states, "The investment climate in the Yukon Territory is currently among the most attractive of any jurisdiction in North America, with six advance projects now proceeding into the regulatory stage. The Yukon territorial government is particularly supportive of the mining industry, and infrastructure and electrical power rates support strategies are currently being formulated. Of specific benefit to Loki will be financial assistance in the upgrading and maintenance of the access road into the property."
From the British Columbia Report of July 4, 1994, an article, entitled "How B.C. Blew $50 Million", states, "The Tat decision shook the mining communities' confidence", says Gary Livingston, president of the Mining Association of British Columbia. Indeed, staking has fallen to 26,000 claims annually, from 100,000, and annual exploration expenditures have fallen to $50 million from $190 million".
On CBC Radio in Whitehorse, it was stated that, "The mining industry in British Columbia says it had a better year in 1993, but is still losing money. The provincial government must do more to help the mining sector. The mining association's annual survey shows industry losses were $14 million in 1992, and close to $500 million the year before. Gary Livingston heads the Mining Association of British Columbia. He says that the industry may even be profitable again this year, but he says it will be no thanks to the provincial government. He says the government needs to clarify where the industry can still mine and improve the taxation climate. Quoting Livingston, "We are the most taxed mining jurisdiction in Canada; one of the highest in the world.""
From The Northern Miner, 1993 Report Card, "The Yukon deserves accolades for rebuking Harcourt over the Tatshenshini-Windy Craggy wilderness fiasco. The territory has had a difficult time, what with Curragh, Faro, and Sa Dena Hes operations at a standstill. However, it is still aggressively seeking new mining opportunities."
The last one is from a publication of the Mining Association of British Columbia, entitled Mining in B.C.. Livingston says "Government attitude is largely responsible for the fact that exploration is declining and for the fact that other provinces and countries are luring B.C. mining companies to invest and create jobs in their jurisdiction". The report, Annual Financial Report in the British Columbia Mining Industry, compiled by Price Waterhouse, notes that industry employment levels are at a 10-year low. Direct employment in the province dropped 16 percent, to 10,576, from a total of 12,587, in 1991.
Pacific Sentinel Gold Corporation, in a press release, said, "The Yukon government has pledged to do everything in its power to enable the mining industry to flourish and established excellent relations with the company." In The Prospector, in an article entitled "The West is the Best", dated January 19, 1994, it states, "Pacific Sentinel Group believes the Yukon government is highly supportive of mining. It has recently announced the strategy to ensure that electrical power will be made available at a competitive price to larger mines."
I do not buy the Opposition's argument that we are not doing anything for mining. I think that what I have just read into the record directly from mining people in jurisdictions other than the Yukon supports what I believe.
In the Renewable Resources sector, the environmental protection and assessment branch is working on a review of the Environment Act. This work will continue, with the objective of improving the ability of the government to achieve the objectives of the act. The branch will continue to actively participate in the Canadian Council of Ministers of the Environment, and assist in the preparation for the Council of Ministers of the Environment's upcoming meeting, to be held in Haines Junction this May.
In the waste management section, this will be the first full year that the waste
management section has been integrated with the environmental protection and assessment
branch. Previously, it was in the Department of Community and Transportation Services. The
section will continue the good work it did with the Department of Community and
Transportation Services. In addition, it will make a substantial contribution to the
regulatory development under the Environment Act. Plans for the 1995-96 fiscal year
include completing public consultation on solid waste regulations and producing final
regulations, continuing the program toward developing regulations for special waste and
continuing the special waste collection and transportation to approved facilities in
southern Canada. The section will be monitoring the compliance level and effectiveness of
the programs and actively offering to help private and public sector proponents faced with
complying with the regulations, such as those regarding pesticides and beverage
Under parks and outdoor recreation, in the years ahead, widespread publicity and special events surrounding the centennial anniversaries are expected to generate a dramatic increase in tourism. Projections run as high as 32 percent.
To meet this increased demand, additional funds will support and enhance maintenance and services in Yukon campgrounds, particularly along the Alaska and Klondike highways. Seasons will be extended in key campgrounds, which will open May 10 and remain open until the end of September. I believe my colleague, the Minister of Tourism, will be happy with that particular announcement.
These enhanced levels of service will help fulfill visitor satisfaction and deliver the message that the Yukon is a great place to visit. We have added $45,000 to the parks budget for 1995-96.
Under mineral resource assessment, over the past two years, Renewable Resources has worked with Economic Development and stakeholder groups to develop a mineral resource assessment process. Comprehensive mineral resource assessment assists in selecting park areas by indicating what areas would best be left for other sectors and by clearly defining park values. In particular, the mineral resource assessment component will assist government in avoiding unnecessary park/mining conflicts and, at the same time, provide certainty to both industry and park interests. Other values that will continue to be assessed include natural, cultural and socioeconomic components.
I spoke about the initiatives of the agricultural branch in my reply to the throne speech, so there is no point going back over them.
In the fish and wildlife budget, a number of new initiatives and a shift in priorities are reflected in the 1995-96 operation and maintenance budget for the fish and wildlife program. These reflect the need to deal effectively with the requirements of implementing land claims, to respond more effectively to the needs of rural Yukoners, and to integrate the management of fish and wildlife resources within the management and development of other natural resources.
Specifically, we are talking about a strengthened regional management section to focus on public communication of branch programs and to encourage effective community involvement, generally. In addition, a regional biologist position will be established in Haines Junction for the southwest Yukon to complement the present regional biologist positions in Dawson City and Watson Lake.
The Member for Kluane can take note of that. We have refocused the fish and wildlife habitat management program to provide proactive habitat protection measures, natural resource management planning in concert with park, lands and forest interests and habitat enhancement initiatives. Several major wildlife conservation initiatives will continue, including the Aishihik caribou recovery program and the Carcross caribou recovery program, in partnership with First Nations and others in those areas. In the case of the Carcross herd, the program also involves active partnership with CYI and the Province of British Columbia.
I wish to bring these items to the fore in response to the Opposition's comments that there are no new initiatives, there is no new vision. Our government has a vision. Our vision includes less interference in the marketplace and with the private sector than the previous government was wont to do.
I wish to put on the record my support for the 1995-96 budget.
Hon. Mr. Ostashek: I am not sure whether it gives me great pleasure or not to get up and close debate on the budget speech. Before Christmas, I laid out in this House what we intended to do with the money we are responsible for spending on behalf of the citizens of the Yukon, and we did that in fairly great detail.
In my wrap-up today, I believe it is important that I refute some of the statements that have been made by Members opposite, because some clearly are not fact, some are misconstrued and, in some instances, I think the Opposition does not really have a grasp of what they are trying to relate on the floor of the Legislature.
The budget has been tabled now for almost four weeks, and for all intents and purposes, it is a budget that I believe has been overwhelmingly accepted by the people of the Yukon. We can go back to the commentary right after the budget was tabled, the next morning, as some of my colleagues have mentioned, by the political pundits on the radio, and some past, very loyal NDP Cabinet ministers.
The past president of the NDP made comments on the budget, as did the president of the Liberal party. Mr. Speaker, I am sure that you, as well as many, many other Yukoners, after listening to them, would have to say that they all supported the budget.
Certainly, the Members opposite are not going to agree with every line item in the budget; we would not expect them to. They are there to provide criticism; they are there to point out the weaknesses; and, in some cases, they will be pointing out their philosophical beliefs that are quite different from those of the Members on this side of the House.
I believe that the budget is balanced. The budget addresses training needs of Yukoners; the budget addresses a social safety net that we require for the people who fall through the cracks; and the budget addresses jobs - jobs for private-sector Yukoners, people who do not work for the government and who are very, very dependent each year on the capital allocations of the government in power to the government of the day.
Members opposite have said no problem; it is just hard choices. If you have that much money, it is no problem; it is just hard choices. That is right; it is hard choices, and we have made hard choices in every budget that we have presented on this side of the House, going back to our first one.
I am going to be clarifying some of the comments that were made that I do not believe were accurate. I want to speak a little bit about how the extended care facility was handled, and I want to speak a little bit about the special warrant that was approved before Christmas.
First of all, I want to make some comments about the speech of the Member for Riverdale South. It is too bad that that Member was so bitter to, and so vindictive about, Members on this side of the House, because I believe it has clouded her rationale and thinking to the point where she cannot even offer constructive criticism any more, and that is too bad.
That Member stands up time and time again in this House and talks about what her constituents tell her and what her constituents want. That Member for Riverdale South is a Member from this Legislature who has not had one mailing to her constituency in the better than two years in this last mandate. This is a Member who has not called any public meetings in her constituency. Who are her constituents? We have many constituents in Riverdale South who phone us to talk to us and who are thoroughly disgusted with the actions of their MLA - thoroughly disgusted.
The Member for Riverdale South criticized two of the Members of our back bench for speaking out in support of their constituency. That is what this Legislature is for: to speak on behalf of their constituents. Why should they not speak on behalf of their constituents? She always speaks on behalf of her constituents.
She criticized the skating rink at Old Crow - the skating rink that the MLA for Old Crow is very proud of - and, from the reports we are getting, the kids are enjoying it immensely. People think it is a good facility for Old Crow. I do not believe that Member has ever been up to Old Crow to look at that facility. I do not think she really has a good comprehension of what she is talking about or what she is criticizing.
On the one hand, she says it is fine for them to talk about the things that are done in their constituency, but they should be interested in the whole Yukon. Well, my backbenchers are interested in the whole Yukon, more than the Member for Riverdale South, whose only concern is building a Grey Mountain school that the numbers cannot substantiate. Is that not for her riding? Is that in the interests of all Yukoners? I do not believe so.
It should not surprise me that she would condemn the skating rink in Old Crow that the kids are enjoying, because this is the same MLA who tried to take a school bus away from school children.
I believe she should be a little more careful in the comments that she makes.
I have had constituents of hers phone me and say they voted for her last time because they thought she was a right-winger, but, after watching her actions in this House for the last two years, are thoroughly disgusted and say they would never vote for her again.
She also criticized the gymnastic facility that was built in her own riding. The facility has been a tremendous success with the kids in Whitehorse. We have heard nothing but positive comments on it, yet she criticized that facility. She does not even know what is happening in her own riding any more.
I could go on and on about that Member, but I have more important things that I need to say today.
I want to talk a little bit about comments made by the Member for McIntyre-Takhini in his budget speech. I believe one of the comments he made was that it is the biggest budget in the Yukon's history. Well, it is, and that should not be surprising. I guess this is where I really differ from the Members opposite. They continue to condemn us for not having a vision and not having a plan, yet they, in Opposition, are not very focused at all. They make conflicting remarks and take conflicting positions day after day. On the one hand, they say we drove the economy down the tube. On the other hand, they reject every positive indicator that comes up.
Certainly, this is the biggest budget ever, and the next one will be bigger yet, and the one after that will again be bigger. As programs are developed, as they have been in the last several years - the Alaska Highway, the Northern Accord, phase 1 of the health transfer - and there are very large recoverables, such as on the Shakwak project, the Alaska Highway agreement and the Canada/Yukon infrastructure agreement, they are all going to add to our budgets. The Members opposite are fully aware of that, yet they continue to make statements about this being the biggest budget ever. If they do not want to see bigger budgets, I ask them to tell us what it is they want us to tell Ottawa and the United States government that we do not want. Should we tell them that we do not want the Shakwak project and that we should turn down the $90 million U.S. that the American government is going to give us to upgrade that highway? Should our tourists continue to drive on that goat trail that has been up there for so many years? I spent many years in that part of the Yukon and I know the complaints from our tourists who travel that highway. Do they not want us to accept that money? If they do not, I would like them to stand up and say so.
Should we not have a new hospital in Whitehorse? A $47 million hospital, for which I believe there is some $12 million or $15 million in this year's budget. We could make those budgets smaller. But I want them to stand up and tell the people of the Yukon that they do not want a new hospital in Whitehorse. Let them say that. Let them be consistent in their attack.
Another comment made by the Member for McIntyre-Takhini is that we are not bringing spending under control. That comment makes me laugh. The 1991-92 year had a deficit; 1992-93 had a huge deficit; 1993-94 had a surplus; 1994-95 and, possibly, 1995-96 will be balanced or in a slight surplus position. Clearly, that must be bringing spending under control. We are not spending more dollars than we are taking in. That, I believe, is spending under control.
Another statement made by the Member for McIntyre-Takhini is that the government will not admit that it is changing spending priorities. Of course we admit it. It is all in the budget we are going to debate, as it was in the last one. It is clear that the priorities of this government are different from those of the previous government. That should not be surprising to anyone.
Another statement, made by the same Member, was that spending lapses experienced last year were of a record size. They were fairly big, but the total lapse under one year of NDP government was larger. The true difference, last year, was that the vast majority of the lapses were in the operation and maintenance side of the budget, not the capital, as was the case in previous years.
Another question, asked by the Member for McIntyre-Takhini, was where the wage
restraint had gone. He said that the total public sector wages had gone up, I believe. Of
course they have gone up. Merit increases have not been cut back or eliminated. The
rollback means that the total wage bill will not increase as much as it would have
otherwise. It gives us a chance to get a handle on things and have some reasonable,
planned approach as to how we do business in the Yukon in the future. We have to control
the O&M spending of government.
I believe I heard Members opposite say it was good to balance the budget. I am glad to hear that. I even heard the Member for Riverside say it was good to have a surplus. I am glad to see him taking that position, after a couple of years. I believe it is good to have a small surplus - it is necessary.
The Member for McIntyre-Takhini also said that, when the Yukon Party took over, the financial health of the government was extremely good, or something to that effect. If we were to put the year-to-year trends on a chart - we have done it before, and we can do it again, if the Members opposite so wish - we would see that was clearly not the case when we took over. We were into the second year of deficits the year we took over. There was a $19 million deficit the first year, 1991-92, and there was a $64 million deficit in 1992-93.
Regardless of the numbers - forget about the numbers - there was a deficit two years in a row. I will pull the chart out. These were annual deficits, not accumulated deficits. Clearly, the trend was not going in the right direction.
The Member also said that we were pulling some shenanigans by making allowances for bad debts. I do not believe we were pulling any shenanigans, and the Auditor General certainly does not seem to agree with the Member opposite. The Auditor General has not said the provision we made is incorrect, and he has signed our statements as accurately describing the financial position of the government.
I do not know how the Member can say that we are pulling shenanigans and making allowances for bad debts.
The Member went on to say that the government transferred funds from the general revenues to the Yukon Energy Corporation to boost the consolidated position. That is impossible - it is just impossible. I believe that the Member opposite, having been a former Minister of Finance, knows that. On a consolidated basis, if you transfer funds between related entities, it will make absolutely no difference at all to the consolidated position. That simply is not the case.
He went on to say, and I presume that this was during the time that he was a government Minister, that that had not been done in the past. I believe that is what he said. I do not believe that is true, because the NDP had the Yukon Development Corporation renovate the old Yukon College. Consequently, those renovations did not show up as an expenditure in the unconsolidated government books, as renovations to any other government building normally would. Consequently, that made their unconsolidated surplus higher than it otherwise would have been. It would have made it higher than what it actually was. If they had taken those renovation expenses out of the government funding instead of out of Yukon Development Corporation funding, it would have been totally different.
They keep making statements over there that we illegally made allowances for two receivables that we took over from Yukon Development Corporation. I am not sure if the Member means to imply that making an allowance was illegal, but if that is the case, he is wrong.
The Auditor General simply said the taking over of the two receivables is equivalent to the government making a loan to Curragh and to the Taga Ku project. In the Auditor General's opinion, in order to make that loan, we should have had an act - I see the Member opposite nodding his head, so he agrees with that.
My officials and I disagree with that interpretation. I doubt - I really doubt - that there is anyone in this Assembly today who really believes that on March 31, 1994, the date in question, the government made a loan to Curragh. We did not do that. There was authority for those loans under the Yukon Development Corporation. There was an authority for them; the loans were not illegally made. This is the Auditor General's interpretation about how it should have been handled. There was a difference of opinion on that, and we are trying to rectify it so it does not happen in the future. To say it was illegal is a fairly strong statement. Our position on that is we simply exchanged one asset for another - cash for an accounts receivable. That is all that happened, and it will be rectified in the future.
There have been a few concerns raised, by motion in the Legislature, by the Member for McIntyre-Tahkini today. I believe there is a previous motion, or a statement by the Member for Riverdale South, regarding one sitting per year - and that it is bad, they claim, to have one sitting a year. I can think of at least two instances during their mandate when they had only one sitting, and they did not think it was bad at that time.
The Member is shaking his head, no; maybe I can refresh his memory.
In 1989, I believe, when they called the election, they did not call the House back until January. They called it back for two or three days and called an election. They did not have a fall sitting. When they called the election in 1992, when it was time to bring the budget down, they did not call the House in. They called an election instead.
