Monday, February 26, 1996 - 1:30 p.m.
Speaker: I will now call the House to order. At this time, we will proceed with silent prayers.
Speaker: We will proceed with the Order Paper.
Hon. Mr. Phillips: I rise today to ask all Members of the Assembly to pay tribute to the women and men who participated in the toughest dog sled race in the world: the Yukon Quest.
Congratulations have to go to John Schandelmeier, the 1996 winner of this great adventure, and to the mushers, handlers, officials and many volunteers who make the Yukon Quest such a world-renowned race.
This year's Quest was a remarkable international event, with racers coming from Switzerland, France, Scotland, Germany, Alaska and Canada.
We are all very proud of the success of our Yukon mushers. The Yukon Quest really demonstrates the strength of the northern spirit.
This gruelling two-week journey really tests the stamina and hard work of the musher and the dog alike.
Again, congratulations to all of those who have made this year's Quest a great success.
Mr. Sloan: I am pleased to join the Minister in extending congratulations to all of the volunteers and racers who participated in the 1996 Yukon Quest.
It is now in its twelfth successful year. This longest and toughest sled dog race in the world is certainly an event that is well-known throughout the world. In particular, I would just like to comment on all of the people who participated. The volunteers, who have made this such a success, include the people who cut trails, marked routes, manned checkpoints, and provided shelter and food for the racers. In particular, special thanks go to the first aid attendants and veterinarians who provided the watchful eye over the racers and their dogs.
Freedom to Read Week
Ms. Moorcroft: I am pleased to rise in acknowledgement of Freedom to Read Week in Canada. This annual observation began 12 years ago as an attempt by the Canadian Book and Periodical Council to raise public awareness about the issues of intellectual freedom and the right of artistic self-expression.
As Members of this House are aware, one characteristic of despotic regimes is the suppression of information. The well-publicized Nazi book-burnings provide an outstanding example, as does the death sentence that continues to hang over British author Salman Rushdie for writings considered offensive by religious and political authorities in Iran.
Even in this country, there have been many attempts to deny Canadians the right to choose what they read. Authors whose works have been targeted include William Shakespeare, Mark Twain, Margaret Laurence, Lynn Reid Banks and many, many others. I would like to commend the Canadian Book and Periodical Council for its campaign to resist intellectual suppression. At the same time, I would like to commend Yukon Read for its ongoing efforts to promote literacy in the territory and, in particular, for its recent initiatives in developing family literacy programs in the Yukon.
Jarrett Deuling debut with NHL
Mr. Harding: I would like the House to acknowledge the significant achievement recently obtained by Jarrett Deuling who was called to play in the NHL for the New York Islanders. Jarrett is a friend of mine and is well known to many Yukoners. His dogged determination should be an inspiration to all youth that big things can happen to people from a small jurisdiction when hard work is matched with determination.
We wish him the best for a speedy recall to the show. We urge him to keep working hard and banging those boards. I think that his success is a lift for all Yukoners, especially those who encourage our youth to take up productive activities.
Hon. Mr. Brewster: I would also like to congratulate Mr. Deuling on his first game in the National Hockey League with the New York Islanders.
It would have been really nice if he could have scored a goal, but I think he probably realizes now that the dream one has to be a great hockey player and what happens when you get on the ice are two different things.
Mr. Deuling is a person whom the young hockey players of the Yukon can look up to and be proud of. This will help them realize that if you want something in this world and you work hard enough and have the determination, you can do anything that you set out to do.
Also, it takes a great number of people to get the individual to where he is now, and there are very few individuals across Canada who get there, yet there are thousands and thousands of volunteers and coaches and mums and dads who spend their weekends taking these children around as small kids until they grow up to be a fine boy like he is in the international hockey league.
There are a few coaches in Whitehorse who can say that they got one to that standard; a lot of coaches all over Canada cannot say that. He may not show up great this year - I know of a few others who they drafted and thought were going to be hot shots but it was five years later before they came into their own. It is a completely different world there, and I would just like to congratulate him very, very much on his achievement.
I sit in this Legislature and hear of so many things that we have done wrong but there seems to be one thing we have done right, and that is with hockey. I can think back 35 years when we could never ever have dreamt about getting a hockey player out to Vancouver, but now we not only have him out there, but we have a few others out there, and some of them may make it if they are determined. I would also point out that that is not the first team that went from here. There was a team that went down by dog team and went into Ottawa to try to play for the Stanley Cup. They will never be as good as Mr. Deuling.
Speaker: Introduction of visitors?
Are there any returns or documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. Nordling: I have for tabling the government contract registry interim report, covering the period from April to December 1995.
Speaker: Are there any reports of committees?
Petition No. 6 - received
Clerk: Mr. Speaker and hon. Members of the Assembly, I have had the honour to review a petition, being Petition No. 6 of the Second Session of the Twenty-Eight Legislative Assembly, as presented by the Hon. Member for Faro on February 22, 1996. This petition meets the requirements as to form of the Standing Orders of the Yukon Legislative Assembly.
Speaker: Petition No. 6, accordingly, is deemed to be read and received.
Speaker: Are there any bills to be introduced?
Notices of motions?
Statements by Ministers?
This then brings us to the Question Period.
Question re: Workers' Compensation Board, workers' advocate
Mr. Harding: I have a question for the Minister responsible for the Workers' Compensation Board.
The week's end will see the resignation of another prominent labour rep from the Workers' Compensation Board. His resignation speaks to the frustration we felt over the inability of this Minister to deliver on the creation of a workers' advocate position for over three years.
Last week, I asked the Minister when he would act on the Workers' Compensation Board recommendation and create the position of a workers' advocate. I did not receive an answer. May I have one today, please.
Hon. Mr. Nordling: To deal with the preamble first, the Member seems to be somehow tying Mr. Noakes' resignation with the workers' advocate position, and that is not the case at all. I do not know how he could be so confused.
With respect to the workers' advocate, the suggestion by the committee is that the Department of Justice hire someone to fill that position. It is not a simple matter for the WCB or a committee to tell the Department of Justice that it should create a position. The position has to be developed if it is going to be approved through the Public Service Commission, and there must be competition for it. What is being asked is a lot more than whether the WCB, itself, or organized labour got together and funded that position. What is being asked for with respect to a workers' advocate is more complicated than I had hoped and it will take some time. I agree that a workers' advocate is a position that would be very valuable.
Mr. Harding: I would point out to the Minister that the resignation letter from Mr. Noakes addresses this concern as one of the reasons for his termination. That is where the connection is made. It is clearly in the letter on page 3, if the Minister would like to read the letter again.
On February 8, the Chamber of Commerce wrote a letter asking for delay in the implementation of the workers' advocate position. It stated its opposition very clearly to a workers' advocate.
I would like to ask the Minister why he is granting the chamber a delay on an issue that has been decided already by all labour and employer representatives?
Hon. Mr. Nordling: I am not granting the Chamber of Commerce a delay. I believe that it was on the committee that looked into the position of workers' advocate. The government has to look at the Department of Justice developing a position in that department, if that is what it wishes to do. I am not convinced that that is necessarily the way to handle the need for workers to have someone advocating on their behalf.
Mr. Harding: The Minister's answers are confusing us. On the one hand, he says that he is in favour of it, then he says that he is not convinced that it should be through the Department of Justice. We have this letter from the Chamber of Commerce that says that they are again opposed. It has taken over three years. The Minister says that this is not enough time for him to implement this incredibly complicated initiative that many people - both labour and employer representatives - have all said we need.
Can he give us more specific information as to when he will have a formal, finalized response and when this position will be implemented? It is ridiculous that it has taken this long.
Hon. Mr. Nordling: The only ridiculous thing here is the Member's questions. This has not been going on for three years. There was a workers' advisor position at the Workers' Compensation Board. That position was recently changed to that of a client representative. The question was whether or not the workers needed someone to advocate strictly on their behalf. A committee was struck within the last several months to look at that position. They have reported back, and now I am considering what I can do as the Minister with respect to their recommendation.
As soon as I have made a decision on that, I will make it known.
Question re: Workers' Compensation Board, workers' advocate
Mr. Harding: I have been to the last three annual general meetings. That is one per year. At all three annual general meetings, this issue has come up and has been the subject of much discussion. It has been three years; the Minister is wrong about that.
Let me speak to another issue that the letter from Mr. Noakes refers to. With regard to new board members, he says in his letter, "I do feel, however, that some new members seem to have an agenda motivated more by politics than concern for our injured workers or maintenance of the Yukon fund's integrity."
We have raised concerns about the chair appointment by the Minister. He is a Yukon Party activist who, last fall, chaired their convention. He has been president of the Conservative Party and we think he was even the principal secretary to Mr. Phelps when he was briefly the Government Leader.
Why did a Yukon Party Minister appoint such a partisan to such an important position, which demands neutrality and objectivity?
Hon. Mr. Nordling: I hope the Member realizes the seriousness of the allegations he makes when he stands up and says these things in the House. When Mr. Tuton was appointed to be the chair of the board, we expected that he would be neutral and would act as a neutral chair. If the Member for Faro has anything specific to say other than simply slinging around mud, making allegations and leaving it to us to defend them, then I will deal with them, but I am not going to deal with partisan political allegations that will harm not only the operation of the Compensation Board if they are not true but our reputations in the House.
Mr. Harding: This Minister has obviously buried his head in the sand. We have had two resignations from labour representatives. Both have spoken to political agendas by board members. Both have raised concerns about them, yet this Minister seems to ignore them. The chair has not acted in a non-partisan and objective way in many areas that I have raised before in this Legislature and outside it. The past chair was jointly approved by all labour and employer representatives. In the case of the existing chair, the Yukon Federation of Labour was not consulted in the selection.
I would like to ask the Minister why he did not seek the proper consensus to build support for the chair's appointment.
Hon. Mr. Nordling: The Member for Faro is playing fast and loose with the letter of resignation by Mr. Noakes. He is talking about political agendas. My reading of the letter is that the political agenda that Mr. Noakes is concerned about is the political agenda of Heiko Franke, the other labour representative who resigned. There seems to be a split in opinion between those two board members.
The other thing I would like the Member to do is to read the letter again, because Mr. Noakes' resignation had nothing to do with any of the activities of the board. He told me that his personal career choice would cause a resignation. When I met with him in December, he had finally formalized it. What he has done is to express his concerns upon leaving, the same as Mr. Franke did, and I think the political agendas that are being talked about are between those two labour representatives, not myself.
Mr. Harding: I do not think that this Minister should marginalize the major concerns that have been identified by this letter because he does not link it directly to the resignation. Does everybody have to resign for this Minister to think that the comments are worth looking into?
Because of this chair's unobjective actions and his partisan connection to the Minister and this party, I want to ask the Minister if he will now seek a new chair of the Workers' Compensation Board who meets with the selection approval of all labour and employee representatives.
Hon. Mr. Nordling: The last thing that this Minister wants to do is marginalize the concerns about the operation of the Workers' Compensation Board. That is why this Minister took the unusual step - almost unprecedented - of causing a public inquiry to be held into the operations of the Workers' Compensation Board with a broad terms of reference, so that on an unbiased, non-partisan basis we can get to the bottom of the problem and improve the operations of the Workers' Compensation Board.
Question re: Community work service programs
Mr. Cable: I have some questions for the Minister of Justice on the community work service programs.
The Minister was recently talking about the value of work for the rehabilitation of incarcerated prisoners. The Commissioner of Correctional Services for Canada recently spoke out on a similar topic when he was speaking about the value of work for dealing with non-violent offenders, and putting more emphasis on those types of sanctions for non-violent offenders.
Is the Minister satisfied that the present community work service program is adequately staffed and adequately funded?
Hon. Mr. Phillips: At the present time, we have a new director of corrections at the facility. He is reviewing all of the programs - that one in particular. We do get an awful lot of demands for work for the inmates to do. We cannot always accommodate all of them. That is something that I asked him to look into. I know it is something that he has a great interest in as well.
Mr. Cable: I think that the Minister misunderstood what I was asking him. I was asking him about community work service programs. These programs are for offenders who are not incarcerated.
Originally, when the program was started in the late 1970s, there was a person appointed who dealt solely with the community work service program. They coordinated and supervised the program and worked with community groups. Is the Minister prepared to re-establish that staff person in that job so the idea that he had - that work assists in rehabilitation - can be put more into practice than it is at the present time?
Hon. Mr. Phillips: I am not prepared to make an announcement that will establish somebody right away. However, if the Member reads the community justice initiatives that were announced, and one we will be releasing shortly on the offender management program, he will find that many of the types of offender management will be based on community justice initiatives and working with groups in the community. I can see that that might be part and parcel of a certain community justice initiative in a community, and it might be able to be done within existing resources just by reallocating resources and prioritizing our budget in some of those areas.
However, I cannot just say off the top that we will initiate the program right away. Part of what we heard from people out there, in talking about crime, was to develop these kinds of initiatives in consultation with communities, and we certainly will be doing that.
Mr. Cable: Of course, the Minister was talking off the top of his head - if that was the phrase he used - on the use of work for prisoners, when he was talking about taking away their videos if they did not work.
Has the Minister or his department, at any time, carried out recidivism studies of offenders involved in the community work service programs?
Hon. Mr. Phillips: I would have to take that question under advisement and get back to the Member.
Question re: Workers' Compensation Board, ministerial involvement
Mr. McDonald: I also have a question for the Minister responsible for the Workers' Compensation Board.
In the letter to the Minister from the outgoing labour representative, Mr. Noakes, he notes there is a concern he shares with others about the Minister's interference regarding individual claims.
Can the Minister indicate to us what his role has been in reviewing individual claims - people who might come to his office from time to time, complaining about the Workers' Compensation Board?
Hon. Mr. Nordling: I have had at least 15 individuals come to my office with respect to complaints they have had with the way they were dealt with by the Workers' Compensation Board. I have asked the Workers' Compensation Board to provide me with briefing notes with respect to these cases so I know what is happening. I have made it clear I do not want to interfere with how the board operates, or with how it is handling cases, but I would like to know what is happening so I can defend it, or refer the people back to the Workers' Compensation Board.
There have been cases where there is nothing I can do, after hearing the status of the case, and I have told those injured workers that. I have also received information back where I had some concerns about the treatment of those individuals, and I have referred them to the board of inquiry to make their complaints, or I have sent them back to the Workers' Compensation Board to talk to the advisor.
Mr. McDonald: Is the Minister not at all concerned that he is now perceived by a board member and by a number of claimants as another line of appeal? Not only does he provide an intake service for workers who have a complaint, but refers those matters to board members to the extent that the board feels the Minister is unduly pressuring it in a matter that is its exclusive jurisdiction alone?
Has the Minister made a request for information about claim files, in writing, to the board?
Hon. Mr. Nordling: I am certainly not providing an intake service with respect to injured workers. As a Member of the Legislative Assembly, I have a responsibility and a duty to my constituents and others who come to seek my help, and I do not apologize for assisting them in any way that I can without interfering with the operation of the board.
Mr. McDonald: Mr. Noakes very eloquently points out in his letter that should the Minister of Justice attempt the same tactic with Supreme Court judges, that would clearly be perceived as interference in the course of justice. Clearly, the Minister has overstepped the line.
I ask the Minister a very clear and direct question: has the Minister made requests of the Workers' Compensation Board for information about claim files in writing?
Hon. Mr. Nordling: The Leader of the Official Opposition drawing an analogy of the Minister of Justice phoning a Supreme Court judge is absolutely wrong. I think that Mr. Noakes is also wrong in making that analogy. The Workers' Compensation Board is a completely different system.
With respect to putting requests in writing, I believe that I have used my electronic mail to send messages between myself and the president of the board, and I believe that I have been sent information by electronic mail from the board with respect to specific cases. What is important is that the information I receive in this regard is handled carefully and confidentially.
As the Minister, I need to know that these individuals are being treated properly and according to the policies and procedures that the board has set up. That is my concern.
Question re: Workers' Compensation Board, ministerial involvement
Mr. McDonald: It is not the Minister's place to determine whether or not individual claimants are being treated fairly and properly. The Minister's place is to ensure that the procedures are fair and not if an individual case is being handled properly. The Workers' Compensation Act is extremely clear on this point. Anything less than allowing the board to act independently, particularly and especially on individual claims, is direct, unlawful interference in board affairs.
A number of the claimants that the Minister talks about have also trooped down to my office claiming that the Minister cannot help them, but that the Minister or the Minister's office told them that because I was the Minister responsible for passage of the Workers' Compensation Act, I had to be the one to answer to their concerns.
The Minister did not refer them to the WCB, he referred them to my office. Does the Minister regard this as a particularly responsible thing for him to do?
Hon. Mr. Nordling: There must have been some confusion in the translation. The Leader of the Official Opposition knows that he was in on the drafting of the new legislation that makes the WCB as arm's length as he claimed.
At the same time, the Member for Faro has been getting up screaming and hollering, and I believe he has even filed a motion saying that the legislation should be amended. I have asked that Member to bring his amendments to the legislation forward and I will certainly consider them, because it is not as simple as those Members would have the public or the media believe. The Member for Faro has a question. I will sit down so he can ask it.
Mr. McDonald: I am not having much success getting answers to many of these questions. I am asking a very specific question about the Minister's referral. Not only is he an intake service for workers' compensation claims, but those he cannot handle he refers to me and not back to the WCB.
If the Minister is expressing concerns about the independence of the board, and fearing that this independence is tying his hands, why does he not advocate a change in the Workers' Compensation Act, which would allow him to interfere as regularly as he obvious is?
Hon. Mr. Nordling: It is funny that the Leader of the Official Opposition has had it both ways in his preamble. First he said that the Minister cannot help them and sends them to him because of the act, and then accuses me of more interference than is necessary. That just illustrates my point that it is not as simple as that Member would make it out to be to make changes to the legislation. It is very important that the Workers' Compensation Board does act independently, and that there is no interference. The complaint from that side is that this Minister and this government should be doing more to interfere in the operations of the board. If that is the case, then help us out with these changes to the legislation that were carefully crafted by the Leader of the Official Opposition, debated in this House and passed by every Member, and are set for review several years down the road.
Mr. McDonald: What I am asking the Minister is for him to come clean and be honest with respect to what he is doing, and accept responsibility for the fact that he has been interfering with the board. I am not saying that the Minister should. In fact, I introduced a piece of legislation, along with my colleagues, to prevent the Minister from doing precisely what the Minister is doing right now, and for what he is being criticized by the outgoing labour representative from the Workers' Compensation Board.
I would like to ask the Minister this: has he, in any way, expressed an opinion about who should act as interim president of the board now that the permanent president has resigned?
Hon. Mr. Nordling: I do not think the preamble had much to do with the question. It was a little speech before the question, so let me answer that.
This Minister has not interfered with the operations of the board - as the Leader of the Official Opposition alludes to. I believe he is accepting Mr. Noakes' position and I think he should be careful doing that. He should read the whole letter and should also look at the positions of other board members, including the other labour representative who resigned, because his position certainly was not the same as Mr. Noakes'. The Leader of the Official Opposition is simply cherry-picking for political purposes and it does not serve the board or the Legislature well.
Question re: Workers' Compensation Board, ministerial involvement
Mr. McDonald: This Minister has, by his own admission, been contacting the board on individual cases before that board while they are being heard. The Minister has also indicated that he has had direct contact, through his e-mail, with the president of the Workers' Compensation Board on these cases.
Why would the Minister have direct contact with the board president on individual cases when his only contact with the board ought to be with the board - the chair of the board and the board members?
Hon. Mr. Nordling: I think the Leader of the Official Opposition is trying to set up a straw man to knock down, but I do not think he has built it very well.
My contact has not been with the appointed members of the board. They are the ones who hear the appeals. The president looks after the administration. My contact with the president is to be assured that the administration of these claims is being done properly, fairly and according to the procedures of the board. I would not contact those sitting and hearing the appeals, and I have not.
Mr. McDonald: The Workers' Compensation Act very clearly lays out the role and what the board of governors of this board is supposed to do. It is supposed to ensure that the administration handles claims in a rational, responsible and lawful manner. It is not for the Minister, a political partisan, to investigate these individual claims in any way at all.
Can he not see that he has no role to play when it comes to individual claims, and that he is interfering with the administration of justice insofar as the Workers' Compensation Board delivers justice? Can he not see that?
Hon. Mr. Nordling: I think the Leader of the Official Opposition is confused about my involvement in these claims. There has been nothing to jeopardize the operations of the board. I am the Minister responsible for the Workers' Compensation Board. I want to be assured, as the Minister responsible, because I stand up here in the House and answer questions with respect to the board, that the administration, policies and procedures are being carried out. I can assure the Leader of the Official Opposition, if he asks me, or an injured worker, if he comes to my office, that the policies and procedures and the legislation are being followed.
Mr. McDonald: When the Workers' Compensation Act was passed, it made some very clear distinctions between what the responsibilities are of the Minister, the Legislative Assembly, the board and the president. At no time was there any hint or suggestion otherwise. I checked the record with respect to the Minister's own involvement in the debate - he did not speak out on the debate, so I am presuming that he agreed with the rest of us. At no time was there any hint or suggestion that the Minister would be checking up with the Workers' Compensation Board on individual claims. Never was that considered to be appropriate. It would not have been appropriate if it had been in the application of the general judicial system, and it certainly is not appropriate in the workers' compensation system. To do otherwise would make the Minister himself an outlaw.
