Whitehorse, Yukon
Monday, April 7, 1997 - 1:30 p.m.
Speaker: I will now call the House to order, and we will proceed at this time with prayers.
Prayers
Speaker: We will proceed at this time with the Order Paper.
TRIBUTES
In remembrance of Kip Boyd
Mr. Phillips: I rise today to pay tribute to a long-time Yukoner and a fellow friend who passed away last week at the age of 65. Kip Boyd came to the Yukon with his family in 1948, where the Boyd family owned and operated a chicken ranch at MacRae. After long days and many hours of hard work, Kip and his family moved to Whitehorse, where Kip met and married Vimi Yeulet and were later to have four children: Christine, Sandra, Gary and Rick.
Kip Boyd had a deep, abiding love for the Yukon. His free time during the winter months was spent at the curling rink and many remember the curling team consisting of Kip, his father Bert, brother Clive and brother-in-law, Jim, who placed first in many of the competitions for many years.
Kip's curling successes followed him to the Briar on two separate occasions and, in 1975, they almost won. Kip was the first president of the Yukon-Northwest Territories Curling Association and was the driving force behind the construction of the Whitehorse Curling Club in 1953.
As during the winter, Kip also enjoyed Yukon summers and kept active climbing mountains, exploring paths unknown and scouting out every game trail known. In fact, many Yukoners who have travelled Tagish Lake have gone down the far end of the lake and camped in a spot that is commonly known as Kip's camp. That is where the family used to spend many of its enjoyable summer days.
In the mid-1970s, several changes occurred in Kip's life, including his marriage to Kathy Cowan of Vancouver and starting Kilrich Industries with his two sons. At age 60, Kip and Kathy retired to their cabin at Tagish River, where most of his time was spent reconstructing their home from a cabin to a house.
Kip was well-respected in the community. Through Kilrich Industries, Kip offered support and contributed to major charities and sports clubs throughout the Yukon. His contributions to the Yukon will be remembered, as well as his humour, his love of life and the commitment to his family and the Yukon. His positive attitude and selfless acts are noble traits for which many will remember him for a long time to come.
Mr. Speaker, Kip passed away last week peacefully at his beloved Tagish home. I would like to ask all members of this House to join me in expressing sympathy to his wife, Kathy, his daughter, Christine, his sons, Rick and Gary, and two grandchildren, Colin and Dennis, and brother Clive and Kip's many friends throughout the Yukon. Thank you, Mr. Speaker.
Mr. Cable: Thanks, Mr. Speaker.
I've had the pleasure of meeting three generations of Boyds - Kip's father, Bert, and Kip himself, and Kip's children. There's a strong family trait of personability and directness that engendered friendship with everyone who met them, and I can quite honestly say - and this is from both business experience and from social contacts - that I don't know anyone who didn't like Kip. He provided a helping hand to many, and I think this was partly responsible for his success in business.
The Yukon will be less rich with Kip's passing.
My sympathy to Kathy and the family.
Hon. Mr. Keenan: Thank you, Mr. Speaker.
I also rise today to pay tribute to Kip Boyd. I guess I shouldn't try to reiterate other things that have already been said in a most elegant and pleasant fashion. I would just like to know that my personal experiences with Kip were certainly limited to just knowledge that I have garnered from other people, but he did touch my life in a very special way, and I think it's something that's worth explaining just a little bit about.
He was a type of a gentleman that would go by your handshake, and he passed this on to his sons that worked with him in establishing Kilrich Industries, and at a point in time when I was having difficulty building my home and working toward my home, Kip did come through. He asked, and drew his company and said, "Are you going to pay?", and I said, "Yes, I am", and he said, "That's good enough for me. Thank you very much."
Mr. Speaker, I think that it's just that one act alone, which he did for myself and which he did for countless other Yukoners, that is testimony to his life as a Yukoner.
He loved to curl. He loved to hunt and fish. He loved to enjoy the land, and I think those are all such typical traits of a Yukoner, and I know that he's going to be sadly missed across the Yukon by all of the people that were touched by Kip. They are going to be sadly missing him, especially his wife, Kathy, his daughter, Christine, and his two sons, Rick and Gary. He also had the pleasure of having two grandchildren, Colin and Dennis, and his brother Clive. To them, as one of the previous speakers said, I too wish to encourage all of us here to think of him and keep him and his family in mind and feel what a great Yukoner he actually was.
National Wildlife Week
Hon. Mr. Fairclough: I would like to advise the House that this week, April 6th to the 12th, is recognized as National Wildlife Week.
This year's theme is "Wild things need a place to grow", an appropriate theme for the year when this government is launching a protected areas strategy, and picking up the habitat protection ball dropped by the previous government.
Mr. Speaker, to mark this week, the Yukon Department of Renewable Resources, the Canadian Wildlife Federation, the Yukon Fish and Game Association, the Canadian Parks and Wilderness Society and the Yukon Conservation Society are sponsoring a week of displays at the Elijah Smith federal building on a variety of wildlife-oriented events, which were detailed in a full-page ad in last Friday's Yukon News.
Next weekend, Swan Haven, a great wildlife viewing opportunity on M'Clintock Bay, will open for the season. I ask members to join in this celebration of Yukon wildlife.
Ms. Duncan: Mr. Speaker, I would like to rise in recognition of National Wildlife Week, also.
I would like to especially recognize those volunteer organizations that dedicate their resources to reminding us that we share this planet and that we have an obligation to the plants and animals that share it with us.
I salute the Yukon Conservation Society, Canadian Parks and Wilderness Society, Ducks Unlimited, Renewable Resources staff and others, who volunteer their time so willingly for the protection of Yukon wildlife on behalf of all Yukoners.
I look forward to the celebration of National Wildlife Week. And, as the World Wildlife Fund poster in my office reminds me daily, on behalf of Canada's endangered species, "Their eyes are upon us."
Speaker: Are there any introduction of visitors?
INTRODUCTION OF VISITORS
Mr. Fentie: Thank you, Mr. Speaker. It's my pleasure today to introduce Mr. Isaac Wood, who is with us in the gallery today. Isaac's a member of Watson Lake and also a town councillor. Thank you.
Speaker: Are there further introductions?
Are there any returns or documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. McDonald: Mr. Speaker, I have a document for tabling.
Hon. Mr. Fairclough: I have two documents for tabling: the draft Bonnet Plume heritage river management plan and newsletter on the draft plan.
Speaker: Are there any reports of committees?
Are there any petitions?
Are there any bills to be introduced?
Are there any notices of motion?
Are there any statements by ministers?
MINISTERIAL STATEMENTS
Non-government organizations, funding for
Hon. Mr. McDonald: Mr. Speaker, I am pleased to rise today and inform the House of a new policy on funding for non-government organizations.
True to our commitment during the election campaign, this government has developed a multi-year funding policy for NGOs. This policy gives these organizations a degree of financial stability and over the course of upcoming months, government department officials will be discussing with them the process of developing their multi-year budgets.
Non-governmental organizations play an integral part in our societies through the numerous valuable services they provide. Often they act as the delivery agent for various government departments. The Yukon government wants to continue to support these citizen groups and the services and programs they contribute to the territory.
Our goal is to create a funding process for NGOs that is equitable, fair and open. This policy provides a measure of financial stability, allowing NGOs to engage in long-range planning and decision-making with some comfort that government funding will also be planned on a multi-year basis.
The guidelines of this new policy provide as much certainty as possible within the existing legislative decision-making framework. NGOs applying for government funding will be required to provide a three-year budget forecast and funding commitments will be made for that three-year period subject to budgetary allotments.
Criteria by which NGO funding will be determined include whether there is a demonstrated need in the community for the services provided by the NGO; the extent to which the NGO creates or encourages local employment; the frequency by which the NGO is requested to participate in government consultation exercises; the contribution the NGO made toward community wellness, education and social well-being; and, whether the NGO works to ensure environmental protection and effective natural resource planning.
