Whitehorse, Yukon

Wednesday, April 3, 1996 - 1:30 p.m.

Speaker: I will now call the House to order.

We will proceed at this time with silent prayers.

Prayers

DAILY ROUTINE

Speaker: We will proceed with the Order Paper.

Are there any introductions of visitors?

TABLING RETURNS AND DOCUMENTS

Speaker: Under tabling returns and documents, I have for tabling the report of the Chief Electoral Officer on contributions made to candidates during the by-elections of February 5, 1996.

Are there any further documents for tabling?

Are there any reports of committees?

Are there any petitions?

Are there any bills to be introduced?

Are there any notices of motion?

NOTICES OF MOTION

Ms. Moorcroft: I give notice of the following motion:

THAT it is the opinion of this House that the Government of Yukon should immediately begin to consult with communities, First Nations, business representatives, Yukon College and other interested groups, for the purpose of establishing community-based training trust funds to promote the development and delivery of adult education programs in communities where such training could lead to increased employment of local workers.

Speaker: Are there any statements by Ministers?

This then brings us to the Question Period.

QUESTION PERIOD

Question re: Dawson school, design contract

Mr. Sloan: My question today is directed to the Minister of Government Services.

In its four-year plan, the Yukon Party government stated that it would give fair and realistic contract regulations that give Yukon contractors a preference when bidding on government contracts. The government also said it would reintroduce the principle of the low bidder being awarded government contracts subject to such requirements as a contractor's history.

If this is the case, I wonder if the Minister could explain why the government awarded the design contract for the Dawson elementary school to an Alberta company when it was not the lowest bid for that contract.

Hon. Mr. Nordling: I am pleased that this government has new contract regulations in place, and the government is giving Yukon companies benefit of preference, and extra evaluation marks for being local.

The situation has been a thorn in the side of governments for years and years. I would invite the Member to go back and look at the efforts that Roger Kimmerly made when he was the Minister, to try and develop local preference. It is a very difficult thing to do.

Mr. Sloan: I am sure that Mr. Kimmerly would appreciate that endorsement. However, one of the things that particularly interested me about this point on past history - first of all, let us address the financial issue.

The local firm that lost the bid on the Dawson school lost it by a staggering one-seventeen hundredths of a point. If we are talking about history, this is the same company that has been hired to design the Tourism business office building next door. I am sure that if we can accept the company for such an important edifice, it should have had some consideration for a school in Dawson.

In this point, I got carried away by my own rhetoric.

If the company were capable of building such a building as the wonderful building next door - which we all love - why was it not awarded the contract for the Dawson elementary school?

Hon. Mr. Nordling: I do not know the details of the evaluation criteria with respect to the Dawson school. However, with respect to that architectural firm, I have met with them on a number of occasions and I can assure the Member that neither I, as the Minister, nor the department, have any problems with the firm's work or its ability to do the job. It did a tremendous job for us on the Golden Horn School and, as the Member has said, it won the contract for the Tourism business centre. So, it is certainly not because of any lack of confidence in the firm's ability that it was not awarded the contract for the Dawson school.

Mr. Sloan: I have a bit of a problem here. It was the low bidder and has a track record of building in the territory - the Golden Horn Elementary School is an example, as the Minister said, as is the Tourism business office - so it does have a record. However, the company that got it was a company that has experienced difficulty in some of its previous contracts - for example, the Ross River school, which has permafrost problems, and the Watson Lake school, where there are ventilation problems. In the Dawson experience, it had some difficulty with the Robert Service School that resulted in legal action.

Notwithstanding who awarded the original contracts, one should learn from such an experience.

Speaker: Order. Could we have a question, please.

Mr. Sloan: Certainly. Perhaps the Minister could explain why an Alberta company with this kind of work record, and, specifically, in light of the Dawson school experience, was awarded this design contract?

Hon. Mr. Nordling: They were rated the highest.

Question re: Dawson school, design contract

Mr. Sloan: Proceeding once again on the issue of contracts, we should move a bit closer to home. In terms of the French first language school in Granger, the construction contract was awarded to Bert Pratch Construction. This is the same company that was condemned by the previous Minister of Education for its work on the Thomson Centre. If we consider this contract and the Dawson elementary school design award, both companies appear not to have illustrious track records. Why were these companies hired?

Hon. Mr. Nordling: I think we have been over this ground before and I expect we will be again, when we debate the Government Services budget.

With respect to the Thomson Centre, my understanding of that is not so much the concern with Bert Pratch, who did the construction, but the original design and the tremendous over-design, in the opinion of a lot of people, that led to complaints. As I said before, there are a lot of companies that there is trouble with on occasion but it gets resolved. It is not enough to prevent them from bidding again. PCL, for an example, built the college. There were problems with that and there are still outstanding lawsuits. PCL also built the Elijah Smith Building, which I understand is performing like it should. PCL was successful on the hospital bid, so we do not hold it against a firm unless there are serious problems.

Mr. Sloan: In the past little while, we have had a number of design and construction contracts handed out to outside firms; in particular, I am thinking of the Porter Creek high school and, most recently, the Beringia Interpretive Centre renovation. In the case of the latter, the local firm was nudged out by an outside firm.

I think contractors and architects in this territory have some concern with this. I wonder if the Minister could explain what kind of initiatives he could undertake to make sure that the government maximizes the benefits that go into local hire and protecting local companies.

Hon. Mr. Nordling: I have been concerned with work going outside the territory since I became the Minister responsible for Government Services. I have met with the architects on several occasions. I have met with contractors and I have talked with them. We have discussed the evaluation of bids in order to give a preference for companies that are located in the Yukon. We are doing that. If the company lost the tender, then it has not had enough preference to overcome the rating of a bid from the south. There is not much more that I think we can do at the present time without interfering more than we should in the marketplace.

Mr. Sloan: One of the things that I think might be worth considering - and perhaps the Minister would take this under consideration - is the City of Whitehorse, in its contract proposals states, "Proposals will be evaluated in the best interest of the City of Whitehorse". By that, I would interpret it to be the economic interest, et cetera, of the city.

I wonder if the Minister would investigate the possibility of including a similar kind of clause within government proposals to maximize the benefits to local design and contracting firms?

Hon. Mr. Nordling: I will look at that suggestion for the Member, but as I said, the department has looked at these issues. I am sure they have talked to the city. To simply award a contract in the best interest of the Government of the Yukon would certainly leave it wide open for selection based on, perhaps, many other reasons than getting the best product for Yukoners in the end.

Question re: Ombudsman recruitment

Mr. Cable: I have some questions for the Government Leader on appointments. The government is arranging for the hiring of the Alberta Ombudsman to fill the Yukon Ombudsman role on an interim basis, pending appointment of a full-time Ombudsman. The Government Leader told the House last month that there was a wrinkle in the Alberta legislation that had to be cleared up before the appointment could go forward, and that there was an Alberta standing committee that would be meeting on March 20 to deal with some preliminary issues that would lead to amending of the legislation.

Would the Government Leader advise the House if that standing committee in Alberta has dealt with the preliminary hurdles so that the Alberta government can now proceed to enact the necessary legislative amendment?

Hon. Mr. Ostashek: I have not been notified that they did not, but I will check on that for the Member opposite. None of my staff has advised me that we have run into any snags. I assume, after hearing the interview with the Ombudsman from Alberta on the radio this morning, that everything is proceeding as I relayed to this Legislature.

Mr. Cable: As the Government Leader is aware, the appointment of the Ombudsman is made on the recommendation of this House and this session is going to be ending in the near future, so the clock is ticking on this long overdue appointment.

Could the Government Leader give us positive assurances that the Alberta legislation will be amended prior to the end of this legislative session, and that the appointment of an Ombudsman will be brought forward to this House for approval?

Hon. Mr. Ostashek: I will check into that for the Member opposite. I have not heard about any problems, and the government fully intends to have the Ombudsman appointed before this session of Legislature ends.

Mr. Cable: The appointment of the Ombudsman was in the Yukon Party's four-year plan. We have been talking about this issue in the House for over three years - I think it was one of the first questions asked in Question Period in 1992 or 1993. It is my assumption that the appointment could be made by this House to take effect when the Alberta legislation is amended, or subject to it being amended. Is the Government Leader prepared to take this approach in order to avoid having this long overdue appointment fall through the cracks?

Hon. Mr. Ostashek: Yes, I certainly do not have any difficulty with that at all. We were waiting to see what was going to happen in Alberta and be assured that it was going to proceed as we discussed and were led to believe that it would happen.

I do not have any difficulty with making the appointment on that basis. As I said, it is our intention to have this completed before this session of the Legislature adjourns.

Question re: Dawson school, design contract

Mr. McDonald: I have a question for the Minister of Government Services about the Dawson Elementary School design award. I am still not clear about his answer to the fundamental question. We have a situation where a respected local company with experience in school design was the low bidder on this particular project. However, an outside company with a checkered track record was awarded the contract. Why did that happen?

Hon. Mr. Nordling: As I said to the Member for Whitehorse West, I do not know the details of the evaluation criteria. I do not know why that firm got the contract over a local firm. I have not been contacted; I have not spoken to the local firm about that; I have not reviewed the criteria or why that decision was made.

Mr. McDonald: As I understand it, this situation has already been appealed to the Contract Review Committee. The government lost the appeal, but the contract was still awarded to the outside firm.

In his response to the Member for Whitehorse West, the Minister essentially said that, in answer to the question of why this company was awarded the contract, it was because it got more points. I want to know why that company got more points. In the four-year plan, the political imperative clearly states that the low bidder will get the preference, and the record of a contractor will be given consideration.

We both know that, on all scores, the local contractor wins, so why did it not get the job?

Hon. Mr. Nordling: I believe I have answered that question. I do not know why the local contractor did not get the job, because I do not know what the bids were, how it was evaluated, and I have not been approached by my department with respect to this, nor by the local architect to review it.

Mr. McDonald: The Minister knew the outside contractor got more points. The Minister also said that while he has been Minister of this department, he has expressed some concern about ensuring that local contractors get work. He has been Minister of Government Services for two years. This is not like his inability to answer questions in Education, like yesterday. This is his responsibility and his area of expertise. He is the person in charge. He has the political imperative in the four-year plan to do something, but an Alberta firm still got the job, even though it was not low bidder.

Why does the Minister not know this situation took place? Why did he not ensure that the department received clear instructions that, if a low bidder has a good track record and experience, it would get jobs like this?

Hon. Mr. Nordling: I think I have answered that question, but as the Leader of the Official Opposition has repeated his question, I will repeat my answer. I do not know why the outside firm was awarded the design of the Dawson school over the local firm, but I am concerned about there being local preference. We want the local architectural community to survive. We want the local construction firms to survive, and the instruction to the department is that, if it is at all possible, local-

Some Hon. Member: (Inaudible)

Speaker: Order.

Hon. Mr. Nordling: The Member for Mount Lorne says that, for someone who does not know, I have a lot to say. I was just chastised by the Leader of the Official Opposition for not being able to answer questions yesterday in my portfolio of Education regarding documents the Member had, which are over a year old and which certainly did not come to the Cabinet or to any of the caucus members to look at. I would invite her to table it and then perhaps I could answer her question.

Question re: Political party coalitions

Mr. McDonald: Expressions of concern cut no mustard. Results do.

I have a question for the Government Leader. He made another foray into national politics today by calling for right-wing forces to stand together to offer an alternative to the Liberals. Clearly, if right-wing forces were to come together, there would still only be one alternative - some kind of Liberal/Reform/Conservative Party coalition, a very crowded field.

My question is this: why did the Government Leader choose to take a very partisan position, a Conservative calling other Conservatives to stand together, a call to action, from a publicly funded office?

Hon. Mr. Ostashek: I believe I took a stand on concerns that had been raised to me by many, many Yukoners, that we have a parliamentary system in Canada that is based on two national parties, and we do not have that today. We have a separatist party, which is the Official Opposition in Ottawa, and I believe it is in the interest of all Yukoners and all Canadians to have a viable alternative in the next election, between a left-wing Liberal Party and a right-wing party in this country.

Mr. McDonald: It is basically party building at public expense, and I have some concerns about that. It is also ironic, coming from a party leader of one of the very first regional rumps to splinter from the national Conservative Party.

When the Government Leader speaks disdainfully of spendthrift governments in his press release, is he talking about the kind of government the Liberals practice or the spend-more, tax-a-lot-more kind of government that he is leading?

Hon. Mr. Ostashek: Whether or not we split from the Conservatives is not the issue I was raising. I was not taking sides with either the Reform Party or the Conservative Party. I was taking a position I believe to be in the interest of all Yukoners and Canadians - that there be a viable alternative - so they can elect a government similar to the Yukon Party government of the Yukon that is fiscally responsible.

Mr. McDonald: If the Minister is claiming that this party building at public expense is something that he is doing in the national interest and the interest of all Yukoners, I presume that he will now be calling for centre and left-of-centre parties to come together, as well, in order to ensure - from his publicly funded office - that there is a real choice in this country to face off against the Liberal-Reform-Conservative-Yukon Party coalition.

Hon. Mr. Ostashek: I think I will leave that job to the Leader of the Official Opposition - to stick up for his left-wing politics.

I make no apologies whatsoever for our government being a right-of-centre government. I believe that I have a duty to speak out on behalf of Yukoners and Canadians who are very, very concerned about what they are going to be able to do in the next federal election.

Question re: Workers' Compensation Board, ministerial involvement

Mrs. Firth: I have a question for the Minister responsible for the Workers' Compensation Board about political interference.

The management meetings that the employees have at the Workers' Compensation Board have minutes. In the minutes of January 9, 1995, item 6 refers to ministerial inquiries:

"R. Farrell asked directors if any of them had received any calls directly from the Minister's office. An employee recounted an incident in which the Minister called him directly and asked why he was not paying an invoice from a particular contractor. The Minister stated that he was not directing what we should do, but inquired whether we could do something for the contractor."

Another employee told of a phone call she had received from Joanne Lewis asking about a decision on a claimant.

The Minister has been criticized on several fronts for interference.

Speaker: Order. Would the Member please ask a question.

Mrs. Firth: The question I have for the Minister is this: how many times a week does the Minister phone the offices of the Workers' Compensation Board?

Hon. Mr. Nordling: That depends on the week. I make no apologies for taking the responsibility that comes with being the Minister responsible for the Workers' Compensation Board.

This has been discussed in some detail. The Member has stood up and not stated the situation accurately in order to create an impression. The impression is wrong. Again, I make no apologies for acting on behalf of my constituents and others who want information, because I am the Minister responsible.

Mrs. Firth: I think that the minutes are quite accurate. I simply read from them. I did not make any allegation; I read the facts into the record.

With respect to the executive assistant to the Minister phoning the Workers' Compensation Board about decisions on claimants - in fact, she phoned an individual for a decision on a claimant - can the Minister tell us how often his executive assistant phones the offices of the Workers' Compensation Board? Does it depend on the week as to how often she phones, as well?

Hon. Mr. Nordling: I do not know exactly. The executive assistant is not often involved. I do not know the incident from one year ago January to which the Member is referring. There was considerable discussion with the president of the Workers' Compensation Board, as has already been indicated, and the former alternate chair, with respect to communication with the Minister's department and the provision of information.

Mrs. Firth: I guess interference is primarily the Minister's responsibility, because he is the Minister.

There is a process in place for communication with the Minister. It certainly is not the Minister, depending on what week it is, phoning up whomever he wants at the Workers' Compensation office.

I would like to ask the Minister why he is circumventing the process of someone being designated to brief the Minister? Why is he just doing what he wants, because he is the Minister, circumventing the process that is in place, phoning over to the Workers' Compensation Board for whatever reason - the time of the week, his mood of the time - and also allowing his executive assistant to do the same?

Hon. Mr. Nordling: Those allegations are absolute nonsense. That is not what the Minister is doing. The Member refers to minutes of a meeting that occurred more than a year ago. I have communicated with the Workers' Compensation Board through the chair and through the president. There was a system set up by which to communicate, and if the Member will read the act, she will see that it clearly lays out that the board reports to the Minister and that the president is a non-voting member of the board.

Question re: Students Financial Assistance Act, amendments

Ms. Moorcroft: Yesterday I referred to the government's confidential legislative calendar and asked the Minister of Education about their proposed amendments to the Students Financial Assistance Act. From his answers, the Minister would have us believe that this secret Cabinet legislative calendar is so secret that even the Minister did not know what the Yukon Party government is planning.

Today I would like to ask the Minister of Education this: what are the secret, controversial amendments the government proposes to the Students Financial Assistance Act?

Hon. Mr. Ostashek: The Minister asked the Member opposite to table the document that she has, and I would ask her to do the same thing today. She has no secret document. She has no Cabinet document. She has nothing of the sort. She keeps referring to it, so I ask her to table it, and then we will be able to answer her questions.

Ms. Moorcroft: I have no problem with tabling the document. It is not the first time we have had to provide information to the government Members over there, because they seem to lose track of things and cannot recall their own decisions.

The Government Leader, when he announced who the new Minister of Education would be, said that the Cabinet is a small, close-knit group that is aware of what is going on in other departments. What the calendar says about the Students Financial Assistance Act is that the government is proposing amendments to it. What are the controversial amendments that the government is proposing to the Students Financial Assistance Act? Can we have them? Will the government bring them forward?

Hon. Mr. Ostashek: Again, the Member does not have a Cabinet document. What I believe she has is something that I have on my desk here, which are working documents of departments that have not received Cabinet approval and have not even got to the discussion stage of Cabinet. What she is referring to is a wish list from the department, and she should identify the documents to which she is referring and not try to make people believe that she has something else.

Ms. Moorcroft: I have already said that I will table the legislative calendar, which is the document that I am referring to here. I do not know what the Minister is trying to hide; everything the government does is controversial.

Will the Minister bring forward the proposed amendments to the Students Financial Assistance Act, or is the government waiting until the next election?

Hon. Mr. Ostashek: The House leaders have been told what legislation was coming forward in this session. There is no other proposed legislation.

I see we have the Member for Faro mimicking again. I guess the Member is saying that the government can pass legislation after the House has adjourned for the summer, which I think is ridiculous.

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

ORDERS OF THE DAY

OPPOSITION PRIVATE MEMBERS' BUSINESS

MOTIONS OTHER THAN GOVERNMENT MOTIONS

Clerk: Motion No. 105, standing in the name of Mr. McDonald.

Motion No. 105

Speaker: It is moved by the Leader of the Official Opposition

THAT it is the opinion of this House that: (a) the government's current energy and environmental policies should be substantial, cohesive and compatible with each other; (b) the government should adequately research alternative energy sources that prove their economic and environmental sustainability; and (c) the government must identify and meet the needs of all Yukoners to provide sustained economic growth through reasonable energy costs and environmental protection.

Mr. McDonald: I am pleased to be in a position to speak to this motion this afternoon.

To answer the obvious question that people may ask about why this motion is being proposed now, I will simply begin by saying that there is more and more concern being expressed by people around this territory about the need for thoughtful leadership in planning the territory's economic future.

There is increasing concern about the way the Yukon government has lurched from one megaproject to the next, trying to curry favour with large developers without any clear sense of direction about what values it wants to respect, be they environmental, recreational, or cultural, or what benefits we should require in return for public investment, or even for the use of our natural resources.

There is a lingering feeling that, far from being the masters of our own house, far from being in a position where we can determine our own future, the government is simply looking for big money, big projects and ignoring the consequences.

There have been a number of things happening over the last little while that I will touch on briefly and come back to in a few minutes - I will not speak long, but I will mention these things a couple of times - to help illustrate the points that have been made so far, and help justify the concerns people have about the leadership being provided by the government.

The Yukon Party government announced, upon assuming office, that it was going to bring some sense to the whole process of inviting in developers who may wish to extract resources and make use of resources in our territory. After a lot of promises and false starts, we finally received something that they refer to as the industrial support policy; something that they referred to as an industrial support policy that would ultimately guide the government's actions when it came to responding to developers.

This policy, in the end, was scant in detail, scant in substance, but it did say, essentially, a couple of things that have caused some people some considerable concern. It essentially sent out the message that big money could get big public benefit if they were prepared to invest large portions of capital into developing our resources. It was silent on the question of benefit to Yukoners: what Yukoners would get in return.

We also heard that the government, a little while later, was going to promote yet another in a long list of megaprojects - megaprojects that never seem to come to fruition, such as the Division Mountain coal project. This project itself was a classic example of what people were expressing the greatest concern about.

Here we had a government that made a decision to support coal, presumably because the Government Leader had some sort of spiritual attachment to coal projects in his home province. We had a government that wanted to build the project knowing that it did not have answers to fundamental questions about whether or not the project was environmentally sustainable or if the project was economically or even financially sustainable. Yet, the decision appeared to be made.

Despite the fact that, from time to time, the government indicates that it is prepared to do further studies to justify a decision already made, it is clear, from everything the Government Leader says from time to time, that we are headed for a major coal-fired electrical generating station.

All the details are not worked out, and all the actions of government are meant to justify that conclusion.

We in this Legislature have been asking the government to produce a comprehensive energy policy. We have asked the government for a long time to produce a comprehensive energy policy. From time to time, the government said it would; sometimes it said it would not; sometimes it said it all depended on the definition of a comprehensive energy policy. In the end, it came up with what it referred to as its energy action plan.

