Wednesday, March 8, 1995 - 1:30 p.m.
Speaker: I will now call the House to order. At this time, we will proceed with silent Prayers.
Recognition of International Women's Day
Hon. Mr. Phillips: I rise in the House today to recognize March 8 as International Women's Day. The origins of International Women's Day come from the labour struggles of women in the late 19th and early 20th centuries. International Women's Day is a day to celebrate and reflect on the status of women's progress and consider future actions that are to be addressed.
Given the comments of young women in the A Cappella North report, which was tabled yesterday, I think it is important today to reflect on the status of young women's lives in our society. When I talk with women in my age group, they say they can relate to the concerns the young women raised in that report. For many, it brings back memories of experiences they faced as young teenage women.
Today is a fitting time to reflect on how much progress women have made toward equality, and yet recognize at the same time that there is still a distance to go. We must all work together to ensure that future generations of young women can participate to their full capacity in an equitable, safe and supportive environment.
Speaker: We will proceed with the Order Paper.
Are there any Introductions of Visitors?
Are there any Returns or Documents for tabling?
Are there any Reports of Committees?
Are there any Petitions?
Are there any Introduction of Bills?
Are there any Notices of Motion for the Production of Papers?
Are there any Notices of Motion?
Are there any Statements by Ministers?
This then brings us to the Question Period.
Question re: International Women's Day
Ms. Moorcroft: I would like to recognize International Women's Day by asking some questions of whichever Minister feels capable of promoting women's equality today. That could be the Minister of Education or the Minister responsible for the Women's Directorate, based on yesterday's Question Period.
The A Cappella report confirms that girls are scared because they know the risks. I know quite a few girls who have been attacked or raped and no one has said anything because they are scared.
Can the Minister give us some information about the group working on rape crisis issues? Who is involved and what resources is this government providing?
Hon. Mr. Phelps: I do not have the list of the individuals who are involved and the amounts right here, but I can bring that information back for the Member.
Ms. Moorcroft: The community, the schools and families all have to work together to make life safe for all women. I would like to ask the Minister why Social Services or the Yukon Family Services Association were not involved in the A Cappella project?
Hon. Mr. Phelps: I can check out for the Member why they were not involved in the project. I have not heard any complaints from any organization or group, nor criticisms of the report, based on who did it. In fact, it is being considered by some to be a very good report, and there was close cooperation with the Department of Education, the Yukon Teachers Association and the Women's Directorate to compile the information that was gathered on the report.
Ms. Moorcroft: I think the A Cappella report is an excellent report, and I would like to quote something that one of the young women said, "It's a man's world. I said that in social studies, now I keep my trap shut. Female Prime Ministers don't last very long.''
I would like to ask the Minister responsible for the Women's Directorate again, today, how he intends to assess his government's progress to help young women lead safer and more equal lives?
Hon. Mr. Phillips: That is more of a question that could be addressed in general debate on the Women's Directorate as it involves a very long answer.
The Department of Education is looking at programs in the schools and at Yukon College now - girls exploring trades. We are continuing the program "Women do math". There are "Our Land, Too - Women of Canada and in the Northwest" and the accompanying video, "A Century of Yukon Women", which were co-produced by the Women's Directorate and the Department of Education. There are all kinds of programs in junior high schools about family violence and violence against women, and all those programs are carrying on in the government now, with respect to young women in the schools.
I would be more than happy to compile an overall comprehensive list of the programs and bring it back to the Member when we get into debate on the Women's Directorate.
Question re: International Women's Day
Ms. Moorcroft: I did not ask for a list of programs. I asked how they were going to measure future progress.
International Women's Day was created out of protest and political activism. Women are still fighting for better jobs, better wages and better working conditions. I would like to ask the Minister responsible for the Public Service Commission about improving women's status in the Yukon government workforce.
There are fewer women in senior management since the Yukon Party took office. Why?
Hon. Mr. Phillips: I suppose there are several reasons for that. In some cases, women have left senior management jobs. In other cases, women have not applied for senior management jobs. I can get back to the Member about why there are actually fewer women there now. It is a very small number. That number fluctuated with the previous government; it will fluctuate with this government, and it will fluctuate with future governments as well. When you are talking about small numbers of people in senior management positions, the percentages, in terms of decreases or increases, are large.
Ms. Moorcroft: There are fewer women in management and in scientific and technical jobs. I know that women are qualified for these jobs. What is the Minister doing to increase women's participation in what are known as male-dominated occupations?
Hon. Mr. Phillips: The lack of women in the area of scientific and technical occupations is, I believe, attributable to lack of applicants. To solve that we are increasing support for training and development initiatives for women at the departmental level. For example, we are supporting training for women studying in non-traditional fields, and preparing women to move from clerical positions to non-traditional and management positions.
Ms. Moorcroft: I do not find that this government has provided more support for women. The employment equity policy was adopted in order to eliminate workplace discrimination. This government does not seem to consider that a priority. When can the government provide the 1993-94 employment equity report and up-to-date employment equity plans for the government?
Hon. Mr. Phillips: I will be providing that in the very near future. As I said before, it varies, and this government is proceeding with the very same plan that the previous government used. It fluctuates from month to month and year to year.
Question re: Special operating agencies
Mr. Cable: I have some questions for the Minister of Government Services on special operating agencies. On January 16, I asked the Minister whether or not he had received the union's reaction to the introduction of special operating agencies. He said, "I have not been made aware of any specific concerns. I know that it was discussed with the union. There was concern about whether or not it was privatization or downsizing. It is not that."
From the debate over the last couple of days, would the Minister again confirm that the concept and introduction of special operating agencies has nothing to do with privatization or downsizing?
Hon. Mr. Nordling: Yes, I can confirm that for the Member.
Mr. Cable: The Minister also stated on January 16 that the special operating agency concept could be moved into departments that deal directly with the public if these three government units now being converted to special operating agencies improve efficiency and are cost effective. This appears to be one of the tests to be used for privatization, judging from the debate that has taken place over the last few days.
Would the Minister confirm that where the special operating agencies meet the test of improving efficiency and cost effectiveness that this government's policy will be to leave those government units in the public sector?
Hon. Mr. Nordling: I am not exactly sure what the Member wants for an answer to his question.
Some Hon. Member: (Inaudible)
Hon. Mr. Nordling: The Member for Mount Lorne says how about the truth. I do not know whether she is accusing me of lying in the past or now, or being misleading, but if she is, perhaps in her turn, she can stand up and make that allegation.
Some Hon. Member: (Inaudible)
Hon. Mr. Nordling: Yes, I agree with the Member. She is telling me that I should not be defensive. That point was made yesterday; I made it to the Leader of the Official Opposition.
With respect to special operating agencies, this government is undertaking a pilot project where we are testing them to see if they work and make sense. The federal government and other provincial governments are trying this concept to make government departments more efficient and cost effective.
That is the goal of the special operating agency.
Mr. Cable: As the Minister has suggested, the special operating agencies have initially been introduced into those government units that supply services within the public sector, rather than supplying services to the public.
What government units, if any, that supply services to the public has the Minister targeted for putting special operating agencies into, if the concept proves successful?
Hon. Mr. Nordling: I do not think that any are specifically targeted at this time. When we considered where to introduce them, there was a whole range of suggestions made - everything from the Lotteries Commission to the advanced education branch to the heritage branch of Tourism. Until the concept is proven to work here, we will not know where SOAs will go next.
It is important that a department or branch that it is suggested become an SOA wants to and is willing to work with that concept.
Question re: Special operating agencies
Mr. McDonald: After we began to think that the government's position on contracting out work was becoming clearer, the Minister of Government Services held a press conference yesterday. Now the government's intentions have, once again, been plunged into obscurity.
What was the purpose of the press conference?
Hon. Mr. Nordling: There was no press conference. The department wanted to give the media access to the Queen's Printer, specifically to discuss the DocuTech 135, which has been of interest and which has been debated in the House. After the media met with the department and was given information about what we were doing at the Queen's Printer, they were given access to the Minister to follow up if they had any other questions.
Mr. McDonald: It is that follow-up after the media had the opportunity to see the government's crown jewel that I am most interested in. The Minister was reported to have said that if there is a service that the government cannot do efficiently, that it would contract it out. If Norcan Leasing could do it cheaper, the government would look at not having a fleet of vehicles at all. What was the Minister getting at?
Hon. Mr. Nordling: What I was getting at was what we are trying to do in the government. We are trying to serve our clients better, which are other departments, and we are trying to serve the public better. We want to do it in an effective and a cost-efficient manner. We have a full vehicle fleet that we spend a lot of money on each year. We want it to run in an efficient manner.
If it is cheaper for us to lease vehicles from, for example, Norcan or Tilden, we would have to reassess what we are doing in our operation.
Mr. McDonald: I am confused as to what the government's intentions are.
The briefing for MLAs on December 2 indicated that if we are going to be clear about anything, special operating agencies were not contracting out nor privatization. Certainly, if one were to lease vehicles through Norcan, one would be giving up the ghost that one could do a public service efficiently; one would be suggesting that a private company could do it better.
What is it going to be? Is it going to be privatization and contracting out of services to make the government operations more efficient or are they going to pursue this rather Tony Robbins-like, flaky idea of special operating agencies to promote efficiency within government?
Hon. Mr. Nordling: It is clear that we are going to pursue the special operating agency method to see if we can improve efficiency and effectiveness in government. I expect that it will give us accountability, so that we can measure and compare our costs of service. That is what we want to know. We want to know that we are not wasting taxpayers' money, and that we are spending it efficiently and providing a service that every government department needs and that the public demands.
Question re: Special operating agencies
Mr. McDonald: I am not sure I understand entirely the government's concept of cost efficiency, because in the case of fleet services, the government is proposing to spend a record public investment of an extra $1 million to build the government's own fleet this coming year, which it claims is going to make the fleet more cost efficient. It is also going to be spending $1 million more in copying services, and that presumably will make the copying services of government more cost efficient. I am not trying to understand that concept, but I am trying to focus again on the question of privatization.
The Minister mused that the government would look at Norcan Leasing to provide fleet services, yet the special operating agencies are supposed to have nothing to do with privatization and contracting out. How can the Minister reconcile those two positions?
Hon. Mr. Nordling: The standard by which we measure ourselves is what can be done in the private sector. The Member is dead wrong when he is talking about us spending $1 million more on photocopying. We are talking about a lease agreement and a management services agreement over seven years, and we expect that that expenditure will save photocopying charges, not increase them. We have over 250 convenience copiers in this government that are making thousands of copies a day and are costing the taxpayer far more money than they should. With a machine at the Queen's Printer, we expect it to reduce the overall cost, not increase it.
Mr. McDonald: This is the wonderful land of double-speak. However, I am again trying to focus on the question of fleet services and the contracting out of fleet services. The Minister mused that if the government could not provide a fleet cost efficiently, they would contract it out and perhaps use a company like Norcan to pick up the service. That is privatization and contracting out. Special operating agencies are not supposed to be engaged in contracting out and privatization. How does the Minister reconcile those two positions?
Hon. Mr. Nordling: I thought I had made it very clear to the Member that this government has chosen to operate the fleet vehicles as a special operating agency. We will measure the cost per kilometre to run the vehicles. We will measure customer satisfaction when we assign these vehicles, and we expect that we can run it as cheaply, or more cheaply, than leasing from the private sector.
That has been the decision of this government. If that was not the decision of this government, we would not be purchasing new vehicles; we would not be developing the special operating agency concept. We would simply sell the fleet and lease vehicles from the private sector. I cannot emphasize enough for the Member that we have decided not to do that.
Mr. McDonald: The Minister's musings about contracting out and privatization, because he wanted to sound like a right-wing conservative, were not really anything that he intended to have happen; he simply wanted to explain how special operating agencies would work - am I right about that? He wanted to help justify how the government is going to spend more money in these areas, particularly in fleet services, buying millions more dollars' worth of cars, and he wants to demonstrate how this is all in aid of making fleet services more cost- efficient - is that right?
Hon. Mr. Nordling: Yes. I think that the Member is catching on. What it is all about is accountability and comparison, so that we know what it is costing us.
Question re: Xerox, business plan development
Ms. Moorcroft: I have some questions about the government's latest public service fiasco, which I would like to address to the Minister responsible for the Public Service Commission. The government is paying Xerox Canada Ltd. the sum of $420,000 to hire a manager for three years. Why is the government paying a Xerox manager to design government printing operations?
Hon. Mr. Nordling: The preamble simply is not true. The agreement with Xerox is for complete business services; it is not simply to hire an individual as manager. An individual to work with the Queen's Printer is just a small part of that contract. We have brought in private sector expertise to help design the business plan for the Queen's Printer. When that comes about, we will table the business plan in the House. Ongoing evaluations of the Queen's Printer and the business plan will be carried out. That is what that portion of the agreement with Xerox is all about. It is not, by any means, simply hiring an individual to work at the Queen's Printer.
Ms. Moorcroft: I know that this government has no respect for public service workers, but it has taken a new approach to keeping them in line. Perhaps the Minister can tell me exactly what it is that the manager, hired through Xerox Canada Ltd., is doing in the department? Is it the Queen's Printer, or is it Xerox Printing Services?
Hon. Mr. Nordling: It is the Queen's Printer, assisted by the private sector expertise of Xerox.
To answer the Member's preamble that this government has no respect for the public service, that is entirely untrue. We respect the employees. They work very hard for us and they do an important job. It is the Members opposite who attack them individually in this House. It is not this government that shows a lack of respect for the people working for this government.
Ms. Moorcroft: This is ridiculous. That government demonstrated loads of support for the public service when it legislated a two-percent wage rollback. I would like the Minister responsible for the Public Service Commission to answer a question.
What is the plan for the public service? Will any other government departments have a private business manager in charge of reorganizing operations and ensuring the department takes a more business-like - privatization - approach?
Hon. Mr. Phillips: The government will be bringing in private sector people from time to time, as it has done in the past, for training, for developing plans and to assist people in government. We will continue to bring in, from time to time, private sector people for their expertise to help government become more efficient and effective.
Question re: Special operating agencies
Ms. Moorcroft: I do not know what kind of announcement that was. When will the government bring in private sector people to help with more business-like plans?
Hon. Mr. Phillips: It is like the Member just arrived in the House this morning. Our government, and the previous government, have contracted services out to the private sector for years. We have also brought people in to give advice on various things, to develop studies, do reports, and make recommendations for government to operate more effectively. That has always been done. I do not know where the Member has been.
Ms. Moorcroft: This is the Minister responsible for the Public Service Commission. He does not even understand the difference between contracting out and bringing business people into the government.
We had a briefing where hoards of people came in to say that special operating agencies were not contracting out, and that this government would not contract out or privatize.
Now we have the Minister saying the government is going to bring in private business people. What departments is the government putting these private business people into and for what purpose?
Hon. Mr. Phillips: We will bring private sector expertise into any government department that requires advice on various programs and programs that we are running. This is something that the government has been doing all along - the previous government did it. The government brings people in to give advice about the various programs and about how to run the programs more efficiently and effectively. There is no change in how we bring people in to train and upgrade our public sector employees. That is what we are doing and it has not changed.
Ms. Moorcroft: The government is bringing in private sector people to run government departments. This Minister has just demonstrated his lack of respect for the public service by saying they are going to keep bringing more private sector people in where departments require advice on various programs. Into which departments is the government going to be placing private sector advisors?
Hon. Mr. Phillips: A few weeks ago there was a list of contracts tabled in this House. I would suggest to the Member that she look at the contracts issued to people who provide training services, expertise and assistance to government. I would suggest that Members read it over.
This government thinks that the private sector can offer some valuable advice and can be of assistance to the public sector. Our employees demand that we provide upgrading and training and, in order to provide these services, we have to bring in private sector expertise to provide these services.
Question re: Xerox DocuTech 135
Mrs. Firth: This is like shooting fish in a barrel. I have a question for the Government Leader.
We have debated in this House, at great length, a very controversial issue. This issue has to do with the machine that the Deputy Minister of Government Services refers to as the "crown jewel", the one-of-a-kind DocuTech machine.
We have had reports and we had questions for over three weeks about this issue. I questioned the Government Leader and the Minister about the process and the costs.
We were told that the cost was going to be $378,000 for a five-year contract. Yesterday, the media who were invited to a press conference were given a printout saying that the cost is $902,530 for a seven-year contract.
