Whitehorse, Yukon
Wednesday, April 2, 1997 - 1:30 p.m.
Speaker: I will now call the House to order. We will proceed at this time with prayers.
Prayers
DAILY ROUTINE
Speaker: We will proceed with the Order Paper.
Tributes.
Introduction of visitors.
Are there any returns or documents for tabling?
Are there any reports of committees?
Petitions.
PETITIONS
Petiton No. 2 - response
Hon. Mr. Keenan: Mr. Speaker, today I have the privilege and the pleasure of responding to Petition No. 2 of the First Session of the Twenty-Ninth Legislative Assembly, as presented by the Hon. Member for Watson Lake on December 17, 1996.
I would like to make the following statements.
This petition was submitted by many people concerned about increases in assessed values of property, mainly in the Whitehorse periphery. The regular reassessment of land and improvements in rural Yukon is a mechanism designed to distribute the tax burden fairly among the different classes of property.
I told the House on December 16th that we would be reviewing impacts of the reassessment increases in the areas assessed last year, prior to the legislated April 15th date for establishing the 1997 property tax rates.
As I've stated, this review would include encouraging people to express their concerns and thoughts on the matter. A series of open houses and briefing sessions were held with the public and local groups. The concerned property owners were sent a letter on January 23rd, which in essence outlined the assessment evaluation process. More importantly, it provided a step-by-step explanation of how to file a complaint if they believe their assessment to be incorrect.
Following the assessment review board process, some assessments were lowered. This government has demonstrated its willingness to take people's concerns into account in settling this year's property tax rates. This government believes in fair and equitable tax rates. Accordingly, we remain committed to no tax increases in tax rates, as we have stated in the election campaign.
As the Yukon taxing authority for properties outside incorporated municipalities, I am pleased to inform the Legislative Assembly that my Cabinet colleagues and I have decided that the 1997 property tax rate will be set to achieve an overall revenue-neutral effect, outside of new lands and buildings not previously assessed.
The tax rates will remain the same as last year, with special consideration given to a new Whitehorse north and south property taxation region.
The result will be a reduction in the effective tax that would otherwise be payable on the three classes of properties, and is as follows: residential/recreational by 23.75 percent less; agricultural by 29 percent less; non-residential by 16 percent less.
This reduction will help to mitigate the impact of the 1996 land reassessment. These percentages have been set to result in an average revenue-neutral result on existing land in the region.
This is comparable to the approach taken by the City of Whitehorse where there was a reassessment and the property values went up. The city is contemplating a reduction in its tax rate.
Land values in the south and north Whitehorse periphery areas have been increased substantially over the last five years. This area is subject to market factors different from those in other areas, due to its nearness to Whitehorse.
Along with substantial increases in full-time occupancy of properties and resulting density pressures, the area has now been designated a separate region for property tax purposes.
During the department's open house consultation process, many members of the public asked what services their property tax is for. They question whether there should be a relationship between the property tax rate and the cost of services provided to the properties being taxed.
Property tax rates have not been adjusted in many years, although new services and facilities have been provided, and the cost of providing these services has increased. It is time to address these inequities by having an informed, public discussion.
This year the Department of Community and Transportation Services will begin to consult with rural residents to get their input on ideas that relate the level of property taxation with the level of services provided. Not all neighbourhoods or communities have the same levels of local services to their properties, and many different opinions exist on what constitutes a basic level of service and on what services should be provided.
Over the next year, the department will undertake a two-stage consultation process. First, we will be seeking the views of Yukoners outside municipalities on desirable levels of local services and how these services should be funded. A draft "rural services" policy will be prepared taking into account what was heard during the first stage of public consultation. Then, public input will be sought on a draft policy. Once this work has been completed, the property tax adjustment will be reconsidered.
Mr. Speaker, I believe this will provide a solid basis for making decisions in the future that consider the lifestyles, the wants and needs of rural people, and are based on their input. Our objective is a policy that is based on equity and fairness that will enable us to set tax rates that reflect the level of services to property.
Thank you, Mr. Speaker.
Speaker: Are there any bills to be introduced?
Are there any notices of motion?
Are there any statements by ministers?
MINISTERIAL STATEMENTS
RCMP/Department of Justice: shared leadership vision statement
Hon. Ms. Moorcroft: Thank you, Mr. Speaker.
I rise today to inform members of this year's policing vision for the territory. The Yukon is the only jurisdiction in Canada where the government, as a contracting partner, participates with the RCMP in developing a directional statement to RCMP members.
The Shared Leadership Vision Statement 1997 places a high priority on building community partnership and encouraging public participation in the delivery of the policing service. This is the second time such a statement has been created and it is a very worthwhile exercise that I hope will be continued.
RCMP strategies to expand community policing include multi-disciplinary partnerships, First Nation policing, family group conferencing and supporting crime prevention efforts. It is my belief that the police must listen to the community and be responsive to their concerns. This means both traditional investigation of complaints and preventive kinds of community policing activities. I welcome the strong commitment by the RCMP to expanding the focus of their community policing initiatives.
I have travelled to a number of communities and have seen how committed and dedicated RCMP officers are in the performance of their duties. I look forward to visiting more of the detachments in rural Yukon where members make a contribution, not just to their job, but their community. RCMP officers speak to students in the schools and volunteer with youth sports activities. They deserve public recognition of these efforts.
We are making progress in community policing, community justice, involvement with youth, and the expansion of victim services to several communities. It is very clear to me that RCMP members believe in the community policing philosophy. They are building increased trust and confidence in our police force as they actively participate in meaningful approaches to delivery of police services in response to community concerns.
As the Shared Leadership Vision Statement 1997 points out, one of the most effective community policing strategies is to increase public involvement. Last night, the media were introduced to several community volunteers, members of the Whitehorse community policing pilot project, who are working with the RCMP to help resolve such problems as bush parties and property crime. This group consists of 14 people representing diverse interests and groups in the Whitehorse area.
Our government also recognizes the valuable work of the auxiliary policing program. I have asked the department to begin work developing options for what the Yukon can do to address current concerns. This work will include a review of how other jurisdictions provide a legislative basis for their auxiliary policing programs.
I want to thank Commanding Officer Tom Egglestone for the opportunity to work with him in developing our shared leadership vision statement. I am confident that, in cooperation with community members, the RCMP will continue to meet the challenges facing them and will adopt commonsense approaches to achieve our common vision of safe homes, streets and communities.
Thank you, Mr. Speaker.
Mr. Phillips: Thank you, Mr. Speaker. I'm pleased to see that the Minister of Justice is following the lead set by the previous Yukon Party government. A directional statement was a good idea in the past, and I'm pleased to see that the new government thinks it's a good idea now. It's difficult to criticize something that we initiated in the first place, and as long as the government stays on track, they will receive our support in these programs.
I'd like to commend Commanding Officer Tom Egglestone and his staff, and officials in the Department of Justice, for their efforts in delivering these community policing initiatives.
Thank you, Mr. Speaker.
Mr. Cable: Thanks, Mr. Speaker. I had the opportunity to review the first shared leadership vision statement, which this one follows, and I had formed the impression that the shared leadership vision statement was really a statement by the RCM Police that policing is too important a matter for the community simply to hand off to the police alone. Now the best police force in the world, which many think the RCMP is, cannot deal with crime and justice and community problems unless it has the backing of its employers, the members of the community. An involvement of this committee that was formed is a positive step toward obtaining that backing.
Now I had the pleasure last night of attending the meeting that the minister was at and meeting some of the people on the committee, and talking to them, and was struck by the diversity of the people that have come forward to work with the police. These people are to be complimented for stepping forward.
The committee's participation will ensure public ownership of the community policing process. The committee will also assist in identifying and prioritizing community concerns.
I should also comment that the review of the auxiliary policing program and the review of the legislative backdrop for the auxiliary police is a positive step.
Hon. Ms. Moorcroft: I would just like to thank the members opposite for their support of - not of our work necessarily, because that might be a little more difficult for them, but - the good work of our departmental officials and of the police and certainly the community volunteers, because the community policing initiative cannot be successful if it is resting solely on the police force itself.
It is heartwarming to see so many people from the Whitehorse area and the communities who are willing to get involved in the community policing efforts.
Speaker: Are there any other statements by ministers?
Activities of Yukon Hire Commission
Mr. Hardy: I rise today to inform the House on the work of the Yukon Hire Commission.
The role of the Yukon Hire Commission is to develop new policy to ensure that Yukon people have first crack at jobs in the communities and make sure Yukon businesses get their fair share of government contracts. We will be recommending long-term policies, regulations and new legislation to ensure that Yukoners get maximum benefit from government spending.
These new policies will use government spending power to contribute to the development and diversification of the Yukon economy. In other words, we will spend the little we have with more intelligence than has been the pattern in the past.
We do believe that government has a role to play in fostering economic development. We need to ensure that the Yukon government's spending creates as many jobs as possible. We are also well aware of the diminishing resources of the Yukon government, so we need to spend smarter.
Our first step in spending more intelligently is to get a better grasp on what the real problems are and what the potential solutions could look like, so we went out and asked Yukoners what the issues and the problems are and what they saw as potential solutions.
The Yukon Hire Commission is listening to what Yukon people of every walk of life have to say - construction workers, truckers, artists, computer technicians and lawyers, engineers, consultants, businesspeople in practically every industry operating in the Yukon, the public servants, the First Nation governments, municipalities, unions and business organizations.
So far the commission has been to Old Crow, to the northern highway communities of Beaver Creek, Burwash Landing, Destruction Bay, Haines Junctions and also to Carmacks and Carcross. Trips are planned in the very near future to Watson Lake, Ross River, Faro, Pelly Crossing, Mayo and Dawson City.
We're also conducting research. We're reviewing local hire and local purchasing provisions in the Yukon and other jurisdictions to see what has worked and what hasn't worked and why. We're also analyzing government data on contracting, purchasing and contribution agreements to pinpoint where the problem areas lie. The results of this work will be published in early June. We will then produce a discussion paper that will outline the issues and the proposed solutions. After that, we begin a second stage in consultation to develop a policy with all the people affected by these decisions.
Although our initial consultations are incomplete, certain common themes have been emerging. There are serious concerns with government planning, especially around budget timing. We heard this concern not only from the businesses and working people, but also from the civil servants who are frustrated with the current system.
Many businesses feel the tables are tilted in favour of firms from outside the Yukon, either because of the ways specifications or requests for proposals are drawn up or because of the timing of the projects. We need to take a close look at our tendering practices. In an era of shrinking government budgets, the government needs to get the biggest bang for its buck. A short-sighted approach to the lowest bids can have a serious negative effect on government finances.
A number of studies have shown that the low bids without wage and employment regulations have actually resulted in higher costs to government because of cost overruns, loss of tax revenue, encouragement of the underground economy and consequent tax losses, more work accidents, higher work and compensation costs and lower quality of work from using an untrained and often an unskilled, unqualified labour force.
What we need to consider is the overall government bottom line and the global effect of government spending on the economy and on our communities.
There is a need for a better and expanded training programs, especially training programs suited to the rural communities. As one result of what we heard, the Department of Education will be putting in place new modular training programs in Old Crow to ensure that residents of that community will have the skills needed to access jobs resulting from the construction of teacher housing and of the new school.
The Yukon Hire Commission will also be cooperating with other departments to develop a training strategy for the Yukon to ensure that Yukon people have the skills they need to get meaningful employment.