While my government is committed to ensuring that NGOs have the ability to serve their communities and plan for the fiscal future of their organizations, it is also clear that the Yukon government cannot be expected to fund every NGO across the territory. The Yukon government will, therefore, not automatically assume funding areas vacated by the federal government.
Mr. Speaker, there are many non-governmental organizations across the territory that provide quality, valuable and necessary services to Yukon people. This government supports and appreciates the work that these organizations do, and I believe this policy reflects that appreciation by providing a fair, multi-year budgetary process for them.
With the implementation of the new NGO funding policy, social service based and other non-governmental organizations now have the financial stability to better serve their clientele and ultimately the Yukon.
Thank you.
Mr. Phillips: Thank you, Mr. Speaker. Well, the Minister of Finance has made this announcement today. I guess the only thing I can say about it is that it is laudable that he announced in the campaign that he was going to provide long-term funding for NGOs, but when you read the ministerial statement, it is clear that there is no guarantee of long-term funding for NGOs. In fact, nothing has changed, and the Government Leader, and now the Minister of Finance, knew that he couldn't change anything when he made the campaign promise back in the election.
He certainly knows that our legislative decision-making framework was in place and he would have to change that to provide guaranteed long-term funding. All he is doing now is requiring the NGOs to fill out a three-year budget forecast and then that budget forecast will be debated within Cabinet in making decisions and when they put the budget together whether these people will receive money. And this is done annually, not every three years, so there is no way that any of these organizations - and they shouldn't be misled at all by the statement today - have guaranteed three-year funding if they meet the minister's criteria. It just isn't possible. The only way it would be possible would be if the minister came to this House and presented a budget with three full years of funding for an organization for the amount and gave them the cheque now and they went for three years down the road. That's the only way he can do it, because otherwise we have to debate their funding annually - Cabinet does as well as this Legislature, so the NGOs will not be able to take this announcement to the bank.
No one would loan the money. No one would give them any guarantees on the fact that they've filled out a three-year budget for the Government of the Yukon, because they're only getting approved one year at a time.
Mr. Speaker, this particular announcement is smoke and mirrors. If the minister had come here today and announced that he was looking at changing the Yukon Act, or taking some other legislative approach to change the funding arrangements, which he knew were in place before - and are still in place now and which doesn't allow that - that would be something that one could look at.
But, really, the announcement he's made today changes absolutely nothing at all, other than forcing the NGOs to provide a forecast for three years' funding in the future. It doesn't give them any guarantee of three-year money.
Thank you, Mr. Speaker.
Mrs. Edelman: Mr. Speaker, there are many organizations that do provide quality, efficient services to Yukon people, and many of these non-government agencies, or NGOs, are the delivery agents for various government agencies. So why, one asks, do these agencies prefer to keep NGO status, instead of amalgamating their work into existing government departments?
Why do people volunteer their time and spend thousands of unpaid, or little-paid, hours developing administrative strategies and programs for their non-government agencies, instead of working for the government?
Maybe these individuals don't want to get caught in the unbelievable amounts of administrivia that it takes to implement a government service. Maybe these people don't want to spend their time doing mountains of paperwork instead of seeing clients. And maybe the reason government contracts these NGOs, or non-governmental agencies, to deliver these services directly to the community is because this approach can be better and more efficient.
So when I see that this multi-year funding is dependent upon the frequency by which the NGO is requested to participate in government consultation exercises, I get a little concerned, because people get involved in NGOs delivering services to the community because they really believe that the service they are delivering is good. The volunteers that sit on the various boards are members of the community in which the service is delivered, and their generous donation of time ensures that there is a great deal of input from the community in decision making.
These volunteers are also the doers in the community, and you had better believe that these are the people that not only sit on the board of this organization, but countless other groups in the town, as well.
How much more paperwork and meetings do these volunteers have to sit through in order to ensure that they receive their multi-year funding? Is this the price - taking even more family time away from volunteers in order to make the government look like they're consulting with the community?
That is unfair, particularly when the three-year funding that they are holding out there as the carrot is subject to budgetary allotments. So, we are talking about spending countless hours in doing government paperwork or sitting in staged government meetings for what? Maybe nothing. You can't do that to people.
After a while, the average volunteer is going to realize that they are spending more time doing government paperwork than delivering the service they volunteered for originally, and they are going to say, "Forget it." So then where are you? What will you have accomplished? Probably during the next election you can say that you consulted extensively with the communities, but you will have burned out an awful lot of volunteers in the process, and that's not right.
There should be a great deal of conversation that is going on between government and NGOs. For example, has there been a change in the organization or the community that would require some flexibility in the funding arrangements? Is there an upcoming or emerging health or social services issue that could be dealt with sooner rather than later? This ministerial statement does not speak to who will be coordinating the funding to NGOs and who is going to be getting the NGOs messages into the department.
Consultation is one thing, Mr. Speaker, but sitting down with one assigned person and talking it out before something gets to be a problem makes a lot more sense. Maybe that approach is just far too practical.
Mr. Speaker, multi-year funding for NGOs could be good, because it will allow groups to plan. But if that is dependent on budgetary allotments every year, where are you? Is there a commitment here or not? A more holistic approach to NGO funding might have been to ask NGOs how they communicate with government.
I truly hope that the government can see their way clear to assigning a liaison person to NGOs, because that is just common sense.
Hon. Mr. McDonald: Well, Mr. Speaker, I'm somewhat surprised at the comments made by the Opposition. I know that they're supposed to find whatever is negative about whatever the government is doing and publicize it to the maximum extent possible. However, I think in the case of the Member for Riverdale North there is a profound misunderstanding of the budget process.
The Government of Yukon signs long-term contracts all the time, and, as a matter of fact, even, for example, the South Access Road, which is about to be reconstructed, was a multi-year funding agreement with the City of Whitehorse. No one realistically said at that point -
Some Hon. Member: (Inaudible)
Hon. Mr. McDonald: Subject to annual approval, precisely. But, nobody said at that time that the funding that was promised for year two was a hollow commitment, and at some point the Yukon government was going to pull the rug out from the City of Whitehorse and leave them stranded, did they? Because, of course, that's just ridiculous, it's silly.
Mr. Speaker, this commitment to NGOs is for multi-year funding, and it is a policy that makes good sense, a policy that allows NGOs to plan their longer-term futures than simply the year-to-year planning process that they've undertaken in the past. Commitments made by this government are commitments that are honoured, of course.
I must say the concern that this is going to require some paperwork or some sort of thought on somebody's part, due to the long-term planning, is a criticism I find puzzling coming from the Liberal member.
Certainly, somebody has to justify why taxpayers' money is going to be committed over a very long period of time. Presumably, the NGO itself will want to engage in long-term planning as well and, in exchange for the funding commitment, presumably they will plan ahead the couple or three years extra, so that they can not only justify to the government and to the taxpayers why they should receive the extra funding, but they will also be able to plan for their own organization and perhaps provide stability for their own organization.
Clearly, there is no desire to increase paperwork or increase red tape or the added burden of negotiating arrangements, but we have to balance that with a need to ensure that there is some thought put into any long-term commitments that we may make to non-government organizations.
This commitment is a significant advance over anything that the government has done in the past. This commitment is done out of respect for non-governmental organizations and the work that they do. They bring some order to the expenditures that are made by our Legislature to support their operations, and it has been well-received, maybe not by the members in the Opposition benches, but it has been very well-received by NGOs themselves, so we are going to be pursuing this course of action, and we will be continuing our discussions with NGOs so they can carry out their useful tasks.
Heritage river systems
Hon. Mr. Fairclough: Thank you, Mr. Speaker.
On the occasion of National Wildlife Week, and in recognition of this year's theme, "Wild things need a place to grow", it gives me pleasure to advise the members that the wildlife habitat values in the Bonnet Plume and Tatshenshini river valleys will be given more consideration as a result of the Yukon government's increased involvement in the Canadian heritage rivers system.
Mr. Speaker, for the information of the members, the Canadian heritage rivers system gives national recognition to the important rivers of Canada. This program identifies and designates diverse rivers across the country that have particularly high natural and cultural values and are seen to be reflective of our national heritage.