If it was okay for them, I guess it should be okay for us. We are going to be back in the House before Christmas this year again. We are going to sit as many or more days than what they did in the past. There will be a break in between. We budget for 60 sitting days in this Legislature. I forget what it was in the first year, but it was something in the high 70s. We are going to be in the 60-day range no matter whether we have one sitting or two sittings or maybe even more. So be it. That is fine. I do not have any difficulty with that.
The Member opposite implied that the government just wants to take the special warrant route. That simply is not true. The government now is doing nothing different from what was done in the past. The NDP made use of special warrants when the supplementaries were not passed before the spending took place. We possibly could have brought the supplementaries in, had them approved before the end of the year without goin and the warrant route. Technically, departments could have been in a position where they were spending money without authority. The Member opposite knows that. There is nothing spectacular there, and nothing has strayed from the normal way that government does business with us bringing forward this warrant. I do not see that it is going to be something that is going to be done on a regular basis. It was just to be able to give satisfaction to the departments that the money was there regardless of when the supplementary was passed. I do not believe that there will be any more warrants than there have been in the past.
In his speech, the Member for Faro made a statement that last year a Finance official said that there would be no federal objection if highway devolution monies were used elsewhere. I believe that is the statement that the Member for Faro made in his speech the other day. That simply is not true. The whole idea of the briefing was to let the Opposition know that our officials thought that the federal government might object to us not spending highway devolution money on highways.
That is what my officials have told me. The same Member for Faro said that this government has done nothing substantial for mining, that we are fortunate the world economy has improved, that there is a bigger demand for metals and exploration, and that is the reason the economy is picking up.
I think you will recall, Mr. Speaker, in 1991-92, when metal prices were at an all-time high, exploration dollars in the Yukon were at an all-time low. We started bringing those exploration dollars up when metal prices were at an all-time low. Now, the metal prices are starting to come up and I, for one, am very thankful for that.
Again, the Members opposite cannot have it both ways. They have to take a position and stick with it. On one hand, we are condemned for doing this on the other hand, we are condemned for doing nothing.
We have aggressively gone after the mining companies for exploration dollars in the Yukon, and it has been successful. The Minister of Economic Development read some of the comments made by mining newsletters from different companies. They all said what we had done for mining, what the Yukon looked like for exploration, and they condemned B.C. Yet, we have the Members opposite telling us exploration dollars are up in B.C. Up from what? From going right down the tube?
Those are the kinds of statements made by the Members opposite.
What else have we done for mining? I just received a document the other day from the House of Commons Standing Committee on Natural Resources. I was very proud and elated to see this document, entitled "Lifting Canadian Mining off the Rocks". I was very pleased to see some of the things you, Mr. Speaker, worked on when you were Minister, and some of the recommendations made by Whitehorse mining initiatives. . .
Some Hon. Member: (Inaudible)
Hon. Mr. Ostashek: ... and completed by the Yukon Party, when the NDP was sitting there doing nothing-
Some Hon. Member: (Inaudible)
Hon. Mr. Ostashek: - and completed by the Yukon Party. Many of the recommendations have been accepted. There are taxation issues that we brought up at every possible meeting. I was at a meeting in Halifax, and I brought that up with Finance Minister Paul Martin when I first met him, over a year ago. I took the mining industry's case to the federal government. Now this Standing Committee on Natural Resources has made nine recommendations, many of them coming from Whitehorse mining initiatives - positions this government has taken in support of mining in the Yukon. To say that we have done nothing is very irresponsible of Opposition Members.
The mining companies do not think that we have not done anything.
I have a document here, which was released on December 19, 1994, by Statistics Canada. It states that combined revenues of provincial and territorial governments in 1994-95 are expected to reach somewhere in the neighbourhood of $154 billion, while the expenditures will be some $20 billion more, meaning there will be a $20 billion deficit for the provinces and the territories - that is not the federal government. It goes on to say that, in terms of government expenditures, social assistance spending in 1994-95 is expected to fall - listen to this - in Newfoundland, Prince Edward Island, New Brunswick, Alberta and the Yukon.
I think we can be proud that we have control of the direct spending on social services. We have taken the money, are retraining people and putting them back to work, but the direct spending on social services is going down. Along with that, Statistics Canada says that the only two areas in Canada expected to be in a surplus position this year are the Yukon and the Northwest Territories. I believe that that is getting spending under control, even if the Member for McIntyre-Takhini does not think so. It seems that the other jurisdictions think we are.
We are done with mining. I could go on for ever with initiatives that we have taken here and I may get a chance to bring them up during the debates, going back to my first meeting with Mr. Siddon in Yellowknife, shortly after becoming Government Leader, and discussing infrastructure needs for Curragh and to try to get some support from the federal government for Curragh. The Member for Faro sits there and shakes his head. He has a short memory - good but short.
The Member for McIntyre-Takhini has several times in this House raised concerns as to
how we handle the extended care facility, and I want to set the record straight. We did
not do anything different than they would have had to do if they were in government at the
The capital cost of the building is written off. What the Members opposite seem to be saying is that they could have handled it differently. Well, I disagree, and think that they are perhaps a little confused on the matter. First of all, it did cost $11 million for the building, and I am sure they are aware of that. Of that cost, $4.8 million was attributable to the residential portion, and the Member for McIntyre-Takhini was, I am sure, fully involved in those discussions, and was aware that CMHC would cost share the carrying charges on that portion only - not on the entire $11 million. That meant that there was financing in place for only $4.8 million, and not for $11 million.
Secondly, this is not external financing. To finance it, YTG loaned $4.8 million to Yukon Housing Corporation, which, in turn, loaned it to YTG. By that method - which, I am sure, is the same method the Members opposite were going to use - we were able to get CMHC to cost share that part of the project.
Aside from that, there is some real confusion on the Opposition side about writing off this asset. As I said earlier, all expenditures on assets, whether they are schools, highways, vehicles or whatever, are expensed or written off in the same manner. Nothing was done differently for the extended care facility. It has always been that way. I find it really troubling and really odd that the Members opposite would now want us to handle that one asset differently.
I am sure that most Members in this House are aware that most governments treat asset expenditures exactly the same way we do. I understand that there have been some exceptions in some classes of assets in some jurisdictions, in that they have begun to capitalize them and depreciate them over time. I also understand, however, that some governments have gone that route, but have returned to the old way of doing it. There are legitimate reasons for capitalizing and depreciating assets, especially if this was a private sector enterprise - but it is not. It is not. I am still not entirely convinced that that is the route to go; however, I am sure that we will have a great debate on that. I am not sure that the Members opposite are even entirely sure that that is the way they would like the government to go. It seems to me that we were talking about only this one asset.
Speaker: Order please. The Member has three minutes in which to conclude his remarks.
Hon. Mr. Ostashek: Thank you, Mr. Speaker. I wish I had more time, but I do not.
Anyway, just to clarify that last remark, what seems to be confusing is the Opposition's failure to differentiate between the source of funds and the application of funds. How we obtain the funds has more bearing on how the expenditure is treated in the books. What the Opposition seems to be saying is that if we borrow money, be it for capital or O&M projects, then we should bite off the interest and spread it over the life of the project. I do not know how we could do that. If we borrowed all our money for capital projects in one year, we would have no capital expenditure in that year is, I suppose, what they are trying to say. I think there is some confusion on the part of the Member on that.
With regard to the warrant, I would like to clearly say to the Member opposite, who was concerned that we were trying to get the $4.5 million back into the budget through the back door, that that clearly was not the case. In that warrant, there is about $12 million for the Alaska Highway. Of that, about $9 million was fully recoverable from the Shakwak project. There were contractors available who needed work, so we put out another contract on the Shakwak project. That is clearly recoverable money. The balance of it was money that was used to keep employees working this winter.
If the Members opposite do not want the employees working this winter, perhaps they should tell us and we would not have to do it. We thought it was important to keep them working. As a result, we used part of the money that was rolled up in that warrant. I want to make it clear, for the record, that the money was not for the construction of the double dips that was referred to in this House by the Member for Ross River-Southern Lakes and by the former Minister of Community and Transportation Services. It was for the Shakwak project, and was fully recoverable from the American government.
I believe that this is a good budget. It is a budget that appears to be supported by
the majority of Yukoners. It is a well-balanced budget. While we may not agree on every
line item, as I said earlier in my speech, I urge the Members opposite to support it and
keep Yukoners working.
Speaker: Are you prepared for the question?
Some Hon. Member: Division.
Speaker: Division has been called. The question before us is second reading of Bill No. 4, First Appropriation Act, 1995-96. Mr. Clerk, would you kindly poll the House.
Hon. Mr. Ostashek: Agree.
Hon. Mr. Phillips: Agree.
Hon. Mr. Brewster: Agree.
Hon. Mr. Phelps: Agree.
Hon. Mr. Fisher: Agree.
Hon. Mr. Nordling: Agree.
Mr. Abel: Agree.
Mr. Millar: Agree.
Mr. Penikett: Disagree.
Mr. McDonald: Disagree.
Ms. Commodore: Disagree.
Mr. Joe: Disagree.
Ms. Moorcroft: Disagree.
Mr. Harding: Disagree.
Mr. Cable: Agree.
Mrs. Firth: Disagree.
Clerk: Mr. Speaker, the results are nine yea, seven nay.
Speaker: I declare the motion carried.
Motion for second reading of Bill No. 4 agreed to
Bill No. 3: Second Reading
Clerk: Second reading, Bill No. 3, standing in the name of the Hon. Mr.
Hon. Mr. Ostashek: I move that Bill No. 3, entitled Third Appropriation Act, 1994-95, be now read for a second time.
Speaker: It has been moved by the Hon. Government Leader has moved that Bill No.
3, Third Appropriation Act, 1994-95, be now read for a second time.
Hon. Mr. Ostashek: This bill is to request $12.8 million for the 1994-95 fiscal year. The vast majority of it is increases in capital, while O&M votes do require additional funding.
In overall terms, the operation and maintenance budget decreases by $3.8 million, with an almost identical decrease in recoveries accompanying the reduced spending. The single largest O&M decrease is in the Department of Health and Social Services, where spending is forecast to be $4.8 million less than the sum originally voted in the main estimates. The decrease is spread more or less evenly between Health Services and Social Services. Several other departments are also forecasting reduced expenditures for operation and maintenance purposes.
On the other hand, offsetting these decreases, eight departments are projected to spend more on O&M monies than they were granted in their original budgets. These sums range from $3,000 in Economic Development to $563,000 in the Department of Education.
The capital budget for the year will increase by approximately $16.6 million as a result of this supplementary. At the same time, the capital recoveries will rise by some $2.7 million. Of this increase in spending, revotes for the 1993-94 lapsed expenditures account for over $2 million. By far the largest increase in spending will occur in the Department of Community and Transportation Services, whose budget will go up slightly over $17 million. This increase reflects additional recoverable Shakwak work, and winter employment initiatives on the Alaska Highway. Also incorporated into this department's request are monies to be spent under the Canada/Yukon infrastructure program.
The Department of Education is requesting an additional $2.8 million for a host of projects, the bulk of which are in the public school program.
Several departments are asking for smaller increases. At the same time, four departments are projecting decreases in their capital spending. Notable among these is the Department of Health and Social Services, with more than $2.9 million being given up, due to the reprofiling of expenditures for the new Whitehorse General Hospital.
Despite the increases in expenditures, the expected surplus for the year should increase from $5.6 million to $8.5 million. However, I want to point out that this is fully dependent upon the federal government's ultimate actions that may be taken to deal with its deficit problem. These surplus funds may prove vital for future years.
The additional funds requested in this supplementary will create new jobs and will enhance the economic and social infrastructure of the Yukon, an infrastructure that is essential to maintaining our quality of life.
I therefore hope all Members will see fit to join us in supporting the spending
measures proposed in this bill.
Mr. McDonald: I have a few comments to make on this bill, and I will respond in general terms to some of the comments that have been made in the past few days about budgeting in general. These are important issues for us to address, and it may help clarify in the government Members' minds what is driving some of the criticism they face from at least some Members on this side of the Legislature.
It goes without saying that we are somewhat concerned that a large portion of this money was sought through the infamous special warrants of last fall. I will elaborate on my concerns with respect to that, not that I am surprised by the creation of the notion of special warrants, which I am not, but about the timing of these warrants and the purposes for which they were sought.
The big point to make is that we are trying to respond to the government's direction. We are trying to respond to the agenda, as established by the Yukon Party government. We try to read its rhetoric, we try to understand their vision statements and we try to interpret those vision statements through their spending practices in the budgeting process.
It is for that reason that sometimes our criticism seems somewhat disjointed, because we are trying to respond to the initiatives as they are taken by the government.
The NDP has clear policies with respect to how they wish to see things proceed. The NDP has economic statements. It has statements about the environment. These are all published documents. They were all embraced by the NDP government and they are still largely supported by the NDP today. Clearly, they could be updated but, being that they are only a few years old, they are very much our vision of what the territory should be doing.
What we are responding to are the Yukon Party's statements. We are responding to the four-year plan. We are responding to the infrastructure documents that they have tabled with federal ministers on occasion. We are responding to the industrial support policies, which are largely a reflection of their economic platform and their economic program. If there are inconsistencies or problems associated with those proposals - because we want to make some sense of those proposals and tie them together in some rational way - it is not because the Opposition is confused. It is because the proposals and the programs that we are critiquing are confusing.
I am hesitant to go too far into this response today for fear that I might be perceived as being picky - that somehow being concerned about a confusion in economic direction might be seen as being picky. There is a fear that because we have very obvious differences of opinion and different priorities in certain areas, we may be seen as being picky. That is our role here.
I am sorry that I could not be a big-enough-picture guy to satisfy some Members in the government, but I think that the budgeting policy of the government is an important issue to address in this Legislature. I think that the priorities of expenditure are important things to address. I think that their policy statements, if they do not make sense to us, should be addressed. I think that the tenor and nature of the financial negotiations with Ottawa and devolution negotiations with Ottawa are important issues to address. I think that respect for this Legislature is an important issue to address. I think that the government's respect for law is an important issue to address. I cannot give two hoots whether Members on the government side think that is being too picky for their tastes.
There are a number of things that I think I have to address in the context of the supplementary estimates, because these are initiatives that are currently under way, or have been under way in the last couple of years and certainly in the last year, which are supposedly a reflection of the government's priorities or its interests.
The industrial support policy is something I would like to address briefly right now, because I think it is, as an example, a good indication of why Members of the Opposition are as concerned about the government's direction as they are. We hear in this Legislature, over and over again, that the government is going to establish a new policy framework supporting the natural resource sector and is going to do it as the fundamental underpinning of its whole economic position, because all we ever really hear about is support for the natural resource sector, and particularly mining development.
This policy, announced years ago, was going to be the fundamental feature of their support for the mining industry. We find out, after a couple of years in development and its being a number-one initiative and the issue of highest importance for which they were going to expend the most intellectual capital, the most political energy, that this policy amounts to simply continuing to make some deals privately and then having them checked in the Legislature, depending ultimately on the good sense of Opposition Members to determine whether or not it is a good deal, once it is debated in public.
How far have they gone, or how far have we advanced the notion that there should be guidelines around the construction of development agreements with the mining industry? We have not advanced it one iota.
Were there development agreements struck with the mining industry in the past during the NDP administration? Yes there were. Were there guidelines attached? Did the government express itself in terms of policy as to what it thought it should achieve out of those negotiations? Yes it did, through the economic strategy. Could that have been improved? Yes it could. Did the Yukon Party government say that they were going to improve it? Did they say they were going to do something new and fresh and different, more advanced, to attract more industry, to make the rules clearer, to establish a level playing field? No they did not.
That is the concern we are expressing. The government has made this its number-one priority. The government has established this policy as being the most important thing in providing support for the mining industry, bar none. Yet nothing has improved.
Do we know whether or not the government is going to tie some sort of public return, some sort of public benefit to its public investment? After some of the most discouraging and mind-numbing questions and answers in Question Period today, I am no wiser about whether or not the government is going to do that. I do not know whether the government is interested in identifying and ensuring that there will be public benefit for the public investment.
All we know is that, in one case, the Minister and the Cabinet have given the negotiators the right to ensure that Loki Gold, in this particular case, receives sufficient funds, whatever that might be, to upgrade a road. At some point in the future, public benefit might be addressed but, of course, there will always be some sort of public benefit because any expenditure in the Yukon is bound to wash off on the local economy.
The point of the matter is that there is no up-front thinking, which is what we were anticipating would come out of this policy. There is no anticipation, nor any clear signals being sent to anyone, about the fact that there should be a very specific return for a particular investment. Nothing at all has changed from past practice - absolutely nothing. Nothing has been advanced by this political exercise.
Then, when it comes to whether this program is going to be grants or loans, we hear that it is going to be largely grants. This comes from a government that has talked endlessly over the last two years that it does not believe in grants and is, instead, a private sector government that believes in free enterprise and not in granting funds to private business.
