Whitehorse, Yukon

Wednesday, January 25, 1995 - 1:30 p.m.

Speaker: I will now call the House to order. At this time, we will proceed with silent Prayers.



Speaker: At this time, we will proceed with the Order Paper.

Introduction of Visitors.

Are there any Returns or Documents for tabling?

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?

Are there any Statements by Ministers?

This then brings us to the Question Period.


Question re: Crime in Yukon communities

Ms. Commodore: My question is for the Government Leader. During the 1992 election campaign, the Government Leader announced that he would introduce measures that would make our streets safer. In his four-year plan, under stopping crime, he said, "Incidents of theft, vandalism and violence, especially by young people, are on the increase in many Yukon communities. This must change." It has changed; it has gotten worse. Can the Government Leader tell us what happened to that election promise that everybody believed?

Hon. Mr. Ostashek: One thing the Member said is exactly right; we believe it has got worse. The former Minister of Justice worked with the RCMP in trying to alleviate some of the problems that were around the mall. I know that the present Minister is looking at some options similar to what they are doing in other jurisdictions. It is a very serious concern and we are working on it, and we hope to be able to have some announcements in the near future.

Ms. Commodore: We are now into the third year of this government's mandate. During his campaign, the Government Leader promised that in order to fight vandalism, his party would educate people in ways that they could prevent crime in their neighbourhoods.

I would like to ask him if he has anyone in the government who is working actively to implement that plan or that promise?

Hon. Mr. Ostashek: I believe the previous Minister did work with some community groups on those sorts of issues. As I just said, the present Minister is now working on some sort of a format to involve community groups to see what we could do. I know that he is looking at one similar to the one we heard about on the radio this morning, which is being carried out in Vernon, British Columbia.

Ms. Commodore: The Government Leader, in the last little while, has placed expanded gambling high on his list of priorities, so much so that he has established a sub-Cabinet committee to deal with the issue, and also has staff in departments actively working researching this vision of his. I would like to ask him where he places stopping crime, as listed in his four-year plan, on his priority list. Is it above or below expanded gambling?

Hon. Mr. Ostashek: As I said, this is a very serious issue, and it is a high priority of ours. As I have told the Members, we did some work on it under the previous Minister of Justice - on vandalism, not gambling, for the Members kibitzing in the background over there. Vandalism is getting far more serious, and concern has been raised with the RCMP on many occasions. As I said, the Minister is now working on it and we will be making some announcements in the very near future about what the government is going to do.

Question re: Crime in Yukon communities

Mr. Penikett: Lately my constituency has been plagued with problems with break and enters, snowmobile thefts and vandalism, and there are well-known concerns about the level of policing in the communities. This government made a number of grand promises about crime fighting in the last election campaign. Can the Government Leader tell us why, in the last two years, there has been no substantial statement from the Cabinet about any real attack on these problems?

Hon. Mr. Phelps: That is simply not the case. There have been major announcements. When I was Minister, I held a press conference about the numerous programs that they provide to try to deal with the issues of crime prevention among young people. The Kids at Risk program has been a priority of the department for a year now, and we have been developing programs to deal with kids. We changed 501 Taylor. There is no question that a serious problem still exists, but I would tell the side opposite that we have made major announcements, and we are doing a lot more now than was done under the previous administration.

Mr. Penikett: The obvious fact is that nothing the government is doing is working.

Given the rising incidence of these kinds of problems and the lack of any real action from this government, people are concerned.

Can I ask the Government Leader, unless there has been a change this morning, this: has Cabinet discussed the problem of our contributing 70 percent of a $10 million police budget, yet having little control over the staffing levels? A complaint often heard in the public is that only a handful of officers are on duty in this town during the high crime period in the evening. Has the Cabinet discussed that and has that addressed it with the police?

Hon. Mr. Ostashek: Most certainly we have discussed it and it was addressed by the previous Minister when there were cutbacks in the RCMP. I believe the Minister was on record as saying that before there would be personnel cuts in the community, other things would have to be cut.

The problem is a big one. It is not one we are taking lightly and it is one that is going to require the involvement of community groups. That is exactly what the Minister is working on now and, as I said, he is hoping to make some announcements in the very near future about what he is planning to do. One of the programs we are looking at is one that is very similar to what is being carried out in at least one community in British Columbia.

Mr. Penikett: I am sure we all applaud efforts to increase attention to crime prevention. I want to ask the Government Leader if he can answer this direct question: has this government done anything to persuade the police to increase the level of staffing and coverage by police officers during the high crime period in the evenings in this city?

Hon. Mr. Ostashek: My understanding is that we have as good a coverage as any other place, on a per capita basis. The issue is much larger than that - much larger. More police on the street is not going to do it by itself. It would certainly help, but there have to be some other programs put into place as well. We have to be more observant as citizens. We have to report more things we see that we do not believe are being carried out in a proper manner. If we see something suspicious, we should all be concerned about it and we should all be helping our police by making them aware of those things.

Question re: Gun registration legislation

Mr. Cable: I have some questions for the Government Leader on another crime related matter: gun control. There are some Yukoners who think that the Government Leader and his administration are totally opposed to the federal Justice Minister's initiative in the area of gun control, and I know that is not accurate.

I would like to ask some questions about the thrusts being made in this area by Mr. Rock. Does the Government Leader support the federal Justice Minister's efforts to increase the minimum mandatory sentence to four years for the use of firearms in the commission of major crimes?

Hon. Mr. Ostashek: I am somewhat surprised the Member would ask that question. I thought we had made where we were coming from very clear in the debate the other day: we felt if the Minister was to give instructions to enforce the laws already in place, that would go a long way toward resolving the problems Canadians are facing in some of the major centres in Canada. We do not agree that the registration of all firearms is going to lower the crime rate in Canada.

Mr. Cable: We will get to that either in this or the next round.

During the gun control debate, the Justice Minister indicated that the four-year mandatory sentence was too weak. Is that view shared by the Government Leader?

Hon. Mr. Ostashek: Yes, we are all in favour of tougher sentences for gun-related crimes, as well as for other crimes. We believe there are a lot of deterrents already in the system if they were only acted upon. However, it seems in most instances people are just receiving a slap on the wrist and being turned loose to do whatever they want.

Mr. Cable: We are sort of getting there. For the third time, does the Government Leader agree with Mr. Rock's proposition that the minimum sentence should be increased to four years? If not, what is the suggestion and what would it be based on? Are there any criminology studies that the government would base its proposition on?

Hon. Mr. Ostashek: The debate was quite clear. We believe in tougher sentences. We said that. I believe that almost every Member on this side of the House has said that. We also said that we do not believe that an overall registration of firearms is going to resolve the situation. All it is going to do is to put the onus on law-abiding citizens to register all of their firearms, but it is not going to do one iota of good in reducing gun-related incidents in Canada.

Question re: Second Opinion Society

Mr. Penikett: I would like to ask a question of the other Government Leader, the Minister of Health. This morning, members of the Second Opinion Society held a press conference to announce and complain about its exclusion from a meeting to discuss the future of mental health services in the territory. In a letter to the groups that were invited, the director of health programs stated that over 50 mental health services were identified in Whitehorse alone. Can the Minister tell the House how the decision was made to choose the 12 stakeholders that were invited to this half-day workshop?

Hon. Mr. Phelps: The department intends to have discussions with all of the major players, including the Second Opinion Society. The first group to enter into discussions was a group of 12, but there will be other large groups as well. My understanding is that there are something like 50 individuals, groups and agencies that are involved, in one way or another, with the delivery of mental health services in the Yukon. The Second Opinion Society has been told that it will be part of another group that is to be heard later on.

Mr. Penikett: The language of the Minister's letter to the Second Opinion Society, in response to their request to be included in these discussions, seems to imply that the people who represent users of the mental health system will somehow disrupt the meeting. Could I ask the Minister to explain to this House exactly what he meant in the letter when he said, "You are well aware of the number of stakeholders involved and the animosity and antagonism that still persists among some groups. It is for this reason that the process involves smaller groups of like-minded people." Can the Minister tell us what he meant by that?

Hon. Mr. Phelps: I would be more than pleased to. The position of the government is that it is consulting with numerous stakeholders in Yukon to try to improve delivery of mental health services. There are cracks in the system. There are groups that are not being properly looked after under the system - particularly youth, and areas that involve youth suicide and so on. What we want to do is consult thoroughly with the stakeholders about these shortcomings in the system. What we do not want to do is hold meetings that simply involve the acrimonious debate that often ensues between the SOS group and professionals. That is not what these meetings are for. We have heard the arguments. We know that the two groups, broadly speaking, are not in agreement on some fundamental issues, but the purpose of these consultations is not to resolve that - if it were ever to be resolvable. It is to deal with trying to find out what some of the shortfalls in delivery are and come up with some ways to fill in those cracks in the system.

Mr. Penikett: I, and a number of other people, heard the Minister refer to the Second Opinion Society on the noon news, as undiplomatic. Would the Minister not agree that his letter to those groups, suggesting that somehow they were not able to contribute responsibly to the discussions affecting them, more than anyone else, was in itself profoundly undemocratic. Could he answer that in the context of how he hopes to develop healthy public policy on such an important issue, when the users of the system are excluded from the very earliest discussions?

Hon. Mr. Phelps: I am sure he meant "undiplomatic" rather that "undemocratic" with regard to the tone of the letter. I think the letter pointed out a fact that is well known to the stakeholders in the system, that there has been acrimonious debate, and that there are positions taken on certain issues that will not change. These talks are not directed at trying to resolve those issues. These talks are directed at looking at the gaps in the delivery system and seeing where we can move to try and fill in some of the gaps.

Simply saying that you are going to hear from one group at one period of time, and other groups at other periods of time, does not in any way denigrate from the value placed on the opinions expressed by any of the groups.

Speaker: Order. Would the Member please conclude his answer?

Hon. Mr. Phelps: Fine, Mr. Speaker, I will. We are going to place equal value on all opinions we hear and we hope they are focused on the issue.

Question re: Education, post-secondary funding cuts

Ms. Moorcroft: I have a question for the Minister of Education. Yesterday, the Government Leader characterized some serious questions about post-secondary education cuts as alarmist assumptions. Perhaps the Minister of Education has a more serious attitude and, unlike the Government Leader, thinks that the government can influence Ottawa.

Can the Minister tell us what he has done to oppose the anticipated Liberal cuts to post-secondary education?

Hon. Mr. Phelps: We have expressed our concern. We are joining with the other Ministers across the country to try and ensure that we will have a unified opposition to the kinds of cuts envisaged by the Axworthy position paper.

I have stated publicly and in the media that we share the students' concerns. We will strenuously join the other Ministers in fighting this level of Draconian cuts to post-secondary education. We certainly agree with - and share the concern of - the students right across Canada who are protesting.

Ms. Moorcroft: The students whom I heard speaking at noon today were very opposed to the cuts. They do not want to face 25-year loans coming out of university or college.

The issue of transfer payments being redirected to roads instead of education occurs not only in the Yukon, but also in other jurisdictions. Does the Minister support direct funding of educational institutions to do training?

Hon. Mr. Phelps: Of course we do. The budget, which is presently under debate, shows this commitment by way of increased funding to Yukon College.

Ms. Moorcroft: When Cabinet has its meeting with the college in the near future, which the Minister told us about yesterday, will there be a discussion of the anticipated Liberal budget cuts?

Hon. Mr. Phelps: They may come up. The intention of the meeting is simply to give the college the opportunity to brief the Cabinet on what it is doing. It is basically an information session.

Question re: Education, post-secondary budget cuts

Ms. Moorcroft: The Government Leader was talking yesterday about the federal, territorial and provincial governments negotiating a transfer of responsibilities for education and training. I would like to ask the Minister of Education this: what has been the nature of negotiations to date for the transfer of Canada Employment Services?

Hon. Mr. Phelps: I have had one meeting directly with Mr. Axworthy, where some of these proposals were floated. Things have not really progressed from there with regard to the devolution of some of the training functions that are currently conducted by the federal government. We are certainly prepared to sit down with Mr. Axworthy and other provincial Ministers to discuss these issues, but of course they are all wrapped up in the budget-cutting exercise that we all fear. I am not sure when we are going to get a more firm position from the federal government on these issues.

Ms. Moorcroft: There will be a number of concerns about that, including whether employment counselling services will be protected. Has the Minister discussed this with the employees involved or with the college?

Hon. Mr. Phelps: We have not begun any formal negotiations, whatsoever. We do not know what the position of the federal government is. Until that position is made more clear, and at least some kind of vague framework is presented, we would be premature in trying to respond.

Ms. Moorcroft: The Minister is talking about being premature in trying to respond, but we had quite a lengthy debate in this House about gun control legislation, which you could argue was premature, as we have not seen any legislation yet. If the government is taking a position on that, it should be taking a position on post-secondary education.

The Minister was talking about the briefing with the college president, and I would like to ask him whether the College Board and the college president will be coming before the Legislature to respond to our questions. Will that take place? Does the government plan to have that happen?

Hon. Mr. Phelps: I really cannot answer the question without talking a bit about the preamble. The policy of the federal government regarding gun legislation is extremely specific and clear, and that is very unlike the Axworthy paper. The Axworthy report is not very clear.

The College Board will, of course, come before this House as witnesses to answer questions from the Members during debate.

Question re: Yukon College/Yukon Arts Centre, access road

Mr. McDonald: I am receiving more complaints about the need to improve the access to Yukon College and the Yukon Arts Centre site in Whitehorse. I noticed that plans to improve the access in 1992 have been shelved, despite record spending budgets in the transportation branch for the last two years.

Can the Minister of Community and Transportation Services tell me if there are any plans to improve that access road?

Hon. Mr. Brewster: Not to my knowledge.

Mr. McDonald: Anyone who has travelled the road knows it can be treacherous in the wintertime. It is the only access road to the site. If there is any congestion on the road, or an accident, emergency vehicles cannot get to the site. It is a high traffic area, probably the highest of public areas in Whitehorse.

Can the Minister say why the public consultation they began in 1993 for a new access road has been shelved?

Hon. Mr. Brewster: In 1993, one of the reasons it was shelved was because we had no money.

Mr. McDonald: The Minister has a strange sense of what "no money" is, given that the government has been spending record amounts of money government-wide, as well as in the department for which he is now responsible. I believe transportation budgets went through the roof; the department was awash in cash.

In terms of emergency preparedness planning, can the Minister tell us what the government will do in anticipation of problems, should there be some accident on the access road?

Hon. Mr. Brewster: I get tired of everyone saying we have all this money. I do not know when they will look at the budget and realize that a big percentage of the budget for the Department of Community and Transportation Services comes from the federal and Alaskan governments for roads. If we did not have the money from the Alaskan and federal governments, there would not be very much with which to build any roads. I am sure the department has looked at this. If there are any accidents that are the fault of the road, they will try to correct whatever caused the accidents.

Question re: Xerox, travel contribution

Mrs. Firth: I have a question for the Government Leader. In the late fall, three government employees went on a free trip to Toronto to look at Xerox products, and the company picked up the tab for the trip. On December 15, Cabinet made a decision to sole source a piece of specialized equipment and system, called a Docutech, for the Queen's Printer, which is worth approximately $200,000, from Xerox. I would like to ask the Government Leader how his Cabinet could have agreed to this preferential treatment of sole sourcing to Xerox.

Hon. Mr. Nordling: The reason for it is because the Queen's Printer was upgrading its printing capability. We are not talking about convenience copiers. The research showed that only two manufacturers, Xerox and Kodak, could supply that type of machine. Since Kodak does not have a presence in the Yukon, Xerox was really the only local presence that could supply that type of equipment.

Mrs. Firth: Right. The trip had nothing to do with it. Wink; wink; wink. How can the Minister expect the public to believe this? The employees went on a trip, they were lobbied, they saw, they came home and they bought. Does the Government Leader really think that the public is going to accept his explanation? Does he really think the public is that gullible?

Hon. Mr. Nordling: Yes, I expect that the public will accept it because it can be shown that Xerox was the only company able to supply the equipment that we felt was needed at the Queen's Printer. We consulted with other suppliers in the Yukon before the purchase was made through Xerox, and they did not have any difficulty with us buying from Xerox. They said that they did not have that type of equipment, and one added that it was out of their league. My understanding is that they were not very, very unhappy with this, as was alleged by the Member yesterday.

Mrs. Firth: We finally get a statement of truth from this government about their impression of the public. Yesterday, we found out about the trip, and today we find out about the purchase. It is no longer something to be passed off as a perception of unfair treatment. This is scandalous behaviour on the part of this government - scandalous.

Speaker: Order. I believe that is an unparliamentary word.

Mrs. Firth: I will look for one that is more appropriate, but if the shoe fits -

Some Hon. Member: (Inaudible)

Mrs. Firth:

No, I am not going to withdraw that.

If the Members will stop interrupting me, I will ask my question. I want to know how much this whole project is going to cost in dollars - $200,000, $300,000, $500,000? What is the final price tag, besides the government's integrity?

Hon. Mr. Nordling: I am a little concerned about the Member's allegations because they are unfounded, and I think research into it will show that she is out of line in making those allegations.

With respect to the Docutech 135 that was purchased to replace the Xerox 1090s at the Queen's Printer, my understanding is that it is a five-year lease and is worth approximately $378,000.

Question re: Docutech

Mrs. Firth: My question is for the Government Leader again. This government professes to support small business, yet it has the largest law firm in the Yukon, in competition with private law firms, and now they want to have the biggest and best printing company, in competition with small private printing businesses.

Since this government has been in office, businesses have had to fight for their lives here in the Yukon. I want to ask the Government Leader what kind of discussions his Cabinet had with other companies before making the purchase of the Docutech Cadillac.

Hon. Mr. Ostashek: I would think that a Member who has been in this Legislature as long as the Member for Riverdale South has would check her facts before she makes allegations in this House. Her allegation is totally unsubstantiated and totally unfounded - totally. Cabinet always has a difficult decision to make when it comes to sole-sourcing contracts, and I can tell the Member that the Minister was sent back at least once that I know of to get more information to make sure that there was no local firm that could do the job and why we had to choose Xerox. What the Minister said was absolutely correct. Xerox and Kodak were the only ones who could supply it, and Xerox was the only company that would maintain it here.

Mrs. Firth: As hard as this government may try to wiggle out of this situation, it is not going to be able to. The government made the decision. It knew about the trip to Toronto. It agreed with it. It made the decision to buy the equipment after the employees came back from Toronto - this government, these guys. They made the decision, no one else.