The Cabinet made the decision to sole source this contract. Why did the Government Leader not tell us the real cost of the project when we first asked about it in debate?
Hon. Mr. Nordling: The Member for Riverdale South has, I believe, purposely confused herself. We spoke about the lease of the DocuTech 135 machine as a portion of a total agreement with Xerox Canada. I understood from the department that it was a five-year lease. I stand here to correct that. It is over seven years, not over five years, that the $378,000 lease runs.
Mrs. Firth: I thank my little bureaucratic friend for that answer, but I have not confused myself. I asked him back in January what the cost of the whole project was, and what the final price tag was going to be.
The Minister stood up and said, "My understanding is that it is a five-year lease, and it is worth approximately $378,000.''
He never once in the last six weeks took the opportunity to correct that. I wrote him a letter over a month ago and I asked for all the contracts and all the costs, and he never answered my letter. The only person who is not coming forward with the straight goods is the Minister.
I want to ask the Minister this question: why did he not correct the record, come back with the straight goods and tell us the truth before publishing this document, which, incidentally, was only given to the media. It was not tabled in House. We have never been given this information.
Hon. Mr. Nordling: The Member for Riverdale South can be as nasty to me as she wants. She can call me names, but that does not change the facts.
I do not know why the Member has not received a copy of the contract with Xerox. I expected that letter to have been answered. I have one here and I will send it over to her right this minute with the Page.
We will have the opportunity to discuss this - I believe the Member is receiving her answers now and has a copy of the contract. If she wishes to have a tour of the Queen's Printer to see the DocuTech machine and meet the Xerox business services people, she is very welcome to do that. We like the Members opposite to know what is happening there.
I know that change is risky and hard to accept. The safe thing is just to sit still and do nothing. We are trying to be innovative and save the taxpayer money. I would be pleased to go with the Member for a tour.
Mrs. Firth: I know Mr. Speaker does not like me to call a crock of crap "a crock of crap" but boy, oh boy, that has to be the biggest I have ever heard.
We have a real dilemma here. This is a dilemma and it is a very serious issue. The Minister gave us one story in the House in response to a question. Now I am getting another, more than six weeks later, and the public is getting a different story. The media put headlines and articles in the paper on information that was given by this Minister. The integrity of the Legislature is in question here, let alone the Minister's.
I would like to know what the Minister is going to do about this. Surely he can see how bad it looks, how bad it smells, how foul it is. What is he going to do to rectify it? What is he going to do to make good on it? What is he going to do to change it?
Hon. Mr. Nordling: If anyone is bringing the integrity of the Legislature into question, it is the Member for Riverdale South. I provided the information. The lease of the DocuTech was not over five years as I had thought, but over seven years. We have now invited the media to see the operation. The Member for Riverdale South is focusing on the DocuTech machine, but it is just a small part of the Queen's Printer and the Queen's Printer is a small part of overall Government Services. It is, in the Member's mind, a sexy issue that she wishes to play out to the fullest. That is what the Legislature is for and she is perfectly welcome to do that. It is her job.
Question re: Xerox DocuTech 135
Mrs. Firth: I will have to follow up with another question to the same Minister. I did not come in the House, give one story and not correct it. I did not give the wrong story; the Minister of Government Services did. That story was reported to the Yukon public because of the Minister's words. The Minister said what the contract was for and how much it was for, but he never corrected the issue. The freebie trip that employees took to Toronto, and which the Government Leader and the Minister said was wrong, has hatched into quite an episode -
Some Hon. Member: (Inaudible)
Mrs. Firth: Exactly - the hen that laid the golden egg.
I want to ask the Minister responsible for Government Services this question: the Queen's Printer will have a person from Xerox probably running the show. I understand the government will build an office at the Queen's Printer for this person and for a buyer. I would like to know why this person from the private sector is running the Queen's Printer. Why is that?
Hon. Mr. Nordling: Because we felt that we needed some expertise from the private sector to develop a business plan. Xerox provides a whole range of business services that will be valuable to this government. We have purchased very sophisticated equipment to serve the departments and the public better, and we had better know how to operate the equipment properly and efficiently. That is why we have the expertise from the private sector to assist us. We expect that in three years we will be able to run it ourselves and operate it efficiently.
Mrs. Firth: So he is running it. I listened to this Minister's bureaucratic nonsense yesterday - that nauseating commentary about how he would not let anything bad or unfair happen in Government Services, and how we could all be reasurred that he would look after everything. He said, "I will not let that happen." Why would the Minister agree to this, when he knows full well that it will be seen as an unfair practice by the business community? It has been seen that way.
Hon. Mr. Nordling: I do not think that it will be seen as an unfair practice by the private sector. I think they will be pleased that the Queen's Printer will be developing a business plan that will enable it to run in a more efficient, cost-effective manner, saving their tax dollars. It will increase the work that goes out to the private sector. I do not think there will be the concern that the Member has raised.
Mrs. Firth: Maybe I can help the Minister out here. We have a person from Xerox in to run the Queen's Printer. There are other businesses who compete on contracts for equipment. I hardly think that the Xerox person is going to be recommending the purchase of any equipment other than Xerox equipment. People in the public have said that to me. The public can see that - the Minister cannot. There are a million dollars' worth of Xerox contracts and equipment, and the Minister does not think it will be seen as unfair. I know that people think it is unfair. If the Minister wants the private sector involved in running the Queen's Printer, why does he not just privatize it, as I suggested yesterday, instead of talking all of this nonsense about some flaky, SOA state-of-mind bill-of-goods he has been sold by God knows who?
Hon. Mr. Nordling: The Member can get as hysterical and as upset as she wants. The contract is over seven years. Yesterday in the House the Member asked me about privatizing the Queen's Printer. I looked into what other jurisdictions do with their printing, and, as I told her yesterday, every jurisdiction, no matter how right wing, has a Queen's Printer. It performs an important function for government departments. It performs an important service. There has to be a Queen's Printer; however, the size may depend upon which government is in power.
I have no intentions of making the Queen's Printer a huge empire that does everything and competes with -
Some Hon. Member: (Inaudible)
Hon. Mr. Nordling: The Member says, "$900,000 later." Again, I would remind her that I see the contract with Xerox as the government finally planning and looking ahead into the future more than one year at a time.
Speaker: Order please. This answer is getting a little bit long.
Hon. Mr. Nordling: I am answering the question that was asked while I was answering the question.
Speaker: The time for Question Period has now elapsed. We will proceed to Orders of the Day.
ORDERS OF THE DAY
Hon. Mr. Phillips: I move that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Speaker: It has been moved by the Hon. Government House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair: I will now call Committee of the Whole to order. Is it the wish of the Members to take a brief recess?
Some Hon. Members: Agreed.
Chair: We will take a brief recess.
Chair: I will now call Committee of the Whole to order.
Bill No. 3 - Third Appropriation Act, 1994-95 - continued
Department of Economic Development - continued
Chair: Is there further general debate on Bill No. 3, Economic Development?
Hon. Mr. Fisher: I would like to circulate some copies of our business planning process for the Department of Economic Development. This is in response to a question from the Member for Riverside, approximately three weeks ago, when we were in general debate before.
Mr. Harding: I would like to ask the Minister if he could bring something back for me in the legislative return, because I need a detailed response.
As the Minister is aware, because I have made him and his department aware of it many times, the Faro Wilderness Recreation Association is, and has been, working very hard for many months on proposals for the development of a Campbell region tourism coordinator, which will eventually lead to extended tourism development in the Campbell region, not looking at Faro as alone, but looking at it as a region.
They have worked extremely hard. I cannot overemphasize how much sweat and toil they have put into the reports and proposals. They care very deeply about it. They have had significant cooperation from the Department of Tourism, and I have lobbied the Minister of Tourism very hard on this issue, and he has been cooperative. The department, in my dealings with it, has been friendly, cordial and helpful.
However, I do sense some frustration with the length of time between the time the idea was created and the proposed development, which we went over and over and over again in different draft forms, the time of the approval for the project; factors have come up, i.e. the March 31 cut-off date that seems to stop everything in government because it is the fiscal year end, and it has an impact on the allotment of monies. The group is concerned about the EDA funding, which we now know will go until 1996, so we have that money. The last time I talked to the department, last week, the director of economic programs said that the group should apply for their first month's funding, get started, and then when the budget comes down, they will find out if they can continue on with their program. It is easier to continue a program once it is started than sometimes to get new programs off the ground, given a questionable fiscal climate.
So, now we have the federal budget. I think the group is starting to feel a little bit downtrodden by all the time delays. The dealings they have had with the people they are trying to hire have been skewed somewhat because they are not sure what kind of monies they have to commit to the consultants, and they are having to tell the consultants that everything is contingent upon this arbitrary date in the real world of March 31. Now the budget is down.
I would like to ask the Minister if he can bring back for me a full status sheet on exactly how the department views its proposal for the Campbell region tourism coordinator, how the department is going to aid them in the future to keep this proposal moving and to get the funding, and how the department sees this regional coordinator issue unfolding in the next little while and what levels of support they are prepared to commit, given that the budget has been tabled. I would like to be able to provide that in written form to the Faro Wilderness Recreation Association so that we have a clear understanding right now. Now that the federal budget has been tabled, we know that the EDA has another year.
They could possibly use this in respect to their dealings with the people they want to hire to undertake this Campbell region tourism coordinator work. If the Minister could do this for me, I would really appreciate it.
Hon. Mr. Fisher: I agree with the Member opposite that they need to know whether it is or is not going to go ahead. They also need to know how much we are able to commit and for how long.
It may be a few days yet, because we have not received all of the information on the budget material. We were told that we were not to commit to any new programs at all. They did tell us the amount of the actual cut in some of the programs, but if this has been approved - and I am not sure where it stands. I recall the particular project and I will get the information as soon as possible for the Member.
Mr. Harding: I have one more point of clarification. It has been approved. I was told this by the Economic Development program director. Inititally, it was for $40,000 for the period to March 1, then we had time problems. Then we were looking at an $18,000 allotment to March 31, 1995.
I and the FWRA have been told that there has been a commitment. If there is not a commitment, then I want to know it. Then we can deal with it on that basis and do whatever we have to do.
Mr. McDonald: I have received petitions from my colleagues that we should all move as quickly as possible through the Department of Economic Development in order to get into debate on the Department of Government Services.
I know, like the Minister, we want to showcase this department, and he agrees with me that we should be talking about issues that are important to the economic future of the territory - a few would be browbeaten into getting some of the good stuff in another department.
When we left the industrial support policy, I was asking the Minister about the manner in which the discussions took place to achieve public benefit in return for public funding. Perhaps the Minister can give us a clear statement as to whether or not the government went into the final round of discussions in January with a sense of what it specifically wanted to accomplish in those negotiations, in terms of jobs and business opportunities.
Hon. Mr. Fisher: We are not asking for a specific number of jobs before we will provide a specific amount of money. Jobs are part of the whole economic spinoff. Under the policy, we want to look at the economic benefit for the whole territory, including Dawson, which would include jobs, but we have not asked them to guarantee X number of jobs. We have been told - and I think the Member opposite is fully aware - that there will be approximately 78 jobs when the mine is operating.
Mr. McDonald: Is that what Loki Gold told the government? I was under the impression that the 78 jobs issue was the result of the consultant's survey that was done in July of 1994 by Hornal Consultants Ltd. Can we get a copy of the Hornal Consultants report?
Hon. Mr. Fisher: Yes. I do not have a copy here, but I am sure there are some in the department. If there are, we will certainly make them available.
Mr. McDonald: Pardon me for sounding picky. The Minister said that if there are any copies available in the department, he would make them available to us. Will he make a copy available to us, irrespective of whether or not he finds them in the department? Is that what he means?
Hon. Mr. Fisher: Yes, it is.
Mr. McDonald: Given the dissection that was taking place in Question Period today, I just want to make sure that we covers these bases, so that there are no misunderstandings between us.
The Minister indicates that the government does not ask for any specific number of jobs. How does the government achieve the objective of encouraging training activity if the private sector proponent - Loki Gold in this particular case - does not ask for training support? How does the government encourage training to actually take place?
Hon. Mr. Fisher: During the discussions, we will be talking about the type of labour that is required. If the mine or one of the other departments feel that the type of labour that is required may not be available in Yukon, we will start discussions with Loki Gold about including a training component. Whether Loki Gold or the government does it will depend a lot on the type of training that is required.
Mr. McDonald: My basic concern, rather than going over and over this again, is if the government does not have a clear sense of what it wants to accomplish from these discussions, and does not have any sense of what it wants to do about training activities, it is essentially left up to the mine proponent to make the request. If the proponent has no particular interest in the government being involved in its training activities, then it appears that nothing specific comes from the agreement to provide the mining proponent with some very expensive infrastructure, it appears.
I guess the Minister understands my concern; I see no point in pursuing it endlessly. I have also expressed concerns about other elements of the policy, which he also knows about.
In the draft, and during discussions on the draft policy, there was a lot of discussion about the idea of tying energy rates to commodity prices. Something that was talked about in the draft, but which has virtually been ignored in the final product, is the whole subject of industrial pricing.
Can the Minister tell us what has happened to the plan to tie electricity prices to commodity prices?
Hon. Mr. Fisher: In Loki Gold's case, this would not be applicable. It would be more suitable to an industrial user on the grid able to hook up to Yukon Energy Corporation power. As Members opposite are fully aware, when a mine starts - especially a mine, but this would relate to most industrial-type enterprises - the greatest cost is in the initial few years, to set up the plant. Under the industrial support policy, we would be willing to help the proponent of the project in those first few years.
We might do it on the basis of giving a reduced rate for power for two years, followed the next two years by service at cost, followed again by a rate that would actually recover the amount we had lost in the first two years, or it could be based on the price of ore.
I have a little bit of a problem with the latter scenario, mainly because the price of ore could go down but, after the mine is in operation, it would still be able to make its profit at the reduced ore price. However, if some sort of subsidy for electricity were tied to it, we would never get our money back.
I have a bit of a problem with that, but perhaps a combination of the two might work. Right now, there is no firm policy, but we have said that we would look at different methods of helping out such enterprises at start-up, and that is where the price of ore as it relates to power might come in.
Mr. McDonald: It is an interesting concept. I think the Minister may be mildly out of sync with some of his colleagues, because I do recall that at least one was quite keen on tying the price of energy to ore prices.
Nevertheless, can the Minister say what the reason was for dropping the pricing policy out of the industrial support policy? I cannot find reference to it. I found reference to it in the draft, but I cannot find any in the final policy. What is the rationale for the government dealing with it in this way?
Hon. Mr. Fisher: The concept has not changed, but we did not feel that it was necessary to put in the final policy. Also, we would not be asking the Yukon Energy Corporation to be picking up the difference. The Energy Corporation would be setting what I believe is termed " the cost of service." If the government chooses, it would actually reimburse the company - whichever company that may be - for a period of time, such as the first couple of years or during initial stages of the project.
The concept has not changed. We did not feel it was necessary to put it in the policy, because each project may have a different requirement.
Mr. McDonald: I think it is understood that each project will have different requirements, and the industrial support policy says that. In our view, it is too generally stated. It suggests that there are no clear guidelines whatsoever as to how the government is going to judge whether or not it is going to spend a dollar in a particular direction or what the reasons would be for that, or why they would want to spend so much money in return for a certain public benefit. However, it made what we consider to be a weakness into a virtue by saying that the policy, in the end, is quite flexible, and ultimately can accommodate any industrial development at all. In asking why there is no industrial pricing policy statement in the final version of the industrial support policy, we obviously cannot expect it in great detail, any more than we expect great detail on some of the other components, such as the provision of energy supply, the road infrastructure, training requirements, and that sort of thing. However, the Minister has not explained why the pricing policy principle has been moved. Unless the Minister can provide us with a clear explanation, presumably we can regard that as being an oversight, because the Minister sounds committed to the basic policy principle.
In the Department of Economic Development's current policy activities, one of the things it is doing - as the Minister presumably knows - is developing an industrial pricing policy. When are we going to see this policy? The Minister has told us this afternoon that there are a number of different alternatives that could be selected in support of such a policy, but they have not come to any conclusions as to exactly how they are going to do it. When are we going to see the pricing policy itself?
Hon. Mr. Fisher: There are actually three components to it: the energy policy, the independent power producers policy and the electricity rate policy. I do not have the date by which we expect to have it finalized. I could bring that information back for the Member. In fact, I will circulate it for all Members, but I do not have it in front of me.