Is the Minister now telling us that he is following the lead of his predecessor, who also broke the Workers' Compensation Act practically from the first day he assumed office by dictating who the board was going to appoint as president? Is the Minister going to continue this practice, contrary to the Workers' Compensation Act, and continue to involve himself in individual claims?
Hon. Mr. Nordling: I have said over and over again as clearly as possible that I do not want to interfere with the board. I want to stay out of it as much as I can.
There has been a board of public inquiry under the Public Inquiries Act set up to look into the operations. If the Members have concerns with respect to the legislation and feel that it should be more clear, I would ask them to bring them forward in the House or talk to the board of inquiry.
There is a big difference between the Minister wanting to know that the board is operating properly and according to its policies, procedures and legislation, and the Minister trying to influence the decisions of the appeal board or the operations. The last thing I want is to be seen to be influencing or interfering with the board or the administration and how it is doing its job.
Speaker: The time for Question Period has now elapsed. We will proceed with Orders of the Day.
ORDERS OF THE DAY
Speaker: Government bills.
Bill No. 73: Second Reading
Clerk: Second reading, Bill No. 73, standing in the name of the Hon. Mr. Ostashek.
Hon. Mr. Ostashek: I move that Bill No. 73, entitled Taxpayer Protection Act, be now read a second time.
Speaker: It has been moved by the Hon. Government Leader that Bill No. 73, entitled Taxpayer Protection Act, be now read a second time.
Hon. Mr. Ostashek: I am deeply honoured to be the Minister responsible for bringing forth this very important piece of legislation. In future, it will give a sense of comfort to Yukoners that governments will act in a responsible manner. Responsible fiscal management has been a cornerstone of our government's policies since we took office in late 1992.
I do not believe that there are many people in the Yukon today - or, for that matter, in Canada today - that do not believe that governments must act in a fiscally responsible manner.
We, in the Yukon, have been very fortunate to have avoided most of the drastic cuts and measures that have been brought in by other governments across this country to meet their fiscal targets.
There is not a day that goes by that we do not hear about debt, deficit and the serious financial difficulty that our great country is in. In the Yukon, we are very fortunate because we do not have an accumulated debt from the operations of government, and nor should we.
I have said many times on the floor of this Legislature, and in public, that if the territorial government were to go into debt for its day-to-day operations, the money required to service that debt and the interest payments would have to come from the money that we use now to provide programs to Yukoners. These are programs that Yukoners feel they are entitled to, deserve and require.
Our best solution toward ensuring a strong social safety net for Yukoners in the future is strong fiscal management of the territory's financial resources.
We need only look at the federal government, which, I believe in 1995-96 fiscal year had some $114 billion in program spending. At the same time, it had an interest bill on debt of some $45 billion to $50 billion. I believe that the figure is somewhere in between 35 and 37 cents of every federal tax dollar that goes to pay interest on the debt.
Mr. Speaker, you have children growing up in the Yukon, and I have children, as do many other Members in this Legislature. Many many Yukoners also have children. I believe that it is important that we do not saddle our children with debts that they have to pay because we lived far beyond our means. That is what has happened in Canada. I am one who believes that it will be many years down the road - maybe another generation at least - before we get rid of this very crippling and troublesome debt with which Canadians are saddled.
It is just not right. We have had governments over the years that have not paid enough attention to the financial resources of government and have spent far beyond their means of raising revenue. I quoted this article the other day, of October 13, 1995, in which the Conference Board of Canada said that even with all of the belt tightening that has gone on to date in Canada, another five years of government belt tightening will only reduce the ratio of debt to GDP by a few percentage points. When we know today that the debt to GDP ratio is in excess of 100 percent, it is not a very optimist future to be looking forward to - we are talking about the next five years.
The federal government in Ottawa has drawn a lot of attention, with a lot of press releases and a lot of speeches about how they are managing the debt and how they are getting this country out of debt, but the reality is that in the first three years of the federal Liberal government's mandate it has put this country another hundred billion dollars in debt. That is the reality. Even today, that same government cannot tell Canadians when it will get to a balanced budget. It will not tell Canadians that. The only thing it will tell Canadians is that in the 1997-98 fiscal year they are going to aim for a two-percent GDP. This is admirable but it certainly is not enough.
I read over the weekend that the federal government is looking at the possibility of increasing the excise taxes on gasoline as a way of raising more revenues. Again, raising more revenues, not saying that we have to have more cuts. How much more can the taxpayers of Canada afford to pay? I believe the projected day is now somewhere around July 1 as being the day when people will be making money they can leave in their own pocket because of all the different levels of government and taxation that affect the take-home pay of every Canadian.
I spoke earlier of the problems in the Northwest Territories. It has a very similar formula financing arrangement with the federal government as we have - in fact, it is almost identical. We heard stories going back to last summer - there was an article called "Ugly Choices" in which the Government Leader of the Northwest Territories stated she would not be seeking re-election. The Finance Minister of the Northwest Territories said he would not be seeking re-election, and the talk last summer was that the projected deficit for 1996-97 would be a whopping $50 million or $60 million. We watched the articles that came out after that, and the deficit has just continued to increase. Not that long ago, on January 19, one article said, "the Northwest Territories deficit balloons by $30 million".
The Deputy Premier said that every time he left Yellowknife, the deficit went up $1 million. From the information we have from news articles and my talks with the Deputy Minister when I was in Ottawa, we know today the Northwest Territories is looking at a projected deficit in 1996-97 of about $160 million. That is what they are admitting to today.
That is how easy it is to get into debt and deficit positions. Three and one-half years ago, in 1992, when we were elected in the Yukon, I believe the financial position of our government was comparable to the financial position of the Northwest Territories' government. This is not something that happened to them some time back in history. This is something that has happened in recent times because of not enough control over how money was being spent.
Because of the situation they are facing now with the huge deficit, and with the Northwest Territories being divided in 1999 - and they have some sort of balanced budget legislation on their books that says they have to balance the budget before 1997 or 1998 - they have a real problem on their hands and are talking about massive tax increases. They are talking about a sales tax, about a 10-percent increase to the territorial income tax, about a substantial downsizing of the government. The other day, we heard that they had combined three departments.
In the same article of January 19, the Deputy Minister of Finance said that Ottawa does not have much sympathy for the harsh times people are complaining about in the Northwest Territories, especially when their government spends three to four times more per person than most other parts of the country.
We are faced with a similar situation in the Yukon. The transfer payments to the territorial government are huge in comparison to the provinces, and there are many reasons for it. The reality of it is that, among the Northwest Territories, the Yukon government and First Nations in the north, the bill is over $2 billion annually, and it has started to attract the attention of the MPs in the House of Commons who are fighting for their own areas of Canada to soften the cuts.
The Deputy Minister of Finance went on to sum up that they have a budget of $1.2 billion and about 65,000 people, so they asked people to stop and think about the amount of money that the government is spending per capita relative to what is being spent per capita in the rest of Canada. That is a reality.
I said that we are more fortunate in the Yukon because we do not have an accumulated debt, and we should keep it that way. That is what this legislation is all about: to make it difficult for governments to get into a position where they have an accumulated debt.
The Taxpayer Protection Act consists basically of two parts. One part makes it impossible for government to have an illegal debt. I will speak a little bit more about that later. It also makes it impossible for government to satisfy its revenue demands by going out and increasing taxes.
I know that when the Opposition gets up, the Members will say that the Yukon Party is protecting Yukon taxpayers from themselves. My answer to that is that had it not been for the $64 million deficit, and if this legislation would have been in place when we took office, there would have been no need for tax increases. It is as simple as that. This legislation will deal with that.
We are determined that the Yukon will never be put in a similar position, and that Yukoners will never see the revenues of their government devoured by interest payments, rather than being used for the direct benefit of the citizens of this territory. The best way to ensure this would be to pass this legislation, which would restrict the ability of the Yukon government to spend its way into an accumulated deficit position.
Once enacted, this bill will make it virtually impossible for any government to table budgets that push the Yukon into an accumulated deficit. In other words, the savings account that we manage to build up over the years we have been in power cannot be driven into the hole by any budget tabled in this Legislature.
I do not believe that this legislation will cripple governments, as the Opposition has been saying in their somewhat subdued replies to the legislation. In the future, if a government does spend such that an accumulated deficit is incurred, the government leader of the day must request a dissolution of the Legislature and, if granted, recommend that the writ for a general election be issued.
I just want to briefly touch on comments made by the Opposition about what would trigger an election and why this is a very unrealistic piece of legislation.
This legislation holds governments accountable. We have looked at legislation in other jurisdictions. It is supposedly intended to hold governments accountable, yet every one of the jurisdictions, with the exemption of Manitoba - I believe they had the toughest legislation prior to this one being tabled - had some nice-sounding words, but there were all kinds of escape clauses in the legislation. If the revenues were five percent below projection or this or that, it allowed governments to go into debt. That works in the provinces that already have a debt - I do not know - but we did not believe it would work in the Yukon.
We believe there are steps that can be taken. First of all, governments should ensure that they do have a surplus; that they do not spend the surplus and go into debt. Members opposite made comments about how our surplus was too small. I found that quite interesting, as I have been told for three years now that our surplus is too big. As soon as we produced our second budget, we were told that our surplus was too big and we were asked what we were saving it for.
It is prudent fiscal management for a government to build a surplus and then use it when they feel it is required, rather than projecting very optimistic revenue figures that will cover off overexpenditures as they occur. That is what got governments into trouble.
I would wait a year and make sure I had the money in my pocket before I made commitments for it.
We have made a projection of I believe somewhere in the neighbourhood of a $25 million deficit this year, with a minimum - and I want to emphasize the word "minimum" - surplus of $7.5 million.
The Members opposite have been very critical, saying that we never count lapsed funds, and yet we know that there are going to be lapsed funds. Yes, we know there are going to be lapsed funds. There are some every year. There were in the supplementaries that I just tabled. There were lapsed funds of somewhere in the neighbourhood of $15 million, $11 million of which was revoted. Also, there will be some lapsed funds that we can add to the accumulated surplus. We know that. What we do not know is how much that surplus will be. We believe that government departments are taking more care in their projections. We believe that the lapsed funds are getting smaller and smaller, especially on the operation and maintenance side of the ledger, which are actually the only lapsed funds that are really called surpluses, because capital projects that lapse usually lapse because the project is not finished at the fiscal year-end, and because our Financial Administration Act says that those funds must lapse and be revoted; that is exactly what happens to them.
I do know that if we are in government after the next election I am not concerned that we are pushing it too close to the line with a projected $7.5 million surplus in the mains, because I know it is going to be larger than that. I would expect that when the final figures are in and the final analysis is done, our surplus will be somewhere between $10 million and $15 million. It only stands to reason.
The Members opposite made such criticisms time and time again. In fact, the Leader of the Official Opposition, when one of our local newspapers ran the headline, "Government has $31 million surplus", said himself - this is what the Leader of the Official Opposition said and I quote - "'It indicates that the Government of Yukon ended up with a $31 million surplus at the end of the 1994-95 fiscal year. This surplus will likely be closer to $50 million or $60 million at the end of this fiscal year, March 31, 1996', Mr. McDonald added."
Quite possibly, if we had not utilized the surplus, we probably would be in the $40 million to $50 million range - not as high as the Member opposite thought.
So that is what surpluses are for. I believe that even the Leader of the Official Opposition says it is all right to spend surpluses. I am sure I can pull those comments out of Hansard and probably out of newspaper articles.
What the Official Opposition is talking about is really not whether we should spend surpluses. I know that the Member for Riverdale South has a different opinion of surpluses. What we are talking about is how big of a surplus should the government have. That is one we could debate forever. Finance officials tell us that it is prudent fiscal management to have a one-month reserve. It could well be. It was very hard for us to justify to the Members opposite that it was a target we should be taking seriously. We were told that we did not need the tax increases or the wage freeze, that there was all kinds of money around, and that the cuts from Ottawa were not going to be that severe. We have seen what has happened with the cuts from Ottawa. We put a program in place three years ago in preparation for those cuts, which we were very sure were going to be coming in 1995-96 and not in 1996-97. It was only through intense lobbying on my part, as Finance Minister, and on the part of John Pollard, the Finance Minister in the Northwest Territories, that we did not get the cuts in 1995-96. We convinced the Finance Minister in Ottawa that he should wait until the provinces absorbed the cuts before the territories absorbed them. A new formula financing arrangement was coming up for renegotiation, and it was the federal government's opinion that we should absorb the cuts then. Instead, we were fortunate enough to have convinced them to freeze our formula for 1995-96 and absorb the cuts in the 1996-97 season.
What I am trying to say with all of this is that we knew that the cuts were coming; we faced the criticism of Members opposite, but we prepared for the cuts and now have been able to absorb them without causing undue concern in terms of the economic activity in the territory.
Some Hon. Member: (Inaudible)
Hon. Mr. Ostashek: Another constituency heard from, Mr. Speaker.
I will be interested to hear what that Member feels government should do with its surpluses if not to prepare for unpredicted expenses.
I want to look a little bit at the balanced budget legislation or taxpayer protection legislation in other jurisdictions. I want to point out how different theirs are from ours.
The one major difference between our budget and other provinces' budgets is that they all have accumulated debts that they have to deal with.
The problem is twofold: getting rid of their deficit and then figuring out how they are going to pay down their debt.
In Saskatchewan, the Deficit Elimination Act sets out deficit limits for fiscal years starting in 1993-94. The Balanced Budget Act amends the Deficit Elimination Act by declaring that, each fiscal year, expenditures may not exceed revenues and annual deficits are disallowed.
Following each election, the government must present a four-year budget plan that outlines forecasted revenues and expenditures. Over this four-year period, the total expenditures must not exceed the total revenues.
It appears that Saskatchewan, over a four-year period, has some flexibility by not forecasting on a year-by-year basis.
In Manitoba, the deficit may not be incurred unless it results from several specific exemptions. If an illegal deficit does occur, it must be offset by an equal surplus in the following year. Surpluses are to go into a fiscal stabilization fund until that fund reaches five percent of operating expenses.
Manitoba also has a penalty clause included in its legislation where their Ministers are fined. This government considered that clause and while it may sound good on paper, it is not workable - if a Minister overspends his department, he is penalized a certain amount one year and more the next year, but what do you do if a Minister is in their last term? How do you impose the penalty?
Other jurisdictions, such as Saskatchewan and Alberta, do not really have penalties, apart from the fact that they would be breaking the legislation. In the Yukon, because we do not have debt, it was relatively simple to deal with and, we believe, quite workable: if the government creates a financial position that puts the territory into debt, it must call an election.
There is an exception to that when governments change, or there could be an exception in the case of an emergency, which would be very easy to deal with. I know a concern of Members opposite is that we have made no provisions for emergencies; however, if we start making provisions for emergencies, we weaken the legislation. Governments can find ways to work around it, and find emergencies on which to spend money.
Our Legislature is very small - an intimate Legislature. There are 17 of us. I believe it would be quite workable and easy for a government to, in an unforeseen emergency situation, call the Legislature back and come in with a one-time-only amendment for that fiscal year. There would be nothing wrong with that, but it would be a two-stage process. It would not be done at the Cabinet or Management Board level; it would be done on the floor of the Legislature, justifying the exemption for that one particular year.
The same could happen when governments change. We looked at drafting a clause to get around that, so that if the government changed, it would not be responsible for inheriting a deficit or debt. Again, however, that would have weakened the legislation, and was not the route we wanted to go.
I believe it is quite simple and proper, on the change of a government, if a government finds itself in a deficit or debt position through no fault of its own, to recall the Legislature or bring forward an amendment at the next sitting, and explain what the dilemma is: how it was not done through any of its own initiatives and why it could not deal with the deficit that was there when it took over. It is quite easy to bring forward a simple amendment for a one-time exemption from the act.
In a Legislature the size of ours, it should not be difficult. At least there would be a public debate, and we might avoid what we went through in 1992 when we took over government. Had that legislation been in place, we would have had to have a debate on the floor of this Legislature as to our belief of a $64 million deficit and the Members' opposite disbelief of same.
It would have been much more easily managed and in the better interest of all taxpayers in the Yukon if that debate had taken place. That debate took place in segments through many following legislative sessions.
We do not see that as a difficulty. We do not see the fact that there is no emergency clause in this legislation as something that is crippling to the legislation. Quite clearly, that may not be workable in other jurisdictions, provinces or the other territorial government. It probably would not be, but there have been emergency debates in this Legislature before and it certainly is not that difficult. It is not that expensive.
Some Hon. Member: (Inaudible)
Hon. Mr. Ostashek: I will not rise to the bait.
Some Hon. Member: (Inaudible)
Hon. Mr. Ostashek: I am not going to speak much longer on this legislation. It is a very simple bill, and I believe it is a workable bill. If the Opposition has real problems with this bill and can propose amendments to make it stronger, I would certainly be interested in hearing them. I am certain I will not be very receptive to amendments that weaken the bill.
As we go along, they will realize more and more that they like this piece of legislation.
Some Hon. Member: (Inaudible)
Speaker: Order. Would the Members please allow the Member to carry on with his speech?
Hon. Mr. Ostashek: As I said, the legislation does not require an annual budget each year. As long as we do not spend more than we have in the bank, I think that it is quite all right.
The Members opposite should go back and look at the 1993-94 fiscal year and the amount of money that we paid in interest because we were utilizing our line-of-credit at the bank. In that fiscal year, I believe there was something like $800,000 in bank charges. That $800,000 would have been better spent on programs for Yukoners, rather than paying interest at the bank.
We need not get into that situation. This legislation will prevent governments from doing that.
Once again, as I said in this Legislature the other evening - I believe the president of the taxpayers' association said it this morning, as well, in somewhat different terms - is that I like this piece of legislation as Minister of Finance in my dealings with my Cabinet colleagues. They want to shake me down for more money every time, and those Members who have had experience being a Minister of Finance know that it is not a very pleasant time of the year, when Ministers come to the door, one after the other, saying one is cruel for not giving them all the money their departments want. This helps to keep the debate focused.
As I said, annual deficits are permitted as long as they do not entirely deplete the accumulated surplus.
If we were to take the approach suggested by the Member for Riverdale South, where we should not have the right to spend accumulated surpluses, I think that would cause some real difficulty when trying to meet the needs and desires of our citizens. There are some years when we might have a surplus and some when we are required to spend more money to level out government spending.
The other issue I have raised is that governments can no longer be the be-all and end-all for all citizens. We do not have the financial resources any more. Transfer payments from Ottawa are going to continue to get smaller; there is no doubt in my mind about that. I also addressed that in the budget debate. We have received assurances from the federal government that there will be no further cuts to transfer payments until the 1998-99 fiscal year, so that gives us some time.
If we are fortunate enough to be returned to government, we will continue to rebuild the surplus to where we have a bit more comfort than we have now, but I am not at all concerned - I want to make that clear for the record - that we will get into financial difficulties based on the main estimates that we presented to this Legislature the other day and will be debating in the near future.
Again, I want to say that the forecast surplus in it is a minimum, based on the best figures we had the day the budget was put to bed. Those figures change, and I am sure that when the variance report for the end of January is in there will probably be a little more money there; and I am sure that, when the end of March comes, there will again be a little more money there. I believe the Members opposite are prepared to accept that and agree with that.
We are in the very fortunate position of being debt-free with regard to the operation of government departments, and of actually having an accumulated surplus. We are unique in Canada in this regard. The enactment of this bill will ensure that this happy situation continues to prevail in the Yukon, and I look forward to the support of all Members in its passage through this chamber.
Mr. McDonald: The Minister of Finance has indicated, in a heartfelt way, that he truly believes in the bill before us. He has accused us of having a somewhat subdued reply up until now and for that I am sorry; I will try and rectify that immediately.
This bill is a fraud. It is a con job. It is a deception. This bill is an attempt to sucker-punch Yukoners into forgetting about the Yukon Party's financial record, into forgetting its record in raising taxes, and into forgetting about the rollercoaster ride we have been on from disaster to surplus to disaster to surplus. This bill, entitled Taxpayer Protection Act, is nothing of the kind.
What is in a name? If we were to refer to this bill as a "Taxpayer Deception Act" it might get agreement in principle from the Official Opposition. The only thing I can imagine about this bill is that, had it been operating in 1993, there would have been an election and the Yukon Party would not have made the Yukon suffer through two more years of incompetent government.
We have to decide for ourselves whether or not this bill promotes responsible spending and balanced budgeting, or if it actually promotes collective amnesia in the Yukon public. New taxes were never an issue in this Legislature. For the last 13 years, apart from three years ago, taxes were never an issue that was raised.
Of course, governments, in their budgets, proclaimed that the budgets were balanced, that there would be a surplus at the end of the year and that there were no tax increases, but no one spent any time thinking about that, because there was never any sense that there needed to be a tax increase, and there was never a sense that the Yukon taxpayers were not paying their fair share, as Canadians, toward the operation of the Government of the Yukon or the general operations of the Government of Canada.