The Yukon first became a participant in the system with the 1991 designation of the Thirty Mile section of the Yukon River. The recent decisions by the governments of Alberta and British Columbia to become participants in the program made it a truly national system to give rise to the drafting of a national charter. I have now been authorized to sign the charter on behalf of the Government of Yukon.
Further evidence of this government's commitment to this system is the public release for review and comment of a draft management plan prepared to support the designation of the Bonnet Plume River as a heritage river. The Bonnet Plume River is a tributary of the Peel and flows out of the Wernecke Mountains in central Yukon. It was nominated to this system as a result of the Na-Cho Ny'ak Dun final agreement. The draft management plan was prepared by the Government of Yukon in conjunction with the Government of Canada and the Mayo District Renewable Resource Council and in consultation with the Nacho Nyak Dun and Tetlit Gwich'in First Nations. The Canadian Parks and Wilderness Society, representatives of the Yukon mining industry, including the Chamber of Mines, representatives of communities closest to the river, outfitters and the Yukon Conservation Society.
The management plan proposes an ecosystem approach to resource management of the river corridor that respects and protects the natural and cultural resource value. It allows for multiple uses conducted in ways which are sensitive to those values. It also lays out the workplan for the collection of information on the river's natural and cultural heritage.
Mr. Speaker, a third initiative in regard to heritage rivers is the government's decision to forward a heritage river nomination document for the portion of the Tatshenshini River which lies within the Yukon boundaries. The Champagne and Aishihik First Nations and the Yukon and Canada have prepared the document as a result of their commitment in that First Nation's final agreement to pursue a heritage river designation for the Tatshenshini.
The nomination document is the first step in the process leading to designation. It summarizes much of what is known about the natural, wildlife, cultural, historic and recreational values of the river.
If the nomination is accepted by the National Heritage Rivers Board, the preparation for a management plan in consultation with stakeholders will be the next step towards formal recognition.
I anticipate the support of all members for the Yukon government's participation in the Canadian heritage rivers system. Thank you.
Mr. Ostashek: Thank you, Mr. Speaker, and I thank the minister for his statement.
It was recognized very early in the management planning process that there were many apparent conflicts of interest in the Bonnet Plume watershed. The nomination of the Bonnet Plume River precipitated concern among the development interests about the loss of potential access to resources. For environmental interests, the nomination demonstrated the need to protect the watershed. It was at this time that the Yukon Party government suggested that an advisory committee be created to make recommendations to the steering committee about the management regime that they wished to see described for the Bonnet Plume as a Canadian heritage river.
The advisory committee included representations from the Na-Cho Ny'ak Dun First Nation, the Tetlit Gwich'in, Westmin Resources, Keno City, outfitters and Friends of Yukon Rivers, the Town of Mayo, Klondike Placer Miners Association and CPAWS. Several meetings were held and input from each of these groups was incorporated into the draft management plan. Substantive changes were made to the original draft plan as a result of discussions that took place amongst members of the advisory committee. Such changes included greater recognition of the presence of mineralization and the implications for the heritage river status, acknowledgement of competing interests and the different stakeholder expectations.
Having said this, Mr. Speaker, I would like to acknowledge the work done by all members of the advisory committee in making this draft management plan a reflection of everyone's interests.
While I recognize there are significant differences of philosophy of thought among the different groups, I believe that it is possible that an agreement as to how our resources can be managed can be reached in such a way that all interest groups are accommodated - mining interests as well as environmental interests.
Mr. Speaker, the work, however, is not over, and I'm pleased the process involving public participation will be held. I believe that it's important that Yukoners have input into the management of the Yukon resources and look forward to being part of that process. There are a number of questions that remain to be answered, those being: is there a legislative time frame in which consensus has to be reached to satisfy the completion of the management plan? Within the Canadian heritage river systems nomination document, it states that within three years of acceptance of a nomination by the ministers, a management plan shall be lodged with the board, at which time the river shall be formally included as a Canadian heritage river. Maybe the minister can elaborate on that when he gets up.
In the event the management plan identifies boundaries, river management area or management principles that were significantly different from those described in the nomination document, will the nomination document be revised or an addendum filed with the board? Once the Bonnet Plume River has been officially designated as a Canadian heritage river, who will ultimately be responsible for the management of it? Will it be the territorial government, or will it be the federal government, or some other body?
Thank you, Mr. Speaker.
Hon. Mr. Fairclough: Thank you, Mr. Speaker. I appreciate the comments from the member. Certainly the issue of having industry involvement in creating the plan was a big part of the discussions. They did have the mining industry and the Yukon Chamber of Mines that did have participation in the development of the management plan. They were very much consulted on this and had their input reflected in the plan.
Certainly with the Tatshenshini, there's a lot of work to do yet. It's just in the nomination stage. It goes back out to the public for comments, and then back to us. This type of information flow happens for a little while before the management plan does get up and going. I do believe that, in order to put together a comprehensive plan that does work for Yukoners, it will take a long time to do, but not so long that we couldn't get it done within the three-year period.
I do believe that the heritage rivers will take on a renewed national profile with the national release of the charter on Earth Day. The charter is not something that is binding on government. Certainly, national recognition of Yukon rivers will enhance the tourism industry in the Yukon.
Thank you, Mr. Speaker.
Speaker: This then brings us to Question Period.
QUESTION PERIOD
Question re: Yukon Energy Corporation, Aishihik Lake water
Mr. Ostashek: Thank you, Mr. Speaker. My question is for the minister responsible for the Energy Corporation.
We have heard in the last two days of a potential for a 20-percent rate increase that is going to hit Yukoners very, very hard. Not only the 20-percent increase in power bills, Mr. Speaker, but every time they go to buy something from Yukon business - a commodity or service - they are going to be hit again, because the costs are going to be passed on to the ratepayers. So, it is going to have a dramatic impact on Yukoners.
Mr. Speaker, one of the contributing factors to the need for a rate increase now has been this government's unilateral political decision to restrict the licensing range on Aishihik Lake. I would like to ask the Minister at this time if he - it is $4.7 million, as I understand - could advise this House if he will be recommending to his Cabinet colleagues to reconsider their decision not to allow YEC to use the licensing range that was issued to them by the Water Board.
Hon. Mr. Harding: Thank you, Mr. Speaker. I guess the first thing I would have to say with regard to the concern on Aishihik Lake and the agreement by the government to support the technical advisory group on Aishihik and the request not to draw down the bottom two feet, which was subsequently supported by board resolution - Yukon Energy Corporation board resolution; most of the members of that board appointed by the member opposite - we felt that it was a decision that had to be made.
Since we were elected, we have been busy honouring our election commitments. One of the commitments we made, on page 21 of A Better Way, was to work to mitigate the environmental impact on Aishihik Lake and err on the side of caution when it comes to the environment. We did that in this case.
The ratepayers are not affected at all by this with regard to the 20-percent hikes that we are also concerned about. The monies for the Aishihik decision will be paid out of Yukon Development Corporation reserves, as we announced when we made the decision, when we announced it to the Yukon public.
With regard to the 20-percent energy rate hikes that have been talked about in the media, Mr. Speaker, and by the public, and have been mentioned by the Energy Corporation, we have asked that they consult with the intervenors prior to going for an application and, secondly, we are investigating the option of perhaps bringing YEC and board members into the Legislature to discuss the matter with all legislators and the public.
Mr. Ostashek: Well, Mr. Speaker, every time this minister doesn't want to take responsibility for a decision, he blames the board. We heard the president go on public record saying that the decision not to draw down Aishihik would have to be a political decision. The president went public and said that.
Mr. Speaker, this will be the third increase in less than six months of this administration - an administration that made a commitment to Yukoners during an election campaign. The NDP promised Yukoners, if elected, they would ensure affordability of power and stabilized rates. Can I ask the minister if he ever intends to honour that commitment?
Hon. Mr. Harding: Well, absolutely, Mr. Speaker. We honoured it in December when one of our first acts was to extend the bill relief program. That was something that the Yukon Party refused to do.