Mr. McDonald: When it comes to setting prices for industry, how is the government going to structure this element of its support for industrial projects? Is it going to have a statement? Is it going to publish a statement of some kind about the current thinking on how it might be structured?
The Minister has indicated a couple of principles - that it would not be the ratepayers who would pay for the risk, it would be the taxpayer. He has indicated that it probably would not be tied to the ore price, but it might be tied to profitability in some way. Can the Minister give us some answers? Is that it? Does that capture the policy statements that the government intends to make on this, or can we expect something more?
Hon. Mr. Fisher: The electricity rate policy will not be tied to the Yukon industrial support policy. The electricity rate policy will outline the various rates for commercial, residential and industrial, but it will not have anything to do with the industrial support policy, other than that the industrial support policy will take that rate into consideration when determining what sort of support we will provide to a company.
Mr. McDonald: The electricity rate policy only deals with the government's intentions when it comes to rates or classes of service but not when the government wants to provide a specific incentive to a company to start up in the resource sector.
The industrial support policy is silent on the particular element of using energy rates. It speaks to supply, not to rates, and that is where I am confused. Is the government doing something else then, which is not on the list here or specifically referenced in the industrial support policy, that is going to bring more clarity to its plan to provide some incentive to industrial consumers in terms of special rate relief measures for consumers who are just starting up?
Hon. Mr. Fisher: Well, there will not be addendums to the industrial support policy. When proponents of industry negotiate a deal with the government, and if there is an electricity component, that is where we would be providing that type of rate relief or support for the first few years of a project, or at the start of a project.
Mr. McDonald: Is the Minister saying that, although it may not be specifically referenced in any policy statement, presumably if, during the discussions between the developer and the mining facilitator, the developer expresses some concern about the cost of energy, then the negotiator would raise the point that perhaps there is another unstated feature in the industrial support policy, which is that there may be some other financial support that could be provided to soften the costs of electricity for the first few years of operation, or perhaps even tie it to profitability or something like that.
Has there been, or is there any other feature to government's intentions here, in terms of providing that kind of financial support for energy pricing to developers that the Minister has not stated? Is there any other consideration or qualifier that we should be taking into account? Could the Minister provide that information in a legislative return? If he is not going to have an addendum to the industrial support policy, can he tell what the government's current thinking is on this so that I can get a clearer sense of what the qualifiers are? Is there anything more? If there is, can he give me the information now? If he cannot, can he give me the information in a letter - or can he file a letter with all Members in the Legislature, as I am sure we are all interested - indicating precisely what the qualifiers are in terms of what restrictions there would be to providing this kind of support?
Hon. Mr. Fisher: I do not know if the Member is setting a trap for me, because if I say there are no other qualifiers and find out later that there are, he will accuse me of misleading the House.
Our industrial support policy has deliberately been made flexible, because we want to be able to respond to the needs of projects as the needs arise. One of the principles behind the electricity component is that, over the life of the project, we will get our money back if there is upfront assistance given.
There is no doubt about there being some risk. For instance, if a mine has a life of eight years and we expect to have our money back by year six, but the mine only runs for four years, that is a risk - which we are willing to take. The main principle is that we want to get all our money back over a certain period of time.
Mr. McDonald: I do not know whether or not the Minister considers this setting a trap. I have made my case very clearly - or at least at length - that I do not like the industrial support policy. I do not think it is clear enough; I do not think it has the appropriate guidelines; and I do not think it does anything more or adds to our understanding about how to support industry any more than what we had a year or two ago, or 10 years ago. I do not have a hidden agenda. I have been very clear. The Minister might even accuse me of being a little blunt, but I have not hidden my agenda.
What I am trying to do is to find out what restrictions do exist, given how generally stated the industrial support policy is. The Minister has identified a couple. When it comes to financial support to subsidize energy rates for developers, he has indicated that it will be a loan, and that payments would be tied to profitability in some way.
Consequently, I am only asking if that is it, or if there is more. I left the Minister the out that he could come back. I did not even pillory him about not knowing the answer right now, on the spot. I am not asking what the heck is he doing, why is he getting paid or why he cannot provide me the information lickety-split. I am not going through that stuff. I am just asking if he can do it at some point. Maybe he could write me a letter. Once he thinks about it - because there may be some more thinking required in terms of all of the restrictions - can he let me know, and when can he let me know?
Hon. Mr. Fisher: I was trying to inject a little humour when I asked if the Member was setting a trap for me. If there is anything more that we can think of, I certainly do not mind putting it in a letter to the Minister. I do warn the Member that the policy is flexible, and something may come up that we are not fully aware of at this time.
Mr. Cable: Following along on what the Member for McIntyre-Takhini was exploring, the taxpayers will be taking a risk, as I think it was painted by the Minister. What is the Minister going to do to secure the risk? Is part of the parcel going to be some security documentation or security that will protect concessions made on electricity rates?
Hon. Mr. Fisher: We might look at some form of security. Under EILRDP, which is essentially assistance for electricity users in the industrial sector, up to a certain point there is some security, but it is quite tenuous as to whether or not one would actually realize the security. That may be one of our problems. We will look at security, but it will be one of the problems. It is not like lending money on a particular building or mortgage. It is a little more difficult with energy users.
Mr. Cable: There is significant risk involved in a new facility, and a smaller risk involved in concessions made on price. It seems to me that both these risks should be protected by way of security, and perhaps backed up with what is called a take-or-pay arrangement.
Over the last 25 years that I have been here, there have been mines open and close in the Yukon with a fair amount of regularity. If the taxpayer has been gotten into for concessions on price or on building a new facility, it would seem the quid pro quo is more than simply the creation of jobs or the facility, but the security for that risk.
Is the Minister of a mind that this sort of take-or-pay arrangement is advisable in the startup of a new mine?
Hon. Mr. Fisher: It is certainly something we want to look at. I would hope that the security would be the economic benefits that would accrue to the territory. Under the EILRDP, we do take some security on the mine plant. However, I think the Member is fully aware that, once a mine shuts down, the plant loses a tremendous amount of its value. It is worth a lot of money when it is running, but when it is not, due to the price of ore or other reasons, it very quickly loses a tremendous amount of its value.
The security is a very difficult thing to assess. We cannot say that we will have all of the loans fully secured. I would not want to say today in the House that we will have those loans fully secured. Although they may be, if we try to realize that security on an asset, we may find that the asset is not worth much.
Mr. Cable: That is a very real risk. However, I believe the Minister has witnessed, over the last two years, the chaos in the electrical system that has been caused by the shutdown of Curragh. We saw that once before. It would seem to me that stabilization in that area should be one of the goals of the Department of Economic Development.
Is the Minister not prepared to review that situation with a view to stabilizing both the Energy Corporation and the flow of cash from the mining project?
Hon. Mr. Fisher: That certainly would be our hope, but in the Curragh situation - what was the Member's terminology, "take or pay" - we would not have anything anyway. We possibly could have on the sale, if we could have somehow tied it to the actual sale of the mine, but when it shut down we would have been more or less out of luck.
Mr. Cable: We would not have been out of luck, of course, if we had a first charge on the claims or on the buildings. If the mining corporation is looking for fairly substantial concessions from the taxpayer, I suggest to the Minister that protecting the taxpayer should be one of his department's first orders of business.
Hon. Mr. Fisher: I will certainly take that representation. I agree with the Member, and we would hope to do that. There is no question about that. We would hope to have a good security on whatever our loan may be, but I do not want to promise here that we will have full security on whatever the loan may be.
Mr. Penikett: It is a fascinating discussion. One is bound to point out with respect to one of Curragh Resources' mines that if there had not been a take-or-pay proposition in place, the Westray mine probably would never have opened and that tragedy would never have happened there. That is one of the ironies one gets into in dealing with these public policy questions.
Without sounding offensive, I want to say to the Minister that unfortunately his description of the industrial support policy makes it sound as if the principles are so flexible they hardly qualify as principles any longer. None of them are firm. There is no real foundation to the policy. In fact, as has been described, almost any possible scenario imaginable could occur. We really do not know very much more about how this policy would work than when it was still in the draft discussion stage.
In fact now, while it is still in the draft discussion stage, I want to try to understand a little bit more about the Minister's approach to the energy policy, because he said, in respect to arrangements with mines, that he would hope to get the money back over the life of the mine. We know, from other discussions with the Minister's predecessors in the Yukon Party, that the government, as true conservatives, are philosophically opposed to loans, philosophically opposed to grants, but they are willing, as I understand it to consider any one or all of the above as subsidies for a developer if there is adequate security and if the risk is not of too high an order.
Would the Minister not agree, though, that if the developer has adequate security and if the risk is not very high, it probably does not need YTG, but can make financial arrangements with its own backers or financial institutions to cover the various scenarios of changing metal prices, changing ore markets, or indeed even various calculations about what is likely to happen to power rates, as long as those are predictable, in the sense that the developer - as do other consumers - knows what the costs are.
Hon. Mr. Fisher: I think that we have spoken about this before to some extent, and I understand where the Member is coming from. If I have it right, the Member is saying that because our requirements are that there must be a production decision and this sort of thing, what would even be the need for mining companies to come to the government? If it is a viable operation, what would really be the need for government to get involved? I think that the Member's colleague did discuss that at some point.
There is a lot of merit in what the Members are saying, but there are sometimes several reasons why a mining operation would want to come to government to get some financial assistance.
Maybe it would be possible for them to raise the money some other way. They may also want to show that they have the support of the government of the jurisdiction they are in. I think we do want to stick with the guideline, which says that the project must be viable, their funding must be in place, and their permitting must be in place. Even though they may have all of that, they still may very well want to get some assistance from the Yukon government, possibly for cashflow. As I said before, the cost is in the first few years of the operation. It may be that they have financing in place, but they have a cashflow problem for the first year or so. I think those are some of the reasons that they would be coming to us.
Mr. Penikett: I certainly do not want to repeat discussions the Minister has had before, but, in his document, The Standards for Project Assessment for Industrial Support Policy, on page 1, at the bottom, the Minister himself said - in direct contradiction to what he said just now - "A project which is not economically viable without additional infrastructure may be eligible for infrastructure support."
Where I would like to get some satisfaction is on the question of subsidies for business. As I understood the rhetoric from the Government Leader - and, indeed, the rhetoric from other conservatives, such as Paul Martin, in the recent budget - is that subsidies for business are now a no-no. They are a thing of the past. They are something that no self-respecting, ideological conservative would ever support. Indeed, there may not just be a problem philosophically, as I understand the infamous free trade agreements - not only the agreement between Canada and the United States, but the one that Mr. Chretien took us into with Mexico and, soon, Chile - subsidies from the state to industrial concerns such as this may be subject to countervail.
So there is, if you like, a practical, economic, political and trade issue here. Even as I listen to the rhetoric of the business community, and I understand there is a difference in the business and political world between rhetoric and real positions sometimes - and I read the reports on business - the political line coming from business is that business does not want subsidies. They want certainty; they want to know what the costs are, and if they can predict the energy costs over time, that kind of certainty is much more important to them than the political vagaries to which subsidies may be subject. Would the Minister agree with that?
Hon. Mr. Fisher: I suppose it could be construed as a subsidy, but we are not really talking about subsidies. We are talking about infrastructure support. A few weeks ago - whenever we were in this debate before - I believe I said that if a mine were to open in New Brunswick, where there is a lot of mining, the distance to a major highway, a power grid and the ocean is very minuscule compared to a mine that may open up in the Bonnet Plume area, for instance, or even Loki Gold in Dawson.
If there are opportunities in both New Brunswick and the Yukon, we would like to see the people putting the project together on a level playing field, so that there would not be much difference in opening a mine in either the Yukon or New Brunswick.
Mr. Penikett: There is not only the question of infrastructure, there is also a question of timing - the current state of world markets. I do not doubt that, if the iron ore and the coal in the Bonnet Plume had been discovered in the last century, that part of the Yukon may have become as significant as Kiruna did to northern Sweden, which was at one point the largest iron ore mine in the world with access to all of the European markets.
Kiruna has now got a tiny fraction of its workforce at the mine and only survives because it makes specialized products that its competitors, who are digging the stuff by hand on the Brazilian coast and loading it straight on to ships, cannot compete with. The realities are that no amount of subsidy or investment in infrastructure will change that. As Mr. Cable said, the problem with the infrastructure calculation should be obvious to anyone who has looked at the history of mines here in the last few decades.
I remember the mine at Clinton Creek, where I worked, was supposed to be a 25-year mine. I think Mr. Chretien signed an agreement promising a 25-year mine. It was to be 75-percent native hire, not just local hire. Within weeks, that was all fiction. They began accelerating production at the mine almost immediately by doubling the capacity of the mill, and it became a 10-year mine, not a 25-year mine, and the huge investment this territory had in the school building and other infrastructure was lost. The school building was auctioned at $6,000 or $7,000, with full fuel tanks - a building that had cost considerably more to be put there. What happened, as often happens around the world, is the costs were socialized and the benefits were privatized. Since that company did most of its hiring outside the territory - at least in the first few years - we did not even get the benefit of the jobs that were promised.
My stance is that you cannot be soft and mushy about this stuff. If you are going to get any benefits for the territory in a deal like this, you have to quantify them. You cannot send someone out to negotiate without a mandate, and you have to be very clear in your mandate what it is that you want. You have to be prepared to tie aid - to use international terminology - to some specific performance.
If we think that we are going to get our money back over the lifetime of a 25-year mine, and then, as the Minister himself conceded, it turns out to be a 10-year mine, we have lost our investment, and we have no way of recovering it. Unless there is a real hardball agenda on the part of the government, in terms of mine jobs, training opportunities and business opportunities, as difficult as those are to negotiate - and I concede that, having dealt with a few companies on these kinds of things - I think that we are just breeding disappointment.
To change gears a bit, I want to ask about the application of this policy on a real project that is on the horizon: Division Mountain coal. From various public statements made by people in the private and public sector about this project, I understand that, for the project to be economic, the developer would have to build a significant surplus capacity in its plant. In other words, it would have to be able to generate electricity surplus to our needs. I understand also that all three of the utilities in British Columbia, Alaska and the Yukon have talked about selling power to each other. It is a great idea to sell power to each other, except that if we all have surplus capacity, then there is no market in this region. Also, in discussion of this surplus capacity, we have heard again mention of government guarantees, time and time again. Whether one calls it a subsidy or a guarantee, or some long-term agreement, such as the take-or-pay arrangements with Westray, once again the government may be asked to absorb a very significant risk without having any obvious benefit.
Let me ask this question: would the Minister not agree that if we had a plant like this come onstream, whatever the arrangements were between the government and the people of the Yukon about seeing it come into place, and if there were significant surplus capacity, it would be the other electricity consumers in the territory who would have to pay the costs of increased power bills to cover the additional cost.
That might be a good arrangement from a developer's point of view, but it would not, in that scenario, be a good arrangement for local consumers. Would the Minister agree with that?
Hon. Mr. Fisher: Certainly I agree with it. If there was major surplus power from that plant that we were never able to realize and had locked ourselves into some sort of arrangement where we had to pay for the surplus regardless, that would not be a good deal. I would hope that we would not get into that kind of situation.
Mr. Penikett: The Minister is also responsible for all energy policy. As I understand it, the policy and philosophy of this government is that residential consumers, in principle and as a matter of general policy, should be paying rates closer to the costs of generating that power. What is the Minister's view of the position of industrial users? Should they be subject to that same policy? Should they, as a general rule, be paying costs or rates close to the costs of generating that power?
Hon. Mr. Fisher: I think that, over time, the rates certainly should be brought much more in line with the residential user paying closer to - or the cost of - generation. However, in the Yukon right now, I do not think that the residential user could afford that cost; therefore, we have varying rates.
With additional users and, if we were able to reduce the users of diesel, it may well be that we could get to the point where everyone would be paying the cost of service.
Mr. Penikett: Obviously the best way to reduce the use of diesel would be to get Watson Lake and Dawson on to the grid within a reasonable time. Whether one did that by building the lines as a public work, or building them as a utility and adding them to the rate base, is a matter of public policy about which we have heard nothing from the government.