We need to make sure that local people get first crack at jobs and government contracts. Workers in the Yukon are frustrated by a lack of job opportunities, especially when they see jobs that could be done going to outside workers. We need to look carefully at our options and develop a made-in-Yukon policy that will result in the largest number of Yukoners getting work. This is the task we have set for ourselves, and we are well on our way.
Thank you, Mr. Speaker.
Mr. Ostashek: Thank you, Mr. Speaker.
It is somewhat ironic to hear the member stand up and try to build some credibility for his local hire commission as he says to ensure Yukon people have first cracks at jobs. It's somewhat ironic to see him do that after his leader has made a complete mockery of the local hire policy that he's trying to implement and this by his ham-handed decimation of the Land Claims Secretariat and removing some very competent people and replacing them with bureaucrats from a NDP regime in British Columbia. I think it sort of makes a mockery of the local hire commission.
Nevertheless, Mr. Speaker, I am glad to see the government is starting to realize that they do have a role to play in fostering economic development in the territory. That is something new for this administration, and I'm glad to see them admit it.
There is absolutely nothing new in what the member has relayed to this Legislature. My understanding was that we were going to get new initiatives, new direction, and that we would be informed of that. This is just a rehash of anything that has been said in the past.
It appears to me that the NDP, during the last election campaign, set up a straw man with this local hire issue and now they don't know how to deliver on it.
I would like to ask the member if he would be prepared to table a report in this Legislature on his consultations in the communities, along with the number of people that attended these consultations and a transcript of what was said. Will the member do that? He can tell us in his rebuttal.
Ms. Duncan: The Cabinet commissioner has offered an interesting, if somewhat incomplete, report to this House.
I took the opportunity to review Hansard, the last time we took the opportunity to discuss local hire.
At that time I repeatedly requested that the ways of work of the local hire commission be made clear. To some degree, this has been done. We know that the commission has made, or is making, a number of trips to Yukon communities and that they are reviewing local hire and local purchasing provisions in the Yukon.
The commissioner took my previous remarks to heart about developing a white paper, and I'm pleased that there will be a consolidation of the work and that a discussion paper will be coming out.
I suppose at that time the commissioner intends to take the Minister of Economic Development's suggestion and consult with the Opposition on this.
I found the common themes rather interesting, particularly point number 1: serious concerns around budget timing. Gee, that could have largely been resolved if the government and the members opposite had taken seriously, and really thought about, the suggestion of fixed sitting dates for this Legislature.
For example, if the public knows that the session will start on the second Wednesday in February, as it does in the NWT, you can be fairly certain that the budget will be announced shortly after that. Or, an announcement of when the budget will be made will come shortly after that.
The common theme of tendering practices - well, all of us heard that during the election campaign.
As the former manager of the Whitehorse Chamber of Commerce, I can tell you that the previous Government of Yukon tinkered with contract regulations and the previous Government of Yukon prior to that tinkered with contract regulations, and there was absolutely no doubt in my mind that whoever was seated opposite after September 30th would be tinkering with the contract regulations.
That being said, I wouldn't recommend that there be a huge stop sign and that we quit tinkering with these contract regulations. I would, however, use the term, "Caution, it's a slippery slope."
Yes, they could use some fine tuning, but be very, very careful. Every industry and every business situation in the Yukon is different, and writing one rule to apply to everyone is very difficult, if it's possible.
I applaud the commissioner's statement that what we need to consider is the overall government bottom line and the global effect of government spending on the economy and on our communities. That's right. That's why we in the effective Opposition scrutinize the budget so very, very carefully.
The commissioner also took to heart my comments on our last debate that local hire is about far more than government spending. It's about education. I am pleased that there are several education initiatives noted.
The commissioner did not hear all my remarks, or he didn't review Hansard prior to this progress report, as he seemed to focus on the role of government and neglected some of the creative ways government could also encourage local hire. Local purchase is local hire. The Government of Yukon is the largest single employer in this territory. What are you doing to encourage your employees to shop locally? I must have said this at least twice in this Legislature, that this has been a suggestion that has been out there since 1991 - six years. Surely, somebody could work out a creative way to work with YGEU to encourage local purchasing. Local purchasing means that you have to have the goods, you have to have the workforce, you have to have the price. It means working with the business community, and I'm looking forward to the local hire commissioner's progress report on this aspect of the local hire issue.
Speaker: Order. The Member has one minute remaining to wrap up her remarks.
Ms. Duncan: Thank you, Mr. Speaker.
Overall, I would like to thank the local hire commissioner for this progress report. Although he has ignored a number of obvious suggestions and, in a number of cases, restated long-held Yukon beliefs, we still don't have a definition of local hire. However, on the whole it's not a bad start.
Mr. Hardy: Actually, Mr. Speaker, it is really wonderful to hear the tremendous endorsement I am receiving from the other side. I believe it was well-heard during the election campaign and I believe the members opposite also believe that the work we are doing over was a long time in coming and are endorsing it, and it pleases me to hear such praise.
I'd like to just do a little history. It kind of falls in with the feeling that seems to be floating around here with this endorsement and agreement on the work that we're doing.
Back in 1986, there was a motion brought on the floor by the Official Opposition, which was the Yukon Party, or its predecessor name I think at that time, Progressive Conservative. Yes, Progressive Conservative, okay. Anyways, it was the hon. Member, Mr. Phelps. I will read his statement and it shows you the long-standing problem we faced in the Yukon and the difficulty in trying to come up with a local hire policy that will benefit people of the Yukon.
The motion was ... this a longstanding problem that has become, once again, very topical in recent days. The issue of local hire and the complaint that Yukon workers watch southern contractors bring their own workforce with them from outside the territory, where there are major government projects. It goes on to talk a little more, and he feels that the problem facing Yukon workers would be solved if the government would examine and develop a policy that would include a provision that for government contracts in the construction of buildings and large projects, the contractors be faced with the condition that they only hire people at established offices in the Yukon. It's local hiring halls, the kind of way he was talking about, and I felt that was real progressive, so it kind of helped with the name "progressive conservative".
The nice thing about this was a motion from the Opposition, and it was endorsed by the government of the day, which was an NDP government, and agreed to by every person that it's a major problem that has to be dealt with, and there was high unemployment at that time as well. Interesting enough, the two people that were talking back and forth to each other are both lawyers and agreed that a Charter challenge was something that they would deal with when it came along. So, no one brought that up today, but that's something that we're also approaching as well.
The comments by the Member for Porter Creek North - we're developing policy, we're not implementing policy at the moment. So we're in the process right now of consultation, and we are going to consult with as many people throughout the Yukon as possible who want to participate in this. The door is open for people to participate, and we're going out into the communities to ensure that they do have a say. We don't believe consultation is rehashing ideas. We believe it's finding solutions.
I thank the comments from the Member for Porter Creek South. She likes the word "take it to heart". I do take to heart what she said, and I hope that she works in a progressive manner with us as we try to resolve some of these issues.
The government does have an opportunity to set an example - the example of training and employment and benefits to the Yukon people - and we hope the example that we set will be copied by the private sector, and then all people in the Yukon will have a chance to prosper and the youth will have a chance to work and seniors will have a place to retire in dignity.
Thank you, Mr. Speaker.
Speaker: This then brings us to Question Period.
QUESTION PERIOD
Question re: Yukon Energy Corporation, sale of assets
Mr. Ostashek: Now that it is abundantly clear to Yukoners that they can no longer believe anything that the present government said when they were in Opposition or during the election campaign, my question is to the minister responsible for the privatization of YEC's assets.
The minister said in this House yesterday...
Speaker's ruling
Speaker: Order. I must ask the member to refer to the minister in his appropriate portfolio.
Mr. Ostashek: The minister of energy. He is still the minister responsible for privatization, Mr. Speaker.
The fact remains, Mr. Speaker, that the minister stood in this Legislature yesterday and said in a ministerial statement that this new arrangement was going to be an overall savings of $2 million for Yukoners over a five-year period.
I would like to ask the minister if he could stand up in the House today and explain to this Legislature and Yukoners where this saving is going to be realized.
Hon. Mr. Harding: Thank you, Mr. Speaker. I want to respond to the preamble to the member's question first. Firstly, Mr. Speaker, the rationalization that has been a small element of this proposed deal by the Yukon Energy Corporation Board of Directors presents some very good opportunities for Yukon people. It affects less than three percent of YEC's assets and it is a neutral asset transaction - it is simply a transfer of assets from distribution to generation. It does not affect the asset base of the corporation. Of course, that money will be invested in new asset infrastructure, in a very targeted way, to improve Yukoners' stead in the energy field. It also allows us to pursue direct management with greater economies of scale for the future. And, of course, it has the ultimate protection, for Yukoners who want to re-evaluate the deal, of a buy-back option at the end of five years.
This deal saves $2 million for the ratepayers of the Yukon over the next five years. Those savings will be obtained through a reduction in fees by YECL and also the provision of our own insurance to the Energy Corporation as opposed to the Alberta Power.
Mr. Ostashek: Mr. Speaker, regardless of how the minister wants to wrap weasel words around this, the fact is the letter that was written to me by the now-Government Leader on August 8th says, "We will continue to believe that the disposal of public assets to a privately owned company, particularly one based outside the territory, is not in the best interest of Yukon people."
That is exactly the position that the government took. The minister said that he is going to realize $2 million in savings on the management agreement when, in fact, in a briefing this morning we were told the only hard costs that we know of in the management agreements is a flat fee of $75,000, plus about $300,000 in costs. That's an arbitrary figure that's based on a best-effort calculation basis.
Mr. Speaker, the point here is, while the minister may be trying to realize those profits there, he is in fact giving up $2 million in return on investment by privatizing $4 million worth of assets. He's privatized $4 million worth of assets on which the Yukon Energy Corporation will not be getting a return. How does this relate to savings? The best the minister could say to the people today is it's a wash.
Hon. Mr. Harding: Thank you, Mr. Speaker. I regret that the member is once again uninformed. The deal will realize a savings to ratepayers over the five years to a reduction in fees from YECL. They used to charge over $800,000 a year. That's what we're paying this year because the former Government Leader, the member that I'm looking at now, failed to negotiate a new agreement of any kind, which put ratepayers on the hook for another $800,000 this year.
Unfortunately, Mr. Speaker, ratepayers will have to bear the brunt of that. With this new proposed arrangement in principle by the board of directors of the Yukon Energy Corporation, there is a savings of $2 million. The monies that are obtained from the assets - the poles and wires, the $4 million - will be invested in new assets so the same level of assets is maintained.
The Energy Corporation, as I understand it, is looking at those options right now, as is the board of directors. There's also, while that money is in transaction, it can be stored in an appropriate savings vehicle to accumulate interest.
Mr. Ostashek: But unfortunately it is the minister who doesn't understand. The fact remains that in order to save $2 million of the management agreement, he is giving up $2 million to $2.5 million in return on investment of assets that he has disposed of. Yes, the money is going to be reinvested at some point - at some point, not now - but the reality of it is that the corporation is going to have to invest in capital on an ongoing basis. The fact remains that we have given up $2.5 million in return on equity.
Inevitably, the sale of these assets to Alberta Power is going to lead to increased costs to the consumers. I would like the minister to explain to Yukoners what he is going to do to bring the energy bills down in the Yukon.
Hon. Mr. Harding: Thank you, Mr. Speaker.
Mr. Speaker, the member is completely wrong. This deal - this agreement in principle - as it was approved by the Energy Corporation Board, which he appointed - will save ratepayers in the Yukon $2 million over five years in decreased costs in management fees, and in savings that will be attributed to the handling of our own insurance matters.