I have constituents who have printing businesses who are very concerned about the viability of their businesses because of the actions of this government. I want to ask the Government Leader what guarantees there are for my constituents. The Member for Porter Creek South has constituents; the Minister of Economic Development ...

Speaker: Order. Would the Member please conclude her question.

Mrs. Firth: ...has constituents who have printing companies. What guarantees are there for them that this is not going to create unfair competition for them?

Hon. Mr. Nordling: The Queen's Printer provides services for other government departments. We do not plan to provide services to the private sector in competition with printing companies. The Queen's Printer is expected to serve other government departments in a cost-effective and efficient manner. That is the mandate of the Queen's Printer. We plan not to compete with the private sector, nor do business for private sector companies.

Mrs. Firth: That is absolute bunk, because the government departments could be doing business with the private sector. Instead, Government Services is going to be doing it all.

I have constituents who own private businesses, who pay their mortgages, who pay their taxes and whose taxes are being used in competition with their businesses - in competition. I would like to ask the Government Leader what analysis was done within this community to see that this government department - which is going to have the largest printing firm in the Yukon - would not be in competition and create unfair competition for the existing businesses? It is my preference to encourage small business growth, and not government growth.

Hon. Mr. Nordling: This is not government growth. The Queen's Printer is replacing the central printing shop. The equipment that we had was very old. We were not able to produce the quantity or quality at a reasonable price that we need for government departments. That is what we are doing.

I suppose we could get into the philosophical argument as to whether we should do away with the Queen's Printer and do everything through the private sector. That is not what we plan to do. If we are going to run a printing operation in the government, it should be cost effective and efficient. We get complaints all the time that the government is overstaffed, is inefficient, and it cannot do the job as well as the private sector. What I want to do is to bring some efficiency and cost-effectiveness to government operations.

Question re: Gun registration legislation

Mr. Cable: I have some further questions for the Government Leader on gun control. We fenced around for the first three questions on mandatory minimum sentences for the use of a weapon in the commission of an offence, so I will just leave that one alone.

Another one of Mr. Rock's initiatives is the increase of penalties for smuggling, and the creation of a new offence relating to the smuggling or possession of a smuggled firearm. Does the Government Leader support Mr. Rock's initiative in that direction?

Hon. Mr. Ostashek: It is somewhat ironic. We had a debate a couple of weeks ago in the Legislature on the gun control bill. We had unanimous support in this Legislature, and now we have some waffling from the Opposition - from both the Liberals and the NDP.

We have said, quite clearly, that the part of the gun control bill that we disagree with is the registration of firearms. It makes the system bureaucratic and inefficient, and it creates a lot more cost for the people of Canada. It creates another bureaucracy, which the Liberals are noted for doing, rather than just using common sense and putting in tougher penalties for people who break the law.

Mr. Cable: The question arises from this statement that the Government Leader made, when he was introducing his comments in the debate: "I want to say, for the record, that I am fundamentally opposed to the legislation proposed by the federal Justice Minister." There are many arms to that proposed legislation. Does the Minister oppose the present system of registration - the registration of sidearms and the use of firearms acquisition certificates?

Hon. Mr. Ostashek: We do not oppose it. The system has been in place and was working, but I can tell the Member that it has not worked very well. There are a lot of people who are not even in favour of that much. However, to take a system that is inefficient and not doing the job and expand it to cover all firearms in Canada is totally ludicrous.

Mr. Cable: We will take it then from that remark that the Government Leader is not opposed to registration per se, but simply to the extension to long arms, such as normal length shotguns and rifles. If the Government Leader does not agree with that, he can indicate this to the House.

Does the Government Leader believe in the banning of military assault weapons and other paramilitary weapons?

Hon. Mr. Ostashek: I thought the Member was in the House for the debate. Why does he not just read the Blues? I stated on the record that I was in favour of banning the military assault rifles.

Speaker: Order. The Hon. Member for McIntyre-Takhini has the floor.

Question re: Xerox, travel contribution

Mr. McDonald: Thank you. I am just waiting for the Liberals and the Conservatives to stop fighting.

I have a question for the Minister of Government Services, and it comes from comments he made yesterday in response to questions from the Member for Riverdale South.

Yesterday, the Minister did not appear to want to close the door on approving any more trips for public servants to carry on public business at private expense. What justification does the Minister have for allowing this practice to continue? Why would he not believe that private business would pay for public servants to travel with no expectation of some consideration?

Hon. Mr. Nordling: I agree that the trip that was taken to Toronto should not have been taken because of the perception that there may be some obligation on the part of government, despite the fact that there were letters that said there would be no commitment. What I did not want to rule out was travel paid for by a third party that was beneficial to the government, where there was no perception of gain or bias. An example that comes to mind is our reservations clerk in Government Services was flown by Canadian Airlines to Vancouver to be trained and updated on their new Gallileo reservation system. I would not want to preclude that sort of travel or benefit given to a government employee by a third party.

Mr. McDonald: If there is a public benefit, surely there would be some consideration to there being a public investment. The point some people have made is that the trips are not free. They can create a sense of obligation to spend large amounts of public money in one direction. In some cases, these trips can do irreparable damage to one's faith in the tendering system, as has been pointed out today.

The Minister said this morning on the news that he did not authorize the trip. Who did?

Hon. Mr. Nordling: To answer the preamble, I agree with the Member with respect to the concern. With respect to the authorization, it was authorized by the Deputy Minister of Government Services.

Mr. McDonald: Would the Minister kindly provide us with a list of all public servants - I will ask this of the Government Leader, or anyone who can answer - who have travelled at private expense on public business in the last year.

Hon. Mr. Nordling: I can try to gather that information for the Member. I have no trouble providing him with that.

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


Hon. Mr. Fisher: 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 Hon. Acting House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Some Hon. Members: Agreed.

Motion agreed to


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

Some Hon. Members: Agreed.

Chair: We will take a brief recess.


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

Bill No. 3 - Third Appropriation Act, 1994-95 - continued

Department of Finance - continued

Chair: We are dealing with Bill No. 3, Third Appropriation Act, 1994-95. Is there further general debate on the Department of Finance?

Mrs. Firth: I have some questions for the Minister regarding some of the Management Board directives that the Department of Finance is responsible for. Specifically, I would like to ask him some questions about the government's travel policy. Can the Minister tell us who is allowed to authorize travel on behalf of the government?

Hon. Mr. Ostashek: If it is travel within Canada, it can be authorized by the Minister. If it is international travel, it has to come to Management Board.

Mrs. Firth: I understand, then, that the Minister has to authorize travel out of the Yukon, as long as it is in Canada. This afternoon, the Minister responsible for Government Services indicated that his deputy minister authorized the travel for the public servants to go to Toronto. Since it should be the Minister who has the authority, why would the Minister say that the deputy minister authorized it?

Hon. Mr. Ostashek: First of all, the Minister can delegate that responsibility, if he so chooses. In this case, there were no government funds involved in the travel, so it did not need to be authorized by the Minister.

Mrs. Firth: That raises two more questions. I understand that the Executive Council Minister can authorize travel outside Yukon for an employee in a department for which he is responsible. He can delegate that to the deputy head responsible. That change was made on December 12, 1994, which would have been after this trip took place.

Hon. Mr. Nordling: Maybe I can help to clarify the matter. The Member has in front of her Management Board minute 94-12-12, and she is reading it as a meeting held on December 12, 1994. That is not correct. The meeting was held on approximately May 6, 1994, at which meeting the Ministers were authorized, if they so chose, to delegate the approval for travel within Canada to the deputy minister. I know the Member is asking about the delegation of authority for the trip we talked about this afternoon during Question Period.

Perhaps I can explain what I did as Minister, speaking for myself and not the other Ministers.

I delegated the authority to the deputy minister to approve travel within Canada if it was budgeted for and approved in the budget, and provided that economy fares were being used. The restriction I imposed on the delegation was that if it was too late to get the economy fare, then I would have to approve the travel, or if it was for emergency or exceptional travel, it should be approved by me prior to the travel taking place.

The trip taken by the three employees of Government Services was interpreted as falling within the authority of the deputy minister. I have since clarified that direction to include a restriction that any travel by employees of Government Services paid for by a third party should be approved by the Minister before the travel takes place.

Mrs. Firth: This raises a lot of other questions. I still have some to follow up on with the Minister of Finance, but I will follow up on a couple now with the Minister of Government Services, since he has chosen to join in this debate.

The Minister knew about the trip to Toronto before the deputy minister authorized the travel. Is that correct?

Hon. Mr. Nordling: No, that is not correct.

Mrs. Firth: So, the Minister did not know about the trip. When did he know about it?

Hon. Mr. Nordling: I believe it was shortly after the three employees returned. I received a copy of the document they had prepared and an outline of the discussions that took place in Toronto. I was informed some time early in October.

Mrs. Firth: Did a copy of the approval by the deputy minister go to the Department of Finance for this trip?

Hon. Mr. Nordling: I do not know. I have been told that the total per diem expenses for the three individuals were between $500 and $600. My understanding is that Xerox paid for the airfare and hotel in Toronto.

Chair: Order please. Would it be appropriate to ask these questions when we get to Public Service Commission? We are now on Finance supplementaries.

Mrs. Firth: I originally asked my questions of the Minister of Finance, but the Minister of Government Services chose to stand and get into the debate. Now he has made some comments that have raised about 10 more questions in my mind.

If it is the wish of the majority of the Members of the House that we leave this until we get to Government Services, I am prepared to do that. I would like to hear what other Members of the House have to say. I do not think I can make that decision on my own.

Hon. Mr. Ostashek: I believe the Minister of Government Services stood to clarify that one matter. I believe any other related questions could wait until the Government Services debate.

Finance was aware of this. The trip was documented through Finance.

Mrs. Firth: I do not think that the Government Leader has the last word on this being debated during Government Services debate. My concern is that, all along, the government has said this trip was not an unauthorized trip because there was no expense to the government, so the trip did not have to be authorized. Now we find out from the Minister of Government Services that there were per diems of $500 to $600 in total for the individuals, which must have come from government funding. Every time they stand to answer questions on this issue there is another contradiction that comes forward. I have a lot of concern about it.

We will wait until the debate on Government Services, but I have some general questions for the Minister of Finance about this whole idea of delegation of authority, particularly the authority to authorize travel.

The old Management Board directive said the deputy head shall authorize travel outside the Yukon for an employee of a department for which a deputy is responsible, but such authorization shall only be given with the prior approval of the Minister for that department.

The new Management Board directive takes away the responsibility from the Minister and allows it to be delegated to the deputy head. I see that as a weakening of the Management Board directive on who authorizes travel. This is inconsistent with this government's claim that it was tightening up on travel and that it was going to keep a tight rein on travel. I remember the Government Leader standing up in the House and answering questions I asked about the travel freeze and the travel policy, saying that all travel would have to be authorized by the Minister. Obviously that has been changed.

I want it on the record that I do not agree with the abdication of responsibility by the Ministers. I do not think the responsibility should be delegated to the deputy heads. I think the Minister should be responsible, particularly if the government is claiming that it is tightening up travel and keeping a tight rein on those who do and do not travel, and that there is some accountability for this process.

Hon. Mr. Ostashek: I will try to answer the question in detail for the Member. Firstly, because the Minister delegates that responsibility to the deputy minister does not absolve the Minister from the responsibility. We have just watched the debate in Question Period in the House on travel. The Minister is ultimately responsible for it. There is no way that the Minister can get out of that.

This Minster has chosen, for the sake of convenience, to trust his deputy minister and to allow him to delegate travel within Canada. There may be other Ministers who have done it also. When we had the travel freeze, all travel had to come to Management Board. After a time, it does get cumbersome, but it was important to impose it at the time we did. We relaxed that to premit Ministers to approve travel. Along with that approval, there is a mandatory quarterly reporting to Management Board, so that we can track what our travel costs are. If there are increases in travel from the previous year, we then ask the departments to justify them.

The checks and balances are in place. There is no doubt that this travel should not have taken place, and I am sure that the Minister has taken appropriate actions to see that it does not happen again. We are not trying in any way to defend the travel. A mistake was made, and it is going to be corrected.

Mrs. Firth: I appreciate the government recognizing that there was a mistake made and that it is going to correct it. I appreciate that, but I still think that we should get on the record what really happened. The government admitting the mistake does not dismiss what happened. I appreciate the Government Leader standing up and saying that the Minister still has to have ultimate responsibility, but that is not what happened here.

The Minister did an interview on the radio. He said very clearly, "Nordling says he did not authorize the trip, but his department did.'' So, the Minister is not taking any responsibility, he is blaming the department. Then, after blaming the department, the Minister said that he did not want to see it happen again and he wasted no time in firing off a memo to that effect, which again makes it look like it was someone else's fault.

It would be nice if the Ministers were doing what the Government Leader is saying what they are doing, that they are accepting responsibility. I do not know if there was a memo fired off anywhere. It is really irrelevant to me, other than this is what people in the Yukon heard on the radio this morning. It certainly did not give the impression that the Minister wanted to take any responsibility for it. In fact, it looked like he was trying to get about as far away from the issue as he could.

That is my concern, as well as the change of the Management Board directive, which, to me, does diminish the responsibility of the Minister if he is going to delegate responsibility for travel approval to his deputy minister. I just want to get those concerns on the record.

I want also to follow up on another concern about the travel directive that is a bit of a gray area.

We were told by the Minister of Government Services in the Legislature, when I first asked the question, that there was no authorization needed because there was no government expense. Of course, we find now that that is not correct; there was some government expense.

I would like to get a clear statement from the Minister of Finance about the situation. When these people went, their wages were paid. They were considered to be at work for this government. They needed some authorization, because in the event that there was an accident, they would have had to have been covered by insurance, workers' compensation and so on. There has to be some legal reason for their travel on government business.

It might have been splitting hairs, or perhaps people were a bit excited when they gave their answers - I do not know what the problem was - but I would like to get a clear statement from the Minister of Finance with respect to exactly what his travel policy is, and what is and is not considered acceptable.

Hon. Mr. Nordling: I would like to reply to the preamble to the Member's question to the Government Leader. The Government Leader and Minister of Finance can answer with respect to travel policy. The Member said that I was blaming the department by saying that I, as Minister, did not authorize the travel. That is what people heard on the radio. I am concerned about that. Yesterday, the Member stood up in the House and said, in her preamble to the first question, that the Minister authorized the travel. She said that as a statement of fact. That simply was not true.

I wanted to set the record straight. I did not want to shift the blame on to the department. I am as concerned as the Member about the public being misled by statements that are made in the House, with no justification.

Often, in Question Period, there is a speech and preamble before the question. There are accusations made, and defences must be mounted. I am concerned that what is happening - and what happened in this case - was that the Member made the allegation regardless of the facts and whether or not they were true. She thought that the Minister could defend it. She thought that she should make an allegation and put the Minister on the defensive. If the Member is concerned about responses and what gets on the radio and in the newspapers - what the public hears - she should be careful about the statements she makes.

Mrs. Firth: I am going to respond to that. It is obvious we are getting into a debate here, and a bit off track, but let us just look at this. What the Minister is saying is absolutely pushing it, stretching it, the rubber band is broken.

I made the statement in the House that the Minister had authorized it. This is not an allegation, because the Government Leader has just stood up in this House and said the Minister takes ultimate responsibility. From what the Minister of Finance is saying, this is an absolutely true statement. The Minister authorized it.

The Minister had five or six opportunities to say it was not true but he did not do that. He defended it, so that, after all the questions had been asked and after all the answers had been given in Question Period that day, the Minister never once said that he had not authorized it or that it was an untrue statement - never once.

The Minister is going on that it was not until it was pushed and pushed and pushed. I have in front of me all the things the Minister said. I also have a statement the Minister of Finance made that ministers will assume ultimate responsibility. I accept that as the government's position. If anything happens with respect to travel, I will hold the Minister accountable here in the House, in public, wherever.

Hon. Mr. Ostashek: The Member is absolutely right, but where she is wrong is with the authorization, and that is what the Minister said. Ultimately, he is responsible because he delegated that responsibility to the deputy minister, but that does not mean that he physically authorized the travel. That is the difference.

Otherwise, the Member is right. The Minister is responsible and I believe the Minister is accepting that responsibility. Whether there needs to be authorization, for the simple fact that they are government employees, yes, there has to be, and a per diem was paid. That authorization was given by the deputy minister. Ultimately, it is the Minister's responsibility.

Mrs. Firth: Perhaps the Minister could tell us why the government has chosen to delegate this responsibility to the deputy ministers instead of the Ministers having that responsibility.

Hon. Mr. Ostashek: We may have a different style of management than the one the Member opposite believes in. I believe that we have some very high-priced help in the civil service. They are much more highly paid than even we, as Ministers, are. They are given the task of running the departments. In order for them to be able to run their departments in an efficient manner, I believe they must be given some authority. I have told the deputy ministers time and time again that we will give them the tools with which to manage, and the authority to manage, but with that comes accountability.

In this case, there was a mistake. I am sure that the Minister has taken action to make sure that it does not happen again. The bottom line is that we have some very high-priced managers, and the Minister should not be making all the detailed decisions alone. If this Minister felt comfortable about delegating the responsibility for travel, knowing that he would ultimately be held responsible for it, I am quite comfortable with that.

Mr. McDonald: I am also interested in this subject. I think that it is a real mine field of concern, particularly when it comes to the approval of travel that is to be taken at private expense. I would like to ask a specific question about the travel authorization, and then I will direct the balance of my questions about the travel directive itself to the Government Leader.

This morning on the radio, the Minister of Government Services indicated that he wasted no time in sending a memo to clarify the problem. When did he recognize this trip as being a problem, and when did he send the memo?

Hon. Mr. Nordling: I recognized the trip as being a problem immediately upon the return of the three employees, when I received a report on their trip. The instructions I had given the deputy minister were that, unless the travel was budgeted for and economy fares were obtained, I should be given prior notice. Also, prior approval should be given by me before the travel, specifically in those instances where full fare had to be paid, if it was emergency travel or if it was any extra travel that was not budgeted.

I would have expected, under that direction, that this travel would have been brought to my attention before it took place, but it was not. I expressed very clearly my concern to the deputy minister and the department when I heard about the travel. I think it was clearly understood then by the department that anything like this in future would come before me, as Minister, for approval before any travel took place.

I thought that that was sufficient, but when it came up in the House yesterday, I felt that it should be clarified so that there would be no question about it. I added the restriction to deputy ministerial authority that any travel by government employees in my department that is paid for by a third party should receive ministerial approval.