The problem for the Minister is that the public does not understand where this government is going. We have heard the notion that residents should be paying closer to their cost. If it happened tomorrow, it would mean something like, as I understand it, a 25-percent rate increase on power bills. We have heard the Government Leader say that will not happen until after the election, and other people, including the president of the Yukon Energy Corporation, say it should be phased in over 10 years.
The problem is that the industrial support policy is like the northern lights: continually moving and changing, quite beautiful, but hard to get one's hands on. If one has a policy that says that residents are going to pay less than the cost of production for another 10 years, and somehow the government is going to help industrial users pay less than the cost of production, it logically puts the government in the position of having to subsidize those other users for quite some time. This is proposed to be done at a time when we are told, time and time again, that money is increasingly scarce. Trying to understand where the government is coming from on this, in a way I could explain to my constituents in a sentence or two, is difficult. I do not know if the Minister understands that.
Hon. Mr. Fisher: There are a couple of points. The cost of service for industrial users would be exactly that. Any assistance given to a company under the industrial support policy would be out of the rate base, so the Yukon Energy Corporation would still maintain its original revenues from that user. If the company were to fail, the risk will be taken by all taxpayers - by the government - not by the ratepayers of the utility.
Mr. Penikett: Given what the Minister has just said, and once the Utilities Board establishes the cost of generating energy now that the Faro mine is coming back onstream, would I be right in assuming that the Faro mine will pay the cost of generating that electricity unless there is some subsequent arrangement negotiated between that company and either the Minister of Economic Development, the Yukon Development Corporation or the Yukon Energy Corporation?
Hon. Mr. Fisher: Yes, that is correct. There could possibly be some arrangements through the Minister of Economic Development under the Yukon industrial support policy.
Mr. Penikett: I am sorry, but I am trying to complete the circle. The Minister will understand that my constituents are enormously confused about what has happened. They saw the Faro mine go down and they saw their power rates go up. They see the Faro mine coming back onstream and they hear stories about their power rates going up again, instead of down.
What is the bargaining philosophy, or the bargaining approach, or the mandate this Minister or this government will take to meetings with Anvil Range Mining under the industrial support policy in terms of negotiating a rate with them, once the Utilities Board has established the cost?
Hon. Mr. Fisher: If we were to provide support to Anvil - and I should point out that they have not asked for support with electricity whatsoever - that would not affect the ratepayers because the support we provided would be separate. It would not be done by the Energy Corporation or the Utilities Board. The Utilities Board will set a rate - like a cost-of-service rate - that will provide for the electricity for industrial users, and that is what will be charged to them. If the government made some other arrangement with them to help them with their electricity costs, it would be separate from that.
Mr. Penikett: It still remains a nice question, because in this territory, at least, ratepayers and the taxpayers are the same people. It may not affect them as ratepayers, but it could affect them as taxpayers.
Also, remember that the Minister said that this company has not asked for anything. Some of the same people are involved in this company who were involved with another company operating this mine, who were actually before the Utilities Board and at the government's gate, asking for five-cent-a-kilowatt power, as I recall. I would not be at all surprised to see some negotiations, especially if they think that, under the terms of the industrial support policy, there is any prospect of getting some assistance.
Certainly that invitation seems to have been made.
I therefore want to know, given that this mine is already up and running, what measurable benefits over and above those that we already enjoy would the Yukon government be looking for in negotiations under the industrial support policy for an arrangement about the cost of power with Anvil Range?
Hon. Mr. Fisher: To start with, under the industrial support policy, the assistance for electricity is on a pay-back basis. What we would want is some sort of an arrangement, as we were speaking about before, of two years with some sort of assistance and two years to repay it. That is the kind of a deal we are looking at.
We are all quite aware of the benefits that Faro provides to the territory. I admit that there would be a risk. If the price of lead and zinc were to go down, the mine could very well close before we got our money back. On the electricity part of it, it is more of a loan than it is a subsidy.
Mr. Penikett: I am sorry. Perhaps I did not express myself well. I do not claim any expertise in the world of commerce. I have nowhere near the entrepreneurial gifts of my colleague, the Member for McIntyre-Takhini.
As I understand the marketplace and commerce and trade, they usually operate on the assumption that there are two parties. Each party wants something, but they want different things. Party A wants something from party B, and party B is willing to give something to party A in exchange for getting what it wants. The benefits of the mine reopening are already plain to us - they are established; they are key - such as a certain contribution to the gross domestic product, certain number of jobs and business opportunities, et cetera. The Yukon government has absolutely no interest in spending the taxpayers' money to secure those benefits. They are already there. So, we have to want to secure, presumably, something extra. I am asking what that extra is.
The whole experience of negotiating - whether they are called development agreements, or industrial support agreements, or subsidy agreements, or guarantees for developers - requires that government be absolutely clear headed, absolutely tough minded and absolutely focused on what it wants in exchange. Those benefits have to be definable; they have to be concrete and measurable. There has to be X number of jobs, X investment in something, or a certain kind of measurable commitment to training, and so forth - the kinds of things that the Minister of Education is insisting that we need in the education system, which he alleges we have never had before - a view that I take exception to - and some kind of measurable outcome or performance is required.
It was not clear what those measurable benefits were when the government was negotiating with Loki. Nothing the Minister has said gives me any comfort that I have any idea what they are with respect to Division Mountain. Since we have had a lot of experience with the mine at Faro over the years, surely this government must have a clear idea of what benefit it would be seeking in exchange for some concession on power rates.
Hon. Mr. Fisher: This is somewhat hypothetical because Anvil Range Mining has not approached us about electricity rates. I would assume that it will be strenuously arguing with the Utilities Board when the board sets its industrial rate. The board wants cost of service, and that is what it will set. What that cost is may be argued by Anvil Range Mining.
If Anvil Range Mining did approach the Yukon government under the industrial support policy - the Member is absolutely right, we know what the benefits are to the Yukon - and wanted some assistance, what would that mean? Would it mean that the mine would last longer? I do not know.
Why would we bother providing some sort of assistance if it were only to help the company's profit picture? I suspect that is what the Member is getting at, and I have to agree that if the company needed assistance because of cashflow, or something, for a startup period, then yes, we would certainly be willing to talk to them, but I do not believe that I can stand here and say what additional benefits we would want to derive from the mine at Faro.
I think there are some possibilities and we could get fairly creative about employment opportunities, training programs and that sort of thing, but I do not know what they may be.
Mr. Penikett: I am asking these questions for a very serious reason. I heard the description of what the mining facilitator was being asked to do with respect to Loki Gold the other day, and it sounded to me like the Minister has made his job very difficult.
Whenever I have been in negotiations with someone, if I did not know what they wanted and if I did not have a clear idea of what their objective and aim was, it was practically impossible to reach an agreement, unless it was not an exchange, but simply a gift from one side to the other.
The Minister opened his statement in the Economic Development estimates with a discussion of benchmarks. I am looking for the measurable benchmarks - the things that are in the public interest - that we can quantify and are seeking in these transactions.
I would ask the Minister if he would take this question as notice: in the negotiations with projects like Loki Gold, Division Mountain coal and Anvil Range, what kinds - not how much - of measurable benefits will this government be seeking for the people of the Yukon - the taxpayer, the public, the consumer? Would he return to the House with a written answer that I could examine?
Hon. Mr. Fisher: I would hope that, in the not too distant future - certainly before the session ends - we will be actually tabling, for the Members' approval, the Loki Gold situation. We will have exactly what the Member is looking for. We will have it all laid out concerning the specific mine involved.
Mr. Penikett: I would like to role play with the Minister for a moment. I am Loki Gold and he is the Government of the Yukon. I, Loki Gold, know what I want. I want the Old Ditch Road improved so that I can move staff and materials back and forth between the Klondike Highway and the site. I am having a tough time negotiating, because I do not know what this Minister wants. What does this Minister want?
Hon. Mr. Fisher: I want to know how long the mine is going to be in operation. I want to know what kind of employment it is going to generate. I want to know the spinoff benefits. I want to know the costs to the government - we spoke yesterday for quite awhile about a school in Dawson City.
I certainly want to know what the benefits of having the mine will be before I make a final commitment to provide assistance.
Mr. Penikett: Suppose I am negotiating on behalf of Loki Gold and I say it will be an eight-year mine, there will be 78 jobs - I cannot remember the other question he answered. I have given him that information, but I still want something from him.
What more do they want? We have to have some add-on. We have to add some value for the people of the Yukon in order to justify the expenditures we are going to make, or is that not the position of the government?
Hon. Mr. Fisher: I do not know that there needs to be an add-on. We need to encourage the mining companies to come here. We want them to know that it is a friendly environment to operate in. It goes back to what I said before - using the Province of New Brunswick as an example - about providing a level playing field for them. We want jobs and we want some training opportunities for our young people, but I do not know that we want anything additional beyond that. We would certainly like to have our money back. We are willing to take a little bit of a risk, but this is not venture capital. We are willing to take a risk, but we want, essentially, our money back. I do not see any additional benefits, beyond the normal ones that accrue from having additional people and industry in the territory.
Mr. Penikett: I think I understand what the Minister is saying. Of course, it makes it extraordinarily difficult for him to know if he has a good deal. Let us say he gives $1 million worth of value to Loki Gold. The way he is doing the negotiations, he has no way of knowing whether or not he would have got those 78 jobs over eight years, even if he had not given them money. So, we have a significant cost to the government with no measurable benefit, which is what I am pushing him on.
The problem of the developer knowing if there is a friendly environment is a very interesting one. The way New Brunswick is attracting business is that it has a lower minimum wage, weaker occupational health and safety laws, and it does not have as tough environmental laws as some of the neighbouring jurisdictions. I want to go on the record as saying that I am not someone who favours being that kind of friendly. That may be friendly to outside investors, but it is extremely unfriendly to people who live and work here, and who have to feed their families or suffer through on-the-job injuries.
When the previous government was in operation, and when my colleague, the Member for McIntyre-Takhini, was the Minister of Economic Development - and even going back to ancient times when I had that job briefly - the calculus we used was the cost per job - how much were we prepared to invest per job. It was quite easy for us to compare the cost per job of a new project with the kind of investment being made by Ontario and Quebec for auto industry jobs, or by British Columbia or Manitoba for mining industry jobs. We were able to content ourselves, for example, with the famous Faro arrangements, that we had a reasonable investment per job.
Is the Minister using, or has he been using, that kind of calculation?
Hon. Mr. Fisher: My understanding is that, when they do the economic analysis, they do not actually use a figure of cost per job. They look at the number of jobs and the amount of money they will bring into the territory and that sort of thing, but do not do an actual breakdown of the benefit per job.
Mr. Penikett: Since this is a measurement used by many other jurisdictions and in fact provides a fairly simple way of evaluating the investment that the public is being asked to make in project A versus project B, or the last two projects the government did, why is the department not using that measure? It is one that is understandable to economists and can also be readily understood by the ordinary citizen - unlike many other economic statistics.
Hon. Mr. Fisher: I would not have a problem with the department using it, and our economists may very well use that as one of their measurements. It could be good for comparison's sake. If assistance has been provided to one program, and another one comes along, it may well be a reasonable measure to use, among others. I would have no problem with using it.
Mr. Penikett: The essential point is that, if job creation is the bottom line, it makes sense to use that measure; if not, then it may not be as useful. Could I ask the Minister, because he used the word "benchmarks" in his opening statement, what is his bottom line? What are the benchmarks he looks for in terms of individual projects or performance in regional economies or, indeed, for the territorial economy as a whole?
Hon. Mr. Fisher: I think that there are probably many benchmarks. The unemployment rate could be considered a benchmark. The number of people working in the territory is probably a benchmark. I am not sure how it is measured, but the financial health of the territory - those types of things - could be considered to be benchmarks.
Mr. Penikett: I understand that most chief executive officers like to use one or two key indicators, as they call them. I seem to remember recently reading that Jim Pattison had a bottom line indicator of how many of a certain kind of car were sold and some other one. Would the Minister dare to offer to the House his preferred key indicators, or which two he would consider most important, of the list that he just gave us?
Hon. Mr. Fisher: Being the Economic Development Minister and the Minister of Renewable Resources, maybe it would be the number of resource development industries that are operating in the territory. I would like to see that. I would like to see a good forest industry in Watson Lake. I would like to see more than one mine operating. I would like to see several smaller mines operating, rather than one or two large ones. I would say that those types of indicators would be my favourites.
Mr. McDonald: I have been hoping to hear the Minister speak about benchmarks in terms of the negotiations that he was undertaking with individual mining proponents. Given that he did not provide anything to me, I should not expect that he would provide anything to another Member. If he did provide something for the other Member, I would have felt hurt that he did not provide them to me.
The Minister indicated that he hopes that the deal for Loki will come before the Legislature for discussion. Can the Minister tell us precisely how he intends to bring that deal forward?
Hon. Mr. Fisher: I would expect that we will bring it forward as a motion.
Mr. McDonald: Okay, so there will be a motion debate at some point, and in advance of the motion debate, the Minister will table the deal. Will the Minister table any economic development studies that have been undertaken prior to the motion debate, so that we can have all available information?
Hon. Mr. Fisher: We will table everything except for confidential information that the company provides with respect to their financial position. There is some information that the company will be providing to us that it would not want made public. For instance, our energy and mines branch is conducting an economic analysis of the mine to determine its reserves and at what ore prices the mine would be viable. Our economists will also be doing some work on this. We will provide that information when we table what we would like to have as an agreement with the company.
Mr. McDonald: Who was specifically involved in the discussions about Loki Gold's receipt of public funds? The Minister has indicated that the mining facilitator was involved; was anyone else involved?
Hon. Mr. Fisher: There were several people involved in the discussions, including the deputy minister and the assistant deputy minister, people from energy and mines branch, highway personnel from the Department of Community and Transportation Services, and I believe there were also some people from the Department of Education involved, due to the forecasted impact on the school in Dawson. I am not certain of everyone involved, but I do know that those people were certainly involved.
Mr. McDonald: In terms of the people involved in government, could the Minister come back with a list, specifically, of the people who have been involved in the discussions that took place in January and February? Can he also indicate to us right now whether or not there is anyone, other than government and Loki Gold representatives, involved in the discussions?
Hon. Mr. Fisher: Was the Member asking if there was anyone other than government people and Loki Gold personnel involved? Certainly not to my knowledge.
Mr. McDonald: The Chamber of Mines had no role at all in the discussions?
Hon. Mr. Fisher: No, not that I am aware of. Now, the Chamber of Mines probably had many discussions with Loki Gold, but certainly not with respect to the industrial support policy.
Mr. McDonald: I am looking forward to the debate that will come forward, presumably shortly. Can the Minister tell us precisely where these discussions are at the present time? Have they concluded with the private sector operator? Are they in the Minister's hands? Are they going to Cabinet? Where does it stand?
Hon. Mr. Fisher: As far as I know, the department is doing analysis right now. Our mining facilitator is out of town for the week, and so I cannot be more precise than that, but I do understand that several people in the department are working on various aspects of the agreement now.
Mr. McDonald: Have the discussions with Loki Gold concluded? Are we now in the analysis phase? Is it fair to say that?
Hon. Mr. Fisher: I am a bit reluctant to say that that is a fact. I know that some parts of it have been concluded, but I do not know if it all has. Because our facilitator is out of town, I am just not sure. The other thing is that the deputy minister is also out of town, so we are not absolutely certain where it stands.
Mr. McDonald: When does the Minister expect that the analysis will be complete and the deal brought before the Legislature?
Hon. Mr. Fisher: Again, I am guessing. I hope that in the first part of April we will be able to come in with something.
Mr. McDonald: I will be looking forward to that discussion.
Where are we in the development of the electricity rate policy? Is that work complete or is it coming close to completion? With whom is the government consulting? Is the Yukon Utilities Board involved at all in this? What is the plan?
Hon. Mr. Fisher: My understanding is that it is still in the development stages. We are waiting for the review of the Yukon Utilities Board by Justice. When that is completed, we will carry on with the policy development.
Mr. McDonald: What is it that Justice is doing to cause the Minister to delay the development of the policy? I was under the impression that Justice was reviewing the way rate requests by the energy producers are analyzed and approved. In terms of the electricity rate policy that the government is producing, what is it that has been held up as a result of Justice's activities?
Hon. Mr. Fisher: The two events are not linked and, in fact, the idea is to keep them totally separate. My understanding is that that is the reason we have not yet gone ahead with the policy.