Secondly, Mr. Speaker, with regard to the options around rationalization, it clearly was a very big part of the options for managing Yukon's power system that the former Government Leader put out in the summer of last year in consideration of this issue. Option number 4 - I've looked through the discussion papers - clearly shows that one of the options that the Government Leader was sponsoring was an option to rationalize assets or diversify ownership of the Yukon Energy Corporation. The facilitator's introductory notes in that public consultations tour say that there is still lots of room - this is according to the former Government Leader - for the consideration of new partnerships and that ownership structure. He goes on to say that the only thing he won't consider is full privatization of the utility as an option, and that is something we backed the Yukon Party government off of because the former Government Leader and the Member for Ross River-Southern Lakes were very much bent on privatizing, wholesalely, the operations of the Yukon Energy Corporation to southern interests.
What we have done, Mr. Speaker, is rationalize transfer assets from distribution to generation for the benefit of Yukoners, which will yield substantial cost savings and allow us to target asset investment in appropriate areas for Yukon ratepayers and Yukon citizens.
Question re: Yukon Energy Corporation, sale of assets
Mr. Ostashek: Thank you, Mr. Speaker. The minister has made quite a speech there, but he didn't answer the question.
The reality of the situation is, Mr. Speaker, we did not go on the public record, like the members opposite, saying that we should not dispose of any assets, and that is exactly what they've done. Now they've made a flip-flop.
In light of their making that flip-flop, if they now have a new vision - which they never shared with the Yukon people - of rationalizing the assets, why didn't they go all the way? Why are they still going to have a convoluted process? Why didn't the demand from Alberta Power that they give up their rights to the McIntyre hydro project? If we're going to rationalize assets, why aren't we doing it wholeheartedly.
Hon. Mr. Harding: The Opposition Leader is quite correct, that they didn't go on the public record with regard to their position on privatization. They gave backroom contracts to people to investigate it. They refused to tell the public, until we pulled it out of them, kicking and screaming, the privatization agenda that was being contemplated by the members opposite.
Mr. Speaker, we have done everything extremely transparently, we are supporting an agreement made by the board of Yukon Energy Corporation, and I invite the Leader of the Official Opposition to take up any concerns he has with Mr. Ernewein, the chair that he appointed to the board of the Yukon Energy Corporation, who supported the deal that was reached by the president of the corporation.
Mr. Speaker, this deal that is being proposed - and there are still some hurdles to go, it has to be finalized at the end of this month - proposes $2 million in savings to ratepayers over five years. It gives more control to Yukoners over the management of the assets. It moves away from that management agreement to more of an operational agreement.
Mr. Speaker, the rationalization only affects three percent of Yukon Energy Corporation's assets and it's a transfer from distribution to generation. It doesn't affect the asset base and allows us to target appropriate expenditures.
There's also, Mr. Speaker, a buy-back clause. At the end of the deal, if Yukon public, the board, or the Yukon government feels strongly that there should be a buy back of those assets, then they have the ability to do that at book value.
Mr. Ostashek: Thank you, Mr. Speaker.
I will concede to the member opposite that that's the only good clause in the agreement, so that a new government, five years from now, can get the Yukon people out of the sorry mess that this government's going to get them into with their actions on the new management agreement. What has happened is Alberta Power has held a gun to their head and said, "Take it or leave it," and this minister hasn't been able to negotiate strongly on behalf of the Yukon people and has caved in.
Mr. Speaker, I ask the minister in my supplementary question: can he tell me what benefit it is going to be to YEC and to Yukoners in having YECL retain 50-percent ownership of the McIntyre Creek hydro project?
Hon. Mr. Harding: Mr. Speaker, the Opposition Leader again is misinformed and erroneous in his comments. There was no gun held to our head. As a matter of fact, we considered the option of direct management, as did, as I understand it, the board of the Energy Corporation, which he appointed. We were only prepared to take a deal that was a good deal for all Yukoners. With regard to the allegation that we haven't been able to negotiate that, I would check his record against ours any day. The former Government Leader was an expert at getting to "no" when it came to negotiations whether it was devolution issues or land claims or the fact that he couldn't do anything other than to extend the contract with YECL for another year. His record is very abysmal on that subject.
Mr. Speaker, we're proud of our deal. It's going to yield savings for Yukon ratepayers. We are proud of the deal that the board has agreed to, and we think it's going to be in the best interests of Yukoners. It's going to give us more control and it does allow us to pursue energy options, such as looking at grid line extensions or substations or microhydro like the McIntyre Creek. There is $4 million that will be realized that will be reinvested into asset infrastructure, so we're quite pleased with it.
Mr. Ostashek: Mr. Speaker, I can just hear that member opposite if, in fact, I would have signed an agreement in front of a general election coming to the territory. In fact, his leader asked me not to, in this letter of August the 8th, and also not to sell any assets. That's what he did.
Mr. Speaker, I would like to ask the minister, in this final supplementary, for once let's get this clear for the people of the Yukon so they know what they're dealing with. Can he explain how the sale of YEC distribution assets in Mayo, Faro and Dawson City is going to reduce Yukoners' high power bills?
Hon. Mr. Harding: Well, Mr. Speaker, the reason we asked the government not to do a deal was because we knew we couldn't trust the direction of the previous government when it came to energy. We knew their agenda was clear. Their agenda was one of privatization to a major degree. We backed them off of wholesale privatization and selling off through the back rooms - the former Member for Ross River-Southern Lakes and the Government Leader giving contracts to their old friends to negotiate deals behind closed doors.
Mr. Speaker, the deal with rationalization that we are recommending be approved on the basis of the board's recommendation is one that we feel would be good for Yukoners. We feel it allows us to stick to the core businesses of generation and transmission. It allows us to invest in acid infrastructure to get us off the continuing push-pull we have with environmental hydro concerns versus diesel consumption and the cost of diesel consumption.
So we feel that it's going to be good in the long term for Yukon ratepayers in that respect. It's also going to be good for Yukon ratepayers, Mr. Speaker, because we managed not to extend the deal for another $800,000, like the former Government Leader. We managed to negotiate fee service reductions, and also to strike some arrangements with regard to insurance that will yield benefits for ratepayers.
Question re: Yukon Energy Corporation, financial position
Mr. Cable: I have some questions for the same minister on the financial position of the Yukon Energy Corporation. I've been going over the various claims that are going to be made on the profits of the Yukon Energy Corporation. What we have is, firstly, $2.5 million in a receivable owed by Anvil Range, and I don't think anybody's entertaining any hopes that that'll be paid in the near future. We have the $1.6 million that the minister has spoken about earlier for his rate relief program. We have the lost revenues from Anvil Range because of the shutdown, and we have the additional diesel costs because of the Aishihik directive. Now, if my math is correct, these add up to somewhere in the order of $14 million to $15 million in claims against the profits.
Now, those profits are generally the order of $7 million to $8 million. Does the minister share the view that the Yukon Energy Corporation is rapidly heading toward insolvency?
Hon. Mr. Harding: Obviously, it is a concern to us - the situation with regard to Anvil Range. On the first point, though, with regard to their overdue accounts, they have indicated to the Energy Corporation that they are prepared to pay them. I understand there have been some preliminary discussions, to be followed by more formal ones, to set out the repayment of overdue bills and to set up that schedule. There are a number of receivables due Anvil Range from concentrate that has been shipped to the Orient - to their market - so they will have some cashflow very shortly.
There has been a miner's lien placed against assets and property assets for the amount that is owed the Energy Corporation. With regard to those lost revenues, the Anvil Range mine only went off the system as of two days ago. My understanding is that they fully intend to work toward a startup as soon as possible. That could be, in terms of the mill, in August.
With regard to the additional costs of the decision not to use the bottom two feet of Aishihik Lake, that did yield some additional costs, but there were revenues in YDC that will be used to offset that. So, along with the fact that there was the rate rider that was approved by the Yukon Party government - the application to go to the courts by YEC back in 1993 - that yielded some more revenues for the corporation.
While the situation is a concern - and I have relayed that concern to the president of the corporation - I do not think that it has reached the stage - nor should it - to declare it insolvent. Mr. Speaker, it is important that the revenues that Anvil Range owes are accumulated by the corporation.
Mr. Cable: It sounds like some "could have beens" and "possibly will be's" on the payment of the Anvil Range receivable and the possible startup of the Anvil Range mining operation.
Is the minister of the view that the disastrous financial position of the Energy Corporation is going to exert significant upward pressure on rates, making the government's election promise to stabilize electricity rates impossible to achieve?
Hon. Mr. Harding: Mr. Speaker, the member is being extremely alarmist. I am not sure exactly what he is getting at. Is he asking us to cancel bill relief? Is he asking us to drain down Aishihik Lake and not make good on election commitments to mitigate the environmental effects there? I am not quite sure what the member is getting at. Is he asking us to take some radical action against Anvil Range when they have had a miner's lien placed on them, when they have committed to a repayment schedule? I am not quite sure what he wants us to do.
Mr. Speaker, with regard to our commitment to stabilize rates, one of the very first acts of this government was to bring in an extended rate relief program - something that the Yukon Party government refused to do. Also, Mr. Speaker, we bear the brunt of a 30-percent increase in world diesel prices - a rate rider that was approved by the Utilities Board - before we ever even came into office. We also faced an increase as a result of a 1993 decision for the YEC to go to court to get costs they felt they were entitled to - that the previous Yukon Party government should have taken action on at that time.
Mr. Cable: Well, I'll tell the minister what I'm asking him to do: recognize the problem before it hits him in the face.
Now the minister had mentioned the $10 million that's sitting in the Yukon Development Corporation, the parent company of the Yukon Energy Corporation, and he's indicated that he may use it to buttress the financial position of the Energy Corporation. Can we get a commitment from the minister to stay away from any financial adventures with this $10 million until the Energy Corporation's financial position has stabilized?
Hon. Mr. Harding: Well, Mr. Speaker, we have clearly indicated from the time we announced the Aishihik decision that Yukon Development Corporation accumulated revenues would be used to offset any additional cost to ratepayers as a result of not using hydro capacity with respect to possible environmental concerns that were identified by the technical advisory group.
So, Mr. Speaker, I will say that we are recognizing it as a potential problem. Obviously, with Anvil Range, the largest customer in the Yukon going off the system, I've asked the Energy Corporation to ensure that they're looking at cutting costs where they can to prepare for the brunt. I've asked them to take whatever legal action they have to to secure the payment of the money that is owed to them. They are in discussions, as I understand it, about energy options with Anvil Range. They're in discussions about a repayment schedule.
Certainly, Mr. Speaker, we have to be assured that we're in control of the situation. We know what the books look like, but there is no need for the member to be alarmed. I can assure him of that.
Question re: Energy policy
Mr. Cable: I have some questions for the energy commissioner on energy policy. The commissioner has been asked to establish a comprehensive energy policy through his Cabinet Commission on Energy. Now, some jurisdictions in Canada are looking at competition in the supply of electricity. Is the commissioner prepared to listen to submissions on, and consider, competition in the supply of electricity?
Mr. McRobb: Thank you very much, Mr. Speaker. It is indeed a pleasure to be the first commissioner to answer a question in this House.
I'm not prepared to sit down just yet. The commission will entertain submissions from any interested parties, Mr. Speaker, on any aspect of developing a comprehensive energy policy. The member opposite refers to what is known as electricity market reform in other parts of the country in North America.