This afternoon, the Government Leader berated a Member on this side of the House for not being right-wing enough. Yet, we have heard from a succession of Economic Development Ministers that, in one case, there should be more loans being esatablished, but no grants. Another Minister stood up and said that there should be no loans and no grants, even though that Minister was personally responsible for accepting a loan for his own company. Most recently, we hear that there may perhaps be some refining of existing programs, but no grants. Yet, the first big program announced following the throne speech, which is the underpinning of their economic agenda, is all about grants - it is grants.
At the same time, the one identifiable sub-program in the industrial support policy - presumably, the only one that is funded - is only loans. So, we do not know what the government is doing. Why should the government Members criticize us for being confused?
It must be because we are responding to their agenda. Their agenda does not make sense to us. We hope that the Ministers put on a better performance than they did this afternoon in Question Period, and have for so many days in this Legislature, in explaining their priorities.
Today, the Minister of Economic Development said that the vision of this government was not to interfere in the marketplace, because they are a private-sector-supporting government. They believe in keeping government out of the lives of the private sector. Yet, when it comes to tough, deregulatory activities, such as the establishment of a single-window development assessment process to do away with all the regulatory reviews - through the Federal/Territorial Land Advisory Committee, the Water Board, and all the rest of them - so there would just be one step, which was anticipated through the land claims agreement - an agreement they supported - there is not one word in either the Speech from the Throne, the recent budget speech, or in the last two years that even passes reference to the development assessment process. Does that mean that we can expect that the development assessment process will be layered on to all the existing regulatory processes now, so it will be just another one?
Members stand in their place now and say that perhaps this is more a federal responsibility than it is the responsibility of the Government of Yukon. I have only this to say to them: it is the Government of Yukon that is uniquely positioned to care about the future economy of this territory. The Yukon government is a full signatory to the land claims agreement. The Yukon government claims to want to deregulate - or reregulate - the mining industry. The Yukon government has the most at stake, because the people of the territory, whose livelihoods depend on a proper regulatory environment, look first to the Yukon government.
If there was any opportunity or any political enterprise to put pay to the government's claims that they want to do something about deregulation, or reregulation, it would be this one, and yet not one word is stated about that. There is a throw-away line in the industrial support policy that talks obliquely about the state of regulation, and how over-regulated the government and the territory is, yet the legislative agenda does not make reference to any reregulating activities at all. Is there any public consultation or discussion out there that is at least open to the general public? To my knowledge there is none. Have they identified any specific legislative initiative in the throne speech that would lead to reregulation or deregulation? No. That is the problem, because it takes work to reregulate and to make regulations more efficient. If that is not even part of the agenda, how can we believe the statements or the throw-away line in the industrial support policy - there are no such statements in the budget speech, to my knowledge - that they are actually going to get serious about this? When a question was raised in this Legislature over a year ago asking the Minister of Economic Development to do some workshops with small business about the state of regulation, the government said that they would investigate, and that they thought it was a good idea. They said they would consider it. However, to date we have heard absolutely nothing. There has been absolutely no response a year and a half later to that suggestion and that agreement to consider that proposal.
There has been absolutely nothing at all. How do we take that, when we are assessing government actions? How do we interpret its rhetoric? How do we interpret its actions? Why should we be concerned? Why should we be confused about its direction? There are obviously very good reasons why we might be.
When it comes time to view other commitments that we have recieve in the House, such as the question of the acquisition of capital for business investment, the only statement we get, through the industrial support policy, is that the government is prepared to raise capital through a grant program - which they do not believe in.
What about access to capital for everybody else? After all, the existing business sector in this territory is largely small business. In my experience, and in the experience of a lot of people I know and relate to, the access to capital, the relationship with banks and the relationship with lenders, both public and private, is a big issue with them.
The Northern Forum, about which we have heard absolutely nothing- that group, largely made up of circumpolar jurisdictions, such as Alaska, even Japan, the old Soviet Union, the Russian Republic, Scandinavian countries, jurisdictions in northern Canada, including the federal government - had assigned to the Yukon government the responsibility of doing a review of the raising of capital for northern business. All the important national and regional governments in the circumpolar north recognize it as being an issue.
The matter was raised in the Legislature, and the Minister of the day agreed that it was an issue. A Yukon Party Minister agreed, after some prodding, that it was an issue worth doing something about, because the Opposition, contrary to claims made by government Members, does make suggestions and does try to be constructive, because they care about this territory a lot.
What has the government done to even discuss this issue of raising capital for business enterprises?
In terms of talking to the public, they have done nothing, to my knowledge. There have been absolutely no attempts - apart from some throw-away positions in this Legislature respecting the needs to maybe do away with loans and grants altogether and reduce the opportunities for available capital - to resolve the problem or to bring the parties together, let alone respond to other jurisdictions in the Northern Forum to make suggestions on how they might consider solving the problems.
So there are some good reasons why we criticize the government's sense of direction. There are some reasons why we have made suggestions - positive and constructive suggestions - for how things might be improved - well over a year ago, in fact, almost immediately upon the Yukon Party's election. Yet they have not picked up on these suggestions. They may have agreed to some in principle in order to get out of Question Period, but they have not done anything to follow through with them, even though these are the kinds of issues - access to capital, reregulation - that are on everybody's lips out there. I defy the Government Leader to say that they are not, because I have a feeling that we do talk to a lot of the same people.
In response to our suggestions about the government passing big budgets - now this will be another one, of course, because the supplementary will raise it - the government's response has been to say, "So what? Budgets were big in the past, they are bigger under the Yukon Party administration, and they will be bigger yet."
Well, yes, they are bigger. Since 1991-92, we are probably talking about $80 million to $90 million bigger per year than they were when the NDP was in government. We have not been criticizing the size of the budget for the sake of the size of the budget. If there is an investment to be made in this territory, and if it is a valid one, then it should be made. Because we have raised the fact that the Yukon Party has, in the past, criticized the amount of public spending without criticizing the particulars under the NDP government, when we criticize it, the Yukon Party government seems to believe that we are opposed to the budget and the budget spending that is available to us, that we are opposed to the investments that are being made in the north Alaska Highway and at the hospital. What a juvenile attitude to take.
Even in the last couple of days, the Minister of Tourism - who presumably could not help himself - said, in his response to the budget, that he has looked back on the spending of the NDP governments and he can list all the surpluses that the NDP government has generated. He lists them: $41 million, $62 million, $77 million, $45 million, $50 million, $53 million and $64 million. These are the accumulated surpluses that the NDP government was living with.
He said, "That is the history of the NDP. It took them 60 years to learn how to spend money, but I will tell you that if they did anything well, they did that. They sure could spend money." We listened to that for seven or eight straight years from the Yukon Party and their predecessors, the PCs. Every time a budget was being tabled, if it was bigger than the last one, the government criticized it as being overspending. They did not say that we overspent in highways, or in public schools, or in any particular area. They just said we were spending too much. So, if we are victims of anything, we are victims of our memory.
We are victims because we remember now that we understood the Yukon Party to be against big spending or larger spending budgets. That is what we remember. It was drilled into our heads, budget after budget, year after year. Every time we made a spending proposal - which now seems paltry compared to the $500 million the government proposes to spend next year - we were just hammered by the Yukon Party and their predecessors, the PCs, for overspending and saying that spending was out of control because we were spending so much.
So, we just happened to raise this minor inconsistency that now, in government, they can spend more than was ever spent in the past - one-half billion dollars in one year - and the answer is, "So what?"
This does not mean that we do not believe in grading the roads, and it does not mean
that we do not believe in providing hospital services, or that we think teachers should
not be paid. Of course we do. We are pointing to an obvious inconsistency and trying to
figure out where the government is coming from. If there is any confusion caused by us in
this Legislature, it is because we are responding to the government and the Yukon Party
while in Opposition. We are trying to understand what they are saying and why they are
criticizing. Why do they criticize the Opposition for pointing out the inconsistency? It
is our job in Opposition to try to make heads or tails of the government's plan of action.
That is our job. We are responding to the government.
We raise a criticism, for example, about the government's devolution policy or its fiscal relations policy with Canada. We ask the Government Leader if he does not think that it is inappropriate for the government to be actively seeking programs from Ottawa - programs currently being undertaken in Whitehorse by the federal government - and stating, before the program is devolved or even negotiated, that the program is too fat and that the territorial government's intentions are to make a profit on it? In other words, as soon as you get it, you are going to gut it. Do you not think that that is inappropriate? How do you know that a program is too fat? What objective analysis has suggested that it is too fat? What kind of negotiating strategy is it to say to the people you are negotiating with that we do not intend to use all of the money that is being transferred to undertake the program and that the service levels are going to be reduced or changed in order to spend less money? What sense does that make?
What criticism do we get from Minister after Minister? Suddenly, we are opposed to devolution. Suddenly, we do not believe in the forestry transfer, or the hospital transfer, or the Alaska Highway transfer. When the Opposition benches here talk about spending priorities and suggest that some of the discretionary money that the government was planning to spend on the Alaska Highway should be redirected in order to balance the government's activities to undertake some school building projects, the government cries foul. It tells us that it can only spend money exactly as it is transferred to it, even though it is discretionary funding; it is within the purview of the Yukon government to spend it any way it wants.
We acknowledge that a large portion of that money is to be dedicated to very specific building projects. It is called contingent money, and it cannot be spent on anything else.
Granted there is a fierce portion of this money that is available to be spent on something else, if this Legislature so wishes and if the government wishes to propose it. Now, the government, for its part, comes along and says "It is only ethical to spend it exactly as it was originally devolved."
Yet, the Government Leader says, "We are not going to do any such thing with all the other devolved programs, we are going to gut them and we are going to make a profit." When it comes to the Northern Accord, which, because we had some questions about it, we were accused by the Minister of Tourism of not supporting, the government has already spent over $1 million of the funds, which is about 50 percent of the funds devolved to us to support oil and gas initiatives, in ways that have nothing to do with oil and gas. For all we know, they could be spending the money to grade the Dempster Highway.
We point out the inconsistencies, and the government responds by saying "You do not support devolution, and you obviously do not support the treatment of sick people, because you do not support the hospital transfer." What a juvenile, ridiculous argument to make.
I will make one final point. When it comes to the size of the budget, every time the government says that it has spending under control - as one Minister said, it has finally brought the wild spending spree under control - we look at the budget and the spending patterns and see spending going up in operation and in capital, both in net and gross amounts, and we say, "Can you explain that? Can you people in the government explain that?"
The operations budget of the government goes up, and they say that they have the wild spending spree under control. They did not say there was a wild spending spree in education, or a wild spending spree in health. They said, "the wild spending spree." They were referring to the overall budget. They have the wild spending spree under control. All we can see is that spending has gone up. Spending in Health and Social Services has clearly gone up. The Government Leader tabled evidence to suggest that the overall spending has gone up.
He proved to us that the spending had gone up. When they make grand gestures about bringing wild spending sprees under control, we respond in kind by pointing out the inconsistencies - the problems with that thesis and analysis. That is only fair comment, quite frankly.
We talk about government priorities. I was criticized by one Minister for saying that perhaps the government's priorities were inappropriate. The Minister said "Well, this Member for McIntyre-Takhini is picayune. He is making the obvious point that we have different spending priorities." I thought that that was what we are here for; we are here to express the priorities of our constituents. They may not jive with the Cabinet's vision of how money should be spent. My job is not to sit in my chair and say, "Well, I defer to you, the brilliant brain trust in Cabinet. I will not even raise my constituents' concerns. Obviously, the Cabinet has thought these things through very completely. Who am I to second-guess them?" That is not what this Legislative Chamber is all about.
If we express some concerns about the amount of spending on computers, I am not going to take lightly a criticism that suddenly we are a bunch of Luddites, and do not believe in computers. I believe in highway spending, too. I believe in education spending. However, if education spending was 100 percent of the budget, I might criticize it. It is not because I am against education; it is because I am against the priorities and the balance being struck. It is not a balance, in my opinion, and I say so.
In this Legislature, we have a situation in which Ministers are openly unable to defend
the systems development projects and the computer spending projects that they have in
their budgets. We sit here and laugh. Someone asks a question and we shrug our shoulders
and say, "Well, I wish I could answer that question, but those computers are a whole
new ball of wax. We cannot begin to decipher the complicated world of computers."
Now, we have $10 million worth of computers and office systems to debate, and it is almost
as if they are not going to answer any questions about that, because, after all, that is a
big, black hole, and they do not know.
We are not saying to the more juvenile Members in the Cabinet that we are opposed to computers. We are not saying that we are opposed to office equipment. We are not saying that we are opposed to even the acquisition of cars for public employees, so they can drive safely down the road. What we are doing is expressing some reservations about the general priority being placed in these particular areas.
We listen to the sanctimonious comments from some Ministers that somehow we are a throw-back to the Middle Ages because we criticize a spending priority, particularly in computers, because maybe it is just a bit too much in this particular area at this particular time. I cannot think of any more ridiculous response coming from - dare I say it - seasoned politicians, people who should know what they are talking about. What kind of seasoning? Too much salt.
As we always do long after the budget debates are over, we always come to the truth, we
always get to the details even though nobody cares, with the exception of at least one
citizen, obviously, about anything other than the grand rhetorical speeches. Nobody cares
about what happens in Committee. A lot of good work happens in Committee. A lot of things
do come out about priorities, which are valuable for us all to remember. I would invite
people to invest a little bit of time listening.
The government says, in response to our criticism about priorities, that we either have to support an expenditure 100 percent or reject it. If we question a particular expenditure, it must be because we are opposed to it. As they say, "You cannot have it both ways." Well, nobody is asking to have it both ways. What we are saying is that a particular expenditure may be enough, may be too much or may be too little, and those are very legitimate comments to make, under the circumstances.
Something we are going to get into in general debate shortly, and I am looking forward to the issue, is the subject of fiscal policy. I am not sure I know what the government's fiscal policy is. I am not sure whether it wants to help the federal government's deficit-fighting measures or not. I am not sure whether they want to secure every last dime from federal authorities, screw every penny out of the federal authorities, or not. We have some Ministers saying that whenever there is a shaving or cutting back in a particular area, they are not saying to the Yukon public that it is not as much of a priority as something else, on which they are spending money, they say, "Don't forget the federal deficit; don't forget we have to fight the federal deficit." Consequently, if we are really fiscally responsible we will aid them in their endeavours by shaving money in this particular area. Who in heaven's name can mount a defence to an argument like that, on those terms? Virtually anything the government does, in highways or anywhere else, if they are going to trade that one item against the need to fight the federal debt, it just about knocks the stuffing out of any critic.
But that is not an honest equation, is it, because it is not as if the government has turned the money they have shaved from, say, public sector employees back to the federal government. They are spending it someplace else and they make no bones about wanting to secure as much money as they humanly can from federal authorities.
We hear on the rhetorical side, quite regularly, that we have to be fiscally prudent, that we have to realize that Canada has to get her house in order and that we should be preparing for that, yet we hear that the budget is bigger. We hear from the Government Leader today that it is bigger this year and we should not be surprised if it is bigger next year and the year after that and the year after that and the year after that, in perpetuity. It will always get bigger.
What is it that drives the Ministers' thinking when they are sitting around the Cabinet table? What is it that they say to federal ministers? What position are they taking?
Are they fighting the federal debt? Are they doing things subtly, in policy terms, that would ease the pressure on the Canadian taxpayer? Or are they procuring every morsel they can to develop a fledgling Yukon economy, knowing that if the Yukon Cabinet does not speak for the Yukon economy, nobody will. If there is a chance that we can become more self-sufficient or improve our economic fortunes, it has got to be the Yukon Cabinet and it has to think of Yukon finances as a first priority. Which is it? A good case can be made for either, perhaps. What is it that the government is looking to achieve? We have got to get some answers to that question and we will shortly, I hope. Certainly, we will put forward the questions.
What are the government's intentions with respect to devolution? I would like to know the answer to that. Are we trying to transfer a service from the federal government to the Yukon government in order that we may better align the service levels to meet our needs and not the needs of federal policy developed elsewhere? Is that the purpose? Or is a primary purpose to cut back on expenditures by providing the minimum level of service that was once provided by the federal government and donate the money to another kilometre of road somewhere? What is it? I think we ought to know.
When it comes to financing and stated government priorities, what the Opposition does -
and I will clue the Government Leader in on this - is read the government's vision
statements, including things like railroads to Carmacks. However, we do not spend a lot of
time on that because that is obviously not very realistic, but we do read the vision
statements when it comes to what the government wants to do with respect to infrastructure
support. We do try to determine whether or not what they are saying in their documents
matches up with the budget expenditures. We may not agree with the priorities, but we want
to know whether or not, in the first instance, the budget priorities agree with the stated
vision of the government.
Last year at this time, we were listening to the government saying that it believed in the John Diefenbaker vision of infrastructure support. That is, establishing a supply-side approach to developing infrastructure. You build the roads and companies come and take advantage of those roads. You build the power; you have a surplus of power and, consequently, companies come along and take advantage of that power. That was the theme of last year's budget speech.