This energy action plan was ostensibly the Yukon Party's call to action when it came to energy development or resolving the complex problems associated with energy, the environment and the economy. What was transparent in this plan - patently obvious - was that it was an attempt to justify a coal-fired electrical generating station. There were some thoughtful comments about oil and gas. There was a postscript about conservation and about the need to consider alternate energy sources. These were clearly afterthoughts, as the heart of the plan was all about justifying an already accepted conclusion within government circles: that we needed to extract coal, burn it, and produce more energy from it.

The energy action plan was supposed to provide for performance indicators so that we could all judge how the government was doing when it came to meeting its commitments under this plan. These performance indicators were so loosely worded that it was hard to determine when the government was accomplishing anything of substance.

As I mentioned, conservation was an afterthought. In our briefing, someone blithely told me that when it came to conservation measures, the government had been there and done that, that there was no need to consider those questions in detail any further, that the whole notion of conservation was passť and that it was not the latest toy energy analysts were considering any more; it was a whole concept that had passed its prime.

When I heard that, I came to the conclusion the government, in its planning process, had lost any sense of perspective. The government appeared to be convinced that its direction of promoting energy through a coal-fired electrical generating process was the only way to go. It had already decided the question of whether or not it was needed. It had already decided the question of whether or not environmental concerns had been addressed; it was simply going to justify it in any form it could.

From time to time, we have heard the government make reference to the Yukon Utilities Board as being a watchdog, as being the independent arbiter to ensure that the public interest would be protected when it came to important matters such as energy price and any controversial issue we have raised in this Legislature, as a matter of fact. We have been told that the Yukon Utilities Board would be addressing that as the consumers' watchdog.

I have been reminded that the Yukon Utilities Board is not a watchdog. It is a judge, a judge that receives its policy instructions from this Cabinet. The board has received policy instructions that have limited its authority and limited its range of consideration when reviewing applications before it by the public and private utilities.

I would remind Members that this board had its mandate changed by the Yukon Party Cabinet to consider cost-of-service implications and to ignore conservation issues and demand-side management principles. Those last two issues were deleted from the order-in-council that provides its marching orders.

Far from the Utilities Board being the broad-picture watchdog that will protect our community and environmental values, as well as watching over issues such as conservation and price, the Yukon Party Cabinet has dramatically focused the considerations the Yukon Public Utilities Board can use when analyzing proposals put before it by the utilities it has seen in the last year.

Apparently it is an attempt by the Yukon Party Cabinet to weaken the board even further by systematically removing from it the most experienced members, who have built up a fund of knowledge about the utilities and energy issues. So, for all the training and experience that those people had undergone over the many years, the most experienced people are weeded from the board.

We even had a chair of the board who was performing a significant function as an executive member on the Canadian Association of Public Utilities, the equivalent for public utilities boards across the country. Even this person was not reappointed. The most experienced member, short of the chair, was not reappointed. Clearly, this Cabinet had no interest in ensuring a wise, experienced board, performing the function that they had misguidedly assumed was the function of the board - that it be some watchdog of the public interest.

We have seen a government that has taken the notion of public consultation and narrowed it to such an extent that we have now taken the whole idea that there should be discussion about such broad issues, such as energy policy - such important issues that are incorporated into the broad framework of energy policy - and focused that through, essentially, a one-day conference, where people are asked to give speeches to each other, all sponsored by the Yukon Council on the Economy and the Environment.

That is not effective consultation. The government does not have a sense of the need to develop a broad, comprehensive energy policy. It does not take seriously its obligation to consider a broad range of opinions. It does not take seriously the need to promote other forms of energy production. It does not take the need to promote energy conservation seriously.

The government, for all its talk in the last three years, has had a very narrow focus. It has spoken to very few people and has come up with a very limited product. The only thing we have seen happening - into which there has been any real political energy invested - was the initiative early in the mandate of the Yukon Party to privatize our public utility.

Having backed off from that particular initiative and having found no obvious partners in seeing to it that our utility is sold off to other interests - we are obviously expressing the most concern about selling it to southern interests - we now see the utilities themselves slowly changing, and the relationship between Yukon Electrical Co. Ltd. and the Yukon Energy Corporation evolving. We see the Yukon Energy Corporation expressing itself on Yukon Electrical Co. Ltd. letterhead. We see the manager for Yukon Electrical Co. Ltd. signing in the signature block for the Yukon Energy Corporation on letters that are also on Yukon Electrical Co. Ltd. letterhead. We see the rate base of Yukon Electrical Co. Ltd. skyrocketing from around $12 million in 1987 to $40 million-plus - an increase of almost 300 percent - since the time the NCPC assets were transferred. We see the Yukon Energy Corporation's rate base only increase marginally.

We do see things happening. We do see the change in relationships, which are not necessarily in the public interest. We see a so-called rationalization of the Yukon Energy Corporation's assets and respective responsibilities, both in how it is managed and in its asset base.

On another point, we have seen lack of leadership when it came to the whole subject of energy rates. What have we heard from the government?

Initially, we heard that rates had to be increased early in its mandate, because the Faro mine shut down. We heard the Government Leader, the Minister responsible for Yukon Energy Corporation, and others talking about how this was a necessary fact of life - energy rates had to increase, because Faro shut down. It was almost a mantra; people were repeating it to themselves. When everyone thought they understood this and were repeating it to each other, Anvil Range Mining Corporation opened the Faro mine, and people were told to stop saying that energy rates will increase.

Now the government wants people to say that Anvil Range Mining Corporation starts up and energy rates go up. Can you repeat that after me? "Anvil Range Mining Corporation starts up, energy rates go up."

This is not something the public easily accepts, because it has been told to march, lock step, to the utilities and with the Minister who was defending the utilities at the time and explaining why energy prices had to climb. We were all told what we had to repeat and what the conventional wisdom ought to be, that when a major user of electricity drops out of the system you still have to pay the bills, you still have to pay the mortgage on some of those great big projects. Consequently, the rest of the users are going to have to pick up the slack. People said, "Okay, if that is the way it is, we will buy into it." Then when the user comes back on stream, people expect something to happen. They expect that the slack will be taken up, there are more users in the system and the rates are going to go down - but the rates did not decrease. As a matter of fact, it looks like they are increasing - only slightly this time, but they are going up, not down.

We have heard from the government that it thinks the system should move to cost of services. Essentially, it means that everybody pays in accordance to what it takes to generate electricity for them. So, if it costs so much to generate electricity for a residential consumer, the residential consumer would pay the exact cost for that electricity. I realize there are a lot of shenanigans that can be applied to this, actually calculating what that particular rate would be, but nevertheless the basic principle is that industrial consumers will pay the actual cost of producing electricity for their purposes, the same for residential consumers and the government class.

The government, for its part, has indicated that the government is getting a raw deal; government is paying more for electricity than it actually costs the utilities to produce for the government.

Where I come from, government should not be considered separate and distinct from the people; it is the people. If government is providing some relief for northerners, thanks to hefty transfer payments that we get from the Canadian taxpayer, then they should get a break.

As an aside, the Member for Riverside suggests that, when I am speaking of benefits from the federal government, I should be speaking about the benefits from the federal Liberal government.

The point is that there is a notion that we are all supposed to buy into now that the government feels that it should be given a better deal - the government, somehow, is distinct from the people - and that the residential consumer should expect to pay more. The Government Leader has suggested, from time to time, that residential consumers should start to pay more over a 10 year period - that that will cushion the blow, but there will be a blow.

I do not buy that argument. I do not think many people buy that argument, because they believe that people in this territory ought to have a government that works with them to keep their costs down because the government is here to serve them, and not vice versa.

The government has also indicated that rate relief is something that the consumer should not expect in perpetuity. As a matter of fact, it has indicated that rate relief will be in place for a while, and he has suggested the rates will not go up before the next election. He has consistently refused to say what is going to happen after the next election.

Whatever profits the Yukon Energy Corporation is going to make are not necessarily going to be given back to the consumer; they are going to be used for something else. From what we can tell, profits will likely be used to pay off what appear to be probably some hefty debt servicing on a coal-fired electrical generating station at the Division Mountain coal project.

The concern of the consumer is that, again - if one talks about moving to cost of service, which is a government initiative, or if one talks about rate support - the government is acting in the interest of government and has given very clear signals to the consumers that they can expect some hefty increases.

What does that mean? Is that the kind of thoughtful direction the government has received from the public? Is that the kind of comprehensive energy rate policy it feels is good for not only business but good for consumers? Are consumers aware of what the government has in mind when it comes to their power bills?

I think we think we know. We all know where the government is going. I am still quite puzzled as to where it is going with the industrial consumer, because we were initially told, in its first draft of the industrial support policy, that the government felt that rates given to Curragh were fair and appropriate. We later heard from the Minister of the Energy Corporation that he felt the consumer was getting hosed by this deal, so we were not sure precisely where the government was going to end up. Then we understood from the industrial support policy and from comments the Government Leader made in the Legislature that, whenever there was any need for rate support, it would come through in the form of some appropriation in the Legislature and not through a special break in rates that the rest of the consumers were going to have to pay for. Instead, we were going to face some sort of annual appropriation to support various industrial consumers.

Most recently, we have been getting signals that the government really has no intention of doing any of that, that industrial consumers will have to pay precisely the cost of any project, and the government support in the energy field will simply be to provide the basic service of building infrastructure through the Energy Corporation, which will be charged back to the industrial consumers themselves. That is not necessarily a bad policy, but it is inconsistent with the Yukon Party's policy, which, on the home page, says that the government will build infrastructure and industrial consumers will come. So, as a government, the Yukon Party is going to respond only to those real life instances and the need for provision of energy infrastructure, but the Yukon Party, as a party, is going to respond to the fantasy world of the need to provide infrastructure in the hopes that industrial consumers will come along and just plug into the system, and help pay for the entire system, presumably by participating.

That is what we think we have heard from the government about its industrial support policy in supporting energy, or the provision of energy, supply-side pricing for the development sector. It is a confused and inconsistent message, and certainly one that needs considerable work.

What have we heard from the government when it comes to the provision of alternate energy sources, apart from the Division Mountain coal project? We are on the Carmacks train now. We are barreling down the track and we are going to have this thing no matter what, according to virtually everything the government says and does.

What is the government doing to support alternatives? The Yukon Party's four-year plan says - I do not know why I keep referring to it because so many of its provisions have been abandoned - that alternative hydro and wind power will be promoted, as will coal, which is its third priority. So, what happened to hydro and wind? We have heard virtually nothing about hydro or micro-hydro. We have heard some benign words from the Minister of Economic Development about wind and the suggestion that there is no real need to consider things further, because the wind turbine on Haeckel Hill will, at some point, give us some information, and then we will simply wait to see what happens.

Basically, however, there has been no creative political energy applied to looking for alternatives. That is not only a sad commentary on the commitment in the four-year plan, it is also a sad conclusion one might draw about the Yukon Party's commitment to the whole search for alternate energy sources.

I would be remiss if I did not mention that the four-year plan also talked about connecting the Mayo dam to the main power grid. That is something that we have heard virtually nothing about, either, from the time that the Yukon Party announced that it would be promoting this particular initiative.

All we do know is that, while there has been virtually nothing done in promoting alternate energy sources, there have been hundreds of thousands of dollars spent in both contract time and staff time promoting the coal project.

What about coal? The government appears to have drawn the conclusion that there will be coal-fired electrical generation in this territory.

The first question is this: does it pass the economic tests; does it pass the financial tests; does it pass the environmental tests?

There is a lot to talk about here. It has passed no tests yet, other than the political test, and that is this: the government wants it.

We have been given fairly clear signals from the Department of Economic Development that if any researchers there want to talk about any of the extraneous things like alternate energy sources, they can do so, but they have to focus on the main bread and butter of the department, which is to research and justify the coal project.

Can the government say that it knows whether or not the project is financially feasible? No, it cannot. Can it say it is environmentally feasible? No, it cannot. Has it consulted with people about the project? Well, it has consulted with Cash Resources. Cash Resources has already indicated that it is prepared to construct a 40- to 50-megawatt plant. As long as it gets a 20-year contract with the territorial government to purchase the energy, it is a go.

Has the government talked to the consumers about who is going to pay if mines do not hook up to the generating station? Has it told the mining companies that they had better start locating their mines near power lines? Is Loki Gold going to benefit from the Division Mountain project? Would the project at Dublin Gulch benefit from the Division Mountain coal project? Would the Cominco property near Watson Lake benefit from the Division Mountain coal project? These are all new mines that are still in the permitting stage.

They are all far from the Whitehorse-Aishihik-Faro grid. There are so many unanswered questions about this project. There are so many questions that need to be answered before the decision is made, before taxpayers and ratepayers are committed, and the deed is done. Yet we appear to have as clear a political commitment to pursue this as one could possibly imagine.

If there was ever a project or commitment that begged the need for good public discussions - not a one-day wonder - this is it.

Quite rightly, the government makes a lot of the need not to burden future generations with risky projects of today. Here the government is blindly talking about taking on a hefty mortgage, with only the slightest political rhetoric to justify it. With this vision that mines will plug in and start up because of this coal-fired electrical generating project, some people are under the misapprehension that there is no, or very little, financial risk to this project, because there are all these mines at the permitting stage.

There have always been lots of mines at the permitting stage. Many times there have been many mines at the permitting stage. What has been quite clear over the last 20 years is that some of those mines proceed and some do not. Some are located near the electrical distribution system and some are not.

There has to be some clear-headed thinking by someone who really cares about planning and can draw in the best minds this territory has to discuss these questions in a cool and level-headed fashion.

The government should demonstrate that carbon dioxide emissions are lower with coal-fired electrical generation then they are with diesel generation and what the cost of transporting diesel is to the Yukon before making any commitments.

It is absolutely essential that we have honest information about projects like this, because not only can there be a financial deficit associated with this project, there can also be an environmental deficit that we will bequeath to our children, unless there is clear thinking.

If there is going to be a financial risk, and there will be, then that risk should be clearly stated to the public well in advance of any commitments being made to any mining company or any promoter, and there should be some notion that the public is prepared to assume that risk.

I realize I am taking some time here. I would like to simply provide a bit of a summary about what some of the concerns are and make some suggestions for action in the future.

Essentially, the concerns boil down to this: there is no clear, consistent thinking in government about what its stand is on energy supply, energy rates or energy conservation. There is no clear-headed thinking about how that is intertwined with economic activity or how environmental commitments will be met - commitments that we can only assume, and I have stated them, that they respect and are prepared to live by. These are issues that need proper thought and planning.

In the last three years we have bounced from one project to the next, from one position to the other, and inconsistent positions have been taken by the government - even between Ministers - about what should happen and even on should there be an energy policy or if there is an energy policy.

We have had concerns expressed, not only to us, but directly to this Legislature, that the government is only paying lip service to its environmental commitments. Concerns have been expressed that the government has downgraded the whole notion of conservation when it comes to energy - what has been referred to as demand-side management.

If there was ever a time to be consulting the public and bringing the best minds together on this question, it is now. I would ask the Government Leader to be aware that most people believe that public consultation is more than a one-day conference.

One of the most frustrating elements of the Council on the Economy and the Environment's conference last year was that it just - as one person told me - got past the title page. It just started addressing what was on the agenda when the conference closed. It just barely scratched the surface of the issues that are front and centre in people's minds, and all the claims in the last few years that somehow the Yukon Utilities Board has been carrying on consultation are nonsense.

Not everyone goes before the Yukon Utilities Board to state a case. The Yukon Utilities Board does not consider all matters related to energy policy. The board has a very specific mandate, and an even more specific and narrow mandate than it had before.

A lot of people have good ideas. There are many issues that are only being given lip service, in terms of planning by this government. What we need is for such planning to take place. What we need is a comprehensive energy policy. We still need the policy. We still need some clear-headed thinking.

I hope that, with the motion made this afternoon, we can once again begin to raise the issues that are important to all Yukoners and to encourage everyone to apply some thought and bring some substance to the debate about energy supply, energy conservation, environmental concerns, quality of life, how this relates to the economy and what we expect in terms of economic activity.

We also need to know how we should promote sustained economic growth, what it means to have reasonable energy costs and what price we are prepared to pay for those costs.

If this Legislature can encourage the debate to happen, then at some point even a new government can once again embrace this issue and get something of substance done.

Hon. Mr. Ostashek: I would like, first, to thank the Members opposite for bringing this motion forward. With a few minor, friendly amendments, we will have no difficulty in supporting this motion. I am especially thankful the Members brought this motion forward so I could take this opportunity to expose the NDP bluff on an energy policy, because that party does not have one. It has never relayed to Yukoners what it would do if it formed a government. If the Member opposite in his rebuttal wants to refer to the Mickey Mouse energy policy that he put out a while back -

Some Hon. Member: (Inaudible)

Speaker: Order. The Member's name is not Mickey. There was a Mickey Fisher.

Hon. Mr. Ostashek: I did not call anybody Mickey Mouse. I said a Mickey Mouse policy. It is basically a joke, and I will lay that out in the debate this afternoon.

I want to talk about several areas this afternoon. I find the debate contributed by the Leader of the Official Opposition somewhat out of line with the motion that was put forward. He spent most of his time talking about a coal project that he is trying to lead Yukoners to believe has already been approved, and that simply is not a fact. I will prove today that it is not a fact. This is the continuous smoke-and-mirrors way the Opposition has to get the message out.

It was a do-nothing government they had on this side of the House, and now their position has changed 180 degrees in Opposition, because they think it is good politics. I will give you some prime examples of that in the debate this afternoon.

I want to cover about four main areas this afternoon. I may be somewhat disjointed because I have not had time to properly prepare for this debate. However, I will try to keep it flowing as freely as possible.

I want to speak about the NDP position on electrical rates and the comprehensive energy strategy of the NDP when it was in government. I also want to put on record this government's policy and position on energy matters. I want to speak a little bit about the general rate application process and the Yukon Utilities Board - issues the Member opposite raised.

I think it is important that we go back and examine the record of the Official Opposition when it was in government for almost eight years. I want to examine its record on energy policy development and what that government did about energy rates in the territory. I think we need to do that, in order to compare it with what this government is doing today and how far we have advanced in three short years, compared to eight years of NDP administration. I think that is very important.

I also want to address the allegations that we have abandoned demand-side management because, again, those allegations are simply not true. They have no basis in fact whatsoever.

I also want to address our environmental commitment and state why I believe that our record on the environment is far better than that of the NDP when it was in government. We need only look at a couple of projects. I do not even have to go into great detail about that. All we have to do is look at the Dawson City and Whitehorse sewage problems to see what the NDP would not do and what we committed to do - and did do.

For a moment, let us examine the NDP's policy - or lack of policy - on rates and what the NDP believed rates should be in the Yukon, because that party has not told anyone. It has not said to the people of the Yukon, "If you elect the NDP, this will be the policy on electrical rates."

I want to put the Members on notice now that, during the next campaign, they will have to do that. I will see to it that they do that. They will not get away with smoke-and-mirror statements, as they have in the past.

If we look at the record of the past NDP administration - looking at what it took from the ratepayers of the Yukon while giving absolutely nothing in return - during its eight years, rates increased for all consumers. No action was taken by that administration.

Like our government, that administration stated that rate setting is the responsibility of an independent utilities board, and it could not interfere. What a change of position when those Members sit on the Opposition benches.

There is all kinds of evidence of statements such as that being made by those Members when they were in power. That administration set up the Yukon Utilities Board. It issued the mandate for the board. Consumer electrical rates increased dramatically under that administration, and it did nothing to stop it.

Unlike this government, that administration took the dividends from the ratepayers and invested them in the likes of the Watson Lake sawmill, which lost millions of ratepayers' dollars. It took the dividends and invested them in loans to Totem Oil and to the Taga Ku. It played around in the private sector markets. The NDP government was going to be a big entrepreneur. It lost the ratepayers' dollars. That is what that administration did for the ratepayers of the Yukon - i

t took the dividends from the ratepayers, increased the rates and subsidized the Faro mine on the backs of the ratepayers. Those were that government's accomplishments with electrical rates in the territory.

Now that they are in Opposition, they just sit there and whine, "What are you going to do about the power rates?" I am going to find out what they are going to do about the power rates, because, if I listen to their political rhetoric and their public statements, it sounds as though they are asking for a 30-percent increase in power rates,.

I do not believe that the former NDP government was sincere at all in its long-term efforts to reduce rates. It certainly did not demonstrate that. It did not do anything to reduce rates; it increased rates. I believe that many people would even consider that to be misleading.

The Yukon government believes that the best way to control rates in the future is to develop cheaper sources of power that would use local energy resources and employ Yukoners. I have made this statement on numerous occasions and this is the appropriate time to make it again: as long as we continue to import diesel fuel to create electricity, we will be exporting jobs that Yukoners deserve, want and need. Any government that does not take the responsibility to try and create our own energy sources in the Yukon and create those jobs for Yukoners is not dealing with the energy issue in a serious manner.

When the NDP government was in power, it was quite prepared to sit back and watch diesel fuel being imported into the Yukon. It did absolutely nothing to curtail the importation of diesel fuel. The truth of the matter is that, in eight years of power, the NDP government did not add one single kilowatt of hydro, coal, wind or wood capacity to our electrical system - not one single kilowatt. The previous government did absolutely nothing; it was a disgrace.