We must keep in mind the Yukon is very unique in several aspects. Number one, we are not part of the main North American electrical grid and we have several factors in the Yukon that are unique to the territory that we must consider before merely adopting practices that are emerging in the south.
Mr. Cable: I thank the commissioner for his first answer.
Now, some jurisdictions in Canada permit municipalities to own and run their own electrical distribution systems, and restoring the right to do this has been pushed, in the past, by the Association of Yukon Communities and by one of the ex-mayors of Dawson, I believe.
Is the commissioner prepared to listen to submissions on municipal involvement in electricity distribution as part of his development of a comprehensive energy policy?
Mr. McRobb: Absolutely, Mr. Speaker, and that opportunity was made quite clear to the president of the Association of Yukon Communities when I met with him as part of our ongoing stakeholder consultation process.
Mr. Cable: Now, the agreement in principle between Yukon Energy Corporation and Yukon Electrical Company Ltd. sets out that a long-term, 20-year franchise will be negotiated with Yukon Electrical Company Ltd. - presumably an exclusive franchise arrangement. This would appear to slam the door shut on competition at the retail level and municipal involvement for at least 20 years.
Is the commissioner of the view that he's now wasting his time on bringing these two issues forward - that is, competition and policies relating to municipal franchising?
Mr. McRobb: Mr. Speaker, I do not see a conflict in what the member opposite raises. There are several aspects to municipal ownership of electrical infrastructure in the territory. As the Member knows from his eight-month stint as president of YEC in 1991, the Public Utilities Act prevents any duplication of electrical services in the communities. There can only be one set of transmission lines and poles. In any case, Yukon Electrical is the major owner of that infrastructure and would have to be dealt with in any event.
Question re: Yukon Energy Corporation, sale of assets
Mr. Jenkins: Thank you, Mr. Speaker. My question today is to the minister responsible for the Yukon Energy Corporation and divesting of the assets of the Yukon Energy Corporation.
In 1987, Yukon was handed a plum with the transfer of the assets of the Northern Canada Power Commission. We were given complete control over our energy future here. The previous NDP government squandered the profits from that cash cow, investing the profits in ill-fated ventures such as the Watson Lake sawmill. The Yukon Party subsequently ensured that the future Energy Corporation profits could only be spent on energy-related projects. But now we have a new government literally selling off the energy infrastructure from this corporation. At the briefing this morning, the financial position of the Energy Corporation was laid out, and it is precarious.
What is the minister going to do to ensure that we have reliable fixed-cost power delivered, so that he can meet his commitments that he has given to this House previously?
Hon. Mr. Harding: Well, Mr. Speaker, I don't know how many times we're going to have to fight the Watson Lake sawmill battle in this Legislature - it seems like thousands and there's been, I don't know, two or three elections since that event - but anyway, if the members want to keep bringing it up they can.
Mr. Speaker, the member for Dawson made a ridiculous allegation that we're selling off the assets, there's been a transfer of assets from distribution to generation. There's a buy-back clause with that at the end of the agreement at book value. We feel that that's a good deal.
One of the ways we'll stabilize rates for ratepayers is through the continued operation of a bill relief program, one that we brought in that the Yukon Party refused to agree to, just last December, Mr. Speaker.
Also, we will continue to do things like reach new arrangements that reduce fees for management, like we just did in this new agreement in principle. We won't keep extending and extending and extending and putting off the tough decisions like the former Government Leader at a cost of over $800,000 a year to ratepayers.
Mr. Jenkins: Thank you, Mr. Speaker. That was a very disjointed answer that goes nowhere. It was no answer.
Can the minister explain how the Yukon Energy Corporation's divesting of its assets is going to give Yukoners more control of our energy future? It simply is not the case. Please explain, Mr. Minister.
Hon. Mr. Harding: First of all, the assertion is wrong that there's a divesting of assets. There's a transfer from distribution to generation. The asset level of the Energy Corporation, the publicly owned, publicly controlled utility, stays the same. There are more strategic asset investments contemplated to help us deal with some of the supply problems that we have in the territory.
Mr. Speaker, we believe that this charts a very solid course for the Yukon and certainly will help us, as a result of this arrangement, cut costs that we were paying for management fees to YECL as a result of the failure of the previous administration to reach a new agreement on this.
Mr. Jenkins: Thank you, Mr. Speaker.
It's obvious, Mr. Speaker, that the minister knows nothing about finance as it relates to energy.
Can the minister explain how the Yukon Energy Corporation's divesting of its assets is going to reduce the cost of electricity for electrical consumers? Let's try another approach.
Hon. Mr. Harding: Mr. Speaker, one of the major ... First, I must take issue again with the preamble and allegations of divesting of assets; there is simply a rationalization of assets here, a transfer from distribution to generation. This will allow us to invest in asset infrastructure in this territory that is more targeted, that will enable us to deal with some of the major supply problems here in the Yukon and the constant trade-off between the use of hydro, which has an environmental impact, as well as diesel, which also has an environmental impact but also has a very, very high cost. So, that's how it will help Yukoners.
The other way, this arrangement with YECL - which has a buy-back clause, as I might add again - that was negotiated by the Yukon Party-appointed board of directors of the Yukon Energy Corporation, Mr. Speaker, is that it will reduce support fees and management fees that were just extended to the cost of ratepayers by the previous government of some $800,000. So, that's another way that it will help reduce rates for Yukon ratepayers and will help to keep us in check.
Another way is through the extension of the bill relief program, which we just did in December, something the previous government would not commit to as well.
Speaker: The time for Question Period has now elapsed, and we will proceed to Orders of the Day.
ORDERS OF THE DAY
MOTIONS OTHER THAN GOVERNMENT MOTIONS
Clerk: Motion No. 52, standing in the name of Mr. Hardy.
Motion No. 52
Speaker: It is moved by the Member for Whitehorse Centre
THAT it is the opinion of this House that:
THAT this House expresses strong disapproval of this neglect of duty, and urges the Federal Government to work with the provinces and territories to stop the offloading and restore funding to essential programs that addresses serious social needs.
Mr. Hardy: Mr. Speaker, I rise to speak in support of this motion. Here in the Yukon we're starting to feel the effects of the federal government policy that is threatening the quality of life of many of us, especially the disadvantaged. It's a multi-faceted policy that goes far beyond the cuts to such important and valuable programs as YES, or the parenting program, Nobody's Perfect. Withdrawal of federal funding from community programs that depend on the financial support and cuts to initiatives for which YTG receives funding, such as French and aboriginal language programs, may be the most visible and distressing signs of the federal Liberal policy, but they represent only a small part of the whole picture.
I want to place these actions in a larger context.
As some Yukoners are beginning to realize, based on local experience, we're entering into a new and perilous arrangement with the federal government with regards to health and social service funding. Mr. Speaker, the relationship between the Canadian government and the provinces and territories is changing in a profound and serious way. I believe many Canadians are still not quite aware of how serious the impact will be further down the road. Never before have we witnessed such a callous dismantling of the social safety net in Canada, putting at grave risk the programs and services which all Canadians are dependent upon, take tremendous pride in and which have served in a major way to define the Canadian national identify, one that is recognized throughout the world and is envied by many countries.
We as Canadians, long ago, came to believe that there are certain areas of common concern that are so important, so vital, to the well-being of Canadians everywhere that strong federal government was needed to deal with them. So the federal government took responsibility for broad areas of social programming and health care, education and UIC. They did this at a time when Canada was divided, when certain areas, provinces, territories, were trying to meet the needs of the people. It was recognized under a federal system that there was going to be a need to have national programs that reached across from coast to coast to coast.
It did this by providing funding assistance to the provinces and territories, and by using that funding power to enact national standards for accessibility and quality of service. Part of the condition was that these national standards would be in place no matter where you lived. This is starting to change, and it's changing fast.
The changes originally started with the Mulroney government. They've been picked up by the Liberal government. It's not a change that's happened within the last year or two years. It's change that's been progressing for the last 10 or 12 years.
They've done this by creating hysteria throughout Canada on the debt and deficit. They've done this by blaming our social programs as a cause of our debt. Unfortunately, many people aren't aware of or appreciate the fundamental threat that these changes are going to have and the fact that, in many cases, what they're saying is not true.
The cuts themselves are only one part of the problem we're facing. As I've already mentioned, it's the way the federal government has redefined its relationship with the provinces and territories that should be setting off alarm bells across this country. And I believe it's starting to be heard; it's starting to be felt. There's definitely a movement among many organizations, many groups, throughout Canada that are now saying enough is enough. We do hold some things sacred throughout Canada.
Under the Mulroney government, some $40 billion or more, depending on whose figures you use - some say $49 billion; well, I'm using a conservative figure; oh, I hear $51 billion - a major amount. I'm being very conservative here, which is not really my nature, but I'm trying hard. Okay, we'll go with the $51 billion - were cut from federal provincial transfers. This represents an enormous reduction in funding for vital social programs. The Liberal government continued this policy when they took power and cut another $8 billion or so from transfer payments. Now, that might be the 40, 42 or 43 plus the eight that would make $51 billion. Those are the ones that are identified. There are more cuts. There're more changes that are happening. These cuts are being felt throughout Canada, and they're being felt in the CBC program, something we hold sacred up here and that's needed by many people; the YES program; NGO programs that they offer for communities, for people. Within my own riding, it's having a tremendous effect.
The federal Liberals adopted the Conservative government's cuts, even though they weren't talked about during the last election, and advanced them even further and have run with them. Now what we have is changes in the rules which I believe put all Canadians at risk. This motion asks to try to address some of these risks, to try to slow it down, to try to protect the people of the Yukon, but to go even further than that: to become part of a movement to try to protect what we call Canada.
We're witnessing the nearly complete destruction of national standards in social services, and health care standards are not far behind. There's no longer a necessity that provinces and territories spend the reduced federal money on health or social programs. So imagine, you can get a chunk of money, a block transfer of money. Before, if it was for education, it had to be spent for education. If it was for the youth, if it was for the elderly, it had to be spent for them. It was marked for them.
Now it doesn't have to be. Now you can take the money that you received for the elderly and build more roads, build more mining roads - take that money and transfer it to where you may feel political pressure. There are no standards being attached to it. There are no conditions. There's no longer any requirement that social assistance be made available to those in need and that there be a right to an appeal. There are no standards that no one be forced to work for welfare. Yet, we have to pay more taxes.
So, these huge cuts every year are getting larger and larger and are affecting Canadians and are affecting Yukoners directly. We're still being taxed more. So, where are our tax dollars going? Who gave the authorization to be able to take, to cut and cut, to attack our national standards, the very fabric of Canada, and yet still keep charging us the same amount of taxes, to still keep taking more from the low-income working class and middle-income people?
Now, I've read in the paper recently as well, but I've also heard about this direct phone line. This is a request from the Liberal Opposition. I've heard about this direct phone line that they have with the Prime Minister, and I've asked them to call him up. I've also heard from some of the candidates who are seeking the nomination that it's a great advantage to the Yukon to have somebody up here that would be, if the Liberal government won the next election, that there should be a Liberal member up here, t
hat it would be a great advantage for that link because that direct phone line that they've already said they have would be even more direct, because that person may be living down there now. It's a 1-900 number with an answering machine on the end.