The theme has changed this year. The theme now is the demand-side approach to developing infrastructure. The Minister of Community and Transportation Services said it best: that he would not build a road unless the mine agreed to produce ore. The industrial support policy, for its part, agrees with the Minister of Community and Transportation Services, and it says that no support shall be given unless the mine agrees to develop. We have gone from the supply-side approach, which is the Diefenbaker approach, to the new approach. This is all in the space of one year.
We may agree with the demand-side approach, but we are forced to reconcile last year's action plan with the major reversal in this year's action plan. We are left wondering what is happening. We are left wondering whether the expenditures for the Freegold Road matches that statement - either mines on the Freegold Road have made production decisions and that is the reason the government is putting money into the FreegoldRoad - $1.3 million. Is there a development agreement associated with that public expenditure, or is this an exception to the principles stated in the industrial support policy? If it is an exception, why is it an exception? What is it about this that is different from other situations?
Why would one insist on a development agreement with some mines to produce a road, and ignore the need for it with other mines?
These are policy concerns that we have. We are trying to figure things out. We are trying to ask questions, and sometimes we may sound a little critical. However, I must say that we have been through a couple of years now of very strange policy shifts that run from one end of the spectrum back to the other end. As I mentioned before, after endless questioning in this Legislature and hearing about all kinds of different positions, I cannot figure out whether the government supports loans or grants, or if they support neither or both. I do not even know under what circumstances they would agree to either or both.
I want to say a couple of things about the financial situation, as notice to the Deputy Minister of Finance, who is listening and who is making notes, I am sure, at this moment. I want to ask about the policy respecting special warrants. I do not doubt that special warrants have been used in the past, and I think they will be used again in the future. The question is, under what circumstances is it appropriate to seek a special warrant? Special warrants were designed to provide the government with operating money on rare occasions, noting that the government would always return to the Legislature at the very earliest opportunity and seek approval for that warrant, the warrant being an approval for expenditures recommended by the Cabinet and made by the Commissioner.
In this particular instance, we have the Cabinet looking for a special warrant very close to the time of a Legislative sitting - or at a time when we ought to be sitting, or when we historically have sat in the Legislature. It is not for a small amount; it is for a very large amount. We, on this side of the House, know that by the time this supplementary budget is debated, all that money will have been spent - virtually all of the money will have been spent. There is no question about what happens to the money, unless there is an election. We know that the debate is all after the fact. What is the policy for seeking these warrants, when we should be coming into the House and asking the elected people rather than seeking the funding through other means?
Today, in defence of the government, the Minister said that the warrant sought money for a variety of different things. Included in that list was money for the Alaska Highway budget. In response to criticisms that were leveled at the government, he said that this money was not the same money that the Legislature had taken from the government's budget last year.
To refresh your memories, a majority of Members in the Legislature had reduced a particular line item by a certain amount. I hesitate to say that it was not because we did not believe that there should be $27 million spent building the Alaska Highway. In fact, we left $27 million to do precisely that. It was a massive commitment to ensure that the Alaska Highway was rebuilt. We said that there were other priorities. The priorities included a couple of schools that our constituents were saying ought to be built. I should point out that they are still saying that they ought to be built.
The Government Leader said that this is not the same money. In fact, he states that the money that is being put into the supplementary is fully recoverable. That is not true. According to the budget tables they tabled with us - perhaps they could table some supplementary budget pages - there is no reference to this. It states that the government intends to spend $12 million of new money on the Alaska Highway and that there will be a recovery of $9.3 million. That is what it states. There is, therefore, some new, discretionary money being put into the Alaska Highway, despite the very clear statement about spending priorities from a majority of this Legislature.
When the decision was made, the Members in Opposition did not zero in on every proposed
expenditure for the Alaska Highway. We focused on the need to spend money on schools, and
left it up to the Cabinet to figure out from where the money was to come and what portion
of the Alaska Highway would be deferred until next year. Yet, the government came along,
anyway, through the warrant system, and obtained new money for the Alaska Highway. On top
of that, it did not proceed to build the schools.
I have a problem with that. I do not necessarily have a problem with the fact that the government may try it again, now that they have a new-found majority. It has managed to provide enough incentive to acquire another Member from the Opposition benches of the Legislative Assembly. However, I do have a problem with their not coming in to speak with the elected Members first, given it was the elected Members who spoke last.
The Government Leader spoke for some time about our concerns with the legislative calendar. On a couple of occasions, we said that, should the warrant system be used, as it has in the past, we have a greater cause for concern, not less. If we are only sitting a few months of the year, and only sitting in one block - January through March - there will be a nine-month period during which we can expect no legislative scrutiny, and for which the government may have to seek special warrants, now and again, for spending that has not been approved by this Legislature.
So, given that we will be sitting at the end of the fiscal year, we can expect to be approving all these amounts after the fact. That causes us some concern, and legitimately so, never mind the fact that three months at a stretch is an exhausting process for a small legislature.
Every Member of this Legislature has to speak regularly, every day, prepare for Question Period, do the research, talk to constituents and address multi-million dollar decisions. This is not like the legislature in Saskatchewan, or like the House of Commons, where you are lucky if you get a question a month and be expected to speak once or twice in a sitting on any particular subject. Members here are expected to do research and speak on every topic all the time, every day.
It is not appropriate to expect them to legislate to exhaustion. Presumably, that is the reason why our forebearers split the session into two.
The Government Leader said there were two examples he could cite when the NDP had only one session in a particular calendar year, and he refers to two election years, which are partial years because we called an election. We went to the people for a mandate, and the public spoke. Those are not good examples because, during that period of election, there is very intense scrutiny on government actions and on everybody's programs, for that matter, as well as policies they may have. This is not a good example, nor a helpful one.
However, the Minister is right. A motion was tabled today to seek a return to at least two sittings, and we will have an opportunity to debate that. I am looking forward to it.
There are a number of things I should respond to briefly that were raised by the Government Leader. He said that the NDP government had a trend to deficits and the Yukon Party has balanced its budgets. As I pointed out earlier, thanks to the Minister of Tourism, who says he has done his homework - I kind of doubt that but I can believe these numbers anyway - he listed a whole series of NDP accumulated surpluses, year after year under the NDP government: surpluses that have us bouncing up as high as $77 million. It may or may not have been a good thing to have surpluses of that size, but it certainly does not respect the government's contention that there was a trend toward deficits.
On March 31, 1992, I think we were sitting on a $50 million accumulated surplus. Thanks
to the Yukon Party's beavering away at spending and allowing for bad debts, or however
they want to determine it, yes, they got that next year into a really super duper bad
shape. It was even openly talked about in editorials in local newspapers that Ministers
were overheard saying, in the bar, that they were going to make the NDP government's
finances look just as bad as they possibly could. Judging from what the government has
been doing and the shenanigans they have been pulling, I know that to be the case.
We have said in the past that the government was in very good financial shape to move from the so-called crisis to a surplus in one year, and I predict in the coming year - nobody has disputed it yet, because I do not think that they can, as they are going to be lapsing probably $20 million or $30 million this year too - that we are going to have accumulated surpluses again in the $30 million to $50 million range. We are really in tough shape around here, are we not?
They then speak of balancing the budgets and of what great fiscal managers they are, because they have revenues in the $500 million range and they balanced the budget. So what? I am not saying that it did not take some work - it did. I am not saying that some hard choices did not have to be made - I am sure there were. I am sure that, even though they are spending $500 million, they probably had $700 million requested, maybe more. On the capital side alone, they may have had $200 million requested.
What I am saying is that this is not new. I am saying that budgets are balanced and surpluses are generated, even by the NDP, year after year, over the last seven, eight and nine years. So, why they should make such a virtue of something that is such an obvious objective under such comfortable circumstances is beyond me.
They are saying that, in the past, the NDP decided to pick and choose which statements issued by the Auditor General they believed: that we did not believe the Auditor General when they said that there was an operating deficit in 1992-93 of $64 million. We did not say that we did not believe in the Auditor General. We said that the Auditor General did exactly what he should. If the Cabinet wishes to show certain expenditures, to write things off, and allow for bad debts, then they can. They have every right to do that. We disagree with it, but we were not disagreeing with the Auditor General. If he says that the accounting practices are satisfactory, we have never disputed that. Now we say that, again, the Auditor General has taken the rare step of noting that the government, in the Auditor General's opinion, has broken the law.
Originally, only a month ago, the government said that it was only a technicality. Now the government says that they did not break the law at all, knowing that we do not have a bank of lawyers to go and analyze the suggestion. We only have the Auditor General and his staff.
So, a month ago it was a technicality, meaning that it was no big deal that the government did that; it was only a small law and was broken only temporarily. Now the government is saying that it did not break the law at all and is asking to be shown proof that it did - it is only a disagreement with the Auditor General. I do not buy that, and I do not think that any reasonable person would buy that explanation.
He said that what constituted a transfer of funds between the government and the Yukon Energy Corporation was not a fiddle or shenanigan at all. It was something that was to be expected, and that the transfer between the unconsolidated and the consolidated positions of government is something that has happened in the past. When the transfer was made, the money was taken from the surplus account and was no longer shown in the unconsolidated position of the government. Surely, it would not change the unconsolidated position at all, but the government does not recognize, for official purposes, the consolidated position, anyway. It only recognizes the unconsolidated position. It only recognizes the surplus deficit figures that it tables. That is the reason we raised the concern.
In 1992, we were referring to the consolidated financial position of the government and pointing to that. So, if there was any change at all, then we would have noted it and recognized it. The government, however, has done everything it can in the unconsolidated position of this government to make its finances look as bleak as they possibly can for its own political purposes - those purposes being, quite simply, that the government wanted it to appear that it was in tough financial shape in order that it could mask the fact that it was changing priorities on the public, even though it was spending more. So, what did it do?
They transfer $12 million or $13 million from the unconsolidated to the consolidated financial position of the government, so the unconsolidated position looks bad, and that is the only position they recognize.
I do not buy that. That is a fiddle. That is clearly a fiddle.
They said that when the NDP was in government, they financed the Yukon College through an expenditure that showed up on the consolidated financial position of the government. So what? We acknowledge both the consolidated and unconsolidated positions. In fact, we officially acknowledged the consolidated position of the government. There was no attempt to hide anything. It was obvious.
The Government Leader indicated to us that we were concerned last year about the lapses. He said that there were record lapses. The Government Leader corrected me and said that there had been one higher lapse while the NDP was in government. I acknowledge that and take it at face value: there was a lot higher lapse than the one last year.
We were not criticizing the government for lapsing money last year. We were criticizing the government because it said no money would lapse. They said that, in the face of all experience of this Legislature, because they were such super managers, the budget was tighter than a drum and no money would lapse. They held that argument right up until the time they tabled the news about the $20 million in surpluses.
The capital and operation and maintenance budget for the main estimates changed, during the course of that year, from the original spending plans, by a total of $45 million. We had large lapses, perhaps the second largest in the last 10 years; we can put it that way. The point is that it is not surprising that there are lapses. It is surprising there are lapses when the government announces there will be none because they say they are superior public sector managers.
The Government Leader said he sent a memo around to deputy ministers and told them not to lapse. I am sure we are all impressed, but it obviously had nothing to do with the reality we were facing at the time. We had to put up with the Conservative nonsense rhetoric that the men on the opposite benches were really great managers - they balanced the books, which helps to spent $80 million extra a year; they generate surpluses, which helps to spend $500 million total in a year. They have lapses. The Yukon Party government said that it would have no lapses, and, of course, it did.
Again, we are responding to their rhetoric. They are the government. We initiate; they respond. We make suggestions, but we respond, because that is our job.
Nothing happens in this Legislature that does not have some impact on the economy. Nothing happens here that can be decided in the absence of considerations about the economy.
The government is saying that it is doing marvelous things with respect to mining. We have the most incredible, selective research being tabled by the Minister of Economic Development today that would not have surpassed any attempt by anyone in an elementary classroom for honesty and soundness. One quote is that the Government of B.C. could be doing better. Another quote, from a local person, is that the Government of the Yukon is doing fine.
What conclusions are we supposed to draw from that - that the Government of B.C. is doing better than the Government of the Yukon? No. He mentions that the Government of the Yukon is being lauded by people impressed by the industrial support policy. We know the industrial support policy better than others do, do we not? We spent half of Question Period on that today, did we not? We found out that nothing had changed from the past, did we not? We found out that there are no negotiating principles or guidelines whatsoever, did we not? We know better than the commentators do about the government's policy framework supporting mining.
The Minister mentions that the B.C. government has been criticized by the B.C. mining
industry for not having done enough, and that any increase in B.C. mineral exploration is
not thanks to the B.C. government.
That is what we have been saying about the Yukon government. Mineral prices are rising and that drives exploration activity. Every time the government trots out what it has done, they refer to the same cocktail party, they refer to the mining facilitator - decent fellow that he is - and they refer to the NDP programs. Now we have the Whitehorse mining initiative, which they say they are supporting, and which was initiated during the NDP period of government.
When we objectively look at the actual level of exploration activity in northern B.C. and see it grow more than it is growing in the Yukon, perhaps some of the criticisms - legitimate or not - that are being leveled at B.C. could be leveled in the Yukon. I think that is a reasonable argument to make. As long as there are going to be all these ad hominem arguments by the commentators who are commenting on the valuable input from the Yukon government, perhaps it would be legitimate for the government to actually respond to the statistics of actual activity. Perhaps we should respond to the criticism that the only policy it has developed is the industrial support policy, and we know how vacuous that is. The programs it has are all NDP programs. The Whitehorse mining initiative was something that was initiated before they came to office. That is what we are facing here.
What we are saying is that we are trying to determine what the rhetoric means and whether there is action tied with the rhetoric, whether it be expenditures, or policy development, or program initiatives, or ministerial action. We are going to have some long discussions about that - and I know the Minister is anticipating it - in the Economic Development estimates.
We have to come to some conclusions. I am not going to try to go through that laborious process again in Question Period of trying to ask the basic question of why there are no figures in the industrial support policy to determine whether or not there should be certain public benefit for certain public expenditure. I can promise the Minister that I will be doing it in estimates, and we will not leave it until we get some clear indication of what the government intends to do and what the parameters of the negotiations are that it is currently having with mining proponents. We know it is having negotiations or discussions - whatever it wants to call them. It can call them negotiations one time and discussions the next. We know they are out there talking, and we know that we are going to have a nine-month layoff from legislative activities. We are not going to wait until this time next year to determine whether or not the projects that they agreed to fund are sound.
It appears that the only real defence the Minister has for the program is that somehow Members of the Legislature are going to be able to show enough common sense to analyze the deals effectively. We cannot do that after the fact, and we cannot do it regularly after the fact, that is for sure.
I have spoken a bit about the economic framework. I realize that is only a brief thumbnail sketch of what constitutes an economic analysis, because mining is not the whole economy. There are also tourism, housing and construction activities. There is agriculture, fishing and forestry, and all of those deserve more play in this Legislature than they have probably received in the past. I think we will do what we can to create a new balance in the discussion. Obviously, for all of the discussion we have had about mining, we have not had much in the way of results or return in the way of real information.
I will sum up by saying this, because I think it is important and is certainly relevant to this budget and to the main estimates: I have questions about the government's vision. I am not being picky, I am talking about the big picture. The government says it is a free-enterprise government. They make statements about where they want government investments to go, and we express concerns that they are not doing as they say they want to do, let alone doing as we want them to do. The government now says that it wants to do a review of regulation, but it has announced no initiatives for reregulation. Certainly the biggest project is not even on their plates.
They say that they do not believe in grants, and yet there are more grants being proposed in the Legislature than I have ever seen, and that includes the period from 1982 to 1985, when there was a PC administration as well.
From time to time, we have a problem figuring out the government's direction, so we are going to test them, not only on their own rhetoric, but also on what we believe ought to be done. We have suggested many alternatives for them to take, and we will continue to suggest constructive alternatives. We hope they will take them and study them carefully, because nobody needs to waste their time here.
I am sure we will be getting into general debate shortly, in the next one-half hour or
so, and we will have a chance to pursue the particulars of this budget and the other
budget in greater detail. I am sure we will all drop the political rhetoric and get down
to business in the hope that we will get some real hard information on the record.
Speaker: If the Member now speaks, he will close debate. Does any other Member
wish to be heard?
Hon. Mr. Ostashek: I will not be too long in wrapping up, but there are a few things I do want to say.
It seems that we may have touched a nerve of the Member for McIntyre-Takhini; I hope he gets over it so we can get down to some good debate in the Legislature. Nerves do get touched in here every once in a while.
There are a couple of things I would like to say in reply to what he said on the
supplementary budget, and on finances in general.
He is making an issue about our being inconsistent about grants. I do not think we are inconsistent at all. We have instituted a couple of programs that I would not really refer to as being grant programs. When we talk about the CAP grant or infrastructure for tourism development, there are some very clear specifics in the program. At any rate, it is not a grant, but a contribution that is going to put infrastructure into place and provide benefits to Yukoners for many years to come - that is part of the criteria for it. I think that is a legitimate expenditure of taxpayers' money.