Now, the previous government sits there in the Opposition benches and rants and raves about alternate energy. It did absolutely nothing. It was a disgrace. What is more disgraceful is the way the Member opposite goes around with smoke and mirrors to take the high moral ground saying that his government did all of those good things. I ask the Member to stand up and state for the record what the previous government did. I am saying that it did not produce one kilowatt of alternate energy and I want it to stand up and tell us where it came from.

I can tell you what the previous government did do. It appointed select people to the board of directors of the Yukon Energy Corporation to approve new diesel generators for Whitehorse, Faro and for Dawson City. That was the New Democratic Party's energy policy: more diesel generators, more Yukon jobs being created in Alberta and other jurisdictions in the south. That is what the previous government did - the defenders of the working man.

I believe that many Yukoners may say that the New Democratic Party has been somewhat misleading to consumers about its position on electrical rates. In a recent New Democratic Party economic policy paper, which I referred to earlier, there are some pretty silly and ridiculous statements made that indicate that the New Democratic Party does not know what it is talking about - and that does not surprise me - or it thinks it can fool the consumers with a lot of poppycock talk and no action. I think it is a disgrace.

What did they say in that economic policy paper? They said this: they want to ensure that electrical rates are fair to consumers while reflecting the true cost of production. That is what they said.

We hear so much from the Official Opposition about power rates being too high. I have heard them state that many, many times. I can only assume that what they mean by "fair rates" is lower rates. That is the assumption that I would make from that statement. Yet, they are fully aware, but they choose to ignore it, that residential consumers do not pay the full cost of service now. They do not pay the full cost of production right now.

They are heavily subsidized through rate design, which the Leader of the Official Opposition spoke of, whereby the government pays, I believe, 145 percent of the cost of service, as well as through the rate-relief program. Consumers are not even paying the true cost of production now. How can the NDP believe the rates can be lower? I believe they must mean lower when they say "fair". I could not interpret that any other way. How can the NDP believe that rates can be lower and still meet the true costs of production.

That is what I mean by smoke and mirrors. That is what I mean by silly statements that they are asking Yukoners to accept. As I said earlier, they are advocating a 30-percent rate increase, or their paper is misleading the public. They cannot have it both ways.

They cannot make a statement that ensures that electricity rates are fair to consumers while reflecting the true cost of production without having a 30-percent increase in rates. That is what they are saying to Yukoners. If that is their belief, why do they not come out and say so, instead of making these foolish statements? Either that, or they just simply do not understand what they are talking about, and I believe that might be more the case.

Are electrical rates high in the Yukon? Residential consumers in the Yukon pay less for electricity than anywhere else in the north. Some communities in Alaska pay over $1.00 per kilowatt hour. Residential bills in the Northwest Territories are higher in every community than in the Yukon. The cost of service in northern Manitoba is three times as much as it is here, although consumer rates are subsidized by provincial rate equalization.

It is true that every Yukoner, including me, would like to pay less for power. There is no doubt about that. We would also like to pay less for home heating oil. We would like to pay less for gasoline. There are a lot of things that Yukoners and I would like to pay less for, but we have to face reality.

I believe that the reason why Yukoners complain loudest about power rates is because the NDP has politicized the issue. It has not given Yukoners the true facts, and I pointed that out in the statement the NDP made about ensuring that electrical rates are fair to consumers while reflecting the true costs of production. I am sure that the Member for Riverside could not help but agree with me on that.

Through their political rhetoric, they have tried to make the Yukon public believe that government sets the rates and that government can lower the rates. We know that is not the truth; they know that is not the truth, but that is what they have tried to get consumers to believe.

The truth is that electricity bills have increased less than the rate of inflation since the formation of the Yukon Energy Corporation in 1987, even with the dramatic increases the Opposition had when it was in power. Bills for residential consumers are on par with other major Canadian cities, including Toronto. Yukon's rates are lower than in the Northwest Territories or Alaska.

As I said in my opening statement, the NDP has never once, in all their political rhetoric, told the public how they intend to improve the situation. They have not offered any viable alternatives. There has not been one well-thought-out recommendation. All the NDP has done is to try to get the public to believe it is paying too much for power in the Yukon and it is all the government's fault. That has been the agenda of the Opposition, and, frankly, I am disappointed in it, as I am sure many Yukoners are.

The Leader of the Official Opposition made a lot of statements in the short time he was on his feet. He alleged that we have made a commitment to build a coal-fired plant; that simply is not true. We are investigating the possibilities; we believe it is a viable alternative to be looked at, but there certainly has been no decision made.

He spoke a lot about the costs of a coal-fired plant. He asked where the demand for the power is, yet he either does not comprehend - I can understand that - or he is intentionally avoiding the amount of diesel that could be replaced by a coal-fired plant.

I have said it publicly - and most Yukoners are fully aware of it - that even with just the Faro mine back on the grid and the population increase, we are using diesel 11 out of the 12 months, beginning last September and going to August of this year, to supplement hydro on the grid. This is without any new development.

We need added sources of energy to replace the diesel we are importing into the Yukon and to replace those jobs that we are exporting to Alberta. We want jobs here in the Yukon for Yukoners. We are not even talking about the projects that are coming along.

That is the situation we are in now. It is a situation that is the direct responsibility of the previous administration, which had no vision for the future and did no planning to increase the base of supply in the Yukon. It was quite content to bring in new diesel generators and export jobs to Alberta.

The Leader of the Official Opposition made the statement that there was no creative political energy being expended to look at alternatives. Where was that government for eight years, during which it added not one kilowatt of power to the grid, other than diesel?

I want to speak a bit more about the history of the NDP before I lay out our energy policy and our vision for the future before the Legislature and the people of the Yukon and why we believe that the only way that we can control electrical costs in the Yukon is to expand our own energy base, be it hydro, coal, wind, micro-hydro or something else. We have to expand our own energy base. We cannot continue to import diesel fuel to the Yukon to create electricity.

I had some notes made up a while back when the Member for Riverside had a motion on the paper that was very similar to this motion - so much so that when I reviewed the notes today I saw they apply to this motion as they would have applied to the Member for Riverside's motion. I have pulled those notes and I will go over them and make some points.

The previous administration - now the Official Opposition - talked about a comprehensive energy strategy initiative. The motion presented by the Member for Riverside suggested that the government should continue with that comprehensive energy strategy initiative that was started by the previous administration. Again, while this motion deals with a comprehensive energy strategy, I believe it is appropriate to take the time now to set the record straight about the former administration's perspective on the energy sector and its development of a comprehensive energy strategy. I think it is important to do this before I hold up this government's energy policy as a comparison to what the previous administration neglected to do.

The previous administration, after purchasing the assets of the Northern Canada Power Commission, found that the system was in such poor shape it required over $40 million in upgrading during the first five years of operation. They were the administration that bought the system. They were also the administration that agreed to subsidize the rates for the Curragh mine by raising the rates for other customer classes on the system. That was an action that has caused the rate structure problems that this government is still attempting to deal with today.

It was the government that created the regulatory regime that was totally disproportionate to the size of our utilities being regulated. That regime cost the ratepayers 10 times more per customer, on a per customer basis, then any other province in Canada. They were the government that zealously preached the virtues of renewable energy, but as I said previously, it did not add one single kilowatt of hydro-based energy to the Yukon's electrical system - not one.

Now they ask about hydro. It was their government that did those things. That was the government that also took pride in its support of alternate energy but, in eight years, not a single kilowatt of capacity from other energy sources - wind, solar, wood co-generation - was added to our electrical system.

The rhetoric we hear from the other side of the House now is, "What about alternate energy?" What did they do in eight years in power? As I said earlier, what they did do was approve new diesel generators in Whitehorse, Faro and Dawson - exporting Yukoners' jobs to southern Canada again.

To be fair, they started some other things. The former administration did launch a two-year planning initiative, designed to produce an energy strategy for the Yukon. It did that. It had staff from the Department of Economic Development conduct consultations in most Yukon communities. An energy strategy was drafted and reviewed by all stakeholders. It was then redrafted and sent to Cabinet for approval - the NDP government in the Yukon did that - and there it sat, never to move again.

Two years of planning and consultation were wasted. Why was it wasted? The Member for Faro says it was because we were elected. Well, we were not elected until two years after the consultations were held. The NDP had plenty of time to act on them, but the government of the day, which prided itself on consultation, did not like what the people of the Yukon had to say, so they shelved the strategy.

What did the people of the Yukon say during those consultations? They said they wanted affordable energy, power for industry, and a chance to buy in. That is what Yukoners told the NDP government, and that is what the NDP government did not like - so it did not proceed.

Now they sit there and criticize. They did not see energy as a social issue or as an environmental issue as much as they saw it as an economic issue, but that is where we come in. The former government may not have been willing to listen to the people but we know what those consultations produced. We got the message loud and clear, and we are acting on that message.

Over the past several years, Members on the opposite side of the House - more than others, the Member for Riverside - have stood and asked us on several occasions if we intend to develop a comprehensive energy policy. We have stood on this side of the House and said yes, we are developing a comprehensive energy policy - and we are. I will shortly lay it out for this Legislature.

In hindsight, because the Member for Riverside was the president of the Energy Corporation at one time, it is now fairly obvious to all Members that we were not talking about the same thing at all. I will leave it to the Member for Riverside to explain to Members what he thinks a comprehensive energy policy should be, but I would like to tell Members what I think it looks like from our perspective.

We said we would take a modular approach to the development of a comprehensive energy policy by dealing with the issues one at a time. When we first came to government, it seemed fairly apparent that some energy issues required immediate attention while others could be set aside for another day.

The first step we took was to redefine the mandate of the Yukon Development Corporation and to limit its operations to energy-related projects, principally the ownership and management of the Yukon Energy Corporation. In doing this, we put a stop to the former government's practice of taking the dividends from the ratepayers of the Yukon and using those dividends to finance other economic ventures such as, as I stated earlier, the sawmill that lost millions and millions of dollars. In the first six months of our mandate, I believe, we stopped that happening.

As a result of that, we have had dividends to give back to the ratepayers, which I will talk about in a moment.

We promised Yukoners that no longer would the government take the profits from their electricity bills and invest in ill-fated ventures. We said that that money would go toward building a better and bigger system; we said it would go back to rate relief, and we have kept that promise.

I believe there has been over $6 million of Yukon Energy Corporation earnings that went back to residential and commercial ratepayers in the Yukon. We could not have done that if we had maintained the practices of the former administration of bleeding off dividends for other ventures. We were able to do what we did, and I am proud of that.

The other priority we saw was to have enough energy to ensure an adequate supply of affordable energy for the mining industry. Again, we differ from the previous administration. Unlike that administration, we do not believe that it is a role of government to create industries that compete with private sector companies. We believe the government should focus its attention on creating a receptive and supportive environment for private sector investment and growth.

Through our industrial support policy, which Members opposite do not like - I can understand why; they never thought of it - and our infrastructure loan programs, we offer support for mine developers to meet their energy and infrastructure requirements without putting Yukon consumers at risk. I believe that is something that has been debated time and time again: how to find the balance of providing power for growth without putting consumers at great risk.

Now that we have these support programs in place, our government is turning its attention to the development of new power plants, such as the possibility of a coal project, if it meets all the criteria. I will say again for the record that this project has not been approved by this administration, even though the Leader of the Official Opposition tried to leave that message with the public.

We are also turning our attention to doing some long-range planning, with a vision for the future, to the development and expansion of transmission lines that are capable of serving potential mine developments such as Carmacks Copper, Minto, Brewery Creek, Drury Creek and possibly Cominco at Finlayson. We are doing the planning. It may be years before these lines are built, but there will be a plan, so that when they are required, they can be built.

We are also now working with the staff at the Yukon Energy Corporation - and we are getting into the process intensely now - to fully explore the potential for thermal coal, which I have already said. I believe the coal at Division Mountain is situated at an ideal location to service the grid. That is not to say that it has an inside track for future power needs in the territory.

We are also now looking very seriously at the extension of the power grid from Carmacks on north to pick up Carmacks Copper, Pelly Crossing and Mayo, where we can run power in both directions. We have a facility at Mayo that, because of the lack of a power grid, has been letting the water just go over the dam, not creating electricity. I believe there is the potential for five megawatts of power and it is producing three-quarters of a megawatt. That is an extreme waste, in my opinion.

If we can build the power grid through to Mayo, we will then have the ability, if the power is not all required there, to put the surplus power into the grid and use it where required to replace some of the diesel generation occurring at the Whitehorse dam right now. If more power is needed near Mayo for more development, we can then push the power the other way. Those are some of the long-range plans. That is some of the vision that we have, which the Opposition did not have.

We are also considering the future potential of a grid extension from Mayo to Dawson, as an inter-tie. If I remember it correctly, in 1989 the NDP, for purely partisan, political reasons, embarked on its prebuild plan to extend the line from Dawson outward and said that it would be the prebuild of the extension from Mayo to Dawson. Yukoners were informed later that if in fact the grid extension went from Mayo to Dawson, it could not go on that route. It was purely a political move and the NDP Members know it.

They know it. As I said, many of these lines may not be economical for years to come, but at least the planning will have been done for them and there will be some vision for the future.

I should note that electrical infrastructure development for industry and protecting residential and commercial consumers from high rates are the types of energy initiatives that my government has undertaken and will continue to undertake. I believe that we can do it.

Again, we have unfortunately had to spend a considerable amount of time dealing with issues arising from the mismanagement of the electrical system by the former administration over a period of years. Let me talk about two examples from early in our mandate - just when we were coming into power - one of which was the regulatory system for ratepayers and the structure of problems that resulted from the former administration's unconscionable use of inter-class rate subsidies, such as to the Faro mine. This was done on the backs of the residential consumers of the Yukon. That was the type of philosophy the former administration had. That was how it was going to protect the ratepayers of the Yukon from higher power rates. Once again, power rates went up during that administration. They did not go down, and they would not have gone down if the NDP were fortunate enough to get re-elected. They know it, and I believe that Yukoners know it.

I know this is painful for the Member for Faro, but I am afraid that the Opposition brought the motion forward, so it will have to sit and listen to this. I know it is painful, but the Member for Faro will get his turn.

We took the initiative and restructured the regulatory process because, if I remember correctly, the rate hearing previous to this one cost in excess of $1 million. It was an unbelievably expensive process, put in place by the NDP administration. I do not know why we would wonder about that. It is a party that believes in process, with very little in results. It ties everything up in process, and it certainly did that in its restructuring of the rate hearing process in the Yukon.

It was so cumbersome it could not help but cost money, and it did. Approximately three percent of consumers' power bills went to the regulatory system. This government restructured that, and when I come to discuss the details about what happened at a recent rate hearing, one will be able to see that there has been a marked improvement in how we set rates in the Yukon, and great savings to the ratepayers.

The government revised the rate design order-in-council. This government restructured the board and brought in some expertise that was sadly lacking on the board. It is good to have Yukoners on the board, and we need Yukoners on the board, but we also need expertise. I believe the restructuring of the board - even knowing there were Opposition Members' concerns about our restructuring - has proven to be successful. The government will save ratepayers a lot of money in the future.

I want to speak a little bit now about demand-side management, and I will say more about it in my closing remarks. I know this is an issue of great concern to the Member for Riverside, and I guess it goes back to when he was president of the Energy Corporation. There seems to be a perception that we have abandoned demand-side management, but that just simply is not the case. We have not abandoned it at all, and I will give some examples of some new initiatives we have taken. But for the most part - and I believe it was the Member for Riverside, when he was president of the corporation, who pushed for the power smart and demand-side management programs - they were designed to assist electrical consumers to conserve energy.

It is also important to note at this point that, although the former government did nothing to enhance the electrical system's ability to supply power, it did introduce a number of loan programs designed to assist consumers to conserve energy in their homes.

The fact of the matter is that both the power smart and retrofit initiatives were quite successful. There is no doubt about that. As a result, most of the gains projected by the programs have already been achieved. There is always room for improvement, but the government has made people aware of the benefits of conserving energy and has ensured that energy-efficient products are available to consumers through retail outlets in Yukon.

If conservation is the best economic choice for the consumers, then surely they can make their own choice, without further subsidies from the government. The program worked, is continuing to work, and we do not believe that further subsidies are required.

We are committed to energy conservation in three ways: we continue to initiate and support programs and offer information to consumers about the benefits of conservation; we encourage the use of life-cycle costing in determining the value of conservation measures in new government buildings, and we have moved ahead dramatically in that area; we will ensure that the utilities give full consideration of conservation options in supply planning. This is done through the use of integrated resource planning processes, which, I would ask the Members in the House to note, are fast becoming an industry standard. It is no longer necessary to budget money specifically for those things. They are part of the normal practice of utilities today.

I also believe that when the Member for Riverside put forward his motion, and I believe it applies to this motion as well, he included the use of carbon-based fuels.

I am assuming that in the Member's interests in alternate energy and renewable energy he was implying that the policy be required to limit the use of carbon-based fuels, or to replace them with renewable energy sources. My government does not share that perspective at all. We believe that the expenditure of some $100 million of ratepayers' money to import fossil fuels is doing little to support the Yukon's economy. But

we also believe that it would be more desirable to utilize local energy sources, rather than diesel, to generate electricity in off-grid communities. Diesel plants produce air emissions, are noisy and they smell.

No matter what we use for energy generation, it is going to have environmental impacts and, at our stage of development, diesel is sometimes the most economic and prudent supply option. I would think that the Member for Riverside, having experience in the corporation, would be able to relate to that more than other Members in this Legislature.

When the Member for Riverside talked about carbon-based fuels, I believe he was primarily concerned with refined petroleum products. When our government thinks of carbon-based fuels, it thinks of local energy resources, which are capable of producing cheaper energy for industry and providing, as I have said time and time again, jobs for Yukoners. I believe that, as a government, we have a responsibility to do everything within our power to create those jobs for Yukoners.

Burning that diesel fuel causes carbon dioxide emissions. Hauling that diesel fuel to Yukon causes carbon dioxide emissions. Producing that diesel fuel at the refineries causes carbon dioxide emissions. It does not matter whether that carbon dioxide goes into the air in the Yukon, Alberta or Ontario; it is still going into our atmosphere.

If we can offset that and create jobs for Yukoners, that is what my government is all about.

Currently, there is some 700 million tonnes of known coal reserves in the Yukon. As I mentioned before, there are deposits that are very close to the grid. If we listen to all of the debate and all the political rhetoric of the recent years, the myth has been perpetuated that renewable energy sources have no environmental impact, while coal is a dirty fuel. That myth has been perpetuated by people who, I do not believe, are fully informed.

I would like Members of this House to ask Yukoners about how they feel about having another stream or river dammed for a hydro project. I would like them to ask Yukoners how they feel about having another valley flooded.

Then, I would ask them to think of a state-of-the-art coal plant, which has similar carbon dioxide emissions to diesel generation and minimal particle emissions due to scrubbers and temperature controls.

We believe that there is a future for coal thermal generation in Yukon, and it is our government's intention to ensure that coal is given equal consideration with other energy sources. That is all we have said up until now. We have not said that we are going ahead with coal and not look at anything else. We have not taken that position at all, no matter what the Official Opposition says. All we have done is something that the Official Opposition would not do, which is to examine the use of coal. The NDP government would not, yet it would continue to import millions and millions of litres of diesel fuel to the Yukon to create electricity and it would continue to export Yukoners' jobs. That was the energy policy of the NDP administration, but it is not my government's energy policy.

Let us talk about alternative energy sources. What is this government doing for alternative energy sources?

This government has addressed that quite clearly and we will continue to do so. I will provide Members with further information in my wrap-up. This government is looking at alternative sources that we believe are applicable to the Yukon and can work, but if Members opposite are referring to unproven, experimental technologies, such as in-stream generation, cold-water slurry, or capturing methane from coal or manure - we do not have many cows in the Yukon; I think it would be hard to gather methane from that source - then I will have to be very frank and tell you that this is not a high priority of this government at all.

I believe the government must be pragmatic in its expectations of what can be reasonably achieved in the Yukon.

We simply do not have the means to support this type of research and testing for unproven technologies. It is, in my view, more appropriate that we adopt new technology that has been tested in other areas, then adopt that technology to our northern environment.

That is what we are doing, and that is what we will continue to do, and I will give a few examples.

We continue to support Yukon Energy Corporation's wind turbine demonstration project on Haeckel Hill. This is standard technology that is used around the world. We are not creating anything new. Wind generation is proven in other areas and we believe it offers great potential in the Yukon as a source of peaking generation, particularly in winter periods when wind energy is most available. I do not think many Members opposite believe that we can use wind generation as a base load, as it is just not dependable enough, but we certainly believe that there is a use and a place for wind generation in the Yukon. The Yukon Energy Corporation will continue its testing program and I do not have any doubts that we will see the introduction of new wind turbines in communities where the economic benefit of installation can be proven. We are doing wind monitoring now in Old Crow, where we believe this type of application holds some promise. Once we have more data available on wind, we will be looking at using wind to supplement diesel in that community. There are other communities also in the Yukon where that type of application can apply. There is no doubt about it, and I am enthused about it, but, again, it is not the be-all and end-all to our power needs in the Yukon.

We also brought in the non-utility generators policy. Here again, we are looking to independent power producers to help supply us with power, either to the grid or to areas that are off the grid. Our policy basically addresses that. What we have done - and I think we have already changed the Public Utilities Act, - is to allow non-utilities generators to sell power to the electric utilities or to an individual industrial customer on an unregulated basis.