Mr. McDonald: The Minister does not want to interfere with the public consultation that, presumably, the Department of Justice is doing with the review of the Yukon Utilities Board. That would explain why the Minister does not want to go to public consultation on an electricity rate policy at precisely the same time.
Does that mean that the department is now developing discussion papers and is going to be ready when the Department of Justice has concluded its public consultation phase? Can the Minister tell us when the public consultation phase by the Department of Justice will be over? I thought it had done a fair amount of consultation, and I was under the impression that it was over. Perhaps the Minister can let me know.
Hon. Mr. Fisher: I would like to bring the Member a legislative return outlining that because I am on pretty thin ice here about knowing precisely where it stands. I know that there are some background papers but I do not know where the whole process stands. I will get that information and provide it to the Member opposite, as well as to the other Members.
Mr. McDonald: Okay. Would it be too aggressive to ask that the Minister come back with that information tomorrow so that we can talk about it then, or is he looking for more time?
Hon. Mr. Fisher: That is pretty tight, but we will certainly try. If not, I can no doubt have it here for Monday.
Mr. McDonald: Monday sounds good. I have a feeling we may be wrapping up the department at that time - who knows, but I am sure we will be here.
There has been a lot of discussion about the comprehensive energy policy. Promises were made back in December 1992 and, I believe, in March 1992, that a comprehensive energy policy would be developed and that the Department of Economic Development was the lead agent. Obviously, much of what we have discussed here today would be components of that policy - the independent power producers, the electricity rate policy, whatever unstated issues exist in the industrial support policy - but there are also a number of other sectors that have not been addressed.
Can the Minister tell us the status of the development of that policy?
Hon. Mr. Fisher: I earlier gave the Member an outline of the strategic business planning process. A planning group has been put together from the department that will be reviewing all energy policy issues and will try to integrate the energy related planning in the department's strategic and business planning process. That is where we are right now.
Mr. McDonald: I beg the Minister's forgiveness. I have not had a chance to thoroughly read through the business plan, but the strategic issues that are identified in the business plan on page 3 or 4 refer to the resource policy needs for energy and forestry. That is a little different from what I am referring to, which is a comprehensive energy strategy that would incorporate not only the resource needs, which would be provided for under the industrial support policy - or what one can understand of that policy - but it would include the electricity rate policy and the independent power producers policy. It would also speak of the alternative energy generation, the need to conserve energy and environmental issues. That is what people mean when they speak of a comprehensive energy policy to determine how all the various individual programs and policies tie together and how they are related. That is what I am referring to. Can the Minister tell us where that project - a much bigger project - stands?
Hon. Mr. Fisher: I think the one that the Member was looking at in our strategic planning process just contained a few examples. The energy policy will be a completely separate policy.
Perhaps I will briefly outline some of the objective about what the department would like to do. It would like to identify some of the current energy issues, determine what actions can be taken to resolve those concerns, develop an action plan for government management of the energy sector and a comprehensive inventory of energy issues, determine how energy interests could be best managed within the structure of the Department of Economic Development, and determine how the department could gain or develop a knowledge base on energy issues. Those are some of the objectives of the group that will be working on the policy.
Mr. McDonald: Where is the policy then? What is the timing? Obviously the Minister is taking a different approach from his predecessors. I will not pass judgment on that approach. I will just say that the Minister responsible for the Yukon Energy Corporation in 1992 indicated that it would take approximately a year to develop a comprehensive energy policy, which mean that we were all waiting with bated breath in December 1993.
Obviously there is no comprehensive energy policy now. Can we get some sense of when this new strategic group - the SWAT team, the team that is going to analyze the strengths, weaknesses, opportunities and threats; I hope that he does not think that the Legislature is a threat, but merely an opportunity - is going to be dealing with all of the various elements of the energy policy? As well, can the Minister give us a better sense of what we should be expecting to see, and in what time frame?
Hon. Mr. Fisher: The strategic planning process incorporates all of the people in the department, but under a planning group has been working on the energy policy.
I really do not want to commit the department, but I expect it will be a year or more before we have a full, comprehensive energy policy in place. I am sure it will be at least a year.
The department is compiling a lot of background material. The group is in place and it has identified some of its objectives, which I related a few minutes ago. The department has a good start on it, but I would expect that it would be at least a year before we had a comprehensive energy strategy.
Mr. McDonald: Will this comprehensive strategy incorporate the electricity rate policy at that time? Does the Minister figure that this electricity rate policy will be completed within the next year?
Hon. Mr. Fisher: The electrical rate structure has to be completed sooner than that, so I doubt very much if it would be part of this process. It would be done separately.
Mr. McDonald: So, whatever is happening with the Department of Justice, as far as the department is concerned the electricity rate policy will have to come out within the next year, and probably much sooner; is that right? I know that the Minister is coming back with information on Monday, but does he have a ball-park idea of when it might be completed?
Hon. Mr. Fisher: I do not know at this point in time. We will include that in the return that we bring back after discussing it with the department.
Mr. Cable: I have just a few more questions about the comprehensive energy policy. The previous administration had started a process that was fairly well developed, or fairly far down the road. It produced a number of discussion papers, and I am sure the Minister's assistant has seen them before. They seemed to me to be fairly well reasoned.
The election interjected itself into the process, and the booklets and the work that went into them, which was some considerable effort, seem to have gone for naught. The present administration seems to have put all that work on hold and has started to reinvent the wheel. Why was that process not kept rolling?
Hon. Mr. Fisher: The information that the Member has will not be lost. We will be using all kinds of background information in the development of the policy.
Mr. Cable: We have discussed a number of segments of the policy in this House. There are also a number of segments that have not been discussed very thoroughly in this House.
It would be useful to get the Minister's view on who is going to be developing the policy and whether or not, in fact, there is going to be a policy component in the comprehensive policy that his department is producing.
I think, in particular, there are three or four different areas. One is the policy with respect to the tying in of individual homeowners and businesses into the system, where they have their own generating systems - either their own diesels or little hydros or photovoltaic cells or windmills. That is now being driven by the Yukon Energy Corporation.
I think that most utilities find these people to be a bit of a nuisance and, in my view, do not give them their proper due. Is the comprehensive energy policy going to incorporate a tie-in policy for these small operators?
Hon. Mr. Fisher: Yes, the department will be developing an independent power producers policy. As a former electrician, I agree with the Member opposite that these things can be a bit of a nuisance.
When I worked for Yukon Electrical Company Limited in Watson Lake, I recall that the sawmill had put in a very large turbine to produce power for the mill and wanted to sell it to Yukon Electrical. We actually used the power for a couple of days, on a trial basis, but the cycles could not be read. It was impossible to maintain a steady flow of power out of that unit. I can imagine that a small one of five kilowatts or so could be a real pain unless the policy outlines exactly the requirements that person would have to meet to pump into the grid.
Mr. Cable: There are two elements of a comprehensive independent power producers policy. We have the non-utility generation policy, which was tabled by the Minister responsible for the Yukon Energy Corporation some time last year. There is also the hook-up policy, with respect to people who are generating their own power, primarily for their own use.
For example, the small generating system at Fraser is basically a mini-utility. However, there are other people - I think there is an example on the Carcross Road of a gentleman who has a few-kilowatt hydro-generating system. Those are two sorts of independent power producers. Is the Minister's department going to be developing policy in both of those areas?
Hon. Mr. Fisher: I do not know. I know they will be looking at them, but I am not sure at this time if they will be developing a policy for both areas.
Mr. Cable: Another area about which we have not had much comment in the House is energy conservation and energy efficiency. This involves a whole series of programs
. Are energy conservation and energy efficiency going to be part of the comprehensive energy policy?
Hon. Mr. Fisher: We certainly will be looking at them. As Minister of Renewable Resources, I definitely have a great interest in both energy conservation and efficiency.
Mr. Cable: That sounded like a yes, so I will take it as such.
Another area that involves the environment and the Minister, with his Renewable Resources hat on, is the use of carbon fuels. The previous administration had delved into that with one of its booklets on the impact of the petroleum fuel use.
Is the Minister, in the development of his comprehensive energy policy, going to deal with the use of carbon fuels - either the encouragement or discouragement of their use?
Hon. Mr. Fisher: I do not really know. That is getting into a lot of detail. I am not sure if I am qualified to address that in detail. The problem in the Yukon is that most of our energy is based on carbon fuels. It will certainly be looked at, but I am not sure if it will be in detail.
Mr. Cable: One of the problems on this side of the House in dealing with energy policy is that we are not certain what the government is going to deal with as elements of its policy. Another issue that has come up and has been debated is the privatization of the Yukon Energy Corporation. Will ownership of the generating facilities be dealt with in a policy sense as part of the comprehensive energy policy?
Hon. Mr. Fisher: No, I do not think that would be part of our policy.
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 on Economic Development?
Mr. Cable: Before the break, we were talking about the elements of the comprehensive energy policy. Have there been any written instructions to the working group the Minister referred to in his budget speech that is working on energy policy?
Hon. Mr. Fisher: There have been verbal instructions.
To clarify something I said before the break, the whole strategic business planning process will outline how we want to conduct the comprehensive energy policy. There will be several different portions to it, and they will all be laid out in the business plan that we will be making public.
Mr. Cable: The Minister says that the business plan will identify what the department wants to do. Does that include identification of the sectors of the comprehensive energy policy that will be dealt with?
Hon. Mr. Fisher: I am not sure if it will specifically identify each one, but it will give an outline of when we want to have certain things done.
Mr. Cable: Some jurisdictions are looking at treating electricity distribution in the same light that we look at phone services, where many people have access to the transmission lines - if I remember correctly, I think the concept is called "wheeling" - and that makes for competition, much the same as we have seen in long-distance rates in the phone system.
Is the Minister going to instruct his officials to review the issue of wheeling and another similar issue of avoided costs? This is very integral to the market forces coming to play on the distribution of energy and, perhaps down the road, the cost of energy.
Hon. Mr. Fisher: I have never heard the particular terminology the Member opposite used. We have had a couple of our people recently attend a conference to make them aware of the many issues that are out there, and we hope that will be brought into the whole planning process.
Mr. Cable: I do not want to confuse the issue; however, the issue of voided cost is an integral part of the independent power producers policy. That policy will not get off the ground unless the government - not the utility - sets the threshold price for the independent power producers.
I have another question about the process. Who is in this group besides the Minister's officials? Are there any other departmental officials? We heard briefly about the Department of Justice. Are there any Renewable Resources officials involved to coordinate the issue of energy conservation and efficiency?
Hon. Mr. Fisher: For the business planning process that is underway right now, it is just the departmental officials who are involved. I would expect that they will be bringing in other involved departments under the various sectors that come into the energy policy.
Mr. McDonald: I have a couple of final questions about the development of the energy policy. The Minister is going to be bringing back some information, so we will perhaps have a more informed discussion later. In the strategic and business planning process for the department, the Minister has indicated that they will be discussing the form and the content of the comprehensive energy policy. What specific direction is the Minister giving the department to consider in the development of the comprehensive energy strategy? What does he consider to be the essential component parts of that strategy?
Hon. Mr. Fisher: I read out some of the draft objectives that we hope to achieve to help identify the current energy issues in the territory and to determine what actions could be taken to address those issues and resolve the concerns that have been brought to our attention. We would then develop an action plan for how we intend to do this. I think those are the two key components.
Mr. McDonald: That is the sum total of the ministerial direction to the working group developing the comprehensive energy strategy? Was there any other sense of what they wanted the group to consider?
I was just listening to the exchange between the Minister and the Member for Riverside. I got the very distinct impression that the department's planning process is going to determine what is in the energy strategy. I just wanted to be clear that the Minister pulled himself into that process and on whether or not the Minister had a role to play in making decisions. Given that these issues have all been on the table for some years now - presumably, Cabinet has passed judgment on what should be part of the comprehensive energy strategy, and presumably the government would make sure that the department incorporated those component parts into a comprehensive plan - could the Minister elaborate on the direction he has given to the department?
Hon. Mr. Fisher: The other direction for the department is the four-year plan. The department, through its business plan or strategic planning process, will be outlining what actions it hopes to be able to take in the overall energy policy. I will be involved, I expect, as we go through process. I think we need to know what all of the energy issues are. We need to compile an inventory of what the issues are and how and when we are going to deal with them.
Mr. McDonald: I will not go on at length about this. It just strikes me that, given all that we have been through in the Legislature in the last while, in identifying the number of issues that have been raised this afternoon, we would be past the stage of taking a passive approach, from a political level, in the development of the comprehensive energy strategy. Clearly, any reasonable action plan or strategy to develope the strategy would involve identifying issues and developing an action plan. I fully concede that point.
Questions such as identifying conservation as an issue and whether or not conservation measures will be incorporated into the comprehensive energy strategy are all things that I would have thought we would take for granted, and that we would not leave them up to a working group to decide if it is going to be in or out.
I am a little surprised by it, that is all. I thought we were further ahead than we actually are.
Ms. Moorcroft: I have a question or two for the Minister regarding the strategic and business planning process that has been prepared and tabled in the House. It states that the most effective business plans are those involving every level of the organization. It seems to me that we heard the term "business plan" earlier today in Question Period. Can the Minister say whether or not there will be any private sector participation in economic development strategic planning?
Hon. Mr. Fisher: In the whole planning process we expect to consult with some groups - likely, the Yukon Council on the Economy and the Environment, and possibly the Chamber of Commerce and the Chamber of Mines.
Ms. Moorcroft: Hearing what groups the Minister is going to consult with is at least a start, although I think it is a fairly limited list that the Minister has provided, and strictly of the business interests. Are there any plans for the Department of Economic Development to move in the same direction as Government Services, and have private companies running the organization in the development of the strategic and business plan? Will Coca-Cola or Dairy Queen have the best chance of running the department next year?
Hon. Mr. Fisher: No, I do not think Coca-Cola or Dairy Queen will be running Economic Development. We may ask MacDonald's; they have a very successful operation. I think the Member was being somewhat facetious, and no, it is not our intent to bring in the Dairy Queen.
Ms. Moorcroft: I do have a serious question. This issue is one that affects the delivery of public service in the territory, and it has a big impact on a lot of Yukoners. Does the department plan to issue any contracts for bringing in management consultants in the process of doing their business and strategic planning?
Hon. Mr. Fisher: We already have a consultant. He does not work full time but he is providing assistance with the development of the business plan, and we will probably use him some more. There may also be other people involved, but I am not sure at this point in time.
Ms. Moorcroft: What is the value of the contract to which the Minister just referred, and who is the consultant who is employed?
Hon. Mr. Fisher: I will have to bring that back. I can have it for the Member tomorrow. I am not sure of the value.
Ms. Moorcroft: I would like to know the value of the contract and its nature - if the contractor is going to be providing direction to government or receiving direction from it. I would also like to know whether or not the Minister has any plans to consult with sectors of the economy other than the Chamber of Commerce and the Yukon Council on the Economy and the Environment. Is there any plan to talk to labour organizations, women's groups, conservation organizations, or First Nations? Is this going to be a full consultation that works with all the Yukon's population?
Hon. Mr. Fisher: I have just a couple of points. We are getting assistance from the consultant on the process, but the content of the whole plan is provided by the department.
Once we have completed the plan, we will be making that public. We will be inviting comments from the public in general.
Mr. McDonald: Can the Minister tell us who the consultant is?
Hon. Mr. Fisher: The fellow's name is Mark Anielski.
Mr. McDonald: Is the person a local person? Does he work for a local company? What is the name of the company?
Hon. Mr. Fisher: It will be on the return tomorrow, but I think the company name is Anielski and Associates. It is based in Alberta.
Mr. McDonald: Can the Minister tell us today or tomorrow whether or not it was an invitational tender? How was this consultant chosen?
Hon. Mr. Fisher: I think the Member for Riverdale South asked for the spelling. It is A-n-i-e-l-s-k-i. My understanding is that it was a sole-source contract. It was under the limits of the contract guidelines for sole sourcing.
Mr. McDonald: Can the Minister tell us what the reasons were for sole sourcing this work to this particular consultant?
Hon. Mr. Fisher: The company apparently has a lot of experience in business planning for government departments in Alberta and our deputy minister knew his reputation. That was the reason for using that fellow.
Mr. McDonald: We will have to keep an eye open for the ebullient flow of contracts and projects going to Alberta firms. I am certain that there are probably a few people in the Yukon who have some experience in strategic planning processes and may feel a little put out that they did not even have a hope in Haiti to get this business.