In fact, there was every reason to believe that Yukoners were paying taxes, and had a tax burden, that were higher than the Canadian average. The last time I can remember debating a tax measure was back in the early 1980s, when the Conservative government of the day increased the personal income tax rate because it felt that it needed to do so to balance the books and to spend in various areas it explained at the time.
For each of 1985, 1986, 1987, 1988, 1989, 1990, 1991 and 1992, the Yukon government posted an operating surplus. In each of those years, the Yukon government proclaimed it did not require new taxes to maintain that record. In fact, the only time the Government of Yukon made any significant movement with respect to taxation was when it eliminated the medicare premiums, a move that was opposed by some Members of the Conservative Opposition, and when it instituted the fuel tax rebate, which was essentially another tax reduction.
In 1992, the NDP Government Leader, in his run-up to the election, indicated that the Yukon NDP government was proud not to have raised taxes; he was scoffed at by the Yukon Party Leader because the Yukon Party Leader knew full well there was no justification for raising taxes. Within months, the Yukon Party Leader was talking in this Legislature about how Canada was in dire circumstances, how the government needed to consider new revenue options, how Yukoners were not paying their fair share - remember that argument, that Yukoners were not paying their share - it was not any part of a big plan to ensure that the books were balanced over a three- or four-year period. At that time, there was no indication that the federal government was going to be significantly cutting back to the Yukon transfers. All that we heard in those days was that Yukoners were not paying their fair share and that the Yukon government wanted to spend more money.
At every turn, whenever there was an opportunity, we had the Government Leader saying - despite his claims about wanting to help out the federal government - that if there was an infrastructure program, Yukoners deserved more; when it came to transfers, Yukoners deserved more; if there were any cuts, God forbid, Yukoners should be given fair treatment. If there was any program that might glean an extra 25 cents from the federal coffers, our Minister of Finance was right in there extracting every dime and quarter he could get from the federal government.
This was supposed to be the genesis of this marvelous plan that we have now concocted, in hindsight, about how the government moved from one fiscally responsible move to the next.
In 1992, the message was that the Government of Yukon was broke. We had visions of people walking into the building, sizing it up and measuring the seats to find out how much the receivers could get for government property. People were saving more because they were concerned that this government was in fact broke.
In a few months, this government was announcing a brand new, $7 million program with brand-new money that it managed to find. A little while after that, what did we hear from the fiscally responsible government with a big plan? We heard that the federal government needed our help. We had to invest a little more to pay down the federal debt. We would naturally have expected at the time that the government was coming in to announce spending reductions across the board. To our surprise, the government provided us with the second largest spending budget in Yukon history. We were told that in order for the government to balance its books we would all have to contribute to the better good of this territory - the public servants would donate a few bucks from their pockets - and we would balance the books because we want to maintain basic programs and services, basic spending levels. What did they introduce? Another big budget. A bigger budget yet.
While the helpless new Minister in the Yukon Party government - the Minister who had been sitting right behind me for a year, who had been criticizing everything that the Yukon Party did and calling it all incompetent, who found a place in the government benches - was undertaking one of his very first tasks - introducing wage restraint legislation - the Minister of Finance, across the building, was announcing that somehow and somewhere $20 million had appeared. This was not part of a plan. This was referred to by the Minister himself as an unexpected surplus. "Unexpected" means that it was unexpected; it was not part of a plan. If it had been part of a plan, it would have been part of the plan. What we were treated to, however, was a $20 million windfall. This is after the Minister had been standing there lecturing us about how the micro-managers on the other side of the Legislature were managing every last dime because they knew a balance sheet. They said that the budgets were tighter than a drum. People could not squeeze another dime out of them.
I will just remind everyone that they were so convinced that everything was just so and could not be manoeuvered that when they were backed off one small part of the taxation measure - to the tune of $1.8 million - they just did not let it ride.
We had to go through 42 amendments to the main estimates in order that the money would be expended just right because they were going to bring the finances into shape. We went through 42 amendments in order to accommodate $1.8 million in revenue cuts because we did not want to give them all the taxes that they had planned to take in.
Then, a year later, $20 million just seems to appear. How can this be part of the big plan? There is no big plan.
We have been on a roller-coaster from square one. What do we actually have in terms of evidence about what has happened? We have big budgets, every one bigger than the last, even accounting for devolution. We have increased spending in certain departments, including operation spending. Operation spending in the coming year is climbing, too. The net spending is climbing, too. Now we have a proposal by the Ministers opposite, who feel that they are such superb micro-managers that they are going to spend down the surplus to $7 million and expect that they can hold the line on this $7 million so much that there is no fear, no need to worry about an election call; thanks to the guillotine clause in the Taxpayer Protection Act.
These superb managers are the same managers who could not foresee $20 million coming their way, planned to spend $490-odd million this year and ended up spending $506 million, and we are not finished the year yet. These same managers are pretending that somehow they can anticipate a $7 million surplus and hold it.
They have not demonstrated their ability to do that to date and yet they are pretending now, in the final months of their regime, sensing an election on the way, seeing their performance at the polls, that the government, in normal circumstances, can maintain the spending levels that this government is proposing and still keep above the threshold without fear.
I do not believe the government really has the confidence to do that at all.
This government has indicated that the Opposition somehow has a problem with the idea of spending down a surplus. Well, the Opposition does not take that position, and never has. The difference between the situation that has occurred in the past and the situation this time is the Taxpayer Protection Act, and it is the guillotine clause in that act.
For seven years, the NDP maintained a registered surplus by the Auditor General of this country without the Taxpayer Protection Act as the hammer, so to speak, to ensure the government would do the right thing. It was only when there was a change in government that the expenditures rose to the extent that they eliminated $51 million worth of surplus that was posted and went over the line to create a $13 million deficit, registered by the Auditor General. We have had serious concerns about what the government was doing in trying to paint the NDP government's good budget record as bleakly as possible. That was the stuff of many long debates in this Legislature. When the Yukon Party proposed this particular piece of legislation, it must have only been thinking about its own record.
They know that people are concerned about tax increases, because the Yukon Party levied tax increases. They know that people are concerned about the Canadian debt, because the Canadian debt is a problem, but to take this particular Draconian measure, given the financial state of affairs of this territory, is not responsible government. It will not guarantee balanced budgets. It will not guarantee smaller budgets. Particularly in the context of the current budget record and the current spending proposals, it will simply put us perilously close to another general election.
I would feel a lot more comfortable about the measure if I felt that the Government Leader was truly and sincerely a believer in ensuring that departments do not overspend, and if he understood that he had a problem and needed a good solution. There is a piece of legislation currently on the books that says that it is illegal to overspend: the Financial Administration Act.
Last Thursday, I asked the Minister about that particular bill. I asked him what he thought were the problems with the bill. It turns out that the Minister's basic problem with the Financial Administration Act is that there are clauses that prevent deputies from overspending. I asked the Minister if there should be penalties for deputies that overspend. He said, "I do not think there should be any in the Financial Administration Act. There are ways to deal with these issues, other than the act. If they overspend for legitimate reasons, why would one want to punish them?"
In response to another question, as he was carrying on poetically about the whole problem of financial budgeting in the Yukon government, the Minister said, "Why would we want to reward a deputy minister who lapses $10 million, $15 million or $20 million at the end of the year? Why should we reward that person and penalize the deputy minister who exceeds his budget by $100 million? It does not make any sense to me."
What is happening? Have we entered the Kafkaesque world of the surreal? Does anyone understand anything any more? Are there any points of reference that have any meaning? The Government Leader proposed a measure this afternoon that states that governments should not overspend, and that if they do overspend - meaning if they ever acquired an accumulated deficit - and he is driving home the point that there is a good chance there would be one, even under normal circumstances, why is it then that he is promoting that deputy ministers should be allowed to overspend whenever there is a reasonable reason for it, and that the clause that says that they cannot be removed from the Financial Administration Act?
It implies that deputies can overspend; Ministers cannot. How does that work? What is the point of this? Is there a consistent budget message? Is there a consistent financial reporting message? I would submit that there is not. I would submit that we have got a very confused government, a government that is lashing out and trying to respond to public opinion - public opinion that has been generated in large part by its own activities - and cares little for any consistent message at all.
The primary purpose of balanced budget legislation under normal circumstances would be that government should want to balance their budgets, of course. They would want to undertake long-term planning and look out for unforeseen circumstances. They ought to be allowed to spend surpluses. That is the basic objective. However, what is the purpose of the penalty clause in the Taxpayer Protection Act?
Let me go on a little bit here. The Minister, in his main speech this afternoon, indicated that he had received some vote of confidence from a fellow by the name of Jason Kenney, president of the Canadian Taxpayers Association. Mr. Kenney felt that the legislation before us was just the cat's meow; it was just the best thing that ever happened. Mr. Kenney is not exactly familiar with Yukon circumstances. According to the transcript, for some reason, he is under the impression that territorial governments are not allowed to run deficits unless they get permission from the federal government. That is patently wrong. Of course, they can run deficits. They do not need permission from anybody. The NDP was allowed to run deficits and run an accumulated deficit for seven years, even though they did not do it. There is nothing in federal legislation nor was there a word from federal Ministers about whether or not we should ever run deficits. The only word that I got from a federal Minister was to thank me in writing for a fiscally responsible budget.
The interviewer asked Mr. Kenney this question: "What do you think of the fact that when the Yukon government did table this legislation, it also tabled a budget with a $24 million deficit?" Mr. Kenney's response was, "Well, there you go. That proves a need for it."
Mr. Kenney, himself, is saying that the Yukon Party should pass this legislation to protect the Yukon from the Yukon Party. He is not even referring to the tax provisions. He just does not believe in any deficits at all.
I can understand a man who has a very narrow focus making this comment. All he wants to do is to serve the best interests of the taxpayer. The best interest of the taxpayer, as he defines it, is simply to spend as little in taxes as possible. The balance sheet for the rest of us, and certainly for legislators, also involves the provision of services. Many of us do believe that there are many people in this territory - in fact all of us in this territory - who should collectively be the beneficiaries of one service or another - services that we jointly provide, whether they be ploughing roads, providing health care, teachers in the schools or other things. There are many things that we like to do together, because it is not only efficient, but it is also humane.
Mr. Kenney does not believe that anything is good unless one side of the balance sheet is accounted for. Those of us who are responsible about the matter consider both sides of the balance sheet: the provision of services, as well as the need to pay for them.
The government has now introduced a bill that will ensure that all new taxes will have to receive referendum approval. I checked through the record. I used the Hansard mechanism where one can look up a word, so I pulled out the word "referendum" and a couple of others, just to see if the Minister of the time, when he introduced the 11-percent increase in personal income tax or the five-percent surtax on Yukon personal income tax, or when he increased the corporate income tax rate by 50 percent or the small business rate by 20 percent, or when he increased the fuel oil tax on diesel by 38 percent or the gasoline tax by 47 percent or the aviation fuel tax by 57 percent, had said, "boy, it would be nice to put this to a referendum, because the public has a right to participate."
I did not find any references to referenda or to canvassing public opinion about any of those particular measures. The Minister at the time seemed to think it was quite legitimate for the government to assess the situation, and in this particular case raise taxes higher than has any government in recent history.
At that time, as I mentioned before, the government was not particularly interested in doing anything other than ensuring that Yukoners paid their fair share. Members will recall that we had a long discussion about tax burden and about whether or not Finance officials in Ottawa ought to be dictating fiscal policy in the Yukon. Now, we are told that it was part of the big plan, but in any case, the big plan back in 1993 did not involve a referendum. It did not involve even a voluntary determination of whether or not the public supported these particular measures. I would argue that the public did not support them, based on the reactions we heard from so many, many people.
I make two points. First of all, this is a completely inconsistent response to everything the government has done so far, and it is a reckless and irresponsible thing for the government to do now. In the world that has been created by the Yukon Party government, it has been obvious for some time that the government - a government, incidentally, that has said that it believes there ought to be a $30 million surplus - is going to take us down close to the wire of the definition of the accumulated surplus and accumulated deficit situation. The government is going to take us right down to the wire, knowing that the consequences for going past the line are changing fundamentally, and that is the reason why this situation is reckless.
It may not be reckless from a political perspective, because it may be that this government believes that it will be defeated in the election and that it will get another opportunity to fight another election the following spring.
If that is the case, then it is also dishonest.
The second point that I want to make is regarding the provisions in this act that call for a referendum vote for new taxes, which is inconsistent with everything this government has said and done, both in raising taxes and not canvassing public opinion. It is in fact the case that the most charitable explanation that one can give is that this government, assessing public opinion, wants to protect the public from its own actions and its own record.
The Minister of Finance, in his opening remarks, indicated that everybody in the country was talking about debt and deficit. The federal government has a big debt - a troublesome debt, as the Minister of Finance calls it - and he is right, but we have to do the right thing for our Legislature, in our circumstances.
When this government took office, the financial record of this territory was extremely good. It was sending out signals in every direction - signals that included more overall spending, obviously, because that is what this government did, but also spending less in various areas.
A few years ago, it was our contention that the Yukon Party government was simply trying to mask the fact that they wanted to change spending priorities. They either told people that they were broke - now the Minister of Finance wants to penalize his colleagues - or that the Yukon government was in serious financial trouble and yet spent money in different directions and on different things. If you happen to be a person working on the Two Mile Hill, if you happen to be in the road construction business, the word goes out in the departments that you are awash in cash.
You could name your price. If you are running a transition home, including in the community of Watson Lake, you will be squeezed. So what was supposedly a claim that the government was facing tough financial times was an attempt to redirect funding to priorities the government felt deserved funding.
On many occasions, the government indicated that the capital funding was worth more to the future of the territory than operation and maintenance funding. We heard the Minister of Finance say that education and social spending amounted to debt creation; building roads and economic infrastructure was wealth creation. That was the real and honest debate. That is what we try to encourage to happen in this Legislature, but w
e were faced with one harangue after another about straightening the financial circumstances. As ludicrous as it sounds, we are doing it in the context of bigger spending budgets every year.
Now we are faced with the proposition that all the chaos we have been through in the last few years was all part of a big plan - to allow us to account for something we did not even know about two years ago, which is the $20 million cut this year.
As the government was preparing for the $20 million cut and taking all these special actions, it was lapsing equivalent amounts in a way it did not even know.
The Government Leader asked this rhetorical question: how much more do taxpayers have to pay? That was probably a paraphrase of remarks made in the Legislature only a couple of years before. I do not think they should have to pay for bad budgeting; I do not think they should have to pay for politically motivated legislation that is clearly a fraud - is a con job. What I think they are looking for -
Speaker: Order. The Member has used several words that are unparliamentary. He used "dishonest" and "fraud". I forget what the other one was, but I have my book lying here, and they are obviously unparliamentary, and I would appreciate it if the Member would refrain from using that type of language.
Mr. McDonald: Certainly I will not impute any motives of that nature on any individual Member of this House.
I have every intention of moving, in Committee, a motion to rename this bill from the so-called Taxpayer Protection Act to the "taxpayer deception act", because I think, in the name of honesty in advertising, the name fits. I hope that I will not be called out of order.
I would like to make a final point, as I wrote it down and felt it was quite good.
Speaker: Order please. If the Member is actually contemplating putting that amendment forward, it would be unparliamentary. The word "deception" is an unparliamentary word and the House, I believe, would not be able to accept an amendment that includes unparliamentary language.
Mr. McDonald: I will wait for the discussion in Committee as I believe I said I would be moving the amendment in Committee. I have every intention of moving the amendment in Committee, and I am going to make the argument that it is not unparliamentary, because I am not imputing motives on other Members. I am saying that the measure itself does not tell the truth.
The Minister of Finance said, in his closing remarks, that this legislation had to be tough. He could not make exceptions for anything. If a government created an accumulated deficit, it would have to drop the writ immediately. As I pointed out earlier, the Minister is more than prepared to change the Financial Administration Act, which has a prohibition for overspending, to allow for exceptions. He seems to think that that is the message he wants to send to all government - to his deputies and everyone else. I will not take up too much time, but he says that it would be "a reasonable thing to do." He is right. He was right on Thursday, but wrong today.
We cannot support this act. We do believe in balanced budget legislation and, in fact, we called for balanced budget legislation and still do. We want legislation that would require the government to balance its budget, undertake long-term planning, prevent surpluses to be spent, if required, and to include provisions for emergency situations. That is quite consistent with other legislatures that are facing circumstances far worse than ours.
We have been taken down this road of so-called deficit fighting in this Legislature far too long. We have been completely manipulated by a narrow-minded government agenda that focuses on only one thing publicly, only to do other things privately: spending more, on all kinds of projects.
For the Minister of Tourism's benefit, we have projects like tourism office buildings, we have beringia centres, and all kinds of things that were never even heard of three years ago, things that did not come through public consultation, things that were generated by the Ministers themselves - multi-million dollar projects. Yet we are expected to believe that this government is in straitened financial circumstances, so much so that it needs or would like a piece of legislation such as the one it is proposing today. It is ludicrous that we are faced with this situation today.
We do believe in balanced budget legislation. We do believe in fiscal responsibility. We do believe in good public-policy making, but this is not what that is all about. This is a politically motivated measure that has not been justified by the government's spending practices, has not been justified by long-standing financial principles embraced by this Legislature, and consequently to vote for this measure today would be to throw everyone in this territory into more chaos than we have been treated to by this government in the last three years.
So, we will vote against this measure - I think for very good reasons.
Hon. Mr. Phillips: I have been a Member of this House for 11 years now. I have had an opportunity over the past 11 years to listen to dozens of speeches and hours and hours of speeches made by the Leader of the Opposition on various topics, but I have to say that I am somewhat puzzled by the speech today on this particular piece of legislation. I have never heard the Member produce such weak arguments for voting against a piece of legislation. It is the weakest argument the Member has ever produced for voting against any piece of legislation. Usually he has some sound and reasonable arguments.
In fact, he did not say anything about the legislation in his speech. He spent all of his time discussing the record of the government, or what the government said, about the roller-coaster, about taxes and about all these other things, but he did not speak about the legislation. That is where I have a concern because I read this legislation. I have talked to a lot of my constituents when I go door to door. A lot of people are supportive of this kind of legislation.
Bringing in taxpayer legislation is sort of a trendy thing to do in Canada right now. I think that we would have been better off if it had been trendy about 15 or 20 years ago. We would not have the huge federal debt we have today. We certainly would not have had other governments across the country in debt and we would probably all be better off for it.
The legislation we have produced is different from the legislation we see in many other provinces and territories across the country. I think the difference is that there are very few or no loopholes in this legislation. This really does force us to get serious about managing the growth of government and managing our expenditures and revenues.
It really does force a government to be conservative in its estimates and revenues and to be extremely careful how it spends its money and the commitments it makes to individuals and groups.
When I talk to people about this legislation - and the topic has come up in the last couple of weeks since we tabled the budget - they tell me they are happy to see this.
You can see that we will have legislation that will in fact protect them from politicians who will make all kinds of promises and spend all kinds of money, and maybe try to buy their way back into office.
The Leader of the Official Opposition, as I said, did not attack the bill. That was a curious part of his speech. He stood up publicly a few weeks before we came into session and said that he wants to bring in taxpayer protection legislation, yet we did not hear one suggestion from that Member about what he would see as taxpayer protection legislation. He did talk in his closing remarks about the need to include provisions for emergencies. There is a provision for emergencies in this bill - call the Legislature back. It takes no time at all to call us back in here and to get a quorum of Members to deal with an emergency. Get it on the floor of the House so that we can debate it in front of the public, and the public knows that it is not just a facade and that we are not trying to fool the people of the Yukon - it is a real emergency and we will deal with it.
Let us look at the type of emergencies that we could get - possibly an earthquake, a flooded highway or a school burning down, or something else that we had to respond to quickly. At any given time in the year, the government usually does have some surplus monies that are not spent. It would not be a matter of having to call us in within two or three days to deal with fixing a bridge that got washed out at the White River. It could be dealt with immediately by the departments. If it was going to cause an overexpenditure in the budgets, we would call the Legislature back in and we would deal with it. We would have to deal with it before the end of the year. There would be room to deal with emergency situations with this particular piece of legislation.
He also talks about including provisions for expending the surplus that we have. It would be foolish to be able to build a surplus in years when the government has lots of revenue and a prosperous economy, and then be unable to ever spend it. Alberta, I believe, has a bill in which they spend a portion of their surplus that they gain to reduce its debt, and the other part can be used in expenditures; they are now going around asking the taxpayers how they want to do that - by way of a rebate or putting it back into programs.
I think that there are provisions in this bill to spend the surplus. I do not know what the Leader of the Official Opposition really has against this bill. The only thing that I can think of is that the Leader of the Official Opposition wants to bring in provisions in a Taxpayer Protection Act that you could literally drive a truck through. An emergency would be simply saying that the government just does not have enough money or that it made a mistake in accounting and that is now an emergency, or that it is going to run short.
This legislation really forces us to get serious, and there is nothing wrong with that. The Leader of the Official Opposition mentioned that we are taking a $32 million surplus and are spending it down to $7 million, and this is really terrible and reckless. I believe the Leader of the Official Opposition described it as being reckless because we had spent this surplus down. However, the Leader of the Official Opposition is inconsistent. First of all he says that you can spend the surplus, but do not spend it down too much. The Leader of the Official Opposition, and maybe some of the other political parties in the House, are worried that they could not balance the budget, even if they tried. They are worried that they would not or could not make the tough decisions to make sure that they do balance the budget.