We also said that we would be interested in purchasing power from non-utility generators if the power could be offered at a price lower than the utility can produce it for, but it has to be reliable power. It has to be at a price that is cheaper than we can produce it for ourselves. We have put that policy in place and that policy will help in some areas. Micro-hydro, I believe, has a great opportunity there.

There are other issues with the non-utility generators that remain to be resolved, but they are not issues that we have to deal with immediately. That is why I believe that the approach that we have taken, by working on our energy policy on a sector-by-sector basis, will deal with the issues that have priority; we can set aside the issues that do not have a high priority and deal with them when they arise.

One of those issues has been dealt with in other areas and has caused great controversy. It is one we have not tried to deal with here yet because we do not believe it is necessary. It is the issues of retail wheeling and deregulation that are going through a period of rapid transition in other jurisdictions.

We do not have any demand for that right now and it may be years in the future before we have that demand. We believe we can let someone else expend the money, get the kinks worked out of the system and then apply what works to the Yukon.

This government will allow micro-hydro projects to set up and supply power for themselves and sell their excess to us if it is a reliable source of energy. If it is not a reliable source, the government cannot enter into a contract to buy that energy.

This government has taken those initiatives, but we are not prepared to enter into contracts with non-utility generators that cannot provide a reliable energy supply. This government will not enter into contracts to purchase intermittent surpluses, because it does us no good for the size of utility that we have.

I believe this government has policies in place that can absorb risks. Those policies, together with creative thinking, can put other projects on stream in Yukon to create a broader base and to lower, in the long run, the energy cost to consumers.

I do not care how much political rhetoric comes from the other side of the House, there is no way that they can come up with lower power rates for Yukoners if they are going to go by the statement that they issued to the general public not too long ago: "ensure that electricity rates are fair to consumers while reflecting the true costs of production". Members opposite know it; I know it and Yukon consumers know it. That statement would mean an increase of 30 percent in consumer power bills.

What is my government doing, other than what I have already told you? In closing, let me re-cap a few things for you.

I want to go through the points of the motion. Point (a) is that the government's current energy and environmental policy should be substantial, cohesive and compatible with each other. In my opinion, they are. Let me demonstrate why I believe they are. Regarding the issue of substantial, cohesive and compatible energy policies, we raised that in our energy plan tabled in November 1995, and we have made substantial commitments that combining energy and environmental goals.

Let me tell you about some of the things we have done. We will develop air emission regulations, as part of the Environment Act, to take effect by 1997. We have developed an implementation plan for government commitments to the National Action Plan for Climate Change in 1996. In November 1995, Cabinet endorsed a 10-point plan to help reduce energy consumption and its impact on the environment.

I would now like to take a few moments to go over the 10 points. The Members opposite either choose to ignore what we are doing or do not want to acknowledge what we are doing.

We have adopted the National Energy Code for houses, and the National Energy Code for buildings is being considered in the Yukon. This will save energy and reduce emissions from the use of heating fuels. Yukon input was provided for two public drafts, and most of the changes to the public draft that were requested by Yukon were made. These were constructive changes to improve the code.

We have adopted an energy management plan for schools, starting with a pilot project designed to reduce energy costs. The costs are funded from savings from no-cost and low-cost measures. I am very proud of this project. Let me give you the encouraging results of the first year of this pilot project. Over $70,000 in savings in six schools have been confirmed. This is double what we expected. Greenhouse gas emissions are calculated to be down 7.6 percent after one year.

This is the government the Opposition says is doing nothing. The Member for Faro says it is doing absolutely nothing. I can see he is in great pain listening to me putting this on the record.

With respect to the energy management plan for government buildings, an initiative to reduce energy costs in government buildings is proposed. We are extending the energy management plan from schools to other government buildings. Government Services is setting up an energy management plan for buildings to meet its commitment in the energy plan.

We made a policy decision in Cabinet not long ago that all new government buildings would be designed and structured for dual-fired furnaces, so that if we ever increased our base load - be it from coal or hydro - and have surplus power, we would be able to sell that power, on an intermittent basis, to lower energy costs for Yukoners. We are doing it in the government to show it will work. It will be incorporated into all new government buildings.

With respect to energy efficiency loans, financing mechanisms will be used to leverage investment in energy efficient retrofits of buildings to reduce heating and energy costs. Energy efficiency loans are now administered by the Yukon Housing Corporation as part of its existing loans program.

With respect to the surplus energy utilization pilot project - this is the one I just talked about - surplus hydro-electric energy is used in two Yukon government buildings for space heat and domestic water heating in off-peak hours to reduce waste of this resource. Provisions for surplus electricity sales, so equipment can be easily installed later, is being done where the installation of equipment can be justified initially, such as in the new visitor reception centre. Other locations are being investigated, such as the hospital.

In order to comply with the new national energy code, there will training for building inspectors and related trades people in the design and construction of homes and commercial buildings. Benefits similar to the effect of R2000 training in improving house quality are expected. Training requirements will be determined once the national energy code is adopted.

Continuing support is proposed for wind research projects through the Yukon Energy Corporation's icing research project and possible renewable power-generation capacities added, such as hydro, if justified. We have the pilot project on Haeckel Hill for wind, and further improvements will be made to the turbine blades to overcome the effects of rime icing. We are working on that issue, and I think that we are going to solve it.

Time-of-use electrical rates are rates to encourage the use of electricity in off-peak periods to make better use of electrical generation. Increased use of hydro-electric power and reduced emissions from diesel generation are expected.

The utilities have discussed an automatic meter reading pilot project with the city. Automatic meter reading would facilitate the introduction of time-of-use rates for secondary electrical sales. The Yukon Electrical Co. Ltd. is considering submitting a new secondary energy rate proposal to the Yukon Utilities Board for approval, when needed, for a possible pilot project.

Ozone depletion regulations are regulations to reduce emissions of ozone-depleting substances. The Yukon government agreed with the Canadian Council of Ministers of the Environment commitment to develop these regulations. The regulations have been requested by Yukon air conditioning and refrigeration businesses. The regulations have been passed by the Legislature. Some companies have now registered under the regulations. It is required of those handling ozone-depleting substances. Implementation of that project is proceeding.

The National Volunteer Challenge initiative encourages, facilitates, manages and registers commitments by industry and government to develop plans and to take actions that reduce greenhouse gas omissions. This is an intergovernmental initiative. The national registry has been set up by the federal government, with the involvement of all provinces and territories. The Yukon has contributed financially to this national registry.

So, we are doing things in those areas. We are also encouraging the development of energy management services in the private sector by developing a services inventory and referral system. We are constructive in our participation in rate regulations, federal water use permitting and the environmental assessment processes related to energy projects.

While I am speaking about the general rate application, I would like to bring the Members of this House up to date on what is happening with the new general rate application that is just about completed. As I said, the general rate applications set up in the past under a process that was implemented by the former administration tended to be conducted in an adversarial atmosphere.

That is a very formal and a very costly process and, as I said, the one that was going on at the time we came to government cost as much as $2 million; I said $1.2 million, but I was wrong. This year, a cooperative approach was undertaken and the cost is expected to be reduced by about 75 percent from past hearings. I think that is a remarkable achievement, and this is only the first one under the new process. As the intervenors and the utilities and the people on the board get more familiar with the process, I expect it will go a lot smoother. I am very pleased that all of the intervenors, for the most part, and the utilities, worked with the board to come to a negotiated settlement after having many meetings. A settlement was recommended to the Utilities Board, which I understand has been accepted. The participants agreed on a number of issues, including confirming the 1995 interim power rate - something that was unheard of in this territory before. The hearings that were held here before were like a supreme court trial, with lots of lawyers and lots of consultants and lots of money being billed to the ratepayers of the Yukon.

The return on equity is set at 11.25 percent. They established a diesel contingency fund to protect consumers from the effect of fluctuating precipitation in the Aishihik basin. They approved a capital structure. They formed a working group to address energy management, conservation and efficient use programs and rates, and incentives to encourage industrial self-generation when it is in the interest of all ratepayers. They discussed some capital projects. They talked about capital requirements to extend power to new mines to be paid up front by the customer. They discussed revenue requirements. They achieved agreements on these things: land transactions and performance indicators, rate design issues and cost of service allocations will be reviewed by the Utilities Board at a later public hearing.

I commend the people who participated in that process and it proves that, with a little bit of restructuring, a little bit of creative thinking, involving the participants, we can move ahead and have tremendous savings for everyone involved.

I already spoke of the $70,000 that we have saved with the school pilot project and that is very encouraging. I want to speak to the second point in the motion, which states, "The government should adequately research alternative energy sources and prove their economic and environmental sustainability."

I believe I have already demonstrated in my debate this afternoon that our policies and actions to research and develop alternative energy sources prove their economic and environmental sustainability. We addressed that in our energy plan. We have made a commitment to promote the development of Yukon energy resources - not Alberta energy resources like the NDP administration did - and to reduce our dependence on imported fossil fuels.

We will do that by participating in forestry management planning to ensure that energy potential of waste wood resources is fully developed, by representing energy interests in the planning of the development assessment process, by building on our 1994 non-utility generation policy, by developing a strategy to encourage investment in energy projects by non-utility generators, particularly in off-grid communities that are dependent on diesel generation.

We are assessing the potential of under-developed energy sources in 1996, including micro-hydro, wind, waste wood, municipal waste, photovoltaic battery hybrid systems and other small-plant technology. There are a series of papers in the works that will be coming out shortly on these alternative technologies.

We are establishing funding support with partners by 1997 for research and development to promote the use of local energy resources to displace imported fossil fuels. We hope to have a paper out on that this summer.

That covers the second point. The third point of the motion says that the government must identify and meet the needs of all Yukoners to provide sustained economic growth through reasonable energy costs and environmental protection. I believe we are doing that. Through our commitment in the energy plan, we encourage sufficient supply of competitively priced energy for industry and communities. We encourage the Development Corporation to work with stakeholders in developing and presenting a capital plan to the Yukon Utilities Board. The capital plan will fully review the options for electric system expansion, including this.

I ask the Members in Opposition to listen. The capital plan will be reviewed by the Utilities Board, which will include coal, hydro, wind and diesel, non-utility generation and transmission grid expansion. They will both be approved by the utilities board. This is the government the Members opposite say does not consult.

The Department of Economic Development is working with the Yukon Development Corporation to develop the electricity grid expansion strategy that assesses the costs and benefits of new transmission lines to the industry and to communities, and to determine the appropriate levels of Yukon government investment. This government is prepared to back-stop them, if necessary.

And this government has the policies that are so hated by the Opposition: the industrial support policy and the electrical infrastructure loans to resource development program to assist industry to develop roads and electrical infrastructure.

There are a few other points that I would like to add before I sum up. A team is currently assessing the role of government in making strategic investments in electricity infrastructure to support industrial development. That paper should be out soon.

The Department of Economic Development and the Department of Justice are working together to support the development of an efficient and stable energy rate-regulation regime that conforms with the normal principles of regulation. This government is also assessing the costs and benefits to ratepayers of market reform in electrical generation and distribution. We are also developing solutions to the problems of the rural electrification and telephone program.

When we look at the motion presented by the Opposition, I believe that I have given evidence in my debate today, in response to the Opposition's motion, that, as I said in my opening remarks, this side of the House would have no difficulty supporting the motion with a few minor amendments. Because we are doing all of these things, I believe the motion has to be amended. At this time I would move the following amendment:

Amendment proposed

Hon. Mr. Ostashek: I move

THAT Motion No. 105 be amended by deleting paragraphs (a), (b) and (c) and substituting for them the following paragraphs:

(a) the government's current energy and environmental policies are substantial, cohesive and compatible with each other;

(b) the government has adequately researched alternative energy sources that prove their economic and environmental sustainability; and

(c) the government has identified and met the needs of all Yukoners to provide sustained economic growth through reasonable energy costs and environmental protection.

Speaker: It has been moved by the Hon. Government Leader

THAT Motion No. 105 be amended by deleting paragraphs (a), (b) and (c) and substituting for them the following paragraphs:

(a) the government's current energy and environmental policies are substantial, cohesive and compatible with each other;

(b) the government has adequately researched alternative energy sources that prove their economic and environmental sustainability; and

(c) the government has identified and met the needs of all Yukoners to provide sustained economic growth through reasonable energy costs and environmental protection.

Hon. Mr. Ostashek: I will be very brief on the amendment, because I believe I have taken considerable time to lay out in great detail for Members opposite what my government is doing. I want to take a few minutes to point out that this is a friendly amendment, and I hope it will be received as a friendly amendment. I want to point out that, even though the amendment says we delete three paragraphs and insert three more paragraphs, the changes are minimal.

In clause (a), the previous motion read "the government's current energy and environmental policies should be", and we have taken out the "should be" and inserted "are". That is the only change in that paragraph.

In clause (b), in the main motion it read, "the government should adequately research alternative...". We have taken out "should" and inserted "has adequately researched".

In clause (c), in the original motion it stated, "the government must identify and meet the needs of all Yukoners to provide sustained economic growth through reasonable energy costs and environmental protection." We have removed the words "must identify and meet" and inserted "has identified and met".

This is a friendly amendment. I would not have amended the motion were it not for the fact that I have laid out in great detail today my reasons and the evidence that points to the fact that the government is doing all these things. It has been a good motion to debate here today. It is one that needed a public airing. I thank the Opposition for bringing it forward.

Without spending a great deal of time, I hope the Opposition views this as a friendly amendment, and I look forward to supporting the amended motion.

Mr. Harding: On the amendment, I would like to begin by saying to the government that, again, this amendment - which is not a friendly amendment and changes the entire context and point of the motion - highlights the failings of the Yukon Party government to develop comprehensive energy and environmental policies. Again, the Yukon Party shows its true colours. It judges itself by an incredibly low standard of performance. Its performance indicators are extremely low. It is not prepared, nor has it ever been prepared since coming to office three and a half years ago, to do any extensive policy work in the areas of energy or the environment and the policies surrounding those important issues.

The current energy policy the government has put forward - if I can use food analogies - are thin soup, light as angel food cake, and full of as many holes as Swiss cheese. The government has yet to develop anything that answers the fundamental questions Yukoners have about vision for the future - a vision for an energy policy that actually says something, that actually makes commitments and meets the needs of consumers, industry, small business and residential consumers.

The NDP, contrary to the Government Leader's version of events, was very active in energy policy. After all, in the area of devolution, which was not even a priority for us, we devolved the ultimate control over the power corporation to Yukoners - Yukon for Yukoners. We took over the power corporation, in a move that was lauded by the Official Opposition at the time - whose Members are now in government. It was a move to bring control to Yukoners over energy issues.

In the Yukon 2000 economic strategy, we dealt, in a substantive fashion, with economic and energy issues and set forth a vision and direction, which we incorporated into law for this territory, and which has been largely ignored by the Yukon Party. Even the Government Leader had to admit that we developed extensive and very successful conservation programs to cut down on energy use, waste and inefficiencies under the saving energy action loan and power smart programs. We even received kudos from the Yukon Party for those.

We developed five books on energy issues and analyses, putting together the types of policies, direction and vision for the future that was comprehensive - not this higgledy-piggledy approach of the Yukon Party, where five or six, or maybe even 10 lines are put down on a piece of paper and called a policy. This method was extremely arbitrary in its sense of vision and direction.

The Government Leader stated in his speech that the NDP had not produced any baseline increase in the power that was available to the Yukon. Through our comprehensive policy work, we had identified to the Yukon Energy Corporation, and were ready to initiate, four micro-hydro sites in the Yukon. That was in 1992, in the Yukon Energy Corporation capital plan. It was not to increase the power availability one megawatt, as the Government Leader indicated when he said we did not increase it one megawatt - "Not one megawatt," he said, "Blah, blah-blah, blah, blah-blah." What we were proposing was 16 megawatts. Unfortunately, the Utilities Board said no at the time because of the risk to the existing system of Curragh shutting down - a shutdown of the mine that happened under the Yukon Party administration, due mainly I believe to their policies of lack of support for the mining industry in terms of environmental and regulatory reviews. Their messages to the mining industry at that time were incredibly bad.

What would happen under the New Democratic Party administration regarding power rates? I will tell this government and the public of the Yukon what would happen.

We have been clear. We have committed to an extension of the rate relief program and we have pledged to keep it in place. Conversely, the Yukon Party has pledged to eliminate rate relief but does not want to come out and say that until after the next election. Our position is clear. Our micro-hydro projects in the Drury area, in Lapie and one or two other significant sites are clear. We were investigating other energy alternatives. We did that with a quite serious intensity. We also invested heavily in conservation programs, and once again I say the fact cannot be ignored that we actually devolved control - Yukon for Yukoners - of the power corporation.

Let us look at the Yukon Party's vision and the way it has dealt, as the Government Leader said, with these issues, one at a time. Its vision is this: it saw two extremely large power rate increases for residential consumers in the Yukon under its regime. It tried, in a backroom deal, to privatize the assets of the Energy Corporation and sell them off to southern friends in Alberta. Thanks to the good work of Mr. Penikett and the NDP caucus, we stopped the government dead in its tracks on that because it saw the political fallout that was going to happen with such a sell-out when good friends of this government were engaged as lawyers. We had to dig the contracts out of them. Finally we did so, and proved to Yukoners what it was attempting to do. It clearly became apparent that Yukoners were not interested in giving away the hard-fought-for power corporation to the Yukon Party's southern friends.

This government, with its so-called vision, has presided over increased integration of the Yukon Electrical Co. Ltd. and the Yukon Energy Corporation to the point where it has gone beyond anything ever anticipated in the original management agreement established when we devolved control over the Yukon Energy Corporation to the Yukon.

The government has also presided over - sat idly by and watched - massive growth in the Yukon Electrical Co. Ltd. asset base, compared to the Yukon Energy Corporation. It has sat back and said very little, unless we posed questions in Question Period, at which point we are offered some cookies and asked to bear with the government as it slowly gets around to this so-called priority it has.

What other vision does the Yukon Party have? What other action has it implemented on energy, other than the wind-generated hyperbole of the Government Leader, who talked in a lot of circles about what the government wanted to do, but nothing about what the government has done.

We all remember the laughable motion the Government Leader tabled about the interlocking power grid among Alaska, British Columbia and the Yukon - this wonderful visionary statement of the Government Leader's, which had the people in Alaskan and British Columbia Legislatures falling out of their chairs as they realized what the Government Leader here was proposing. It was a system whereby all three jurisdictions sold power to each other. He did not have a clue about the foundation, the cost or the economic viability. It was just some airy-fairy concept of what he wanted to see in the future.

It was ridiculous. We pointed out the folly of the motion. Jurisdictions that all had surplus power at the time could not sell power to each other. The motion was never heard about again. That has been the vision of the Yukon Party when it comes to energy.

This government's approach to energy policy has been to pump and pump coal in every speech that we hear, whether it is the throne speech, the budget speech, or any economic speech, such as the Department of Economic Development energy action plan.

The words do not match the action we have seen on coal. While we continue to ask the government what it can do to produce energy studies that provide a basis for this promotion of coal projects, it cannot prove to us that it is either economically or environmentally friendly. This is after spending $100,000 and more of taxpayers' money to invest in these various studies. It is all part of their big-dam philosophy.

I want to look back, just to promote and to further my argument with regard to this government's view of energy, energy policy and how misguided it has been since it was elected, and how it has actually backtracked on its field-of-dams, field-of-mines, field-of-roads mentality - where one builds it and they will come - to the point now where it is starting to come and talk a little bit more about the demand side.

I want to look at a document, which they submitted to the federal government on behalf of the Yukon Territory in 1992. At that time, one of the lines from Toward Self-Sufficiency by the 21st Century document said, when it is talking about adequate infrastructure, such as transportation systems and power, they said that it is especially true that these systems must be in place to promote mining, which is already facing problems due to high transportation and energy costs.

What is the government's grade in reducing high transportation energy costs? I would submit to you that it is a failing grade, if one wants to talk in terms of performance indicators. It is an F, a big fat F.

If one looks at the documentation that I have seen from the only actual, operational, in-production mine in the Yukon right now - Anvil Range - it is severely upset with the arrangement that it had to take in the recent general rate application because, as an industrial customer, it felt that it had been asked to pay more than it should be paying.

There are residential consumers who are feeling the same way, yet this government has not tackled these tough issues in any substantive manner. For the Government Leader to try to tell us, after reading the correspondence on the so-called negotiated arrangement with Anvil Range, that everyone was happy about it, I think is stretching it to say the least.

The government has failed to address the issue of high transportation energy costs, which was its benchmark. I am just holding it to its own vision. I am basically acting as a person who measures performance, and its performance has been very, very poor.

One of the other lines in this document says, "Together we must provide the necessary infrastructure to business and industry that will encourage investment in Grum stripping, Casino and Williams Creek mines, and other key projects in the Yukon".

What infrastructure has this government provided to business and industry? We know that under the industrial support policy there was the Loki Gold road. But, beyond that, what has it provided in over three and one-half years of governing?

By its own benchmark, its gets an F on that score.

The government says that the Yukon Party government is committed to taking steps toward a more self-sufficient economy - "We recognize the need for partnerships with the federal government and industry to create a solid infrastructure base and investment climate."

What evidence of success have we seen with this government's performance, in terms of creating partnerships with the federal government and industry to create that solid infrastructure base?