Mr. McDonald: Let me get this straight. The Minister indicated to us just now that the original authorization for the deputy minister to delegate travel was, in essence, misread by the deputy minister and, obviously, also by Finance, because Finance ultimately allowed the travel to proceed or any payment to be made. Certainly, the authorization was misread by the deputy minister. At the time, the Minister thought it was necessary to clarify the direction.

I am not sure that I understand what the Minister did, but yesterday, as soon as it was raised with him in Question Period, it seemed that he had fired off a memo and rectified things.

He also tried to give us reason to believe that he had known that this trip was a problem since he received the report in October, and that he has acknowledged all along that there are some ethical concerns about this kind of travel.

Can I ask the Minister precisely what he did in October to clarify the situation and make his concerns known to his department?

Hon. Mr. Nordling: Yes, I spoke to the deputy minister and told him that if there was any more travel paid for by a third party, or anything not specified as a line item in the budget, it should come before me for approval because, particularly with respect to this travel, I would have to answer for it politically.

Mr. McDonald: The Minister actually sent the memo in October and has done nothing further.

Help me out here.

Hon. Mr. Nordling: The Member is essentially right. I am not going to spend the afternoon nit-picking with him. There was no memo sent in October. There was a face-to-face meeting with the deputy minister and it was clearly understood at that time. I sent a memo yesterday so it was on record that any government travel paid for by a third party was to be brought before the Minister before any approval for travel was given.

Mr. McDonald: I am not sure I understand the need for the memo, unless the Minister wanted to show action. Obviously, if he says he made the ethical judgment and cleared it up in October, to berate officials simply because of questions asked during Question Period does not seem like a justified response. That may be the Minister's way of operating.

The Minister indicated he sent the memo yesterday.

Am I clear on the fact that he sent the memo yesterday, just to close this loop so I can go on to the Minister of Finance?

Hon. Mr. Nordling: Yes, I added that line to the restrictions that were set out in the original memo.

Mr. McDonald: I think I understand: the Minister sent the memo yesterday, which reiterated what he had already said to the deputy in October about his original memo earlier in the year, when he delegated his travel authority.

Obviously, we will talk about this situation at length during Government Services debate, but I would like to also talk a bit about the travel directive.

The concern I have is business trips being taken by public servants at private expense. The Minister of Government Services appeared to want to keep the door open, which suggests that there may be other opportunities we may not want to miss, if there is a free flight somewhere for public servants.

The point has been made on a number of occasions that there is nothing free about these flights. One may not have to pay for the ticket, but it may raise a sense of obligation on the part of the public servant to return the benefit, at least, in the public's mind. There may be some sense in the mind of the person who is providing this free flight that there is an obligation on the part of the government to return the benefit. I do not think that there are many times that the private sector invests in something like this when they would not want some consideration in return.

Because it really is not free, all it does in the end, besides creating a sense of obligation, is ultimately hurt the business community's sense of what a fair tendering practice might be in the future. They may be concerned that a tender might be tailored to fit a particular company.

I am not suggesting this is this case, because we do not yet know, but an example is that there may be a concern that a particular piece of equipment is tendered for not because it is needed, but because it would not hurt to have it. If there is only one supplier - the one visited - on the surface it seems to be an acceptable practice, but in reality there is a lot of engineering going on in the subtle behind-the-scenes decision making.

I am concerned about this notion that there should be some permission for public servants to travel at private expense. I do not particularly like the practice. I hope it has not happened before, and I hope it will not happen again. Presumably the Minister is going to give us a list of public servants who have travelled in the past year at private expense.

Can the Minister give us his thoughts about this subject? This is important. It really is not the bottom-of-the-barrel kind of question the Minister of Government Services has suggested it might be. This is actually fundamental to the integrity of the government.

Hon. Mr. Ostashek: I hope I am not coming across as if I am making light of this issue; it is very, very serious. We understand that.

The Minister can speak for himself when we get to Government Services. However, I want to speak in terms of the overall situation. The Minister, when he made that comment yesterday, was trying not to close the door on the type of situation he related today in Question Period, where a clerk who runs the reservation system for airline tickets was sent outside to be upgraded at the airline's expense. That is appropriate.

The Member for Riverdale South is shaking her head indicating that it is not. There is no other competitor here; it is an appropriate trip.

There are other instances, such as in Renewable Resources, such as when a biologist was asked to speak at a conference for an organization. This has occurred under previous administrations, as well as this one. We do let them go, and the ticket is paid for by another government or organization, as opposed to a private company.

I agree that a private company is totally different. The Minister was trying not to box himself into a situation where nothing can happen if the government does not pay for the ticket. It is an issue that we will be discussing in full in Cabinet. We will be setting a new policy directive so that the departments know what they can and cannot do.

Mr. McDonald: I want to make it clear that I am not referring at all to the travel in the category that the Minister has identified. If a conference is struck someplace, it is not uncommon for public officials to be asked to be speakers and to have their travel paid for by the conference. Neither is it uncommon for public officials to have their way paid by another government, but - and I think the Minister is hinting at this - there is a world of difference between that and it being paid for by a private company. Private companies are really the engine of a lot of economic activity in this country but they do act out of self-interest. We all understand that, particularly other private companies, and that is where the problem occurs in this particular situation.

The Minister has indicated that they are going to give us a list of people who have travelled outside. Can the Minister give us some indication of when that is going to be done? I would like to put the Minister on notice, too, because this is Finance estimates and we are indirectly dealing with the travel directive, that we will want to talk about this at greater length to determine the parameters of what is acceptable public travel. That will probably take place in Government Services, I presume.

Can he give us some sense of when the Cabinet is going to decide the question? When will we know when the government has limited itself in terms of what is acceptable travel at private expense?

Hon. Mr. Ostashek: I do not know if we can get it on the Cabinet agenda for tomorrow, but we will for the following Thursday, for sure. As for the list, we will get to it. I am not aware of any other circumstance where a private sector company has picked up the travel expenses for a government employee, but we are checking the records right now.

Mr. McDonald: We are back to Finance, Mr. Chair. Yesterday, when the Minister was reading out a statement that he had prepared on the subject of commodity tax collection, he indicated - I believe it was at that point - that should the government receive more interest income from its investments, it would lower the grant and it would mean that we would be less likely to suffer a cut in the grant in the future. Can the Minister tell us what specific agreement would cause the Minister to draw that conclusion?

Hon. Mr. Ostashek: I do not know if the Member opposite is aware of it, but I understand that between the Yukon and the Northwest Territories the grants exceed $1 billion. When one starts getting up into those figures, they really attract attention at the federal level. I would assume that if the grant numbers were smaller, they would not attract the same attention when departments are looking for cuts. The larger the number gets, the more attention it attracts.

I know, as I am sure probably the Member opposite knows - or maybe not as much as we now know, because a few years ago the financial problems of the federal government were not being faced realistically like they are now - it is a topic of discussion whenever I meet with DIAND officials or federal Finance officials. They make a point of stating how much we are getting here, compared to other jurisdictions in Canada. That is our assumption for that.

While on my feet, Mr. Chair, I have the banking agreements and instructions for the tender that the Members opposite wanted. I will hand them over for distribution now.

Mr. McDonald: The Minister did not mean by that that there was anything special, or any contractual arrangement, that would cause him to draw the conclusion that if we are really aggressive in collecting tax - the lower the grant - the less likely there would be cuts in the federal transfer. I understand that now. I will not agree or disagree with that point, but I understand the context in which the offhand comment was made.

I have a couple of specific questions, one is to do with the handout the Minister brought in yesterday, which details the commodity taxes collected from 1986 to 1996. The pages are not numbered, but there is a question that refers to how the government checks the import of commodities like tobacco and fuel oil.

In the answer, the Minister indicates that fuel oil imports were calculated through an information-gathering system at the weigh scales, because the weigh scales would have an accurate account of how many tonnes of fuel come into the territory. At least at one time, every truck entering the territory had to report to the weigh scales.

There is a cost to the closure of the weigh scales I had not considered, which we will be asking the Minister of Community and Transportation Services to calculate for us.

The Minister indicated that, in the absence of a weigh scale review, the government appears to be doing desk audits of returns and field audits of fuel distributors and tobacco wholesalers.

Can he tell us how many of these audits, particularly field audits, are undertaken in a year? Are these audits widespread? For instance, do they cover all fuel distributors?

Hon. Mr. Ostashek: Desk audits go on all the time; it is an ongoing function. In the last 18 months, there have been approximately six or seven field audits done, and they have been fairly broad-based audits.

Mr. McDonald: Have all the fuel distributors and tobacco wholesalers had a field audit done in the last 18 months? I know that there are not many of them.

Hon. Mr. Ostashek: No, not all of them.

Mr. McDonald: At some point during the estimates debate, would the Minister give us a list of those that have had a field audit done, both fuel distributors and tobacco wholesalers?

Hon. Mr. Ostashek: I would prefer to give numbers and not names. I think that is fairly confidential information.

Mr. McDonald: I am not asking for a copy of the audit. That is clearly private company information. I am asking who has been audited. I just want to be reassured that the decision to do a field audit on a particular company is justified, and that there is some sense of fairness. Given that there are not a lot of fuel wholesalers, or even tobacco wholesalers, in the Yukon, it does not seem to me that it should be particularly difficult to tell us on which ones an audit has been done. I am interested in whether or not it has been done fairly, and whether one company has been targeted or if the audits are being conducted across the board.

Hon. Mr. Ostashek: I am reluctant to make that commitment, so I will not make that commitment until I check with the Department of Justice, because I think we are getting into fairly confidential information when we start naming companies that have been audited. I will have to check the regulations and the legislation, and we will have to check with the Department of Justice. I have no difficulty in coming back to the Member with the exact number of field audits that have been done.

Mr. McDonald: Given that the Minister knows the essence of my concern, can he tell me how the department might go about reassuring us that field audits are done fairly and that no wholesaler is unfairly targeted? How can the Minister do that?

Hon. Mr. Ostashek: I will take that under advisement. We will discuss this internally, and, if I cannot bring the names back - as I said, I cannot make that commitment now - I will bring back what I hope will be a satisfactory reply to satisfy the Member that the audits are being done fairly.

Mr. Penikett: On this subject, the Minister will understand that I have not had a chance since last night to go over in detail the numbers and trend lines, which are of interest me, in the commodity tax information that I received yesterday. There are a couple of aspects of the line of inquiry I made that have not been satisfied. My colleague has asked about audits and, of course, without getting into who and where and when, although who is an extremely interesting question - even if the government demures on that point, I think it would be interesting to know about the frequency of the audits and, as my colleague said, who did them and how.

I cannot recall it exactly, but I believe that 1988 was the last time the previous government saw an audit of the revenue stream. Mr. Sanderson will know for sure. However, I cannot remember if that was an internal audit or one done by the Auditor General. Obviously, I do not have it in my files, so I am not able to go and look it up.

The question I would like to ask goes back to the very basic one that got me interested in this question in the first place. The question is a very precise and very practical one about the billings of the people who deal in commodities, how often they are billed, how current the bills are, who supervises the work, and so forth. I would like to know if they are billed monthly, and if the billing process, apart from any audits, shows a delay in the payment of accounts.

May I compliment Mr. Hayes, once again. He is a superb witness and his brief on this question is extremely thorough and well worded. I am sure he will not mind if I say that it fudged a couple of questions that I was asking about. So, I would like to ask about the billing practices.

It does not really concern me how the government answers the question, whether it is in writing or whether the Minister can do it now, but I would like to feel comfortable that the billing is aggressive rather than passive, let me put it that way.

Hon. Mr. Ostashek: When the Member opposite gets time to read yesterday's handout, it is in there in the question-and-answer section. The question was asked: do we actually send out monthly billings to people who are importing fuel and tobacco and other commodities? The answer is no, we do not. This can be accomplished without performing an audit of their operations. We do send letters or phone taxpayers who are late on filing their returns.

Mr. Penikett: I did have a chance to read the return quickly and I did notice that answer, but my problem is that it does not square off some information I had from the private sector. I do not understand, if we are not billing, given all the other information in there, how we can be comfortable, how we can know whether a supplier has collected a significant amount of taxes on our behalf and not forwarded it to us. Given what has been said about audits and given what has been said about billing practices, the department, in the answer provided last night, seems to have indicated a high level of confidence that, while we may not be collecting 100 percent of the taxes, the amount we are not collecting is small. That seems to indicate a level of comfort on that score, which the description of the billing and auditing practices does not give us.

Mr. Hayes' justification, in the information provided last night, is largely dependent on a comparative analysis with other jurisdictions. The Government Leader and Mr. Sanderson will recall that when I first asked these questions I was not basing my line of inquiry on that spatial comparison but on the temporal comparison with the previous numbers from Statistics Canada and the Department of Finance, which are on the public record.

I have not yet been able to extrapolate, historically, as Mr. Sanderson will understand, because I have not had the time. I need to sit down with a calculator and do that. It was some interesting things about the trend line that made me curious about this, so that is why I am coming back to this question of billings and audits. I want to know how we know whether or not a supplier is sitting on some money that is due us.

Hon. Mr. Ostashek: It would be very difficult to bill a supplier, because we do not know how much they sold in that quarter or that month - whatever is the reporting period.

We would not know how much to bill them. There is a due date. We are saying that there is a reminder sent to them, either by way of a telephone call or a letter if their filing is late. In this way, it is being monitored.

If a supplier has consistently been giving a certain level of tax income to the government, and all of a sudden it dropped off, I think that would alert the audit branch to do an audit. I think the checks and balances are in place.

Mr. Penikett: I am going to describe a hypothetical situation. I am not claiming that it is a factual situation: if there are three main suppliers - given the size of the market, the major suppliers are easy to identify - and one was only a month behind in sending in the fuel tax owing, and another was two months behind, and another was three months behind, the monitoring practices of the Department of Finance might not identify that because they were getting regular payments from the supplier. If I were the supplier that was sending in the taxes promptly, I might think, since we are not charging interest on any accounts, that someone who was sending in their taxes two or three months late would have an unfair advantage. What worries me is that the method that the department is using would not pick that up - at least, I am not sure they would.

Hon. Mr. Ostashek: I feel comfortable that we are monitoring this closely enough. It is not that difficult because of the numbers of people we are dealing with. Perhaps somebody could slip through the cracks, for awhile, if we had new people in the department, but I feel quite comfortable with the manner in which it is now being handled. I believe that if payments were consistently overdue, and they do not appear to be, we would immediately have a field audit pick it up.

Mr. Penikett: I would like to make one more comment in passing on this, because I will want to spend some time looking at these numbers. I must express a personal view about the interprovincial comparisons that we were given yesterday. I am a little uncomfortable with those, partly for the reasons given in the Government Leader's statement about smuggling. I do not know the level of smuggling of tobacco and other commodities between jurisdictions and this one. We do know that in places like Ontario and Quebec, until recently, it was massive. The explanation for the level of effective collection of taxes owing is, perhaps, not surprising in jurisdictions that are close to the American border or, particularly, close to border states that have much lower levels of taxation on some of those commodities than does the neighbouring Canadian jurisdiction.

In fact, I happen to know that Quebec's method of addressing that is interesting. By graduating their tax from the interior of the province downward by steps, until they get close to the American border where it is the same as at the American border, they are trying to discourage smuggling. Of course, critics have said that produces inequities within the province.

I am not asking the government to respond to this. Although we had a problem at one point with cigarettes shortly after we first raised the taxes here, given the levels of smuggling, particularly of tobacco, in some of those southern jurisdictions, I am not sure how useful a comparison between our situation and theirs is. Let me just say that I would like to look at those numbers a little bit more and think about them, and perhaps pursue this at another time.

Deputy Chair: Are we prepared to go line by line?

Hon. Mr. Ostashek: If we are finished with general debate, I move that we report progress on Bill No. 3.

Motion agreed to

Bill No. 4 - First Appropriation Act, 1995-96 - continued

Department of Finance

Hon. Mr. Ostashek: I have a few brief comments to make.

The Department of Finance is requesting $4,626,000 in O&M funds for the 1995-96 fiscal year. At the same time, we are requesting $111,000 in capital funding.

O&M requests constitute an increase of $61,000, or one percent over the forecast expenditures in 1994-95. This is largely due to fewer vacancies being projected for 1995-96. Capital spending will be some $35,000 higher than in 1995-96 and is an increase of 46 percent over the 1994-95 forecast. The increase is in part due to a requirement to replace the department's principal photocopier during the year. There is also a provision for funding of a local network within the department.

I would be happy to answer any questions of a general nature at this time.

Mr. McDonald: I think that we have covered most of the general subjects that we intended to.

I have some difficulty with one expenditure in this budget, and I will get to it either now or later. This is the line item in treasury for banking services. I understand the department wants to be cautious, but I do not agree with the expenditure. I do not think it is needed, and I do not think that the government has done anything to justify it. However, the $150,000 is worth noting.

The government provided us with the banking contract and its instructions. Is it complete, or did the government remove any items in agreement with the TD bank? Is this the complete contract? Are the instructions to the financial institutions and the amendment all here? Is there anything missing?

Hon. Mr. Ostashek: I believe that they have a complete package.

I would like to speak about the $150,000 for banking services. We agree that this may be somewhat over budgeted if CIBC continues to fund the seven banking agencies. Until such a time as we know that they are going to remain in those communities, I believe that it is appropriate to budget some money for it.

Mr. McDonald: As I understand it, the CIBC has indicated publicly that they are going to stay in those communities and, to my knowledge, have made no move to leave.

The situation, as it stands, is that, last year, the government started off with an accumulated surplus - technically - of $1.5 million, and they are going to end up with an accumulated surplus of $8.5 million. This coming year they are going to start off with an accumulated surplus of $8.5 million and they say that they are going to end up with an accumulated surplus of $10 million. There are going to be lapsing funds. I realize that these do not correlate completely with the cash situation of the government, but they do relate to it.

Based on the arguments that we have all heard about the need for compensating balances, and, given that the expenditure last year was reduced from $540,000 to $150,000 - presumably they got the $150,000 figure, because that is what the government thinks it will end up paying - I do not think the government needs it. I am not going to move an amendment to reduce the amount. However, I think it is important to put this on the record. I think that this is too much conservatism. If there is ever a concern about some worthy organization that needs a little bit of money, and the government says it does not have any, I would suspect that this subject may come up again.