On one hand, we are hammered for not consulting with the people. Then, when we put together a program that would allow the communities to come to us with what they consider to be their priorities for infrastructure development, we get hammered again. That is what I mean when I talk about inconsistent criticism from the Opposition benches.
I believe that the CAP is a very worthwhile program. It seems to be working well in the communities, and has different sectors of the communities talking. We are not funding each sector to keep division within the communities. It is important that each community is united in what it wants to do. We are a very small jurisdiction, and cannot have our communities divided into different special interest groups and sectors, not working together at the community level. I think that the CAP is going to go a long way toward pulling communities together. I know that we have received some very positive comments back, so far, about what has happened in different communities.
The Member for McIntyre-Takhini took great issue that we had not looked at that process in the Speech from the Throne and never mentioned it in the budget. I really wonder what level of criticism we would have received if we had put something like that in the Speech from the Throne as a Yukon Party initiative. Clearly, the Member opposite is as familiar with it as I, and knows that this is a tripartite process that will go hand in hand with the implementation of land claims. It is a process that we hope - and I have said this publicly and, I believe, in this Legislature - will replace a lot of the vehicles that are used now for permitting. We hope to get it all under one system under the development assessment process.
We believe that there is a lot of work to do on the DAP. We are prepared to do that work. The Member opposite also has to be aware that the First Nations that will be working on this have been very busy trying to finalize the land claims agreements. It has not been possible to work as diligently on the DAP as I would like. There is, I believe, a two-year period for it to come into effect. I would hope that we can shorten that time frame. Once the finalization of the land claims packages are done here, and the First Nations have the ability to dedicate the time to working on the DAP, we will be working harder on it. The Member is quite correct that we should be working diligently on this. It is a process that we hope will streamline regulations in the Yukon, and we have said that time and time again.
I do want to say to the Member opposite that, although we did not make a big issue of it or put out a flurry of press releases on it, we worked very diligently, and spent some of that political capital that the Member keeps talking about, to get surface rights legislation in place that was acceptable to all parties. We did that. We worked very diligently on it. We will work just as hard and just as diligently to get a development assessment process in place that would be beneficial to all Yukoners.
The Member talks about workshops on regulations. There are many different ways to get
public input. The one we are using right now in our review of the economy - and
regulations that will come under that, as well - is a sector-by-sector review by the
Council on the Economy and the Environment.
Perhaps that is not the process that the Members opposite would like to see, and that is legitimate. However, that is the process we are using. We are doing the reviews.
The Member opposite wants to know where we are coming from on devolution. We have said what we wanted to see in devolution. We know what the Members opposite have said about devolution: that devolution should not go ahead until the land claims process is finished. We disagree with that approach. It seems that the federal Minister also disagrees with that approach. He sees them going hand-in-hand, so we are going to work to the time lines set out.
The Member opposite says we want to take these programs over and then gut them. That is not the case at all. The fact remains that what we need to do is have control of them, so that we can have regulations and legislation made by Yukoners for Yukon resources, not something that is done in Ottawa and has layers and layers of administration by the time it gets down to us.
He says we are inconsistent, between the last budget and this budget, on where we want to build roads and roads to resources. I do not think we are inconsistent at all. Last year, in the budget, money was allocated for the Freegold Road in the highways budget, but when we sat down with the proponents of the project, they said they were not prepared to go ahead at that point with its development. If we had gone ahead and spent that money on the Freegold Road, rather than putting it into other roads that are more utilized at this time, I am sure we would have been severely criticized by the Members opposite.
The money is allocated again in this year's budget for the Freegold Road. In the event that that project should go ahead, we have to be ready to do upgrading on the road. Again, the company seems to understand that we are not going to make the investment unless there is going to be some economic activity at the other end of it and a real return to taxpayers. It is just ridiculous, and I think it is a very weak criticism.
The Members opposite were very critical about the industrial support policy: there are no numbers in it; we do not have a price for power. I could just hear the criticism now if we put a crazy figure in there, no matter what it was, and said that we are going to give everybody who is an industrial user this rate of power. We would be torn apart by the Members opposite, and rightly so.
The Minister said quite clearly today that every project is different. Let us look at what the industrial support policy is. That is the problem: it is not a program, it is a policy. There are programs that will fall under that policy. What we have done is set up some broad parameters that we are prepared to negotiate within with companies coming to the Yukon that have high up-front costs - high capital costs to get their projects going. We are talking mainly about public infrastructure - grids and highway extensions, such as the Freegold Road. That is a public road, and it does not need to be upgraded if nothing is going on. However, with the creation of jobs, it is important that the government be in a position to assist those companies with those upfront costs.
There is a simple way to diffuse all this debate, and I hope it will happen in the next couple of months, before this Legislature adjourns. If that agreement is reached with Loki Gold, we can bring that agreement to the floor of this Legislature and analyze it for the economic benefits. When we are talking about upgrading the road, it is because the company is talking about having their personnel live in Dawson City. If we do not upgrade the road, they would be forced to put in a camp. Is that not an economic benefit to Dawson City? Does that not help create a community?
The economic factors are going to be taken into consideration. As the Minister of Economic Development said, we have the Campbell Highway and, if the Cominco property is to go ahead, it will take millions of dollars of upgrading work on the Robert Campbell Highway. If we were to start doing that now, before knowing whether or not that is going to eventually end up as a mine, I do not believe we would have the support of the Opposition. I do not believe for one minute that we would have the support of the Opposition for spending millions of dollars on a highway that has very little traffic. We may have the support of Mr. Speaker, because that is in your riding but, realistically, for the amount of traffic that is on that highway, we cannot afford to undertake such an expenditure.
However, we have to send a clear message to companies that want to invest in the Yukon that the government is prepared to enter into negotiations with them to help with high capital costs. It is not a grant program, nor is it a subsidy program, and that is exactly what some of the companies said when we sent the policy out to them. They wanted to make certain that we did not turn it into a subsidy policy.
That is clearly what we do not intend to do.
I believe that the policy is sound. It sets out some parameters so that this Legislature, the people of the Yukon and the companies that are coming to the Yukon know that this government is supportive of industrial development in the territory and is prepared to help with high capital costs. We talked of power. The Member for Faro spoke about power for the Faro mine and Anvil Range Mining. Clearly, if something was negotiated under the industrial support policy and preliminary talks are underway, it would only be after the Yukon Utilities Board had set the rate. We have said time and time again that we were no longer going to have backroom deals for mines or industrial users at a set rate that rides on the backs of the ratepayers in the Yukon. We are not prepared to do that and we clearly said that the Utilities Board will be the policeman of the Yukon Energy Corporation, of the utility, and it is clearly up to that board to set the rate. Then, if a company feels that in the early stages of its development it needs to be assured of a stable power cost over a period of years, we even said we would look at tying it to the price of zinc. But what we also said was that it would not be a subsidy policy. They would pay the full cost of power but it could be spread out over a period of years.
The same is true of Loki Gold, for its Old Ditch Road development. I know that talks
are progressing, but no one is going to sit down and write a big cheque to Loki Gold.
There are certain checks and balances about how the money will be paid out and over what
period of time. Probably the best way to see how the policy will work is to bring an
agreement in here that this Legislature can debate, to see how it works. I do not believe
that the criticism of that policy would be nearly as great.
Clearly, we are not in a position, and the Members opposite know it, to build roads solely for the sake of building roads. I think, however, that we also have to send a clear signal to industry that we are prepared to assist and make the infrastructure investment if they have a project that is coming onstream.
The Member for McIntyre-Takhini asked if we would contribute if the program was not economically viable without government assistance. Clearly, this is an infrastructure program, and the project would have to be economically viable. What this policy is going to do is incorporate other programs within Economic Development to help defray the high start-up costs by letting the company spread them out over a number of years. Certainly, that will assist them in obtaining financing.
When I was doing the budget wrap-up, I did not have time to get into the warrant. The Member for McIntyre-Takhini has come back to it again in his reply to the supplementary budget, so I want to clear the record, because what is being heard from the other side of the House is simply not the case. I want to deal specifically with the Alaska Highway.
I do not think there was any doubt in any Member's mind last spring, when we were debating a reduction in the line item of the Alaska Highway, as to what the government was going to have to drop from it. There were many speeches made. There were many comments made by the Minister of Economic Development - who then was Minister of Highways - that they would have to drop that section of reconstruction that was scheduled. It was known as the double dips.
The Member for Ross River-Southern Lakes talked about safety. We talked about how we could get the highway up to standards so that when the Sa Dena Hes came back into production the highway would be in good enough condition to avoid imposing road bans. We had the logging trucks hauling from the Watson Lake area - your riding, Mr. Speaker. Clearly, there was no doubt in any Member's mind as to what was going to be dropped from that line item of the highway if that $4.5 million was removed.
We did not go through the back door, as we have been accused, to get that construction project back into that budget. That construction project for the double dips is in the 1995-96 budget. It is in there. What we did do - and the Member for McIntyre-Takhini is quite right about this - is let another contract on the Shakwak project, so that over $9.3 million would be recoverable.
Why did we do it? We did it because we had construction companies here that were available to do the work, that needed the work and that said they could handle the work. We did not want to create a project that had to go to someone outside of the Yukon. We had companies here that were ready to bid on it. We had a very favourable exchange rate, and we felt that it was the appropriate time to put out another tender. I believe that putting that tender out helped to reduce the unemployment figures in December to 7.7 percent. The company that won the bid worked until the middle of December, and it is my understanding that they are going to be working again on February 15. I think that putting that contract out was a smart move on our part, especially considering the favourable exchange rate that was available to us.
The Member spoke about the other $3 million. I can tell him where that went. That was to keep some people working this winter. We did it last winter, and we did it again this winter. There was $1.245 million for gravel crushing. We put another $200,000 into smoke stabilization and another $1 million, I believe, into an excavation of a waste cut. We did not spend the money that they removed from the budget on that project. The north Alaska Highway is a terrible mess and everybody in this Legislature knows it. The sooner we get it improved, the happier it will make our tourists. Happier tourists will possibly spend more money in the Yukon.
I have travelled a little in my day, too. I go to the United States where there are freeways all over, but I do not go like hell to get through a state and keep on going and drive that many more hours. I stop and enjoy it a little more. And that is what our tourists will do here. Rather than fighting our roads and the frost heaves and wrecking their recreation vehicles and paying for repairs, they will spend their money in other areas in the Yukon.
A good portion of the $4.5 million that was removed from that budget went into the Education budget. It went toward upgrading some schools. The Members opposite said they wanted that money spent in the Education budget. They suggested a couple of specific projects they wanted it spent on and that we did not feel were appropriate at that time. I believe that over $3 million of that money, in total, between both capital and O&M, was spent in Education - over $2 million for sure, I know - and it will all be debated when we go through it. Quite clearly, however, we did not try to circumvent the Legislature as we are being accused of having done.
It was not our intent and was something that we surely did not do.
I do not have a lot more to say on this now, because we are going to be spending hour after hour of debate on it, which is quite all right. We can get the things out that we need to hear, and we will be able to listen to the criticism of the Members opposite.
I do just want to say that there certainly is a change in spending priorities of this government compared to the previous government. I think this is articulated in the budget. Nothing more has to be said. We do not have to draw up big policy statements like this, with every "t" crossed and every "i" dotted, pointing out that this goes here and that goes there. Our budgets reflect where our priorities are.
We also said that we believed in infrastructure development and in controlling the costs of O&M. Regardless of the criticism from the Member for McIntyre-Takhini, I believe that we have controlled the costs of O&M. They are not escalating nearly as rapidly as they were. They have leveled out quite dramatically. We have taken on more responsibilities from the federal government and, as we continue to take on responsibilities, the O&M will increase. It is a reality. If we look at the number of people who are working for the territorial government now - they may even be down a little from when we took over office, even with the devolutions that have transpired - I think they could come down somewhat.
We have worked very diligently to provide services in a more efficient manner, and I think that is what governments should do, whatever their philosophical beliefs. They should be trying to get the best value they can out of the money they are spending on behalf of the citizens of the Yukon.
We have been able to get the discretionary capital back up to levels that are more appropriate and in line with what has been spent in the past. I believe we are now in a position - and I do not think it is a matter of "if", I think it is a matter of "when" the cuts come from the federal government, as the federal Finance Minister has said, that they are going to come - where we, as Yukoners, have to carry our fair share. That is what we have said. We are not going to allow the federal government to impose more than the fair share or give us a harder deck to deal with than what they give to the rest of Canadians. As long as the cuts come on a fair and equitable basis, on a per-capita basis equal to the rest of Canadians, then we are prepared to work with the federal government, but we are not going to allow them to impose heavier cuts on us than they do on the rest of Canadians.
I believe that the actions this government has taken have situated us in a position where we will be able to absorb those cuts without seeing a dramatic impact on the economy of the Yukon, and I think that is what government should be doing. It should not be waiting to react; it should be planning. We have planned for that. It is something every Member in this Legislature knows - whether they want to admit it or not - is coming. Every financial guru in Canada says that we cannot go on in this way. The federal government is in a sorry state of finances, and we have to get our fiscal house in order. We are prepared to work with the federal government to do that, but we are not prepared to absorb more than our fair share.
With that, I think I will leave it for the exchange in general debate and Committee. I am looking forward to it.
Motion for s
econd reading of Bill No. 3 agreed to
Hon. Mr. Phillips: I move that the Speaker do now leave the Chair, and that the House resolve into Committee of the Whole.
Speaker: It has been moved by the Government House Leader that the Speaker do now leave the Chair, and that the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair: I will now call Committee of the Whole to order. We will recess until
Chair: I will now call Committee of the Whole to order. We are dealing with Bill No. 3. Is there any general debate?
Bill No. 3 - Third Appropriation Act, 1994-95
Hon. Mr. Ostashek: This bill will increase the spending authority of the government by some $12.8 million for the 1994-95 fiscal year. On an overall basis, there is a decrease of $3.8 million in O&M spending, but some individual departments do require supplementary spending authority. On the other hand, capital spending is forecast to increase by $16.6 million, in overall terms, although there are several departments that now foresee a decrease in their individual department requirements. Approximately $2 million of the increase in capital spending is simply due to a revote of capital funds from the 1993-94 year into the current fiscal year.
Despite the increase in spending, our surplus for the year is expected to rise by $2.9
million. This figure will be very much dependent upon the exact interpretation of the
freeze and the financing entitlement Mr. Martin and I agreed upon late last year.
The mechanics of the freeze have yet to be worked out by officials.
I will only briefly touch upon the changes in spending that are proposed in this bill because detailed explanations are best left to the appropriate Ministers in the line-item debate.
No changes are forecast in the Legislative Assembly budget, and the Executive Council Office is merely transferring monies from O&M to capital, with no net change in overall expenditures.
The Department of Community and Transportation Services is asking for a minor increase in O&M spending and a major $17 million increase in capital authority. The bulk of these monies is for highway construction and the Canada/Yukon infrastructure program. Of the highway monies, $9.3 million are recoverable for the Shakwak program, as is $900,000 under a joint infrastructure agreement. Also within the additional funds for highways are several millions of dollars of winter employment projects.
There is a very minor change in funding in the Department of Economic Development. That department's capital spending is being reduced by over $1.3 million. A more or less similar decrease in capital recoveries accompanies this change. A majority of the Department of Economic Development's capital spending reduction is in business development fund loans, although federal cutbacks have also reduced economic development agreement expenditures.
The Department of Education has increased its forecasted O&M expenditures by more than $500,000.
Increases are evident in each of the department's programs and consist of a host of relatively small changes, although $200,000 in additional funding for a mine training program in advanced education deserves separate mention. Accompanying the increase in O&M expenditures is an increase of over $72,000 in recoveries.
Education's capital expenditures will increase by almost $2.8 million. This increase is apparent in a number of line item projects with the largest being an increase of over $1.4 million for numerous school capital maintenance repairs. The responsible Member will be speaking to this in much greater detail in Committee debate.
The Department of Finance shows a relatively large $478,000 decline in O&M spending. This decline is due to forecast position vacancies and a reduced requirement for the payments to the bank to cover the cost of our banking services contract. The department also shows a small decline in capital spending for the year.
Government Services is projecting an increase of both O&M and capital spending. The
O&M increase consists of a number of relatively small changes in virtually all
programs of the department. The increase in capital of over $900,000 is largely due to an
increase in capital maintenance and upgrades, although there are significant changes in
some other line items. As with the Department of Education, there will be an emphasis in
this department on maintaining and improving capital infrastructure in the territory.
Very large spending reductions are forecast in both operation and maintenance and capital for the Department of Health and Social Services. As I mentioned in my remarks during second reading, the operation and maintenance reduction of $4.8 million is split between both Health Services and Social Services. In both cases, utilization of these services has been less than anticipated, and the Minister will be speaking to these matters at some length during departmental debate; however, I am sure that all Members will agree that this is welcome news.