Well, the government came up with one energy infrastructure loan program that has failed to have even $1.00, or one applicant make a successful application. We fail to see any partnerships for infrastructure with the federal government other than road deals, such as the Shakwak project, which was negotiated by the New Democratic Party.

Another line in this document says that our small population, underdeveloped infrastructure and high cost production put us even further away from that marketplace. In this paragraph, the government is talking about exposing us to the American tidewater. This was in 1992, and the government failed to do anything on that score about what it considered, at that time, to be a priority for them. Again, if I am looking at performance indicators and conducting an evaluation based on them, the government gets an "F" on that score.

I could go through this document and all of the projects that are listed in here as priorities for the Yukon Party government, which it failed to do anything to improve from the way things were done in 1992, and which it felt it would address in its mandate.

The Government Leader also talked about what he felt was a success of the general rate application that was just underway. I pointed out that there are some people who are not entirely happy about how things transpired and who feel there are some important substantive issues still to deal with, contrary to the Government Leader's view that everything is hunky-dory.

Thanks to the good work of the New Democratic Party and Tony Penikett in this Legislature, as an Opposition Member and energy critic for the last few years, we, the New Democratic Party, managed to get the government to do something about the costly regulatory process and rate application that took place under its administration back in 1993. Thanks to us it has been streamlined and modified due to good Opposition work, putting the issue out there and demanding that the government finally act upon it.

Thankfully, again due to our good work, the cost of this general rate application has dropped. I do not often like to get up and take credit for these kinds of things when we do them, but gol' darn it, we have to in this instance, because the Government Leader is failing to recognize the good work of Mr. Penikett. I will dig out the Hansard for the main motion debate when I speak again, to read out the Opposition critique that was done on the bureaucratic process under the Yukon Party for the general rate application.

We New Democrats are extremely proud of our record. It was interesting to listen to the Government Leader talk about failures under the Yukon Development Corporation. He named one of the projects - his favourite - the Watson Lake sawmill. He also named the Taga Ku.

If anyone is to blame for losses on the Taga Ku, it is Members opposite, who broke the contract. Twice we had to have courts decide that that was indeed the case. The Yukon Court of Appeals upheld that it was the Yukon Party that broke that agreement, to the detriment of all Yukoners, to the detriment of First Nations and First Nations partnerships, and to the detriment of the land claims process.

For him to stand up and say it is our fault the money was loaned to Taga Ku through the Yukon Development Corporation is absolute ignorance of the justice system and the ruling that was handed down by two successive courts. The Supreme Court of Yukon will soon be ruling, if we can get the case there before the next election, that this government failed when it broke the contract.

We are not going to stand by and take those kind of ridiculous...

Speaker: Order please. The Member has three minutes to conclude his speech.

Mr. Harding: ...allegations from the Government Leader. The Yukon Party's agenda and vision with regard to energy policy has been to raise residential rates and to encourage nothing but megaprojects. It has tried to portray a field of coal and a field of mines agenda, where we build the power and they will come.

If these companies are worked hard enough, they might even make a donation to the Yukon Party.

We have proven that the Yukon Party's promises ring hollow to the Yukon public. If the Members opposite want to get into a debate about environmental record, they will surely lose.

They have to do something when they are in government. When we were in government, we did a lot of things. We devolved the Northern Canada Power Commission. We devolved other things from the federal government to the Yukon. We devolved the hospital. We devolved the freshwater fisheries and many other initiatives that were not even priorities.

We brought in the Education Act. We brought in the Health Act. We brought in the Environment Act. We developed the Yukon 2000 Economic Strategy. We devolved things from the federal government. We settled the umbrella final agreement. We settled four band final agreements.

We brought in the Employment Standards Act, the Public Government Act and conflict-of-interest legislation. We developed an entire strategy for conservation and training. We developed the Yukon College and the College Act. We balanced our budgets; we did not raise taxes. We brought in habitat protection amendments and waste reduction regulations.

We did all these things. We cannot do everything. We could not do everything then, and we cannot do everything now for the Yukon Party.

They are going to have to roll up their sleeves and do some work on comprehensive energy policy, and they are going to have to do some work on environmental policy, if they hope to get an amendment to our motion passed like this. So far, if one goes by performance indicators, they have received an "F" on both scores, so we will not be supporting this amendment.

Mr. Cable: The amendment to the main motion essentially changes the motion in all respects, so I will be speaking to a number of issues.

I do not want to dwell on the first and last parts of the motion. I want to focus on the middle part, but I would say in passing, in dealing with the Government Leader's comments about perceptions of what they have done, that I have two perceptions of the government's actions that somewhat unsettle me.

One is that I have an uneasy feeling that the government has predetermined its position in the energy field and that the environment is sort of a tag-along consideration. I would like to draw the Speaker's attention to a number of speeches that have been made by the government and the Government Leader over the past few years.

In the Speech from the Throne of December 1994, on page 8, the Government Leader said, "My government has agreed in principle to the use of coal for thermal electric energy generation." This appears to be a predetermined position. It was softened later on in the budget address of February 15, 1996, and I refer to page 14 of that budget address where the Government Leader said, in introducing the budget, "Yukoners know there has to be a proper balance struck between environmental protection and resource development in a resource-based economy such as ours. Our government is working with Yukoners to achieve this proper balance." He went on to say, on page 24, "The Department of Economic Development, in conjunction with the Yukon Development Corporation, is currently conducting investigations on the viability of coal development as a source of electrical generation in preparation for the 1996 YEC/YUB capital planning process. Should a coal-fired generator be viable, it could and would have to meet or surpass very stringent environmental standards."

That softens the Speech from the Throne of December 1994. I have a letter from the Minister of Renewable Resources that I would like to table if the Page would pick it up. It deals with carbon dioxide reduction plans, when the eight-point plan put forward by the government was announced last year. The carbon dioxide that was supposedly to be reduced was 87.1 kilotonnes of carbon dioxide. Quite coincidentally, the prospective coal-fired generating plant of 20 megawatt size at Braeburn - if one does some back-of-the-matchbox calculations based on the numbers in the Simons report of March 1995 - comes to 160,000 tonnes of carbon dioxide.

One has to think if this carbon dioxide reduction plan of the government's was there to lay the groundwork for the coal plant. I have the uneasy feeling that the government seems focused on the conventional problems of acid rain and ash reductions. There seems to be a lack of recognition of our national obligations on carbon dioxide creation and the downside of carbon-base fuel.

There seems to be a belated recognition of greenhouse gases and the necessity of reducing carbon dioxide at page 11 of the government's energy action plan put out last year. It does not allay my fears, however, that a decision has been made, and we are backing into the coal plant, laying the groundwork by doing some cosmetic reduction of carbon dioxide in other areas.

There have been many attempts to put forward the straw man argument of diesel replacement. We find it at the budget address, page 23, among other places - we heard it this afternoon. One of our government's four-year plan commitments was to make Yukon less dependent on imported diesel for electrical energy generation, which, in itself, is good.

This saves the outflow of cash. This is not the real issue. The question really is, can our utility planners, engineers and scientists come up with non-carbon-based energy generation so that we can look to the future - a future without carbon-based fuels and without the generation of carbon dioxide.

One of the other areas that is dealt with in the first part of the motion and in the first part of the amended motion is the integration of our energy policy.

The policy has been a long time coming to its present status, but there has yet to be an independent power producers policy. We have the non-utility generating policy, but we do not have a policy for people who might want to hook up to the grid from their houses. We do not have a real policy about risk management on the Whitehorse-Faro-Aishihik grid and the reduction of the economic shocks.

We heard the Government Leader talk this afternoon about the wheeling policy and the fact that we do not need it, because there is no one there to take advantage of it. There will never be anyone there to take advantage of it until the policy is in place, and I think we have to work ourselves through the chicken-and-egg situation. If we want to increase competition in the electricity-generating field, we are going to need a wheeling policy.

The Government Leader has said that the perception on the demand-side management, part of which is energy conservation, is inaccurate, and he spelled out a number of things that his government had done. Perhaps he is right, but certainly, the perception is not what he put forward, and perhaps one of the greatest disappointments in the energy field is the lack of focus on energy conservation.

It is has been said that the cheapest form of generation is the generation that does not happen, and that is energy conservation. For instance, lights that use less wattage, buildings that are constructed to take advantage of solar gain and buildings that are super insulated. Those things were touched upon by the Government Leader, to be fair, in what he had to say, but there seems to be a strange, stand-offish attitude toward energy conservation.

Let the markets send the signals. Let this invisible hand make the energy conservation strategy work. Perhaps that will work, but there needs to be informed decisions by the consumers, and there will not be informed decision unless there is some education.

There is a large role for government in energy conservation, even if it is reluctant to get into participation in the market. At the very least, there is a large role in education, and there is a leadership role in building energy savings. Perhaps in a larger sense, there is a leadership role in encouraging us to be weaned off our destructive, consumptive habits.

I will not dwell on that part of the motion because there is something that is of greater interest to me. I would like to speak to a matter that is addressed in the second part of the motion, and that is energy science.

What do we have here in the Yukon that addresses energy science? We have the budding energy group in the Department of Economic Development that is building expertise in the new energy branch that is talked about in the Economic Development department's business plan.

We have Yukon College, which is doing some monitoring of the alternative energy sources. The federal government has done some balloon data on the wind. We have the Yukon Science Institute, which provides a forum for our technical people to come together. We all recognize its role with respect to our science fairs. We have a local engineering professional association with a few dozen local members. We have two utilities with energy expertise.

What we do not have is an integration of our Yukon scientists in the energy field. We do not have a policy on development of our scientific, intellectual inventory.

The government has, for three and one-half years, talked about infrastructure - our buildings, roads and the physical plant - and that is fine; we need all of those things. But what we also need to talk about is our scientific intellectual infrastructure.

We also need to talk about the creation of energy think-tanks, perhaps centred around our college, and we need to talk more about energy research and we need to do energy research. All energy research does not involve large dollars. We are not inventing the wheel. In many cases we are simply adapting outside research to our northern climate.

We, more than many Canadians, have a stake in keeping energy costs low. We pay more than many southern Canadians for electricity and research and development is going on in the continent and in the world that needs to be monitored and adapted to our climate.

Many advances are taking place in the field of alternate energy. There is the use of solar cells, there is the use of fuel cells, and there is the development of wind farms in Alberta. Perhaps the use of solar cells is imminent, perhaps not; perhaps it is very close to commercialization, perhaps not. Perhaps there are imminent large-scale technological breakthroughs but we should be right on top of those items. We should not be afraid of them. Many elements of the research can be done for small sums. In particular, we need to get out of the business-as-usual complacency that we have adopted here - that the conventional turbines and the conventional generators are the be-all and end-all. We need some intellectual ferment to meet the challenges.

We should recognize that the wind turbine at the top of Haeckel Hill a few years ago was viewed as a Rube Goldberg contraption.

We should not be afraid of science. We should work with science, and we should not take a posture that makes us intellectually incompetent or impotent in the scientific field.

Intellectual infrastructure has economic benefits and it has commercial value and job employment prospects. One of the best and easiest places to build intellectual infrastructure is in the energy field.

With respect to the motion and with respect to the amendment, I cannot help but notice the contradiction between the amendment and the energy plan. The energy action plan talks at page 10 about assessing the potential of undeveloped energy sources in 1996, including micro-hydro, wind, waste wood, municipal solid waste, photovoltaic battery hybrid systems and other small plant technology. Yet in the government's amendment it would have us believe that it has adequately researched alternate energy sources. That work is just beginning; we should read the energy plan.

I read the main motion as inoffensive and not sinister. I am surprised that there is some judgmental comment being read into it. There is no cheap shot in the motion. In the interest of consensus building, I am not going to vote for the amendment. I think the original motion is quite adequate and I will be supporting the main motion.

Hon. Mr. Phillips: I will be supporting the amendment, but first I want to talk briefly about some of the comments that have been made by the Member for Riverside and the Member for Faro.

I take the Member for Riverside's points very seriously. I think that he made some good arguments in some cases. When the Member is reading the amendment and comparing them with the energy plan, I think he is somewhat overreacting to how he reads the amendment. I think the Government Leader, when he proposed the amendment, clearly laid out that this work is going on, is contained in the energy plan and there is work happening. All the amendment is doing is acknowledging the fact that there is work going on.

I think it was meant in that context, as a friendly amendment, and not an amendment to say that this is it, it is all done, all finished and there is nothing else to do. I think what the Government Leader was pointing out to Members opposite is that there are things being done and that there are things happening.

I take exception to the Member's comments about our government not caring at all about the environment, and I challenge the Member to demonstrate any project currently underway in the territory that has not had to undergo a strict federal and territorial environmental process. I think the Member knows that the territorial government has been very much involved with the federal government in working out details of that process. I think a lot of credit has to go to the federal Liberal officials and government, as well as Yukon Party officials and government employees, for the work they are doing to streamline and improve the process. I would challenge that Member, who said that we do not care about the environment, to point out to me any project undertaken in the last three and a half years that our government has been in office that has not had to undergo a strict environmental scrutiny. Not one project has not been through that process.

I can give examples of a couple under the NDP regime that did not. The road that was built up to the mountain in Old Crow did not go through an environmental process, yet the road went through some of the most environmentally sensitive country in the world. In fact, the Opposition is jumping up and down and asking us to support no development whatsoever - of any kind or shape - on the migration patterns of the Porcupine caribou herd when, in fact, it was their government that built a 12 kilometre road right through the middle of the migration pattern of the Porcupine caribou herd and did not get even one single permit. They did not ask anyone.

It is a bit hypocritical to stand in the House and demand that others follow the rules and guidelines set out under the environmental regulations in this country, but they seem to acquire instant amnesia when it comes to what they used to do when they were in government.

The Liberal Member for Riverside, the last person who spoke, spoke about the carbon dioxide emissions we are putting into the environment, but it is interesting to note that, as the Government Leader pointed out today, there is no doubt that coal-fired generation emits carbon dioxide into the environment. No one is denying that, but there seems to be a blind impression given that they want to ignore the fact that someone has to produce the diesel fuel that we are burning, someone has to haul it up the highway, and all that emits carbon dioxide as well. When one adds the emissions produced from that kind of energy production - getting it up here and all the other things that go with it - I would think that it would be comparable to coal. The Member chooses to ignore that, for whatever reason I do not know.

If we ever have to put together a 40-megawatt plant in the Yukon, and that is probably somewhere in the near future - we are going to be looking at that with the various mines that are starting to come on stream; there is no doubt that there is going to be a need for a much better power grid in the territory with much more power available - there is no way under this sun that we are going to be able to produce 40 megawatts with diesel and not contribute to the carbon dioxide emissions into the environment. There is no way, if we have to do it with diesel.

The Member of the Liberal Party, and the New Democrats as well, have not given us any idea or any suggestions - other than what the Liberal Member said about scientific data, which I would concur with, as that is an important area that we should explore further and is an area that needs more development. There is nothing that comes to mind right now, to me at least and from what I know, that we could look at in the very near future for producing 40 megawatts of power in the territory - other than most of the conventional methods we have now. I do not think any government, be it this government or any other future government, would want to jump right in without further research into wind power, solar power, thermal power or the other initiatives that have been talked about.

I would like to hear from the Members opposite. If they do not think coal is a very good idea - if we have to produce 40 megawatts for the upcoming mines, that are going to be at our door very quickly by the sound of things - then what would they suggest? There were suggestions today from the Member for Faro that there were four micro-hydro projects, but they had not gone through the environmental screening and all the processes that they had to go through. They have not been through all that. That was going to produce 15 or 16 megawatts. We are talking about 40 megawatts. Where are we going to get the balance?

It was the New Democrats that made the Yukon a nuclear-free zone, so I suppose automatically we could rule out nuclear power. I do not know if Yukoners want to see nuclear power. I sure do not want to see nuclear power in the territory. That is one option gone.

Wind power has some potential, but it also has its limitations, as it has been shown by the demonstration project that is going on now. When it turns 40 degrees below freezing in the middle of the winter for six weeks in a row, when 40 megawatts of power are needed on a regular basis you may not be able to rely entirely upon wind generation to produce that 40 megawatts. Where would we produce the balance if we needed it in a hurry in a big cold snap, or if we had a week or two of no wind?

Natural gas, I guess, is an option, but we are trying to get the federal Liberal government to pass its oil and gas legislation so that we could bring ours forward. There can be some natural gas development in the territory, but that again is probably several years away regardless of what happens in the next few weeks and months. That is one that we could consider.

Micro-hydro is one thing. It will solve some small problems in small areas, but many of the micro-hydro projects are in rather remote locations and create a problem for plugging into the grid. There are some, like the one I believe at Drury Lake, that are relatively close to the grid, but there are others that are quite far away. When building transmission lines, the power loss involved due to remoteness, and all the other things experienced on the line, is often not the total answer. Some micro-hydro projects do not necessarily work well in the winter months when our water levels are lower.

Concerning the issue of massive hydro power, I think those days are over. I would be really surprised, no matter how much power we used, if someone suggested we dam the Pelly River, the Yukon River or the White River or some other major Yukon river, if we would be able to get backing from the general public and the environmental screening processes. I think those kinds of projects, even when they do develop, take 10 to 15 years, all kinds of debate and go through environmental processes before anyone decides on whether or not the project is viable and will actually happen.

Another option is solar power, but I do not think solar power has the potential to produce 40 megawatts. I think that solar power could be used in small instances to produce some power in some cases, but it certainly is not the type of power, from what I understand, that would be needed for a major mine or major development happening in the territory.

Another option that could be explored is thermal hydro power. There are a lot of hot springs in the territory and known areas of hot springs, and maybe there is some potential in those areas for steam generation of some kind. I do not know; I am only speculating about the kind of power that would be out there.

As I tried to point out, we are somewhat limited in our options and we are getting pressure about where we can go with these options. There are several mines that might go into production within the next three to five years. Something is going to have to be done. I think when the Government Leader changed the policy to examine coal, he just opened the door for looking at another possibility. We are already looking at wind, diesel and micro-hydro and we are also looking at coal.

No one is suggesting for a moment that we would proceed to the coal project without the coal project having to go through an extensive environmental screening process. I do not think the Liberal Member was suggesting that we try to bypass that process when he stated that, a few years ago when we tabled a speech, we were talking about doing that. I do not think we were talking about doing that at all. This government has demonstrated that in the last three and a half years; we have not bypassed any environmental process at any time on any project. I think it would be folly of this government, or any government, to try and do that in today's world. I do not think people would accept that position.

What we do have to accept is the reality of what is happening in the territory with respect to development. One only has to live where I live in Riverdale - I know that the Member for Riverside spent some time there this winter during the cold snap - and walk out the door to hear the roar of those diesels across the river burning up millions of gallons of diesel fuel and emitting hydrocarbons into the air 24 hours a day, seven days a week.

If the Member had the opportunity to walk over to the hydro generating plant and look at the gauges, he would see that there were several days on which we were just about at the maximum and had very little leeway, with all of the diesels running, in producing all the power we needed.

We are at the edge and our economy is growing. Two new airlines have announced that they are coming into the territory. There are new businesses that have sprung up in the territory over the last three years. There are seven or eight mines in the environmental screening process at present that are close to making announcements. Some of those mines are going to generate their own power with diesel power. Some of the bigger mines are going to need much more power than we can possibly generate right now. We are going to be seen to be holding up the show once the production decision is made, and I think that some hard and tough decisions are going to have to be made by government. We have to examine all options.

I do agree with the Member for Riverside when he talks about the scientific data and new ideas. I would support any work being done there. I also strongly support the Member's points about conservation and education. I think that does play a large role. However, it will not get us 40 megawatts. It might save us part of a megawatt here and part of a megawatt there, but when 40 megawatts of regular power are needed on a regular and consistent basis, telling people to turn down their hot water heaters and so on will not be the solution. It is part of the solution - a very important part - but I think we have to look a bit further than that for the development we need.

The amendment to the motion that we have in front of us is a good amendment. Basically, the Government Leader has laid out for all of us here today that there is a lot of work going on in the energy field and that there are a lot of concerns being expressed by people out there who realize that we are going to need more energy in the future.

The Member for Riverside was quite refreshing because, as I said in my speech, I have already agreed with many of the things he pointed out. He made some really good points.

I would have liked to have been able to say the same thing about the speech by the Member for Faro but, again, we had the Member for Faro rise to his feet in the House and give us a rewriting of the history of the Yukon. Every time he rises to his feet, he seems to change the history books of the Yukon Territory, and I quite enjoy it. As I said before, I just hope to heavens that he never has the ability to get his hands on those history books and actually change them, rather than trying to rewrite them here in the House just with his speeches. I am sure that if he did, things like the Gold Rush probably would never have happened. There would be a lot of other things that might not have happened, and the NDP might have been responsible for the Gold Rush, quite frankly, back then, because the Member seems to put that kind of a twist on those kinds of things.

The Member for Faro decided to grade our performance and he gave us "F". I would disagree with that, but I certainly know that if he has had any history teachers that have ever read anything about Yukon history and have ever listened to his speeches in here, they would be giving that Member an "F" for his renditions of Yukon history.

I almost could not believe it when I heard the Member being so critical, and whose party has been so critical, of the new process we are going through at the rate hearings. They have been criticizing us at every drop of the hat in every way ...

Speaker: Order please. The Member has three minutes to conclude his speech.

Hon. Mr. Phillips: ... on the new utility process. Then he stood up and said that the NDP forced us into this new process.