I asked them to phone. I asked them directly to save the YES program. It is a federally sponsored program. Phone them up. Save CBC. Maybe they don't care. Maybe it just doesn't mean much to them. The youth doesn't matter too much; let the feds cut it. That's all right. Let CBC be cut $300 million. That's all right. Let the NGOs be cut. All these affect the people in my riding. The seniors being cut - the programs - the changes to the Canadian Pension Plan. The small businesses are being asked to pay more into the Canadian Pension Plan. But then you read a little bit further and realize there is going to be less for the people that are retiring by the year 2000. Once again, more taxes - indirectly more taxes, less benefit. Why? That might be good if you are in a business and all you can think about is profit, profit, profit.
We all do know how the finance minister does his taxes. We are all very aware of how he has ensured himself that he pays what some people in his circles call his fair share. We also know how the banks pay their fair share. But what about the working people and other small businesses? What about the low income that still pay taxes and yet can barely get by. And yet, we are still facing cuts. These cuts are affecting the people of the Yukon.
I ask the Liberals to use their pull and demonstrate to the people of the Yukon that tremendous pull that they have. I ask them to demonstrate it to us today and make a promise that they will, and support this motion.
Mr. Jenkins: Thank you very much, Mr. Speaker. I rise today to support this motion in principle. The Canadian social safety net is a major feature in our country. Canadians enjoy it. I guess those damn federal Liberals are destroying it with their downloading, so we will just have to take them to task very quickly.
We have to recognize that in Canada there is really only one taxpayer that is funding all of these various programs. Numerous other federal programs have been downloaded previously: post-secondary education field, maintenance enforcement and numerous others.
While I do not agree with the federal cuts and the downloading as a way of balancing the federal budget to cut out the deficit, let us recognize, Mr. Speaker, that this government is well financed to weather a storm.
What I would like to suggest, Mr. Speaker, is that this government examine its priorities as to where its expenditures are going - eliminate the commissioners, their respective staff - and there'll be ample money to support a number of these programs such as the YES program.
Some Hon. Member: (Inaudible)
Mr. Jenkins: Well, that would be consistent in an approach - shoot them all.
Some Hon. Member: (Inaudible)
Point of order
Speaker: Order. The Member for Riverdale South, on a point of order.
Unparliamentary language
Mrs. Edelman: What are we going to do with them? Shoot them? I see that as violent language, Mr. Speaker.
Speaker's ruling
Speaker: I'm going to have to call the member to order on that and ask, pursuant to the recent SCREP recommendations to this House, that you withdraw those remarks, please.
Hon. Mr. Keenan: On the point of order, I'd also like to clarify that that is violent language and certainly the agreement with that is violent language, and I would say that they both are out of order.
Speaker: I just remind the members, even in off-hand remarks, that you could simply follow the guidelines that were put forward by the SCREP.
Withdrawal of remark
Mr. Hardy: Mr. Speaker, I apologize. I withdraw the remark.
Mr. Jenkins: Thank you, Mr. Speaker.
Mr. Speaker, it is my feeling that what we have to do is just get the government of the day to re-examine their priorities as to where their expenditures are going, and I'm sure with some prudent advice and some good fiscal management, they can address the numerous programs that are being downloaded from the federal government and address the responsibilities that are expected by Yukoners from this government.
Thank you, Mr. Speaker.
Hon. Mr. Sloan: Thank you, Mr. Speaker. I was trying to put some fright into my colleague from Riverdale South over there with my copious notes, here. However, I did see Hamlet last night just to reassure myself that some people spoke longer than I did. Having taken Polonius' injunction that brevity is the soul of wit, I've trimmed a little from my comments.
Mr. Speaker, today I would like to address an issue that does have a serious impact on all Yukoners and, indeed, on many Canadians. The federal Liberal government, which has long prided itself on national unity, has in fact, over the last few years, been systematically undertaking the dismantling of many of the programs for which this country is renowned and which give our country a sense of purpose and a sense of unity.
In its headlong rush to appease its fiscal financial masters on Bay Street, the federal Liberal government has forgotten ordinary Canadians. It's only in the past few weeks, Mr. Speaker, that many Canadians have begun to see the reality of the impact of the federal budget of 1995-96. Monday saw the cessation of numerous programs throughout this country. Last Friday, 2,500 CBC employees walked out the door for the last time, thanks to the cuts of this federal Liberal government.
In this territory, the most significant impact is that of the federal transfer payment cuts, which are now estimated at $20 million. For a jurisdiction such as ours, the impact is tremendous. We simply don't have the large-scale industries or population base to offset these losses.
Moreover, Mr. Speaker, beyond the transfer payment cuts, it appears that the territory will experience federal program cuts of an estimated further $5.3 million. In the last two federal budgets, $7 billion have been cut from Health and Social Services and post-secondary education - a cut of 40 percent.
All of these, Mr. Speaker, are from a Liberal government that tries to claim a social legacy. This government has proven one thing: it's proven and demonstrated its ability to protect its corporate friends. Massive family trusts persist, allowing many wealthy Canadians to protect family fortunes from taxes. Corporate Canada continues to enjoy a $51 billion tax holiday. The federal Liberals, who were so pious in their condemnation of the Mulroney drug patent law, have now agreed to the dominance of pharmaceutical multinationals and have retained Bill C-91, which costs Canadians and the health systems, primarily in the provinces and territories, millions - literally billions - in extra expenses. At the risk of being laughed out of this Chamber, I would remind the members of the Prime Minister's vow to scrap the GST.
It's estimated that the latest Liberal tax grab -
Some Hon. Member: (Inaudible)
Hon. Mr. Sloan: Okay. In fact, the latest Liberal tax grab, which is the supposed tax harmonization, will see a shift of $6 billion to $7 billion in the tax burden from corporations to consumers in this country, and of course we're still waiting for the 250,000 child care spaces.
Mr. Speaker, what I find most odious about this, however, is the determination of the federal Liberal government to wage a deficit war on the backs of the provinces and territories through offloading. Recently, I met with the social services ministers in Manitoba and Saskatchewan, who told me of the doubling of their social budgets that occurred when the federal government abandoned all fiduciary responsibilities to off-reserve First Nations people. The most recent provincial-territorial council meeting has asked aboriginal affairs ministers from throughout the provinces to consult with First Nations governments to get a clearer and more definite picture of what this impact is going to be on First Nations people throughout the country, but predominantly in the west.
Ministers from Atlantic Canada talked about UI changes that have reduced eligibility, increased the numbers of hours that have to be worked to qualify for employment insurance - formerly called unemployment insurance, now euphemistically changed. These changes have consequently ballooned social assistance demands and, Mr. Speaker, this is a situation which we are facing in the Yukon as more and more Yukoners simply do not qualify for employment insurance and are forced on to social assistance. We have an economy here that is very seasonal in nature. Many of the people in this territory work in jobs related to tourism and, unfortunately, the kind of qualifications that they now require do not allow them to qualify for employment insurance and, consequently, they are forced on to social assistance. It is being noted in increased social assistance costs.
I'd like to speak a little more about the situation in the Yukon, and I'd like to take a few moments to catalogue what the impact has been here and what it means to Yukoners. Let's just take a look at some of the impact of federal offloading in the last few years.
Young Offenders Act funding - this comes under the Department of Health and Social Services. The ceiling was set at the 1988-89 levels. The losses for us in 1995-96 are $258,000; in 1995-96, $250,000; the losses for 1996-97 will be $52,000 - almost $53,000. Mr. Speaker, we've seen the Department of Indian Affairs simply backing away from bills that are outstanding to this territory, primarily for issues surrounding child care. The losses for 1993-94 and 1994-95 are $8,143,000. The losses for 1995-96 are $9,434,000. Mr. Speaker, they've simply stopped paying. They don't pay, and this money is outstanding. So when the Member for Klondike refers to some moderate changes, I would dispute that.
The replacement of the Canada assistance program with the Canadian health services transfer has represented a loss in 1996-97 of $1.1 million. As I mentioned before, the changes to UI with reduced weeks of benefit, stricter eligibility, et cetera, we do not yet have a figure in, but we suspect that it will be a significant portion of increased social assistance costs. We just believe that this is the case.
Crossroads - the federal government has stopped paying for status First Nations people. This money did go to NNADAP, but we did not receive any of it to the treatment facility. That represents $115,000. Social assistance regulations, which help social assistance recipients in the Human Resources Development Canada programs, have been cut to the tune of $300,000. Skookum Jim's lost a federally funded counsellor to the tune of $30,000 and the child care initiatives that were promised by the federal Liberal government represent a loss to this territory of $774,000. Some of that will be recovered, to be fair, in such programs as the national child benefit, but it represents still a loss of $774,000 to us.
Now, Mr. Speaker, as you can see, this Liberal legacy goes on and on and, quite frankly, it's no surprise that the last true Liberal left in Canada, Warren Allmand, is heading for the hills and getting out of politics.
I'd like to take a look at what I regard is the most disturbing and damaging aspect of the federal withdrawal from the social field and that is the reduction to non-governmental groups.
The federal government has proved itself relatively adept at beginning programs, then stepping away after raising expectations. We've seen this most recently with programs such as the YES, the tobacco reduction strategy, new horizons for aging and other programs.
If this territory were expected to take up federally offloaded programs to non-governmental agencies, it is projected that it would be an additional $750,000. For us to take up the cost of such programs could only come at the expense of already hard-pressed NGOs.
Yet, Mr. Speaker, where is the outcry? Where are the social-conscious Liberals? They are strangely silent, strangely silent. I suppose they don't want to mess up their chances for a Senate appointment.
You know, Mr. Speaker, I can sort of understand the federal Liberal candidates. After all, they don't want to annoy their federal power brokers. And as Francis Bacon once observed, silence is the virtue of fools.
I'm a little more disappointed with my friends across the floor because I had supposed that they would have some measure of care for programs here. So, I've asked why haven't the Liberals in this House been standing up for Yukoners? Why haven't they spoken out? And then it struck me, Mr. Speaker. It struck me. It came as a revelation. They don't have the number.
The Member for Riverdale North, I want to you to observe this: they don't have the number.
So, Mr. Speaker, you know I was pondering this problem: why haven't they called. My friend from Whitehorse Centre said, "Get on the phone." And I thought, why haven't they called and this made me think, well, they've lost the number. So, I was wondering about this and a chance comment from my friend from Kluane kind of came up and it gave me an idea. I realized I had to provide the necessary number for my friends across the floor and as well, as an educator, Mr. Speaker, you'll appreciate this: you know the value of audio-visual aids in such teaching. So, what I would like to do is assist my friends across the floor in accessing their friends in Ottawa and, as you can see, "Dave Dingwall: say yes to YES. Give Dave a ding: 613-957-0200."
Well, that's the problem, that's the problem, Mr. Speaker. We've got two Dave's here and unfortunately, we're not the big Dave's.
Some Hon. Member: (Inaudible)
Hon. Mr. Sloan: I'm sorry?
Some Hon. Member: (Inaudible)
Hon. Mr. Sloan: Oh, have I stirred something there, Mr. Speaker? Have I perhaps probed a nerve?
So, once again, "Dave Dingwall: say yes to YES. Give Dave a ding, 613-957-0200." Now, Mr. Speaker, this has changed from the earlier number, which was 613-957-CHOP, so they have changed it; I think it's part of their strategy to keep any criticism off there. So perhaps I'll just leave it out here for members later on.
Now I'm very confident that they have the number. Mr. Dingwall will be subjected to a veritable cacophony from my friends across the floor as they rouse themselves against this whole question - cacophony, I'll send a definition - of federal offloading.
Mr. Speaker, humour aside, this territory has neither the population, the economics nor the political clout to deal with federal offloading of this kind.