At the same time, there is a fairly large decrease in recoveries, the largest being in child welfare recoveries from DIAND. The $2.9 million reduction in capital spending is basically the result of the reprofiling of cashflow estimates for the Whitehorse hospital construction, and the net of a number of additional expenditures for various other department structures. Recoveries decrease is due to the hospital cashflow reprofiling.
The Department of Justice will spend a little more in both operation and maintenance and capital, as will the Public Service Commission. Renewable Resources will require more capital than operation and maintenance funds. In operation and maintenance, this is largely the result of the carry forward of the country food study, under the Arctic environmental strategy, and the funding of several winter employment projects.
In capital, the biggest single new item is due to the transfer of the revoted special waste program from the Department of Community and Transportation Services. Winter employment projects also contribute to the increase.
The Department of Tourism's operation and maintenance expenditures will rise by slightly over $250,000, principally as a result of the foreign exchange fluctuations and postal increases. Capital spending is also increasing by over $400,000, essentially as a result of costs associated with the coming relocation of the department's offices and the Whitehorse visitor reception centre to the Taylor Chev property.
Finally, in terms of expenditures, the Yukon Housing Corporation will see decreases in both O&M and capital spending, due largely to a decrease in demand for monies under several recoverable programs. As a result, recoveries have also declined in this supplementary.
The responsible Ministers will provide Members with much more detail on expenditures in Committee debate, and I am certain Members will have many questions for those Ministers.
On the other side of the ledger, Members will note that our own-source revenues are down some $3.2 million. This is, for all practical purposes, entirely due to an expected decline in income tax revenues from those projected in the main estimates. This decline is composed of a larger decrease in personal income taxes, partially offset by an increase in corporate income taxes.
These figures are provided by the federal government, and are, at this time, subject
to significant fluctuations.
Recoveries are down, a little under $1 million, for a change of less than one percent. The transfer payment from Canada has increased by a rather significant $14 million. A portion of this increase is due to the decline in revenues and the consequent operation of the fail-safe clauses in the formula financing agreement. The remainder of the increase is due to a reduction in the keep-up factor under the formula. The factor depended upon changes in the national average provincial tax rates. As usual, this figure is subject to changes at a later date.
I believe I have now covered the more significant points of the supplementary contents, and I hope that Members will see fit to support us in its passage in this House. I would now be happy to answer any questions of a general nature.
Mr. Cable: I would like to signal some interest in questions that I think will be forthcoming during the debate on the supplementary budget. There are a number of areas where there is some unsettling bookkeeping. Going back through the old first supplementals from the last three years, and comparing them to the present supplemental, we find very large changes in the capital budgets each year. In 1991-92, it was $12,069,000, of which the Community and Transportation Services' change in budget was $3,077,000. In 1992-93, we find the first supplemental, if I have the numbers correct, at $17,586,000, of which Community and Transportation Services was $18,075,000.
In 1993-94, the first supplemental was $15,542,000 off the original target, of which the Department of Community and Transportation Services was off by $9,830,000. Now we have this one here, where the total supplemental is $16,626,000, of which the Department of Community and Transportation Services is off by $17,007,000. I think, during the course of the debate, particularly when we get to the Department of Community and Transportation Service, it will be useful to determine whether that is what we should be expecting, and why, because those numbers, on a percentage basis, are fairly large. It would be useful to find out whether the budget process has gone awry or whether that is simply the nature of the Community and Transportation Services budget, in particular the highways budget.
The Government Leader has made the point that the Grey Mountain Primary School monies were not reallocated, and I think the Member for McIntyre-Takhini quite correctly pointed out the difference in numbers between the capital expenditures. Under highway construction, we have the first supplementary showing $12,131,000 under the Alaska Highway and recoveries showing $9,313,000. I believe the Government Leader made some sort of explanation, but I have to say that I was not totally convinced. It would appear that the money was taken out of asphalt and, poof, it disappeared into general revenues and then sort of metamorphosed back out again into asphalt. I am wondering whether that is just a fancy bookkeeping entry or whether there is some further explanation. I do not think the explanation we have heard to date was very satisfactory.
I also need and would like some assurances that the warrants were not misused as a screen to hide the reallocation of the Grey Mountain School money. There is a suggestion by the Government Leader directed toward the Opposition, or some of the Opposition, that they do not understand elementary bookkeeping. It could be very useful, particularly now that the Deputy Minister of Finance is here, to get a full explanation of the reallocation of the funds from the budget - those funds relating to Grey Mountain School - the funds that we, on this side of the House, had hoped would be reallocated to Grey Mountain School out of the Alaska Highway budget.
Hon. Mr. Ostashek: I will try to answer some of the questions for the Member
opposite, but he may have to wait until we get to Department of Community and
Transportation Services in order to get the full answer.
I am not exactly sure what was going on under the previous administration in 1991-92, but I can tell you about this supplementary estimate. I want to take as much time as necessary so the Member has it clear in his mind that we were not trying to get the money through the back door, which allegations have been made from the other side of the House.
First of all, the major portion of the supplementary estimate, as I said in the debate this afternoon, was in excess of $9.3 million for another section of the Shakwak highway project on the north Alaska Highway. I would like to refresh the Member's memory. I said that during the debate of about a year ago on the capital budget for the Alaska Highway, and the motion to reduce that line item by $4.5 million - and we can go back and pull Hansard, if necessary - it was very clear to me and Ministers on this side of the House about what we would have to drop out of the Alaska Highway project. If the Member will recall, it was the reconstruction of the double dips on the south Alaska Highway.
Clearly, we have not gone through the back door to get that back into this supplementary budget because it is not in here. That money has, once again, been budgeted in the 1995-96 capital budget for the section that was dropped by this Legislature. Some of that monies - if you want to try and follow this money around - included in excess of $3 million that went into education. It was part of that $4.5 million, one could say. That went to school upgrades and ventilation systems in a couple of schools. There was a tremendous amount of work done in Haines Junction. I believe some of it went to Grey Mountain. Some of it could possibly have gone to the school in Mayo for roof repairs and renovations there. Anyway, the Minister of Education will be able to lay all those out for the Members opposite when we get to that department.
I want to make it very clear, and I want Members to have it clear in their minds, that we did not circumvent the Legislature to put that $4.5 million back into the project that we had to take out of the budget. I said this afternoon that the reason we went ahead with the Shakwak project was that there was a construction company sitting here that could use more work. There seemed to be an ample supply of workers around, and the exchange rate was very, very favourable.
So, we let another contract go on the Alaska Highway for the Shakwak project, which kept people working right up until December 15 last year. My understanding is, on that specific contract, at least half the crew will be back on February 15, because they are working on permafrost and have to remove a lot of it prior to the thaw. That was how that money was allocated.
As I said this afternoon, the additional $12 million was for different projects to keep people working this winter. We did this last winter. Some $7 million or $8 million went into projects that had to be done anyway, so they were advanced. They were looked after with funding from other sources, with a reallocation of funding, and we did the same thing again this year.
In September, we thought about what we could do to keep more people working through the winter. We all know that winter is the time when, even in our best years, we experience increases in unemployment in the Yukon. It is important that governments address that, if at all possible, and advance projects - not come up with make-work projects - to keep people employed. We do not believe in make-work projects.
With the other $3 million, we did some gravel crushing to be used on the highway next summer, for $1,245,000. That kept some people working this fall. There was some slope stabilization work done. There was excavation of a waste cut. The Minister can explain what that is, when we get to his department. That was $1 million. There was also some minor reconstruction here and there, for $373,000. That totals about $2.8 million, which makes up the difference.
I want to make it very clear that we did not put back in a project that was cancelled by this Legislature.
Mr. Cable: The Minister indicated that the money went into the Education budget. Does that indicate, notionally, that the accounting of this money, once removed, is pooled - kept separate from general revenues - and then allocated? Why is the Minister saying that this money was allocated to Education, in part.
Hon. Mr. Ostashek: I am just trying to think back, but I believe that those decisions were made prior to this other work on the Alaska Highway that I just related even being anticipated for winter works. That other money was already inserted into the Education budget. This was done after September. We had had a retreat with the deputy ministers and discussed different things. One of the issues was how to keep people working during the winter. The Education money was allocated prior to this allocation being made.
Mr. Cable: My recollection and sense of the debate on the Grey Mountain School was that the Members on this side thought that Grey Mountain School should be reconstructed. Is that the Government Leader's recollection of that debate?
Hon. Mr. Ostashek: If I remember the debate, the Member for Riverdale South gave us some suggestions about using the money to reconstruct the Grey Mountain School and to begin work on the Mayo school.
I guess that I have a lot of difficulty allocating money to build a school because the Opposition Members say we should when the numbers do not justify it. The numbers clearly did not justify the building of a new Grey Mountain School.
Mr. Cable: I do not think that there is any question that the government is free
to spend as it sees fit. We, if we can obtain a majority, can remove items if we see fit.
Would it not be fair to say that the sense of it was that the Opposition - and the
majority, as it turned out - thought that money should be taken out of pavement, whether
double dips or whatever, from the Alaska Highway budget and reallocated to a different
type of construction: school construction. Would it not be fair to say that that is the
Government Leader's recollection of the debate?
Hon. Mr. Ostashek: Basically, that is what the debate was about, but the Member also has to be fair to us and consider what we stated quite clearly we would be removing from the Alaska Highway budget.
Mr. McDonald: I will just get my two licks in now because now is probably the appropriate time. I really find it extremely objectionable the way the government has handled this particular matter. Clearly, the Legislature did consciously vote to reduce a certain expenditure by a certain amount. There was no notion from the majority of Members in the Legislature at the time that we were going to make a judgment for the Cabinet as to what specifically the reduction should be applied to in the Alaska Highway budget. We made a general assumption that a large proportion of the Alaska Highway budget would be maintained, but that there would be less emphasis applied to that particular line item in the budget. Certainly, it was up to the executive to decide how the remaining monies would be allocated.
We did not comment on how the remaining monies should be allocated. That was something that, quite appropriately, would have to be decided, through some deliberation, at a later date. What we did say at the time, and quite clearly, was that the Alaska Highway budget should be reduced somewhat, and we expressed a desire, prevented only by the rules of the House, that expenditures should be made in two building projects.
Clearly, not being Cabinet Ministers, under our parliamentary form of government we are not permitted to make expenditure proposals. That did not prevent a majority of the Members of this House from expressing themselves on that point. I think the fact that the government has gone to some lengths to top up that particular line item, after a majority had expressed different priorities, suggests that there is not as much respect for this House as the Government Leader suggests there is. Frankly, I think there is precious little. I think the Government Leader does not have to remind us what rights he has as a Cabinet Minister. I know them quite well.
There was an extraordinary action taken last year at this time. It expressed the majority will of the House very clearly. I think the government is dipsy doodle about how it has reallocated the funds in trying to pretend that certain funds made a trip over to the Department of Education and other funds made a trip into other expenditures that had nothing to do with the project that they had cut. That is really irrelevant because I know that is not how budgeting works at all.
The point of what the Legislature had said at the time, quite clearly, was to spend less on this particular line item. That is what the majority of the Members of this Legislature indicated as being their desire. The government restored a large portion - $3 million - of that non-contingent funding to the Alaska Highway because it felt that that was its prerogative.
Hon. Mr. Ostashek: I have heard the Member opposite and I clearly do not accept that argument, because the money that was spent on the Alaska Highway was not spent until this fall. It was not spent when the budget was put together. The capital budget started to be spent at the start of the fiscal year. This $3 million over and above the Shakwak recoverable monies went to provide some winter work. We did that last year in departments as well. We did that again this year. We had the money available so we put it into winter works.
I am not sure whether the Member for McIntyre-Takhini is saying that we should build a school even if the numbers do not warrant it.
Mr. McDonald: First of all, we had the debate last fall. We had this whole debate about whether or not the expenditures should be made in this particular area. One element of that debate was that there should be less emphasis applied in one line item. That was half the debate. I know for a fact that if money is freed up, it is not traced. The serial numbers on the bills are not traced into the Department of Education or traced into some other department. That is not how it works at all. What the Legislature clearly said was that there should be less attention paid to this particular area. The Government Leader, in his defence, is coming back and saying, "There were some good gravel-crushing contracts that made work for people.'' That is not the point. The point is that when it came to works projects, winter works or otherwise, a majority said to place less emphasis in one area and more emphasis in something else. The government ignored that. They restored the funding to this area and that is crystal clear.
Hon. Mr. Ostashek: I do not believe it is crystal clear because we did increase the capital expenditure by $2.8 million in Education in renovating and upgrading schools. The Minister will lay them out for the Member when we get to the line-by-line debate. There was $2.8 million in capital and another $300,000 or so in operation and maintenance. There was an increase in the Education budget as a result of the debate last winter.
Mr. McDonald: Who was here for that debate? We all said at the time that we wanted less emphasis on one line item, which the government ignored, obviously, because they put more emphasis in the line item. We said we want to have two particular construction projects undertaken. The Government Leader has reminded us about who calls the shots when it comes to making expenditure proposals but they are not the few projects that were even cited by anybody here. Otherwise there would have been a different debate. People were not even aware. Nobody had even heard of some of the projects that had been identified in the Education capital budget. It is not to say that they were not valuable projects or that they do not have some intrinsic or inherent value. The point is they had nothing to do with the debate, and the Legislature - elected people - passed judgment on something.
We all passed judgment on this point, so there are two sides to this equation. One was to reduce emphasis in one area, which the government ignored, and the other was to increase emphasis in a particular way in another area, which the government also ignored. How can it be much more complicated than that?
Hon. Mr. Ostashek: It clearly was not ignored, because there was an increase in the Education budget. It may not have been for the projects that the Members opposite wanted, but there was, because of the debate, an increase of over $3 million in the Education budget.
Mr. McDonald: There is obviously not much point in belabouring this. I think that the way the government does its finances is too cute, to be sure, and the way the government is defending its actions, at this point, is equally cute. I just want to register my disappointment at the government's approach, and hope that we do not have to go through this for too much longer.
Mrs. Firth: I would like to start out by making some general comments. I guess that we are still in general debate on this particular supplementary budget. I have a great deal of difficulty supporting this government's budgetary initiatives, and this evening I would like to lay out why that is so. I would like to ask some of the Members if they would do me the courtesy of just listening to me, and maybe thinking about some of the things that I am saying. Maybe they could just forget that it is me talking, and then they will be able to hear some of the comments that I have to make.
I am looking for some philosophical direction from this government, and I do not see that. I would like to ask the Minister of Finance if he could tell me under just what philosophy this government operates. What motivates them and what drives them? What do they believe in? Perhaps he could just give me a quick, cut-and-dried summary of what they actually stand for. I do not want to hear any of this stuff about their not believing in grants, but then they go and give out grants, and so on. I would like to hear some clear, philosophical statement describing what the government stands for and what they represent. Secondly, I have a great deal of difficulty supporting a government and their budgets, when they cannot stand up and defend their actions and tell me why they are doing the things they are doing. Maybe they can stand up and say they did not know why they were doing them, but that it just sounded like a good idea at the time.
I would like some explanation of why they are doing the things they are doing, so I can compare to see if it is consistent with what they claim their philosophy is. I might then be able to understand them better and understand why they are doing the things they are doing.
Thirdly, I know the Government Leader and his colleagues would cry and howl with outrage and protest if they were in Opposition and another government was doing what they are doing. I know these people. I have worked with them for many years, and I remember well the criticisms they used to levy at the previous government. I would like them to explain to me now why it was wrong when the previous government did it - and it would certainly have been wrong for the previous government to try some of the stunts these people are doing - but it is not wrong now, and they cannot see that we would question their activities, in light of what I thought they used to stand for, and what their position on issues was.
I am referring to things like the one sitting of the Legislature, the use of the special warrants, and the attitude of not standing up and defending their actions, of just sitting in their chair. Why is it all right for them to do those kinds of things, when I know they would object if they were in Opposition and the previous government was doing things like that?
Perhaps the Minister of Finance can clarify that for me.
I have some concerns about this government's respect for the Legislature and their respect for the law. I have some concerns about the very noticeable attitude of the government. There is an old saying that knowledge is power, but this government seems to have replaced that saying with "money is power". I know that the bigger the budgets are, and the more money individuals have control over, the more powerful they feel, which is of great concern to many Yukoners.
People are concerned about abuse of that power. It is powerful to be in such a position and have control over millions of dollars, and to have control over whether you get something in your constituency, Mr. Chair, or whether the Member for Klondike gets something in his constituency, whether any of the Members in the House get something in their constituency. It gives the people in charge a tremendous feeling of power.
The test is in how these individuals use that power. If we do not have any idea what philosophy is guiding them and we do not have any idea why they are doing things, because they cannot defend themselves, if we seem critical when we ask questions and find that there is no defence, and when we make suggestions and are not listened to, how, then, are we, as a group of elected people, going to communicate with each other in the best interest of Yukoners. I do not see any communication back and forth.