Hon. Mr. Ostashek: I hear the Member's comments, but there is one other thing that is not known yet, and that is that the federal government is looking at a different way of handing out our grant to us and is looking at issuing 12 equal instalments, whereas right now it is loaded heavily earlier on because of the back payments we make to municipalities, and so on. The feds are talking about distributing it into equal monthly payments so that they can save some money up front.

Mr. McDonald: That raises an interesting question. What will the government do in the event that the federal government introduces a new way of paying the transfer? Is it going to pay municipalities in equal instalments? Is it going to absorb some of the costs associated with this - the banking costs or the costs of a higher line of credit? What is going to happen? Is the Yukon College going to have to face 12 equal instalments? What is the government thinking?

Hon. Mr. Ostashek: I believe that is why we budgeted $150,000. For this year, at least, we would have to continue the practice we used before. It would not be fair to just drop this on the college and municipalities at the last minute and tell them we are going to start funding them in a different manner.

Depending on what ramifications this will have on our budget, we will have to seriously look at it in the future. But for this year, it is our intention to continue the payments in the manner they have been made in the past. Therefore, we have budgeted a little bit extra as a cushion, because it could deplete our compensating balances for several months, and we would not be able to draw the interest that we otherwise would.

Mr. McDonald: I understand what the Minister is saying and I caution him not to get too deeply into it, because I do not think a reasonable justification for $150,000 vote here would be the paying of the $10 million grant to Yukon College up front. Clearly, if we are talking about grants to municipalities in the $9 million or $10 million range, which are paid up-front, and grants to the Yukon College, which is in the $10 million range, $150,000 does not even come close to making up the difference.

The original justification the Minister raised, which was that they just wanted to be cautious, is probably sufficient for his purposes, but if he is looking to make up the difference or prepare for a new federal arrangement where the federal government will be paying its grant to us in 12 weekly instalments, $150,000 is not going to be anywhere near enough to make up the losses of financing the payments to the college and municipalities.

Hon. Mr. Ostashek: As the Member opposite says, he is not going to move an amendment so I am not going to get into a big debate on this, but we feel comfortable that it would be enough.

Ms. Moorcroft: I would like to go back to an item we briefly discussed yesterday. There is an increase in personal income tax for the current year that is projected at $3.3 million. I understand this is a result of the fact that personal income taxes have now gone from 48 percent to 50 percent.

I received a call from a constituent who was very upset about this, having completed preparing an income tax return for 1994. Why was the government so quiet about this personal income tax increase?

Hon. Mr. Ostashek: The Member is mistaken. There is no personal income tax rate increase. That is a volume increase we are projecting for the 1995-96 year.

Ms. Moorcroft: I was just going over what the Minister said yesterday in the House in response to some questions from the Member for McIntyre-Takhini. He says that it is the effect of tax rate changes.

Hon. Mr. Ostashek: That was for the 1994-95 year. I thought I said that, but if not, I will say it now. The increase in 1995-96 is a volume increase. There are no further rate increases.

Ms. Moorcroft: Does the government anticipate rate increases for next year?

Hon. Mr. Ostashek: No, we do not.

Mr. Cable: I would like to go back to the banking contract. I was rather curious about why three of the major banks did not bid on this. I think the Government Leader speculated on some reasons why, if I recollect correctly. What does the Government Leader's department intend to recommend, assuming the Government Leader is here five years from now, on how to encourage the other three banks to bid on the contract the next time around?

Hon. Mr. Ostashek: The banks are good business people. They may have been laid back in this instance because of the simple fact that the CIBC has been the government bank for many years. Now that they see that the government was serious in its tender and was looking for some efficiencies and cost savings, I do not think we will have to do anything further to encourage the other banks to bid.

Mr. Cable: I suspect that one of the reasons they did not bid on it was because they were not aware of the current contractual provisions and probably thought they were super-complicated. I gather they were not privy to the Canadian Imperial Bank of Commerce contract. Am I correct in assuming that the contract with the CIBC that just expired was not made available to the various responders to the proposal call?

Hon. Mr. Ostashek: No, the contract itself would not have been made available. I do not think that it is appropriate, when going to tender, to make a contract the government had with one company available to other companies submitting a proposal on a new contract.

Mr. Cable: Now that we have extracted this document and it has been made public - and perhaps amended from time to time - could the Government Leader indicate whether or not it would be appropriate to make that part of the proposal call practice, so people would not be frightened off by what they perceive to be an over-complexity of arrangement?

Hon. Mr. Ostashek: What we are talking about is five years down the road. I am not going to speculate on what will be in the new tender proposal. There may even be a change of government by then, so it would be inappropriate for me to speculate at this point - or we may have a far larger majority.

Mr. Cable: I should not comment on that.

Some Hon. Member: (Inaudible)

Mr. Cable: This document has a draft stamp on it. Am I to assume that this document was prepared by the bank?

Hon. Mr. Ostashek: Yes.

Mr. Cable: We have not really had an opportunity to read this. I suppose we can put forward further questions on line items after we have had a chance to read it. It appears, however, to grant exclusive rights to the Toronto Dominion bank to service the regional areas. Is that the government's intent? I am referring particularly to section 4.3.

Hon. Mr. Ostashek: It gives them the exclusive right to serve the regions on behalf of the Yukon territorial government. It means that we will not pay another bank to go in to the communities during the term of this contract.

Mr. Cable: Regional banking services involves a number of things, such as the opening and closing of accounts. If the Canadian Imperial Bank of Commerce is in a community and there is an exclusive right to do those things that are called "regional banking services", how are we going to intermesh this exclusive right with the fact that the Bank of Commerce is servicing some of those outlying areas?

The answer may be further on in the contract. We did not get it very far ahead of time, so we have not had a good chance to look at it.

Hon. Mr. Ostashek: After the Member reads the contract, he will see it a lot more clearly. It is quite simple. We agreed with the Toronto Dominion Bank that we will not enter into a contract with another bank to service the same area in which we are paying the TD Bank to provide service. That does not preclude any other bank from going into those communities and setting up a service on its own.

Mr. Cable: If another bank does just that - and I gather another bank is doing just that - which will the government use for their deposits: the other bank or the Toronto Dominion Bank?

Hon. Mr. Ostashek: I am sorry. Is the Member saying if that should happen? Our agreement is with the Toronto Dominion Bank.

Mr. Cable: We have some outlying areas the Toronto Dominion Bank is not going to service - so far, anyway - and which are serviced by the Canadian Imperial Bank of Commerce. In which bank are the regional services going to be dealt with - services such as opening and closing bank accounts and providing a facility for the operation of chequing and savings accounts? Which bank is going to be used in the outlying areas, in view of this exclusive clause?

Hon. Mr. Ostashek: I thought we laid that out in the debate here earlier. In the communities where CIBC branches are located, we use the CIBC. We are not going to put the TD in there in competition with the CIBC and having then be paid by us. Seven out of the nine communities we were paying for have been retained by CIBC. In those communities, the people who were banking with CIBC continue to bank with CIBC. Our government agencies continue to bank with CIBC and, as I may have indicated to the Member for McIntyre-Takhini during debate, there is a cost to the government for those banking services, which I believe we estimated at somewhere around $15,000 for the year.

Mr. McDonald: I have one final question on banking services and one final question on picking up the difference paid for those organizations that currently get their money from us, or from the Legislature, up-front.

On the subject of the banking contract, can the Minister tell us whether or not the terms of the contract with the CIBC were shown or made known to any other bank prior or during the tendering period?

Hon. Mr. Ostashek: No, I do not believe so; not that I or my officials are aware of.

Mr. McDonald: On the subject of the $150,000 expenditure and the possible need to make up for the fact that the federal government may provide their transfer payment to us in 12 equal instalments, when Yukon College received its grant from us - in the neighbourhood of $10 million - they calculated they received around $400,000 a year in interest income. This is interest income that they keep; it is not retained by the Yukon government obviously, and ultimately it does not return to the federal government.

Can the Minister provide me with some further information? He does not have to do it now, but I would like to know what the impact would be if the Yukon government were to continue its practice of paying certain organizations their entire grant up-front. What would the financial impact be?

Obviously Yukon College and municipalities receive their grants up front, and there may be others. If the federal government were to pay us our transfer in 12 equal instalments, obviously there would be a cost to us. Can the Minister calculate that cost precisely, showing me the actual calculations, so we can have a look at that?

Hon. Mr. Ostashek: I have no difficulty in doing that. It is an exercise that we will probably have to go through anyhow, if the federal government follows through with some of its trial balloons in that area. So, yes, that is no problem; we will get it to the Member as quickly as we can.

Mr. McDonald: The policy of the government, then, just so we all know, is that, irrespective of what the federal government does, the grants will be paid out just as they always have been. Is that correct?

Hon. Mr. Ostashek: I am not going to get trapped into that one. I said quite clearly that for this next fiscal year they will be. We will look at the impact when we have analyzed all this to see what can be done. We know it will put a strain on the college and on some of the municipalities, and they would probably be asking for a larger grant from us if we do not pay it up-front. It is something we will have to analyze, but I will not make that carte blanche commitment here today that it will carry on that way indefinitely. That would be very irresponsible of me. I will make a commitment that, for this year, it will carry on that way.

Mr. Penikett: Would the Government Leader permit me one more question on the commodity tax issue? I have been sitting here thinking about something and I want to ask one question before I leave this today.

As I understand it, wholesalers can claim off-road exemptions for private users. In other words, they can have the ability to advise the department of the levels of off-road use. In other words, they can say this is the amount we sold that was for off-road use, and therefore is exempt from taxation, and this is the portion that was eligible for taxation. I want to ask the Government Leader who audits it and has there been any evidence of any improper claims for the off-road fuel tax exemption by suppliers?

Hon. Mr. Ostashek: I am sure that it must be picked up in the audit. I think that you need to have a tax number. You cannot just go to a bulk fuel dealer and say, "I want to use this off-road." You have to supply a tax-exempt number that you get from the government. If the Member opposite were going to use fuel off-highway and he went to a bulk plant dealer, he would be asked for his tax-exempt number, and he would have to supply that to the dealer. Also there must be a cross check, because when you apply for a tax-exempt numbers they ask you about the volume that you are going to use, and they do check. I had a tax-exemption number years ago, and they did request my invoices to see how much fuel I bought over the year, and how much of it was tax exempt.

Mr. Penikett: If the Government Leader agrees, I would like to get a more detailed written answer about that. I think it is in that case that a supplier can give the government an estimate or an approximation of the volume they are handling that is tax exempt, and claim the tax exemption. From what I have heard about the way in which we are monitoring that, it might be quite sometime before one discovered whether or not the claim of the wholesaler is accurate, or could be justified in a retrospective audit.

Hon. Mr. Ostashek: We will get the Member a written reply on that. That is probably the best way to handle it.

Yes, there may be some time lag, but my understanding is that the wholesaler does not estimate how much is off-highway, rather he reports what he actually sold as off-highway. That is where the fuel tax exemption number he is required to put on the invoices when he delivers tax-exempt fuel to anyone comes into play. The only way that one could be 100 percent sure that tax-exempt fuel was not being burned on the highway is to have coloured fuel. Due to the volume sold here, there has been a real resistance from the bulk plant dealers to even get into that.

Chair: Is there further general debate?

Hon. Mr. Ostashek: Mr. Chair, I move you report progress on Bill No. 4.

Motion agreed to

Bill No. 3 - Third Appropriation Act, 1994-95 - continued

Department of Finance

On Operation and Maintenance

On Treasury

Mr. McDonald: I think the Minister has explained this item: $390,000 was for the reduction of banking services, but can the Minister briefly explain the balance again?

Hon. Mr. Ostashek: Costs are reduced because of surplus funds on hand, which were provided, in the amount of $390,000. Position vacancies were a fiscal analysis and an ADM Management Board Secretariat, $134,000. Funds required for a consulting contract was $20,000. That left a balance of $370,000. Workers' Compensation Board supplementary benefits revised estimate, based on 1992-93 actuals, was another $26,000, for a total O&M variance of $478,000.

Mr. McDonald: What was the consulting contract for?

Hon. Mr. Ostashek: That was a cost-shared study that was cost shared with Government Services and ECO on computers and computer programs.

Mr. McDonald: Is that study a public document or is it advice to Cabinet?

Hon. Mr. Ostashek: I believe it is advice to Cabinet.

Mr. McDonald: What were the terms of reference for this study?

Hon. Mr. Ostashek: We can get the terms of reference for the study, I believe. It was basically to take a look at our computer systems to see if we were headed in the right direction and were not overspending.

Mr. McDonald: That should be a very interesting report to read in that case. Ultimately, it may cause greater interest in this particular area but I can always raise my concerns or express my interests during Government Services debate.

There has been a lot of discussion about the future of the government's mainframe. What is happening? Can the Minister give us a thumbnail sketch of what the government intends to do - whether or not it intends to maintain the mainframe service?

Hon. Mr. Ostashek: When we get to Government Services, the Minister will be able to explain it better. I believe we are going to keep the mainframe. Without getting into the whole context of the report, it outlines that we are getting pretty good value for our dollar with our mainframe.

Mr. McDonald: Who are the consultants?

Hon. Mr. Ostashek: EDS.

Mr. McDonald: I am happy to hear it was not Xerox.

Treasury in the amount of an underexpenditure of $504,000 agreed to

On Workers Compensation Supplementary Benefits

Workers Compensation Supplementary Benefits in the amount of $26,000 agreed to

On Total of Other O&M Programs

Total of Other O&M Programs in the amount of nil agreed to

Operation and Maintenance in the amount of an underexpenditure of $478,000 agreed to

On Capital

On Treasury

On Office Furniture, Equipment and Systems

Office Furniture, Equipment and Systems in the amount of an underexpenditure of $11,000 agreed to

Capital in the amount of $11,000 agreed to

Department of Finance agreed to

Hon. Mr. Ostashek: Mr. Chair, I move you report progress on Bill No. 3

Motion agreed to

Bill No. 4 - First Appropriation Act, 1995-96 - continued

Department of Finance

On Operation and Maintenance

On Treasury

On Administration

Administration in the amount of $423,000 agreed to

On Financial Operations and Revenue Services

Mr. McDonald: Is the four-percent change because of the filling of past vacancies, or is there some other explanation?

Hon. Mr. Ostashek: Yes, the Member is correct.

Financial Operations and Revenue Services in the amount of $1,889,000 agreed to

On Fiscal Relations and Management Board Secretariat

Fiscal Relations and Management Board Secretariat in the amount of $952,000 agreed to

On Banking Services

Banking Services in the amount of $150,000 agreed to

On Public Utilities Income Tax Transfer

Public Utilities Income Tax Transfer in the amount of $771,000 agreed to

Treasury in the amount of $4,185,000 agreed to


Workers' Compensation Supplementary Benefits

On Supplementary Pensions

Supplementary Pensions in the amount of $374,000 agreed to

Workers' Compensation Supplementary Benefits in the amount of $374,000 agreed to

On Allowance for Bad Debts

Mr. McDonald: I am surprised that the government could not come up with more items to throw into this line item in the budget. Last year, they showed a real dearth of imagination. There must have been something out there that they could have written off - or listed under allowance for bad debts. I am hoping that they are much more imaginative in this coming year.

Allowance for Bad Debts in the amount of $67,000 agreed to

On Prior Period Adjustments

Prior Period Adjustments in the amount of $1.00 agreed to

Operation and Maintenance in the amount of $4,626,000 agreed to

On Capital Expenditures

On Treasury

On Office Furniture, Equipment and Systems

Hon. Mr. Ostashek: As I said in my opening comments, that is mainly for the purchase of a copier as well as incidental furniture or other office equipment that may need to be replaced.

Mr. McDonald: Should I ask the Minister of Government Services or this Minister if that copier will be a Canon or a Xerox?

Hon. Mr. Ostashek: I believe it will be whichever is the cheapest.

Office, Furniture and Equipment in the amount of $111,000 agreed to

Capital in the amount of $111,000 agreed to

Department of Finance agreed to

Hon. Mr. Ostashek: Mr. Chair would you like to go back to the Legislative Assembly now?

Bill No. 4 - First Appropriation Act, 1995-96 - continued

Legislative Assembly Office - previously stood over

Chair: We have the total for the Legislative Assembly to clear.

Does the total clear?

Legislative Assembly agreed to

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

Some Hon. Members: Agreed.


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

Executive Council Office -continued

Chair: We are on Bill No. 4, Main Estimates, Operation and Maintenance, Department Executive Council Office, Bureau of Management Improvement, page 2-11. Any further debate on the line item?

On Operation and Maintenance - continued

On Bureau of Management Improvement - previously stood over

Hon. Mr. Ostashek: We have distributed the audit documents and the 14 suggestions that have been implemented. The Members opposite will see that there are no figures on the suggestions. The departments say it is almost impossible to calculate savings on them, and I would like to point out that other suggestions have been initiated in the departments that have not gone through the Bureau of Management Improvement, such as using the big disk on the highway in order to reuse chipseal. That was one that did not go through the Bureau of Management Improvement, I understand, but departments looked at it and said it was almost impossible to calculate savings. I would like to point out that the suggestions were more in the way of service improvement. If there are some cost savings in it, that is so much the better. It is just not possible to calculate the savings.

Bureau of Management Improvement in the amount of $229,000 agreed to

Mr. McDonald: I will do this very quickly. I do not feel particularly pushy in asking this question: will the Government Leader provide us with the audit plan for the coming year? I understood that the question was asked about what the plan was.

Hon. Mr. Ostashek: I believe that we said in the debate yesterday that the 1995-96 work plan was being completed and we hoped it would be completed before the onset of the fiscal year. I did agree to provide it to the Leader of the Official Opposition once it was completed, and I will make it available to all Members at that time. It still has to go through various committees.

I could just read into the record what I said yesterday. Work is underway to develop a work plan for the Bureau of Management Improvement for the 1995-96 fiscal year. A call letter is being issued to the departments and corporations to identify potential projects. The list will be reviewed by the Deputy Ministers Review Committee and the Audit Committee prior to being submitted to Management Board for approval. This work will be completed before the onset of the fiscal year. I would be happy to provide a copy of that to the Members opposite.

Executive Council Office agreed to

Hon. Mr. Ostashek: Mr. Chair, I move that you report progress on Bill No. 4.

Motion agreed to

Bill No. 3 - Third Appropriation Act, 1994-95 - continued

Department of Community and Transportation Services

Chair: Is there any general debate on the Department of Community and Transportation Services?

Hon. Mr. Brewster: I believe that my letter and my speech has been sent to the Members. I will read it so that it is in Hansard. I usually do this, because they sometimes cannot understand what I am speaking about. They tell me I do not speak good English.