At recent meetings I've heard Minister Pettigrew extol the virtues of cooperative federalism. If, indeed a renewed federation is desired, it needs to be realized that it cannot be accomplished at the expense of smaller jurisdictions. The federation is not Quebec and Ontario.
This new federation cannot be accomplished by financially and socially disenfranchising Canadians and Yukoners. It cannot be accomplished by pandering to the wealthy of this country, while forgetting the First Nations. It cannot be accomplished by remembering only the privileged of Westmont and Rosedale and forgetting the children of Carmacks and the seniors of Dawson.
Mr. Speaker, I ask that all members of this Assembly join in condemning the actions of the federal government in unraveling our social fabric.
Thank you.
Mrs. Edelman: Well, first of all, Mr. Speaker, I have heard the concerns of the members who spoke before me, and please rest assured that the next time I am on the red line with the Prime Minister of Canada, Mr. Chretien, I will pass on those concerns.
During my two terms of office as city councillor for the City of Whitehorse, I, along with the other councillors and the mayor, was responsible for approximately $240 million worth of municipal expenditures. Now, a portion of those dollars are from revenue from taxes and licensing and fees, but the vast majority of those funds came from a block funding arrangement with the territorial government. This block funding negotiation was started in 1985, coincidentally the same year block funding from the federal government started on the territorial level.
Now, I was not one of the municipal councillors who took part in the negotiation process with YTG, but it was my understanding from the city councillors who did take part in the process that block funding was a great improvement on the previous arrangements that municipalities had with the territorial government. Like formula financing to the territorial government from the feds, block funding brought the ability to make program funding decisions closer to local government. Previously, every time a capital project or a program was necessary, the City of Whitehorse had to go hat in hand to the territorial government and literally beg for the money to go ahead.
Many of us are parents, and we were all children, so we can understand that having to go to the federal government or the territorial government for funding prior to block transfers was a little like going to a parent for your allowance. It was not a happy situation. Territorial formula financing from the federal government supports the evolution of accountable government in the north by making territorial governments responsible to their electorates rather than the federal government for their fiscal decision making.
Now, as I look at the motion before us for discussion, I don't see any recognition from the government in power about what their responsibilities are to Yukoners. Formula financing makes the territorial government accountable to the local electorate. Now, during the election campaign, Mr. McDonald's party said - and I quote from page 23 of A Better Way - "The growing cynicism about government can be reversed if the government is more accountable for its actions." Does this government now say that they have no responsibilities toward Yukon people? Is this government saying that they don't have to be accountable to Yukon people for the responsibilities of health care and social programs?
Is this government saying they can't handle their legislative responsibilities under the Health Act and they want to hand those responsibilities back to the federal government? Personally, I see that as a step backwards and I'll never vote for that.
Formula financing is the principal source of revenue for the territorial government, along with program dollars. The federal government sends about 77 percent of our annual budget. Now, on page 14 of A Better Way, it states that New Democrats believe that people will only be able to thrive and prosper in strong communities where we all have responsibilities to one another and where we work cooperatively to achieve our goals.
Well, that's good stuff. One of our responsibilities is to our children. Sixty-five percent of Canadians want to eliminate the Canadian deficit and cut government spending. The majority of Canadians know that, until we get rid of the deficit, there can be no guarantees on our future. Despite this, the federal government has committed to a five-year predictable and stable funding of the Canada health and social transfer, and that entitlement will grow to the year 2003.
That commitment is far more than this government has given to Yukon municipalities. For the tenth year in a row, this government has frozen block funding to Yukon towns and cities. The Canada health and social transfer to the territorial government and the federal government is stable for five years, and it will grow. The territorial government expects municipalities to take on ever-increasing responsibilities as they are devolved to them without an increase in funding. Yet it seems to me that this is a little bit more like, "Do as I say and not as I do".
And what does this territory do? This territory, like all the provinces and the Northwest Territories, has the responsibility to deliver health and social service programs, build and maintain highways, provide services like electricity and fire protection, develop tourism and other economic opportunities for Yukoners, educate and house those that need it, protect our environment, administer justice, and develop land. All these responsibilities were devolved to us from the federal government.
Federal transfer funds allow us to carry out our responsibilities and the stark reality of our economic base is that we could not carry out any of those responsibilities unless we had federal funds to do it.
The other reality is that transfer funding allows us to set our priorities. If this government wants to set seniors housing as a priority, it can do it. And if this government wants to fund YES, then this government can do that.
The motion that we are discussing today says that there is a neglect of duty by the federal government because it is not carrying out the territorial government's legislative responsibilities. I would like to suggest that this government needs to take stock of what their duties are to Yukoners. Be clear about that. There are a lot of people out there who know what your job is. You have a lot of expectations out there that need to be met.
I realize that you have only been in government for six months, so perhaps people are still unclear about what their job description is. To refresh your memories, you are here to govern the Yukon. It is your responsibility, given the $483 million in the budget - 77 percent of which came from the federal government - to govern the Yukon. It is your responsibility to deliver programs to young people, seniors, First Nations people who request it, single parents, people needing medical care and those people who require social assistance. That is your job.
Mr. Fentie: Thank you, Mr. Speaker. Very interesting comments from the opposite bench.
I would like to add my support to this motion. As I mentioned in my budget reply yesterday, the federal budget cuts and offloading of programs has hurt many people in the Yukon, and especially those who are most vulnerable in our society. The federal Liberal government has broken faith with its citizens and the casualties are the young, the elderly, single parents, First Nations and low-income families.
Mr. Speaker, as I said yesterday, what Mr. Martin has been doing has been to dismantle everything that has been built up over the years, regardless of the social costs to communities. The social safety net is being sacrificed on the altar of deficit reduction - deficit, mind you, created by the two right-wing parties, the Conservatives and the Liberals.
What concerns me is that the federal Liberals now expect our government to bear the load while they cut our formula financing by $19.7 million. Unlike some of the very wealthy in this country, most Yukoners don't have trust funds we can pass on to our children tax free. Unlike some large corporations, most Yukoners don't have vast investments we can transfer outside the country to avoid paying taxes. Unlike some of our Liberal MPs, most Yukoners don't have the luxury of registering our companies offshore, as Paul Martin did, to avoid paying taxes.
The every day, average Yukoner works hard, pays their taxes, invests their money in the Yukon and Canada and then stands by and watches as the leaders of our country pander to their rich Bay Street buddies and the big banks in order to stay in power.
Mr. Speaker, it is time the federal Liberals stop giving special tax breaks to their power cronies and start ensuring that all Canadians share in the load equally.
If the banks and the power brokers started carrying their fair share of the burden, then the poor, the elderly and the youth of our country will not continue to be casualties of the deficit war.
Mr. Speaker, I believe the federal Liberal government has lost their way. For years they have been raising public expectations for funding for social programs, only to dump these programs in an effort to appease the financiers bent on deficit reduction at any cost.
Another manoeuvre used by the federal Liberals, Mr. Speaker, has been to offload programs on to the provinces and territories, hoping that the populace will lay blame on their local government when they can't possibly pick up the slack.
The youth empowerment program cut is a prime example of federal government offloading, and again it is hurting a vulnerable group in society: our young people.
Unemployment insurance programs have been cut; social assistance programs, cut; Canada drug strategy, cut; alcohol treatment programs, cut; child initiative funding, cut; and so on, and so on, and so on. This offloading has to stop.
In my community of Watson Lake, the burden of offloading is being borne by many groups who can least afford this extra load.
A case in point are the Signpost Seniors whom I spoke about yesterday. The seniors and elders are a very important part of the community fabric and we must ensure their needs are taken care of. The seniors in my community have already done their part. They've worked hard all their lives and their contributions to society are immeasurable. It is now our turn to make sure they are treated with the dignity and respect they deserve.
By cutting programming designed to help seniors maintain their dignity and independence, the federal government shows disrespect and disregard for those people who helped build this country.
Mr. Speaker, it is imperative that the federal government continue to fund programs and invest in our youth. They carry the future of our country on their shoulders and we must ensure that they are given every possible opportunity to prepare for this duty and to develop their potential in a positive manner.
The more the federal government cuts youth programs, the more of a negative affect it will have on all our futures. Our young people are our most important and valuable resource and we must support and care for this resource.
Mr. Speaker, it is well known statistically that the more money you cut from social budgets such as health care and education, the more money you'll end up spending on justice budgets. You either pay now or pay later, but keep in mind what the cost to society as a whole will be.
Mr. Speaker, it is my belief that the federal government must ensure that they continue their responsibility to fund First Nation programs as well as continue to invest in our future by supporting youth programs and caring for the needs of our seniors and elders.
Mr. Speaker, recently it came to my attention that the federal government has fallen behind over the last three years in share payments to various programs. This translates into a cost to our government of $17.5 millions in unpaid bills by DIAND. This neglect on the part of the federal Liberals adversely affects the programs our government is trying to deliver. This delinquency must be rectified as quickly as possible so that Yukon citizens will not be forced to carry even more of a burden than they already do.
Mr. Speaker, I would like to conclude this afternoon by asking all members of this Legislature to join me in supporting this motion. As elected members of the Yukon Legislature, we are here to represent the interests of all Yukon citizens and fight injustice, inequities and unfairness on behalf of our constituents whenever we have an opportunity to do so. I think we all recognize, in this House today, that the opportunity is now, and I urge you to support this motion.
Thank you.
Hon. Ms. Moorcroft: Thank you, Mr. Speaker. I'm rising to support the motion of my colleague that what we see in Canada today is a broken faith with members of our community who are severely affected by the federal government abrogating its responsibilities. I'd like to respond to the statement previous members made about how governments have responsibilities and that a fundamental responsibility of government is to be accountable to the public, as I certainly agree and believe that to be true.
It is also a fact that in Canada we have come to define ourselves as a country that takes pride in the level of social programs we've been able to offer and that takes pride in the fact that our federal government has taken responsibility in a number of areas and has funded programs which help ensure, for instance, that we have a well-educated society.
Under past education programs, post-secondary education was available to most Canadians because there was funding of colleges and universities so that tuition costs were heavily subsidized, and that meant that a lot more Canadians were able to have an education. That is changing and there are many things that are changing as we see the Government of Canada neglecting its duties as a national government in dropping support for programs that address social needs and that are necessary to our citizens.
Now we as a territorial government also have responsibilities and we are taking increasing responsibilities in the face of many federal cuts. I have to point out, Mr. Speaker, that we get many, many requests from members from the side opposite to add new programs or to take on additional responsibilities or to move airports or build more schools and governments have a responsibility of balancing limited amounts of funds available.
Regardless of whether or not the Yukon government steps in to fill the void that's been created by federal funding cuts, in most cases when the Government of Canada decides no longer to fund legal aid or to cut its funding to native courtworkers or to eliminate funding to the youth empowerment and success program, there are costs to the Yukon government and the Yukon public in one form or another.
Our government is not in the position of being able to automatically take on additional responsibilities when the federal government drops them. This does not mean that offloading has not happened. Costs may be more difficult to quantify if the Yukon government doesn't step in to fill the gap directly, but in the case of cost-shared programs, there may be reductions in the quality of service that the Yukon government is able to provide.
As an example, in legal aid, there now must be a much more rigorous assessment of when legal aid can be granted, leading to it being denied in many more cases. The federal government reduced its contribution unilaterally to legal aid by over $220,000 in 1994. This means that we have much less flexibility to manage cost increases within existing budgets. The Yukon government, where it does cost share a program, may face increased demands on related service areas and increased costs, and not have the money available.