Some Hon. Member: (Inaudible)
The Member for Faro says that we should all have a group hug. I do not think that will happen, but I think we should start talking to each other and to start listening. I do not get the feeling that any of the Members on the other side of the House want to listen to me or the other Members of the Opposition. I do not get that feeling at all.
We will be persistent. I will continue to offer ideas and suggestions. I will continue to ask questions. If I ask questions that offend Members of the government, so be it. I know that if I stood up and said that the government was great in the way it handled the wage rollbacks and that their biggest grant program in history was wonderful, or the Conservatives sure love those tax increases, they felt that was what we really needed and that we were really due, I know that they still would not be satisfied. The Government Leader keeps saying that it is a no-win situation: if they do something, they are criticized; if they do not, they are criticized. If they do something and are asked why they did it and cannot say why or defend their reasons, they will be criticized for it.
I remember that, after election night, some of the Members of the Legislature were
flying on a trip to an Alaskan legislative exchange. I was reading an article that was
written by Don Sawatsky, who I know in the past has been a good Conservative. He was an
individual who I worked with when I was still with the Conservative Party. He had written
an article about the election and about the new Government Leader. The last line of the
article made reference to fact that the Government Leader's downfall would surely be his
stubbornness. Mr. Sawatsky went on to make some rather lighthearted comments about the
Government Leader being pretty stubborn, and did predict that that would be his downfall.
The Member for Faro says he agrees. I think a lot of people agree with that statement. It does not have to be that way, but when we raise issues and questions we are told, "No, it is absolutely not that way. That did not happen. It absolutely was not an illegal write-off, absolutely no perception of conflict-of-interest," and today "Absolutely no political interfering in the tendering process or the contracting process". How does one have any communication or exchange with a person who absolutely refuses to believe that we may have a point, or to even listen to see whether or not we might have a point, when they just shut it down and say it did not happen. We are asking now about the Alaska Highway, and we hear, "No, it did not happen that way, and that is it." What do I do? How do I get through to these people? They cannot defend what they have done, so we ask another question. "No, it absolutely did not happen that way." We are going back all through the debate on the Grey Mountain Primary School again and now the Government Leader, the Minister of Finance, has a whole new idea of how that debate went. What did happen? "No, it absolutely did not happen."
This is the individual who has publicly admitted that he had a communication problem with his party and with getting his message out to the public, and I am here to tell him that there is also a communication problem with the Members of the Legislature, because he is not getting his message out to us either, and he is not listening. Communication is a two-way street and it is just not working that way right now.
I want to get into some specifics, particularly about this Alaska Highway designation
of money, and particularly about the government's financial management with respect to
illegal loan write-offs and to special warrants. I am going to have a lot of detailed
questions about those particular areas, but I would like to give the Minister of Finance
an opportunity to answer the questions I asked him - the three or four questions about
philosophy and defending some of the things he is doing and his understanding of what the
Legislature and its Members can and cannot request. We have already been told by him that
we cannot tell the government how to spend its money. Just what does he want from us?
Perhaps that would be a start.
What does he want us to tell him? What kind of ideas is he prepared to listen to and accept from us?
I will let the Government Leader answer a few of those questions. I will probably have some further comments to make when we get into some of the more intricate details of the debate.
Hon. Mr. Ostashek: Even though I listened very intently, I think a lot of questions asked were meant to lecture. I do not believe it would matter to that Member what we did on this side of the House. She would continue to be critical of us no matter what we did. She asked us what our philosophical beliefs are. We stated quite clearly that we did not believe in huge increases in O&M of government, and that we thought more money should be placed on the capital side to put private sector people to work, especially when the economy was turning down. That is the way our budgets have been crafted - to put more money into capital and less into O&M. We have tried to maintain that. I thought that was one of the principles that the Member opposite believed in. She always says there is too much government. That was her philosophy - that there was too much government. We are trying to curtail the size of government and spend more money on the capital side of the ledger and put private sector people to work.
I do not think the special warrant was misused. We do not expect to be using them all the time. It is not appropriate, and we have no intention of doing that. They have been used in the past. You are allowed to use them, under the Financial Administration Act, and we have done that. As stated earlier in debate today, we probably could have gotten away without bringing the warrant in. We could probably have brought the supplementary in and debated it here, but I do not think the reception from the other side of the House would have been any different. They still would have said we had already spent the money and were now coming to the House for approval.
However, the warrant was there to cover the possibility of technical overspending without authority. I am sure it has happened in the past where there has been no warrant and supplementaries have been entered, and where departments could conceivably have been in a technical violation if they had spent more money than was voted in this Legislature. That was the reason for the warrant. We were not trying to circumvent the Legislature by doing it. We do not expect to see a lot of warrants in the future.
As far as one sitting of the Legislature goes, I do not know what all the fuss is about. We came into the Legislature this year on December 1. We will probably be here until March, April, or perhaps May. I already stated earlier in debate that we intend to be back in the House before Christmas again this year. It is a matter of reallocating where the time goes. We are going to have just as many sitting days as we had before, and there will not be nine months between sessions, as was alluded to today.
Mrs. Firth: There will be eight months.
I just want to repeat what the Minister said so that he can correct me if I have not understood him. He has just told us that whatever the government does, we are going to criticize it, anyway - I believe that is correct. So, what he is saying is that, because we will not like it anyway, the government is just going to do whatever it wants.
The Government Leader is shaking his head and saying that he did not say that at all and that that is what the trouble is. I am trying to understand this. I want to know what these guys want. What do these guys want from us? If I wanted something from somebody, I would not go in and say, "I really want your cooperation on this, but I know you are going to criticize whatever I do anyway, so to hell with you." I am pretty sure that that is what I heard him say.
I would like to help my constituents and other Yukoners by making some headway here in the Legislature. One person cannot do it only by standing up and asking questions. It has to be a two-way street, and it is not that way. I will try another approach. I will try to be more specific and see if we can get some specific answers from the Minister of Finance.
First of all, this is the way I see what happened with respect to the highways budget. We in the Legislature made a suggestion to the government to remove some money from the Alaska Highway budget. The majority of the Members agreed with that principle. The government went away, and I was told by written communication from the Minister of Finance that the $4.5 million was put into surplus.
Then we come back into the Legislature and get a supplementary budget. First of all there is a special warrant that we are made aware of by an order-in-council, requesting that millions of dollars be spent covering off projects that we, in the Legislature, had indicated that we did not want any more money identified for. We did not want any more money put toward them. That was done with a special warrant.
My first specific question is this: where did the government get the money that made up the money for the special warrants? Where did that money come from - the $6 million and the $26 million? From where did all that money for those special warrants come?
Hon. Mr. Ostashek: As we go through the supplementaries, the Member opposite will see - or has already seen, if she has gone through them - that there has been allocation of funding. Some departments gave up funding and other departments reallocated it.
The bulk of the supplementary, which is the $9 million, is recoverable for the Alaska Highway Shakwak project. That is where the biggest portion of it - the $9.3 million - was allocated. There was a contract let on the Shakwak project.
As I said, the other $3.3 million - a little over $3 million - was not spent until this fall. Prior to that, there were allocations made for the increase in the Education budget. There was an increase in the capital budget of $2.8 million for renovations. I do not have the line items here in front of me; the Minister can give them to the Member. I believe that one of them was for some work on the Haines Junction school, and some was for work on the Grey Mountain School. It was spent for renovations to different schools within the public school system. As I said in debate earlier today, while they did not get the two projects that they wanted, they did get more money into capital and O&M in Education. I believe that there was also approximately $500,000 in O&M.
Mrs. Firth: I would ask the Minister of Finance not to jump the gun; I do not want to go that far yet. All I know is that I read these orders-in-council authorizing $1,363,000 for operation and maintenance and $20 million in capital to be paid from the consolidated revenue fund. I understood from the Minister, after the budget debate in the Legislature last session, that we did not have that kind of money to spend. We had rolled back the employees' wages and went through all that business of the $20 million surplus that mysteriously popped up, and the $10 million in capital.
What I am saying is that I want the Minister to be able to defend what he is doing.
From where did we suddenly get all this money? I read through all the supplemental
information that the Minister sent me when I requested more information. I want to know
how they knew that they had well in excess of $20 million - almost $30 million - to spend.
From where exactly did that money come? Did it just come from lapses within government, so
that they had this extra pot of money to spend and, therefore, could ask the Commissioner
to sign special warrants?
Hon. Mr. Ostashek: The warrant just asks for the additional monies that are required. There is some explanation where the money comes from on page 3 of the supplementaries. There has been an increase of $14 million in transfer payments from the federal government, and there is a clear picture of where the money comes from laid out in that column in supplementary number 1.
Mrs. Firth: I understood that these special warrants were for money that was already spent. It was not money that they were looking for that they were going to spend. It was the supplementary - money that had already been spent, and the special warrant was used to justify the overruns of those expenditures.
Hon. Mr. Ostashek: I think the Member is misunderstanding that. When the special warrant was put out, hardly any of the money had been spent yet, and we knew these other revenues were coming in at that time. We knew what was lapsing in some of the departments, we knew what additional revenues there were, so I would say that at the time the warrant went through a lot of the money had not yet been spent.
Mrs. Firth: The date on the warrant is November 1. That is only a month ago. Is
the Minister telling us then that they spent this $23 million to almost $26 million in one
or two months? The date on the special warrant is November 1, which, to me, means that all
the money had been spent and the special warrant was used to cover off the money that had
already been spent.
Hon. Mr. Ostashek: The special warrant was issued to make sure the departments do not run out of money for these projects before the supplementaries are passed in the House.
Mrs. Firth: Can the Minister answer a question for me? In reviewing the Shakwak project, I find that the companies are already doing the work, so a lot of that money had to have been spent already. They had worked until the middle of December, according to the Minister. The warrant was in November. All that money had to have been spent. Surely the Government Leader is not saying they spent all $26 million from November 1 until now. Is that what the Minister of Finance is saying?
Hon. Mr. Ostashek: No, not at all. In fact, there are probably monies not spent yet. The Shakwak contract was not let until some time in August. They started working on it very late in the year, and they worked on it right up until December 15. They will be going back to work on February 15.
Mrs. Firth: Where is the money coming from for the extension of the Shakwak project until February 15? Is that coming out of the special warrant?
Hon. Mr. Ostashek: There is an ongoing flow of capital through the government. It is coming out of general revenues at this time but we must have spending authority for it. At some point it must be accounted for, and so the special warrant is to make sure that the monies were available prior to the supplementaries being passed through the Legislature so that we would not be in default. The money is coming out of cash flow now.
Mrs. Firth: What is the Minister of Finance saying then? I read the Financial Administration Act this afternoon, because I was concerned about this when I heard the Minister's comments about extending the Shakwak contract. The government has the authority to spend up to a certain amount of money. It is not supposed to spend beyond that vote or it is doing something illegal, according to the Financial Administration Act. Traditionally, there have been overexpenditures. If there is a project on the go and there are cost overruns, the government comes back with a supplementary budget to cover it, so that it is done legally, because it cannot exceed the spending within that vote.
Is the Minister saying then that because it tendered another contract on the Shakwak, it is going beyond the authority of that vote? It brought the special warrants forward to legitimize and make legal the extension and tendering of that Shakwak contract. Is that what happened? Is that what they are using the special warrants for?
Hon. Mr. Ostashek: It is basically to make sure the department does not overspend. Right now, I believe the deputy minister just said, we have a balance in the bank of $45 million, but that money still has to be accounted for and we cannot overspend the vote authority. As I have said, the contract was let late in the season because we knew that it was an area that had a lot of permafrost in it, and it could be worked on in the period of time when highway construction is not normally worked on, such as working right up to the middle of December and going back to work in February, which will keep Yukoners working during the slack period. It is very hard to explain and we seem to be going in circles, but if the Member would like a technical briefing on that one aspect, I would be happy to have the Finance officials give it to her.
Chair: Is it the wish of the Members to take a brief recess?
Some Hon. Members: Agreed.
Chair: We will take a brief recess.
Chair: I now call Committee of the Whole to order. Is there further general debate?
Hon. Mr. Ostashek: I will try, once again, for the Member to try to clarify this.
The warrant is to give the department the authority to spend the money. The money is not in the warrant itself; it is the authority. Presumably, the department would not need to utilize the warrant until such a time as the money that was voted in the main estimates was spent. In Community and Transportation Services, this is a fairly substantial budget amount. I believe it is about $70 million or $80 million.
In the event that the supplementaries were not passed for a long period of time, and so that the departments would not be overspent - and this is why we have said that departments probably are not overspent at this point - they will need the warrant. However, at some point they may have needed it, prior to the supplementaries being passed. This was the reason for the warrant.
Mrs. Firth: I just want to make one comment about the Minister's last remark just prior to the break. He mentioned obtaining for me a technical briefing by the Finance officials.
The Member for Faro says, "No way". I would just like to point out to the Minister of Finance that it took one hour before he relented and told me that the Finance officials would give me a briefing, if I wanted. Although I have asked for the Finance officials to come to the House as witnesses, he does not want to do that. I am just pointing out for the Minister of Finance that it did not take very long before he was saying that we could have this briefing. I expect him to be able to defend his actions and what the government is doing.
I would like to know from the Minister whether or not the work was already underway
before the special warrant was signed.
Hon. Mr. Ostashek: Some of it was probably underway.
Mrs. Firth: So, the work was underway before the warrant was signed. Under what vote was that work being carried out?
Hon. Mr. Ostashek: As I said earlier, it would have been covered under the main estimates. They would not have been out of money in the main estimates yet, so they could quite conceivably do it under the main estimates. That is what the warrant was for - to make sure that they did not exceed it.
Mrs. Firth: Can the Minister tell us when it was anticipated they would run out of money in the main estimates?
Hon. Mr. Ostashek: It will vary from department to department. A small department, such as the Department of Education, will run out more quickly than will the Department of Community and Transportation Services, for example. It would vary tremendously from department to department.
Mrs. Firth: That is my concern. The Minister said that the work was underway before the warrant was signed. The warrant was signed in November. Perhaps the Minister could tell us when the new project was contracted. Was it in August, as he said?
Hon. Mr. Ostashek: I do not have the exact date, but I know that it was some time in August. It was tendered in late July or early August, and the work started in August. I know that.
Mrs. Firth: So that I can put this in chronological order, the work was probably tendered in August. That would be August, September, October - this department has a huge budget of $80 million or so. This special warrant represents something like a 16 or 17 percent overall increase in the department's whole budget.
The contract was going on before the warrant was signed, the people were being paid, and the contractor was being paid from money for the 1994-95 fiscal year. When was that anticipated to run out, so that the department felt it had to have this special warrant to cover it off?
Hon. Mr. Ostashek: My understanding is that it would have been some time after the special warrant was issued, before they would have thought they had run out of money. I think the reason for the special warrant was to make sure they did not run out of money. They certainly had not run out of money at the time the warrant was put up.
Mrs. Firth: Why did they have to have the special warrant? I could probably answer that question: because the House was not coming into session, we were not going to be sitting in the Legislature and they had to legalize it prior to running out of money and coming in with a supplementary budget. Is that correct?
Hon. Mr. Ostashek: No. The reason is that the department did not know at that time when the House was coming back, for one thing, and, as I said, there have probably been cases in the past where a warrant has not been used and the supplementary was a long time being debated so technically they would have been overspent. So, with them not knowing exactly when the House was coming back in and knowing they had taken on this huge, new contract, they wanted to be assured that they did not run out of money. That is why the warrant went through.
Mrs. Firth: Can the Minister provide us tomorrow with a copy of the contract he is referring to and can he give us an idea of the total value of the contract?
Hon. Mr. Ostashek: I will see if we can get a copy of the contract. I believe the contract was a little over $12 million or $13 million in total. I want to draw the Member's attention to the fact that that contract is only one item in this warrant.
Mrs. Firth: I am aware of that, and I will be getting to the other items, too. Right now, I would like to get as much information as I can about this one because I may request more information from the Minister.
I presently have in front of me the government document called "Government
Contracts Registry - contracts by department April 1 to November 30, 1994". It is an
interim report of the contracts that have been issued so far. It was provided to us by the
Minister responsible for Government Services. In that document, there is a page from
Community and Transportation Services with construction general contracts, and there are
three contracts specifically dealing with the Shakwak project. I would like to just put
the Minister on notice that I will be asking some questions tomorrow and I would like an
explanation of what these contracted amounts mean. As well, I would like a copy of the
specific contract we have been discussing tonight.
I am sure the Minister probably does not have the contract document that I am referring to in front of him. However, I have a particular question about the Shakwak project. One contract amount is in excess of $5 million for the contracted amount, and then there is a current year commitment for which they have put in an amount of $1.00. I would like the Minister to bring back an explanation about that. There are two other contracts for construction on the Shakwak. One is for $8,769,000-plus, and the current year commitment is $6.5 million for that one. Another one is for $10,112,000-plus, and the current year commitment is $6.9 million. Does the Minister know right now if that is one of those contracts, or is the one he is going to bring in tomorrow in addition to these?