The strategic planning process identifies a vision as the first order of business. What constitutes that vision? What is the vision statement?
Hon. Mr. Fisher: Part of the process is to identify the vision, the mission and the objectives. We wanted to outline in this paper what the whole planning process would entail, and that is what we did. I have discussed it with the department but I do not know what it has actually come up with at this point to identify the vision, the mission and the objectives.
Mr. McDonald: My experience in the strategic planning process is that it is quite helpful sometimes for the political level to have a vision, and to communicate that to the department. The department then has a much more comfortable time developing missions and operating principles. We will see what the department comes up with in terms of its vision.
I have a number of other questions to ask. We spoke briefly about the Yukon Economic Strategy and the updating of that strategy. The umbrella final agreement refers to ensuring that there be one-quarter First Nation delegates to any conference reviewing the Yukon Economic Strategy. How is the government living up to its obligations under the UFA in this regard?
Hon. Mr. Fisher: The last conference that the Council on the Economy and the Environment was involved with was the mining conference. Invitations were sent to all First Nations. I believe that the wording - if I remember correctly - was that 25 percent would be invited. The Yukon Council on the Economy and the Environment assured me that more than 25 percent of the invited delegates were First Nations people.
Mr. McDonald: The government's official position is that any update of the Yukon Economic Strategy can be accomplished through what the Yukon Council on the Economy and the Environment is doing in its sectoral, one-day conferences - is that correct?
Hon. Mr. Fisher: The department will be working very closely with the Council on the Economy and the Environment on the sectoral component, but the whole thing will also be addressed in our strategic or business planning process.
Mr. McDonald: We are certainly loading a lot on to the strategic and business planning process. It is unfortunate that the process could not have been completed prior to the legislative session, where questions on the accountability of government takes place. However, we will have to make do with what we have.
Does the Yukon Council on the Economy and the Environment have a specific workplan? Has the Cabinet or the Minister given the council some instructions on what should be included in the workplan and when the items on the workplan should be discussed?
Hon. Mr. Fisher: The Government Leader, to whom Yukon Energy Corporation reports, has directed that it do the sectoral review of the issues. The Department of Economic Development has asked that it be involved in this business planning process, as well. My understanding is that it has shown interest in becoming involved.
Mr. McDonald: Can the Minister bring back a copy of the council's workplan for us - if there is one - so that we can gain a sense of where it is going, what its thinking is, and what it regards as being the highest priority?
Hon. Mr. Fisher: As I said before, the Yukon Council on the Economy and the Environment reports to the Government Leader, but I will certainly pass on that request to the Government Leader.
Mr. McDonald: If the Minister is not successful with the Government Leader, would he please undertake to tell me, so that when the Government Leader is actually sitting in front of me, I can peg him for the same information. If he could do that, I would appreciate it.
There are a number of items on the department's current policy activities list that are certainly of interest. One has to do with the development of economic profiles for various communities in the territory, and the one that is listed here is Watson Lake. Can the Minister tell us more about this profile study?
Hon. Mr. Fisher: I am glad that the Member asked that question. I did the very first one there when I was the town manager in Watson Lake.
I believe that the town put the first one together. I think there was one put together, and then the Chamber of Commerce and the department worked together to update the information they had. Actually, I have not seen a copy of it, but it apparently is not completed as yet.
Mr. McDonald: When it is complete, could the Minister provide us with a copy of the profile? Can he also tell us how a community is selected for a particular economic profile?
Hon. Mr. Fisher: Generally, it is in response to a request from the community. Apparently, one was done for Dawson about a year ago, and we would be quite happy to provide all the Members with a copy of that one and the one for Watson Lake when it is complete. It is just in the development stage and is not complete yet.
Mr. McDonald: So the government's policy, then, is to agree to carry out a profile for any community requesting that such a profile be done?
Hon. Mr. Fisher: Yes, taking into consideration priorities and time and so on and if they are prepared to work with the department, either through the Chamber of Commerce or some such organization in the community.
Mr. McDonald: Another item on the list of policy activities is estimating the economic benefits of several potential mining properties. Can the Minister tell us which one of the mining properties the department is analyzing, aside from Loki Gold?
Hon. Mr. Fisher: My understanding is that there is an analysis of probably all of the properties that are in the permitting stage right now.
Mr. McDonald: Is that analysis complete? I think at one point the Minister indicated that there were five properties in the permitting process. Is that correct? Is this public information?
Hon. Mr. Fisher: Generally it is not public information because it is from the company. Some of it is definitely confidential information.
Mr. McDonald: Why would that be? It seems to me that analyzing the economic benefit of a mining project would be very public. I do not understand why there would be any concern about betraying commercial confidence. What is the problem?
Hon. Mr. Fisher: I do not think that there is anything confidential on the benefit side, but on the viability side there is information that came from the mining companies themselves. I would expect that some of that information would be confidential. The benefit side is not confidential at all.
Mr. McDonald: That is what I was asking about - the estimation of economic benefits of several mining properties. It is not confidential, and the Minister said it is done at the permitting stage of the mines - I thought there were five mines. Can the Minister tell us which ones those are? Can he give us a commitment that he would provide that information upon request?
Hon. Mr. Fisher: We can provide a list. I just asked Terry if we can. We will try to provide the information that we have on the benefit side to the Members in the next day or so.
Mr. McDonald: There are a number of other little projects. I am going down the list, because there is some information that I want to request and I am going to do it quickly, one at a time, so that I can get it all over with in one brief period.
There is a survey identified here, entitled "Access to Financing Survey", which is under program review. Does the Minister have that?
Hon. Mr. Fisher: Apparently this is the annual survey that is done by the Bureau of Statistics. Apparently there were three questions with respect to financing that we asked the bureau to include in their survey. The survey may be complete, but the publication of the survey is not. That survey will be made public when it is completed.
Mr. McDonald: Presumably the economic development agreement and business development fund evaluations are going to be made public. When are they going to be made public - they generally are made public, which is why I am assuming that they will be.
Hon. Mr. Fisher: The economic development agreement is made public every year, and it should be out some time in May. We should have the business development fund evaluation completed by the end of March. We could also make that available to the Members.
Mr. McDonald: I would like to receive copies of a couple of items. In the section entitled "environment and economy planning", there is an item entitled "state of environment reporting". Is there any documentation or specific analysis that the Minister can make available that would explain or describe this project?
Hon. Mr. Fisher: This is really a Renewable Resources project. However, Economic Development is involved in providing information to them. Putting on my other hat, I do not know where it is at right now under Renewable Resources.
Mr. McDonald: Can the Minister come back to us with some information about the state of environment reporting. That has actually been a very interesting project done in other jurisdictions, and I am very interested in what it might identify in terms of issues for us in the Yukon, and what the government counts as being valuable in the environment and what should be preserved. If the Minister could come back with that, I would appreciate it.
Has there been any analysis done on the trade policies that he has identified under the title "trade policy" that might be made available and might be made public?
Hon. Mr. Fisher: No. There are no actual studies or reports. It is just a monitoring function that the department undertakes.
Mr. McDonald: I do not want to get into another subject for the next two minutes, so if other Members have a quick question or if we want to break soon, that would be fine with me.
Chair: The time being close to 5:30 p.m., we will recess until 7:30 p.m.
Chair: I will now call Committee of the Whole to order. We are on Bill No. 3. Is there further general debate on Economic Development?
Mr. Cable: Prior to the break, we were discussing the department's current policy activities, and the Member for McIntyre-Takhini was going over the various policy initiatives that the Minister's department is involved in. I notice there are several policy initiatives that appear to overlap with the Department of Renewable Resources. It suggests to me that the Minister, now having both hats, is in a position to shut down some of the warfare between the soldiers from one department and the soldiers in the other department.
I am thinking particularly about agricultural policy. Who is actually responsible for developing agricultural policy? Is it the Department of Renewable Resources or the Department of Economic Development?
Hon. Mr. Fisher: It is the Department of Renewable Resources, with assistance from Economic Development.
Mr. Cable: There appear to be a number of other initiatives, such as the forestry policy and the parks policy, that would suggest a two-department system of policy development. Is there an interdepartmental group that works on the overlapping departmental responsibilities?
Hon. Mr. Fisher: Yes. In the case of forestry work, there is a person from each department who is named as a sort of lead hand from each department. They then work with the staff in their respective departments, as necessary, but it is a team where there are two people, one from each department working together.
Mr. Cable: Who is responsible for developing the agricultural policy and who is responsible for developing the forestry policy?
Hon. Mr. Fisher: The agricultural policy is the responsibility of Renewable Resources. Forestry policy is where we have a team. The devolution part of it is the responsibility of Renewable Resources and the management policy is the responsibility of Economic Development.
Mr. Cable: I am sorry, I am not clear on agricultural policy. Is the Minister saying that is the sole responsibility of Renewable Resources? It appears to be listed in the Department of Economic Development under current policy activities.
Hon. Mr. Fisher: It is the responsibility of Renewable Resources, but there is assistance given on certain issues by Economic Development.
Mr. Cable: What is the input from Economic Development? What do they have to do with agriculture?
Hon. Mr. Fisher: The Department of Economic Development looks at the economic potential of agriculture, such as the impact of using land for agriculture, as opposed to something else.
Mr. Cable: Who would be responsible for working out the forecast as to the future of agriculture and its effect on the economy, in terms of its projected size? I am referring to the Minister's remarks of a few weeks ago, where he indicated that forestry would become a major part of the economy here.
Hon. Mr. Fisher: The Department of Renewable Resources would determine the potential for agriculture in the territory. I would expect that they would be using people from Economic Development for other parts of it. However, the potential viability and so on would definitely be the responsibility of the Department of Renewable Resources.
Mrs. Firth: I want to go back to the Minister's strategic and business planning process. The Minister indicated this afternoon that he would bring back the information about the cost of this contract. Is he going to bring us the whole contract, or just the cost of it? The reason I am asking is that I would like to know if I can have the whole contract. I would be interested in knowing the terms of reference for the development of the plan.
Hon. Mr. Fisher: I do not have a problem with bringing the contract. There is probably a service contract in effect. I can probably bring that back tomorrow.
Mrs. Firth: I will wait for it.
In the development of the strategic business plan, is the government developing it with the existing budget in mind, including the capital budget and the operating and maintenance budget, or is it being developed in a more generic way? How is it doing this with respect to the amount of money it has to spend in relationship to the plan and the strategy?
Hon. Mr. Fisher: Naturally, we would be guided by existing budgets. However, the whole idea of the business plan is to carry out a fundamental look at what we do, how we go about doing it, what we do best, what we do not do well, and so on.
Mrs. Firth: I would be interested in knowing what the department does best and what it does not do very well. I hope that the Minister is going to bring that information back to us.
I listened to the Minister's remarks when he introduced his department's supplementary budget for the current year. In those comments he stated that the business plan will be an action plan that will clearly state the steps government will take to develop mineral, forestry and energy sectors, and small business. I would like to ask the Minister just what he feels the Department of Economic Development's role is, and what its responsibility is in developing these industries.
Hon. Mr. Fisher: I do not really know what the Member means. Maybe she could clarify it for me.
Mrs. Firth: I do not think that it is the government's responsibility to develop small business; however, that is what the Minister said in his opening comments. He said that his department is going to develop the mineral industry, the forestry industry, energy sector, small business, and so on. I want to know what he means by that. What is the Department of Economic Development going to do to develop small businesses?
Hon. Mr. Fisher: It does not mean that we run small businesses. That is not what the department is for. What we need to do is to create a climate that is conducive to small business and industry, so that they can develop their own plans and their own strategies to run businesses or industry, or whatever.
Mrs. Firth: Could the Minister tell us what kind of climate that is and what his department has done on that so far?
Hon. Mr. Fisher: In the past, the department has provided loans and grants. In my opening remarks, I said that the department would create a planning process that would lead to an action plan, which would lay out the steps we would take to help the industries develop minerals, forestry, energy, small business, or whatever it may be.
Mrs. Firth: So, the Minister is saying his department has really done nothing other than give out loans or grants to help in the development of small business. For example, it has done nothing to deregulate so businesses do not have to go through all this red tape to get started; it has done nothing with respect to reducing the tax burden to the business community. In fact, it has increased it. It has done nothing with respect to any tax incentives. So, really, the department has just been handing out loans and grants. Is that correct?
Hon. Mr. Fisher: I think there is quite a bit more than loans and grants. We want to develop an action plan. Budgets are tightening up, as I think we are all aware since the federal budget came down the other day, so our role will naturally change as that funding dries up.
Mrs. Firth: The Minister said they had done lots of other things besides giving out loans and grants. I would like him to tell me what.
Perhaps I will let him finish that, and then I have a couple more specific questions.
Hon. Mr. Fisher: I will just read some of the departmental objectives from the budget.
Mrs. Firth: If it is in the budget, I can read it.
Hon. Mr. Fisher: That is exactly what we do. If the Member can read it, I wish she would.
Mrs. Firth: We have all read that. The Minister stood up here and said, "We do not just give out loans and grants. We have done lots of other things." I do not consider the objectives as being "lots of other things". I want to know what exactly his department has done so that he can stand up here and say, "We have done lots of other things." Obviously, he cannot do that, so I will not belabour it. I will just make my point.
Could the Minister tell us what the position is of his department and his government with respect to grants? Do they support grants or not?
Hon. Mr. Fisher: Generally speaking, we do not believe in outright grants.
Mrs. Firth: "Generally speaking" is not really a position. What is the position of the government? Does this government support grants or not? I want a yes or no answer.
Hon. Mr. Fisher: Generally speaking, we do not support grants. The Member should know, if she does not already, that under the economic development agreement a large portion of that funding is from Canada and, even though we may not necessarily agree with that type of funding, it is our responsibility to deliver it on behalf of the federal government, and we have continued to do so.
Mrs. Firth: For a government that "generally" does not support grants, why is it giving $9.5 million out in the form of grants by way of the centennial anniversaries program?
Hon. Mr. Fisher: That was exactly the type of argument I did not want to get into, because the next thing the Member will say is that we should not be supporting municipalities. The centennial anniversaries program is infrastructure support for tourism. I believe something like $11.4 million per year is given to municipalities so they can operate services. That is why I refused to say that we did not or that we did support grants. The funding to municipalities is a grant and we do support that type of funding.
Mrs. Firth: We are not talking about funding to municipalities. We are talking about $9.5 million.
The Minister is saying, "you said grants, you said grants". Look, the Minister stood up here and said, "generally, we do not support grants", but this government has started a $9.5 million grant program for the centennial anniversaries project. This is the biggest grant program that the territory has ever had, and it is the Minister's government doing this, the same government that says generally they do not support grants. There is a huge inconsistency and contradiction in statements. What is this government's position with respect to loans?
Hon. Mr. Fisher: Under the economic development agreement, there is program support from the federal government for loans. The territorial government has its own loan program, the business development fund. The government is probably going to get out of the loan business because this government generally does not support loans. However, again, the municipalities borrow money from the Yukon government, so I cannot say that the government does not support loans, because the government supports certain loans. Generally speaking, we would prefer not to be in the loan business.
Mrs. Firth: So I guess this government supports grants if it is giving grants to municipalities, and it supports loans if it is giving loans to municipalities. What is the government's position with respect to grants and loans to the private sector? Is that the part the government does not believe in? If the government does not believe in loans for the private sector then why is it doing it?
Hon. Mr. Fisher: The budget amount for loans this year is less than it has been, and we want to phase out of the loan business. Before we do that, we have to know what impact that is going to have and whether we should be making loans.
The government is conducting an evaluation of the business development fund program right now to find out if it should be in the loan business at all. For instance, in the communities outside of Whitehorse that do not have a full banking service, it may be very difficult for the private sector to have access to capital.
We want to find that out, and we will make a final decision after we have done an evaluation of the business development fund.
Mrs. Firth: Banking access in the communities is not the issue or the question, when it comes to trying to get a loan - it is risk. If someone has a good idea for a good business and has collateral to put up, and the bank thinks it is a good risk, it will lend that person money. It has nothing to do with whether or not there is banking in the community.
I want to ask the Minister some questions about the loan problems in his department. I asked the Minister to provide information about how many delinquent loans had simply been renegotiated. I received a five-line commentary about how it was not a simple process and it involved a lot of stuff. However, we were not told how many delinquent loans were renegotiated, and I am wondering if the Minister can answer that now.