Another effect can be elimination of service to the public, which is potentially very costly and damaging to individuals.
We also are damaged when the public perception of a government department is that it is unwilling or unable to fulfill a federal funding gap.
The native courtworker program has also been cost shared in the past by Yukon and Canada, and we are finding the demand for native courtworker services has increased while the federal funding has been reduced. This leads to programs running in a deficit position. It makes it impossible for the department or the carrier agencies to effectively plan in advance how to make the best use of their budgets, and it creates a great deal of uncertainty over future budgets. This affects the quality of service that the Yukon government can provide, and it is a serious problem of the federal government's making when they decide that they don't want to meet their commitments any more, that they don't want to take responsibility for what they have been responsible for in the past.
One of the Liberal critics made a point of discussing that Canadians want to see the deficit reduced. This deficit hysteria has been a feature of federal governments' actions for quite some time. It is not social programs that are responsible for the size of the deficit in Canada.
We have seen at the same time that social programs are being attacked and reduced that there has been a reduced tax burden on wealthy Canadians. We've seen governments with monetary policies that see enormous profits for banks and bankers, and we see increased suffering on the part of ordinary Canadians in our communities.
I'd like to speak for a moment about the new Employment Insurance Act. Under that new legislation, the federal government has made changes to the structure, delivery and responsibility for social programming. The federal system of funding for unemployment insurance, training, apprenticeship, post-secondary education and career counselling has undergone fundamental change with this legislation and will continue to do so. Some of the cuts that have occurred include eliminating all programs associated with the consolidated revenue funding, which will cost the Yukon $1.8 million. In 1996-97, there was a cut of $1.7 million, a large portion of which would have been spent on the direct purchase of training at Yukon College. The government-to-government funding for course purchases at Yukon College will be eliminated in three years with a loss to the college of approximately $1 million.
Overall, the federal government's changes will severely affect Yukon College and colleges across Canada and the students who are interested in their programs. In our rural communities, most of the students at the community campuses were consolidated revenue funding clients who were not eligible for unemployment insurance but could receive funding for training or educational purposes. They will no longer be eligible to receive any post-secondary support if they are not eligible for unemployment insurance.
Now, despite federal cuts, the funding at Yukon College has been maintained at the same level as the previous year. It means, however, that resources need to be taken from other areas of government priorities in order to continue that level of funding for Yukon College.
The federal legislative changes will also put more of a burden on Yukon in apprenticeship support. Previously, apprentices had received unemployment benefits while attending training courses. They are now required to be eligible for employment insurance in order to receive income support from Canada.
The established program fund, which covered post-secondary and social assistance programs has been combined under the Canada health and social transfer and reduced by several million dollars in the current year, with further reductions expected in the future.
The reduction of federal transfer payments for post-secondary education under the Canada health and social transfer has led to rising tuition fees at institutions across Canada. Canada has extended its student loan program, but the net effect is to transfer a federal cost to the student who is assuming an ever-increasing debt burden. This is resulting in increased polarization of society and can lead to educational opportunities only being available to wealthy Canadians in the future.
Provincial and territorial education ministers are working together to convince the federal government of the error of this approach, but without support in this House from members opposite, I don't have a lot of faith that we will be able to be effective in that.
There are a number of public school programs that also have been affected by federal offloading, including the stay-in-school contract. In 1995-96, the Yukon government assumed 100 percent of the cost of this program to provide continued support for First Nations students at F.H. Collins after the end of a one-year agreement. The Yukon government has picked up funding for a school attendance counsellor for Dawson City, which was cut by the federal government. The math tutors program, which was instituted by CEIC and then funded by Health and Welfare Canada has been cut and the Yukon government has picked those up.
We see a pattern emerging where the federal government will change the name of the department responsible or change the mandate of departments responsible or simply eliminate the program, as they did recently, as the Minister of Health and Social Services spoke about when he was speaking.
There have been co-op education funding agreements in place, and the federal government has cut, initially, 85 percent of the costs for that program down to 35 percent of the costs in the current year. The Yukon government sees the co-op education program and the co-op education First Nations programs as critical links between schools and the business community.
So, the Yukon government's been picking up funding for that program. We can't continue picking up funding for all of the programs the federal government is divesting itself of, and offer the existing programs that we're responsible for.
I know that my colleague is going to speak about some of the cuts that have affected First Nations, such as the aboriginal women's program and the aboriginal friendship centres. The funding agreements on aboriginal languages are being cut by the federal government, and that is leading to increased costs for the education department.
The Secretary of State eliminated the funding to women's programs a few short years ago. There was a massive outcry from Canadians, demanding reinstatement of that program. It was reinstated, but it has been drastically reduced. We now find that women's groups are only able to apply for project funding and are no longer able to apply to the federal government for core funding.
So I think, Mr. Speaker, that some of those areas that affect my responsibilities demonstrate the fact that the federal government has broken its faith with Canadians. I think it is important that the federal government do take responsibility and no longer raise public expectations of funding - as they did when they promised a national child care program, which they've failed to deliver on - and then retreat from the programs, or offload responsibility to other levels of government.
I would encourage members to support this motion, and I thank my colleague for bringing it forward.
Mr. Ostashek: Thank you, Mr. Speaker.
I rise today to speak to this motion that's been presented by a government backbencher on downloading from the federal government. While there's a lot of merit in the motion and what it says, there is no doubt, I agree, that there has been a substantial amount of downloading by the federal government, or their taking the easy way to meet their budgetary targets. There's no doubt in my mind.
When we have a federal government that solves their budgetary problems by cutting transfers to the provinces by some 40 percent, and only reducing their own program spending by less than 10 percent, something is out of sync in this world, and it's very hard to support a government that does that.
With having said that, Mr. Speaker, the reality of it is, this is not new. We have a Liberal government now that is going into the fourth year of their mandate, almost the fifth year of their mandate, almost completed the fourth year of their mandate. They will be going to the polls very shortly, and I think that members opposite, as well as our caucus here, have to recognize that the federal Liberal government has been very successful in selling to Canadians the cuts that they have imposed, because, they, as I believe the Minister of Justice just said, didn't have to bear responsibility for the cuts, and I believe the Minister of Health and Social Services just said it, too.
So they've taken the easy way out. But, we can stand here and chastise the federal Liberals - and I sort of enjoy doing that, too; I don't have any difficulty with that - but, that's not going to solve the problems that Yukoners are facing. The cuts are there; they've been made. If we can believe the federal Liberals, we are entering into a period of stable funding in the areas of health and social services. And, I believe that all governments, this government included, have to live up to the realization that the cuts are there. They're not going to be reversed.
We can debate a motion like this every day in this Legislature, and it's going to have no impact on Mr. Martin or the federal Liberals, or our Liberal colleagues here, too, as far as that goes. This will have no effect on them whatsoever. The ineffective Opposition by the way, Mr. Speaker.
But, what I'm trying to say is that I believe the government, the Yukon government, members opposite, have to get their priorities straight. And, we have listened, since this government has been elected, to them pleading poverty to the Yukon people. They don't have the money; they don't have the largess that other governments have had.
Well, Mr. Speaker, that's a reality of today's situation, and that's the reality of what governments are faced with in Canada.
My colleague from Riverdale North says they are better off than any other government in Canada and that's exactly right. That's the point that I'm trying to make, Mr. Speaker. This government is well-financed and, when they were in Opposition, they reminded us of that every day, that we were not short of money, we didn't need to impose a wage freeze, we did not need to raise taxes because we had lots of money. Well, they have lots of money.
We absorbed a $20 million cut - yes, we did - a greater percentage than what the provinces had to. We fought that very, very hard, to no avail. The minister would not change, but I do think that we made some gains by getting some adjustments to the perversity to offset that.
The reality of it is I heard one of the members over there - I am not certain which one it was now - saying the transfer payments are going down. The reality is transfer payments are going up. They're going up; they're not going down. We've absorbed the one-time-only cut and, if we look even at the projections of this administration's budget, they are projecting that transfer payments are going up, and they are going to continue to go up, not only with devolution but just with population adjustments. Faro mine's shutting down. If it stays down for any length of time, it's going to give this government more money, not less money. That's the perversity of the formula financing, Mr. Speaker.
This debate has gone on and on in this Legislature before, when the members opposite were in Opposition and we were in government. So, let's look at the real situation here. This government is well-financed. Sure, every government would like to have more money. No doubt. But I'm going to say to the members opposite the same they said to us when we were in power: it's a matter of your spending priorities. And you have been elected by the people of the Yukon for this mandate, and it is your responsibility to set those spending priorities. Certainly, you cannot fund everything that the federal government has dropped or downloaded, but you, as a government - you as a Cabinet and a caucus - have to decide what your priorities are, what you're going to pick up and what Yukoners can afford to do without. It's not an easy task and I don't envy you for it. But I believe that if we're going to just continue to stand in this Legislature every session - I believe in the last several years there has been a motion very similar to the motion put by the Member for Whitehorse Centre condemning the federal government for downloading - we are not going to move yardsticks ahead very, very far. Because, let's face it, the federal government really doesn't care what we say here in the Yukon. They have one MP here. That's the most they can hope to elect - just one. Not very much impact.
I believe that the responsibility of the government of the day is to sit down and make those hard decisions. We know that this government went out there and raised expectations of a lot of NGOs during the election campaign and prior to it, but now they have to deal with those expectations that they raised. As I said, we can sit here and continue to cry. We can sit here and continue to plead poverty. It is not going to increase the amount of money we are going to get from the federal government. It is as simple as that. We are well-funded in the Yukon. We have been for many, many years. When we look at the per capita transfer here compared to some other jurisdictions, it is very easy for the federal government to target a group of people that are getting a greater amount of the federal pie on a per capita basis than what other Canadians are. I do not agree with it. I do not agree with it at all, but it is a reality.
The Minister of Justice said it was not social programs that are responsible for the cause of our deficit. Well, I will agree with her to a certain extent - not entirely. But the reality is that everything that we have done in Canada for the last 25 years, we have done with borrowed money. You cannot run your household budget that way - nobody can. The federal government had to do something.
In fairness to the federal government - I am not a great fan of the federal government, no more than I am a great fan of this administration - but the reality of it is, let's give credit where credit is due. The federal government did, by their actions - hurt some Canadians and hurt some other governments, who had to turn down people because they didn't have money because of federal cutbacks - accomplish lowering interest rates in Canada to where people now have more money in their pockets. The sad part right now is that it appears that the wheels are going to come off just when we should be starting into an economic upturn in this country.
And that, I guess, is one of my greatest concerns with what the federal government has done and what Mr. Martin has done in his budgetary figures, is that he has not ... well, he's used very conservative targets so that he could look good. He has done that, as I said, by downloading to the provinces. He has done that by digging into the employment insurance fund to the tune of $5 billion a year, payroll tax increases, the Canada Pension Plan, which is a payroll tax, and, if you listen to businesses - small and large - they say it's a job killer in this country.
So, while the Member for Mount Lorne may figure that Canadians and Canadian corporations are not taxed enough, there is that delicate balance that the government has to find as to when are we taxing too much and providing a disincentive to creating jobs for Canadians, because, let's face it, that's one place that the federal government has failed and failed dramatically - providing jobs for Canadians.
Mr. Speaker, in our own territorial budget here - our expenditures on the operations and maintenance side - 60 percent is for social programs, when expenditures on education, justice and health and social services are combined. Sixty percent of our budget now goes to the social side of the ledger. That's a big nut to crack. Can we put more into it? I doubt it. I think we have to look at how we can redefine it.