Hon. Mr. Ostashek: No, I cannot say for sure. I can try to get a copy of the contract for the Member, but I would suggest that the right place to ask those questions would be under the line item for highways in the budget. I have no problem trying to get a copy of it for her.
Mrs. Firth: I would appreciate having that. I would like to have it tomorrow so that we can carry on with it. We are still in general debate, and I may have some general questions about tendering procedures, and so on, when I have had an opportunity to become more familiar with the contract and the terms of it.
I guess it is fair to say, then, that the decision to overspend was made before the special warrant was signed.
Hon. Mr. Ostashek: It is probably fair to say that, as I have said, as long as there was money in the department. The warrant was issued to give them the authority for the extra money that they would need before year end, so that is probably the case.
Mrs. Firth: Would that have been a Cabinet decision?
Hon. Mr. Ostashek: I think it went to Management Board.
Mrs. Firth: So, Management Board made the decision; it did not go to Cabinet. I see the Government Leader shaking his head yes.
The process with respect to the Minister's defence of this project being a job creation project, the timing, and so on - was this an initiative that was discussed at the Cabinet retreat? He told us he had the Cabinet retreat, and there were ideas that came forward. Was this one of those ideas?
Hon. Mr. Ostashek: Not the main contract, but the additional $3 million the Member for McIntyre-Takhini alluded to that was not recoverable.
Mrs. Firth: The $3 million that went toward Education, or
the $3 million that went toward the Alaska Highway? Could the Minister of Finance tell us what other initiatives within this special warrant and in the supplementary budget were job-creation projects as a result of that Cabinet retreat?
Hon. Mr. Ostashek: No, I cannot say exactly what they were. The warrant only covers the overexpenditure. There was a whole list of underexpenditures that made up the total of the supplementary. I cannot say exactly.
Mrs. Firth: I am sure the Cabinet retreat did not go into a detailed discussion about underexpenditures. The government Members would have been looking for ideas, initiatives and creative ways to spend money and creative projects to present. I would be interested in knowing this. I am trying to analyze and understand how the decision-making process works and where the ideas originate.
I would appreciate it if the Minister could bring back some information with respect to where the ideas are coming from for the extra expenditures. Is this going to become an annual way to spend money in the Yukon? Of course, as Members of this Legislature, we are concerned with how these decisions are made. Say, at the retreat, the government proceeds to spend money on gravel crushing, and so on, and we, as the Opposition, are given the information after the fact - after the Shakwak contract has gone out - and we are asked to agree with it, with no debate, discussion or input into the particular initiative.
It is the concern of the Legislature that our input into initiatives are being circumvented, because decisions are being made at retreats or Management Board, or wherever, and the government is coming to us after the money has been spent telling us what they did, that it was good for everybody, and we now have to approve it.
I would be interested in knowing how the decisions are made, how the government does its planning and where they came up with the ideas for these expenditures in the supplementary budget and the special warrants.
Hon. Mr. Ostashek: Again, we are back to the fact that the Member is saying that the money is all spent before the warrant was obtained. That is simply not true. There is money in the main estimates for the departments that was voted through this House in the spring of this year. The supplementaries readjust that money for the different line items. We have had supplementaries every year, in this Legislature, to do that. We come in every year seeking approval of supplementaries for different departments. We move money around in departments. Sometimes we look for more money and sometimes less.
At the Cabinet retreat, specific projects were not identified. It was decided that it would probably be worthwhile to see what money could be freed up in order to put Yukoners to work for the winter, since the mines were just starting to come back into production and the unemployment rates were still quite high - about 10 percent. This is similar to what we did last year. As to whether or not the winter works idea will be an annual event, I do not think it will be. Once the economy picks up, it will not be necessary to look for additional expenditures in the fall of the year to keep Yukoners working. At that point, we will probably not be taking those initiatives.
If the Member is asking me whether or not there will be supplementaries, certainly there will be. There are supplementaries every year in this Legislature. There are first and second supplementaries, in order to finalize the department's budgets.
Mrs. Firth: We all recognize the whole concept of supplementary budgets. However, surely even the Minister of Finance has to admit that this whole special warrant idea is different. It has never been done with this government before. I am trying to establish why they did it. I am trying to get some answers from the Minister as to why it was done. It is not like the routine supplementaries.
The money has already been spent. The work was underway before the warrant was even signed. That was a contract that was underway before we, in the Legislature, knew anything about it. If we had known about all this lapsed and leftover money, perhaps we would have had some good ideas for winter job creation projects, but we did not have that opportunity for input. One reason was because we were not sitting. The other reason was because the government had already started the project without our having any knowledge of it.
I am just trying to find a way that I can better represent my constituents by being more knowledgeable about what the government is doing. I just find out about it when I read the orders-in-council, when we have the budgets and supplementaries in the House, or if I happen to pick up some messages on the street or if someone alerts me to some initiative that is going on or if we see some contracts advertised in the paper.
I understand the principle of supplementaries. I can understand how some departments
overspend their budgets and need additional funds. However, an $80 million department,
with a 16 or 17 percent increase through the use of special warrants, raises a bit of a
red flag for me. That is why I am pursuing the questions.
I have asked more than my share of questions. If other Members would like to follow up on this particular subject, I will give them a chance, and then I am prepared to move on to some other items until I get the further information from the Finance Minister.
Hon. Mr. Ostashek: I will just make one comment, but I do not want to get into a long debate about it.
The Member opposite seems to be implying that this is an extra-special circumstance, a special warrant. They are used every year, mainly at the end of the year. Sometimes, special warrants are used for two months until the budget is passed. This is what special warrants are for. It is not something the government will use all of the time, but the Financial Administration Act does give the authority for a special warrant. This time, it was used in that respect.
Mr. McDonald: I would like to ask the Minister more questions about special warrants and, in particular, about the special warrant policy of the government; that is, when do they go to the Commissioner seeking extra funds? What are the circumstances that cause them to make a request such as this, so close to a sitting? What is the policy?
Hon. Mr. Ostashek: I understand that we are following the same policy the previous government did, that there has been no change in it. Why this close to a sitting? I told the Member in debate the other day that we held the sitting off a little longer than what we probably would have because of the fact that we did not have a figure from Ottawa as to what our budget was going to be. I guess we could have called the sitting and went along with it, but I had to make a trip to Ottawa at the end of November, so we delayed calling the sitting until December 1. We had hoped that we would have a figure from Ottawa by that date so we could table the budget.
The Member seems to say "when the Legislature is normally sitting." There is no rationale as to when the fall sitting comes in and when it does not. The sitting dates were changed on numerous occasions by the Members opposite. There is no hard and fast date.
Mr. McDonald: I think the Minister was not the only Minister with travel plans in November. We all know that. I am asking the Minister about the special warrant policy. It is not good enough to say that that was what the previous government did. I want to know what this government's policy is, and I will make the judgment whether or not it is the same as the previous government's. What is the policy?
Hon. Mr. Ostashek: We use the policy as it is set out in the Financial Administration Act, to top up the budgets and to give the proper authority for spending when the Legislature is not sitting. If the Members are asking me if we intend to make continual use of special warrants, I say we most certainly do not.
Mr. McDonald: I think we have a right to be nervous about this particular matter, largely because we hear that there will be one sitting per year and, obviously, there will be an appetite to top up summer spending with a special warrant in October and November, as was the case with this particular year. The Minister says they will not be doing it often. What kind of comfort can he give us that greater effort will be made to seek funding through the Legislature and not take the easy route and go to the Commissioner?
Hon. Mr. Ostashek: I take exception to the Member saying that we went the easy route, because we did not. We probably could have done without a warrant, brought this supplementary in and debated it, and it probably would have been passed before the departments ran out of money.
Being a former Finance Minister and a former Cabinet Minister, the Member knows the
departments do not like to operate that way. They did not know when the House was coming
back in at the time that they requested this - they requested it earlier than when it was
passed, but I forget when it was requested - but they wanted to have the comfort of
knowing that they were not going to overspend their budget. We have said quite clearly
that there must be an extraordinary circumstance to do this. The Member opposite has to be
aware that for the second supplementary, if it is coming in around the end of the year,
there always has to be a warrant.
Mr. McDonald: There may have to be a warrant if the Legislature is not sitting. Presumably, if the Legislature is sitting, I would dearly hope that the government would not seek a warrant and then come to the Legislature whenever they felt like it. I would hope that they would make a special effort to seek the funding through a bill in the Legislature. That is the normal practice, as I understand it. As I remember, departments operate in any way that they think the Department of Finance will let them. They are not overly concerned about vote authority or anything else, unless they are told that there is a problem.
The need to go to Ottawa is something that has, and probably will - if we do not hear any chippy comments about our pairing policy in this Legislature from certain Members, though not the Minister of Finance - permit Ministers to conduct important government business while the Legislature is sitting. So, I do not think that the Minister should have been too concerned about being unable to get to Ottawa to get the financial projections for next year. As I understand it, the subject of the Ministers' meeting was not to determine the transfer payment this year, as that was more of a technical calculation that the transfer payment would increase by this amount of money.
I will, however, just make this point, because I do not think I am going to get very much further. It should be a rare event and an agonizing decision for Cabinet to seek a special warrant and determine whether or not they should be coming to the Legislature. It is up to the Opposition to make the moment poignant for the Cabinet when they do get to the Legislature, if there is any suggestion that we could have been sitting in any case. I think that is what keeps the government honest and avoids the need for debating what might be perceived, from time to time, as capricious attempts to bypass the Legislature, because it is a simple thing to do.
I have a couple of questions about the winter works projects. The Minister has indicated that there is a list of projects that were put together to provide for winter works. I would like to have an answer to a number of questions. What specific thing was it that caused the government to want to undertake winter works projects? What was the analysis? If there was some analysis, can we see it in order to justify the winter works program? Can the Minister give us a list of projects that he would call winter works projects? Also, when it comes to how the projects are determined, I would like to know more about how one project qualifies for winter works while others do not.
The Minister indicated that at the deputy ministers retreat there was a decision to free up some money for winter works to ensure that some of the winter works projects could go ahead. I guess it does not take a wizard, looking on page 3, to see that one does not have to do much freeing up of money when one is getting $14 million from the federal government that had not been anticipated. Nevertheless, can he tell us what process the government went through to free up whatever available capital there was?
Hon. Mr. Ostashek: As I said, the discussion was at the retreat. It consisted of ways we could be looking at to try to keep some Yukoners working this winter, as the Member opposite is fully aware. He has sometimes criticized the government quite extensively about what is being done for Yukoners, and this is one of the things we are doing for Yukoners - trying to keep them working in the winter. We did it last year. I believe some $7 million was reallocated. I am not sure of this year's exact figure. I can try to get a list for the Member opposite but I think each Minister can speak to it as we get to their department. I can try to find the list but I do not know if there is one.
Basically, what we did when we came back was to have each department go through its budget to see what was available and what they thought would qualify for winter works. Then that was brought forward to Management Board and decisions were made.
What qualifies for winter works? A project that is going to go ahead anyhow. I believe
last year we even ran a small deficit to put the winter works project together in the
supplementary. As the Member said, that was not necessary with this supplementary, but it
is a project that would be going ahead anyway and one that can be done in the winter
without additional expenses or additional costs, or one that would have to be done next
summer. Last year, and I believe maybe this year, too, there are some brushing contracts
on the Shakwak project.
They were done during the winter, rather than in the summer. Those are the types of projects that we tried to move ahead and fast-track. I am not sure if the education projects qualified for that, or whether they were already done, but I know there were some Yukon Housing projects and some in Government Services - maintenance on buildings and the upkeep of buildings. As the Member opposite knows, when we felt that we had a financial problem we cut back on a lot of the maintenance in Government Services, and now we are trying to catch up so that our buildings do not deteriorate.
Mr. McDonald: The government will provide a list of what they refer to as winter works projects, as opposed to other projects that they have in mind - is that correct? Could the Minister provide the dollar amounts that are allocated to each project as well? I hesitate to ask this, given that we have been around the track a number of times on the question of the calculation of jobs, but has the government calculated the number of jobs associated with this, or are they just going to say that there will be more jobs than less jobs?
Hon. Mr. Ostashek: I am not going to go through a week of that in the Legislature again - arguing about whether it is 700 jobs, or 675 jobs, or 725 jobs. When we spend money, especially on capital projects, we know that we put Yukoners to work.
Mr. McDonald: That is honest, if not precise. I think the problem that we had before was not whether there were 700 or 725 but, rather, whether there was something closer to 200 or 300 jobs.
Nevertheless, I would like to ask a quick question about the transfer payment from Canada. The Minister will remember - it was only about seven or eight months ago, or whenever we were in the Legislature last - that I took issue with the projected transfer payment from Canada. I suggested that I did not understand why there was a projection that the transfer payment, contrary to recent living memory, was going to take a dip. It was projected to go from $280 million down to $275 million. Based on the figures over the course of the last six or seven years, the transfer payment had shown a consistent increase every single year. I was assured that I did not know what I was talking about, and that it was all a bit too complicated for me, but that the $275 million figure was a much more accurate projection of what we could expect.
Why is it that there is now a $14.2 million scheduled increase in this particular area?
I noticed on page 3 that the government is looking for a fairly dramatic jump, and that
not only should the transfer payment not have gone down, but it probably should have gone
up $10 million from the estimate?
Hon. Mr. Ostashek: About $5 million of the increase is due to a decline in the revenues and recoveries, and the remainder is due to a drop in the keep-up factor from $1.57 to $1.50. That would be as a result of the cigarette tax that was eliminated in Ontario, some of the other provinces, and at the federal level. Our keep-up factor dropped from $1.57 to $1.50.
Mr. McDonald: The government is saying that the calculations were completely unknown to them. They are saying that there was no way of anticipating these expenditures or this revenue at the time, that it was all brand new, and that the analysis showed that, for the first time ever, the transfer payment was going to do quite a remarkable thing and actually go down but, now that it has gone up, it is all understandable. Perhaps the Minister could explain it further.
Hon. Mr. Ostashek: Certainly, I can explain it further. We work on figures from Statistics Canada. That is all that we have to work on. As the figures change, we keep recalculating. I do not know what method we could use other than figures from Statistics Canada.
Mr. McDonald: The point that I am making is that there is a certain amount of ball-parking that goes on, even for the precision artists in the Department of Finance. I find it quite awkward when a forecast is made that the transfer payment will go down by that much money, and it causes us to continue to show an accumulated deficit in the main budget papers, when perhaps there should not have been one at all. It is only later on in the year, after all the hoopla has settled about what the financial position of the government is, that we actually learn that things have changed so dramatically. To say that I am surprised is probably an understatement.
Hon. Mr. Ostashek: Maybe the Member opposite did not have the same difficulties, or the intense debates were not going on at the time and it was not that relevant. However, we have to do the formula calculations based on Statistics Canada figures. That is what the figures were showing at the time, and that is what Finance was reporting. As those figures change, we keep updating them, and that is what is happening now. I have explained where and why we have the increase, to the best of my ability.
Mr. McDonald: I would just like to leave the Minister with this question. I would like to pursue it a bit more. Perhaps he could come back with some information.
I am interested in the swings in the estimates here. We are only eight months from the last debate. I think that none of us should be expected to be wizards when it comes to analyzing and calculating the formula. However, we do have a right to expect some dependable information on that score, because we have a lot of debate around here over very small amounts of money. When the swing can be so dramatic, from a reduction of $5 million to an increase of $14 million from the previous years' estimates, it does not give people in my position a sense of confidence.
For those of us who are interested in the revenue picture of the government - and I am sure that many of us are - a lot of debate in this Legislature revolves around this very number. We spend so little time thinking about it and so much time talking about the expenditure side that I think we should receive more comfort than we are.
If the Minister would think about this overnight and provide us with some information
about the swings in expectations from that which is laid out in the main estimates and
that which is laid out in the supplementaries, perhaps he could provide some argument that
would suggest that we can all feel more comfortable with this kind of news.
Hon. Mr. Ostashek: I certainly will do that for the Member opposite. While $14 million is a lot of money in percentage terms, based on the budget the swing is certainly not that dramatic. I do not know what it is, but it is a very small percentage. I move that you report progress at this time.
Motion agreed to
Hon. Mr. Phillips: I move that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order. May the House have a report from the Chair of Committee of the Whole?
Mr. Abel: The Committee of the Whole has considered Bill No. 3, Third Appropriation Act, 1994-95, and directed me to report progress on it.
Speaker: You have heard the report from the Chair of the Committee of the Whole. Are you agreed?
Some Hon. Member: Agreed.
Speaker: I declare the report carried.
Hon. Mr. Phillips: I move that the House do now adjourn.
Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker: This House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:29 p.m.
The following Legislative Returns were tabled January 9, 1995:
Land Advisory Committee and Land Use Advisory Committee membership, as at January 4, 1995 (Brewster)
Oral, Hansard, p. 188 and 201
Mobile homes: joint review initiated regarding issues affecting; number of lots currently available (Brewster)
Oral, Hansard, p. 237