Hon. Mr. Fisher: I do not have that information with me. I will have to bring it back in the next day or so.
Mrs. Firth: I look forward to getting that information tomorrow. The legislative return made reference to a detailed process involving counselling and financial assessment to develop a repayment schedule acceptable to the government and within the capacity of the business. Can the Minister tell us if any of the businesses that were delinquent in making their loan repayments borrowed from another institution with a government guarantee? Was that a method used to pay off some of the delinquent loans?
Hon. Mr. Fisher: Not for guarantees, but I understand that some businesses were encouraged to totally refinance through a regular financial institution, which some did.
Mrs. Firth: The government did not then turn around and guarantee that loan to that financial institution for that business?
Hon. Mr. Fisher: Not that I am aware of.
Mrs. Firth: That is the answer I am looking for.
I tried to get a clear answer from the Minister about what delinquent loans are. The list of loans in arrears is considerably greater than the ones that are delinquent over 90 days. There are something like 62 in arrears and only 18 in arrears over 90 days.
I had asked the Minister when they considered the person or company to be delinquent and what actions were taken in what time periods. I know that there are written notices sent out at 30, 60 and 90 days, so the Minister does not have to tell me that. When does his department begin getting a bit concerned about the ability of an individual or business to make the payments? What is all this "aggressive action" the Government Leader referred to on the radio and all the new things they are doing that the previous government never did? Can the Minister give us that information, please?
Hon. Mr. Fisher: After 30 days, they go on our arrears list. Action is begun at that point. I have the procedure here. The first reminder notice would go out 10 days after a payment is missed. The second reminder notice is sent after 20 days. After 30 days, there is a letter indicating that two payments are now due. After 60 days, there is a letter stating that the account is seriously in arrears and the client is requested to contact the economic development officer immediately and make arrangements. The EDO is advised to contact the client and prepare a report. After 90 days, the economic development officer's report is reviewed and they actually go to the client.
Next, the program officer prepares a letter to the client outlining the situation, if there is no response from the client, information, et cetera. This is done on a case-by-case basis. The project security is reviewed and a recommendation and a course of action is sent to the deputy minister. A credit bureau report is completed and forwarded indicating that collection problems are occurring. Then, in 120 days, if the deadline for client action has passed, the file is referred to the assistant deputy minister and the deputy minister with the recommendation that a final collection letter be sent before referral of account to the Department of Justice.
Mrs. Firth: This aggressive process that was referred to is mainly a communications process. Now, I just want to make a note here while I am speaking and thinking and chewing gum.
It is only after 90 days that it is reviewed. The financial program officer outlines the information they review and a course of action is recommended. Is it the financial program officer who reviews it and makes the recommendation as to the course of action? Who is involved in that process? If the client refuses to come in, and is not involved in any way in the discussions, what happens then?
Hon. Mr. Fisher: The economic development officers are involved throughout the process, but after the 90 days the EDO then passes it over to a financial program staff member, but the EDO remains involved throughout the process.
Mrs. Firth: When is the decision made that this loan has to be written off? When do they make the decision to write off the $1.2 million worth of loans?
Hon. Mr. Fisher: After the 90-day notice and telephone calls, a report is completed and forwarded to the credit bureau. The deputy minister and the assistant deputy minister would do a complete review after 120 days and refer the matter to the Department of Justice for whatever action is necessary. Unless the client had deceased, or something like that, I believe that a recommendation to write it off would probably come much later in the process, because it would go to the credit bureau and then to the Department of Justice, and so on.
Mrs. Firth: Is the correspondence sent by way of registered mail or by way of regular mail?
Hon. Mr. Fisher: I am not sure, but I believe the correspondence mailed after the 90-day period is sent registered mail. I am not exactly sure what the process is, but at some point in time there is registered mail sent to the client.
Mrs. Firth: I would appreciate it if the Minister could bring back that information for me.
Once the 120 days have elapsed and the file goes to the ADM and the DM, a decision is made regarding a final collection letter, and it is then referred to the Department of Justice. Who makes those decisions?
Hon. Mr. Fisher: The deputy minister would make that decision.
Mrs. Firth: The deputy minister makes the decision with respect to it going to the Department of Justice. What does the Department of Justice do with it?
Hon. Mr. Fisher: I am not sure what the process is in the Department of Justice. Eventually, the people are brought to a court of some sort. I am not sure what the process is.
Mrs. Firth: What I am trying to determine is who makes the decision about whether or not there will be court action taken? In the department that is referring it to the Department of Justice, do the assistant deputy minister and the deputy minister say that it is to go to court action? Is that where the decision is made, or does the Department of Justice make that decision?
Hon. Mr. Fisher: Once it is given to the Department of Justice, a court action will commence unless there is a stop put on it by the Deputy Minister of Economic Development, or possibly by the assistant deputy minister.
Mrs. Firth: So it is the Department of Economic Development that makes the decision about court action.
Some Hon. Member: (Inaudible)
Mrs. Firth: Let us get it straight about who makes the decision first. It is the Department of Economic Development that makes the decision about whether or not it goes to court. Is it the deputy minister who has the authority to do it? It is not the Cabinet or the Minister who has to approve it? It is the Deputy Minister of Economic Development who initiates the court action - is that correct?
Hon. Mr. Fisher: Yes, that is correct.
Mrs. Firth: Regarding the five accounts on which court action has commenced, what generally is the process? Does the Minister just wash his hands of it? Do I have to ask Justice this question? Does the Minister know what happens when the court actions proceed? Can he tell me if the department has been successful in getting any of the delinquent loans paid back through court actions?
Hon. Mr. Fisher: I do not know how the courts actually apprise our clients of what the action will be, but in several cases, when it got to court, but prior to an actual hearing date, the people came in and paid the loan.
Mrs. Firth: If a person or business came in and made one loan payment, is that enough to stop the court action, or do they have to pay the whole amount owing?
Hon. Mr. Fisher: I suppose that would depend. If they were behind two years and made one monthly payment, or something like that, I doubt very much that that would stop the action. However, if they were able to make a substantial dent in their arrears and agreed to a new schedule, then the deputy minister or the department could ask the court to cease further action.
Mrs. Firth: Are there some written guidelines or a policy about how much has to be paid back to satisfy the action? Is there some kind of formula? Who makes the decision about whether or not it is acceptable, and on what is it based? Is it simply at the discretion of the Deputy Minister of Economic Development, or is there an actual formula, policy, procedure or rule in place?
Hon. Mr. Fisher: Generally it is the judgment of the staff, which is reflected through the deputy minister.
Mrs. Firth: I asked the Minister if any court actions had been launched and if businesses had paid it off. I think the Minister said there might have been some but he was not specific. Have there been and could he tell us how many?
Hon. Mr. Fisher: Yes, there definitely have been some. I do not know the numbers off the top of my head.
Mrs. Firth: Perhaps the Minister could bring that information back for me. In this information, five court actions have been commenced. Could he bring me the information with respect to all of the court actions so that we could get a better idea of how many there were and how many have been successful? I am sure some may not have been successful and were included in the $1.2 million that was written off.
These five court actions, I gather, are going to be to try to claim money back from some of the delinquent loans that are in arrears over 90 days. I am interested in knowing why there have only been five court actions commenced, yet there are 18-plus on the list of the over-90-day delinquents. Have court actions not been launched on those others, or is the department still trying to decide whether or not to take action? What is the status of the remaining 13?
Hon. Mr. Fisher: The other ones would be under review. The government's economic development officers will be working with these people, and there will have to be decisions made as to whether or not there will be a court action, or if they will be coming up with a new payment schedule. All 18 debtors are currently under review.
Mrs. Firth: I wanted to leave loans for a bit, unless someone else has some questions about it. I want to ask the Minister some questions about general policy. I am going to come back to loans when I receive the information from the Minister, which he has given us a commitment to bring back.
I want to ask about another policy activity that the department is currently undertaking. It is a program review, including an access-to-financing survey. Could the Minister tell us how that survey is being done?
Hon. Mr. Fisher: I believe that I did supply that response earlier. The Bureau of Statistics has prepared three questions in the form of a survey. The survey included three questions with respect to access to financing, but it is actually a Bureau of Statistics' project.
Mrs. Firth: I am sorry I did not hear the Minister's earlier response. I wanted to know if this survey is as a result of an identified problem, or another survey, such as the Whitehorse Chamber of Commerce's survey, or how was the decision made to go ahead and do this?
Hon. Mr. Fisher: The Bureau of Statistics does that type of survey every year. We wanted to know about access to financing, as part of the whole business development fund evaluation, so we asked that those questions be included on the survey.
Mrs. Firth: Does the Minister know what the target group for the survey is?
Hon. Mr. Fisher: Yes, it is all of the registered businesses in the Yukon.
Mrs. Firth: Occasionally, a reference is made to a time line on the economic development of current policy activities - this agenda that he gave us, this form with all of these reviews and activities on it. I have not heard the Minister give us a time line. Are these things that are going to be ongoing? Is there some objective to have these projects done by a certain time? Is this an annual activity report or a five-year activity report, or what is it?
Hon. Mr. Fisher: These particular activities are all over the place. Land claims is ongoing, and so on. This is a sketch of the activities that the department was involved in at a given time. It was asked for in the House at one point - I cannot remember exactly when - and that is the activity they were involved in at that time.
There may be some additional ones that will go on the list and some that will be taken off in time. I do not know if any have been concluded.
Mrs. Firth: I read the strategic business plan process and the current policy activities, and I am trying to see how the two fit together. I am having a bit of difficulty finding any correlation or relationship between the two documents. Can the Minister tell me how they interact with one another?
Hon. Mr. Fisher: The documents the Member has are essentially the current action plan, I suppose. They cover the things the department is doing. These kinds of activities will fit into our whole business plan, when it is completed.
Mr. McDonald: I have a number of questions with respect to access to venture capital, the BDF and the role of loans and grants, as well.
I was under the impression that the government wanted to seek a renewal, if possible, of the EDA, but that that option was denied them with the announcements in the federal budget. Was that not the case? Was the government not interested in seeking a renewal of the EDA?
Hon. Mr. Fisher: The economic development agreement initially ran through 1996. Because of commitments made, what we would have preferred was that it would remain intact until it expired of its own accord. As the Member is well aware, the budget cuts that were announced the other day certainly affected those programs. It did not totally scrap them, but it was something like $1.7 million that was knocked out of our portion of it.
Mr. McDonald: Yes, I am aware of the cuts that are expected, even prior to the expiry of the program, but I was told by the previous Ministers of Economic Development that they were interested in a renewal of EDA if they could get it. They were unaware, as we all were, that the federal government was going to cancel EDAs altogether.
Was it not the case that the Yukon government was seeking a renewal or wanted a renewal of EDAs?
Hon. Mr. Fisher: Yes, we did. We asked for a renewal. There are some portions of it, such as the mineral development agreement for the geoscience office, mapping and surveying that we think are essential to the territory. Yes, we had asked for the consideration of a renewal of the EDA.
Mr. McDonald: Apart from the elements of the economic development agreement that fund the respective departments - DIAND and departments of the Yukon government - is not the balance of the economic development agreement all about loans and grants to businesses?
Hon. Mr. Fisher: I believe there are six subagreements. The business funding is just one of those many agreements. The economic planning portion does provide a lot of monies to the small communities outside Whitehorse, and that concerns me quite a lot. With that being substantially cut, it can affect some of these communities.
Mr. McDonald: In the subagreements - not just the small business loans agreements - there are large portions that really have everything to do with providing loan funding to business, do they not? Was it the case that the government took the position with the federal government that, in the event there was a renewal of the economic development agreement, loans and grants to private business would have to cease? Has this government ever expressed that opinion to the federal government?
Hon. Mr. Fisher: No, we have never expressed that at all.
Mr. McDonald: From listening to the conversation this evening, I was under the impression that government is so eager to get out of the loans and grants business that any suggestion that it wished to continue providing loans and grants under the economic development agreement is unacceptable. I now have a different understanding of what the government was, and is, doing.
The Minister said that the government wants to get out of the loans business and indicated that, in aid of this effort, it had reduced the amount of money in the business development fund. Was that reduction in funds to the business development fund a result of a conscious desire to reduce the government's activity in the loans business, or was it a reflection of a lower uptake on loans programs by private business?
Hon. Mr. Fisher: Well, there definitely was a lower uptake of the program in the previous year, with fewer applications received. Also, we would like to get out of that business.
Mr. McDonald: I thought I had heard the Minister say that the government was getting out of the loans business and, to prove it, they were reducing the amount of funds in that program, but I guess that is not the case.
The Minister did say that, before they got out of the loans business, they were going to wait for the business development fund evaluation. It was indicated that the business development fund evaluation will be completed shortly and that we will be getting copies of it.
What percentage is the government looking for, in the BDF evaluation, that would tell the government what they need to know in order to get out of the loans business? What is it that is concerning the government?
Hon. Mr. Fisher: The main purpose of the evaluation is to determine whether or not the program is meeting a need or if there are other agencies, such as lending institutions - the FBDB or, possibly, Dana Naye Ventures - that can fill a need if it is out there. That is the type of thing we want to look at.
Mr. McDonald: The FBDB and Dana Naye Ventures are both government lending institutions, or they funnel government funds to private business through their loan programs. Is the Minister saying, then, that if other government loan programs are meeting the needs of the private sector, there is no need to have a government loan program sponsored by YTG? Is that what he is saying?
Hon. Mr. Fisher: If other government loan programs, such as the Federal Business Development Bank, or the chartered banks are providing the service, we do not see that there is a need for us to do it. We do not feel that government should be in a type of business that it may not necessarily be the very best at. If other institutions are doing it, then we should get out.
Mr. McDonald: Is it not the case that the business development fund only loans funds to a business after it has been rejected by a bank? It first has to make application to a bank before it can come to the government for loan funding.
Hon. Mr. Fisher: As far as I know, that is the case.
Mr. McDonald: The Minister is saying that he recognizes that his government's loan program is there to supplement what the banks currently provide. He is also acknowledging that FBDB and Dana Naye Ventures have a role to play. However, if the Yukon government is going to get out of the loans business, it is not going to be because it is philosophically opposed to government lending institutions - he has acknowledged that Dana Naye Ventures and FBDB have a role to play - it is going to be because there is overlap, and there are other government lending institutions that supplement the banking services that meet the current needs. Is that a fair characterization of what we have been hearing?
Hon. Mr. Fisher: I think that is generally what we are saying. FBDB has expanded its program somewhat in the last year or so. It is a much, much larger institution than we are, and its staff does this on a daily basis.
So, if they are meeting the need, I see no sense in the Yukon government being involved.
Mr. McDonald: I have it clear now. I thought the government wanted to get out of the loans business on ideological grounds, and that it believes that government does not have a role to play and the private sector - meaning private lending institutions - should be the only ones playing that role, in terms of providing loan funding to business. However, the Minister has clarified it, and he is only stating that his party is not philosophically opposed to government lending institutions, but to overlap between government institutions that may be providing essentially the same services. I think I have that clear now.
In the BDF evaluation that is being done, what is the government looking for, apart from overlap with federal government programs, to determine whether or not it will stay in the business?
I would make the side comment that it was Mr. Lang and the government in the early 1980s that strongly advocated a small business program, funded by YTG, on the grounds that these other institutions did not meet all the need.
I am just wondering what precisely it is, besides an overlap with federal programs, that the government might be looking for to determine whether or not it wants to stay in the loan-funding business.
Hon. Mr. Fisher: Essentially, it is to determine whether or not we are meeting a need that cannot be met by any other method, either through private banks or federal government lending institutions or whatever. What we can say is that the whole idea of the evaluation is to determine whether or not we are meeting a specific need.
Mr. McDonald: Will the BDF evaluation give us a sense of what their loan loss ratios are and how they compare to other lending institutions? Does the Minister have that information now?
Hon. Mr. Fisher: I do not have the information here and I do not believe that is part of the evaluation. I believe the department is looking more to what the need is for a particular program.
Mr. McDonald: Could the Minister come back with some information about the loan-loss ratios and how those ratios compare not only with the chartered banks, but also with other government-sponsored lending institutions?
The Government Leader seemed to indicate in response to some issues that were raised in the House that the position of the Department of Finance is that the government is not losing money on the loan program, even with the losses that were being experienced - that the interest rates charged are sufficient to cover the losses. Could the Minister verify that statement?