Mr. Speaker, that had an impact on stabilizing the rates of Yukoners. Subsequent to that, we had a court decision from 1993 reflecting a 5.5 percent appeal rider. We had a 30-percent increase in world diesel prices and a rate rider that was approved by the Utilities Board prior to us ever coming into office.
Mr. Speaker, we're not blaming the board for anything. I'm just reporting to the Legislature that the board made a decision and passed it by resolution to support the Aishihik decision, and that's a fact. That's a matter of minutes that could be provided to the public from the board's deliberations.
So, Mr. Speaker, we've been honouring our commitments on stabilization. Unfortunately, we have lost the largest customer for the Yukon Energy Corporation and the rates that are in existence today were set at the last GRA, which assumed that the Anvil Range mine would be operating. So, we've been thrown a bit of a knuckle ball, but we intend to continue to work toward continuing on with rate relief, continuing to come up with long-term plans to deal with rate stabilization questions, and yes, we are honouring our commitments.
Mr. Ostashek: Well, Mr. Speaker, I think it's a very peculiar way to honour commitments. I think the minister will find out pretty soon that the Yukon public will say the same thing.
He says his decision not to draw down Aishihik Lake didn't have any effect on the ratepayers - that's ridiculous. It impacted on the Energy Corporation's cashflow by $4.7 million and has contributed to the problem.
Mr. Speaker, my final supplementary to the minister is: in 1995, the minister and his colleagues, while in Opposition, were adamant that with the opening of the Faro mine, power rates should come down. In fact, they went on to say that the corporation was reaping windfall profits because the rates didn't come down. Those were the statements they made in public. So, I'd like to ask the minister, now that power rates are continuing to go up with the closure of the Faro mine, and go up quite dramatically, were the minister and the NDP government wrong in 1995, or are they wrong now?
Hon. Mr. Harding: Mr. Speaker, firstly, with regard to the number that has been bandied around with the decision not to use the bottom two feet of Aishihik Lake water, I would just say that the numbers on that aren't quite in yet, so I'm not too sure that the Leader of the Official Opposition is clear on his numbers as he iterates them to the public.
The decision we made has not affected ratepayers. The decisions come out of Yukon Development Corporation reserves, as we indicated when we announced it.
Mr. Speaker, with regard to the question about the rates going up when the Faro mine came back up, we were obviously concerned about rates. Some rates did come down - commercial rates at the time of the 1995 ruling by the Utilities Board - and we're concerned about rates going up right now as a result of a proposed interim rate application that's being put forward by the Yukon Energy Corporation. That's why we've asked the Energy Corporation to consult with the intervernors prior to making the application, and that's why we'll be taking steps to work the Energy Corporation, as we have been this morning, to see if we can get Anvil Range to pay the arrears as soon as possible, which will take considerable pressure off the utility.
Question re: Yukon Energy Corporation, power rates
Mr. Ostashek: Thank you, Mr. Speaker, my question is to the same minister who is responsible for the Energy Corporation, and probably responsible for the 20-percent McRobb surcharge, because I think that's what we can relate this to.
Mr. Speaker, the minister says the $4.72 million figure isn't accurate. I just draw the minister's attention that that's the figure that was given to us by the president of the corporation at a briefing that the minister provided to us last week. It's not a figure that we picked out of the air.
Mr. Speaker, this government has only been in office for six months now, and power rates have gone up twice, even though their commitment to continue the rate stabilization - which every political party said they were going to do prior to the election - and now Yukoners are facing the third increase, a potential 20-percent increase.
Can the minister explain to me why he and his Cabinet colleagues accepted the recommendations of the MLA for Kluane not to use the licensing range at Aishihik, which is now going to cost ratepayers another $4.7 million and put the corporation into a financial crisis?
Hon. Mr. Harding: Mr. Speaker, in the election campaign the New Democratic Party committed to mitigating the environmental impact on Aishihik Lake. We took action to do that.
In the 1992 election campaign, the Yukon Party, and I'll read it out - I suppose I could table it - promised in the four-year plan, to "Stop the environmental devastation of Aishihik Lake." In four years, they did nothing.
Mr. Speaker, in the Gold Pan they softened their commitment to the public somewhat. They said, in the 1996 election campaign rhetoric that they put forward, that they'd work toward the stabilization of Aishihik Lake at a level that will not cause environmental damage.
Well, Mr. Speaker, that's precisely what we did with our decision. We accepted the recommendations of the technical advisor group. We funded the decision with Yukon Development Corporation reserves, as we said we would do.
Mr. Speaker, we're not responsible for a 20-percent increase. We acted very quickly in December to extend bill relief to soften the rates for residential consumers, and I wish the former Government Leader in 1993 would not have allowed the Yukon Energy Corporation to go ahead with their court action for recouping those costs for the rate rider.
Mr. Ostashek: Well, Mr. Speaker, what the minister is standing on his feet and saying is utter nonsense. There's been hundreds of thousands of dollars done on environmental studies in the last few years on Aishihik. The licence is up for renewal in the year 2002. The government has a window of opportunity to mitigate the damage at Aishihik Lake without taking knee-jerk reactions like this Cabinet has done.
Six inches of water, Mr. Speaker, relates to about $2 million in diesel fuel - a substantial amount of money.
Mr. Speaker, in view of the fact that the MLA for Kluane was one of the founders of a lobby group - Friends of Aishihik - and has a home on the lake, does not the minister agree that this MLA could be seen in a perceived conflict of interest in situations relating to Aishihik Lake? So why has Cabinet accepted the recommendations to make ratepayers pay 20 percent more on their power bills?
Hon. Mr. Harding: Well, first of all, that's completely false. The Yukon Energy Corporation Board, appointed by the Yukon Party, has made a decision to proceed for an interim rate rider, but not before we've asked them to consult with intervenors about options that may be taken, such as looking at the diesel contingency fund.
Mr. Speaker, the member says that hundreds of thousands of dollars of work have been done on Aishihik Lake. I'd like to ask him why, then, when he campaigned to stop the environmental damage in 1992, did he raise not one finger in four years to deal with that problem? Mr. Speaker, what he's just told the Legislature and the public is he wasted hundreds of thousands of dollars but was not prepared to take one cognizant step of action to help with the problem.
Mr. Speaker, the fact that the Yukon is reliant on diesel right now is directly related to the action of the Yukon Party government, and for four years they took no action whatsoever to reduce diesel consumption and to give us power options.
So, Mr. Speaker, we're dealing with that. We've extended bill relief and will continue to work on our election commitments, as we have been.
Mr. Ostashek: Well, what utter nonsense. This government was working to alleviate the damage at Aishihik Lake, and we weren't doing it with knee-jerk reactions like this Cabinet.
Can the minister explain to this Legislature, Mr. Speaker, why he decided not to allow YEC to use a licensing range that was awarded to it on Aishihik Lake by the Water Board, going to protect the environment when, in fact, he's creating another environmental problem by replacing that water with diesel fuel and pumping harmful CO2 and other harmful emissions into the atmosphere in the Whitehorse area and the whole water shed, affecting thousands of Yukoners? How has he solved the problem?
Hon. Mr. Harding: Mr. Speaker, I would concur with the member opposite that the emissions of CO2 from diesel usage are a concern to this government. What you're in is a situation of the lesser of two evils. We intend, as the Minister for Renewable Resources is responsible for it, to take steps to deal with that. We also intend to develop longer term energy policy through the Energy Commission to provide us with some energy options to help us get out of the equation of the trade-off between environmentally costly hydro use versus environmentally costly diesel use.
So, Mr. Speaker, we're in that push-pull, and we need some options to get out of that. Unfortunately, for four years, the Yukon Party did nothing about that, until death bed repentance during the election campaign caused them to come up with the interlocking power grid from Carmacks at a cost of $30 million, which they had no idea how to pay for.
So, Mr. Speaker, we made a commitment with regard to Aishihik Lake publicly to the electorate in the election campaign, and so did the Opposition parties, by the way. The only difference is we said we were going to do it, and we're doing it.
Question re: Yukon Energy Corporation, rate application
Mr. Cable: Thanks, Mr. Speaker.