The decisions that we have had to make over the last three years have been tough and very difficult. I think the Member for Faro can remember the gallery being full day after day with people from his riding who were very concerned and upset about the future of the mine. That Member was encouraging this government to guarantee a $29 million loan to Clifford Frame. If this government had done that it would have been in big trouble.
I have had many people tell me that they are glad this government did not guarantee that loan. This government did not loan that money because we felt it was extremely high risk and we still feel that the mines should stand on their own feet to be developed. We had already been stung once by losing the $5 million worth of ore that was stored at the terminal in Skagway, which we never saw again. That money was difficult to recover, but we could have lost another $29 million. If that were the case, we would be sitting here today, no matter how well we tried to balance the books, with a $22 million debt if we had guaranteed that loan.
I am kind of blown away when the Leader of the Official Opposition stands in this House and uses examples, such as the Taga Ku incident, and has a collective memory loss about being involved in the major decision that cost us money on that project, and then he says that the NDP never had a debt; it had a surplus for seven years.
He said he even received a letter from the Finance Minister, whom he also fooled.
During the election campaign, when Mr. Ostashek spoke out about whether or not taxes would be raised, it was interesting to note that Mr. Penikett was silent on the issue. Going back to 1992, there were a few election promises made by other political parties - the Liberals and the Yukon Party. What was surprising to me and many of the Yukon Party workers was that, in 1992, the New Democrats made very few election promises until the last week of the campaign.
I remember clearly they were getting a lot of pressure from the media and from other candidates about when they were going to release their platform and all the figures. There was a lot of pressure put on them to release a costing-out of their election promises. Others had costed theirs out.
The New Democrats did not cost out their election promises until the Thursday or Friday before the election, which is pretty unusual. The picture became clearer after the election.
The very first meeting we had with officials from Finance - two or three days after the election - Mr. Ostashek was told he had a problem, that he had a deficit, not a surplus.
I am a Member of Management Board, and I am a Member of Cabinet. Each and every week there is a Cabinet meeting. There is a document that comes into Cabinet, as all Cabinet Ministers know, which lays out the surplus-deficit position of the Government of Yukon. There is no way in the world, unless no one knew what was going on at the time, that the Cabinet Ministers in the Penikett government, including the now Leader of the Official Opposition, did not know until October 19 that there was a serious financial problem. There is no way. I will never believe that as long as I live.
The Member for Faro was mumbling over in the corner but, if he ever has the privilege of being a Cabinet Minister, he will know exactly what I am talking about. Members of every single Management Board or Cabinet meeting are brought up to date on its current status, and I cannot believe for a second that that Member, the Leader of the Official Opposition, did not know that they were in trouble in late August and early September. They did know, and why, because it was obvious from their actions. They called an election on September 19 and did not table a budget before calling the election because they did not want us to know. They did not tell anybody about the costing-out of their election promises until two or three days before the final days of the election campaign, and they still did not promise that much in the election. Why? Because they knew that if they got back in they did not have any money to do anything. They had a $64 million debt to deal with, and they were going to have to make some tough decisions.
If we had the debt protection legislation that is in front of us here today, if we had the Taxpayer Protection Act that is in front of us here today, we would not be facing that problem. We would not have had to increase taxes. We would not have had to deal with the rollback of our own wages and the rollback of the wages of the civil servants. What would have happened is that the government would have been forced to get a handle on government growth. It would have been forced to get a handle on government expenditures, and maybe if it had got a handle on it soon enough, it might have been able to bring in a budget that at least could have used up some of the surplus - because that is what the surplus is for: to be used in years when things are not so good. I would remind Members that in 1992 and 1993 things were not so good in the Yukon. It was a tough time because of the closure of the mine, as well as other problems. If they would have had this legislation, we would not have had to deal with this problem.
When I listened to the Leader of the Offical Opposition, I thought he might come forward with some possible amendments that could improve the legislation if he felt there was room for improvement. I know that, when one brings in legislation like this, one tries to think of every conceivable problem that might arise and try to sort it out and see whether the legislation can accommodate it or not. The Government Leader has pointed out various aspects of the legislation and how we can deal with it in cases of emergency and otherwise.
I would have hoped that the Leader of the Official Opposition would have brought in some friendly amendments. He, after all, has said to the public that he would bring in balanced budget legislation. I can tell Members that there will be a huge debate in the next election about how much protection we are really going to give the taxpayers. This bill gives taxpayers the ultimate protection. We have not heard what kind of loopholes the Leader of the Official Opposition or the Liberal Party might want to put into legislation like this - if the Liberal Party does not support it - to accommodate a government overspending.
It would have been nice to hear from the former Minister of Finance - the present Leader of the Official Opposition - about how he could see ways of improving the legislation. If he wants to bring in balanced budget legislation, here it is; let us get at it. Instead, we heard a bunch of rhetoric. We heard the Member twisting the facts to the point where no one is quite sure who is right any more. The Member did not address the bill itself or say whether it was good, bad or indifferent. He just said that it was "taxpayer deception legislation." That is outrageous. How can one call that bill deceptive, without addressing any parts of it? The Member did not address any parts of the bill; he addressed what he thought were the actions of the government, but he did not address the bill.
What is it he does not like about the bill? Is it that one cannot overspend in a particular year or he wants to see a margin of 10 percent for overspending? Should there be a loophole stating that the Cabinet Ministers can gather in a room and decide what a loophole is, where they can spend and what they can spend?
Speaker: Order please. The Member has three minutes to conclude his speech.
Hon. Mr. Phillips: All I would have liked to have heard from the Leader of the Official Opposition are some good, sound reasons why this particular bill is not good for the Yukon taxpayer. We did not hear that from the Member.
I am not going to apologize, from the Yukon Party standpoint, about ending our first term in office with a surplus, albeit only $7 million. Let us remember we inherited a debt of over $10 million from the previous NDP government, which they did not tell anyone about. We paid off the $10 million, built it up to $32 million and now we are able to stand some of the cutbacks that are coming from the federal government in Ottawa. I do not think that is too bad, considering 1993 was a tough year for this government and the people of the Yukon, with all the cutbacks.
Our economy is on the upswing. Things are getting better in the tourism industry, in the mining industry and in other sectors of the Yukon economy. We are the only jurisdiction in this country that currently has a surplus budget and could absorb these cuts.
I am not going to apologize for one minute for that. I think this is good legislation. It is not good legislation necessarily for us, because we can tend to run a little rampant spending the taxpayers' money. This is good legislation for the taxpayer of the Yukon. This will ensure that this government and future governments in the Yukon Territory will not spend more money than they take in. I think that is what the taxpayers of the Yukon would like to see.
Mr. Sloan: It always a pleasure to follow the trendiest Member of the benches opposite. It makes me want to run out and grab a cappuccino.
Before I get into this, I want to address a couple of points. First of all, the Members of this side were berated for not addressing what they felt would be the point of the bill. That is what I intend to do; I intend to address two key points in this bill.
Before I start, I would like to address a point that the Minister raised right at the start when he spoke of the comfort level, and he made some reference to Canada's overall financial picture. I am certainly as patriotic as anyone else and am cognizant of our economic position, but I think one of the things that the Government Leader referred to was the idea of tax-free day. He told us that we would not be tax free until some time later on in the year. That is very true for individuals.
However, it may be of interest to the Government Leader to know that the corporate tax-free day was January 25. Most of us will not reach our personal tax-free day until some time in the summer.
I am always impressed when captains of industry get up and berate the country and the workers for somehow getting us into this dire economic strait, and that somehow we are responsible for dragging the country down. At the same time we see record profits. For example, we see Mutual Life Insurance of Canada posting profits of 24 percent; up to $192 million last year. We see companies such as General Motors posting profits in the billions. We see companies such as Petro Canada with profits coming up to 20 percent and laying off 700 people at the same time. When we really begin to talk about where this debt picture comes from, we have to understand very clearly that the tax burden has largely shifted from corporate Canada to the individual. I thought that it might be worthwhile for us to keep that in mind as we deliberate here today.
I would like to make reference to a couple of things in this bill. I am not going to get into the idea of the name itself, much as I disagree with it. It is interesting that this bill is following a trend that has been apparent in Canada of governments trying to indict political opponents by naming a bill in such a way as to conceal its true nature. I am concerned about this bill because it does not do what I feel is a fundamental point in Canada and in the Yukon, namely, balancing the budget. I am in favour of balanced budgets. I believe that we all have to live within our means. I think that is an expectation of the taxpayers today. However, I think to bring in a bill like the Taxpayer Protection Act, as it is named, does not really meet that goal of balancing the budget.
I do not believe this is balanced-budget legislation. My major fear with this bill is that it will work against the smooth operation of government. I believe that it will actually impede and cause a gridlock in the legislative system.
I know the Government Leader would say that I have not looked at it and examined it. As a matter of fact I did look at the legislation and I compared it to four other pieces of legislation from Saskatchewan, Alberta, Manitoba and New Brunswick. I found this legislation surprisingly simplistic.
I know that the previous speaker referred to seeking loopholes. No one is seeking loopholes, but I think that we have to look at legislation as being rational, effective and flexible. I think that inflexibility leads to some serious difficulties that are no more apparent than in this bill.
I would like to make reference to the bill - since the previous speaker said we did not refer to the bill - at section 8. This is the section that requires a referendum before the government can increase personal income tax or fuel tax. To me, that is a cynical kind of clause. The probability of such a vote succeeding is not that likely; therefore, a government would be left with only one choice.
If, for example, the government wanted to increase its revenues and it knew that it was unlikely that a referendum would pass for increased tax powers, the only alternative that would be left is to cut services. My real fear is that this would do a couple of things. There would be serious cuts in health care, education and social services. I think those three areas would be the most vulnerable and I think it would be very easy for the government of the day to take a look at the departments and say that is where their largest expenditures are and where the cuts have to be made.
The other alternative is to have the equivalent of a Yukon garage sale and start selling off assets. Maybe we could start by selling something like Yukon Energy Corporation to our southern friends.
Neither one of those is a particularly positive move. If any of us have any doubts about how referenda on increased taxes work or how successful they are, I think we only need to take a look at the experience of some of our American friends. Coming as I do from an education background, I taught for a while in Windsor and each year we would see various school districts around Michigan, especially in the Detroit area, going back to the voters seeking to increase their mill rates so that they could just keep programs going. These referenda would consume vast amounts of energy, vast amounts of time that could be better expended on other things. My fear, quite frankly, is that we are going to end up moving into that kind of a U.S. referenda-driven tax system.
That is my first major concern, and it is with respect to section 8. The interesting thing is that when one compares this bill with what the Government Leader and the previous speaker see as being the teeth of the bill with the Alberta bill and the Saskatchewan bill and the favourite of the Canada West Foundation, Manitoba, we see that the people who are being punished for any financial excesses of the government really are the population, not the people who should hold the responsibility. The Government Leader is very fond of saying that the dreadful situation in the NWT is a ministerial responsibility. I am sure the poor people in the NWT, by now, must have a serious inferiority complex because they have been dragged through the mud here many times since the beginning of the session. The Government Leader pointed out what would happen to a Minister who overspent his budget in Manitoba; that minister would lose 20 percent of his salary. That would not mean anything if he was leaving office the next term. In fact, if the Government Leader had taken the time to read the clause in the Manitoba legislation, he would realize that the 20-percent financial penalty does not only extend to the Minister in question but to all the Ministers; therefore, there would be considerable pressure from his colleagues, I would imagine.
So, we have a bill here that is penalizing the population by forcing it into an unnecessary referendum and forcing them into an unnecessary vote. Despite what the speaker on the radio mentioned - that a referendum in the Yukon would be inconsequential - I believe the recent election in Whitehorse West and Vuntut Gwitchin set the government back $47,000. I can imagine a territorial referendum would not be inconsequential. That is a rather false premise.
I would now like to look at the next section, which I have some difficulty with. The previous speaker said we have not proposed any amendments or suggestions. I would suggest that after we get through with this we can take a look at some other balanced-budget legislation to see what we can propose in terms of amendments. Right now, however, I would like to bring out some of the concerns I have.
Section 6 would precipitate an election in the event of an accumulated deficit. To me, that simply immobilizes the government more. What government could operate efficiently if its ability to respond to change was limited?
The previous speaker said it would be a simple matter of calling back the Legislature to debate it, but it is not that simple. We know that what probably appears to be a simplistic situation at the start would not take one or two days; it would take several days while this issue is debated in the court of public opinion and in this Legislature. It is not a simplistic process to, with a snap of the fingers, just get together and debate it.
There are many financial contingencies we could be faced with. The previous speaker alluded to natural disasters. I would suggest we might take a look at some serious financial- industrial disasters; for example, a major mine closing or a major project failing, for one reason or another.
There are a number of things. The federal government could find itself in a much tighter situation, for one reason or another. They are not merely academic situations. They are very real.
In my short time here - 18 years in the territory - I can remember the megaprojects that were going to bring us all financial salvation and make us all tremendously rich. I can recall that on my first visit to the Legislature we had that marvelous acrylic timeline out there showing the pipeline. It was a matter of waiting in the right spot for the dollars to appear, but it did not happen. We have a number of financial contingencies that could strike us.
I believe that the result would be that any government that came into office would have such a cautionary view toward spending that it would see itself continuing in a liability situation. For example, a large-scale project that the government might want to undertake could end up being shelved or stretched out over a longer period of time to avoid the possibility that something could go wrong and the government find itself going back to the people before its mandate was up. Similarly, changes in programs could be put off if the government felt at all hesitant about its economic situation.
The idea of forcing an election is not an academic point; it is a very serious point.
This bill will not really bring about balanced budgets. What it will bring about, as I have said before, is legislative gridlock.
One of the real fundamental problems with this bill - once again, I am referring to some of the other legislation in western Canada - is the lack of forward planning. I know that the Government Leader has said, "Well, I am not going to do anything until I have the money in hand." That is fine. We should not count our chickens before they are hatched, but I think that anyone who does not project their own economic situation forward to the next few years is not being fiscally responsible.
I have taken a good look at the Saskatchewan legislation, which requires that a government coming in lay out a four-year expenditure and revenue plan. I do not think that it has to be iron clad, but the requirement of the government to at least do some forward planning in that nature would be a positive addition to this bill. If we are talking about possible changes, that is one that I might suggest. Quite frankly, I think that it is required. By the way, Alberta has a similar plan, but its plan is in the nature of deficit reduction. It may not be quite as applicable, but it certainly does suggest that a government needs to take a look at some forward planning.
I see this bill as being essentially reactive and very inflexible. There is very little scope for eventualities, as I have said before. The Manitoba bill, which was rated A-plus by the Canada West Foundation - I am sure, no socialist mouthpiece - does acknowledge that contingencies, such as decreases in revenues and natural disasters, can occur, and a government does need a certain amount of flexibility to be able to react accordingly. That is a loophole; I realize that the government Members would see that as a loophole. However, I think that we need to be realistic. Things occur. Situations change. We have to be able to respond. I see a serious danger in this bill in that it is so inflexible and concerned about preventing any kind of loophole or opening that would really contribute ...
Speaker: Order please. The Member has three minutes to conclude his speech.
Mr. Sloan: ...to the freezing of government.
I will wind up.
In short, basically, I feel that this bill is very limited. I see it as being dogmatic, rather inflexible, and, very clearly, narrowly focused. It focuses only on so-called taxpayer protection without taking a look at balanced budgets.
Any government that sees its role as being limited by this kind of legislation fiat is one that, quite clearly, I believe, has no vision, and, quite frankly, lacks courage.
Hon. Mr. Phelps: How pleased I am to have this opportunity to enter into the debate at second reading regarding this very important bill.
Let us get the issue out on the table and make it as clear as possible. We, on this side, are saying that we support taxpayer protection, that we feel that the need for balanced budgets ought to be in legislation, and certainly the need for sanctions against accumulated deficits ought to be in legislation.
Members opposite do not agree. They are going to vote against this bill. They do not agree that there ought to be balanced budgets. They do not agree that an accumulated deficit is a bad thing and an increase to an accumulated deficit is a bad thing. They are opposed. They are opposed to this legislation on principle, and little wonder, because they are hoping to get into the government one day and they do not want any legislation saying that they should be striving for a balanced budget, that they should not be raising taxes and that they should not be allowed to have an accumulated deficit.
That is what this is about; it is that simple. We think that we should be protecting taxpayers in the Yukon; they think that government should not. We think that we are here to govern on behalf of the taxpayers and the citizens of the territory; they feel that they ought to be allowed to govern by divine right. Really, that is the issue; it is that simple.
We have heard a lot of nonsense that contradicts earlier statements by the very Members who have spoken, with the exception of the last one. He had no chance to really get into this in any depth. I am sure that once he has been here long enough, he will find ample opportunity to contradict previous stances on issues, if he follows the example set by his leader.
We have a situation where the Leader of the Official Opposition, in debate earlier this afternoon, tried to find some justification for voting against this legislation. He really did not want to say to the taxpayers of the Yukon, "Look, we do not want anything that would curb our right to go into a deficit situation whenever we like. We do not feel that you ought to have a vote that might entitle you to veto the government raising your taxes." No, the Member did not want to say that, so he got into the most unusual set of non sequiturs and contradicting statements I have had the pleasure of listening to during my years in this House.
Let us look at the record and what has actually happened here, for God's sake. We should not run around believing these half truths. The Member talked about the wonderful fiscal record of the NDP government. Do you know what that record is about?
For example, did you know that when we left office and they took office that they had been left with an accumulated surplus in excess of $40 million? Did you know that because of the formula financing agreement signed by this government before the NDP took office, the NDP received another $40 million in addition to the surplus the first year that they were in power? My God, they were running around like chickens with their heads cut off. They did not know how to spend this money fast enough. I think they had to go and purchase a couple of cheque-writing machines in order to meet the demands of everyone who said, "Me too, give me some." The NDP went around and dispensed this money like Santa Claus out of a big sack. There was money for whoever wanted it.
This situation continued and the NDP government made some horrible investments, built some ugly buildings - I think of the visitor reception centre on the Alaska Highway, the Watson Lake sawmill and the terrible waste and dumb decision making by the NDP in that regard.
We left them with enough money they could play around and not enter into an accumulated deficit, at least not right away. What really happened? According to the Auditor General's report, there was a $13,647,000 deficit in 1992. Then we got into 1992-93.
This government took office on November 2, and finances were in a shambles.
Some Hon. Member: (Inaudible)
Hon. Mr. Phelps: Nine months. He said five months. That is how good his addition is. They had been in power for nine months, and we just took office. The first thing we did was to try to get a handle on how bad the situation was. We brought in an auditing company - Consulting and Audit Canada. It is a reputable firm and does work for, and in conjunction with, the Auditor General of Canada and for departments of Canada. This company projected that the mess the NDP had us in would lead to a deficit for that year of $57 million to $58 million.
What was the position taken by the NDP? One can look it up. Go back in Hansard, page 76, and those following, on December 17, 1992. What was the position of the NDP back then? Do you know what it was? It was denial - outrage that anyone would suggest that they had left the government in a mess. They denied the figures; the figures were false, they said. They went on and on. One can read what the now-Leader of the Official Opposition, Mr. McDonald, said on pages 77 and 78, and his denial of the situation that was portrayed at that time. He said this was not right, and he wanted the Public Accounts to review all the figures. He could not trust the firm, Consulting and Audit Canada. He denied they had spent us into a very difficult position by then.
Yet later, the Auditor General made his report and filed it. What did he find? Not a $57 million to $58 million deficit, which the NDP was denying, but a $64,145,000 deficit. That was the real deficit. All of a sudden, they had to take another tack.
Instead of denying what was really true, which is that they were out of control with their spending and that the programs were just a mess, their new tack was that they denied that they had anything to do with the 1992-93 deficit at all. That is really what the Leader of the Official Opposition just said. He says that was not their budget. They went from denying it, because they realize that it reflected poorly on their management skills, to denying that they had anything to do with governing that year. They set the budget and the spending. Their programs were out of control. We did not even take office and have a chance to look at the books until November, yet they are saying that they had nothing to do with it. This is the new false scenario that they are going to foist on the people of the Yukon. I wish them good luck.
The simple fact is that they do not believe in taxpayer protection. The simple fact is that they are against balanced budgets and they do not want anything to prevent them from going into an accumulated deficit. Otherwise, why would they vote in principle against this bill?
They are the ones who had this to say, "In any one of the past seven years, if we had asked departments to simply put forward their wish lists, and we had approved them, we would have been broke in the first year. Our budgets would be $1.5 billion per year today, if we had the revenue for it and simply said yes to every request. The Members on the front bench are going to have to grow up and understand that they have choices to make. Departments ask for expenditures, and many of the requests are reasonable and respond to something that the public wants. Some requests are private projects of individual department members. This government is going to have to take these requests and analyze them to determine whether or not they are realistic and affordable." I just quoted the now-Leader of the Official Opposition. The quote can be found in Hansard, December 17, 1992, page 78, for the record.
That is good advice.
The governments in power, after this legislation is passed, will have to heed that advice.