Please allow me to present the 1994-95 Supplementary No. 1 for the Department of Community and Transportation Services.

Taking into account the impact of increased O&M and capital recoveries, the department's total net supplementary is $6,643,000. The operation and maintenance supplementary consists of miscellaneous expenditure increases totalling $28,000, with corresponding increase in recoveries of $21,000. The net O&M supplementary is therefore only $27,000.

The major part of the supplementary is capital, and consists of an expenditure increase of $17,007,000, offset by a corresponding increase in recoveries of $10,371,000. Of this, the net increase in capital expenditures in recoveries is $9,313,000 for the Shakwak project, which is required to meet the construction schedule, as agreed by the U.S. Federal Highways administration.

Other significant items of the capital supplementary are a revote of $683,000, with a $36,000 corresponding recovery. The amount of $1,800,000 is allocated to the Canada/Yukon infrastructure program, which is 50-percent recoverable.

The amount of $3,049,000 is allocated for various winter works projects, of which $73,000 is recoverable. The amount of $2,000,162 is required in various other areas. This is offset by a corresponding recovery of $49,000.

The operation and maintenance supplementary includes the following: in the office of the deputy minister, an increase of $3,000 was required for response to the flood at Dawson City's Rock Creek subdivision resulting from an ice jam on the Klondike River. In the transportation division, the $21,000 increase consists of a $24,700 increase in airport operation and a $40,000 increase in transportation maintenance, offset by a decrease of $85,000 in transportation services. In municipal and community affairs, the $4,000 increase is the difference between an increase of $14,000 for mosquito control and employee training and a decrease of $10,000 due to a position vacancy.

With respect to operation and maintenance recoveries, the $21,000 increase reflects recoveries of $42,000 from the State of Alaska for maintenance on the South Klondike Highway during the period of April 1 to April 15, 1994, offset mainly by a $22,000 reduced recovery from Transport Canada under the CARS agreement.

Capital expenditures supplementary requests primarily consist of an increase of $63,000 for emergency measures and communication, of which $12,000 is funding required for office accommodations of the joint emergency operation centre and $51,000 is a revote from 1993-94 for the purchase of peripheral equipment for the 911 service.

There is an increase of $214,000 for transportation division facilities, of which $93,000 is a revote to complete the work from 1993 to implement the local network component of the highway maintenance management system being developed. There is $56,000 in additional funding required for building maintenance and accommodation upgrading at various locations, and $65,000 is required for major facility maintenance, mostly at grader stations and the Old Crow airport terminal.

There is an increase of $11,801,000 for highway construction coverage: $9,313,000 for the Shakwak project; $2,818,000 in additional funding for the Alaska Highway for miscellaneous work, including slope stabilization and evacuation of large waste cuts; $500,000 for the Klondike Highway for permafrost burning south of Stewart Crossing where numerous cracks were formed; $200,000 for the Dempster Highway for erosion protection and to replace collapsed culverts; $1,350,000 for the Top of the World Highway to accelerate reconstruction utilizing 50-percent funding from Transport Canada; $200,000 for Silver Trail to carry out slide reclamation work by replacing rip-rap to prevent erosion; $600,000 to pave the Yukon River Bridge at Carmacks and to do pre-engineering and design work for Willow Creek and Tatchun Creek bridges, as they have numerous structural deficiencies.

There is a net reduction of $175,000 on the Campbell Highway, mainly due to the reduction of the scope of work on the restructuring and BST paving of kilometre zero to kilometre 50, as the opening of the Sa Dena Hes mine did not proceed. The money was transferred to Alaska Highway reconstruction.

There is a net reduction of $1,005,000 on the Freegold Road due to a slow down of reconstruction pending production decisions by Carmacks Copper and Williams Creek mine. There is an increase of $254,000 for transportation maintenance facilities and sundry equipment, of which $54,000 is for miscellaneous retrofits to highway camps and $200,000 is for the installation of an overhead crane at the Marwell area welding shop.

There is an increase of $333,000 in transportation regulatory facilities for the relocation of the Whitehorse weigh station; $318,000 of this is a revote for work carried forward from 1993-94.

There is a total increase of $2,342,000 in municipal and community affairs, of which $217,000 is a revote. Significant items in this area include; an increase of $56,000 for public safety, mainly for the Burwash firehall preparation for construction, Golden Horn training room exterior construction, Ross River firehall repainting, and for the development of a permits and inspection computer software.

There is an increase of $39,000 for sports and recreation for a structural engineer and assessment of the Beaver Creek curling rink foundation to address a concern raised by the Ross River Community Association with respect to their community centre, and for acquisition of a photocopier for the branch.

I guess my engineers must have taken the day off early that day. I know that road is there. I do not know why they did not put it on the map. I have been on that road quite a few times and it is there. I must apologize to the Member for McIntyre-Takhini because I know he is very concerned about that area. I agree with him that it should have been on the map.

Ms. Moorcroft: Before I ask some questions on the statements the Minister has made about the supplementary budget, I would like to ask for a more detailed map and a summary of the land developments. Those are items that we will need for the capital and operation and maintenance debates.

Hon. Mr. Brewster: What more detail does the Member want? Is the Member concerned about the one road, or is there something else we have missed? I am still not quite clear how many other roads the Member would like to see on the map. Does the Member want all these other little roads? That is going to take the department quite awhile. There are an awful lot of little roads that run all over the place.

Ms. Moorcroft: I take it then that the department does not have a road map of the Yukon that includes all the roads that it maintains. Is that map not presently in existence?

Hon. Mr. Brewster: We just put this one out to show where we were doing construction and different things like that. Actually, it was not intended as a road map. I suppose we can look around and see what we can find for the Member. The intention was to simply show where we had construction and other such things for the coming year.

Ms. Moorcroft: I have a question about the municipal and community affairs division and the decrease of $10,000 due to a position vacancy. I would like to know what the position is and whether they are filling it. I would also like the Minister to tell us whether they still assess every vacancy to see if they can dispense with the position once someone resigns.

Hon. Mr. Brewster: Yes. When a position becomes vacant we do assess whether we need it or not and whether we can do without it.

Ms. Moorcroft: Does the Minister have the information on what position became vacant in the municipal and community affairs branch and whether that position will be filled?

Hon. Mr. Brewster: I do not have that information right now, but I will get it to the Member very shortly.

Ms. Moorcroft: I am looking at the revote in the transportation division. There is $93,000 to implement a local area network component of a highway maintenance management system that is being developed. Can the Minister explain this and tell us who is part of the local area network?

Hon. Mr. Brewster: The $10,000 is the result of the Dawson City community planning advisory position being vacant while the incumbent was on extended maternity leave.

We could do these better line by line.

Ms. Moorcroft: I was asking general questions about programming and policy matters relating to the comments just made by the Minister.

There is an increase of $11 million for highway construction, including additional funding for the Alaska Highway. There was some debate with the Government Leader in general debate on supplementaries about the $4.5 million reduction to the Alaska Highway line item that had been passed by this House, because it was a majority view that that money should be spent, and would be more wisely spent, improving the Grey Mountain Primary School and the J.V. Clark School in Mayo. Can the Minister tell me whether he shares the opinion of the Government Leader that we cannot tell them what to do, and that they feel they should just go ahead with improvements to the Alaska Highway?

Hon. Mr. Brewster: We did not put it back in that way. If you would let us get into the line by line, we have it broken down, unless the Member wants me to run through this every time to pull these figures out. With respect to that amount of money, most of it was put into Education. Some went back into roads, but it was not on the Alaska Highway.

Ms. Moorcroft: Perhaps if the Minister does not have an appetite for debate on that now and wants to save it for the line by line, I will ask him another question. There is $3 million allocated for various winter works projects. I have here two different versions of winter works projects for the Department of Community and Transportation Services. Can the Minister explain the winter works employment projects and exactly what jobs have been created as a result of the funding that has gone forward?

Hon. Mr. Brewster: Some of the winter works projects we have include remodeling the second floor of the Lynn Building to accommodate improvements for the EMO centre. In the transportation division, there is $32,000 for the replacement of overhead doors at the Watson Lake grader station and $3,000 to repaint the interior; $7,000 to replace the subfloor at the Old Crow air terminal; $10,000 to repaint the interior of the Dawson grader station, $8,000 to repaint the interior of the sign shop, and $5,000 to repaint the first floor of the Lynn Building.

In highway construction, there is $1,170,000 for aggregated production kilometre 1056 to kilometre 1085 to surface and BST road construction in 1994-95; $200,000 to stabilize several slopes in the Swift River area that erode during spring runoff, and $1,000 to do evacuation of large waste cuts at kilometre 1178, immediately south of Swift River, and kilometre 1557, immediately west of Mendenhall River bridge; and clearing of right-of-way on the Alaska Highway in preparation for reconstruction of kilometre 1787 to kilometre 1800, which funding is 100 percent recoverable; $55,000 for the Freegold Road for clearing road right-of-way in preparation for reconstruction kilometre 17.8 to kilometre 21.6; $90,000 for crushing and stockpiling of gravel for resurfacing and reconstruction of kilometre 0 to kilometre 10, of which $73,000 of the $145,000 is recoverable.

For maintenance facilities, there is $20 for miscellaneous retrofit of doors and lights for the north Alaska Highway grader station; $3,000 for window upgrade at the Teslin grader station; $3,000 for replacement doors on Watson Lake grader station and $7,000 on Watson Lake workshop; $3,000 to replace parts, rooms and windows at Dawson workshop; $4,000 to supply and install a living complex at Stewart Crossing; $10,000 to supply and install a humidifier system at Ogilvie living complex; and $4,000 to replace worn flooring at the central workshop.

For transportation equipment, there is the installation of an overhead crane in the welding workshop in the Marwell area. This crane is required to improve work safety conditions.

For public safety, there is the repainting of the interior of the Ross River firehall, at a cost of $6,000, and the supply and instalation of an auto-scaler at Klondike Valley firehall, at a cost of $2,000.

For recreation, the item is for a structural engineer to do an assessment of the Beaver Creek curling rink foundation problems.

For community service, the item is for computing equipment and assistance to acquire computer software for an ADM secretary position.

For photography and mapping, the item is to produce a digital air photo of the City of Whitehorse.

For public health and streets, a sewage disposal study is required at Marsh Lake, to carry out a needs assessment. Sewage pit relocation in Pelly Crossing is required to carry out geotechnical investigation and related work for site feasibility. Also there is street upgrading in Beaver Creek and design work for the roads.

Quarry site analysis and development is to do a comprehensive site selection analysis and geotechnical investigation in the Whitehorse area.

Ms. Moorcroft: Can the Minister tell me how many of the jobs created as a result of these particular projects went to workers outside the regular government workforce? I am sure some of the maintenance he referred to, such as replacing doors and lights at the north Alaska Highway grader station, would be work that would be done by regular maintenance personnel within the department. Does the Minister know how many additional people were hired or how many of these jobs went out to private contractors?

Hon. Mr. Brewster: For the private sector. there are 13.47 FTEs. That is for transportation service, capital, office of the DM, transportation and community services. That is for the capital.

Ms. Moorcroft: The Minister indicated that some $55,000 was for the road right-of-way for the Freegold Road. We have heard some concerns from people in Carmacks about local residents not getting the work there. Do they tender those particular clearing projects outside of the local community?

Hon. Mr. Brewster: We broke it into three parts. It is tendered the usual way, but it is usually the people in Carmacks who get the work.

Ms. Moorcroft: I note that there was $6,000 for repainting the Ross River firehall. I would like to ask whether the Ross River firehall has been repainted and whether the alarm systems have been repaired yet?

Hon. Mr. Brewster: They are apparently still working on the siren. There is, to my understanding, a mix-up in the wiring. They have to straighten it around to get the five fire alarm pulls working together again. We are not sure whether or not the painting has been done yet.

Ms. Moorcroft: I think that maybe the alarms should be fixed before the painting is done. If the Minister does not know whether the painting is done, I will leave it at that for now.

Does the Minister have a breakdown on the sewage treatment and disposal? He indicated that there had been a needs assessment in Marsh Lake. Has that been completed?

Hon. Mr. Brewster: I would like to point out that in Ross River there are different crews. One is an electrical crew that is working on the fire siren, and the other is a paint crew. We do not hold one up against the other at all.

Ms. Moorcroft: Would the Minister go over the description of the sewage treatment and disposal again? There was Marsh Lake and there were a couple of others. I missed what the others were. I would also like to know if I could have a copy of the report when it is completed.

Hon. Mr. Brewster: There was a sewage disposal study carried out for Marsh Lake that led to an assessment study, a sewage pit relocation study in Pelly Crossing to carry out geotechnical investigation and related work for site feasibility. I was in Pelly Crossing, along with my deputy minister and the MLA for Mayo-Tatchun, for a meeting. We looked at a place where they wanted to put it. Apparently the federal government does not want us to put it right near that lake. We are now looking for another site. The street upgrading in Beaver Creek was for the design of the roads.

Ms. Moorcroft: Regarding the quarry development in the Whitehorse area, for $140,000, can the Minister describe what work is being done and what stage the work is at?

Hon. Mr. Brewster: That is a program to do a comprehensive site-selection analysis and a geotechnical investigation in the Whitehorse area to see where we have more gravel, or if we have any. That study is to be completed some time in July.

Mr. McDonald: I am interested in winter employment. I would like to ask the Minister a few questions about the winter employment program. Obviously, not every project that the Department of Community and Transportation Services has identified in the supplementaries has made it to the short list of winter employment. I am interested in what the department has determined should be included in this category. First of all, can the Minister explain to us how the list of projects that he has identified have made it to the list of employment projects? I realize that they do not all happen in the winter, but what, in his view, makes them winter employment projects?

Hon. Mr. Brewster: An employment project is one that puts someone to work. It does not necessarily have to be someone who is not working at the present time. It may be to extend a person's job. For example, work on the Shakwak project may extend the jobs there for another month or two. To me, that is still employment because, at the same time, it keeps a person from going onto unemployment.

Mr. McDonald: I am certainly interested in the Shakwak project, and I will be asking questions when we get to that line. I am particularly interested in the reasons why the government decided to tender an additional $9 million, $10 million or $12 million worth of work. In his comments, the Government Leader indicated that the government did it because construction companies were available to do the work, they needed the work and they could handle the work. He said that they did not want to create a project that had to go to someone outside of the Yukon. I am interested in that rationale, particularly as it affects tendering practices, but I will get to that in a moment. I am more interested in winter employment. Regarding the crane in the central workshop, how much of the crane project was the crane itself, and how much was labour?

Hon. Mr. Brewster: It is .40 full-time equivalents, which is four-tenths of a year.

Mr. McDonald: Did I ask that question? I am happy to have the answer but I am not sure to what question it is tied. I asked for the costs of the crane project. How much of the crane project is the crane?

Hon. Mr. Brewster: The cost of the project is $200,000 and we estimate about $24,000 for the work of welding and putting it in place.

Mr. McDonald: So, approximately $176,000 is for the crane itself?

Hon. Mr. Brewster: We have only just put it out to tender and it may change, but yes, that would be the cost to bring in the crane.

Mr. McDonald: The Minister identified a couple of other projects that apparently made the short list of employment projects: computer software for an administrative assistant and some work to design roads. Does he have a sense of how much those two projects are worth, in dollar terms?

Hon. Mr. Brewster: We will have to get back on that one. We do not have the information here.

Mr. McDonald: Thank you, I appreciate that commitment.

I will get right to the point that I want to make. I do not take exception at all to the purchase of a crane, nor to the fact that it should take place, nor that it could take place in the wintertime. I do take particular exception to the purchase of computer software for an administrative assistant. Nor do

I take any exception whatsoever to the government designing roads, at all, nor do I even take exception to proposals to do some insurance planning on public facilities. That is not the point I am making. The point I am making is that this has been characterized as an employment program, as distinct from any other expenditure that the government is undertaking, as distinct from other projects that the government is doing in the wintertime at public expense.

They are not characterized as employment programs, they are characterized as government activities. The moment the government comes forward with some notion that it is promoting an employment program, it gets people's expectations up about there being something that is going to be particularly focused on people who need work, and this is going to put them to work.

If the program does not accomplish that task, it does not mean that people disagree with the particulars, they disagree with the labeling of the program as an employment program. The Minister knows as well as I do that the moment the government says that there is going to be an employment program, there are people all across this territory - probably a larger number in the rural communities than here in Whitehorse - get their hopes up. They think that somehow next summer's road-slashing work is going to either happen this year, or in the wintertime, and that somehow they are going to be out there working - or that there is going to be an opportunity to work.

I have difficulty with the government raising people's expectations unnecessarily. I had a call from someone from Mayo who wanted to know more about the employment program. That is what generated the questions in the first place. I said I presumed that they will be contracting work, that I knew the criteria was that they wanted to do work that they were going to do anyway. Some guys whom I know in Mayo got together and thinking it through. They went to the highway camp and asked the highway camp foreman about what projects were likely to go ahead next summer, and if there was any word about what was going to be called ahead for this year for the wintertime, and started thinking that there may be some hope that they might get a few weeks in.

Obviously, that is anticipated. It seems that the government is going to do things anyway, and they are not going to pay particular attention to the employment-generating capacity of each project. Some work is going ahead anyway, this winter, which has a greater employment-generating capacity than do the projects on the employment project list. What differentiates the employment project list from any other list of government work, other than the fact that it identifies advanced projects for next year? What makes buying a crane an employment project in the Yukon, as worthy a project as it is, when 85 percent of it is the purchase of equipment from outside the territory? What makes it different from another project we are undertaking anyway - one that is creating more employment?

What I am worried about is that, when we leave this Legislature, someone will say that the government does not care about the winter employment situation. Then, somebody is going to say in a government press release that we passed a budget that included an $8.7 million winter employment program. By that time, we will all be gone. We will not be here any longer to find out how much employment is generated or why certain projects were called employment projects and others were not.

Personally, I am supportive of the concept of building a crane in the central workshop, but I would hesitate to call it an employment project. I do not think it can be characterized as an employment project, any more than can any other project the government is doing.

I will cut to the chase. If the Minister has some comments on that, I would appreciate hearing them.

The Minister indicated that the employment associated with his list of winter employment projects included 13 FTEs for the private sector. Did he give a figure for the public sector - the government's own forces? Can he please clarify that for me?