I have some questions for the same minister on the same issue.
Last week, the minister spoke about asking the Yukon Energy Corporation to talk to the intervenors before preparing its rate application. He reinforced that today, and of course he spoke on the radio on Friday with the same tune, which suggests to me that he's trying to take a little heat out of the issue and put the fires out until he gets his thoughts together.
Now, there is no application, of course, so there are no intervenors. So, could he tell us just specifically who he asked the Energy Corporation to talk to prior to making their application?
Hon. Mr. Harding: Thank you, Mr. Speaker.
Well, I would say to the member opposite that the people who traditionally intervene on the applications that go before the Utilities Board could include organizations like the Utilities Consumer Group; they could be the Association of Yukon Communities, the City of Whitehorse, industrial customers, commercial customers, chambers of commerce - those types of organizations, the ones that traditionally intervene.
Mr. Cable: So, while Rome is burning, we're going to have the Energy Corporation fiddling around.
Now, we have a process where the Energy Corporation prepares an application and takes it before the public Utilities Board, and individuals and groups then comment to the board. That's the process set up in the act. Just what is this process supposed to come out and do for the Energy Corporation? Who is actually going to be involved in some detail? Has he told the Energy Corporation what they are supposed to do, and why this process is necessary?
Hon. Mr. Harding: Well, Mr. Speaker, you know the member opposite says that Rome is burning. I haven't heard too many concrete suggestions from the member. All he says is that there should be a reserve fund to stabilize rate swings, but he hasn't told anybody where the government should come up with the millions of dollars for this rate stabilization fund.
Mr. Speaker, what we've asked the Energy Corporation to do is meet with the intervenors to discuss options to deal with the situation, to make them exactly and precisely aware of the financial situation of the Energy Corporation, because all Yukoners have a stake in this, and I understand they intend to be meeting with intervenors on Wednesday, and I understand they intend to be - when I say "they", I mean the Energy Corporation - giving a copy of the interim application to the intervenors some time today, so that they can have a couple of days to prepare, to ask questions about it, to ascertain precisely what the reasons behind it are, and to make suggestions about options.
Mr. Cable: Now, we have a government that yanked the president and appointed a new president, as far as I can make out, without consultation with the board. It issued a directive on the use of Aishihik water while the corporation is spending millions of dollars trying to work up to a water licence application. Now the minister appears to be running the day-to-day operations of the corporation from his desk on the second floor here, on rate applications.
Could the minister tell us whether he has confidence in the management of the Energy Corporation to run a rate application without his interference and, if so, whether he is going to withdraw that letter and let them get about their business?
Hon. Mr. Harding: Well, Mr. Speaker, the member opposite should know that all we've done is make a request of the Energy Corporation - not a directive - to consult with the intervenors this Wednesday to talk to them about the situation facing the Yukon Energy Corporation and to talk to them about the situation we face as Yukoners with regard to losing the major customer, Anvil Range Mining Corporation.
So, I believe that's a prudent, responsible and less-costly option than the one proposed by the member. I know he's anxious, Mr. Speaker, for the process to unfold before the Utilities Board and for the government to take an appropriate response once that occurs. I concur with him that, as soon as the consultation with stakeholders is undertaken, there should then be a hearing before the Utilities Board and the government can then take a responsible course of action.
On the question of the Aishihik Lake decision, Mr. Speaker, I would like a clear position from the Liberals on that. The Liberal Leader, in the pre-election run-up, was out on the lake at Aishihik awareness weekend saying, "Save the lake. Save the lake." Now the member opposite is saying to me, "Drain the lake. Drain the lake." I'd like some clarity on their position from the Liberal caucus on the Energy Corporation and Aishihik Lake.
Question re: Yukon Energy Corporation, financial position
Mr. Cable: I think the minister fully appreciates what Question Period is all about. You know, I can sort of elucidate. We ask the questions and then we get the answers. So we're supposed to get some answers. I think that's the way it works.
And speaking of answers, if he'd like to file that letter so we can all view whether he, in fact, is interfering with the management of the corporation, that would help us.
Last Wednesday, Mr. Speaker, the minister told me that I was being a bit of an alarmist, that there wasn't much of a problem, I gather, with the Energy Corporation's finances. Next day, the minister was expressing a little concern after the announcement of a likely rate increase.
Could the minister tell this House when he first became aware of the precarious financial problems, or the precarious financial position, of the Energy Corporation? Was it after or before he called me an alarmist for expressing some concern?
Hon. Mr. Harding: I thank the member for that question. First of all, the member referred to the insolvency of the corporation. I still continue to maintain that that was alarmist.
Mr. Speaker, we have taken action just as of this morning in discussions with Anvil Range to assist the Energy Corporation because there is $3.6 million in arrears from Anvil Range, which would go a long way toward taking some of the solvency pressure off the Energy Corporation.
I was always aware that losing the major customer and some $6 million to $8 million in revenue a year was going to put some pressure on rates. Obviously, that is why we acted so quickly in December to bring in a new bill relief program when the Yukon Party government had refused to do so. It doesn't take a rocket scientist to figure out that when your rates are based on having Anvil Range in operation and you lose your major customer as of March 31st, it will eventually have some impact on rates.
Mr. Cable: That was a good spiel. It had nothing much to do with the question, but I have to give the minister credit. He is good with words.
Now the minister was on the radio talking about a $6 million shortfall in revenue on Friday. Could he provide this House with some detailed information? We have heard numbers bandied around backwards and forwards. We have the Anvil receivable. We have the Anvil loss in revenue. We have the money in the court case. We have the Aishihik Lake costing, and we have the rate relief program. Can we get something presented to the House so that we can come to grips with this issue? Is he prepared to issue a ministerial statement and give us something we can get our teeth into?
Hon. Mr. Harding: Thank you, Mr. Speaker. I would be more than happy to see the member come to grips with some things. I will provide him with some information, and certainly, as I have said before, I am looking forward to bringing the president of the Energy Corporation and perhaps a board member before the House to answer questions for the legislators, and hopefully for the public, who will be communicated to through the media.
Mr. Speaker, I want to thank the member for participating in a kinder, gentler House, and now explaine to me that there is accountability for this side, but there is no accountability for that side.
Mr. Cable: Oh, I think the member knows what Question Period is all about but, good try.
Just back to the previous question: it appears that what is going on from the outside looking in that the minister is, in fact, running this corporation from his desk on the upper floor - not doing a particularly good job. Does he have the view, which I think everybody else has in this territory, that this is an arm's-length corporation and he should not be mucking around in the day-to-day operations of the corporation?
Hon. Mr. Harding: Thank you, Mr. Speaker. The member opposite, on the one hand, says that we cannot make a commitment to stabilize rates. Well, Mr. Speaker, we interfered to lower rates with bill relief. We do not make any apologies for doing that.
He is dead wrong about the fact that there is any running of the corporation from the Cabinet offices. With regard to the agreement in principle with Yukon Electrical, it was supported and approved by the board prior to Cabinet even discussing it. Secondly, with regard to the Aishihik Lake directive, it was supported by a board resolution.
I want to inform the member, if he doesn't know already, that most of the members, with the exception of the CYFN reps on that board, were appointed by the former Government Leader and were appointed by the Yukon Party government.
The Energy Corporation is still being run by the president and the board. Where we can, on the basis of good public policy decision making, we will provide some direction to the Energy Corporation and do what we can, as we committed to do and as we did with bill relief, to continuing to try to work toward stabilizing rates in the Yukon.
Question re: Yukon Energy Corporation, energy alternatives
Mr. Ostashek: Well, Mr. Speaker, I think the minister's going to have a very hard sell to the Yukon public, if he thinks he can sell that they don't believe that he's politically interfering with YEC.
Mr. Speaker, this is a question to the minister responsible for the Energy Corporation, and it's quite obvious that the minister is floundering and doesn't have any answers or any solutions. They've flip-flopped on election promises and now we're going to have another 20-percent increase when he was going to stabilize rates. So, maybe I could offer some suggestions to the minister and hope he'll take them.