If the Members opposite are afraid to have a balanced budget and afraid to have sanctions against going into an accumulated deficit, I ask them to take their own advice. If they ever get into government, they are going to have to grow up and understand that they have choices to make. Departments ask for expenditures. Some requests are reasonable and some are not. They will have to make choices that lead to a responsible fiscal situation for Yukon. They, or whoever is here in years to come after this good legislation is in place, are going to have to be prudent and ensure that Yukon does not suffer the fate of the Northwest Territories and each and every other jurisdiction in Canada except Yukon, and go into debt. Whoever is in these front benches in years to come, with this good legislation in place, is going to have to do what is best for the taxpayer, the residents of Yukon and future generations, and make sure that we never make the same bad mistakes as have been made by other governments and by the NDP government, leading into 1992.
Mr. Harding: I am extremely pleased to enter this debate today. It is one for which I have been waiting for the last couple of weeks.
To me, this debate is a classic case of center-left position versus the ideological rights of this territory. It is the center-left - the government of vision, the government of thought, the government of plan - versus the half-Vander Zalm, half-Mulroney ideologues who are currently ruling the land in the Yukon and who are void of ideas.
The "taxpayer deception legislation" is the result of two minutes in the back room with the boys thumping their chests, trying to come up with a plan to get them out of their desperate straits. Where are they in the polls in Lake Laberge: Nine to 12 percent.
I equate this "taxpayer deception legislation" to a political peep show. It is a cheap thrill. The Yukon Party, which has no ideas, vision, thought or direction left, has come up with their last-ditch effort as they are being plucked, finger by finger, from that cliff.
This legislation is a complete and utter joke.
I want to deal up front with some of the comments of the previous speaker. In 1992, this government took over with five months left in the fiscal year. I do not know how he counts; I will not even try to figure it out. However, they took over in November. That left November, December, January, February and March. The fiscal year ends March 31. We had surpluses in every year that we were in government. Magically, with five months remaining in the fiscal year, the new Yukon Party government comes in. They say, "Oh my goodness, the reckless socialists have spent the kitty bare. All those surpluses and no tax increase budgets that they brought in. It must have been a mirage. They have obviously spent the kitty. They are reckless. They are out of control, and we have been brought in to save the day." How did they save the day? Well, they brought in the obscene tax increases - the largest tax increases in Yukon history. They kept spending and spending, with bigger and bigger budgets. My goodness, how can they stand there with a straight face and try to convince Yukoners that they made the tough decisions and wrestled something to the ground, when they spend and they spend to the point that $507 million is being spent by this government - the largest budget in Yukon history. They spend over half a billion dollars, yet they say that they make the tough decisions.
A lot of that revenue that they are so graciously spending on our behalf was achieved from the windfall revenues of their huge tax increases, which, incidentally, they promised the electorate were obscene and would not be brought in. That, however, is all part of the peep show.
When you look at what they have done, when you look at their record, it is clear they are not to be believed. They cannot be believed. They are void of vision and, worst of all, they are void of credibility.
When they came into power, with that five months left, we had this report from Consulting and Audit Canada. They brought in their team of Tory honchos to come up here and tell us what the situation was, as the Yukon Party think-tank was struggling with this incredible emergency of this deficit in the Yukon that was quickly growing in their heads. They came up with this number, a $57 million deficit. Of course we said that is hocus-pocus. That is not an accurate picture. There is still time left. There are various reports to come in. Things have got to be trimmed. Requests have to be denied. Every year that is the budgeting process.
When we found out later that the Consulting and Audit Canada report was a useless piece of information - none of the numbers were correct - they just punched in a bunch of new numbers. They made some write-offs: the extended care facility, the Curragh loan, which has since been paid back. They did anything they could. They converted Yukon Energy Corporation loans to equity grants, put it into the consolidated picture of the government so that the true picture of what the Yukon's finances were were totally messed up, all in the name of their politicizing.
Then, they told Yukoners that the Yukon was broke. Six months later they signal the all-clear flag. These miraculous fiscal managers have just saved the day. Thank God for the Yukon Party. What a great party it is. What a great government.
When I went door to door in Whitehorse West canvassing for the fellow who is sitting beside me to my right, I never heard anything about the Yukon Party being great fiscal managers. All I heard was dissatisfaction with the manipulation - the fact that the Yukon Party thinks that Yukoners are stupid. That is what I heard. People resent that. They resent that because they saw this government with their wage-protection legislation and with their budgeting and their phony numbers, their pumping in the write-offs. The Auditor General had no choice but to accept it, because the Auditor General said, yes, we will allow these write-offs. I might add, he later on called some of them into question because they never came for approval. They were in the Legislature and went beyond the Financial Administration Act.
This is absolutely a preposterous bill. All of their squawking about their particular position when inheriting government did not resonate in Whitehorse West a couple of weeks ago, and it will not resonate in the general election, because our record was good. Our record was balanced budgets and fiscal responsibility. Our record was no tax increases and that is something that the Yukon Party cannot say.
This has been a slash/tax/spend government. They are a unique blend of Tory. We do not always know where they are coming from. I have talked about the reincarnations. They were Klein, then they were Filmon and now they think they are Mike Harris. They might be Klein again. They might be Vander Zalm. Then they might be Reform. You never know what you are going to get.
One thing is sure, you are not going to get the actual picture from this government.
I would like to talk about the specific sections of the bill. The first thing that I want to say about sections 3 and 6, and the guillotine clause, in this taxpayer deception legislation is that we should not forget that all governments are accountable. We got the boot in 1992, the previous speaker got the boot in 1985 and governments all over the country get the boot from taxpayers and citizens. We talk about citizens as taxpayers. Well some citizens are taxpayers and they pay the bills. I like to refer to them as people, as citizens and Yukoners. These individuals have priorities, needs and wants. They want their children to have a good education, they want good recreational facilities, they want good roads that are safe so that the economy can flourish.
These are all priorities for government expenditure and investment. We cannot lose sight of this, because people do not lose sight of this. When these individuals have a chance to speak to their government, they let them know that in a big way.
It is a fallacy to say that governments are not accountable; I do not believe that. I believe they are accountable at the polls and the fact that I am sitting in the Opposition benches is a clear testimonial to that fact.
This legislation will not bring about fiscal responsibility. It is going to lead to reactionism. It is not going to lead to any kind of vision, which is the same kind of destitute government planning that we have seen over the last three years in this territory. The government has no long-term planning. We have heard a lot about the interlocking power grids and the pipelines to Watson Lake, the big mines, the coal projects, the mega-dams - the Pittsburgh of the North - however, none of this has come into being.
The Yukon New Democrats believe in government that consults with Yukoners and implement an agenda from those consultations. They work with Yukoners over the time of their mandate to implement a social democratic progressive agenda. We did that in health care, the Education Act, conservation strategies, economic strategies, and our record is good. We did not do this with tax increases, such as the Yukon Party introduced, and we did not do it with this ridiculous guillotine legislation. We wanted Yukoners to take a look at our plan and our vision. We did not want them to react to what they saw, on a day-to-day basis, but asked that they take a look at the long term. In 1989, the people of the Yukon rewarded us with another mandate. In 1992, the people of the Yukon felt we did not do as a good a job so they gave us the boot.
That is why we are over here. We accept that; we realize the mistakes we made; we realize the good things we did and we want to do more of them.
There are other problems with this particular piece of legislation, which I want to highlight. I do not have much time, as I am cut to 20 minutes. It is a bill that does not take many things into account. It does not take into account the fact that this government spent $20 million more than it planned to last year. It does not take into account the fact that if Paul Martin has a bad day and decides he wants to pick on us a little more, we could lose a lot of the revenues we presently use to make up the revenue projections in our budget. It does not take into account any kind of emergency situation or investment strategy, or anything of that nature, because this government has no vision. This is the problem.
This government has left us perched on the edge of an accumulated deficit, and then says it does not care, it is leaving government and knows it. This government is at nine percent at Lake Laberge and is gone. So, it says it will foist this on the next people coming in. They will have to deal with it and make tough choices and, this government hopes, they will be booted out of office and this government will come back in as the great saviours of all.
I think the Yukon Party Cabinet room must be getting some of that bad gas from the Liberal offices because they are deluding themselves. The public will not buy this in any way, shape or form. How will this legislation make public policy making better served? How will it lead to long-term planning, to strategic decision making, to visionary thought? It will not.
Aside from the electioneering, I believe this is all about this government always wanting to make cuts to health care, education and social services, and doing little deals with their buddies in the back rooms, like selling off our Energy Corporation, all in the name of fighting the great god, Deficit. I will not let that happen. There is no way that will happen in this territory, as long as the Yukon New Democrats are sitting in the Opposition benches. We will fight that agenda of the Yukon Party to the nth degree. We will fight it to the end.
Obviously, we feel very strongly about the protection and improvement of our health care, education and social services and issues like community justice, and we will not let them take them down. We will not let them sell the power corporation off to their buddies in Alberta. It will not happen with us in Opposition, and it certainly would not happen if we were in government.
To be safe, this government has taken the position that it needs about a month's operating cash or surplus on hand to run government. That budget leaves us with $7 million by the government's own figures - it could be less, it could be more. It has told us that lapses will be more, or they could be reduced, so I do not believe we are in a good enough position to accept this legislation. Fundamentally, it is flawed. I think it is reckless and irresponsible. I do not think it tells the story to the people of the Yukon who should be told exactly what our situation is. It is cynical and, again, that section of the act is irresponsible.
Now, let us get to the second section of the act, section 8, which is the referendum. We may need referenda in the Yukon to protect Yukoners from the Yukon Party. It might have been a good thing back in 1993, when it brought in the biggest tax increases in Yukon history. It did not say one word about referenda then and Yukoners know that they do not need protection from Yukon New Democrats, because when we are matched up on the taxation record with the Yukon Party Conservatives, we come out with flying colours; they lose big time.
The corporate and personal and fuel and tobacco and income and surtaxes that were brought in in 1993 by this government are well documented and in the record in this debate today. The Yukon Party government told Yukoners that it would not do it, but it did it. It had no need to do it to balance of budget. We ended up with a surplus that year of over $20 million, and that proved clearly that it had no idea what it was doing. Cuts from Ottawa were certainly not on the way. It did not even know they existed. This is no big master plan. These Members are foggy ideologues we are stumbling along, issue to issue to issue, trying to find some lines to justify their actions and it is failing miserably.
It failed in Whitehorse West when they got 24 percent of the vote; and in Lake Laberge, it is failing as well, where they have between nine and 12 percent, according to some informal polling numbers that we got recently.
I just want to say that I do not want to see this Newt Gingrich kind of quick-fix government response to long-term planning of government. I think that the right was winning this debate for a while, and they are starting to slip behind in this country. Recent protests in Ontario show me that. Some of the actions in the United States, where Bill Clinton is winning the debate about the protection of health care and education in America, are clearly telling me that the tide is turning. Obviously, this government, as usual, is a few months behind - or perhaps a year behind - in trying to implement this crazy right-wing luniness. However, that is not surprising. Their policymakers are a little slow in the uptake.
It is now introduced by this government. Quite frankly, we are prepared to do battle over this. We have said so, and we have made it clear why we object to this bill. It is a cheap election quick-start. It is something that I think is not responsible; it is reckless, particularly in light of the position they have put us in.
We, the Yukon New Democrats, did not stand for tax increases; the Yukon Party did. We were the first party to come out months ago and say that we supported balanced budget legislation. We looked through all of the other jurisdictions and were getting kind of tired of the roller-coaster ride of the Yukon Party - "We are broke. We are broke. We are clear. We are clear. We have built up a surplus. Oh, the surplus is gone. We are back down to $7 million." It has been a real roller -coaster ride. We got tired of that. Quite frankly, a lot of the people who provide services in the communities and in Whitehorse were getting pretty tired of the messages. They were not clear or consistent.
We say that we have to put an end to that. We have to tell people that this deficit in the Yukon has never been - and should not be - an issue, because we have had good fiscal managers when the New Democrats were in power. We do not have a deficit now; we never did have a deficit. Let us just say it. Let us just say we are going to have and will continue to have balanced budgets so that we can put an end to this. We want to balance our budgets. We want to undertake long-term planning. We want to disallow manipulative accounting through increased government reporting. We want to permit surpluses to be spent, if required, on investment, and we want to include provisions for emergency situations. I think that is rational; I think that is sensible. I do not think it is ideological; I think it is right.
In this case, the Yukon Party has conversely brought forth a reckless, controversial and, I would say, dishonest bill. We cannot accept it, because -
Speaker: Order. "Dishonest" is considered unparliamentary.
Mr. Harding: I was not imputing motives on the Members opposite or the Ministers. I was talking about the bill. I will accept what you have said, Mr. Speaker.
I will say that this bill has some elements that do not tell the whole story to Yukoners.
We cannot support the taxpayer deception bill. We cannot support it because we believe in vision and long-term planning. We believe that Yukoners are citizens and taxpayers. We did not raise taxes when we were in government. The Yukon Party did. They are playing fast and loose with the wording in this particular piece of legislation and hoping that Yukoners will forget -
Speaker: Order please. The Member has three minutes in which to conclude his speech.
Mr. Harding: The record will not be forgotten. Their credibility as a government is shattered. As I said in the beginning, this particular piece of legislation is a political peep show. It is a cheap thrill, and it is their last-ditch effort to try and pull themselves out of the doldrums of where they are in terms of popularity.
We believe our arguments will carry weight. We believe our arguments against this legislation are sound. We know our commitment to balanced-budget legislation is strong. Therefore, I will not be supporting this legislation, nor will any other of my colleagues.
Hon. Mr. Fisher: I am only going to talk for a few minutes, but, for the record, I fully support this legislation.
I am somewhat surprised that the NDP is coming out so strongly against this legislation. I thought that they may find some problems with certain sections or that maybe it was a little too harsh and that they would propose some amendments, but it is pretty obvious that they are not going to vote for the legislation, regardless of the amendments that may come forward. That is disappointing.
I could support an amendment that provided for some sort of a natural disaster, such as a major forest fire or an earthquake. The new Member mentioned a financial disaster. I hope that he was referring to lost revenues, because the only financial disaster that I know about in the Yukon Territory so far is when the NDP had control of our tax dollars.
I am quite disappointed. I would like to know why the NDP do not believe in some sort of taxpayer protection when it comes to spending taxpayers' money. I do not understand where they are coming from.
All that we have to do - and I think this has been mentioned before - is look at what happened in the Northwest Territories. If Members had attended any ministerial conferences with Ministers from the Northwest Territories, they would be aware that their spending was virtually unlimited. The number of people they sent to conferences always amazed me. They had as many representatives, or more, than some of the largest provinces.
They have done all sorts of things that have created a humungous debt for the Northwest Territories. I have read figures of up to as much as $160 million. The Northwest Territories is sitting in a very similar situation as we are. Most of its money comes from Ottawa. Right now we are one of the have-nots in Canada. We cannot afford to be put into the situation where one-third of the tax dollars that go to the Yukon government are used to pay off some sort of accumulated debt.
We have social programs that all of us want to see maintained. We do not want to lessen our commitments and our responsibilities to people who are not as fortunate as the rest of us. We want to be able to continue those programs. In order to do that, we need to have some protection for those people. To me, this act seems to be the best place to start.
We have heard all sorts of different comments from the Opposition about having no deficits - they had a deficit in 1987, because of the buyout of Northern Canada Power Commission, or they had a deficit in 1991-92 or that they had no deficit. We have heard many different versions. They did not run deficits in certain years - and I believe it was in 1987; and I believe it was again in 1991-92 - and then in 1992-93 they had, as the Member for Ross River-Southern Lakes pointed out, a deficit of $64 million that was confirmed by the Auditor General, which left an accumulated debt of $13.5 million.
When we finish our mandate, we will leave a surplus of $7.5 million.
That is not a large surplus. Our financial people tell us we should have one month's operating expenditures as a surplus, which is approximately $35 million to $40 million. It would be nice to maintain that size of surplus.
Regardless, we are going to have a $7.5 million surplus, which is a lot better than what was left to us in 1992.
I did not quite catch all the Leader of the Official Opposition's words, but I did hear the word "fraud". I have a problem with that. I think it was fraudulent of the Opposition -
Speaker: Order. I think I ruled the word "fraud" out of order, and I am certain I will have to rule the word "fraudulent" out of order. If the Minister wants to refer to something like that, he will have to think of something else.
Hon. Mr. Fisher: Thank you, Mr. Speaker. I respect your decision.
I do not think the Opposition, who was in government in 1992-93, did the right thing. I worked for the government at the time. I was not involved in the Department of Finance, but I was quite aware of where we were going. Most of the bureaucrats who worked for government at the time knew that we were drastically overspending; yet the people of the Yukon Territory did not know that. I do not think that was responsible, to use better terminology.
Taxpayer legislation has not, until very recently, come to the forefront in Canada. If one remembers 1966 and the Trudeau government, it was when we first started to get into a deficit situation. People thought this was wonderful. We lived way beyond our means for 25 years.
Then realization started to hit, and people right across Canada now realize that Canada is in financial trouble.
I think that the Alberta government is coming out of it. Other governments are working very hard to come out of it, and some of it really hurts. It would have been very scary had some of the programs that we have heard about had gone ahead. In Alberta, for instance, Mr. Klein backed away from some of the social programs. The province was lucky in some respects because it received some windfall profits that it was not expecting, so that he was able to back away. It would have been devastating for a lot of people if he had continued in that mode.
We in the Yukon do not want to have to cut our social programs. We do not want to have to cut our old age pension supplement. I think that we can guarantee that by establishing this legislation.
Again, I fully support it. I would like to see some amendments from the party opposite. If its Members feel that it is too harsh, would they please bring some amendments forward. Let us at least provide some protection, regardless of who is in power, for the general public in the Yukon Territory.
Ms. Moorcroft: After listening to some of the previous speakers, I had to check the new Standing Orders to ensure that we are in the Yukon Legislative Assembly and not in the Northwest Territories Legislature.
One of the Ministers who spoke very early accused the Opposition of not speaking about the bill. I want to be really clear that I am pleased to rise to speak to the taxpayer protection legislation before us and I would like to outline the major points in the bill.
It says that the Yukon government must not create an accumulated deficit. If it creates an accumulated deficit, the Government Leader must recommend that writs for a general election be issued. It also states that electors of the Yukon must approve an increase in the tax rate in a referendum before a tax increase can be granted. It says that costs of a referendum, similar to the costs of an election, are to be borne by the taxpayer from the consolidated revenue fund.
As one of my constituents said to me very recently, we cannot accuse the Yukon Party of being overly consistent.
On Thursday, in this House, the Government Leader rose and said that he does not believe that the Financial Administration Act should include penalties for overspending.
Here we stand today debating the Taxpayer Protection Act, which calls for a general election writ to be issued if there is an accumulated deficit.
I think that the Yukon Party was thinking about its own record when it drafted this bill. It has not been a responsible fiscal manager and has had the Yukon economy on a roller-coaster ride of record high budgets and of posting large surpluses with no knowledge about the size of the surplus until the end of the year came around.
It has not only been a roller-coaster ride on financial matters. We have seen a roller-coaster on critical matters such as the education of our children, such as the issue of grade reorganization. The Minister of Education stood in this House and said it was a dead issue and that it would not happen, and then the government announced that it was going to change the grade structure in Whitehorse. We have seen this government's lack of planning on things such as the Dawson school, where the government stood and said that the only sensible thing to do was to build a school in Dawson, and then said it was not going to build the school. The government's planning, whether it is economic, social or educational, just is not there.
When we look at the balance sheet, we have to realize that governments have social responsibility. Governments provide basic needs, such as shelter and food for people who cannot otherwise obtain these necessities. Governments plough roads, ensure that there are teachers in the school and that health care is in place.
We believe that those services are essential and that is why the New Democrats were the first to make a commitment to balanced budget legislation, in October 1995. We believe that prudent spending and social responsibility should be part of balanced budget legislation. This Taxpayer Protection Act does not contain a provision in it for balancing the budget. We have before us a Yukon Party budget that spends more than it takes in. This is the government that has manipulated its accounting and been rapped on the knuckles by the Auditor General of Canada for its spending. That is also part of the roller-coaster ride.
Taxpayers need protection from a government that says one thing to get elected and then turns around and does the exact opposite.
This is the government that said it would be obscene to raise taxes and then boosted the personal income tax rate, imposed a five-percent surtax on Yukon personal income taxes above $6,000. It raised the small business corporate tax rate and fuel oil taxes, gasoline taxes, aviation taxes and tobacco taxes.
If this act is passed, we are going to be faced with a $7 million surplus. That is the figure the previous speaker was boasting about. That is a $7 million surplus that the government is going to post if its figures are going to be accurate, which they have not been in the past. That is a $7 million that it is going to post if there is no cost associated with the Taga Ku court case.
This government cannot do what it is elected to do. This government cannot make sound decisions and manage public affairs responsibly. That is why it has brought in taxpayer deception legislation. It calls for a referendum. We do not need a referendum; what we need is an election. This government refused the opportunity for a referendum on its tax increases. It decided that it would hold two by-elections instead of going to the polls on a general election. Now it is bringing in this bill before us. It thinks that Yukoners' memories are going to be so short that they are not going to remember that this is the government that raised taxes and is now turning around and saying, "You have to have a referendum before you raise taxes."