Hon. Mr. Brewster: There are 16.47 full-time positions. I certainly understand the rationale behind the Member's position. This is one of problems we have in the rural areas. When somebody says there is work, they all expect to work. The philosophy of make-work projects, even if they were of no value, has been one we have been in for a long time. I think the Member on the other side will agree with me that there have been an awful lot of make-work projects. That is not meant to criticize the former government; this went on for years. There were make-work projects that did not really create anything.

What we were trying to do was bring forward projects that were going to be done next summer anyway. Perhaps we should be looking at changing the title so that we do not get into the same misunderstanding. I agree with the Member that this happens.

Mr. McDonald: I appreciate the Minister's candor. I do agree with him that there is a lot in a name. When one refers to a program as being an employment program, people have a tendency to think, for whatever reason, that employment is a major criteria in the program, and that that is the reason the government has invested significant resources in it.

I am not disagreeing that every project should be useful, but every project should be useful not only to the Yukon government, but also to others. Some of the projects that have been funded in the past - even by this government - have been useful to other levels of government, to other community associations or to some other group.

If the government wants to target employment, it does not have to exclusively think about its own needs to meet a desire to reduce unemployment. It should be thinking of the legitimate needs of other organizations. There are legitimate needs out there. The municipalities and the community associations do have worthwhile projects that do not, as one Minister pointed out, involve shoveling snow before the sun melts it. That is the kind of comment I would expect from a patrician who understands nothing about the needs of people who are unemployed. I would not even want to pretend to transmit that from this Legislature to the homes of the people who are out of work.

However, I think that the Minister understands the position I am taking here and understands the impact of government announcements. I am not opposed to the government, for its own purposes, advancing projects that it believes to be useful and doing that in the wintertime, if necessary. If the projects involve a lot of employment, then one can say that they are targeted to employ people.

There is also an expectation that these employed people are going to be non-government personnel. Historically, when we have talked about employment projects, particularly when justifying things in the capital budget, the assumption has been that a lot of this work is going to be for the private sector. Certainly, the whole justification for the capital budget spending - at least, as it was explained by the Government Leader - is that it is the way to get money into the private sector. That way, we can give less attention to government need and more attention to responding to the needs of the private sector.

I do not want to explore all of the elements of that particular argument again, but I will point out that the number of people one can put to work in the private sector is one of the criteria that one generally associates with an employment program. If, in the future, the government is going to designate a program as being one that promotes employment, then, obviously, we are going to be asking questions about employment in the private sector, such as what has changed and if these projects are going to have a large employment component to them. So, I make that point.

Can the Minister tell us if any consultation, in the context of this program, or whatever this group of projects is called, was carried out? Was there any attempt to ask municipalities or community groups if they had important, worthwhile projects that it could sponsor, instead of the government sponsoring projects to meet its own needs?

Hon. Mr. Brewster: No, we doidnot, because they receive a municipal grant. We do not put money into their projects. If we started doing that, we would have all seven or eight municipalities looking for more money all of the time.

Mr. McDonald: You are not going to avoid the municipality coming and looking for more money all of the time. I think that the Minister and I will be long dead and the municipalities will still be doing exactly that. However, the government did come into a lot of money in this supplementary, which was money that it did not expect - $14 million. Presumably, that was part of the justification for proceeding with some projects or advancing some projects. The money was there to be spent.

The government did not anticipate the $14 million, and it presumably felt that it could meet its operational and capital requirements with the main estimates budget. Otherwise, it would not have been tabled as such. Surely the Minister knows that the municipalities and the community groups have legitimate needs, as well. Much of the funding to meet their requirements comes from this government. The community groups, in particular, do not have taxation powers; they cannot raise revenues. Nobody wants to raise taxes, in any case.

Municipalities often assume that when the government comes into money that they did not expect, they are going to get a share of the wealth. There is a sense that the government will share the wealth with the municipalities and other governments. Did the government not think about things in that context, or did it just feel that meeting its own specific needs to meet its own purposes were of a higher priority than anything that the municipalities or community groups could offer?

Hon. Mr. Brewster: We have the Yukon infrastructure program, which has put out several large programs. There was $1,800,000 divided among the communities, including Whitehorse, for extra work. It is extra money, over and above the other.

I would like to say one thing, and I will probably be kicked around for saying it. For a large number of years, I was asked by the young people of Haines Junction to supervise the winter works programs they put on. Quite frankly, they did not encourage people to work. A person who wanted to work would come to work at 8:00 a.m.. Others would come to work at noon, or after noon, and they would get the same pay. To me, this was a complete waste of money. Maybe there is something wrong with me, but I do not believe in that. That is taxpayers' money.

Some of those programs were ridiculous. If you fired someone, then you would have to go through an investigation in Whitehorse about why you fired the person who would not work. The others were sincere and wanted the job, but many would come in at whatever time they wanted. That discourages people in the workforce, and I think we have to get away from that. We have to get projects out there that we need, and that the Yukon needs, where people can go and work an honest hour, instead of just working when they feel like it. When a worker does not show up for work the next day, there is someone sitting in a nice office in Whitehorse to say that person cannot be fired. There is no point in using the taxpayers' money for that.

The projects we have are supervised. They are on things that we want to have done, and people work for their eight hours .

Mr. McDonald: Let me begin by saying this: one of the justifications for the winter works and for a lot of the supplementaries was that the government came into extra cash, beyond what was anticipated in the main estimates. The main estimates incorporated block funds for communities, some funds for community groups to do various things, and an infrastructure program with the federal government that we knew was coming down. That was anticipated through the beginning of the year's spending proposals.

Midway through the year, we discover, to the Yukon's surprise, that we are getting an additional $14 million. So the Yukon government sees that it can meet some of its needs through the expenditure of this $14 million. That is fair. If the needs are individually justified and make sense, they should be supported, but there are also other organizations out there that depend on us and have emerging needs. Would they not love to have a five percent windfall on revenues? They would love to have it because they would have projects that are important to them. They have legitimate interests, and they also have legitimate responsibilities.

For example, the Village of Mayo has needs it has to meet. It is a government. It does things to meet the needs of the residents of that community, but it cannot do everything because it has a limited budget. If one was sitting on the Village of Mayo's council, for example, and heard that the Yukon government had a windfall of $14 million, and one were a fair-minded person one would not say, "we should have $1 million of that". One would say, "the Yukon government has an increase of five percent on income; maybe we could do something useful with an increase of five percent on our income".

If one were to target some of this for employment creating projects, one has to guard against the kind of thing the Minister is talking about, namely projects that do not have utility and that are just there for show, and it does not matter whether a person works or not. Who needs that kind of project any more? Who wants it? Nobody I know. No sensible person I know could possibly advocate for that.

In my opinion, many of the problems we have faced in the past are the result of inexperienced management associated with those projects. People just simply accepted that one could be loose with the project's objectives because, after all, it is all about just paying a cheque; it is not about doing a job of work.

I agree that is a problem, but that is the problem associated with the management of the project. If there is a problem with people in Whitehorse saying that a person at a community works project can no longer be fired, or someone in Whitehorse tells the Village of Teslin that it cannot fire anyone from a project they are contracting, then I can tell you there would be a lot of hell raised in the Legislature over that. That simply is not done any more. It may have been done when the Minister was young, but today, when something is delegated to Teslin, and Teslin does the contracting, this notion that people in Whitehorse are going to say who is hired and who is fired on that project - those days are over. They had better be over.

Unless the Minister has serious misgivings about the ability of communities to manage worthwhile projects, I am not sold on the Minister's position that they should not be given any consideration at all. The Minister knows they have legitimate needs. I think the Minister also knows that municipal governments are more sophisticated at project management than they ever have been. They can put on a good project and get good value for money. They can also target employment much better than some central government agency in Whitehorse.

When the Member for Porter Creek East was here, he made this case all the time: municipalities are better at targeting employment needs than is the central government.

I would be interested in hearing the Minister's further comment. We may have a difference of opinion that could be quite important to identify.

Chair: Order. The time being 5:30 p.m., we will recess until 7:30 p.m.


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

We are on Bill No. 3. Is there further general debate on Community and Transportation Services?

Mr. McDonald: Yes. I made some comments about winter employment, particularly about consultation with the municipalities, that probably deserve something of a response from the Minister, even though the Minister does not speak very much.

What does he think about consultation with municipalities? What does he think about their needs?

Hon. Mr. Brewster: I agree with the Member that the communities can run things better than big government can. I do not have a problem with that. I have always believed it, but we are facing a situation in Canada that nobody seems able to understand. We are going off our financing formula agreement next year and we do not know what we are going to get then. If we start giving more and more to the communities - and I think the Member across the road will agree with me on this - one can give, but it is very hard to take back. They seem to be doing fairly well on what they have, and on top of that we have budgeted another $900,000 for infrastructure, so we are giving them more money. There is work going on in Mayo, and a few places like that, this year. It is not just money that we give out in the municipal grant. We give out money for other projects and work with the communities, and it is time we all started looking at our budgets and try to hold the line. There is no question that, as long as I am here, the line is going to be held on this budget.

Mr. McDonald: I do not understand what the Minister is talking about. The budget for the Department of Community and Transportation Services does not exactly toe the line on capital expenditures. It jumped from $60 million to $77 million.

There is no question that we may be facing more restraint in the future, but all I see for the coming year is bigger budgets. The Minister says that we should be careful about raising expectations for the public and for everyone else whom we fund, and I agree.

If one spends millions of dollars in road building, surely the road building community would start thinking - if you did not tell them this was a one-time expenditure - that this is something they could expect every year. They must be told that it is a one-time expenditure and that it is a project with a finite life. Municipalities must also be told that we have $14 million from the federal government, which we did not expect, and that we are going to give them $2 million or $3 million to meet their needs. We would have to remind the municipalities that this was going to be a one-time expenditure because we did not expect this windfall. We do not want to spend it all on things that are important to the Yukon government, once we have satiated our appetite for road building and the construction of cranes in workshops. We know there are other things municipalities may want to do that are valuable and important, so I do not understand the Minister's argument.

He must realize that we have just completed three or four weeks of debate on government finances. I am absolutely boned up on every penny the government is spending and the growth in budgets and all these things. I am not some yokel from someplace else who does not understand that the government budgets are growing. I have been sitting here listening carefully and asking questions. I do not understand this. I am not looking for the Minister to tell me, "Oh, yes, you are absolutely right. The next time we have a windfall, we are going to share it with other people who need it and deserve it, too." All I am suggesting is perhaps the Minister could agree to take into account that, at some point during the discussions, the next time the government comes into money such as this, that there are other legitimate needs, and those needs can be embraced by communities who can perform good works and can meet the so-called needs of Yukoners. I think that is a perfectly reasonable position to take.

Hon. Mr. Brewster: I will concede that the Member probably knows more about budgets than I ever will, and he has a better education. However, that does not necessarily mean that I cannot understand a little bit of it. I do not know how often I have to point out that, if the Shakwak project was not there, our capital expenditure would be very, very small. I think we all know that, and I think it is time to own up to it, instead of ignoring it and not having anything to do with it.

The other thing is that any of the things we have done have certainly improved things for some of the people in the Yukon. For instance - and I do not think that anyone would dispute this - the crane has, and will, make life much nicer and safer for the people who are working in the shop. Is the Member saying we should not spend money like that? I do not think he is saying that at all, because I think he believes in the crane and a few other similar things. I guess we are just going to have to disagree on some things. That is all there is to it.

Mr. McDonald: We are certainly finding disagreement. First of all, I want to point out to the Member that he has been in this Legislature as long as I have. Prior to that time, I spent six years working in the mines and, prior to that time, I was a kid. So, the Minister cannot look at me and tell me that I have a lot more experience or education than he does, and that he is just a poor country boy. I do not buy that. We have the same experience and have been here the same days over the last 12 years. We have been exposed to the same information.

I can read this budget just as well as the Minister can, and this budget says that the transfer payment from Canada rose by $14.2 million. I asked the Minister of Finance if he knew that that money was going to be there, and he said no. That is simple. There was what can be characterized as a $14.2 million windfall in revenue to this government, and this government has responded through expenditures - pure and simple. Some of those expenditures, such as the Shakwak project and other things are recoverable, but there is $14.2 million net - brand new money, discretionary funds - that can be used by this government. I see that, too.

When it comes to the crane, I am not talking about whether or not the crane should be there, I am talking about employment projects. The government, in its wisdom, has decided that it is going to call a certain proportion of funds - $8.7 million worth of funds - employment projects. I would point out to the Minister that, if he looks at the list of projects, only one-quarter of the $8.7 million in funds is dedicated to the Alaska Highway - and that is recoverable, the Minister is quite right.

The rest of it has nothing to do with the Alaska Highway. The rest of it has everything to do with employment projects. I am trying to make a pitch for the people who represent Yukoners who have legitimate Yukon interests to protect, too. I am saying that they deserve some consideration when the government faces significant increases in revenues.

Hon. Mr. Brewster: I guess we could talk about this forever.

In the Department of Community and Transportation Services budget, we had $6,636,000 extra money. From that, we have already given about $900,000 to the communities, so we are not quite as rich as people say.

Mr. McDonald: I do not understand the Minister's point. I am making a general point. He is suggesting that the government is poverty stricken. I am not suggesting that they are a bunch of Richie Richs over there, either. However, I am saying that they have come into $14 million. They have characterized a large part of that money as a winter employment program. It turns out that there is not a lot of employment in some of those projects.

I am saying that the municipalities and a lot of other community organizations could have done a better job of identifying useful, worthwhile projects that would have gone ahead anyway. These jobs could have met Yukoners priorities. They could have been managed well, which could have resulted in a lot more employment. I think that is quite plain.

I will go on to the next subject.

The subject of low-cost land has come up during Question Period a number of times. I am more and more puzzled by the government's response to this. I will explain the situation, as I understand it.

There are a lot of people in this territory who live in trailer homes. The vast majority of those people in Whitehorse live in trailer homes but rent the site on which their trailer is located. There are literally hundreds of trailer owners in that situation. There are approximately 900 trailers in the Whitehorse area. In my own riding, there are three large trailer parks, and there are probably 1,500 to 2,000 people living there.

These people are facing a whole series of problems, but I will just deal with the land problem, to start with. The land problem is one where they are faced with a situation where they purchase a trailer through a personal loan. They cannot get a mortgage because they do not own the land.

Now, these folks purchased a trailer through a personal loan, which means that they borrowed that loan at a bank, usually at a high interest rate. It is usually a short-term pay back because it is a personal loan; it is not a mortgage. Usually we are talking about a period of three to five years. We are talking about high interest rates. That is the first problem that they face. The second problem that they face is that they must pay rent for a trailer stall. Nowadays, that can be anywhere between $240 and $275 a month.

Even though people are living in a trailer home, they are paying a fairly high cost just for their own accommodation. They are captive to those trailer parks because there is no land inside the City of Whitehorse that is available on which to move their trailers. There is no alternative for them. It means, in essence, because there is no true marketplace - there is no real choice for the trailer home owners - that they must simply absorb rent increases or whatever conditions are imposed upon them by the trailer park owners.

When the notorious evictions at Kopper King were taking place, it was obvious that there was an attempt to only relocate three trailer homes out of the whole complement, and it was like pulling teeth to find a single spot in an existing trailer park to which to locate those trailers. In fact, I think in only one case did that relocation take place, and it happened to be within the same trailer park.

There were not a lot of spaces available; in fact, there were no spaces available elsewhere. So, on the one hand, these folks are paying a high cost of living and have to face pretty stiff loan payments; they really have no choice with respect to the pad rental rates, and yet there is no alternative through which they can escape. There is not even another private rental trailer park where they could move to even if they wanted to; but what many of them really want is the opportunity to move their trailer home to a piece of land they own. What they need to do is move out of the trailer park and move onto a low-cost lot so that they may go to the bank and seek a mortgage for the trailer, which will do a number of things for them. If they own the lot, even if it is a low-cost lot, they can get a mortgage, which means that suddenly living becomes more affordable for them. They can amortize the payment over 25 years, like in every other mortgage. They can pay a better rate of interest because it is a mortgage.

The combination of lower interest rates and long-term payback means they can upgrade their trailer homes to meet modern code requirements and still, in some cases, pay less than they are paying now, because they have a personal loan financing their trailer and they are paying pad rental.

They need an alternative - land they can buy.

The Minister knows that when land development takes place in rural Yukon, quite often in the communities, expectations about what should happen is a lot less than it is in Whitehorse. People do not even think about establishing subdivisions in Haines Junction or Mayo, where one has to have curb and gutter, sidewalks, three inches of pavement, underground cable, underground telephone and underground electrical wiring. That does not even cross anyone's mind, because it is ridiculous.

However, in Whitehorse, for some reason, we only develop Cadillac lots. I understand some of the rationale about why the City of Whitehorse has historically resisted the development of so-called low-cost lots. I have taken the opportunity to speak to both the old and new city councils, and I think there is more than just an agreement in principle that they would like to provide some alternatives for people who want to purchase low-cost land.

During Question Period, the Minister said that one of the ways to reduce the cost of land is to make the lots smaller. That is right, but they do not have to be made so small that one breaches the setback bylaws of the City of Whitehorse. There are good reasons for some of those bylaws.

There are reasons for some of the bylaws, such as those that help prevent fires from spreading from one trailer to another. Most people can understand that. However, we are only talking about a separation between trailers of 15 feet - 4.5 metres. That separation means that one can develop lots right now that are smaller than the existing housing lots in Granger.

There is a combination of things that a government or developer can do to produce lower priced lots. They are developed all the time anywhere else; why can it not be done here? These people are desperate for an alternative.

Many of them know that they should be upgrading their trailers, because they know that, even though some of the code requirements may be difficult to justify, a large portion of them are purely safety related and justifiable. These people would like to have the funds to upgrade their homes.

One way that they can get the funds to upgrade their homes in an affordable way is if they can get a proper mortgage for their homes, not a personal loan with a three-year payback, but a proper mortgage with a 20-year or 25-year payback, like many of the rest of us have. Some people have calculated that, even if they were to upgrade their trailer, purchase a lot and reprofile the original loan they have for their trailer, they would still be paying less in payments on a 25-year mortgage than they currently pay and they would own their own home - upgraded.

This is a complicated area; we know that. We will have many discussions at some point or another about the situation about building inspections. We know that some of the restrictions are justifiable. However, we need an alternative. We must have land available that the people can afford and to which they can move.

Somebody has to talk to the city about whether or not it will, first of all, agree to zone property for this purpose. Somebody has to talk to the city about whether or not it will be prepared to amend bylaws to allow the removal of trailers from one part of the city to another. Somebody is going to have to talk to First Nations to make sure that this can be done on a fast-track, and that everybody acknowledges that land selections should take into account that this is a high priority for all governments. Once that is done, somebody is going to have to back the development financially so that it can take place.