Last August, the Yukon Party government, through the YEC, issued a request for proposals to develop Yukon's energy alternatives, and I know that there's been quite a response to that; that they've got documentation of several proposals that came back in.
Will the minister follow up on Yukon Party government's lead and seriously consider those proposals, rather than just continue to raise Yukoners' power bills?
Hon. Mr. Harding: Thank you, Mr. Speaker. Well, first of all, I want to respond to the preamble.
Mr. Speaker, the Yukon New Democrats took action to stabilize rates. We committed to working towards stabilizing rates in the election campaign, and one of the first things we did was extend the bill relief program.We had to deal with two rate riders that were the result of decisions before we ever came into office, and we have to deal with the unexpected loss of the major customer on the system.
So, Mr. Speaker, we will continue to work towards rate stabilization, and I think we will develop some good initiatives for the Yukon public in that regard.
With regard to energy options discussions from the Yukon Party, all I heard for four years was coal, coal, coal. They were philosophically in support of coal, whatever that means. Then, on the election campaign, when they had a bit of a deathbed repentance, they decided that they couldn't sell coal, so they decided to try and sell us a $30 million power grid.
Mr. Speaker, our election commitment is to work for energy options for Yukon people in consultation with them, and that's part of what the Energy Commission will be doing and that's also part of what YEC is doing.
Mr. Ostashek: He's standing up in the Legislature supporting a coal project.
Mr. Speaker, the long-term solution to Yukoners' energy future is to develop Yukoners' own energy resources and to expand the grid, which the member just said he was against, as well as other energy infrastructure. That's what the Yukon Party government set aside $10 million in dividends for: to develop infrastructure, not to take that money for a short-term fix because the minister's now in trouble and doesn't see his way out of it. I don't see a solution by spending that $10 million for cash infusion into Yukon Energy Corporation just for day-to-day operating expenses.
So, can we get the assurances from the minister that that $10 million won't be used to purchase diesel fuel? Could he give that assurance?
Hon. Mr. Harding: First of all, Mr. Speaker, there never was $10 million in reserves from Yukon Development Corporation. The member is incorrect about that assertion, and, I want to know if the member opposite had all of the answers, why for four years there was no action taken, because that really would have helped me out in terms of handling some of the tough decisions and tough issues that have been on our plates since we got elected, whether it comes to energy options or rate increases.
Thirdly, Mr. Speaker, we indicated to the Yukon public, when we announced our Aishihik decision, that that would be funded by Yukon Development Corporation reserves. Now, the member is arguing against, I assume, a 20-percent rate increase, but he's not telling us where the shortfall for the Energy Corporation will come from. Is he advocating that it comes from the taxpayers or that it comes out of higher rates, if it's not going to come out of Yukon Development Corporation?
Mr. Ostashek: Mr. Speaker, that minister and his colleagues had all of the answers when they were in Opposition, that's what they told the Yukon public. Now, the Yukon public is finding out that they don't have any answers - none whatsoever. They're wandering around in the dark and pretty soon Yukoners will be wandering around in the dark, because they won't be able to pay their power bills.
Mr. Speaker, the Yukon's energy future is literally going up in diesel smoke, and as the minister dithers and dallies around, I would like him to tell Yukoners right now what actions he's going to take to get out of this disastrous situation, other than making Yukoners pay for his lack of decisions through more increases in their power bills.
Hon. Mr. Harding: Well, Mr. Speaker, we've chosen a thoughtful and deliberate approach to energy options through dealing with questions of rate stabilization.
The members opposite, in the Yukon Party, chose an approach of philosophical adoption of coal. When we were in Opposition, we didn't quite know what that meant, but they really developed very little in the way of concrete options for us.
What action we have taken, is, as I have said before, to approve the bill relief program in December to bring some rate stabilization to the forefront.
We've formed an Energy Commission to deal with the long-term policy questions to try and bring some thoughtful approach to energy questions in the territory.
We've just approved, in principle, an agreement reached by the board of the Yukon Energy Corporation that should reduce costs for Yukon ratepayers, and we feel that it will also provide us with money to invest in other assets to help us deal with some of the tough questions that are facing energy issues in this territory, whether it's generation capacity or transmission, or whether it's looking at other energy options.
We have a number of initiatives underway to take action to deal with the situation, and I've been through many of them today in this Legislature.
Speaker: The time for Question Period has now elapsed and we will proceed to Orders of the Day.
ORDERS OF THE DAY
Hon. Mr. Harding: I move that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Speaker: It has been moved by the Government House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair: I will now call Committee of the Whole to order. Is it the wish of the members to have a brief recess?
Some Hon. Member: Agreed.
Chair: Twenty minutes.
Recess
Chair: I will now call Committee of the Whole to order.
Bill No. 4 - First Appropriation Act, 1997-98 - continued
Chair: Is there any further general debate?
Mr. Cable: When we signed off on Thursday, we were talking about long-term planning, and we were going through the NDP's platform document. We were going over the NDP promises made in the document at page 24 - the document called A Better Way. We had dealt with the commitment on tax increases, and we had talked about fees.
Just give me half a moment, Mr. Chair.
Then we dealt with the promise to develop a pay-as-you-go budget, and I think that's where the Government Leader signed off.
Now the next promise, under item (c) on page 24 of the document A Better Way, is "with each annual budget, present a five-year financial plan so Yukon people know what direction the government's moving in."
I think we started to talk about that and the Government Leader's comments that he was unable to do that this year because of time constraints.
He had been previously asked whether he was prepared to table that document in the legislative session. If the Government Leader would refresh the House's collective memory on that, is he prepared to table the five-year financial plan in the legislative session, in that he was not able to do so during the budget session as required or as suggested in the platform document?
Hon. Mr. McDonald: Well, I don't know what the member is referring to in terms of his interpretation of this commitment. I indicated that with each annual budget we would present a five-year financial plan. So, when we present the next budget, we will present it in the context of a long-term plan. Now, I'm hoping that it'll a five-year plan. It may be a three-year plan, but it'll be a long-term plan. So, we'll do it in the context of the budget. We will not table it in this sitting. We'll prepare it for the next budget.
Mr. Cable: That'll be about a year and a half into the government's mandate, of course, and the Opposition is curious as to where the Government Leader, as the finance minister, is going. Is he prepared to give us some indication of what his long-term planning is, you know, prior to the budget session?
Hon. Mr. McDonald: Well, I would argue that we've given more than normally is the case already. We've already indicated that NGOs would be getting long-term funding. We've indicated that we do not intend to raise taxes for the length of our term, on both the revenue and expenditure side. Those are pretty fair signals. Those are pretty clear signals, and signals that haven't been made before, but they're being made now.
There is a commitment to maintain service levels. That is something that has a cost to it, of course, particularly on the operation side. We have a commitment not to go into debt or have an accumulated debt. We've made that a commitment.
So, there are some long-term signals that have already been made on the record for the four-year term. I'm looking, in terms of the financial plan, at something with more detail than that, and the proposal would be that we would submit this longer-term plan in the context of the tabling of the budget.
Now, in A Better Way we were going to do a number of things, and I'm proud to say that a lot of these things are being done in the first year. But we did not say that we could do them all in the first year, and some of these commitments are going to take longer than others, but we do intend to change the systems, as we indicated we would, and this is one that I think would make some sense from a long-term planning perspective, and I'm thinking that the public will see, too, what the direction of the government is at any given time through this kind of financial planning process.
Mr. Cable: We got into a bit of a communication problem, as I recollect, on Thursday afternoon.
The tabling of the five-year financial plan with each annual budget - of course, it's not a four-year commitment, it's an annual commitment, and therein lies the question.
Let me ask this of the Government Leader. Assumedly, there's going to be significant revenue flow from the devolution process once the Department of Indian Affairs and Northern Development has devolved their programs.
Is there any document being prepared that would tell us what the revenues are that are anticipated and what the expenses are, so that we have some idea before the next budget comes up, which, of course, is another year away.