It was quite hilarious. I do not think he meant it as a joke, but it was pretty hilarious to hear the Member saying that. I think the Liberal Member was gasping for air. Some of us over here were suffering the same kind of anxiety attack because we just could not believe what we were hearing. The Member for Faro - with a slight smile on his face - was trying to rewrite the history books of the Yukon. I think people are a lot smarter than that.

The Member for Faro blamed us for the Curragh shutdown. I cannot believe that, either. We were at fault for the falling metal prices and for Clifford Frame absconding with all the money from Faro - that was our fault. The Member for Faro was the one who wanted to give Clifford Frame $29 million and send him on a bigger holiday than he was already destined for. We said no to that, and I think the Yukon is far better off because of it.

When it came to the rate utility hearings, it was interesting to hear, for the first time, an NDP Member supporting corporations. It was interesting to hear the Member for Faro saying that he was supporting this big corporation. The NDP is usually known to support the little guy or little gal, but this time one of its Members is supporting a big corporation.

I believe that the motion before us is a reasonable one. I think that the Government Leader has laid out, in a clear way, what the government is doing and that, in fact, many of the things in the motion are being worked on, and that is the purpose of the amendment to the motion. I would recommend to all Members of the House to support this friendly amendment put forward on this motion.

Mr. Sloan: Well, I always enjoy hearing my friend the Minister of Tourism speak on issues. He always raises such a variety - a plethora - of issues.

A couple of things I will check to see is whether or not Robert Henderson, George Carmacks and Joe Boyle did hold Yukon New Democrat cards - just for the Minister's information. I do not think they did, but I will check into it.

The other thing that I was relieved to hear about is that we will not be building any fast-breeder reactors. Thankfully, the government has ruled out the use of atomic energy. There are a few small mercies.

The previous speaker alluded to the past cold winter. I can certainly relate to that, as I am sure the Member for Vuntut Gwitchin can, because we were out on the campaign trail in that rather frosty weather. One of my interesting experiences with energy was in Arkell, where I visited a young fellow who was experiencing the joys of propane for the first time with an unprotected tank. When I went to the door to hand out my literature he asked me if I knew anything about propane and how to thaw out the tanks. We got out a light bulb, a long cord and some cardboard and tried to thaw out the tank. I can appreciate how the cold spell impacted on energy.

With regard to the amendment, in itself, I think it addresses some of the concerns that have been raised in the original motion and some of the concerns that I have.

In my opinion, there are three key points with any energy options that we look at. The previous speaker seemed to suggest that it was other one or the other - wind, solar power, micro-hydro or whatever. I believe that what we are looking at is a mix of different options. My concerns are that whatever energy options we adopt in the territory be first of all sustainable, second, renewable, and third, affordable.

When we talk about sustainable, I think the kinds of alternatives that we are speaking about are such things as a mixed group of energy options.

We cannot say that because a wind-generating plant might not work in one place that it is necessarily precluded from another place. Similarly, there are areas in the territory that would lend themselves very well to geothermal. For example, we know there are places where micro-hydro can lend itself quite well, perhaps looking at somewhat larger hydro plants.

I have several concerns with the main option I see emerging, which is the coal option. First of all, coal is largely extractive in nature and, by its definition, I do not think it can be called renewable. Secondly, I have some serious concerns, and not just with carbon dioxide. That is a principal concern I have with coal, but there are other things we have to seriously look at. One is the problem of fly ash. I know there are ways to reduce this, but technologies and methods can be prohibitively expensive.

Second, there is the sulphur content of the coal and the release of sulphur into the atmosphere. From the review of the studies, and in going through the supplementaries with the Minister of Economic Development, I was not convinced we had a variety of these things nailed down; for example, issues of transportation, cost and demand.

As well, one question I do not think has been addressed yet is the cost of a grid. That did not appear to be contained in the original Cash Resources speculation on the plant.

I also have some questions with regard to the whole issue of coal and the kinds of consultations that have been done with the Carmacks-Little Salmon First Nation, as that group would be highly impacted.

With regard to some of the other concerns that I have concerning the renewability of options, I think we have moved away from the late 19th century industrial model. We are in the 20th century, moving into the 21st century concept of what industry is like. I think the whole idea that one source of power leads inevitably to heavy industry, which leads inevitably to manufacturing industries, is an idea that has been quite effectively challenged.

Unfortunately, I think that kind of logic still holds sway with many people and, unfortunately, the idea of a large coal plant has that kind of attraction.

The previous speaker alluded to the shortage of the 40 megawatts. That is a question that has to be addressed. Incidentally, a 20- to 40-megawatt plant would be an enormous cost. The figures that I have seen - and I believe the figures are from Cash Resources - indicate that a 20- to 40- megawatt plant would cost anywhere from $75 million to $300 million. That is a substantial amount of money.

While it may, at various times, make a certain amount of economic sense if we have a lot of mines on stream, we know well enough from the history of this territory - and indeed of the north and throughout Canada, as well - that an economy based on extractive industries tends to be boom-and-bust, or cyclical.

My question is this: what happens if we are locked into a $75 million to $300 million plant, which is creating power, and we are also locked into a 20-year contract for the purchase of that power, and the demand reduces - what happens? We will not have a grid system that will effectively deliver that power to other sources, primarily Alaska and northern British Columbia, and there would not be the markets there to handle that excess power.

Those are a couple of the concerns that I have. I believe that we have to look no further than Quebec's example, when it went into its megaproject - the James Bay project - where the province found that the amount of power it produced from that development proved to be too much for the market to bear in the northeastern United States, and it actually ended up losing money on some of the projects.

The same applies to the Chetwynd coal project. It was premised on sales to Korea, the markets declined, and there were losses there in terms of expenses.

My primary concern with coal, and the reason I would be very reluctant to support an energy policy premised on coal, is firstly environmental, for which we have to take a look at a variety of things, not just the carbon dioxide emissions, but other things such as I alluded to before - the fly ash and the sulphur content. There are also some questions about what the impact would be on wildlife. One of the problems with coal-fired plants is that essentially they are thermal plants, and thermal plants do produce a certain amount of thermal pollution from the output. That could have an impact on fisheries, as has been the experience in Ontario - particularly with the Douglas Point and Pickering plants, which returned warm water to the lakes, which has had a negative impact on fisheries.

Those are some concerns. I am surprised my colleague, the Minister of Tourism, did not mention this, but there are also some questions with regard to what we might call aesthetic pollution. Do people come from Iowa or elsewhere in the world to see a thermal generating plant sitting out there in this pristine wilderness?

I think some things would have to be addressed there. Economically, it was suggested before that we may be looking at committing ourselves to a major project - a major debt - that may not be sustainable, either in markets or in terms of the Yukon people being able to pay for such a project over a longer period of time.

I would suggest that our energy plan has to be diverse. I think we have to look at a variety of options. I do not think that for us to say we are going to be committing to micro-hydro or to wind necessarily precludes another. I think we have to take a look at what our energy needs are now, what is applicable and what is appropriate for smaller communities. We have to give people in the smaller communities some options with respect to energy, and this is why I would prefer to see, as the motion has suggested, a truly cohesive kind of plan. The plan must be ecologically and economically sustainable.

Those are some of the reasons why I am in favour of the original motion and why I would suggest that the House give serious consideration to it.

Mr. Millar: I am a little surprised to be speaking, actually. I did not have a lot that I wanted to say to the amendment, but I do have a couple of things that I would like to get on the record, so I will do that very quickly.

One of the things that I have heard constantly being mentioned by the opposite side is that we on this side do not have any respect for the environment. I find that statement absolutely amazing. I have sat on numerous committees. As a placer miner, I have brought forward many things working toward environmental protection. I think that all industry in North America realizes that environmental protection is a fact of life in today's society. For the Opposition to be trying to make points on that does not make any sense to me. There is a very strict environmental regime in place everywhere in Canada and in most of North America these days.

Megaprojects cannot be done; they simply cannot be done if they are going to be extremely damaging to the environment.

The other thing I have heard the Opposition Members speaking about quite a bit is megaprojects, suggesting that that is all that this government supports. I must take exception to that. There are many small industries in the Yukon that we have supported that the Opposition did not support as well as I felt they should.

Regarding coal, I have heard many of the things that have been said today, and all of the comments from the side opposite have been pretty negative. Some of the points have been good, because there are some environmental concerns, but I do not think at any point have we have ever suggested to go out and build something. The government is talking about looking at coal. The territory has a huge deposit of coal and it has been totally ignored in the past; it was totally ignored by the New Democratic Party.

The motion that the New Democratic Party brought forward today talks about looking at alternate methods of energy, and coal is one of the alternatives. So we are looking at it, and that is all we are doing.

Some of the things that should be pointed out, and one of the reasons why I think it should be looked into is that coal, if it were to be mined in the Yukon, would be putting Yukoners to work and opening more mines. If one wants to diversify the economy more than it has been in the past, we do not want just one mine, such as has occurred in the past with Curragh. The entire Yukon economy was dependent on that mine, and when it closed it was quite difficult for the Yukon to get through that period.

We could put Yukoners to work and generate electricity right here in the territory. There is also a possibility of Asians coming over to purchase our surplus coal. I think these are very positive things that can happen.

They warrant a look; they deserve at least that much. If there are major environmental concerns that prevent it from going ahead, which I do not see - there may be, but I doubt it very much - we should at least look at them as we would look at other alternatives. I think it has been mentioned here today already that major hydro projects are one of the most damaging things that mankind does to the environment.

I am getting lots of little hints and help here that is throwing my line of concentration off quite a bit.

I was talking a little bit about diversifying the economy and the fact that Faro was the only mine. As a matter of fact, I think the Member for Faro today said it was our fault that Curragh shut down. I was absolutely amazed. I can remember going on a trip with that particular Member. He was talking about how we had to give Clifford Frame his $29 million, and that the only way any companies that were mining lead and zinc were going to survive was if government stepped in and helped them out.

I told him at the time that I did not believe that for one second. I think the Government Leader told him that we did not believe it and, obviously, we were right. That one mine did go down, but a new company has come in and is making a go of it. The prices have come back up, and we cannot take the credit for that mine being there. However, I think we can take credit for not spending the $29 million that the New Democratic Party government wanted us to give to Clifford Frame.

I think that speaks to another issue, which seems to come up in the House a lot, and that is fiscal management. The Leader of the Official Opposition says it will keep coming up again and again, and I am sure that it will. As long as we can provide examples like that, I think people are going to realize that the New Democratic Party is not a good fiscal manager. It speaks for itself. There is absolutely no doubt whatsoever.

They have talked many times in the past about how they have continually brought in balanced budgets when, in fact, they were cash rich at the time because of deals that were made by the former Member before Ms. McLaughlin was elected to the federal House of Commons. Mr. Erik Nielsen did a lot of work and managed to get a lot of money for the territorial government. The NDP constantly like to take credit for that, but the fact is that they had a lot of money given to them in those days and, after seven years of their management, they had a $64-million deficit.

However, I think I am getting slightly off topic. I will try to focus my comments where they belong, which is on this motion.

Speaker: Order please. The time being 5:30 p.m., the House will recess until 7:30 p.m.

Debate on Motion No. 105 and the proposed amendment accordingly adjourned

Recess

Speaker: I will now call the House to order.

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

Motion agreed to

Speaker leaves the Chair

COMMITTEE OF THE WHOLE

Chair: I will now call Committee of the Whole to order. We will be dealing with Bill No. 73, entitled Taxpayer Protection Act. Is there any further general debate?

Bill No. 73 - Taxpayer Protection Act - continued

Hon. Mr. Ostashek: We adjourned debate of this bill on Monday, I believe, so that we could look at some amendments that were proposed by the Member for Riverdale South. After that, I received a couple of amendments from the Member for Riverside. I would like to go through each of the amendments and comment on them before we get any further into debate.

My opening remarks to the amendments that were proposed by the Member for Riverdale South were made after reviewing the amendments. They would basically entail an entire rewrite of the bill. In my opinion, it would have weakened, not strengthened the bill.

The Member for Riverside proposed a couple of amendments. This side of the House will have no difficulty in accepting one of them. I do not believe we can accept the other one. I would like to go through the amendments and give Members the rationale behind our decisions.

On the amendment proposed by the Member for Riverside, which states that the Taxpayer Protection Act be amended in clause 8 at page 5 by adding a new subsection as follows: "prior to conducting any such referendum, the government shall first fully inform the electors of the consequences of rejecting any such bill and specific program services and capital projects that will be cut out or reduced thereby, together with the specific amount of such a cut or reduction."

As I said, we do not have any difficulty accepting that amendment, if the Member opposite wants to propose it when we get to that section of the bill. We take the position that we took it for granted that any government would take the measure proposed by the Member in this amendment. However, we are amenable to incorporating it in the legislation, as it can only strengthen the principle of the legislation that the public should have all of the information and facts before them when deciding upon public policy questions.

We have no difficulty with that. We felt that any government that was going to go to a referendum for tax increases would have done everything within its power to educate the public about the consequences of refusing the tax increase.

The next amendment the Member proposed was basically a sunset clause for this legislation. We have difficulty with it. We cannot agree to accept a sunset clause in legislation of this nature. Sunset clauses, I believe, are more appropriate in spending bills. I do not think it is necessary in this legislation because a sunset clause would automatically cause it to die unless a government brought it forward to the Legislature for renewal. In my discussions with the Member opposite, he said we could draft around it so that any Member of the House could bring a motion forward. The view we take of it is that, after this bill has been in effect for a while, whoever is in government at the time has a couple of choices if they do not like the bill. They can bring in an amendment to the bill or they can bring in an act to repeal it.

I know the Member opposite said that the sunset clause only pertained to the tax portion increase, the referendum portion of the bill. I do not know what his rationale really is for that, and he may get up and elaborate on it, but I do not think it is necessary in this bill because there are other avenues available to the government to either amend or repeal this legislation, if it has the political will to do so.

I do not believe that it ought to be allowed to die on the Order Paper. I also believe that a clause such as that would weaken the bill, so we are not prepared to accept that amendment.

In speaking to the amendments that have been proposed by the Member for Riverdale South, of which there are many, I will go through the amendments, but will not read the amendments in great detail because there are too many of them.

The first amendment involved the definition of "deficit". My interpretation of the amendment is that these definitions are necessary because the amendments proposed prohibit annual deficits, except under certain circumstances as, for example, emergencies. Our bill does not prohibit annual deficits, so we do not feel that those kinds of explanations are necessary. We disagree because our bill focuses on accumulated deficits, and we feel that is what is important to control. An annual deficit should be allowed, for any reason, if it is approved by the Legislature, and as long as there is not an accumulated deficit.

I know that we and the Member opposite differ in our positions with regard to that. However, I believe that this clause was discussed thoroughly when we met, and I know that, from comments made by other Members in the Legislature, some have a similar feeling to that of the government in that respect.

On the next amendment dealing with "notwithstanding the Financial Administration Act", I understand what the Member is getting at, but I think the amendment is unnecessary because I do not think that any existing act would directly conflict with this act.

We have been advised by our Justice department that such clauses can also cause difficulties in the future, where there may be a number of acts saying that they take precedence over other acts. So, for that reason, we would not accept that amendment.

On the next amendment, which deals with deficit budgets, we disagree, because this section again prohibits annual deficits, except under certain circumstances. We, in contrast, want to control accumulated deficits that can be equated with debt. The whole intent of this bill is to not cause debt, but not to control annual deficits.

If, in subsection 3.(2)(a), by "compensating surpluses" the Member means "accumulated surpluses," it has the same impact that our legislation does. Our legislation contemplates a request to the Legislature to modify the act if an emergency were to drive us into an accumulated deficit. The Legislature could then publicly debate the issue about whether or not the situation is an emergency and whether or not it justified that additional expenditure. We believe that that is the best type of control that we can have in place.

The next amendment deals with surpluses and we have a totally different belief than the Member has on this matter. We believe the use to which surpluses are put should be a matter for each Legislature to determine. We cannot agree with the Member that this is a matter that should be predetermined by taxpayer protection legislation.

The next amendment deals with non-consolidated public accounts laid before the Legislature. This amendment accommodates the prohibition against annual deficits. We therefore disagree with it, since it is the accumulated deficit that we believe must be contained.

The next amendment deals with consequences of allowing a debt. We disagree with this amendment because we believe that the consequences of incurring an illegal deficit should put the future of the government in the hands of the people via the vehicle of an election.

Surely, the Member has to agree that this is a much harsher action than that proposed by the Member. I would think that the possibility of losing all of one's salary is a far more effective deterrent than merely a fine, which would usually only consume a portion of the salary. Also, the legislation, as drafted, avoids the problem of apportioning fines among Ministers if there has been any turnover during the year.

The next amendment is a bill to impose a new tax or increase in the rate of tax. The bill, as tabled, requires a referendum for new taxes, or increases in income or fuel taxes. This amendment would add all other taxation acts to the list. We cannot agree that this is justified.

Liquor and tobacco taxes are a result of consumption of products that can have a fairly high social cost. I believe a government should be able to increase those rates of taxation without referendum in order to help recover some of the costs associated with those social costs.

Property taxes have at least some relation to the services provided by government in various areas; therefore, the government should be able to increase their rate if the level of service is increased.

Finally, the yield from insurance premium taxes is so small it would be difficult to justify a referendum if one wished to increase their rates of taxation.

On to the next amendment. The government shall not increase fees. I appreciate that the Member opposite has concerns about government getting around the referendum requirement for taxes by instituting massive increases in fees. However, if we look at this in practical terms, I do not think that this would occur and I do believe that a government should be able to increase fees where necessary, especially since at least some of our fees are supposed to bear a relation to the cost of service being provided for the fee. Many fees are very much out of date, and requiring unanimous legislative approval or referendum to bring them up to current and competitive levels seems a case of overkill to me.

The next clause deals with income tax on mine reclamation trusts. A federal-provincial-territorial agreement on the taxation of mining trusts has been agreed to, and the industry concurs with the changes.

I think that we have little choice in this matter unless we wish to be the odd jurisdiction in Canada, and I am not even sure we have that option since our own legislation must match federal legislation.

The next clause deals with a referendum being held, proceeding with a bill being referred to in subsection (1) and substituting ... may only take place with the approval and imposition of a new tax or increase in the rate of tax.

The legislation that has been tabled requires that 50-plus-one percent of the eligible electors vote against a proposed tax increase or it will be deemed as approved by the electors. The reason the legislation has been drafted in this manner is because we felt that many people who are indifferent to, or in favour of, a tax increase may simply not come out to vote. Therefore, a relatively small group of electors who are opposed to a tax increase, but in a minority among the total eligible voters, could carry the vote.

Many municipalities have similar provisions for bylaw approvals. I think Whitehorse could require such an approval process. For instance, if improvements were to be undertaken on certain streets within the city and the administration wished to have the approval of the ratepayers, it could apply.

This government feels that in an issue relating to tax increases, if the electorate feels strongly enough, it ought to cast a ballot indicating they do not want the tax increases. The electorate will have the opportunity to do it, but there should not be a de facto no vote because they did not participate in the democratic process.

Then we get to penalties. The amendment proposed by the Member would allow for financial penalties or loss of remuneration or fines for breaching the act. We believe that our measure of requiring an election is the most appropriate in that it permits the people to decide the issue almost immediately after a breach is confirmed.

We also believe that the possibility of a total loss of remuneration is more severe than what the Member opposite is proposing.

I would also go on to say, if we were to impose financial penalties on the Ministers, I believe - human nature being what it is - we would be asking the Ministers to pad their budgets to make darned sure they never got into a deficit position. It would be a stroke against better budgeting practices rather than a stroke in favour of better budgeting practices. I really do not think it is workable, especially in a small Legislature like we have here and a small population like we have here. There are procedures that the government can use to not be forced to go to a vote. It is not a difficult task, so I believe there are other alternatives, and if a government is not living up to expectations, then it is appropriate that it be forced into an election and let the people decide.

Regarding the amendment to repeal, our feeling on this matter is that the Legislature is passing this law and it should therefore be the Legislature that amends the act. Were a government to attempt to amend this act in a devious manner to avoid its provisions or to repeal the act, I am certain the court of public opinion would weigh heavily upon the Members in this House.

It is conceivable that an emergency may arise that might drive government into an accumulated deficit position. This act has no blanket emergency out, as does the amended act as proposed by the Member. We anticipate that a government would call an emergency session of this House to consider whether or not the situation was, indeed, an emergency. In any case, depending on the circumstances, it may not be feasible, given the time constraints, to hold a referendum.

We believe that the amendments that were proposed by the Member opposite would entail writing a new bill, which would be weaker than the bill we have now. We are not in favour of weakening the bill that we have before us today.

I got a copy of the news release that was put out by the Canadian Taxpayers Federation on February 22. The news release states, "The Yukon leads the pack; new Taxpayer Protection Act gets Canadian Taxpayers Federation stamp of approval." It says things about triggering an election. "The federation president welcomes the Yukon's initiative in the taxpayer protection movement. It is seen as a real shot in the arm for taxpayers to see governments all over Canada, and now the Yukon, adopting taxpayer protection measures." He points out that five provinces have already introduced some form of balanced budget legislation, and Ontario has promised to. While they were extremely supportive of the legislation, they wanted us to go even further. They proposed financial penalties for Ministers who incur deficits; all tax increases being subject to referendum; and a lower threshold for the rejection of a new tax or tax increase.