This situation has been around for awhile. The Minister has not been in the portfolio that long, but the situation has been around for awhile and the government has been here for awhile. Consequently, in my opinion, something should be done this year.

I have taken the trouble to talk with both Kwanlin Dun and the City of Whitehorse about this, at least at the political level, and I can guarantee the Minister, here and now, that he is going to get no resistance at the political level from either of those governments. Kwanlin Dun sees a need and City of Whitehorse councillors acknowledge the need, as I understand it to be, and they will agree to this kind of development in principle.

Obviously the details have to be worked out, but that is why we pay good people to do that. We have to get the political accommodation first. That means that we have to have a political commitment first, which means that the Minister has to state that this is a priority, and it has to show up in the budgets.

Last year, I spoke to the Minister of Community and Transportation Services - I have the Hansard right here - and I went through virtually the same spiel that I went through just now, although I did not read it word for word. The Minister said that he would have officials speak to the City of Whitehorse, and that they would look at doing something soon. I made the point that the capital budgeting process is going to come up soon and monies have to be identified for the purposes of developing low-cost land, if we are going to go in this direction. I got the impression that there was no resistance from the Yukon government and that it was just a matter of having the meetings and getting the job done.

Now, I look at the budget for next year and there is nothing there at all. At this point, I do not want to stand here and keep on talking forever until somebody finally relents and says it will be done. If the government said that it disagreed, then I might be inclined to call it a day. However, if the government agrees in principle and then does nothing, I have a problem with it.

I would like to ask the Minister what the department has been doing, what the department is going to be doing about this, and particularly what the character of his discussions have been with the City of Whitehorse.

Hon. Mr. Brewster: In the first place, I would agree with the Member that it is a problem that has been there for quite awhile. I am not trying to pass the buck when I say there is now a committee looking into this. I will talk with other Ministers to see if we can get the committee to move faster.

I have spoken with only one person on the city council, but I did not get the same impression the Member opposite did. In all fairness, it was just a short conference after breakfast, and we did not get down to it seriously. They are on the committee, and there are some trailer people on the committee.

I would like to personally speak with the Member opposite. Perhaps he has some ideas we have not thought about. It is a problem that also involves the city and the First Nations. The Member says he has the First Nations on side, and that is one hurdle overcome. We are looking at this.

I want to see what recommendations the committee brings back. There are some experts on the committee, with more expertise on city bylaws and such things than we have. We have to see if the city is prepared to change bylaws and cooperate on this. We will have to look at all those things.

I certainly agree with the Member that there is a problem. I do not have the answer, but we are trying to find one. Perhaps the Member has some ideas for me that we can look at.

Mr. McDonald: I can do that. First of all, I would like to know where the problems are with the city. What are the reasons for the city's resistance, in the view of the department, with respect to developing low-cost land? I can tell him that, in my discussions with Kwanlin Dun, even though it is going through its land selection process right now, the First Nation acknowledges - this is historically acknowledged - that some land development is going to continue. As long as there is consultation with them as to location and type, they are not going to provide resistance. They have indicated to me that they would not only embrace some low-cost land development, but they would even like to be part of it, even to the point that if land could be set aside for this purpose, they would be more than happy to undertake the development of the land to ensure low-cost land is the result. That is the reading that I have received from that government.

I am interested in the problems that the city has identified in this area, because I have spoken to most of the councillors and to the mayor, and frankly, I have received no resistance at all.

Hon. Mr. Brewster: I did not receive any resistance. I just received a few questions about the building code standard and a few things like that. I think that the Member opposite would have to agree that we certainly have to look at these things for people's safety.

As I said, it was a short meeting, just as we were leaving. No one said no, but they asked about these things, because they must make the decision. If the land is in their jurisdiction, they will have to make a decision as to whether they are going to downgrade some of the inspections or change them for that area. I would be very concerned if the standards get too loose. There is no question that these trailers are a fire hazard. Any building - not just trailers - that has been around for 30 years is pretty well dried out and is a fire hazard.

As I said, the committee is working on it. I am certainly open to suggestions, and that is as far as I can go at the present moment.

Mr. McDonald: The limit these folks face is pretty extreme if looked at from one perspective. A lot of the trailers in some of the trailer parks actually pre-date 1974, and obviously standards have changed considerably. They may have been considered safe by government authorities back in the 1960s and early 1970s but, by our standards today, they are not. Even trailers that were constructed in 1978 and the early 1980s have construction standards that were surpassed by the building code requirements.

Some of the people are concerned that if an inspector sets foot on their property the inspector will be obligated to cite them for some pretty obvious code violations. I know of two cases in one trailer park where the inspector not only noticed the code violations but went so far as to put a "cease occupancy" notice on the door and decided, in all conscience, that those trailers could not be lived in.

The problem that other people on the same street face is that they think the trailer that has just had a "cease occupancy" notice put on the door is in better condition than their own, and they cannot afford to leave their trailer. They do not want to live in an unsafe trailer. They want to have a place to live. They have a commitment to this place that they can prove - there is a bank manager who wants to collect on the loan they took out to pay for the trailer.

If these homes are unsafe in many cases, then the people want an opportunity to extricate themselves from the situation, but they cannot do it living in a rental home park. They cannot do it because they cannot get loan funding that permits long-term payback and reasonable interest rates.

They need an alternative, which is the reason they need low-cost land. This is a huge problem in this city. I was told by the Yukon Housing Corporation that Whitehorse has the highest proportion of trailers per capita of any city in Canada. Given that most of those people live in rental parks, and given that most of those trailers are old, it means we have a serious problem to address. In my view, it is a high priority item, and complicated.

When we talk about the building codes, there has to be some flexibility to identify obvious code requirements that are life saving versus those that are nice but not essential. Some people purchase a trailer for, say, $10,000 or $15,000. It is their home. One has to remember that some of these people are making the minimum wage. It may not seem like a lot to some people, but it is a whole lot to someone who only makes $20,000 a year.

They purchase a trailer and hear that, by some people's standards, the trailer is so far beyond the pale that it is not worth upgrading. But they cannot just walk away from that loan. They are not like some of us who can stick the trailer in their backyard, put siding on it and use it as a storage shed. This is the only place they have and the only place they can afford.

They cannot abandon that investment. They have to keep it; they have to do something with it. They want to upgrade it to make sure it is safe. No one wants to live in a trailer that has unsafe wiring or a heating system that is going to blow up and set the place on fire in the middle of the night. No one wants that. They want to be able to improve their living situation without having to bring their entire unit up to code.

There are some code requirements that probably make sense in new construction when we should be trying to improve the situation for all new construction. However, for example, say there has to be an electrical plug in the diningroom, as well as in the kitchen and livingroom, which reduces the chance of people having extension cords in that area, or something.

It does not make a lot of sense for a person who does not have the money to install brand new receptacles in a dining room. This may sound picky, but this is a huge issue to them. They are being told that for them to significantly upgrade their trailer to meet, in their opinion, what are considered to be the essentials of building code improvements, they have to upgrade to meet all the improvements. Suddenly, what was a $3,000 or $4,000 bill to make their trailer safer, is now a $9,000 or $10,000 bill to do the whole job. What was once an affordable project has turned into an unaffordable one.

There has to be some hard discussion, without anyone giving anyone a guilt trip about whether or not we believe in safety. Everyone believes in safety; no one wants to compromise anyone's life. We have a serious situation. If inspectors have any reason to go into a unit anywhere, they are obligated to do what they understand their job to be. They have liability questions to face. I know that and they know that. That is why they say that the buildings have to meet nothing less than code.

At some point, we have to discuss this from a political perspective, which means a general policy perspective, from one elected person to another. What standards are we going to insist on in order to ensure the minimum safety requirements? How are we going to allow these people to extricate themselves from what is otherwise a hopeless situation, which, in effect, if left at the status quo, is more dangerous than allowing only minor improvements? Why would anyone doubt that there is a movement to start up a trailer park owners' association? Why would anyone doubt that it only takes one-half of a day to plunk 900 signatures on a petition before this Legislature to improve laws for trailer home owners?

It takes no time at all. It is no problem, because the situation is ripe for political action. People realize that, unless something is done, there is no hope for them. They need that hope. They saw their neighbours in Kopper King get evicted in short order, and with no protection. Incidentally, they have noticed - everyone in town has noticed - that there is no car wash sitting where those three trailer homes once were - all of that rush was for nothing. The plight of these people has only emphasized the problems that we face all over the city with trailer home owners. It was not just the eviction; the Legislature addressed that problem. It was the fact that they could not move elsewhere in the City of Whitehorse because their trailers were too old. They could not move to another place without upgrading the trailer to meet the code. There was no place to move to. All of these things suddenly blew up in everybody's face, and they asked what they could do about it.

We do not have people being evicted at this time to provide the impetus to do something, but we do have literally hundreds and hundreds - maybe thousands - of people who are worrying about the situation. They are saying, among other things, that they need alternatives. The committee that started up in January of this year is perhaps better late than never.

There are things that we could be doing now that would be good for everyone. I think that low-cost land is good for everybody. I think that if we have the political commitment, and if we can seek and get the political commitment from other people - the city counsellors and Kwanlin Dun - to make a move, we should, as Robin Williams would say, seize the day. We should not lose this chance. We should get some commitments, identify the land, invest the money - it is all recoverable through land sales - and develop the property. We should get people to start making those decisions right away, and then we can talk about some of the long-term things that we are going to do.

I am sure that the Housing Corporation will be talking about loans for home improvement, et cetera. There are other things that we should be talking about. We should be talking seriously in the Legislature about buyer protection rules. Why should real estate agents, or anyone, be allowed to sell a trailer to somebody who is typically a first-time home buyer and not tell them that the trailer is seriously below code?

All you ever hear in the advertisements about buying trailers is that this is a marvelous opportunity for a first-time home buyer. What they are not telling people is that they are not really a home owner; they are a renter with heavy baggage. They are in a worse position than a person who rents a downtown apartment if they are living in a trailer rental park. Why are they telling people that if they buy a trailer, there is a serious chance that if an inspector has any reason to set foot on the doorstep, they are professionally obligated to insist that one upgrade one's trailer by $5,000 or $10,000, or whatever it is.

There ought to be buyer-protection laws that tell people what they are buying. There should be an obligation to make the buyer aware. These are some of the long-term things that we should be thinking about. There is a chance right now - our best chance - even before the committee decides. If it takes this long to get a committee started, I do not know when it is going to meet and come to any conclusions. We are talking about a budget and we are talking about land development or planning for subdivisions that could take place this summer, which means that development could actually take place in the following year. All the details could be worked out. That is my pitch.

Hon. Mr. Brewster: It is a pretty good pitch. I agree with 90 percent of it, but a lot of it that the Member is jumping all over me for is the responsibility of the city. We have to get together. I do not have a problem with that. We have meetings, and perhaps we will make sure that that is discussed the next time we meet. I hope the committee does not take a long, long time. I get really sick of committees that take two or three years to get something decided, and find that by the time we get it, it is out of date. I would hope that they could speed this up. I will do my best to see that they speed it up and come up with an answer.

Ms. Moorcroft: I would like to follow up on the same issue of land pricing.

The Minister knows, because he was at the Association of Yukon Communities meeting in Mayo, that a resolution was passed stating their concern that there was a great deal of inconsistency in the appraisal and evaluation of all raw land in the Yukon. It was felt that the ad hoc and subjective system of land pricing of federal and territorial land ultimately discourages economic development.

The AYC was calling for a complete review of the Yukon lands branch, including inspections, enforcement and how raw land is valued. The AYC suggested that YTG work with the federal government and Northern Affairs and with municipalities to create a consistent approach to raw-land pricing in the Yukon.

The Minister stood up and responded to some of that. He spoke about the fact that there is more red tape between the federal and the Yukon governments, and that they are working on that. He said that they had to work with the federal government and the Council for Yukon Indians, as well as with the municipalities.

However, the land belongs to the people of the Yukon. I should remind the Minister that these land claims agreements that we have signed mean that the land belongs both to the First Nations and to all taxpayers and residents in the Yukon. The land should be available at a fair price.

Last session, we were dealing with some things that the former Minister said about working on land policies, and that all Members of the House were going to receive a discussion paper this past summer. We have not seen that discussion paper and do not know where it has gone. We have heard the Minister say just now that there is a committee. We do not know who is on the committee or exactly what the committee is going to study.

Can the new Minister tell me if we can expect any land pricing policy from the department? Also, what has happened with the study it is doing on land availability and land pricing, and with what issues is this new committee that he has talked about dealing with?

Hon. Mr. Brewster: The department is working on a land pricing policy document. I hope it will be ready in the very near future. I must point out, however, that we keep saying that everybody owns the land; I wish somebody would tell the federal government that because I do not think it believes that. The Yukon government owns less land than anybody else in the Yukon. The other land is federal, or it belongs to First Nations; I have no problem with that - it is their land. So, as far as land goes, we are down at the bottom of the stick.

The evaluation between what the Yukon government does and what the federal government does, from the few I have seen, shows a great discrepancy and I can see that, but I have no say in what the federal government does. We hope to get that land pricing policy out as soon as we can.

We are also working with municipal legislation. We promised we would change it around and get a draft out to the AYC, and I have been working on getting that out to them.

Ms. Moorcroft: The Minister just said there is a discrepancy between what the federal government does and what the Yukon government does. What I heard as a concern expressed at AYC is that there are discrepancies in what the Yukon government does - even within municipalities, there are discrepancies on pricing in the same general area, whether outside or within municipal limits.

The former Minister told us that this discussion paper would be ready in July or August, and I guess this Minister is being a little more cagey in saying it should be ready soon. What is happening with it? When is it going to be ready? Why is it not ready yet? Who is working on it? What is the story?

Hon. Mr. Brewster: The AYC gave us a very good document; it is very long and very extensive and we have to see where we can amend the legislation. Quite frankly, these things are not done overnight.

As for the pricing policy, for a long time it has been that the Yukon government recovers taxpayers' money put into developing that land. It depends on the soil situation, it depends on how far the power has to go, where the water is, where the sewer and so on is going to be - that all has to go into the pricing. Is it fair for other taxpayers to pay the shot for lowering the price of this land? It is a catch-22 situation. We recover just what we spend to develop the land.

Ms. Moorcroft: I have to differ with the Minister. It is not always the case that the land is sold for the development costs alone. In some cases land is sold for development cost, and in other cases, land is sold for what is deemed to be market value. I get calls from constituents all the time who have a lot of concerns about the fact that there is so little land available that the prices are artificially high. Can the Minister respond to the question that he has already been asked and tell us the political direction that has been given to the committee that is preparing a discussion paper on land pricing? With what exactly are they being asked to come forward with? What are they working on?

Hon. Mr. Brewster: They have been asked to come to a pricing policy that is reasonable and sensible, and yet does not require other taxpayers to pay for the development of other lots. It is a simple policy. If one develops a new subdivision, the people in the subdivision are going to have to pay the development costs.

Land outside of Whitehorse, I will agree costs less, because they do not necessarily require underground services. A lot of them do not have curbs and gutters. If you do not have those, the price comes down. Some of the smaller communities do not require them. The City of Whitehorse wants them. What the City of Whitehorse wants within the city, it has a right to require.

Ms. Moorcroft: Is there any kind of an interim progress report available from this committee? The Minister just said, in response to the representations for the Member for McIntyre-Takhini, that there was a committee being established to deal with the problems of, in particular, the trailer owners. Is that the same committee that is working on land pricing? The Minister is shaking his head, no. Perhaps he can elaborate?

Hon. Mr. Brewster: The one that Yukon Housing and the city is on, and I believe some trailer people are on, is one looking at the trailers that are a problem. The Association of Yukon Communities gave us a book, which is about this thick, with a lot of general ideas that they would like to see contained in the Municipal Act. We are still working on that and it has not come up in Cabinet. I have not seen it since the department started to work on it.

Ms. Moorcroft: Does the Minister know when he might see it?

Hon. Mr. Brewster: We would naturally like to see it after it has gone through Cabinet and they have made a decision on how they want it to work, but not before then.

Ms. Moorcroft: Does the Minister anticipate that might be before the end of the session, or does he expect it to be three or four months from now?

Does the Minister know what is happening with that committee?

Hon. Mr. Brewster: It is not actually a committee. The department is working on the recommendations from the AYC. That is the organization that provided us with the recommendations. The department is looking at amending the Municipal Act to reflect some of these recommendations. When there is a rough draft, it will go back to the AYC for a review. If the legislation has to be amended, or the committee wants it amended, it will be brought before the House. However, it

will not be brought before the House during this session - I can tell the Member that.

Ms. Moorcroft: It seems to me the Minister is bringing something else into the equation when he is talking about the recommendations of the AYC and a whole package of Municipal Act amendments.

Hon. Mr. Brewster: The deputy minister just corrected me on one thing. The land pricing policy is not from the AYC. It is a policy of the department. A draft has been given to us to amend the Municipal Act in several sections.

The land pricing policy is in the department's hands, and it has been instructed to bring a policy forward for the whole Yukon.

Ms. Moorcroft: They have been instructed to bring a land pricing policy forward to Cabinet in the near future. We have been told by previous Ministers in previous sessions that this was something that the department had been working on for some time, and we have been told that for some time. Can the Minister be specific at all about a time frame?

Hon. Mr. Brewster: I am not going to put a time frame on it; they have other things to do. This is one of the top priorities, so they should be trying to work on it and get it to us as soon as they can.

Ms. Moorcroft: It is a top priority, but they have other things to do. The Minister cannot give us any answers about when they might be coming forward with it. I just do not know about this. Can the Minister then describe for us some of the concerns that are being addressed in the proposed Municipal Act amendments? Can he tell us what they are working on?

Hon. Mr. Brewster: No. That is a private document that the Cabinet has not seen, and I will not discuss it.

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

Some Hon. Members: Agreed.

Chair: We will take a brief recess.


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

Is there further general debate?

Mr. Cable: There was quite a debate going on here one and one-half years ago on the job creation effects of dollars spent on school construction versus road construction. I think the Minister's predecessor put forward some numbers. There was an indication that these numbers were derived from the federal statistics bureau raw data.

Subsequent to that, I had called the Canadian Construction Association, or one of those organizations, and got a somewhat different picture. I sent a letter to the Minister's predecessor asking him to look into it.