So, we have that expenditure, and if you take Yukon Housing's expenditures, they can also be considered for a major portion as part of the social side of the agenda.
I guess where I start having difficulty is when I look at the budget that has been presented by the members opposite, and while the increases are not dramatic on the operations and maintenance side, they are there, and you can put whatever words you want around it. You can blame devolution for it. You can do whatever you want. The fact is that operations and maintenance costs of government are going up. This administration has hired more personnel. We'll get the numbers sometime during this session to see exactly how many there are, but those are ongoing costs that are going to continue to build. There isn't a government in Canada that has that luxury, and I caution the members opposite that they really have to re-evaluate the direction that they are taking there.
We're going to have to watch those expenses if we're going to continue to provide the programs to Yukoners that Yukoners want and deserve. We've had commitments from the Member for Whitehorse Centre for the St. Joseph hostel for the homeless, or whatever it is, in his riding. They are very admirable causes, but they all cost money. Where's the money going to come from?
As I've said, we can sit here and beat on the federal government. It isn't going to get us any more money - not one cent more; it's not.
The other thing, Mr. Speaker, it's not only the cutbacks in transfers from the federal government to the provincial and territorial governments that's hurting. In the north, where the federal government is a major player in the Yukon and the Northwest Territories, the cutbacks to their own programs are having a dramatic impact on Yukoners.
Let's face it, there's only one taxpayer in this country. Whether he pays his taxes to the territorial government or to the federal government, there's only one taxpayer. Maybe the members opposite don't agree with it, but the movement across Canada is for a reduction in personal taxes. People are tired of paying taxes. So, governments are going to have to learn to do more with less.
And as I say, we've been very fortunate that while we have endured cuts, and cuts that have caused some difficulties, we have not fallen victim to the massive cuts to social programs that have occurred in other parts of Canada. We have not had to close hospitals. In fact, we have a state-of-the-art hospital that's in the final stages and I believe it will provide a very good service to Yukoners for years and years to come.
There's no doubt that Canada's social safety net is being stretched to the limit, Mr. Speaker, but if we are just going to take the approach that we are going to blame the federal government for it, then we're not going to do justice to our citizens. We are going to have to look at programs, such as the YES program, and analyze it, review it. Is it, in fact, going to save us costs down the road? Is it worth the investment of that $100,000-odd?
This government has taken it upon themselves to spend quite a few dollars on bureaucratic processes that they feel are important. Is that money better spent on the commissions they've set up, or is it better spent on programs such as YES? Those are the decisions you people have been delegated to make, not the Opposition. You people have been delegated to make those decisions. We're here to criticize what you do.
That's the way this Legislature is set up, I'm sorry.
During the years that we were in office, the Yukon Party undertook consultations in every community, seeking feedback from Yukoners on important health care issues. Areas that were discussed included health program delivery, dental programs, continuing care, midwifery legislation and social assistance. Those were consultations that were done during our mandate.
Reform efforts are ongoing, as we see, and I'm pleased to see the memorandum agreement that's been signed by the Yukon government, the federal government and CYFN, which demonstrates their commitment to public participation and consultation in an effort to ensure the communities, as a whole, will now be involved in the delivery of health service programs to Yukoners. But again, we have to be cautious about what sort of an administration we build up to deliver these services. We're a really small population.
Speaker: Order. The member has two minutes remaining to conclude his remarks.
Mr. Ostashek: Thank you, Mr. Speaker. It's been a very quick 20 minutes. I didn't know I'd have so much fun in this debate.
But the reality of it is we have to be careful of administration costs in a small population like we have. And I know every community wants to have a hands-on approach. That's human nature, but we have to make sure that it's not going to add to the administrative costs of delivery of programs. We have to look at the most cost-effective way of getting that input from the communities to the decision makers.
So, Mr. Speaker, also when we were in government, the premiers, the APC, took it upon themselves to put together and provide some leadership and influence in national social policy, as many of the social programs are in provincial jurisdiction. And at the conclusion of this, Mr. Speaker, in 1995, the leaders established the ministerial council on social policy reform and renewal, made up of a representative from each jurisdiction. I think that's been a very successful process, and I think it's had some influence on the federal government. I believe that we can continue to provide some leadership and some direction to the federal government on how to harmonize and how to restructure the social programs so that there isn't a further impact of downloading to the provinces.
I agree with the members opposite. Downloading by the federal government has been excessive, but I also take this opportunity to go on the public record to say to the members opposite that they have a responsibility to do with their budgets what they can to fill in the gaps. They can't pick up everything the federal government is dropping, but they have a responsibility to Yukoners to fill in the gaps.
Thank you, Mr. Speaker.
Hon. Mr. Keenan: Thank you very much, Mr. Speaker.
Mr. Speaker, I will not take up much time this afternoon. Although, I would love to take up very much time this afternoon to rebut some of the comments that have been made, but I certainly speak in favour of the motion and I'll explain why I speak in favour of the motion.
I was indeed very pleased to hear the previous speaker clarify, in his closing comments, that he was willing to support this motion. I also will listen to his comments and put them where I may.
But, in holding with the line and thoughts, somehow or other we must come out of this quandary of where we're at. I think it's expectations. I hate false expectations. I think that this Legislature, and any Legislature across this land, whether its territorial, provincial, federal, can work to people's expectations, and that's by working with the people.
Well, I'm very pleased to say that this administration defines, in A Better Way, how we're going to do that. We were left, not only by the previous administration, but also by the federal government, with expectations that we have to live up to.
We certainly realize that administration, how to priorize, and we're going to do that and we have done that, and I think it's reflected in our budget.
I must also say though, that what is not reflected in our budget is that the expectations of the average Canadian - be it as a man, a woman, a child, a First Nation citizens or a Canadian - were brought forth, not by the people, but by the government, in light of getting elected.
People will do anything to get elected. Well, I do not think that we, in our platform, A Better Way, did that. What we did was clarify exactly what we had to do. Now we're left with expectations.
I do not like to stand up here and be critical of other peoples and other governments, but I do understand the nature of the Legislature also, and I hope that at some point in time, that, with consistency, we'll get away from criticizing and we'll get focusing - focusing on what the real issues are and how we, as people representative of all Yukoners, might be able to move forward on issues and not personalities.
My greatest fear, from federal offloading, downsizing - call it what you will - is that, as they go through that process, we create another process called devolution.
I'm very pleased to be a part of this government that has signed agreements with First Nations governments because I do believe that that is what I was talking about by representing people based on issues. That is what we were doing and going to do within that process. Now, when you offload on one side and say there is a process on the other side, it seems to be a juggle of resources, not an identification, nor, I don't think, in part, a true commitment. So I am, in part, questioning the process of devolution.
I came, as my Cabinet colleagues and indeed all of my colleagues, with expectations that we are going to work towards providing better services through the devolution of lands and resources to Yukon.
If you look at the offloading, the downsizing, the raising of expectations, the passing the buck to the territorial government, well then it makes me very nervous. But we are going to proceed. But I do want to raise that now, that if we are raising people's expectations, it's got to be defined within that process.
So we must hold the line, and I expect that the federal government will be an honourable partner in holding that line when we sit down with the three orders of government to clearly focus on the issues. I hope that we'll be able to focus on the issues and not on the downsizing or the passing of the buck or the politics of it. I think that what we have incumbent upon us is the responsibility to focus on the issues.
Mr. Speaker, let me just talk a little bit about the effects on aboriginal people. From the Canadian heritage, the aboriginal friendship centres are down from last year $1.561 million. The Northern Native Broadcasting access is down $1,414,000. Aboriginal representative organizations, down $706,000. The aboriginal women's program, down $207,000. The Canada-Yukon cooperation funding agreement on the development and enhancement of aboriginal languages transfer payments, down $25,000. Mr. Speaker, I hope you can see what I'm getting at. Expectations have been raised, the buck has been passed, the money is going down. I do believe that if we all clarify what the issues are, focus on what the issues are, nothing is insurmountable. I suggest that to this Legislature. I do not have all of the answers but I do think that through dialogue and communication we might be able to focus on those issues.
Mr. Speaker, the list goes on.
I cannot simply believe this at times, because First Nations people are struggling through our desire to look after ourselves, and we are looking after ourselves, based on our very own cultures and traditions, and when we are borrowing money to move forward and to recognize the elders of our nations and the federal government is simply cutting back on the loan equity that we pay to our First Nation elders, well, that is not right. That is absolutely not right. This year the loans again have gone down - loans, I stress, not passing the buck, but loans.
Contributions to the Government of the Yukon Territory in relation to the Canada/Yukon economic development agreement are down $1,877,000. Mr. Speaker, I do suggest that if that's not passing the buck, raising expectations, taking away the expectations, I don't know what that is. So, I encourage all members to pass this resolution so that we might be able to move forward on a government-to-government-to-government basis representative of all our people to focus on the very issues that affect us as Yukon people.
I do believe - I'm trying not to use unparliamentary language, and I'm trying to think of another word for parliamentary language - the dissemination of our resources to create the almighty buck is not the answer, and it should never be the answer, and it should never even be the question.
And so, I just get back to the expectations. I encourage all members to focus on our motion and to encourage people to move forward to think about it - what the real issues are - and to focus with dignity on how we can get out of these problems, Mr. Speaker, because I do believe that that is the actual problem. If it is the reality that life must go on and that expectations are going to be raised and bucks pulled, well then let's start to change that. Let's recognize that for what it is and change it.
Does that change the immediate problem that we now have? No, it does not, and I must say, after listening to the previous speaker, that I wholeheartedly disagree with most of what he has said. I do believe that there are better ways of doing it, and that if we sit down collectively, we can do that for the people of the Yukon. I do believe that a jurisdiction - you've heard me say it before - of 30,000 people can get together and do these things.
Mr. Speaker, I encourage all people here to do that. Thank you very much for your time.
Mr. Cable: Mr. Speaker, I was very pleased to hear the somewhat collegial approach to the issue given by the previous speaker. I think he should talk to some of his colleagues and get them off this class warfare that they've been propounding all afternoon. The last great practitioner of class warfare, Bob Rae, was unceremoniously dumped by the voters in Ontario, and that's something for everyone to remember. If you want to divide people by driving them apart, there's a penalty to pay.
Now after the last election, which is six months ago - seven months ago, I guess, is it? Six months ago. You could hear this monstrous "whoops" happen. You could hear the wheels go around in the government's collective head. Boy, oh boy, we've got a lot of debts out there. We'd better find somebody to blame for not being able to perform. Now there were two bêtes noires they found to blame. The first are these gentlemen to my right here, the previous administration. You know, these socialists in conservative clothing - these profligates - these financial profligates that spent every sou they could get their hands on. And if you don't believe that one - if you're having trouble selling that one - well, there's always the feds to bash. So this is where we are today; we're fed bashing. We've run out of bashing the Yukon Party, I guess.
Some Hon. Member: (Inaudible)
Mr. Cable: Okay, we haven't run out of bashing the Yukon Party. I'm corrected.
So, let's have a look at some of the facts that I should draw to people's attention. Firstly I'd like to refer you to the Yukon Act, section 17. What does it give to the Yukon? It gives the Yukon the power to make ordinances, now statutes, of course, in relation to the following classes of subjects: Number H is property and civil rights in the territory, Q is the establishment, maintenance and management of hospitals in and for the territory and, then, down below, generally all matters of a merely local or private nature in the territory. That's really a paraphrase of the provincial powers in our Co