This government has been inconsistent on every action it has taken. It did not canvass public opinion before it raised taxes, just as it did not canvass public opinion before it brought in grade reorganization in Whitehorse. We have a lot of good reasons to vote against this taxpayer protection legislation.
We are not going to support having the Yukon thrown into chaos by this bill before us.
Mr. Cable: This bill raises a lot more questions than it answers. The act suggests a budgeting system with a lot greater precision from what actually exists in this territory. It suggests a greater control over the revenue side than actually exists in this territory.
Eighty cents of every dollar comes from Ottawa. Sometimes the variables in the Canada transfers do not show up for some time - several years later. The economy is subject to wide swings that do not happen in many other jurisdictions.
We also have large contingent liabilities sitting around, such as Taga Ku and uncompleted leases. The Manitoba act takes a more sensible approach to the penalty provisions for breaching the balanced budget provision. It is somewhat more supportable than the penalty provisions in the act.
I have many questions, and I would like to telegraph one of the main ones to the Government Leader. Perhaps we can get a legal opinion on it.
In view of the Yukon Act provisions, is section 6 even constitutional? Do we have a legal opinion to that effect, so that we at least have the comfort of knowing the Department of Justice has reviewed that issue?
A couple of hours ago, the Minister of Justice said this bill would force government to get serious. Over the last three and one-half years of sitting in this House, I had thought we were serious.
The bill telegraphs, by innuendo, that we politicians cannot be trusted to obey the law, and that we will not be "serious". What it reinforces is all the wrong messages about politics and politicians. If we have sunk that low in self-esteem to require the sort of whips that are in this act, perhaps we should be looking for job retraining.
The bill cries out for a discussion paper so there is some public involvement, not only from the standpoint of receiving input, but also from that of educating the public on the bill.
The concepts call for more than the superficial treatment that we have received to date. It was back in December that the Government Leader indicated in a press release that they were looking at this bill and were getting ready to draft it. That was only two and a half months ago.
Many of the arguments are very complex and need that public debate so that we know, firstly, that people know what it is we are talking about, and secondly, that they are behind us in moving in this direction.
The Canadian Federation of Independent Business put out a questionnaire last year. The results came back on May 19, 1995. They talked about tax and expenditure limitation legislation. The arguments were discussed - the pros and cons. The supporters said that tax and expenditure limitation legislation would effectively switch the power to tax from politicians to the taxpayers, and it would force the governments to do their jobs within the permitted tax resources that the public has given them. Although some provinces have introduced balanced budget legislation, they say TEL legislation would provide greater discipline for further budget balancing. The opponents say that TEL - this is tax and expenditure limitation legislation - would not stop some high-spending governments from overturning the legislation.
Furthermore, they say that budgets and government spending needs are unpredictable and that government would lose some needed financial flexibility. They also say it would cause a referendum governing style, which would be costly and bog down the governing process.
All of these issues are identified and need some discussion, not the frivolous and superficial treatment this bill will get in the House, we hope.
The Canadian Taxpayers Federation put out a news release. I must say - to be fair to the government - it is a very positive news release. However, they would also like some amendments. They would like to see the bill include financial penalties for politicians who incur deficits, all tax increases be subject to a referendum and a lower threshold for the rejection of a new tax or tax increase. We need to understand what the Canadian Taxpayers Federation has to say. We also need to understand what the results were in these American states that brought in the restrictive legislation - for example, we need to understand the experience of Proposition 13 in California. I dare say that not many of us in this House do.
If one thinks about the mandatory election call and we go back to 1992 when the election took place, the budget was brought in, if I recollect correctly, in the spring of 1993. That was the first Yukon Party budget. The public accounts came out in the fall of 1994 for that particular budget. So it would be February 1, 1995, before there would be any action on the control of the deficit, which is two and one-half years into this government's mandate. I really wonder if that is an effective hammer - if it is really the hammer the Government Leader thinks that it is - and whether or not we should take it back to the drawing board.
When the Government Leader brought in his good government bills - the Ombudsman Act, the Conflict of Interest Act, and the Access to Information and Privacy Act - he called individuals from the various parties and had discussions with them. I think what came out of that process was a very useful set of good government bills. The same process was started and used in the House rules that were introduced last week. That was a very productive exercise. While I can say that I support the balanced budget provisions within the act, with some reservation, I have a lot of reservation about this legislative Russian roulette that we are talking about in the rest of the act. I think it needs a lot more consideration.
This legislation grossly simplifies the processes of government. I would hope that the Government Leader would see fit to stand this bill down and discuss this matter off the floor of the House in greater depth. If the Government Leader is not prepared to take this bill to the people for public discussion, then he should at least discuss this bill with the party leaders.
We have all talked about the great value of consensus government, and we saw the experiment that took place with the good government bills. I hope that process will be repeated; otherwise, I would find it extremely difficult to support the bill in its present form.
Mr. Schafer: I know it is very hard and difficult to speak to taxation. A long time ago, there was no such thing as tax among my people, but today we are living in the modern world and have to live with it.
I support the motion on this Taxpayer Protection Act. I believe this party is positive about itself. I support this act and think it is good for Yukoners so that whatever government is elected in the next general election will not overspend its budget. This act will protect the budget after the next election. Once again, I do support this act.
Ms. Commodore: I was not exactly sure in which order we were going, but I guess everybody who wants to speak right now can stand up and speak.
A lot of things have been said about this bill, and I agree with everything that has been said on this side of the House, except I am not quite sure what the Member of the Liberal Party was trying to propose, although he had some good ideas about Yukoners knowing what is in this bill. It is very difficult for Yukon people to understand exactly where this government is coming from when we go through three years of great big budgets and introducing all sorts of new programs and slashing others.
All of a sudden, it is saying we have to cut back and it introduces this hard-line piece of legislation in order to make sure there is not a deficit again. It does not make a lot of sense to taxpayers. Perhaps the Member for Riverside had a good idea; I am not sure.
What does not make a lot of sense to me is that, after all the years this government has been cutting back on programs, raising taxes and making decisions, it finds out, in the next breath, that it has millions of dollars. It does not make a lot of sense, because the decisions this government is making are confusing to the general population.
It has talked about the many good things it was going to do in its four-year election plan. I am beginning to wonder if its plan made any sense at all. I have not heard a lot of talk on how far it has come in regard to its railroad to Carmacks. I am not sure how much money it intends to spend on that.
I look at its actions over the past three years, and the kinds of things it does bother me. The Member for Ross River-Southern Lakes made the angriest speech I have ever heard him make. I was not sitting here listening to him; I heard him on the radio. I can only assume that all the information from this side of the House finally got to him.
More than anyone else, he has been the person responsible for the war against poor people. Without a thought, he has cut programs for transition homes. He made a decision early one day to close down Kaushee's Place and open a group home in Riverdale. How responsible is that kind of a plan?
One has to wonder about the gentlemen across the floor and the kind of things they come up with. They say, "Hey, today, let us cut back on transition homes. Gee, tomorrow, let us ask Yukoners if we should reduce social assistance rates for poor people. That sounds like a good idea, because they are sending all kinds of people up here from northern B.C."
Some Hon. Member: (Inaudible)
Ms. Commodore: I am getting to him again.
He certainly does not like to be abused in this House, but certainly he likes to abuse poor people, in the common sense, where he looks at cutting back on programs, and cutting back on transition homes. When I hear the laughter across the room when we talk about cutting back on transition homes, this tells me where they are coming from because they think it is a joke. We do not.
When they talk about a Taxpayer Protection Act, one has to wonder who the heck they are trying to protect. I think they are trying to do an injustice to the taxpayer.
There was some discussion about changes to this piece of legislation. I think it was the Minister responsible for Justice who got up and said that he was disappointed in what our leader had to say about the bill because he had not talked about any amendments and did not propose any, but what he did do was talk about the record of this government, and I think that that record has to be restated over and over again. It was done today by our leader and other people who spoke in this House.
We have been sitting on this side of the House for three years and we have been speaking up on behalf of our constituents. We have been trying to appease them in many ways because we know that a lot of the funding has been cut for non-profit organizations. That continues to this day.
Where is this government coming from? One day it is going to build a gambling casino. What a great plan that was. The Government Leader stood in this House and he proudly stated, "We are going to build a gambling casino." What a great idea that was.
Then they turn around and talk about building the Beringia Interpretive Centre, because they do not like what the visitor reception centre looks like. So they are going to close it down, build something in town at a cost of millions of dollars to the taxpayers and without a second thought about why they are building it, open up the Beringia Interpretive Centre for animals that have been dead for thousands of years. What a great idea that was, but they then turn about and cut programs.
Some Hon. Member: (Inaudible)
Speaker: Order. Please allow the Member to continue her speech.
Ms. Commodore: I love this, Mr. Speaker. I think I am going to enjoy my last few months in this House, because when the good old boys start responding to something that one of the good old girls is saying on this side of the House, it makes me feel good.
When we talk about building beringia interpretive centres and then in the next breath talk about cutting back on transition homes and social assistance recipients, you have to wonder where this government is coming from.
I have to repeat things that my colleagues have said about this government concerning section 8 of this act. One has to wonder exactly where their minds were when they called for a referendum if there was a move to raise taxes. What Yukoner in their right mind is going to say, "Sure, what a great idea that is, John. Let us do that." Of course, the referendum is also going to cost money, and I do not think that anyone in their right mind, after what the Government Leader did in 1992, is going to say what a great idea this is. We will remind the people what the government did.
We will remind people that when the Government Leader was being very obscene, he boosted the personal income tax rate by 11 percent. What a great idea that was.
He imposed a five-percent surtax on Yukon personal income taxes above $6,000. What person in their right mind is going to agree to that. He boosted the general corporate income tax rate by 50 percent. He boosted the small business corporate rate by 20 percent. He boosted the fuel tax rate on diesel 38.4 percent and on gasoline 47.6 percent, and boosted tobacco taxes by 160 percent.
Tax and spend, or slash and spend, is what this crew across the floor has been doing for the last three years. Then they turn around in their last session, knowing what is in the future for them, and introduce a bill to protect the taxpayers from that government. They have been very irresponsible in all of the things they have done. They came into this Legislature. They had a right-wing agenda. Ralph Klein was their god, and they proceeded to follow in the footsteps of Ralph Klein and all of the things he was doing in his government. We are finding out now that the Klein revolution is almost over - as it is almost across the country - because we are seeing the reaction to all those cutbacks. Maybe it was a great thing at one time to pick on poor people and reduce social programs, but it is not popular here. It is not what Yukoners want.
Everybody is equal and is entitled to some dignity in their lives. This government has been very irresponsible in those actions. For them, at this time and place, to introduce this bill is so very irresponsible that an ordinary person would look at it and want to know where this government is coming from, after watching them for three years in government. I think it is a very irresponsible bill.
We will be talking about it in Committee of the Whole. They are asking why we are not talking about making amendments, or recommending amendments, during second reading. We are going to Committee of the Whole, and we have all the opportunity in the world to deal with it at that time.
It may be a fact that some amendments may be introduced. I do not know about that. Certainly, the legislation as it is right now is very irresponsible. I cannot support it. I cannot even believe that the Government Leader had the nerve to introduce it. It is just a rotten piece of legislation that will not work.
Mr. Millar: I would like to take a couple of minutes to speak about this bill.
I must say that I am absolutely amazed about what has happened here today. We are talking about a taxpayer protection act that has two essential ingredients in it: first, there will be an election if there is an accumulated deficit; and second, if the government wants to raise taxes, it will have go to a referendum.
I guess it is only natural that we talk about each other's records, and go back and forth about it. The Member from Faro said, "Why don't we just say it? We don't have to put any meat in it. We can just say we are going to balance the budget. That is all we have to do." I think that the people from not just the Yukon, but from the whole country are not very trusting of what politicians have to say. That includes me and everyone else. I think that, generally speaking, all across this country people do not have an awful lot of faith in politicians. I think they have pretty good reasons for feeling that way.
The Member for Faro was talking about the taxes being obscene. That was something that happened in the past and does not matter. This act will prevent it - period. It will not happen again. This will stop it from ever happening again - period.
Some Hon. Member: (Inaudible)
Speaker: Order. Please allow the Member to continue with his speech.
Mr. Millar: Thank you, Mr. Speaker. I do realize that this is a very emotional subject for some Members in here.
I think that this is a good act. I guess I am amazed that the Members opposite do not want to protect the people of the Yukon - or any place - from the government-
Some Hon. Member: (Inaudible)
Mr. Millar: Yes, that is what I am saying. I am talking about protecting the taxpayers of the Yukon from the government. I do not care if it is this government, their government or any government. That is what this act does. To me, that means that it is a good act.
Obviously, the Members opposite have some kind of inkling that they are going to form the next government. That is good for them; I appreciate their optimism. I personally have a lot more faith in the voters of the Yukon. However, the next election will provide the answer and there is no sense in talking about what may or may not happen.
I think the Member for Mount Lorne talked about the deficit and said that we are bringing in an act that protects against deficit, yet what we are protecting is an accumulated deficit, not an annual deficit. I understand that it is very complicated trying to sort out the differences between accumulated deficits, debts, surpluses and all those other things. I do not think that I would want a party that does not understand that sort of thing trying to govern the affairs of the Yukon.
The Liberal Member for Riverside said that he would like to see this taken off the floor of the House and talked about in the back rooms. I do not quite understand why he would want to talk about it in private. I thought that the purpose of the House was to talk about these issues and try to be more open and honest with the people of the Yukon. I guess that goes to show what kind of government the Liberals would make.
Again, I would like to say that there are two essential ingredients in this act. The main point is that if there is a debt created, the government has to pay for it. It was brought up and pointed out that this would take place two years after the fact. I am a little bit unclear about what was meant by that, and I am sure the Government Leader will clarify that for me. I am a little unclear about what the time frames would be, but the bottom line is that an election would be caused.
The NDP are worried about that clause, and I suppose that if I were in their shoes, thinking that I might form the next government, I would worry about that too. There is no doubt that the NDP will overspend, because they have that kind of a track record. They will continue on that course, regardless of where they are or what jurisdiction they are in.
The other fundamental ingredient of this act is the fact that if the government wanted to raise taxes, they would have to have a referendum. I think it was clearly illustrated that it is not likely that very many Yukoners would support a tax hike. I would not support it and I do not think there is any doubt about it.
I do not understand their argument. They are unhappy about the fact that there were tax increases in the past. It is not that I do not care about the increases in the past, but what this act does is prevent it from ever happening again, and I think that is the main ingredient here. We do not want tax increases.
I am sure somebody will get up and try to change the bottom line on that one, but I do not see how anybody can. With that I will sit down.
Mrs. Firth: I will just begin subtly and quietly because I know I do not have very much time.
Why do I not begin by just making some comments about the previous speaker's understanding of accumulated deficits. I have no doubt in my mind that the previous speaker does not know what he is talking about - there is absolutely no doubt in my mind.
People on the street do not understand what this government's taxpayer protection legislation is all about. When the government tells the taxpayers it is going to protect them, it is supposed to do just that - protect them; not spend any more money than it takes in. The Member for Klondike does not understand that, and to compound that problem, he stammers and stutters about accumulated deficits and accumulated surpluses and nah, nah, nah, but he does not know what he is talking about.
They stand up in the House and say that it does not matter what happened in the past, that it does not matter if the government raised Yukon taxes in the past. The Member shoots the biggest hole in the only argument that those guys across the floor ever present about this side of the House. They say that everything that they did in the past matters. Suddenly, it does not matter. It does not matter that this government gave Yukoners the biggest, deepest and most expensive tax increases in the history of the Yukon. This government did that three years ago. Now they are saying that they are going to make it illegal for anyone to do that, because it does not matter what happened in the past. "Gee, shucks, I am just the guy from Klondike. It does not matter."
I really object to that kind of an attitude coming from a Member on that side of the House. He just agrees with whatever the government does. He stands up and says, "It's great, it's great. I think it is good."
I heard the Minister of Tourism make some comment about trendy legislation. This is a trendy Minister. Everything he does is trendy. It is a trend to have the Beringia Interpretive Centre. It is a trend to travel around. It is a trend to take free parkas to wear. It is a trend to have biscotti and coffee at the coffee shop and discuss things. The trendy little Minister. Come on. Give me a break. We are talking about more serious issues than that. The stakes are a little bit higher than what is trendy and what one of the Members does not completely understand.
I have a real concern about what is happening in the territory. I find the whole justification and basis for this initiative of the government - I do not know what word to describe it - ludicrous? That is not unparliamentary. I find that there does not seem to be any logic or common sense associated with what this government is doing.
The government coming into the Legislature six or seven months - or whatever it is going to be - before an election trying to hang its hat on this piece of legislation does two things.
First, it reminds every Yukoner in the whole Yukon Territory who is going to vote in the next election that these guys were the ones who raised the taxes.
Second, it is going to remove any reason for Yukoners not voting for someone else, because they have taken away the ability for these spend-thrift socialists, such as they call them, to go around spending all our money. My constituents and business people are saying to me, "Why should we not vote for the NDP? We have taxpayer protection legislation now. They cannot overspend, so why should I not vote for them?"
Where is the political astuteness associated with this legislation? Did some bureaucrat tell the government to do this? I do not know who drafted the legislation, but the principles in the legislation, the principles that these people are trying to pass off as some protection to people, are not included in this legislation. They just are not.
When you protect the taxpayer against government spending and against unbalanced budgets or against deficit financing, which I think was in the Government Leader's big election speech-
Some Hon. Member: (Inaudible)
Mrs. Firth: He said that it does not believe in deficit financing. It was not going to deficit finance. It did not think that is right. We are Conservatives. We are going to balance the books.
Speaker: Order please. The time now being 5:30 p.m., the House will now recess until 7:30 p.m.
Speaker: I will now call the House to order.
Mrs. Firth: How much time do I have left, Mr. Speaker - 13 minutes, 14 minutes, half an hour?
Speaker: Fourteen minutes.
Mrs. Firth: When we broke for dinner, I was talking about this piece of legislation, the Taxpayer Protection Act. I want to raise a concern. I was away when this great debate took place on Thursday, February 22, when the Government Leader made some comments about something that has always been of particular interest to me. I can recall asking the Government Leader about penalties for deputy ministers who overspend their budgets. The Government Leader reassured me that he was going to get tough with people who did that. Heads were going to roll, things were going to be tough, he was going to call the shots, he was going to be in control of everything. Well, I came home, and what do I read in the Blues but the Government Leader saying, "In my opinion I do not think there should be any" - referring to penalties for deputy ministers - "in the Financial Administration Act. There are ways to deal with these issues other than the act. If they overspend for legitimate reasons, why would one want to punish them? It would have to be considered on a case-by-case basis...". "It would be up to the Ministers and me, as Government Leader, to instill whatever discipline we felt was necessary."
Why does this not give me a feeling of comfort? I will tell you why. I have never seen this government - what do they call it? - "instill whatever discipline we felt necessary." I have never seen them do that with anything - ever. Do you know what extra privileges deputy ministers have been given since this government has come into power? I will tell you.
First, they had a wage scale that consisted of three or four categories. That is now gone and now it is just one big, fat category for their wage scale.
Second, severance packages. We had a great debate in the Legislature about severance packages. We, as Opposition Members, were not allowed to see the proposed severance package policy, but the deputy ministers were. They were consulted about these packages and allowed to help write up the policy.
Third, Management Board used to have to authorize all new person years created. They do not have to do that any more. You know who does that now? The deputy ministers get to do it, and then they get ministerial approval for their decision.
Four, guess what we just found out during the first week of the sitting of the Legislature? Guess who gets to authorize RCMP investigations now? The Ministers? No, the deputy ministers. It is an administrative matter. Then I find out that on Thursday - I am gone for one day, and already they are trying to take advantage of it - the Government Leader stood up and wanted to change all of the regulations so that the deputy ministers can overspend their budgets.
Five - five big pluses for the top bureaucrats of the government. These were the guys who were going to keep everybody under control. These were the guys who were going to keep a tight lid on the bureaucrats running things. These are the guys who were going to be tough, and they were going to call the shots and make the policies and run the government. There is no doubt in my mind, or in the minds of many business people, constituents and other Yukoners I talk to, about who is running the government; and it is not the front bench.
I do not want to waste a lot of time talking about the other Members' speeches, so I will just leave all of that out. I want to get down to some of the points about this legislation.
This government claims to be a conservative government and claims to be a group of people who were going to get the bureaucrats under control. They said that they were going to lead the way and be in charge, but they cannot answer a question without asking a bureaucrat what to say. Now we have to get briefings from them so that we can find out what is going on in the departments because the Ministers do not know.
I want to know why this government has not done something about reducing the cost of government to Yukon taxpayers. I see the Government Leader making notes. He is going to stand up and say that we have done this and that. This government has done nothing. The budgets are bigger than they have ever been. I do not see any decrease in the size of government. I have not seen any evidence of privatizing government so that we have a healthier private sector. I have not seen any conservative initiatives from this government.
I do not know where they are philosophically; perhaps they are lost somewhere in the wilderness, out on horseback hunting. I do not know where they are.