Does the Minister know whether the Minister's officials have looked into updating the job creation value of a dollar spent on building construction versus a dollar spent on road construction?

Hon. Mr. Brewster: I am sorry. We have some information on the highways, but I do not have anything on the building. The highway expenditure for the 1994-95 capital program generated 12,535 hours of direct employment per million dollars of expenditure.

The 1994-95 highway reconstruction program, including winter works projects, will generate 298 person years of direct employment. I am sorry, but I have nothing on construction.

Mr. Cable: I am not reading these very well. Are these actual jobs or ones that have been calculated from the charts, based on Statistics Canada?

Hon. Mr. Brewster: This is data that we collected from the contractors on actual jobs.

Mr. Cable: Between now and tomorrow, I will sit down and figure out if those numbers correspond with those that were released some time ago, which reflected that there was one person year generated for every $130,000 of capital spending on roads and one person year for every $160,000 of capital spending on building construction.

Is the Minister saying that there is no comparable job-creation data for building construction or did I misinterpret that?

Hon. Mr. Brewster: My department does not have it. We could check to see if anyone else does.

Mr. Cable: Has the Minister's department now discounted the original ratio given to the House one and one-half years ago, based on the Statistics Canada figures? I believe the Statistics Canada figures were gross figures, relating to building construction across Canada versus the number of people thought to be working in these various trades.

Hon. Mr. Brewster: We are not arguing with that. The data on the highways is our own; we did not make any on buildings.

Mr. Cable: Could the Minister ask his officials to check on whether or not anything proceeded from the correspondence I had with regard to my conversations with the Canadian Construction Association?

Hon. Mr. Brewster: We do not actually do construction, but I will see if any of the other Ministers have that information and bring it back for the Member.

Mr. Cable: We talked briefly, the other day and tonight, about the Municipal Act revisions. Who is doing the revisions? Are they being done in house or has a consultant been hired?

Hon. Mr. Brewster: We do not have a consultant. It is being done in house, with the help of the AYC, which brought the original recommendations to us. The AYC has seen some of the drafts that we have produced so far.

Mr. Cable: I am misunderstanding what I thought the Minister told me the other day and what he told the Member for Mount Lorne.

Is the AYC in this process on a regular basis or are its members simply looking at drafts from time to time?

Hon. Mr. Brewster: They compile the issues they want to change and give them to us. Then the department looks at the act as it is now to see where the amendments can be introduced. Then they talk with the manager of the AYC. He is consulting with the department. The amendments will be presented to the AYC before they go any further.

Mr. Cable: Are there any written terms of reference given to the Minister's drafters - the people who are preparing the legislation?

Hon. Mr. Brewster: What we are using is the package given to us by the AYC. The department looks at it to see if the package is compatible and legal.

Mr. Cable: I suppose that is a good point. Is the Minister willing to table that package so that we can see what is going on?

Hon. Mr. Brewster: I would have to ask AYC if that is all right with it. It is their document, not mine.

Mr. Cable: Okay, prehaps the Minister would do that. Is there any other input besides the AYC, or is it simply the AYC and the Minister's drafters working on this project?

Hon. Mr. Brewster: That is the original one, but after it has been through Cabinet, it will go out, in draft form, to the public to look at before it is finalized.

Mr. Cable: I have one specific point. I gather Alberta has looked at divesting municipalities with residual powers. At present, municipalities have only those powers specifically given to them. If I have my wires uncrossed, I think that Alberta has at least thought about, and perhaps legislated, residual powers to the municipalities. Is this being considered?

Hon. Mr. Brewster: A person from Alberta attended the AYC meeting in Mayo. He pretty well told us what Alberta's legislation was. I think ours was more like what the AYC wanted, although it does have some changes it would like to see made. Being a rural member, I agree that the municipalities should have more authority. That seemed to be the one that was most important - to have a little more authority to make their decisions. As a rural Member, I agree with it and would fight for it.

Mr. Cable: I just want to be sure that I understand where the Minister is going. Is the Minister saying that the draft the Minister's officials will be working on with AYC will then be put out to the public? If so, when does he anticipate that this will be done?

Hon. Mr. Brewster: I am going to have to say that I do not really know. It has to go through Cabinet before it is put out to the public to be reviewed.

Mr. Cable: Does the Minister anticipate there being some sort of discussion paper, or is it simply going to be tabled in the House and debated?

Hon. Mr. Brewster: No, it will not actually be a discussion paper. The actual regulations will go out to the people to see if they want changes before the document comes in to be legislated.

Mr. Cable: On another topic, the Members speaking previously tonight have talked about land costs. Many people have talked to me about their inability to understand why land that starts off at virtually a zero cost ends up costing so much, in relative terms. Let me ask this question: is the Minister satisfied that, when he puts the property out for sale on a cost-recovery basis, all of the costs have been ruled in? For example, has all of the financing been properly amortized, and has all the government planning costs been rolled into the cost of the lot?

Hon. Mr. Brewster: Regarding the financing, there are no finance charges on it. Regarding the planning, we think that all of these things are being done properly, but they are doing an audit now to see that we are getting the full amount from it.

Mr. Cable: I think that one of the points that the fellow who was up here last week or the week before from the National Home Builders Association was making was that the government puts costs into the land, and then there is no notional interest charges on them, so there is unfair competition with the private sector because, of course, the costs are not immediately recovered. There is a delay from the time the costs are loaded in by the government and paid for, and the time the money is received. There is not really a free interchange with the free market. Does the Minister agree with that proposition?

Hon. Mr. Brewster: It is true that we do not do the financing, but there is interest. However, the Home Builders Association has asked us to put out a few more lots in a block area, and the department is looking at that right now.

Mr. Cable: We have gone over this, I think, in the previous debates. What is roughly the percentage of the government's cost versus the private contractor's cost in the development of a residential subdivision? When I say the private contractor's cost, I mean the people who go in and put the pavement down and the sewer lines in, versus the costs of the government for the planning and surveying and those things done by government officials.

Hon. Mr. Brewster: We are guessing at this because we do not have the exact figures. Probably the private contractors' charges would be about 90 percent, and the extra 10 percent would be the government's cost.

Mr. Cable: We have had one experiment with the private sector taking over a subdivision. That was the Pineridge subdivision, where the land was transferred en masse. I suppose practically all of the planning and construction was done by the private sector.

Did the Minister view that development as a success or did he think that the lots were probably a little over priced?

Hon. Mr. Brewster: I think they probably were a little over priced.

Mr. Cable: That is a sentiment shared by quite a few people. Maybe one of the reasons was that two Pineridges were not going on at the same time, so there would be competition. If the Minister repeats this process at some time, is he open to ensuring that there are two Pineridges going on at the same time, so we do not get one group of people marauding the public treasury and not really effecting the goal of lowering lot prices?

Hon. Mr. Brewster: I can assure you that I will be very cautious. If we do any more developing, it will be on a small scale. It will not be on a large scale, to start with.

Mr. Cable: The Minister is talking about an "if". Is this a viable possibility: the development of two or more subdivisions at the same time by the private sector?

Hon. Mr. Brewster: It is something that could be looked at, if we get the number of lots up to where we could do these things. By next fall, we hope to have a few lots left over, so we may be able to do something like that.

Mr. Cable: I have been up here for 25 years. The chronic complaint has been that lot prices developed by the government have been too high. That may be a misapprehension, but the free market has never really had a shot at beating the prices down. What does the Minister see the government doing in the future? Does he see it just sort of plodding along the way we have for the past 25 years, or experimenting with another way of trying to lower lot prices?

Hon. Mr. Brewster: I do not know if we are just plodding along. By next fall, we hope to have a fair amount of lots on the market. I also hope to have the land pricing policy completed. Perhaps this will help reduce the cost of the lots, but we must recover the taxpayers' money that goes into them.

Mr. Cable: Quite so.

Municipalities periodically ask for the transfer of large blocks. Is the Minister of a mind to accommodate them further in the transfer to the municipalities in order for them to develop subdivisions?

Hon. Mr. Brewster: Yes, I am, but I think that most of the smaller municipalities find it is almost cheaper for us to do the surveying and get the lots started, because we have the expertise and the surveyors, and they do not. The City of Whitehorse could be in a different position because they have engineers, but most of the smaller municipalities do not.

I am quite prepared to turn land over to them, but I think most of them would probably want us to develop it. Every year, we develop a certain amount of property in each municipality.

Mr. McDonald: On the last point, one suggestion that has been made by municipalities is that, if they were to assume the responsibility for land development in their community, the one thing for which they would have to be covered is the upfront cost of developing land. They can manage the development, but they can hold land in inventory for years less easily than can the Yukon government. Right now, if the government develops a subdivision and does not sell all the lots for 10 years, it has to hold the development costs for 10 years, and many municipalities are not in a position to do that. They would perhaps be more than prepared to take on the responsibility of land development if they had the funding for land development fronted for them, on the agreement that once lots were sold they would repay the Yukon government.

That is one alternative for the Minister to consider, and I offer it as advice.

I have a couple of questions about land pricing, then I will return to trailer land for a moment. Did the Minister say the direction he has given to the land-pricing committee is that he is going to be insistent upon a pricing policy that provides for full cost recovery for residential land development? Did I hear that right?

Hon. Mr. Brewster: That is the basic idea, but it does not cover the financing.

Mr. McDonald: So, in terms of the arterial and central services that support new land development, are these also costs that are going to be transferred to the land purchaser in every case?

Hon. Mr. Brewster: They are in Logan and in that area. It has all been transferred to the lot price.

Mr. McDonald: I know for a fact that, despite everyone's best intentions, there has been a case in the past where certain central services have been written off. This is done on a case-by-case basis when it appears that the final lot price in a particular subdivision is perceived to be way too high, so suddenly people are of the view that certain central services and arterial roads could be written off in the name of general road development, or something.

I am trying to determine whether or not there has been a change in pricing policy here in the sense that all those central services - pump stations, roads like Hamilton Boulevard, and all the support infrastructure - will be charged to the lots, with no exception, or will there be exceptions depending upon lot price?

Hon. Mr. Brewster: If we got into the position the Member says happened before, and which may happen again, Cabinet would have to make the final decision.

Mr. McDonald: I was just wondering whether or not there was a big change in policy. I think I understand what the Minister is saying.

In terms of low-cost land in Whitehorse, can the Minister tell us - he can bring the information back tomorrow - what has been identified by the planners as potential sites for further trailer home parks, and so on? Can we get some sense of what has been done? There must have been something.

Hon. Mr. Brewster: Some of that information will have to come from the city. We can try, but I cannot promise it for tomorrow. We will draft it up as soon as we can.

Mr. McDonald: I can certainly wait until Monday, or so. If the Minister can do it by tomorrow, that would be great.

Can the Minister tell us about the committee that is reviewing the trailer home owners' situation? Who is on the committee?

Hon. Mr. Brewster: I thought I had mentioned that a couple of times. I will try again: the Yukon Housing Association, the City of Whitehorse and a group of people whom I suppose we could call the trailer association.

Mr. McDonald: Is the Minister saying that the Yukon Housing Corporation, the City of Whitehorse and this new trailer association that is having its founding meeting tomorrow night are on this committee?

Hon. Mr. Brewster: They are people who were put there before the association formed last night. There are several people who represent that area, and I am not sure if they are members of the trailer association or not.

Mr. McDonald: Can the Minister tell me precisely who they are, by name? Would he bring that information back tomorrow?

Hon. Mr. Brewster: Yes, I will get that for you.

Mr. McDonald: I am puzzled about how they have chosen the trailer home owners; I will be fascinated to see who they are. Is there no one from Community and Transportation Services on the committee?

Hon. Mr. Brewster: It is not primarily our committee, but we do sit on it from time to time.

Mr. McDonald: Is there another category of committee members? I am just trying to figure out who is on the committee. I just want to be sure that the various interests are represented. Is there a lands branch person or a building inspections person on the committee? Who is on the committee?

Hon. Mr. Brewster: It is not actually my committee, but I will find out the information for the Member. It is a committee that was formed between the Yukon Housing Corporation, the City of Whitehorse and the trailer home representatives. I will get the names for the Member.

Mr. McDonald: The only committee that I was aware of met, at one time, to discuss the Kopper King situation. It included trailer home owners, the Yukon Housing Corporation, someone from inspections from the City of Whitehorse, someone from planning from the City of Whitehorse, someone from the lands branch of Community and Transportation Services, the president and the secretary of the Yukon Party and me. That is why I want to know precisely who is on the committee. I want to know if the committee has credibility or if it is a political committee. I would appreciate it if the Minister could have that for me tomorrow.

I would strongly recommend that the inspections branches from both the city and YTG be present, because I do not see how any long-term resolution can be reached without some agreement on inspection services and policies. Obviously, those people have to be there and be part of a solution. For them not to be present would simply mean that the committee's work is incomplete and that will delay a final resolution. So, I would recommend that the Minister have those people there. I would also recommend that a representative from the lands branch be present, because I believe that any land development that takes place within the city will involve the lands branch, either to front the costs, to provide the land, or something.

Clearly, I would recommend that either someone from the Land Claims Secretariat or someone who can ensure that there are no problems associated with the Kwanlin Dun First Nation be present. Otherwise, a lack of communication between the committee and the Kwanlin Dun, while the Kwanlin Dun is engaged in land selections, could create an insurmountable problem - a problem that may not currently exist. So I would recommend that they be there.

Does the Minister agree that perhaps Community and Transportation Services should have more of a presence on the committee than appears to be the case at the moment?

Hon. Mr. Brewster: On the question of whether I am trying to get cheaper land value, we are working on it.

With respect to the other question, I will talk with the Minister who formed that committee and take the Member's recommendation back to him.

Mr. McDonald: Can the Minister provide information tomorrow on the committee membership, and that sort of thing? I can bring some information to the meeting tomorrow night. There would be no point in bringing it up in Question Period if we can get the Minister to volunteer it in Committee. Will he do that?

Hon. Mr. Brewster: Yes, I will do my best to see that it is done.

Mr. McDonald: Can he also find out from whoever is holding the meeting, precisely how many meetings have been held by the committee, who attended and what the terms of reference of the committee are so that we can get clear information?

Hon. Mr. Brewster: Yes, I will.

Mr. McDonald: That is fine.

There is another alternative to developing land within the city, and that is to develop land outside the city. Has the department given any thought to developing low-cost land outside of the city limits but within commuting distance of Whitehorse?

Hon. Mr. Brewster: Any land developed outside the city would probably be on bigger lots, and this might increase the cost considerably.

Mr. McDonald: Is there a rule about bigger lots?

Hon. Mr. Brewster: The current rule is that in most cases it will be 15 acres. If we went outside the city, with the cost to get electricity out there - and I presume they would want sewer and water - the cost would increase tremendously, compared to smaller lots inside the city.

Mr. McDonald: I must have misheard the Minister. Did he say the minimum lot size outside the city boundaries is 15 acres?

Hon. Mr. Brewster: The Whitehorse periphery area regulation calls for 15 acres.

Mr. McDonald: It seems pretty large to me. I will pursue that tomorrow, after I have thought about it a bit. In terms of providing lower cost land options, is the government thinking about providing minimum sized lots in some areas outside Whitehorse, so the cost can be held down?

Hon. Mr. Brewster: If we develop an area, we usually put electricity and roads in. I think I could probably say that we would be a little cautious. I recall the fight about Mendenhall, where we spent a lot of money. We were supposed to put in a four-wheel drive road, and it ended up with a very nice, wide road, which the school bus was able to access. The costs went up and up. The taxpayers have to pay for this.

Mr. McDonald: I know the Minister will never let anything like Mendenhall happen. The idea behind Mendenhall, of course, was that there was ostensibly a desire for people to homestead and it was not until after they purchased the lots and moved onto them, and made it clear that some of them wanted to put really nice weekend retreat homes on them and that they had no intention of homesteading at all, in the old, romantic sense of the term. They came back and got a couple of MLAs to fight their cause for them. The government did end up doing the homesteading for them, at public expense. We do not want any more Mendenhalls. I think we can agree on that point.

Nevertheless, the Minister realizes, I am sure, that there is some need for lowest cost possible land. The Member for Riverside has brought up the issue of perhaps encouraging a number of development possibilities - private sector development or government development - all with the view to increase competition.

Certainly, as we both know, the level of servicing does affect the costs. Can the Minister provide us with a list of projects that the lands branch has identified that could be characterized, possibly in the near future, as lower cost land development?

Hon. Mr. Brewster: There is one we are doing in the Mount Lorne area. It involves the development of eight rural residential lots, and they will cost approximately $160,000.

Ms. Moorcroft: Are the eight lots the Minister was just referring to rural residential lots in the Mount Lorne area, or are they the agricultural lots?

Hon. Mr. Brewster: They are the rural residential lots.

Ms. Moorcroft: That raises an issue that we will be debating for a longer, rather than a shorter time, regarding what is happening with the Hamlet of Mount Lorne and Carcross Road area plan that the former Minister had assured us would go through the House quickly. We have not seen anything happen with that yet.

Before I open up that issue, I just wanted to comment on the Minister's statements regarding Pineridge. I was interested to hear the Minister state that he thought the profit margins there had been too large. That is certainly a view I have heard expressed by my constituents in the Pineridge area.

The Member for Riverside suggested that the government make a commitment to ensuring that there are at least two developers working at the same time if an area was being developed. That may be a way of bringing the price down in a free market.

I would like to ask the Minister for a different assurance: that there would be lots available at cost for owner/builders. There are a lot of people in the Yukon who want to design and/or build their own homes, and would like to be their own developer.

Does the Minister support making land available at a raw-land price or at a development cost price for owner/builders to build on, so that they would not have to pay a developer that extra profit margin?

Hon. Mr. Brewster: I agree with the Member for Mount Lorne more than I agree with the gentleman from Ontario, who said that everyone wants contractors to build their home. I do not think that is the situation in Yukon at all. A lot of people like to build their own homes. I agree with that principle. Even if they buy a lot, they can still build their own home. According to him, contractors do it all outside.

Mr. Chair, I ask that you report progress.

Chair: Are you agreed?

Some Hon. Members: Agreed.

Motion agreed to

Hon. Mr. Fisher: 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. 4, First Appropriation Act, 1995-96, and Bill No. 3, Third Appropriation Act, 1994-95, and directed me to report progress on them.

Speaker: You have heard the report from the Chair of Committee of the Whole. Are you agreed?

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

Hon. Mr. Fisher: I move that the House do now adjourn.

Speaker: It has been moved by the Hon. Acting 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.