Hon. Mr. McDonald: Well, I indicated the answer to the question, I think, on Thursday or Wednesday, why we could not table a financial plan with this budget. So the next opportunity is the next budget, and that's what I'm trying to explain.
It is, I believe, a good idea. We will have it in place for the next budget.
With respect to devolution, the next major opportunity for the Government of Yukon is going to be, of course, devolution of the northern affairs programs. Either that, or the one remaining, the Attorney General function.
But, in any case, this opportunity will not be realized in this fiscal year and, consequently, I don't anticipate any devolution taking place - that is, actually happening - in the year that we're in right now.
Mr. Cable: Okay. I don't intend to get into a long-winded debate on that. I think the first opportunity is probably early in the next budget, but let me leave that.
The next item in A Better Way, page 24, is, "provide ways for public input in the budgeting process." The preamble to that is, "An NDP government, led by Piers McDonald will: (d) provide ways for public input in the budgeting process." What are the minister's thoughts on that at the present time? What does he intend to do?
Hon. Mr. McDonald: Can the member repeat the question, please?
Mr. Cable: If I could refer the member to his platform document at page 24, the item that says, "An NDP government, led by Piers McDonald will: (d) provide ways for public input into the budgeting process," how is he going to involve the public?
Hon. Mr. McDonald: Well, the public consultation plan, for the next budget, has not been established, so I can't give, with precision, what the plan would entail; however, I can give him some time lines and some general thoughts. First of all, the budget cycle formally starts in September for a spring tabling of the main estimates - September in terms of Cabinet input; it will start immediately or very, very soon for departments to start working on their budgets. So, the period of consultation will take place at the end of this sitting at some point and September/October.
I would intend to certainly discuss our priorities or ask people what they think our priorities ought to be during that period. The organizations will include the additional umbrella organizations of the territory that generally have an interest in this matter, and there will also be some community discussions as well, through public meetings and that sort of mechanism. Certainly, meetings with chambers of commerce, federations of labour, et cetera, will be part of the process, I would assume.
Mr. Cable: Does the minister intend to provide some formal terms of reference for the budget consultation process?
Hon. Mr. McDonald: There may be some. I don't know yet, Mr. Chair, whether or not we're going to put a lot of it to paper, but if we do, and anticipating the member's next question, he can see. I will give it to him.
Mr. Cable: Just so we can be clear on what the government intends to do with respect to long-term financial planning, in the budget speech at some juncture, and I was just trying to put my finger on it, I believe the minister talked about long-term capital plans. Is that one and the same as the long-term financial plan that he was talking about in the platform document, or is that part of the five-year financial plan?
Hon. Mr. McDonald: I'll try to find the reference the member makes. He says the reference to long-term capital plans is in the budget speech. It'd be helpful if I had the actual reference to help me out here, if the member can provide it.
Mr. Cable: It's at the top of page 6. The first paragraph reads, "It allows us to create jobs through capital works such as schools, roads and community facilities, while working with Yukon people to develop balanced, long-term capital plans for future years."
Hon. Mr. McDonald: The point of the statement is to indicate that the public will be involved in helping us by providing opinions about what they think should be the capital priorities for the government. Now, this can be done in formal ways through, say, a budget consultation exercise, community meetings, and that sort of thing, or it could be done very formally through the kinds of planning processes, for example, that are being sponsored by the Minister of Education when it comes to capital facilities. In that particular case, of course, the minister is going to be working with school councils to determine priority projects for coming years, starting next year, beyond what we've already decided. So, we would use any one of those ways to ensure that we do appropriate long-term planning.
Now, the plans, if they are well-known and well-crafted in advance, should maximize our opportunities for taking advantage of a particular project. For example, in Old Crow, if they know the school is coming, and it is coming, they can plan to ensure that there are opportunities available for local workers through training and other things to get work on that site.
So those are the kinds of things that can be done through long-term planning.
Mr. Cable: No, I guess I'm not making myself clear. What I was wondering was whether that reference to long-term capital plans was one and the same as the reference in the A Better Way document to a five-year financial plan, or are these two long-term plans that are going to go on simultaneously, or is one part of the other? Just what is the connection between long-term capital plans - that phrase, as used in the budget speech - and the five-year financial plan, as used in the platform document?
Hon. Mr. McDonald: In essence, they're one and the same, but the reference in the budget speech refers specifically to specific capital works. The long-term planning that I'm speaking of is the sending of general signals to the community as to what our spending priorities will be, to the extent that we have a detailed understanding of what the capital commitments would be in various departments. It might be telegraphed if we knew what they were and through planning that they may undertake, such as school development planning.
But the planning that I was speaking about in the A Better Way document refers to general financial planning for the future, so that people can see what our general objectives are over the period of our mandate.
Mr. Ostashek: The debate has raised a substantial number of questions I have. I won't try to hit on them all right now, but I really want to follow up on the Member for Riverside's questioning of the finance minister on financial planning, because I just want to draw to the member's attention that when he was in Opposition, this was something he brought up almost every budget: long-term planning.
I'm somewhat surprised that he can't elaborate a little more on what he intends to do. I don't expect him to have a plan in place, but I would've thought that he could've stood on his feet in this Legislature and given members opposite some indication of where he intends to go. I'm really more mystified, since he started speaking, than I was before he started, because if I look at the Blues from April the 3rd, he goes on to say in there - he was speaking to the Member for Riverside - "He has to appreciate the government has worked essentially on the O&M side on a year-to-year basis for as long as I can remember, except for the capital plan. The capital plan, for its part, anybody knows by year three or four is a complete fantasy."
So, on one hand he's saying that long-range planning is a complete fantasy; on the other hand, he's going to embark on it in greater detail.
My understanding of government is that they work on a three-year O&M plan and a five-year capital plan, not on a one-year O&M plan - that they work now on a three-year O&M plan.
And their capital plan is, in my understanding, how departments work. I don't know what the member is saying when he says he's going to come in with longer length planning, when on one hand he says that the five-year capital planning is now a fantasy in year three or four.
So, I'd like the member to try to elaborate a little bit and give us some understanding of how he believes his five-year capital planning - if he's going to do it for operation and maintenance and capital and financial planning - is going to be any less of a fantasy than what the five-year capital planning is now.
Hon. Mr. McDonald: Mr. Chair, first of all, I'd like to point out that what I'm proposing to do is general financial planning for the longer term. I'm not talking about specific planning on specific projects through to year three, four or five. That's the first point.
The second point to make is that, as the member knows, a capital planning cycle is much a fiction, as proposed by departments right now. So, they may go out there and they may have a five-year plan, but the reality is that there's no - given that they've generally asked for more money than we have - possible way that they could fulfil the commitments in the five-year plan, years three, four or five. They generally have a fairly good feeling for year one and two.
Now what we're talking about doing here is not to replace that process in the context of this long-term planning process for capital, but it would be a worthwhile project, in my view, to try to send some signals to departments through the long-term planning cycle, which would bring some discipline to their capital planning. If we send signals that we're going to spend so much money on the capital side, generally, over the term of the plan, then departments would know, essentially, what the limitations are. So, there may be some opportunities there for us to make the estimates less of a fiction on the capital side.
Now, the member also knows that, on the O&M side, the Management Board approves on a year-by-year basis, and I would like to be able to do some planning internally within government so that when we make longer-term commitments in key areas, we can do long-term planning and perhaps spend more wisely as a result. So that's the general objective. I haven't had a lot of time to work out the details of the financial planning process. We've spent a lot of time putting together the budget that's before the House for this particular fiscal year and I believe it's a well-constructed budget. I think we spent our time wisely.
Mr. Ostashek: Well, thank you, Mr. Chair.