But the next paragraph was very interesting, I thought, when the president, Mr. Kenney, suggested that the federal government ought to take a closer look at Yukon's legislation, and it is about time that the federal government took the lead on this issue. He goes on to say that they might start by adopting some of the provisions outlined in the Yukon bill: mandatory balanced budgets and referendums on new taxes and tax increases.

So the bill that we have before us has received general acceptance, and we believe it is a step in the right direction. In the future, we may need higher thresholds. In the future, we may need financial penalties for Ministers. However, I believe the bill we have in front of us is a good bill for Yukon. It is a good bill because we have no accumulated debt now. We have the luxury of being able to spend accumulated surpluses, which I think any government is justified in doing, with the approval of this Legislature.

Having said that, I have replied to the amendments, and I thank the Members for bringing them forward, even though we do not agree with any of them except the one proposed by the Member for Riverside. We will be happy to entertain that if he introduces it when we get to that clause.

As I said earlier, we will be proposing one amendment of our own: that a new government would not have to comply with subsection (1), if an accumulated deficit was created or increased in the fiscal year in which neither the Government Leader nor any Member of his or her Executive Council was a Member of the Executive Council.

Mrs. Firth: I would like to thank the Government Leader for his explanation.

Before I begin my comments in general debate, I want to circulate, for the perusal of all Members of the House, the package of amendments that I am going to be proceeding with throughout the debate on this bill.

I thought that the purpose of this bill was twofold: we were supposed to be protecting the taxpayer with this piece of legislation from governments overspending, and we were also supposed to be giving more power to the people to control their affairs and to participate in decision making with respect to budgetary matters. The Minister of Finance made much of this when he introduced this bill.

Just about every amendment I have proposed that give people an opportunity for more say on taxes other than the ones in the bill, thereby allowing people to participate in decisions about whether licence fees and other so called hidden fees or taxes are increased or how surpluses should be dealt with, the Government Leader is rejecting out of hand. All of my amendments have been rejected by the Minister of Finance.

Concerning the amendment with respect to the mining trusts, I pulled it after a discussion with the Deputy Minister of Finance. I have not circulated that in my official package of amendments.

I have made notes on the government's position on all of the principles of the amendments as the Minister went through them. I will address those comments when we get to each clause and to each amendment.

I also have a news release from the Canadian Taxpayers Federation, which was released on April 3, 1996. It says, "Yukon Taxpayer Protection Act should be strengthened. Taxpayers urge Yukon Assembly to adopt Independent Alliance amendments." The press release goes on to say that the Canadian Taxpayers Federation "today urged the Yukon Legislative Assembly to adopt a series of amendments to the territory's recently proposed Taxpayer Protection Act." They said that while they saw a great deal of merit in the act, as proposed by the government, "there are also a lot of holes that need to be filled. The amendments put forward by the Independent Alliance would help to overcome the current deficiencies."

The amendments include provisions for the disposition of surpluses, financial penalties for politicians who incur deficits, the inclusion of all tax increases being subject to referendum requiring a simple majority of votes cast to pass the tax increase and the requirement of a referendum in order to repeal or amend the act itself.

"These amendments are absolutely essential for ensuring that taxpayers receive the strongest protection possible," said Kenney. "Financial penalties for politicians are probably the most effective deterrent to running deficits, and forcing referendums on types of tax increases prevents the government from doing end runs around taxpayers through tax increases outside of specific acts."

The federation also commented that the Alliance's amendments actually hold out the possibility of tax relief, something missing from the current bill. The amendments would guarantee that at least half of any surpluses in a fiscal year would have to be returned to taxpayers through a reduction in personal income tax.

The average Canadian family currently doles out 46 percent of its income to pay for government. It is about time that someone proposed to put some of that money back into taxpayers' pockets.

That is a principle that I have been espousing in this House for the last three years that this so-called Yukon Party/small "c" conservative government has ignored. In fact, they did exactly the opposite. They took more money out of Yukoners' pockets than any other government in the history of the Yukon Territory. I would expect a Liberal bunch to do that, but I would not expect a group of people calling themselves conservatives to do that.

One of the Members is asking if the NDP are my friends? The NDP were in government for seven years here and never raised our taxes. The record speaks for itself.

I, too, have a press release to talk about the amendments that I am proposing. Certainly, there is nothing in the press release that indicates that the bill would be weakened. I think the bill would be strengthen by accepting the amendments.

I guess the most salient point for me to make, addressing the most glaring contradiction that I see, is that the Minister of Finance is, on the one hand, saying that the government is going to protect people and involve them in making decisions about the financial management of the government, but is only prepared to do that in areas that the government chooses. The government is only prepared to give the little tiny bit it wants to give.

One either believes in the legislation or one does not. I believe in it and I am prepared to give Yukoners as much say as they want to have. That is why I have brought forward most of these amendments. I thought that is what the side opposite believed in too.

I am disappointed, but not surprised, to hear the government's position on these amendments. I am still going to proceed with each amendment. Obviously, the debate is not going to be lengthy, long or drawn out. I think the Minister has stated his position on the record about all of the amendments, but I think it is important to get all of the amendments on the record.

I and my research staff have put a lot of work into these amendments. We have had a lot of communication with the Canadian Taxpayers Federation. The federation has taken the time to call me to review, in great detail, every single amendment that I am proposing, and the federation has advised me about the merits of the amendments.

I think it is very important for the Yukoners whom I represent to put these on the record. I have had many people approach me and say that they do not think the government's taxpayer protection legislation goes far enough. I have had many Yukoners make representations to me that they thought it should be called balanced budget legislation. I have told those people it could not be called that, because the government does not believe in balanced budget legislation in the same context that the people in the public understand it to be, which is the principle that you do not spend more than you take in.

I agree with the Minister of Finance. I lost that argument. I knew that I was the odd person out again, that I was the only one who supported the principle of not allowing a deficit, period. I proposed an amendment, prepared to compromise on that issue, recognizing that others were in favour, but prepared to offer what I thought was a positive suggestion that, if we were going to have deficits, there be some controls placed on those deficits and that Yukoners be given some say and some input into it, and certainly a larger majority of Members in the Legislature than are currently involved.

We will carry on with the general debate. I can see the writing on the wall, so to speak, as to what the outcome is going to be, but perhaps, as we go through the debate this evening, the Government Leader might change his mind and might be convinced through the debates of one of the amendments. I can send a copy across the floor to him of the Canadian Taxpayers news release so he can see the comments. Maybe he wants to reassess the strident position the government has taken with respect to the 10 amendments I have presented and the one sheet of amendments of definitions. Perhaps he will soften and see the wisdom of the amendments and convince his colleagues to accept some of them.

Hon. Mr. Ostashek: I will be very brief because I have already stated the position of this side of the House. I just want to say, for the record, that we are giving the constituents of the Yukon much more say in how government operates its finances. I suggest to the Member opposite, who has proposed this string of amendments, that, if we accepted everything she put forward, I could offer her another solution as to how we could save the taxpayers of the Yukon lots of money. With all those amendments, we could let the bureaucrats run it, because they would have to consult with the public on everything they did.

We have given the public input on this bill. In any case, the public has the chance to elect us to this Legislature every four years, along with that. I am prepared to go through the bill, clause by clause, any time the Members wish.

Mrs. Firth: I thought that the principle of the bill to involve the public was to give them more say than the attitude the Minister of Finance just expressed, which is, "you elect me and in four years, if you do not like what you elected, you can get rid of me." I maintain that four years is too long a period of time.

The Government Leader, the Minister of Finance, says he wants to involve the public in decision making with the government. He has made the comment before that we should just let the bureaucrats run things. I believe there are many people who think that that is what is happening now. The bureaucrats are running everything and the Ministers are on the front lines taking the heat.

I am looking forward to the debate. I am prepared to debate each and every amendment.

Mr. Cable: Just to get the amendments on the table, the Government Leader spoke about an amendment that I had proposed in relation to clause 8, which would enlarge section 8 to require that the electorate be informed of the consequences of the negative vote in the tax referendum.

In that the Government Leader has indicated that he is not prepared to deal with a sunset clause, I will be asking questions on it, but I am not prepared to waste any time filing it.

Hon. Mr. Ostashek: I will make one further comment to what the Member for Riverdale South said. I would like to draw to her attention the fax cover on the press release the association faxed to us. It says on the bottom, "Keep up the good work."

Mrs. Firth: The Minister of Finance's knuckles are dragging on the ground from patting himself on the back so much. These are very nice people we are dealing with. Of course they are going to say to the Minister, "Keep up the good work." I do not think he should take that as a resounding endorsement that the work he is doing is absolutely perfect, the be-all and end-all, and cannot be improved upon. If that is what the Minister thinks, then that is a danger signal.

I just want to address one subtle comment that the Member for Riverside just made. That comment had to do with not wasting the time to proceed with the motion that the Minister of Finance has already indicated he is not prepared to support. I hope that the Member was not alluding to the fact that I might be wasting the time of the House or of the Committee, because I certainly do not feel that I am wasting anyone's time. I take this issue very seriously, I am presenting it in a very serious manner, and I think I have every right, as a Member of this House, to do that.

Chair: Are we prepared to go clause by clause at this time? We will proceed clause by clause at this time.

On Clause 1

Amendment proposed

Mrs. Firth: I move

THAT Bill No. 73, entitled Taxpayer Protection Act, be amended in clause 1 at page 2 by adding the following new definitions:

"deficit" means the difference between total revenues and total expenditures in such a case where the total revenues are less than the total expenditures of the Government of the Yukon as a whole for the fiscal year;

and

"emergency" means a serious and imminent threat to public safety and health, including drought, earthquake, fire, flood, tornado, storm, act of intimidation or coercion, or threat to the security of the citizens of the Yukon that falls under the responsibility of the Yukon;

and

"expenditures" means all direct and indirect expenditures whether accounted for or not in the annual budgets of all the departments and government agencies, and includes, but is not limited to, all contributions, gifts, grants, transfers, loans and revenues lost by means of sale of assets wholly or partially owned by the Yukon, at prices below their market value, in any fiscal year;

"revenues" means all revenues collected by the Government of the Yukon as a whole from all sources and includes but is not limited to all taxes, fees, intergovernmental transfers and non-recurring items such as the sale of government property or assets received in any fiscal year;

and

"surplus" means the difference between total revenues and total expenditures in such a case where the total revenues are more than the total expenditures of the Government of Yukon for a fiscal year.

Chair: Would the Committee of the Whole like me to re-read that or does it wish to consider the amendment deemed to be read?

Hon. Mr. Ostashek: For the record, the government will not be supporting this amendment.

Mrs. Firth: I think you should read the amendments into the record. Mr. Chair,

I would hope that if you had to read it into the record, you might agree with some of the things I am proposing. If the Chair read it and said it, perhaps some of the other Members across the way might listen if the amendments are not coming from me. It might sound different coming from the Chair in his deep, convincing, Klondike voice. Maybe the government Members would be more impressed with the amendments coming from the Chair than from me.

Chair: I will certainly do my best.

It has been moved by the Member for Riverdale South

THAT Bill No. 73, entitled Taxpayer Protection Act, be amended in clause 1 at page 2 by adding the following new definitions:

"deficit" means the difference between total revenues and total expenditures in such a case where the total revenues are less than the total expenditures of the Government of the Yukon as a whole for the fiscal year;

and

"emergency" means a serious and imminent threat to public safety and health, including drought, earthquake, fire, flood, tornado, storm, act of intimidation or coercion, or threat to the security of the citizens of the Yukon that falls under the responsibility of the Yukon;

and

"expenditures" means all direct and indirect expenditures whether accounted for or not in the annual budgets of all the departments and government agencies, and includes, but is not limited to, all contributions, gifts, grants, transfers, loans and revenues lost by means of sale of assets wholly or partially owned by the Yukon, at prices below their market value, in any fiscal year;

and

"revenues"' means all revenues collected by the Government of the Yukon as a whole from all sources, and includes but is not limited to all taxes, fees, intergovernmental transfers and non-recurring items such as the sale of government property or assets, received in any fiscal year;

and

"surplus" means the difference between total revenues and total expenditures in such a case where the total revenues are more than the total expenditures of the Government of the Yukon for a fiscal year.

Chair: Is there any debate on the amendment?

Amendment to Clause 1 negatived

Chair: The amendment is defeated. Is there any further debate on clause 1?

Clause 1 agreed to without amendment

On Clause 2

Amendment proposed

Mrs. Firth: I move

THAT Bill No. 73, entitled Taxpayer Protection Act, be amended in clause 2 at page 2 by adding the following new subsection: "(2) Notwithstanding the Financial Administration Act or any other Act, if there is a conflict between this Act and any other Act, this Act prevails."

Chair: It has been moved by the Member for Riverdale South

THAT Bill No. 73, entitled Taxpayer Protection Act, be amended in clause 2 at page 2 by adding the following new subsection: "(2) Notwithstanding the Financial Administration Act or any other Act, if there is a conflict between this Act and any other Act, this Act prevails."

Hon. Mr. Ostashek: For the record, we will not be supporting this amendment.

Mrs. Firth: This is one of the areas that the Canadian Taxpayers Federation thought presented somewhat of a loophole. They thought this was quite a good amendment to plug that loophole. I do not buy the Minister of Finance's argument. What I believe he said was that it was unnecessary in that it would create more conflict and cause some difficulty, or something to that effect. I find that a weak argument and wish the government would reconsider it.

Mr. McDonald: I would like to know what the concern is. I do not understand what the concern is; why would the government not want to put in a provision such as this?

Hon. Mr. Ostashek: We do not believe the amendment is necessary. I do not think any existing act would directly conflict with this act, and we have been advised by the Department of Justice that such clauses can also cause difficulties in the future when one may have a number of acts saying that they take precedence over other acts. So, we do not believe it is necessary because we do not think there is any other act that conflicts with this act and we do not want to set a precedent by having a lot of acts in this Legislature that say they take precedence over other acts.

Mr. McDonald: There are, of course, a couple of acts that do carry such a provision - the Financial Administration Act is one. Presumably, if the government really believes in the principles of this bill and it is a high priority for the government, they would not want anything that the government does through other legislation or through another initiative to conflict with the basic principles of this bill without making reference back to this bill in some way. I do not understand why the government is shying away from a provision like this.

Hon. Mr. Ostashek: Maybe the Member opposite could give me some examples. We just do not think it is necessary. If the Members opposite can convince me with some examples, I will consider it.

Mr. McDonald: The burden for rejection, I believe in this particular case, is on the government. The suggestion is that if the government, in future legislation, tries to pass a measure in the Legislature that compromises the provisions of this bill, then this bill still stands front and centre, and that the Legislature would have to return to this bill if it wanted to compromise the bill. That is what the provision means. So, why not?

Hon. Mr. Ostashek: Our argument for that is that any future act could address that in the act itself and say despite this act the other act prevails. That is why we see this as an unnecessary amendment.

Mr. McDonald: That does not explain why the Financial Administration Act has such a clause. It also does not explain why the Human Rights Act has such a clause. I do not understand what the government is doing. I guess it just wants to reject the provision.

Mr. Cable: I do not want to interrupt this exercise, despite the inference that was drawn by the Member for Riverdale South on my remarks, because I think it is useful.

When we last left this, we were in general debate. I have a number of general, rather than specific, questions. What is the Chair's ruling?

Chair: It is too late. We are in clause-by-clause debate now.

Mr. Cable: How did you get there?

Chair: I asked the Members; no one responded, so we moved on.

We are now on clause 2. The Member could relate his questions to this clause if they are relevant.

Mr. Cable: I have a number of questions. That must have floated by quickly. If it is the Chair's wish, I do not wish to interrupt this exercise. I think it is very valuable.

Chair: I asked the wishes of the Members, and they have indicated to go ahead.

Mr. Cable: That is great.

Chair: It would be best if the Member can bring them up when we get to the relevant clause - that would be the Chair's preference - instead of dealing with them all at this particular moment. If the Member could do that, it would be my preference. If not, I will not rule the Member out of order.

Mr. Cable: It would be very difficult to do that. Just let me start, and we will see if the Members' good manners will tolerate my continuing.

I would like to ask the Government Leader just where this legislation came from. What was its genesis? I know that the first whiff of it was at the Yukon Party convention, when there was a report of it in the newspapers. Was that the first efforts at production of this legislation, or had there been something ongoing in the Executive Council Office prior to that time?

Hon. Mr. Ostashek: We have been contemplating this type of legislation for some time, but I believe that, about a year ago now, at the Watson Lake convention last spring, a resolution for this type of legislation was on the floor. We had been talking about it in Cabinet before that, so that was the genesis of it - about one year ago.

Mr. Cable: What actually got it off the ground in the way of research? Was it research done by government officials or by party officials?

Hon. Mr. Ostashek: Once Cabinet had made the agreement in principle to move ahead with this, I asked Department of Finance officials to gather all the information they could from other jurisdictions on this type of legislation.

Mr. Cable: Was a briefing book prepared - an analysis of the experiments that had taken place in other jurisdictions?

Hon. Mr. Ostashek: There was a host of information about what had taken place in other jurisdictions. I am not sure if it included explanatory notes beside it, but I believe there were. Any information brought to Cabinet from the departments generally does.

Mr. Cable: If I remember the original announcement correctly, I think that came from the Government Leader at the Yukon Party convention - the Government Leader can correct me if I am wrong - and it was on the balanced budget portion of the legislation. There was no reference made to tax referendums in his public pronouncements. Is that accurate?

Hon. Mr. Ostashek: I am not certain if we talked about the Taxpayer Protection Act when we put out the press release, but it was always our intent that the referendum would be part of this bill, so that it would have some real teeth in it.

Mr. Cable: My recollection is that no reference was made to the tax referendum provisions. It appeared to be tacked on after the fact, rather like escalating the ante after the other parties had also shown their interest in the topic. Is that a misapprehension on my part?

Hon. Mr. Ostashek: Clearly so. In fact, we had no intention of announcing it when we did, but another political party in the Yukon was trying to upstage us, so we were forced to make an announcement.

Some Hon. Member: (Inaudible)

Mr. Cable: The Minister of Justice is being quick and cute - no depth, but quick and cute.

As for the Canadian experience, if the recapitulation sheets that I have are accurate, there are four or five jurisdictions that have balanced budget legislation, and two of those, Alberta and Manitoba, have tax referendum legislation. Is that correct?

Hon. Mr. Ostashek: I believe there are five in Canada that now have balanced budget legislation, and several of them have referendum legislation. I know Manitoba does, and I believe Alberta does as well.

Mr. Cable: How long have these pieces of legislation been around? Am I correct in my assumption that this is a fairly recent innovation in Canada?

Hon. Mr. Ostashek: Yes, it is very recent, and I think a lot of it is a direct result of the federal cutbacks by the federal Liberals to the provinces.

Mr. Cable: I thought it started before November 1993, but I could be mistaken.

I gather that this sort of legislation - the spending limitation and tax referendum limitation - came out of the United States, where they have had experience for some 20 years. Has the Government Leader reviewed that experience and drawn any conclusions from it?

Hon. Mr. Ostashek: We have reviewed it, and it gets mixed reviews, even in the State of California. It seems to work in some areas; in other areas, it does not, but they have got tax increases through for special projects. I am not certain what the polls are saying now, but I think they have better than 50 percent of the people in California who are still in favour of the legislation.

Chair: Order please. We will take a brief recess at this time.

Recess

Chair: I will now call Committee of the Whole to order. We are dealing with Bill No. 73, Taxpayer Protection Act. We are discussing clause 2, dealing with Mrs. Firth's amendment. Is there any further debate on the amendment?

Mr. Cable: With the Chair's permission, as he graciously extended it to me previously, I would like to ask some questions that apply to that clause and to all of the other clauses in the bill.

I gather it has been the American experience that the tax referendum legislation has had a very mixed response in the United States and, in fact, I am told that several of the states have actually withdrawn that legislation. Is that what came out during the Government Leader's research?

Hon. Mr. Ostashek: The government did not research the whole American system. The State of California was the only one that we closely researched, and we also looked at legislation across Canada. We did not bother researching the rest of the United States.

Mr. Cable: I will have to pass over to the Government Leader the results of some of the research that I have done, because it is my understanding that is in fact the case - that the Americans have had a somewhat indifferent response to this sort of legislation, and that the problems it has created are now coming home to roost in many jurisdictions, and I will deal with that when we get to the final reading of the bill.

I wonder if the Government Leader would tell me something. This legislation has been referred to as backbone legislation. It causes - particularly the balanced budget provisions - legislators to do those things they should be doing, anyway. Does the Government Leader personally feel that he has to be restrained in running up deficits, or would he be prepared to do it without this legislation?

Hon. Mr. Ostashek: I think we have already proven that we do not need this type of legislation in order to be fiscally responsible.

Mr. Cable: What was the Government Leader's thinking in bringing this bill forward after he had raised taxes a couple of years ago? I do not want to jump to the defence of my friends on the left here on my right, but there had not in fact been any tax increases and, I gather, the first tax increase - if the history has been related to me correctly - was brought in by this right-wing government. Was it the government's intention to signal to the voters that this government would be restrained in the future from bringing in further taxes?

Hon. Mr. Ostashek: I think the Member knows full well why we brought it in. If this legislation was in place when we took over government, the tax increases would not have been necessary.