I have had an opportunity to make a comparison with other jurisdictions and their taxpayer protection legislation, which does really protect the taxpayer. This legislation being proposed by the government protects two people - it protects the Ministers because there are no direct penalties to them, and it protects the deputy ministers because obviously there is no penalty there either.
This should be called "taxpayer risk legislation", not "taxpayer protection legislation".
In Alberta, the deficit provisions of their legislation are that the balanced budget act amends the deficit elimination act by declaring that, in each fiscal year, expenditures may not exceed revenues. Annual deficits are disallowed - period. I could support that. That is not what this legislation does.
The Alberta legislation states that the use of special warrants for spending outside the budget by Cabinet is restricted. Warrants may only be issued if the Legislature is dissolved for an election or the government needs to respond to an emergency or disaster. I could support that. This legislation does not do that.
The penalty clause in Manitoba states, "An illegal deficit will result in a 20-percent pay cut for all Ministers. Failure to offset the deficit in the following year will result in a further 20-percent pay cut." I could support that. I think all Yukoners could support that. This bill does not do that.
This bill penalizes the taxpayer.
It does not penalize the Ministers at all, nor does it penalize the deputy ministers. These guys will not do anything about deputy ministers who overspend, because they want to make it legal and allow them to overspend their budgets.
With regard to the proposals with respect to referenda, in the Alberta taxpayer protection legislation, the government may not submit a proposal to the Legislature for a general provisional sales tax unless voters have first given their consent in a referendum. The act applies only to a potential sales tax.
I have to ask the Government Leader for some clarification with respect to the clause in the bill about the referendum. I understand even the Canadian Taxpayers Federation applauded the Yukon government for the introduction of this bill. That was in the first paragraph. They went on to elaborate, indicating that while they were extremely supportive of the legislation, they proposed a number of constructive amendments. They would like to see the bill include financial penalties for politicians who incur deficits. I agree with that; this bill does not do that. They propose that all tax increases be subjected to a referendum. I agree; this bill does not do that. They propose a lower threshold for the rejection of new tax or tax increase. I agree with that, because in this bill, as introduced and as pointed out by the Taxpayers Federation of British Columbia, it requires 50 plus one of the electors named on the referendum list in order to reject a proposed tax increase.
There may be
10,000 people on the voter list, but if only 50 plus one go out to vote, and even though they all say no, they do not want it, the government gets to do what it wants anyway.
Say only 40 percent of the voters went out -
Speaker: Order please. The Member has three minutes to conclude her statement.
Mrs. Firth: Say 80 percent of those 40 percent voted against the legislation. The way I read the Minister's bill, the tax increase could still pass because it has to be 50 plus one percent of all of the Yukon voters, and I have a concern about that.
This is my position: no deficit, penalties for Ministers, and we have to review clause 6 with respect to the referendum.
I completely - 100 percent - support taxpayers being protected from tax increases and from bad government, but this legislation does not do that. After it goes through Committee of the Whole, if it is changed and does that, I will support it. If it is not changed or if it is changed but does not do what I believe in, what I think the principles of this legislation should enunciate, then I will not be supporting it.
Mr. Joe: I am going to be very brief.
I have a problem with this motion. It is being pushed a little too fast for me. I did not even get a chance to talk to my own riding. They are the ones who should be telling me to go for it before I support this kind of motion.
I hear a lot of words going back and forth in here, and people in the public are listening. They want to hear good decisions from us.
I have a great problem supporting this motion. We have enough problems to deal with. What I want to say is that we should not make more problems for the taxpayers. It does not matter how we play politics with it, because it is not going to work.
It would scare me to support this motion. I have a big riding to represent and I cannot support the motion without talking to the people in my riding. They would ask me who told me to vote for the motion. They would say I did it on my own.
I do not know what the big rush is to get this act passed. This is a very broad act.
We have to find out what the taxpayers really want. I know they want good housing, good training programs, good aboriginal justice, good roads, good wildlife programs, good environmental protection, good health care and a good education system.
I am really having problems with this. I have never even been given a chance to talk to people in my riding. I think it is important for me to do that.
It used to be that I would stand up here during the budget speech, for example, and talk about the many poor people. If we keep talking about protecting the people of the Yukon without their advice, people are going to get mean. I think we should talk to our people before we pass anything like this.
For this reason, I cannot support the motion.
Speaker: Does any other Member wish to be heard?
If the Member now speaks, he will close debate.
Hon. Mr. Ostashek: I thought that I had heard everything about this before today's debate. It is unbelievable. It quite clearly shows the philosophical differences between our party and the Official Opposition. Quite clearly, they do not believe in balanced budget legislation. The only type of balanced budget legislation they would like to see is one that had loopholes big enough to drive a truck through. They governed with smoke and mirrors, and that is what they want to see for balanced budget legislation. They even had the audacity to try to steal this and say that it was their idea - the nerve of them. This started from a resolution by the Yukon Party in Watson Lake last spring.
They came out publicly because they wanted to steal the thunder and the credit. They wanted to bring in balanced budget legislation if we did not. I would like to have seen that legislation; it would be something through which they could drive a Kenworth truck.
My time is limited for my wrap-up, but I want to address the issues raised by the Member for Riverdale South and the Liberal Leader, because they, at least, had some valid questions. All we heard from the Leader of the Official Opposition was political rhetoric and reasons why we should not have balanced budget legislation. I will love to send this debate to my constituents.
The Liberal Member asked about section 6. He asked if we had obtained a legal opinion on it. We did, in fact, get a legal opinion on it. The wording is structured in a manner that satisfies the requirements of the Yukon Act. First of all, at any time that the government wishes to call an election, an order-in-council has to be invoked in Parliament before an election can be called. Then the government must go to the Commissioner and ask that the writ be issued.
In section 6(a), that is basically covered, and it is legal. "If the non-consolidated public accounts laid before the Legislative Assembly or distributed to its members show that an accumulated deficit has been created or increased, the Government Leader must (a) request before February 1 of the following year that the Assembly be dissolved, and (b) if dissolution is granted, forthwith recommend that writs for a general election be issued." That is the wording the legal drafters advised us to use. I hope that will answer the concerns of the Member for Riverside.
The Member for Riverside also had some valid concerns about penalties. It seems that his biggest concern was about invoking an election. I truly believe that this legislation is to keep the government's feet to the fire when it is dealing with the finances of the people of the Yukon. We know that the days of irresponsible management of government's financial resources are over.
We need only to look at tonight's Globe and Mail: "Future Youth to be Taxed Doubly, a Study Says". The article basically says that "those born in the future could face lifetime tax increases almost double to those awaiting today's children unless Canada's government cuts spending and raises taxes, according to a study released today."
It goes on to say, "Canadians in their mid-twenties face the stiffest tax bill in relation to what they can expect to get. Those in their mid-sixties will get the most benefits relative to what they pay." It says, "A man who is 25 in 1994, for example, can expect to pay $445,000 in federal, provincial and municipal taxes over his lifetime, while only getting $155,000 in direct transfers from the government." His net payment would be $290,000.
That is the situation we have got ourselves into in Canada with free-spending governments. Canadians for 25 years have been living beyond their means, and it cannot continue. I cannot believe that any political party could stand up in this Legislature and say that it is going to vote, in principle, against balanced budget legislation in second reading.
I could see that after it went to Committee, if there was something wrong with it, they may vote against it, but to vote against it in principle tells me that the Official Opposition does not believe in balanced budget legislation. That is the philosophical difference between our party and theirs.
The concerns raised by the Member for Riverdale South were very legitimate. I want to take a few minutes to answer them.
The Member quoted Alberta's legislation, which stated that there could not be an annual deficit. There are very valid reasons why that would be in Alberta's legislation, because it has a huge debt that it has to deal with - a debt that we, in the Yukon, do not have.
I differ from the Member for Riverdale South, who basically says that we ought not to be spending our surpluses. I disagree with that. I believe it is good fiscal management to build up a surplus and then use it wisely.
The Member for Riverdale South and the Member for Riverside were both concerned about the penalties. I am going to tell the Legislature that that was an issue that I dealt with for quite some time before we decided to choose invoking an election.
A paycut? Quite possibly. Perhaps that is the route to go. If the Opposition Members feel more comfortable with that, we could look at it. We were looking for the ultimate penalty for causing an overexpenditure by the government. I am not hung up on it; I am hung up on enforceable penalties. I am hung up on strong legislation that has no loopholes and no escape clauses. That is my concern. I do not believe in smoke-and-mirrors legislation, the way the Official Opposition does.
The Member for Riverdale South said that she did not believe our legislation covered all tax increases. I am sure when she reviews the bill once more she will see that it covers all tax increases - any new taxes, which would be a sales tax - or income taxes, both corporate and personal, and excise taxes on gasoline. The only avenue it leaves open to government is property taxes and alcohol and tobacco taxes. If the government wants to raise revenues - especially the alcohol and tobacco taxes - those are areas that cause a severe strain on our health system and programs. We felt the government should be able to make a political decision to raise those without going to the people. Any other tax increases would require a referendum.
The Member for Riverdale South also raised the valid point of the threshold of 50 percent plus one for tax increases. That is another issue I struggled with for quite some time when we were crafting this legislation. She is absolutely right. The decision we came to was that it should be 50 percent plus one of the voters who vote. We had a valid reason for doing that. This is a debate that will take place in Committee, I am sure, but the rationale for it was that if people feel strongly that there ought not to be tax increases, they ought to come out and exercise their democratic right and say so, not sit at home, let their neighbours vote and just accept the outcome of the ballot, or that their vote should not be counted because they did not go to the ballot box. That is a debate we could have in Committee of the Whole. It is an issue I dealt with and thought quite a lot about when we drafting this legislation.
She made the point about special warrants. We do not believe that special warrants should be used to operate government either. There is a place for the use of special warrants in our legislation and as long as it is not abused I see nothing wrong with it, but there is a fundamental difference - and I touched on it briefly - between Alberta's legislation and ours, in which we allow annual deficits but we do not want to get into the position of creating a debt. That ought to be allowable. I know the Leader of the Official Opposition has shared those same sentiments. He believes that surpluses be allowed to be spent. Where our debate should be is on the size of the surplus one should have before spending it. I can say that the Official Opposition certainly has not been very consistent in its arguments about what the surplus should be.
Both the Member for Riverdale South and the Opposition talked about the debate the other day on the Financial Administration Act, and whether deputy ministers ought to be allowed to overspend the budget. I said there was a fundamental difference between this legislation and what we were talking about under the Financial Administration Act, when managers are being asked to project some 16 months in advance, and managers who come in with a huge surplus - $2 million, $3 million or $4 million - are rewarded, but managers who go over by $100,000 or $200,000 are penalized. That does not seem equitable to me.
Some Hon. Member: (Inaudible)
Hon. Mr. Ostashek:
The Member for Riverdale South asks why. First of all, how can one expect someone to hit their target on the nose. What one is doing is asking managers to pad their budgets, asking them to make sure they have little pools of money all over, and they do it all the time. They have positions they do not fill and which they have no intention of filling. I just believe that our managers would do a better job of budgeting if they were not faced with that clause. Nevertheless, it is not a big hangup of mine, one way or the other.
The Leader of the Liberal Party said he would like to see some time before this goes to Committee of the Whole, at least so that the leaders of the parties could meet to discuss it. He seems to think that that worked very well with the legislation last year on the ombudsman, access to information and conflict legislation.
I will make the commitment to this Legislature tonight, but before I make that commitment I want to make it very, very clear that we are committed to this legislation and we are committed to a strong Taxpayer Protection Act, which has no loopholes in it. I am committed to enforceable penalties and I am prepared to discuss those with the Opposition, but I want to make it very clear that I have pointed out in my earlier remarks that there is a tremendous difference between us and the Official Opposition regarding taxpayer protection. This was evident from the points raised during debate this afternoon. They do not believe in this legislation. They want to see taxpayer protection and balanced budget legislation that has huge loopholes in it. This government does not want that and I am committed to strong legislation, but I will give Members two weeks to meet with me and discuss how we can improve this legislation, not weaken it, before I bring it back to Committee.
I will allow the Member for Riverdale South to also come to the meetings. I will say that I have great difficulty with her position that every budget has to be balanced. I do not believe that, in the Yukon where we do not have an accumulated deficit, it is necessary. We can have that debate later.
Again, I will give the Opposition two weeks to meet with me and see how we can improve this legislation. For the record, it has to be tough legislation and it has to have enforceable penalties. If we can come to a compromise on enforceable financial penalties, rather than calling an election, I will consider that.
I am not worried about this legislation if I am elected again. I am not worried about balancing the budget, but that is the difference between us and the Official Opposition. They do not understand that the way one protects one's social programs, one's education system and one's justice system is to have the financial resources to deal with them. One does not do it by creating deficits.
I want to get this on the record. This morning, the Leader of the Official Opposition made some comments about Mr. Kenney of the Canadian Taxpayers Association, who spoke about us requiring authority from Ottawa to run deficits. I would say that Mr. Kenney was partly right; he was not 100 percent right. He may have been referring to the requirement that the Yukon have a federal order-in-council for borrowing. I am sure that Mr. Kenney was equating the accumulated deficit with debt. I believe that if in fact we were to exceed our borrowing limits, we would have to go to the federal government to have the order-in-council amended.
Speaker: Order please. The Minister has three minutes to conclude his speech.
Hon. Mr. Ostashek: I believe that Mr. Kenney was partly right. There were some things that he said this morning that I did not agree with, but some things I did agree with.
I will just point out one more time for the record that I am prepared to talk with the Opposition Members in this Legislature to improve this legislation; I am not prepared to entertain amendments that would weaken it or put loopholes in it. I will give the Opposition two weeks before I bring it back into Committee.
Some Hon. Members: Division.
Speaker: Division has been called.
Speaker: Mr. Clerk, will you poll the House.
Hon. Mr. Ostashek: Agree.
Hon. Mr. Phillips: Agree.
Hon. Mr. Brewster: Agree.
Hon. Mr. Phelps: Agree.
Hon. Mr. Fisher: Agree.
Hon. Mr. Nordling: Agree.
Mr. Millar: Agree.
Mr. Schafer: Agree.
Mr. McDonald: Disagree.
Ms. Moorcroft: Disagree.
Ms. Commodore: Disagree.
Mr. Joe: Disagree.
Mr. Sloan: Disagree.
Mr. Harding: Disagree.
Mr. Cable: Disagree.
Mrs. Firth: Disagree.
Clerk: Mr. Speaker, the results are eight yea, eight nay.
Speaker's casting vote
Speaker: Standing Order 4(2) states that in the case of an equality of votes, the Speaker shall give the casting vote. In general, the principle applied to motions and bills is that the Chair should always vote for further discussion. Voting for a bill at second reading provides the House with another opportunity to decide the question. I therefore vote for the motion and declare the motion for second reading of this bill carried.
Motion for second reading of Bill No. 73 agreed to
Hon. Mr. Fisher: I move that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Speaker: It has been moved by the Hon. 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 Committee to take a brief recess?
Some Hon. Members: Agreed.
Chair: We will take a brief recess.
Chair: I will now call Committee of the Whole to order. We will continue with Bill No. 9, Third Appropriation Act, 1995-96.
Bill No. 9 - Third Appropriation Act, 1995-96 - continued
Mr. McDonald: I continue to have questions about general matters.
When we last left the subject, we were talking about the Canada Pension Plan and the Minister indicated that there was a federal initiative to seek public input about the future of the plan. What has the Minister specifically indicated to federal authorities about reforming the plan? I did not get a clear impression as to whether or not he had taken a position, or if he had been asked for a position. What is happening?
Hon. Mr. Ostashek: I thought I answered this question the other day, but I will repeat it. None of the Ministers of Finance would take a position until such time as public hearings are held and they see how the public feels about additional premiums, cuts in benefits and whether or not it should return to being called the Canada Pension Plan. One of the points that was raised is that 17 percent of the payments are now used for disability pensions. Initially, the plan was put in place for pensions only.
Other government agencies, be they social services or compensation, have sent people to Canada Pension for disability benefits, and this is having a tremendous impact on the plan.
As Members opposite are aware, small businesses see Canada Pension Plan premiums as a payroll tax. We feel there needs to be full public debate before we are prepared to take a position on what we would like to see done with the plan. As I said to the Member opposite during my comments the other day, we in the Yukon do not get a vote on this. We have a say but only the 10 provinces and the federal government need consensus on it.
Mr. McDonald: The Minister can correct me if I am wrong, but I will assume that the Minister has not taken a position with the federal authorities on any aspect of the plan, including whether or not premiums should be raised or benefits cut. I am assuming that is correct.
The Minister indicated the Liberals would be leading a consultation process. Will the background documents promote any particular options, or will they simply throw it out for general public discussion?
Hon. Mr. Ostashek: At the last Finance Ministers meeting, we reviewed a draft document that was to be released publicly. It is a fairly thick document that sets out all the options and all the different scenarios. That is supposed to be ready for distribution shortly. We will get copies of it to the Member opposite as soon as we can. That is supposed to be available to the public well in advance of the hearings.
As to the hearing schedule itself, I understand that it has been proposed that a couple of representatives from the Legislature will participate or chair public meetings to discuss this matter. What is the timetable for providing response to the federal government?
Hon. Mr. Ostashek: I think the government is in the process of setting its timetables now for when the hearings will be held. As I said last Thursday, I have a commitment from them to come to the Yukon. Since then, they have corresponded with us and asked that one Cabinet Minister and one Member of the Opposition sit on the committee when it holds its hearing in Whitehorse.
Mr. McDonald: Certainly, the Official Opposition will take the federal government up on this offer and participate, as the co-chair along with the government.
Can the Minister briefly tell us what the status is of the Canada Pension Plan right now? Is it zero funded? Are they paying benefits out of expropriations or is there any funding in the system at all?
Hon. Mr. Ostashek: My understanding is that they keep a two-year contingency that runs somewhere in the neighbourhood of $40 billion. Do not quote me on this, but I believe it is in the neighbourhood of $40 billion.
The debate that is occurring, from my understanding of it, is that if we do not make any changes to the plan, it will run out of the $2 billion reserve. It is going to be depleted every year. There is more being paid out than is coming in premiums to maintain that two-year reserve. By the year 2015, the fund basically will be be broke if they do not make any changes to the way it is now. That is what the debate is about now. Mr. Martin is hoping that we get an agreement on it by July 1, so that it can be implemented by January 1, 1997. This is part of an ongoing process. My understanding is that every five years a review is made of the plan. It has been five years since the last one was carried out. This is the normal five-year review.
The federal government cannot unilaterally increase the premiums or cut the benefits. This is one agreement that needs the agreement of all 10 provinces and the federal government.
Mr. McDonald: The Minister can correct me again if I am wrong, but I will assume that the actual financial status of the pension plan itself will be in the discussion document so that we will be able to have a clear reading of what options might be more realistic than others.
While we are on the subject of pension plans, the public service pension plan repatriation is a project that the Minister has talked about. The previous government had undertaken it as well. What is the status of those discussions?
Hon. Mr. Ostashek: I will just ask the Minister responsible for the Public Service Commission to give the Member a preview of it in general debate.
Hon. Mr. Phillips: What has happened now is that we have gone to the next stage. We have acquired the services of the individuals to do the first part of the study on the repatriation of the plan. We have made some inquiries of the federal government. There have been some preliminary discussions, I believe, with the unions on their involvement in the process, and they will be very much involved in the process.
Because it is so complicated, as the Member knows - it is a very complicated process - what I can do for the Member is to offer a briefing by the staff, because for me to get up and repeat it all - there is a huge book on it - would be a complicated process, but if the Members are interested, I could set up a comprehensive briefing with the department staff, as they gave us a briefing and all the pros and cons involved on the repatriation and where we are now. As I said, the whole thing is being done in consultation with the YTA and PSAC, but I could offer a briefing for the Members if they wish.
Mr. McDonald: I will raise the matter again in debate on the estimates. Certainly, there may be a requirement at some point for a briefing by staff. At this point, we can see whether or not we can get from the Ministers the information we need; if we tap all their knowledge but need more, then we will take him up on the offer.
Certainly this is a fairly big and important question, involving probably many, many, many millions of dollars. It consequently deserves some time on the floor of the Legislature to allow us to discuss what the parameters are for the proposed transfer and what the liabilities and costs might be.
With respect to another related matter, I would like to ask the Government Leader whether he has been canvassed for his views of the future of the unemployment insurance program. This is obviously a discussion that has rocked certain regions of the country. There is a lot at stake, even in our jurisdiction, about what will happen to this program. Has the federal government consulted with the Yukon government and provincial governments on the future of the UI program? If so, what has the Yukon government's position been?
Hon. Mr. Ostashek: I have not been canvassed on it. When we get to the estimates on Health and Social Services, the Minister responsible may have been in discussions about that or in other discussions on the Council of Ministers Committee that was putting a report together for the premiers. They may have discussed it in their discussions. I have not been canvassed on the UI program.
Mr. McDonald: Does the government have an opinion on the future of the UI program? I know that in some jurisdictions they have obviously formulated a very clear opinion about the proposed changes to the program. Has the government itself adopted a position with respect to the reduction of benefits or the shortening of the eligibility period? All of the proposals that have been coming from the federal government recently have been designed to reduce costs of the program, but also have had the effect of reducing benefits of the recipients. Can the Minister tell us what his position would be if he were to be canvassed?