Hon. Mr. Fisher: It is my understanding - and we will confirm this - that the interest that we collect more than pays for the losses that we incur on write-offs or whatever. I do not believe they take the full cost of administration into account, but I am not certain about that. I can bring some further information back.
Mr. McDonald: If the Minister could do that, I would appreciate it. It would be useful. I realize that it will be hard to do, given that the so-called loans officers also provide other services that do not necessarily have anything to do with the specific loans themselves. If the Minister can do his best to give us some financial comparisons, I would appreciate it.
Chair: We will take a brief recess at this time.
Chair: I will now call Committee of the Whole to order.
Is there further general debate on Bill No. 3, Economic Development?
Mr. Cable: I have a few more questions about the business development fund. I notice, since I have been a Member, that there has been money allocated every year. Has the fund ever been self-sustaining? I know that the Minister mentioned that the interest covered the losses.
Hon. Mr. Fisher: I really do not know. I know it has never been set up as a revolving fund. The monies that are paid back go into general revenue. There is a vote each year for a new allocation. We are more or less getting out of it, so I do not think that we will be setting it up as a revolving fund.
Mr. Cable: The statutory terms of reference for the fund, as I recollect it, put an emphasis on job creation. As a matter of fact, I think that is the main statutory determinant for the fund.
I asked one of the Minister's predecessors, a couple of years ago, about the determination of the number of jobs and how and if there was follow-up on whether or not there was in fact job creation according to the original application. I got the impression from the return that the analysis of job creation was fairly loose, but that the department intended to tighten up on the checks as to whether or not people were actually producing jobs the way that they said they were going to.
Has there been a tightening up in the procedures for determining whether or not the money is in fact creating jobs and whether or not people are doing what they said they were going to do in the first place?
Hon. Mr. Fisher: My understanding is that the economic development officers are somewhat more active about following up with the businesses. I do not believe that there has been a major effort to analyze the actual number of jobs created, or that sort of thing. However, in the application process, and so on, the number of jobs are definitely noted. With the economic development officers doing a little more follow-up than they have previously - being more active with the actual businesses - they are probably able to determine if there are as many jobs in a particular business as they indicated in the application.
Mr. Cable: Was the job creation facet of the loan part of the terms of reference for the review of the business development fund? This is a statutory requirement, so one would think that would be one of the aspects of the fund that would be reviewed.
Hon. Mr. Fisher: As I said before, the main purpose of the evaluation is to determine if the fund is meeting a need. I do not believe that they are going into any detail on the job creation portion.
Mr. Cable: I do not have the statute in front of me, so I am just going from recollection. I believe that job creation is spelled out as a term of reference - is that correct?
Hon. Mr. Fisher: Neither my official nor I recall that, but I believe that the Member is correct, and that it is referenced in the act. However, I cannot confirm that.
Mr. Cable: I will go on to another topic. I have to make the observation that if in fact there is statutory requirement or objective, presumably one could only judge the effectiveness of the fund against a statutory objective rather than some other term of reference.
We spent some time this afternoon talking about the rate concessions that would be given to some large corporations under the industrial support policy that the government has developed over the last year. That seems to me to be a rather sophisticated form of loan. We just had a philosophical debate about this a few moments ago. How does the Minister support loans to large industrial corporations under its industrial support policy if his government does not feel comfortable making loans to small businesses?
Hon. Mr. Fisher: That is a very good point and a very good question, and one that I have had some problems rationalizing in my own mind. With the assistance that we may be able to provide to industrial users for electricity, I sort of agree that it is a type of loan program, but we are looking for an overall general Yukon benefit, and I believe we can rationalize it by looking at the broad benefit the thing will provide.
Mr. Cable: If I remember correctly, the cut-off point was $5 million. Would it not be fair to say there is nothing magic about businesses that are just a little under $5 million in size and businesses that are just a little over $5 million in size? There seems to be some philosophical inconsistency, would the Minister not agree?
Hon. Mr. Fisher: Under the Yukon industrial support policy, we are looking at big projects. The energy portion of the EILRDP - I am not going to try and say it in full again; I said it once today and that is enough - actually provides for a loan for the smaller businesses, and the rural electrification and telephone program provides a loan for individuals to acquire power and telephone services. We are filling a gap at the top end of the spectrum that was not available to people before.
Mr. McDonald: I really cannot figure out the government's position when it comes to its ideological or philosophical underpinning, and whether or not its actions support its rhetorical statements.
Frankly, I do not know where to begin. In response to the Liberal Member, did the Minister say that the government is getting out of the business of loans, for sure? I thought we were waiting for the business development fund evaluation before making a decision about whether or not the government is going to get out of the business of loans. What is the government doing?
Hon. Mr. Fisher: We are waiting for the final report on the evaluation. Essentially we feel that we will be getting out of the loan business. However, if the evaluation points to a certain need that we could fill, then we are going to have to look at it very carefully.
Mr. McDonald: The Minister has already said tonight that he is not philosophically opposed to governments providing loan funding if the banks are not providing it, and he has acknowledged that the banks do not provide some loan funding and that there is a role for government loan funding through Dana Naye and through FBDB - we have covered that base.
How can the government say that it is getting out of the loan funding business at this moment? We have an evaluation going on that is not completed, as far as I am aware. The evaluation is going to tell us whether or not the business development fund is meeting a need. How can the Minister say that the government is getting out of the loan business for sure? I do not understand.
Hon. Mr. Fisher: It may be that we can do other things rather than being in the direct lending business. I think that FBDB is in a far better position to do that. The Member is correct that it is a federal institution; however, it is set up as a bank, and it has a national organization that is very large. That is what it does full time. I think it is certainly in a better situation than we are - as a very small jurisdiction - to be in the lending business. However, there are other things that we may very well need to be involved in. There are a lot of small businesses that need help with marketing. They may need assistance in setting up a bookkeeping service and that type of thing.
There may very well be a need for government in certain areas, but I hope we do not have to be a direct lending institution at all.
Mr. McDonald: The Minister hopes that is the case; he does not know that to be the case. Is that correct? I want to get this clear. I have heard so many different positions with respect to their ideological underpinning when it comes to loans and grants. Just to run through a few of them - I cannot remember all of them: we have a Government Leader who has indicated quite clearly that he does not believe the government should be loaning money to anybody, that it should be done by private institutions only. He certainly does not believe in grants, unless he or his company is the one making application.
Other Ministers have made it very clear that they do not believe there is a role for government in providing loan funding on ideological grounds, which is probably a sensible position. Now we learn that the government is not ideologically opposed to government providing loan funding, but it does not want duplication - a seemingly sensible position to take.
We will not know whether or not there is duplication until the evaluation is finished, yet we hear that government has essentially made the decision to get out of loan funding anyway.
I cannot tell whether or not the government is interested in getting out of loan funding because they are worried about duplication, or if there is some other reason.
It is very unclear. The fact that the evaluation is going on and the government is not even looking at job creation to determine whether or not it is meeting a need seems almost incomprehensible to me. From what the Minister has said, I just do not know whether or not the government has made the decision on philosophical grounds to get out of the loan business, or not - I do not know.
Now we seem to hear that the government might be opposed to it on philosophical grounds, but that is only for small business, but the door is wide open on loan funding for big business, of which there are very few candidates in the Yukon, and there are more programs being created.
A small Yukon-based business is not eligible, but big business is eligible. The government wants to get out of loan funding because it does not want duplication with the Federal Business Development Bank, and some Ministers want to get out of loan funding because they are just ideologically opposed to anybody getting loans from government - it should be the banks or nothing. Is there any way that the Minister can cut through this maze for us?
Hon. Mr. Fisher: Personally, I am philosophically opposed to government being in the loan business. I do not think we are good bankers. The reason I do not think we are is because we are political. We are standing here debating this in public. We have debated about clients in public. I do not think that we are set up to be proper bankers. My personal philosophical thinking is that we should not be in the business.
We have been in the business in the past. Whether I approve of it or not, it does not matter. We have been in the business and we have been in it for quite a number of years. I think that the other institutions, especially the Federal Business Development Bank and some of the charter banks that were represented when we attended a seminar sometime in October or November all indicated that they are changing their system so that they can respond to the needs of small business and in a much better way than they have been.
If that is the case, I do not really know why we should be in the banking business. There is definitely a duplication factor, but the other factor is that we are not good bankers. We have proven not to be very good bankers.
Mr. McDonald: The Minister has not given us figures that demonstrate - to me, at least - that there is a clear, cogent case that government cannot be involved in loan funding. I do not like to call it banking services, because that suggests a lot more than simple loan funding. However, the Minister has admitted that the government does not lose money in its loan program. My understanding was that historically, the loan-loss ratio was equivalent to that of the chartered banks, even though the risk was higher. So, I am not sure I understand what the Minister means by not being good at loan funding.
I know that the losses are celebrated ones, and are painful ones to Ministers who were responsible for the program. Irrespective of what good things may have happened as a result of the loan program, the fact of the matter is - this is a reality of life - that the losses are going to hit a public forum. They are not going to be kept secret as are the same or similar losses by private lending institutions. That is a reality.
The fact that FBDB is in the business does not protect FBDB from public debate. We all remember the big debate about whether or not that government loan program should fund strip clubs. That occupied some elected people's time for awhile. It proved itself incapable of behaving like a private institution, because it is not. It deals with public funds. Consequently, the standards of public disclosure are much greater than they would be in the private sector.
Whether or not that is painful to politicians is, in my opinion, irrelevant if a public need or public benefit can be demonstrated and the program can be run efficiently.
The Minister started by mentioning that he felt there should be no duplication. If he can demonstrate a case where there is duplication and that it can be resolved through the demise of the loan funding sponsored by the Yukon government and, at the same time, the identifiable needs in the community can be met, then he will have my support, because I do not believe in duplication either. I do not think there is any point to it. I believe that if money can be saved through administrative costs, it should be saved, and as long as the needs are met, then duplication should be eliminated. Go for it all the way.
However, the philosophical point about staying out of the loan business simply because it is painful or causes discomfort is not an adequate justification for getting out, and I do not think it is even ideologically sustainable either. Although the Minister has not yet explained the ideological case to us, I do not think it can be sustained.
The loan program that was started in this territory was not started by the NDP. The business development fund, which brought into it a lot of different tentacles of loan programs and services, was undertaken by the NDP, but the loan program itself was started by the Progressive Conservatives, presumably with the support of the government of the day. They promoted the program, they passed the appropriate legislation and they defended it.
The other governments have seen a need for the public sector to be involved in some loan funding. The reason for that is, I think, patently obvious. The banks are not the greatest venture capitalists in the world. Canadian banks do not engage in what they consider to be high-risk ventures in the hinterland regions, and that is the reason there is a government loan program, that is the reason why Dana Naye Ventures has been so active and growing, and that is the reason why the FBDB has a significant role to play.
The banks are very cautious organizations. I have had some personal experience with banks and I have been very successful with banks. I have not come to the government for loan funding, but I know precisely how cautious banks can be and how much security they need to support any particular loan application.
I know from political experience that banks are very reluctant to look outside of the City of Whitehorse. Banks already regard Whitehorse as being the farthest-flung outpost in their empire. The notion that they would branch out into the smaller communities and actually take a risk, other than only assuming deposit services for people, but take a risk in providing funding to some small business is something that they have historically been very hesitant to do. That is the reason why the government program is there.
I cannot say that I am much wiser in terms of understanding what the government is doing. I presume that we will be waiting for the evaluation to tell us something or other, and we will be watching the next budget to see what the government has finally concluded that it will do with the business development fund.
The previous Minister of Economic Development indicated that he was going to discuss with the banks the expansion of their loan services to businesses. Can the Minister give us an update about the nature of those discussions and what the government has been able to achieve?
Hon. Mr. Fisher: I have not actually spoken to the banks since taking this portfolio. However, I did attend a symposium - I suppose that is the proper term for it - back in October. I believe there were three chartered banks and FDBD there, giving talks on their lending abilities and programs.
At that time the chartered banks, as well as FDBD, indicated to quite a number of people who were present at Yukon College that they would be extending their lending services, specifically for small businesses. I cannot say that they have and that people are having more luck with them, but I do know that we have had fewer applications in the last year. That may be because we have said that we do not like being in the lending business, so people have stayed away, or it may be that they are finding money in other areas - I do not know.
Mr. McDonald: Has there been any attempt to encourage the small business community? I do not mean the chambers of commerce - the representatives of small business - but actual small business operators themselves, to sit down in a symposium-like setting - workshop setting - and to encourage them to talk to all lending institutions in the territory - private banks, Dana Naye, FBDB, BDF to talk about lending practices, access to venture capital and to exchange information? Have there been workshops of that nature undertaken?
Hon. Mr. Fisher: We have done a bit of that; for example, the access-to-funding survey and the questions that we included in the Bureau of Statistics survey.
Besides that, we held a fax poll in conjunction with the Yukon Chamber of Commerce, where we received a whole array of information from 41 businesses that responded.
Some Hon. Member: (Inaudible)
Hon. Mr. Fisher: The Member for Riverdale South said it was the chamber fax poll. The chamber conducted it; we were involved and assisted with the poll.
Next, we are going to work with the chambers of commerce in Dawson, Haines Junction and Watson Lake. The chambers will advertise and put the meetings on, and our people will go to the meetings to discuss the types of things that the Member is inquiring about. I believe that will start some time in April.
Mr. McDonald: Could the Minister elaborate a little bit more on this last initiative? Could he also tell us what the results of the poll that was jointly sponsored by the chamber and the department were?
Hon. Mr. Fisher: I think we can probably table the results of that poll. The businesses are not identified. However, we will check that with the chamber. If the chamber does not have any objections, I certainly would not mind circulating it to the Members because I find there is quite a bit of useful information in it.
The objectives of the meetings we will be having in April are to define and clarify the issues or needs and to obtain direction for a solution or preferred step to address the issues or needs. The chambers in Dawson City, Haines Junction and Watson Lake have been requested to organize a meeting in their respective communities.
The chamber has been requested to submit a proposal for two meetings, one specifically for only young entrepreneurial business people, which should determine if there are any special or different needs for that group.
Mr. McDonald: What are the needs? Is this need for financing? What needs are they going to be cataloguing and seeking?
Hon. Mr. Fisher: I think that financing is only one portion of it. In the fax poll, which the Yukon Chamber of Commerce was mostly responsible for, we asked the small businesses for an order of priority for issues that they felt would grant them success. Then we asked them to fill in their first, second, third, fourth and fifth priorities for what they felt would ensure success for their business. We will go back to the poll and get information from it when we have the meetings in the communities.
Mr. McDonald: The Minister indicated that the meetings in the communities would include Dawson, Watson Lake, Whitehorse and Haines Junction. How would any other municipality or region wishing to engage in this kind of meeting be included? Are they going to be invited to one of the meetings in Dawson, Haines Junction, Watson Lake or Whitehorse, or are they going to be canvassed in some other way to see if they wish to participate in this kind of activity?
Hon. Mr. Fisher: It will depend upon what kind of interest we get in the four communities. If there is a lot of interest and if we receive inquiries from other communities, we would be willing to hold those meetings in those other communities. In Watson Lake, Dawson and Whitehorse, we are working with the chambers of commerce, which will set meetings up for us, and the government representatives will act as resource people at these meetings. I do not see a big problem with working through the town council or some organization in other communities, if they felt they would like to have a meeting and if the first four communities indicated that there is an interest.
Mr. McDonald: Am I assuming correctly that the government will be providing a financial contribution to allow the meetings to happen? Is that a part of its contribution, besides support from its own personnel?
Hon. Mr. Fisher: We were not really thinking of it as being a high-budget item.
My colleague is looking at me strangely. I think it is time I that I report progress.
Before I do that I want to say that we did not see it as a big expense. If there are some hall rentals or something like that, we are expecting the chambers in the four communities to pick up some of that cost. If we were to go to a community where there is no chamber of commerce and where there is a lot of interest, we would be willing to pick up some of the costs.
I move that we report progress on Bill No. 3.
Motion agreed to
Hon. Mr. Phillips: I move that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order.
May the House have a report from the Chair of Committee of the Whole?
Mr. Abel: Committee of the Whole has considered Bill No. 3, Third Appropriation Act, 1994-95, and directed me to report progress on it.
Speaker: You have heard the report from the Chair of the Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. Phillips: I move that the House do now adjourn.
Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker: This House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:27 p.m.