Mr. Cable: The Government Leader was banging on the NDP throughout its term for bringing in leading-edge legislation. There were lots of shots at the NDP for its Employment Standards Act and Environment Act. Yet we have before us what is definitely a leading-edge bill. Does the Government Leader not see some inconsistency in that approach to legislation?

Hon. Mr. Ostashek: No.

Mr. Cable: Well, it is all getting on the record, anyway.

On the sunset provision that I gave the Government Leader, which he sort of nibbled at for a while and then rejected, there is a sunset clause in the Ombudsman Act. What is the apprehension in the Government Leader's mind? He brought it in for one bill, but seems to have reversed his stance in this other bill.

Hon. Mr. Ostashek: I have said it here and will say it once more for the record - I said it also just a while ago in the general debate, if the Member had been listening - the Ombudsman Act is an expenditure bill. This is not an expenditure bill. We do not believe that a sunset clause is required in this bill. In fact, we believe it would weaken the bill.

Mr. Cable: I was indeed listening. What is not appreciated is, what is the difference? Is it simply because it is an expenditure bill? So what? Wherein lies the difference in principle?

Hon. Mr. Ostashek: I explained that. If the Member opposite, if he is in government, wants to repeal the legislation, he has the legitimate right to bring in a bill to do it. He does not need a sunset clause in this bill.

Mr. Cable: That does not explain it, but I have one last point I want to get on the record. I think the Government Leader agrees that this is populist legislation. It is in response to the populist movement that has been - not sweeping the American states and not sweeping the western provinces - picking up some support. It involves involving the voters in making decisions, which politicians normally make. Why was this legislation not actually taken to the voters? If, in fact, we believe in this populism and voter input into what is going on in government, why was a white paper or a discussion paper not put out so that the people of the Yukon could make the decision whether they wanted a change away from representative government to this new type of populist formula that we find in the tax referendum clause?

Hon. Mr. Ostashek: This legislation has now been sitting on the Order Paper for some six weeks. We have not been bombarded with letters asking us to repeal it or to rescind it or not go ahead with it. I could ask the Member opposite the same thing when he talks about this being populist legislation. It is similar to the federal gun control bill that was very populist in the urban centres of Canada, but they did not even listen to the people; they just went ahead and did it.

Mr. Cable: That does not answer my question. The Government Leader is moving us into a new type of government when he talks about referenda. That may be good, or it may be bad. If we are going to bring the people into the legislative process, one would have thought that the initial step would have been to seek consultation with the people. I have spoken to a lot of people about this bill, and a lot of people drew blank looks when I mentioned it. There is obviously not a big information base out there on this bill. There is not a big information base on the ramifications of the tax referendum provisions, so I am really quite surprised that the Government Leader did not put this out for discussion and just came winging it out of the air at a Yukon Party convention. Is there any reason why it should not have been put to the people for discussion?

Hon. Mr. Ostashek: I believe the people have sent strong messages to governments across this country that they would like to see legislation of this type.

Chair: Is there further debate on the amendment to clause 2?

Amendment to Clause 2 negatived

Clause 2 agreed to without amendment

On Clause 3

Amendment proposed

Mrs. Firth: I move

THAT Bill No 73, entitled Taxpayer Protection Act, be amended in clause 3 at page 2 by deleting clause 3 and substituting the following:

"Deficit Budgets

(3).1 All budgets presented to the Legislative Assembly should be balanced budgets or budgets under which a surplus is anticipated.

(2) Deficit budgets may be presented to the Legislative Assembly under the following conditions:

(a) A deficit must be offset by a compensating surplus from previous fiscal years, or

(b) A budget, supplementary budget or special warrant, which will result in a deficit, is permitted in the case of an emergency, such as a natural disaster which is beyond the control of the Government of the Yukon, and with the approval of the Commissioner in Council, and

(c) A deficit allowed by Subsection (2)(b), must be balanced by compensating surpluses in the two following fiscal years.

(3) An appropriation which would create a deficit requires the approval of 75 percent of the Members of the Legislative Assembly.

(4) An appropriation does not authorize an expenditure in violation of this Act.

(5) A special warrant must not be made if it would result in a deficit, except in the case of any emergency situation such as a natural disaster beyond the control of the Government of the Yukon."

Chair: It has been moved by the Member for Riverdale South

THAT Bill No. 73 entitled, Taxpayer Protection Act, be amended in clause 3 at page 2 by deleting clause 3 and substituting the following:

"Deficit Budgets

3.(1) All budgets presented to the Legislative Assembly should be balanced budgets or budgets under which a surplus is anticipated.

(2) Deficit budgets may be presented to the Legislative Assembly under the following conditions:

(a) A deficit must be offset by a compensating surplus from previous fiscal years, or

(b) A budget, supplementary budget or special warrant, which will result in a deficit, is permitted in the case of an emergency, such as a natural disaster which is beyond the control of the Government of the Yukon, and with the approval of the Commissioner in Council, and

(c) A deficit allowed by Subsection (2)(b), must be balanced by compensating surpluses in the two following fiscal years.

(3) An appropriation which would create a deficit requires the approval of 75 percent of the Members of the Legislative Assembly.

(4) An appropriation does not authorize an expenditure in violation of this Act.

(5) A special warrant must not be made if it would result in a deficit, except in the case of any emergency situation such as a natural disaster beyond the control of the Government of the Yukon."

Mrs. Firth: I have introduced this amendment because, as I stated briefly during general debate on the bill, I accepted the fact that I was outnumbered with respect to the issue of disallowing deficits altogether. That being the case, I thought it was appropriate to put a suggestion forward, that since we agreed with allowing a deficit, that we be very specific as to what the deficit would be allowed for. In that way, we would have some control over the deficit as Members of the House representing constituents, and that is why I have asked for the approval of Members of the Legislative Assembly.

I would like to ask the Minister of Finance if he would reconsider his out-of-hand refusal to consider this particular amendment.

Hon. Mr. Ostashek: We will not be supporting this amendment.

Mr. McDonald: I would like to ask a couple of questions which, basically, boil down to "why?" - particularly in a couple of specific areas.

Subsection (5) of this amendment states that "A special warrant must not be made if it would result in a deficit." Why would the Government Leader refuse that motion out of hand?

Hon. Mr. Ostashek: It is already covered in the bill, in section 2, clause 4.

Mr. McDonald: There is no section 2, clause 4.

Hon. Mr. Ostashek: I am sorry - section 3, clause 4: "A special warrant must not be made if it would create or increase an accumulated deficit."

Mr. McDonald: So, any exception, such as an emergency situation or natural disaster, is not something that the government would even contemplate?

Hon. Mr. Ostashek: No, we believe that, once we start making exceptions, we weaken the bill. Further, we believe that, if a government did - in a rare circumstance - get into that situation, I am sure that it could very easily recall the House for a debate and receive permission to be exempt from the bill for that one time only.

Mr. McDonald: The consequence of, say, for example, landslides on the north Alaska Highway that result in immediate action by the highways department and require multi-million dollar expenditures, perhaps - this has happened before, of course - is that the Legislature is to be recalled? Is that what the Minister is saying is one of the consequences?

Hon. Mr. Ostashek: There would be no difference under the amendment that the Member has put forward. It would be exactly the same thing.

Mr. McDonald: No, the amendment talks about the exception of emergencies, which the Minister indicates is not an exception he would permit.

I asked the question about subsection (2)(c), which suggests that if the government gets into a serious accumulated deficit, there is the option for a debt-recovery plan. Basically, the government has to get out of the deficit within two years.

If the government, in its spending in the next year, overspends the mark and creates an accumulated debt of, say, $20 million, the bill, as it currently reads, is such that a new government may not have to call an election immediately - depending on whatever amendment the Minister is going to propose - but it would have one year to balance the books. The Minister is saying no. Could he tell the House how it would work?

Hon. Mr. Ostashek: My understanding of the bill is that a government would not have to balance the books at all. It could finish its whole mandate carrying no more than that deficit. The government could not add to it. The legislation says that the government would have to bring in a plan on how it plans to eliminate the deficit. It does not say that it has only one year to do it.

Mr. McDonald: Perhaps when we get to clause 7, the Minister can explain more properly what he means. The way I read the act, accumulated deficits simply are not permitted, and they have to be recovered immediately. There should be a plan to eliminate them, but they are still not allowed.

Perhaps the Minister can think about it, and we will deal with it in clause 7.

Chair: Are you prepared for the question on the amendment?

Amendment to Clause 3 negatived

Amendment proposed

Mrs. Firth: I move

THAT Bill No. 73, entitled Taxpayer Protection Act, be amended in clause 3 at page 2 by adding the following new clause:

"Surpluses

"3.1(1) Surpluses should be used to establish and maintain a fund which is equivalent to one month of the government's average annual spending, in order to minimize the need for short-term borrowing to cover immediate expenses.

"(2) Any surplus over and above that described in subsection (1) will first be applied to the accumulated deficit or debt of the Government of the Yukon.

"(3) In the event that the Government of the Yukon does not have any debt, at least half of any surpluses in a fiscal year shall be directed toward reducing personal income tax.

"(4) Any additional surpluses over and above those required to fulfill the obligations outlined in subsections (1), (2) and (3) will be spent as determined by a majority of the votes cast by the electors in a territory-wide referendum which presents various options."

Chair: It has been moved by the Member for Riverdale South that Bill No. 73, entitled Taxpayer Protection Act, be amended in clause 3 at page 2 by adding the following new clause:

"Surpluses

"3.1(1) Surpluses should be used to establish and maintain a fund which is equivalent to one month of the government's average annual spending, in order to minimize the need for short-term borrowing to cover immediate expenses.

"(2) Any surplus over and above that described in subsection (1) will first be applied to the accumulated deficit or debt of the Government of the Yukon.

"(3) In the event that the Government of the Yukon does not have any debt, at least half of any surpluses in a fiscal year shall be directed toward reducing personal income tax.

"(4) Any additional surpluses over and above those required to fulfill the obligations outlined in subsections (1), (2) and (3) will be spent as determined by a majority of the votes cast by the electors in a territory-wide referendum which presents various options."

Hon. Mr. Ostashek: For the record, we will be voting against this amendment.

Mrs. Firth: I remember our discussions with the Minister of Finance. He had some concerns about what to do with the surpluses. I think I have provided an alternative or an answer to the concern that the Minister of Finance had about surpluses.

I think I have outlined four very good points in this new clause. I think the important aspect of it is providing an opportunity to allow taxpayers to have input, once again, into surpluses and how they should be spent.

Of course, the most important principle that I have continued to espouse in this Legislature is that of reducing personal income taxes and putting money back in the hands of Yukoners so that they can decide how to spend it, as opposed to the government taking money away from them and deciding, on their behalf, how it is going to spend it.

That is a very strong conservative principle that I stand by. I am disappointed to see that the Members opposite, who call themselves conservative, do not support that very basic conservative principle.

This government and this Minister of Finance dug very deeply into the pockets of Yukoners, increased their taxes - increased corporate taxes, personal income taxes - and I think had a tremendous impact on individual disposable income in the Yukon. If anything is to be done with surpluses, I think that that is probably one of the most responsible issues the government could deal with, particularly if they are going to call themselves conservatives, and more particularly if they are going to be so bold as to refer to themselves as right-wingers.

I am extremely disappointed that the government is going to dismiss this particular amendment out of hand. I thought it might have been one that it would be interested in and would be prepared philosophically to incorporate into its bill, to make the bill, the Taxpayer Protection Act, a better one -

the bill that they hail as the cornerstone of their party and of their government, the bill that is going to get them re-elected and the bill that they are going to stake their reputations on. I am disappointed that the government, and the Minister of Finance in particular, is prepared to dismiss this particular clause out of hand without any real thought or debate on the issue.

Hon. Mr. Ostashek: We have looked at the Member's amendments for several days now, and we have put a lot of thought into them. We are not saying for one minute that the government would not reduce taxes; the government is saying that it is up to the Legislature to do that through this bill.

Mrs. Firth: It was not up to the Legislature to increase taxes. It was up to the government and the government increased the taxes. Yukoners had absolutely no say in that increase at all. Yukoners woke up one day and they had a budget introduced to the Legislature that gouged them.

Yukoners were going through a very tough economic time when the Minister of Finance decided to put his hand deep in their pockets. There was not a peep, a hint or thought for direct democracy, or of involving Yukoners in that decision.

There is a glaring contradiction in what the Minister of Finance is saying. I do not have to remind Yukoners of it, because I do not think they have forgotten about it and I do not think they will forget about it in the next eight months. I also do not think Yukoners will forget about it when they go into that little cardboard booth with their ballot to mark an "X" in the next election campaign.

Mr. McDonald: I have spent many years trying to fathom the conservative psyche. I have tried to understand, or at least predict, what will come from conservative benches. I would have sworn that a conservative would vote for this amendment. Let us take a look at this for a moment.

This government and previous governments have all stated that, as a matter of policy, they will keep a savings account equal to one month's operating reserve, if at all possible.

Clearly, under current circumstances, the government is not prepared to accept that notion, presumably because it is an election year, and it wants to drive the surplus down as much as possible. I think there are other reasons why one might want to spend some of the surplus but, I think, from the Yukon Party government's perspective, the fact that it is not prepared to go along with this section is puzzling.

It says here that any surplus will first be applied to accumulated deficit or debt. Presumably the government, which is so concerned about debt and deficit, would want to make the paying down of the debt its top priority. We will get to section 7 in a moment, but I would still argue that this bill does say that accumulated debts are not allowed - or the bill has to be changed or something. One can present a debt recovery plan, but the debt is still not allowed.

Based on the government's priorities, one would assume that this particular subsection would be something that it would greedily adopt - except, as the Member for Riverdale South had pointed out, for a glaring error. Clearly, if there is a surplus, the first priority is to pay the debt.

The Minister says that it is up to the Legislature to decide, from time to time, how the money should be spent. If that is the principle to be applied, we do not need any of this bill, because it is up to the Legislature every year to decide everything. So, I do not understand why the government is not prepared to put something like this in law.

The next clause says that if there is a surplus, the government shall take half of that surplus and put it toward reducing personal income tax. Using the government's argument - and I disagree with it - it says that it needed the taxes to get out of debt. It is out of debt in one year. Why does it need the taxes if it says it needs the taxes to get out of debt?

Why does government not give it back to the public if it is so concerned about the taxpayer? I would expect a conservative to take that position, and I am not surprised at all that the Member for Riverdale South is taking that position.

I am getting mixed signals from the government as to how much it cares about the taxpayer, in reality, and whether or not this is just smoke and mirrors.

The Member for Riverside pointed out that it is common knowledge that most people regard this as a bill being passed by the government to try to eliminate any public memory of their tax increases. Of course, as the Member for Riverdale South pointed out, that is not going to happen and never will happen, but I am certain the government thinks it is a valiant try.

The point, though, is that if the government was truly and genuinely concerned about taxpayers, the first people it would try to sooth would be the people it taxed in the first part of its term because, clearly, the government does not need the money in order to get out of debt or even to balance its budgets.

I am surprised the government has not agreed with this particular position.

The last clause deals with the suggestion that there should be a referendum on how to spend the money. I know the government believes in direct democracy when it comes to the revenue side of the balance sheet, but it certainly appears to be very, very reluctant to allow direct democracy when it comes to expenditures. That presents a lopsided balance sheet, which people who have household accounts or people who are in business know one cannot do and cannot have.

I am surprised that the government adopts direct democracy in some instances, representative democracy in other instances, and no democracy in other instances, particularly when it came to the whole issue of raising taxes in the first place.

I realize the government is going to vote against the amendment - that part of its position is clear - but I do not think I understand the reasons why. Could the Minister, from a good conservative perspective, explain this to me?

I know the Government Leader was trying to rally the conservatives in the country today, to band together to present a coherent option, and if they are going to band together, they are going to have to get the conservative philosophy straight so we can all be clear about it.

If the Government Leader is going to provide that kind of moral leadership to the rest of the country and to all conservative parties, wherever they are, could the Government Leader explain - seeing as this is something that I would regard as being inherently significant to a Conservative philosophy - why he cannot agree with this amendment?

Hon. Mr. Ostashek: I have already stated, on the record, why I would not agree with the amendment. I do not really think it needs to be stated again, but I said that I believe we do need some sort of protection from governments increasing taxes.

If we are going to go the entire route of the Member opposite's amendments, we would be doing everything by referendum in this Legislature. We believe that we can decide in this Legislature how the surpluses will be spent and to what uses they will be put.

Mr. McDonald: I am not sure whether or not the government really believes in referendum of direct democracy. It is being very selective about this direct democracy business. I would have thought that there would be lots of citizens who would want to express a vote on some of the expenditures this government has made in the last few years.

The government may even argue that the public might have wanted to have a referendum on some of the expenditures made by the previous NDP government, or even the previous-to-that conservative government. Why is the government being so selective when it comes to direct democracy? Why is there only one side of the balance sheet here?

There is more than that. It is not just the referendum question that is at stake here. This clause strikes to the heart of what it means to be a Conservative, in my opinion, and that the whole notion that the first priority is to get out of debt would be a top priority. The Minister seems to suggest - although I do not read the bill the same way as he does - that somehow the government can get into accumulated debt and stay there, as long as it was not responsible for the debt in the first place.

They have talked about a debt recovery plan, but that could be a plan over 15 years. There could still be surpluses and not get out of debt. Why not, at some point, state that if there are surpluses, to some extent the priority for the government is to get out of debt and to apply those surpluses to getting out of debt.

I am just trying to be the conservative conscience of the Conservative Party and if no other conservative will speak up for the conservative element, I am prepared to at least let their voice be heard.

Based on what the government said when it raised people's taxes, at the time, it did not talk about referenda, it talked about wanting to get out of debt. Actually, it talked about wanting to acced to federal Finance concerns that we were not paying enough taxes in the first place. That was the actual subject of debate at the time.

What has happened, effectively, is that the government has said that it raised these taxes for one reason, but when it comes to wanting to pay back the taxpayers once that concern is covered, there does not seem to be any willingness to get the money back into the taxpayers' hands.

The Minister falls back on the need to respect the whole notion of representative democracy and that referendum is not an option. On one hand, he has the representative-democracy flag wrapped around him, but whenever someone suggests that the legislators have a role to play in making decisions, he throws off that flag and wraps himself in the direct-democracy flag.

I do not understand why the government is not being philosophically consistent when it comes to paying back the taxpayers when the government has said that the taxpayer had to have their taxes increased in order to balance, or to get out of debt. This clause strikes right to the heart of the government's own statement.

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It says that surpluses, once acquired - thank goodness for fiscal responsibility, so that things are working in a fiscally responsible way - get one out of debt. Number one, the taxpayer gets paid back - is that not what conservatives do? I have been in the Legislature a long time, and that has been the rhetoric right up until now. I am absolutely flabbergasted that the Minister would dismiss this particular clause.

The issue that is going to have to be addressed is the whole notion about the debt recovery plan. We might as well deal with it sooner rather than later, because once we get this clause settled, all the great opportunities we have to be real conservatives will have been missed.

If we wait until clause 7 to talk about the debt recovery plan, we will have passed up all the rest of the clauses which actually allow this Legislature to pass a truly conservative, right-wing bill.

The act says that there shall be no accumulated deficit and that, if one is responsible for incurring a deficit, that one has a responsibility to go to the polls - right?

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If the government is not responsible for incurring one, it does not have to go to the polls in the next year, but the following year it may still be in an accumulated deficit situation. If someone says it has to present a debt recovery plan, that does not mean that the debt recovery plan forces it out of debt, because the next year it will have posted, as of October 31, an accumulated debt situation, and it will be forced to go to the polls the following February unless it recovers the deficit.

Essentially, it does say that the government must get out of debt, and the debt recovery plan itself is something that is not particularly relevant.

This amendment would provide some conservative guidance to a conservative Cabinet saying, "Look, top priority, get out of debt." Why not do something like that? Is that not acceptable? I am completely flabbergasted by the Minister. If he could respond, I would truly appreciate it.

Hon. Mr. Ostashek: We will get into that as we get further into the debate. I just want to say that I do not think anyone in the Legislature or in the Yukon would turn to the Leader of the Official Opposition as an authority on conservatism.

As for applying the surplus against the debt, that part of the amendment I would not have difficulty with, because it is common sense. Any government in its right mind would do it anyway. My concern is going to the people with a referendum.

Mr. Chair, I move you report progress at this time.

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Motion agreed to

Mr. Sloan: I move that the Speaker do now resume the Chair.

Hon. Mr. McDonald: I move that the Speaker do now resume the Chair.

Chair: It has been moved by Mr. Sloan 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. 73, entitled Taxpayer Protection Act, 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.

Speaker: The time being 9:30 p.m., this House stands adjourned until 1:30 p.m. tomorrow.

The House adjourned at 9:30 p.m.

The following Sessional Paper was tabled April 3, 1996:

96-2-127

Report of the Chief Electoral Officer of the Yukon on Contributions to Candidates (February 5, 1996 by-elections) (Speaker Devries)

The following documents were filed April 3, 1996:

92-2-16

Legislative Calendar: Part 1 (scheduled for Fall 1995 Session); Part 2 (approved but unscheduled); Part 3 (departmental, planned but not approved) (dated June 1995) (Moorcroft)

92-2-17

Carbon dioxide reductions: letter dated December 20, 1995, to the Member for Riversde, Jack Cable, from the Hon. Mickey Fisher, Minister of Renewable Resources (Cable)