Hon. Mr. Ostashek: To the federal government, the reforms to the UI program seem to be like sands on the desert in a wind. Things were going to get really tough under the Axworthy review. Then Mr. Axworthy softened them up somewhat. Then Mr. Young came along and said he would review it again and take some of the training money Mr. Axworthy had set aside and pay it back to the unemployed workers.
We have some concerns about it. We do not have a firm position because we do not know what the reforms will be at this point. However, it will have an impact on a jurisdiction like the Yukon, which has seasonal workers. We are concerned about that. We are also concerned that, if the cuts are too severe, they will shift people from the unemployment insurance rolls to the social assistance rolls, which would be a larger, direct cost to the local government, our government.
I was listening to the news over the weekend. I do not know the exact figures, but a substantial number of people in Canada agreed with the reforms being proposed by the federal government. What I found interesting was that, even in Atlantic Canada, where there have been demonstrations against the reforms, somewhere in the neighbourhood of 58 percent or 62 percent of the people felt the reforms were a step in the right direction.
We do have some concerns here and we are not certain what the federal government plans to do with it. We will be monitoring it very closely, because we are concerned.
Mr. McDonald: Is it a fair assumption to say that the government, in principle, is not in favour of reduction of benefit levels to unemployment insurance recipients in the Yukon?
Hon. Mr. Ostashek: I do not want to be pinned down on that question right now, because I do not know what is going to happen. If there is a reduction in benefits, what is the federal government going to do to get people back to work?
I think this is a bigger issue than just reducing benefits or lengthening the amount of time that is required to qualify for benefits. I would need to know what is going to happen on the training side of the program and what the federal government is going to do to help people get back into the workforce. How are we going to go about creating a climate for new jobs and put these people to work? I believe this is an exercise being undertaken in Atlantic Canada right now, but what jobs are they training them for?
Mr. McDonald: It is a laudable objective to encourage people to get out of the social services network and to get back into the workforce. I think there are a number of jurisdictions, including British Columbia, that have done some innovative things to try and encourage people to work when there is work available. However, if one is supporting a family on $800 or $900 per month, it is obviously going to be a big issue for that individual as to whether or not benefits are going to be reduced.
The ultimate question becomes whether or not the unemployment insurance program is going to continue to be an insurance program for people who are unemployed, or whether or not it is going to be another mechanism for government to extract money from people's paycheques without the corresponding benefits.
Perhaps I will let the Minister think about this and I will raise the matter again during the main estimates debate. I think this is a fairly important issue and it does have direct consequences on territorial programs and services. Certainly, the Minister has admitted that the moment there is a cut to some of the federal programs, the recipients turn to the Yukon government to pick up the difference, if there is a difference.
I will ask the question later, but I will let the Minister think about it. I would ask the Minister a question - and in general terms, it is sort of a wrap-up - about the subject of education and social service programs that are funded by the federal government. I will ask him whether or not he has taken the position that there ought to be national standards, in terms of benefit levels and qualifying periods, for certain income-support programs that the federal government and the provinces and territories currently sponsor. Has he taken the position that there should be national programs or standards that are common to all Canadians in the country? What has the Yukon government's position been?
Hon. Mr. Ostashek: The Minister of Health and Social Services has quite clearly stated the Yukon government's position. We believe in national standards. That is the message that he has been taking to the meetings that he has been attending, representing the government in the areas of health and social assistance. Quite clearly, we believe in national standards.
Mr. McDonald: In defining national standards, does this also refer to such things as qualifying periods, benefits levels, the sort of things that are common to all Canadians in all parts of the country, or does the Minister believe that there ought to be a substantial amount of flexibility in those areas?
Hon. Mr. Ostashek: Is the Member talking about social assistance? When I spoke, I was talking about health - one area in which we believe there ought to by national standards. On the topic of social assistance, there ought to be, as long as the federal government is contributing to the purse, a say in what is happening across the country.
This is the debate that is going on in Canada today. This is the debate that has been going on at the premier's level and this is the reason that the premiers have appointed the Council of Ministers on Social Programs, Health and Education. We appoint one Minister from each area to come up with a paper for some national standards. I believe that paper is in the final stages of being finalized and delivered to the premiers for discussions with the federal government, because the federal government, as the Member opposite knows, is pulling out of funding in those areas.
The provinces have said quite clearly to the federal government that if it does not pay, they will not play. This is where we are having the breakdown with respect to national standards. The federal government no longer has the fiscal capacity to dictate to the provinces - and it is a huge debate, especially with provinces such as Ontario, Alberta and British Columbia - so there are some big problems. There is a problem with the approach the federal government is taking with respect to the social safety net.
Mr. McDonald: I will follow up on this again later. I have some fairly specific questions, but I am not sure if the Minister can respond to them. I will ask the Minister of Health and Social Services some more direct questions.
I have one final general question. Last Thursday, the Minister indicated that he believed that in the federal government's effort to resolve its debt/deficit problems, it should not be focusing on education and health. I got the impression that it should not be focusing on cuts to transfers to the provinces. Is that a fair statement?
Hon. Mr. Ostashek: That is the position that has been taken by all Ministers of Finance across the country. They feel that the cuts to the transfers to the provinces in the areas of health, social services and post-secondary education have had a far larger percentage in overall program cuts in federal government spending.
Mr. McDonald: I have a couple of questions about revenues that the government receives.
If the Minister does not have the specific information on this question, I can wait for them. CMHC provides some funding for the operation of the Thomson Centre. Can the Minister tell us precisely what the funding schedule is?
Also, I asked the Minister a question some time ago about debts that had not been written off, but for which there had been an allocation in the estimates to account for them. I would like the Minister to tell us in the next short while, if he can, how much he is actually recovering from those debts that previously had been accounted for in estimates.
Hon. Mr. Ostashek: I am not sure that we have that information with us this evening, but I will get it for the Member opposite as soon as possible.
Mr. McDonald: I have a couple of questions. I should probably let others participate, but I have a number of other questions. Some are general in nature, some are not.
The Minister indicated he was throwing out a figure in the budget speech for creation of 600 jobs this year. He indicated that was something we could chew on for a little bit. I am more than happy to do that, but I need at least some preliminary analyses about how the 600 jobs were created. Could he commit to provide that?
Hon. Mr. Ostashek: We need only look at the stats that come from the statistics branch every month and compare them to the number of people employed in the Yukon. I believe I was using the December estimates. We compared December 1994 to December 1995. I believe there are 600 new jobs - more people employed - than there were a year previous. That is the figure I was quoting when I made that statement.
Mr. McDonald: I see. So, the government is taking responsibility for whatever new jobs were created in the economy, then, I take it. There are 600 new jobs. Consequently, it is as a result of direct government action that those jobs exist.
It might be a little bit of a tough sell to defend that particular position before my constituents, but I will give it my best shot. When they want to know who is responsible for the 600 new jobs, I will tell them that the government is, and I will try to tell them why. I will do my best, even though I suspect they might be somewhat skeptical of that claim.
There is obviously a change to the public utilities income tax transfer. It is a change from $550,000 to zero. Can the Minister explain the reason for that?
Hon. Mr. Ostashek: I believe we debated that in the House last session. The federal government has done away with it. It no longer allows it.
Mr. McDonald: When we last debated it, we debated $550,000, and the supplementary shows a reduction to zero. Can the Minister tell us what has happened?
Hon. Mr. Ostashek: My understanding is that it was shown last year because we had tabled our budget before the federal budget came down. This year, we know that the federal government is no longer allowing it, so we are not showing it.
Mr. McDonald: I have some questions about that but I will raise them in the Finance briefing.
I have some questions about the Government Leader's participation in trips overseas, seeking mining development. Can the Minister tell us precisely what message he is sending to potential developers about investment opportunities in the Yukon? Is he talking not only about the opportunities but also the responsibilities, should they come and invest in the Yukon?
Hon. Mr. Ostashek: Most certainly. On the trip we were just on, we made overseas investors aware of what is happening in the Yukon, not only in the mining industry but in the tourism industry as well and the possibility of future investments in forestry. The companies we talk to are companies that look for joint ventures with local companies.
Very little is known about the Yukon, probably because we have not marketed it. There is a real misconception that Yukon is part of British Columbia, and we point out that we are governed by different laws than British Columbia. We point out our proximity to tidewater. We discuss our tax structure and we describe the environmental review process that goes on for major developments in the Yukon. All of those aspects are of great concern to overseas investors.
Mr. McDonald: The misconception about Yukon being part of British Columbia was a misconception shared by Premier Vander Zalm from time to time - certainly during the constitutional discussions. Obviously, somebody has sought out Mr. Vander Zalm and corrected the matter.
Can the Minister tell us, in the context of the discussions he has had, with whom he has met? Can he give us a list of who he has met with and what each company's responsibilities or potential investment in the Yukon might be at some point?
Hon. Mr. Ostashek: Yes, I will get the Department of Economic Development to make up a list of the different companies we met with while we were on the trip, and provide it for the Member opposite. I have no difficulty with that.
Mr. McDonald: I had an opportunity to peruse a letter from the Government Leader to the Member for Riverdale South on the subject of ministerial travel. I do not want to get into the subject of ministerial travel here, but the letter did refer to the trip to Taipei as a Team Canada trip. Can the Minister explain how Team Canada was involved in this particular venture?
Hon. Mr. Ostashek: I did not know that it stated it was a Team Canada trip. If it did, it probably was not the correct terminology. This trip came about when we found out at one other forum we attended earlier in the year that Natural Resources Canada had taken what was basically a trade mission to Tokyo and Taipei about two years ago. As the Member opposite is probably aware, Canada does not recognize the government in Taiwan. Therefore, we have a trade office in Taiwan, not an embassy. We participated in a half-day forum in Tokyo and another half-day forum in Taipei. They were put together by Natural Resources Canada with the embassy in Tokyo and the Canada trade office in Taipei. There was representation there from British Columbia, New Brunswick, and maybe one or two other places in Canada - but, specifically, New Brunswick, British Columbia and the Yukon were represented.
Mr. McDonald: Was this a trip organized by the Yukon alone - and there were other partners - and was it facilitated by the federal government? Is this what you were saying?
Hon. Mr. Ostashek: It was facilitated by the federal government. We were made aware of it and invited to come along if we chose to talk to potential investors in both Japan and Taiwan.
Mr. McDonald: I will leave that. I did not want to get deeply into that subject at this point. There are other things to discuss.
One issue that is continually raised is that of land inventories and the amount of money that we invest in land.
I understood from the budget briefing that the government currently has approximately $22 million worth of land held for sale but not yet sold. In the main estimates there are projected expenditures of $5 million or $6 million toward further lot development. What does such a large land inventory do for the cash position of the government? With the draw-down of the surplus, is there any danger that the government will be in a tight cash position? Is there any chance that the government will have to pay for its banking services through expenditures or appropriations?
Hon. Mr. Ostashek: There is always a concern when you have that amount of money tied up in land, but the Member opposite is aware that things can happen very quickly in the Yukon, and we feel that it is incumbent upon the government to keep a year's supply of lots in reserve. This seems to be what the developers want to see. We are trying to meet that demand.
The Member is right that this means a lot of money tied up in land inventory, but we do have an offset with leave accrual on the other side, so it is basically awash.
Mr. McDonald: I cannot claim to be an expert on the matter, but I do recall having some discussions a few years ago about the fact we had tied up a lot of cash in land development and were busily spending hundreds of thousands of dollars to pay for banking services, something the government had not had to do previously.
Obviously, I am very interested in the subject, because it is no longer a situation where we forego lost opportunity or lost investment income because money is tied up in land.
There appears to have come a time when we have had to spend hundreds of thousands of dollars in banking service charges that we did not have to pay for previously.
Suddenly, what is kind of a neat idea turns into a major expenditure. Hundreds of thousands of dollars is big money, by our standards. Consequently, that means we have to be very careful about this initiative to build more lots.
I will be taking up with the Minister of Community and Transportation Services the issue about how many lots we indeed have for sale. It appears we have more than a year's supply of a certain type of lot in a certain community, and that is something that is of growing concern to some people.
Is there any chance in the next year to 18 months that the government will have to make an expenditure to provide for banking services?
Hon. Mr. Ostashek: The Member opposite is quite right. That is always a concern. Again, what is the magic number of lots we should have in reserve? Do we want to see a huge demand for lots we cannot satisfy, as we have seen happen in the past in the Yukon, when not enough land was developed for the demand, or is a year's supply of lots the right number to have?
As to whether or not we will need to pay for banking services, there is always that possibility, but we do not foresee it in the near future. However, it will depend upon cash flow. I feel quite comfortable that, if we do, it will be negligible.
Mr. Cable: I would like to follow up on one line of questioning the Leader of the Official Opposition started, which is the subject of national standards. There was a leaked media report a few weeks ago of a meeting of the premiers and the federal Minister. It was said the national standards should be set by the provinces, along with the federal government.
Does the Minister see the federal government as a significant player in the setting of national standards, now that it is significantly withdrawing from funding the programs to which the national standards relate?
Hon. Mr. Ostashek: That is a question that may better be posed to the Minister of Health and Social Services, as I believe that this was one of the recommendations of the council that I was speaking about: that the standards be set by the provinces and the federal government if the federal government was no longer a major contributor. In fact, there is a great belief across Canada that, within a very short period of time, the federal government will be completely out of health, social services and post-secondary education.
The provinces do not believe for one minute that the federal government will be there for any great length of time. If it is, its contribution will be very small.
I spoke earlier about Mr. Martin's comments about how there will be no future cuts for 1998-99, but he would not make any commitments to the provinces that they would not have to endure any further cuts in that year. He had said, along with that, that the federal government will always contribute a certain amount, but he did not say what level that would be.
The provinces, right now, do not believe that the federal government has the unilateral authority to be setting standards on its own when it is not paying to participate in the game.
Mr. Cable: I would like to get this clear. I believe the discussions were between the provincial premiers and the Government Leader.
There seem to be three schools of thought. There are the absolute decentralists who, of course, want the provinces to set the standards. They say that that is the constitutional right of the provinces and that the federal government started meddling in it because of its financial power. There are also the absolute centralists - the strong federalists - who want the federal government to set the standard unilaterally, as it probably has to some extent over the years. There is also the group that thinks that the federal government is just one player.
If I am reading the Government Leader correctly, he falls into the latter group. Is that a correct appreciation of where he is coming from?
Hon. Mr. Ostashek: It is probably a fair assumption to make. I do not know where the Liberal Member for Riverside is coming from - is he here to defend the federal government, or if he is just asking questions about it. Quite clearly, the delivery of health services is a provincial responsibility that the federal government stepped into. At one time, when it was funding 50 percent of it, it had a big stick to wave around. As its percentage drops, that stick gets smaller and smaller. I certainly am in the camp that believes that the federal government is only one player in the equation, and that every jurisdiction should have a say in national standards that are going to be set across this country.
Mr. Cable: To follow up, I think this topic was touched on by the Leader of the Official Opposition. Does this Government Leader feel that the setting of national standards, from the bottom up, with the federal government as one player, will provide a suitable set of national standards in our social safety net?
Hon. Mr. Ostashek: Yes.
Mr. Cable: I would like to telegraph where I will be coming from in the main budget debate, if I could at this time. I think I have done that briefly once before.
Are there a set of long-term forecasts being carried out on a continual basis? I believe that I have asked the Government Leader this question in previous debates. Is there an ongoing set of long-term forecasts on which he is basing some of these optimistic statements that he makes periodically in budget debates and debates on other financial matters?
Hon. Mr. Ostashek: Forecasts are just that - forecasts - and every government uses all the data that is available to it. There are times when I ask Finance to run numbers for four or five years on what they see playing out, based on what is happening in the Yukon today, based on what is happening on the national scene, based on what interest rates are today and where we think we are going. So, yes, we do make some projections from time to time, and we take all of the reports from the Conference Board of Canada and other forecasting venues such as that, along with our own people in Economic Development. We have to have some sort of idea of how we see the future unfolding in order to make the decisions that we have to make in government, and that is an ongoing process.
Mr. Cable: Is there any long-term forecast document that the Government Leader can provide to us in the Opposition so that we can ready ourselves for the debate on the main estimates?
Hon. Mr. Ostashek: If it would help the Member opposite, we could certainly provide him with revenue assumptions for the next few years, for the length of this formula financing agreement, based on best guess estimates at this point.
Mr. Cable: I think that any information of that sort would be useful, because there has been a lot of apprehension expressed about what the future holds for the Yukon. The Government Leader may have different views from the Opposition about what the future holds, which may bear on how we think about such things as the Taxpayer Protection Act, the budget and other things.
Could the Government Leader indicate whether or not there is a long-term projection for oil and gas exploration and associated revenues? I touched on this very briefly during the budget lockup with the Minister's deputy. We talked about these riches that are about to be bestowed upon Yukoners as a result of Yukon resources. I would like to canvass what kind of riches we are looking at, beginning with the oil and gas revenues. What does the future hold?
Hon. Mr. Ostashek: We can provide the Member opposite with the projected oil and gas revenues based on producing wells in the Yukon, but we cannot provide anything more than that at this time. We will not know how fast the oil and gas industry will develop in the Yukon until the land tenure issue is settled and we have control of the resource. We are not making any projections based on those virtually unknown reserves or possible reserves. We do not know how quickly these reserves will be developed.
We do know that an interest in the Yukon has been expressed by oil companies. We will not know how that relates to revenue until there is development.
Mr. Cable: Surely there must be some estimate.
Let us move on to minerals. The Government Leader has spoken quite glowingly about the new mine. Have we got any best or worst case scenarios painted for revenue projections from the new mines that are supposed to come onstream, such as Loki and the four or five others that the Government Leader has spoken about on various occasions?
Hon. Mr. Ostashek: Yes. We will have some of that. However, the Member opposite has to remember that it all flows into our formula financing agreement with the federal government. This is not free money. This is money that we have talked about with the incentive factor that we have built into the formula with 20 percent of our revenues being exempt from the perversity factor. All of these things flow into the formula. We can give him some projections on that.
Mr. Cable: The reason I asked - and I do not want to jump too far into the debate - is that on page 18 of the budget speech, the Minister said, "The impact of the spinoff benefits of these developments on other business and new employment in the service and supply sector will be enormous." This leads me to believe that there will be quite significant new tax streams. Perhaps the apprehension that we are feeling about things that are coming down the line from Ottawa may be balanced by our taking over the resources.
Is there any forecasting or projection done on the multiplier effect of these new mines that are coming down the line?
Hon. Mr. Ostashek: Perhaps the question would be better asked of the Minister responsible for Economic Development when we get to his portfolio, because he has people in his department who do that scenario on the multiplier on jobs that are created here.
Mr. Cable: Just one last question on this line of thinking: the investment corporations were dissuaded from keeping their head offices here by the effect of the tax increase. Whatever the merits of the tax increase, that was one of the results. Has there been any calculation made on the lost revenue due to losing these investment corporations?
Hon. Mr. Ostashek: My understanding is that we do not have recent income tax tapes on that. The latest ones we have are for 1994, but this will show up in years after that.
Again, I just want to point out to the Member opposite, on the particular concern he raised about this being a tax haven for corporations across Canada, that it was to the detriment of Yukoners, because for the volume increase we had in income tax revenues, for every $100 we were losing $151 due to the perversity factor.
I do not believe that the investment, which was basically a docile investment that was sitting in our banks, was doing anything to create jobs in the Yukon, with the exception of perhaps keeping some lawyers busy and a few receptionists in their offices.
When one looks at the pluses and minuses, I do not think that the Yukon, with the formula financing agreement we have with the federal government, can afford to be a tax haven for Canadian corporations.
Mr. McDonald: I have a related question. The federal government currently receives revenue from resource industries, such as Curragh Resources, Loki Gold, the placer fields and also from forestry. Has there been an estimate done on how much in revenue royalties it would receive that would otherwise go to the Yukon if Yukon managed those resources?
Hon. Mr. Ostashek: I can get that number for the Member opposite. We have done some calculations on it.
Mr. McDonald: In doing the calculations, can the Minister do a brief extrapolation of what might happen if the mines, which the Minister is indicating are in the permitting stage right now, go into development? What revenue, which is now going to the federal government, would the Yukon receive from the increased economic activity if the Yukon were responsible for the resource? Could the Minister do that?
Hon. Mr. Ostashek: That may take a little time, but we can certainly try and get those figures for the Member opposite.
Mr. Chair, in view of the time, I move that you report progress.
Motion agreed to
Hon. Mr. Fisher: I move that the Speaker do now resume the Chair.
Chair: It has been moved by the Hon. Mr. Fisher 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. Millar: The Committee of the Whole has considered Bill No. 9, Third Appropriation Act, 1995-96, and directed me to report progress on it.
Speaker: You have heard the report of the Chair of Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. Fisher: 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 9:28 p.m.
The following Sessional Papers were tabled February 26, 1996:
Government Contracts Registry by Type - Interim Report (April 1, 1995 to December 31, 1995) (Nordling)
Government Contracts Registry by Department - Interim Report (April 1, 1995 to December 31, 1995) (Nordling)