I'm still no further ahead than I was when I got up on my feet a few minutes ago and asked the question, because the minister's talking in very, very general terms, and what he's basically telling me is that his general planning is not going to be any more concrete than what governments have done in the past with their throne speeches and their budget speeches when they give an indication to the public of the direction they were going to go in their mandate. That seems to be what he's telling me, so I don't see where there's a whole lot of difference. He may want to call it by a different name, but I think the minister is going to have great difficulty building any credibility into a five-year plan with the fluctuation in revenues and expenses of government on a year-to-year basis. Unless he's got a crystal ball that is very, very clear, and he believes he can stick to it, I don't see how he can accomplish what he's saying, and I would have thought that - the New Democratic Party campaigned on this, they put it in their platform - that he could have stood on his feet today and given us an idea of what he means by this, other than throne speeches and budget speeches, as to what the government's going to do over the next five years.
Capital planning is, to some extent, a wish list, but, also, it's a list that Cabinet is given, that Management Board is given on a regular basis, and they can make amendments to it as they go along. I think there's been a lot of political rhetoric here, and I don't see much substance in what the minister is trying to tell the House today: that he's going to embark on something that's going to be a lot tighter than what's happened in the past. I just don't see it.
I have another question for the minister. When he was in Opposition, when we started using the contingency figures in the budget, he was very critical of it. Why has he changed his mind?
Hon. Mr. McDonald: First of all, Mr. Chair, I want to point out one thing for the member. This platform is not a year one platform. We did not say that it was a year one platform. If anybody asked us - and people did ask us - we said it was our platform if we were re-elected to the government for the four-year term. We didn't call it a four-year plan, but it is essentially a plan of action over a four-year period. So, for the member to come in after five months - and all that this government has done, everything from devolution, we've been putting this budget together to restore collective bargaining, and everything else - and insist that we have to deliver everything is completely unreasonable, and I think any person watching this or listening to this debate will understand that to be the case, just on the face of it.
Any financial planning process has to - and this is true for a government, it would be true for a business, it's true for anybody - make some assumptions about what revenues and expenditures will be, and you have to use the best information you've got to do that.
We're going to try be as reliable as we can; the assumptions will be clear. If members disagree with the assumptions, disagree with the projections, they can say so. But at least we're putting the best information we have on the table and saying that under certain conditions, certain circumstances, we intend to go this way.
If the federal government cuts us back $50 million, of course, after the formula is completed, that's something we may not anticipate and may not account for. That would obviously put a chink in the plan. But, based on the information that we have, as reliable as it is, based on our history, our experience, we'll put that information together and try to ensure that there's at least some reasonable long-term projections, to the extent that we could possibly consider those.
With respect to the issue of the contingency, I was expressing concern before when the member first put the contingency in. The member was trying to make the Government of Yukon's finances look as bleak as he possibly could. I did not believe that that was - that and many other things - under the circumstances, a responsible thing to do, so I was critical.
I think now the contingency, in the context of the budgets from last year - the member will remember that I didn't criticize it last year, or the year before; I criticized it the first year - in the context of this budget, when it's clear you have a sense of what you may spend in the course of a year, I believe it's a reasonable tradition to continue, under the circumstances.
Mr. Ostashek: Thank you, Mr. Speaker. Well, first of all Mr. Speaker, I didn't insist that the minister have a five-year plan here now.
What I did say was that I was amazed that he couldn't give us any more detail on what he was planning to do when he raised this issue several years back, and I will remain skeptical that he can tighten it up over a five-year period any tighter than what the departments are doing now with their three-year O&M planning and their five-year capital planning.
So, I will remain a skeptic, in that respect - that it's just not going to be possible. And, in reality, I don't believe the minister is going to be doing anything new, because I believe his governments that he was part of in the past and our government laid out priorities in throne speeches and budget speeches to give the general public an idea of where they were going.
To get back to the contingency a little bit, I believe the contingency is a very valid way of budgeting. But I also would suggest to the minister that this budget's contingency is not very realistic as to what additional expenses this government may incur on the operation and maintenance side, alone, over the next 12 months when we have negotiations going on. I can understand the minister not wanting to put a figure in there and send a signal to the unions as to what he is prepared to give; I can understand that. But, we've heard the minister of energy say the contingency may be used to help Faro out, another major expenditure, if, in fact, the government decided to go ahead with it. We've heard - well, the minister is sitting there making faces now, but, in fact, he did say that, publicly.
He said publicly it could be used for that. He hadn't made a decision. I am just saying that the contingency, for all of the things that it's been identified for, seems to be fairly small. So, Mr. Chair, I do not have any trouble using the contingency; I am just wondering why the position of the minister is different from when he was in Opposition to when he's in government, because his contingency does the same thing to the surplus as ours did. There are certainly no changes in the way it's accounted for. That is the only question I have.
I have another question for the minister while I'm on my feet this time. I look at the transfer payments from Canada and there is a six-percent increase. How much of that is attributable to devolution?
Hon. Mr. McDonald: I will get the information for the member on his final question.
First of all, on the subject of contingency, I have no intention of debating Yukon Party's budgets of many years ago; we spent a lot of time doing that. I have indicated the reason why I think that the contingency under these circumstances is not to make the government's budget look bad or to overstate the deficit. I believe that the contingency is realistic.
The ideas that people have put forward that may use the contingency are simply to demonstrate a class of decisions, not the decisions themselves. Some financial decisions for extra funding, if they are made early in the year, may have to be swallowed by departments and the contingency may not be used at all. I don't want to send a signal to anybody in the public service that they have an automatic right to contingency funds.
With respect to the financial planning - the member's first point - I would argue that NGO funding is a new concept. Now, the member's colleague today completely misunderstood the point of the NGO funding proposal. For the uninitiated, the understanding would have been that, based on the member's criticism, one could not make a commitment to anybody that is longer than one year. That is not true. They certainly can make a commitment that is longer than one year. What the contribution agreements and the agreements that are struck in any contracts bind the executive to do is to put the estimates before the Legislature - put them in the budget. If the Legislature turns those expenditures back, then one of two things, at least, happen. We consequently say that we cannot live up to that commitment because the Legislature changed the budget. The second thing that happens is that we go to a general election because the government gets defeated.
So, I would say that the commitments that are being made here for NGO funding are, in fact, very solid commitments. It does bind the executive - the Cabinet and executive - to present spending plans for the Legislature. If we had said to Diversified Transportation, for example, in year two that, "Sorry, we only put in half the budgeted amount in this particular year and the Legislature has not approved enough money for your contract and, therefore, we have to cut your contract back," you don't think we would have been sued? We would have been sued and we would have been sued successfully.
So, I would say that the NGO funding policy is a new way of doing things and it is a longer-term arrangement and it is something that is innovative. Certainly that is one thing that we have already done.
The member says he's going to be a skeptic until he has a more detailed financial plan, or presumably until that financial plan's validity is determined through experience. That's fair enough. I don't have any problems with that. I don't expect the member opposite to be any friend of ours or to take anything we say at face value. I know what his job is and I don't expect anything different, but in the face of information I would hope that he would drop some of his skepticism if the information that we provide proves, in fact, to be correct.
So I think we have done some new things in budgeting already.
The answer to the question with respect to the transfer payment is three-percent increase if devolution is factored out.
Mr. Ostashek: I just have one short question, and then I'm going to let some other members get in here.
I'm concerned about the examples that the member was using about Diversified Transportation and NGOs. Is the member telling me that, when he goes into a multi-year funding agreement with NGOs, he's going to leave the government open for lawsuits? Is that what he's trying to tell me?
Hon. Mr. McDonald: We're making commitments, Mr. Chair. We're making commitments to people that we're going to provide a certain level of funding for a certain kind of service. That's what it's all about, and clearly that's what we're intending to do. There's no doubt about it. Now, if the majority of the members in the Legislature determine that that's not appropriate, they can say so, but the government will be making those commitments. That's what the NGO funding arrangement is all about.
Mr. Ostashek: Mr. Chair, it's one thing to have a contract with the government. It's another thing for the government to say, "Well, we're going to give you this, subject to budget approval every year." There's a vast difference, and that's the point the Member for Riverdale North was trying to make with the leader of the government when he made that statement.
Hon. Mr. McDonald: No, Mr. Chair, the member's wrong. "Subject to budget approval" doesn't give the executive of the government licence not to put something in the budget if they've made a commitment to somebody. It binds the government to put the estimate before the House, but there's always the caveat that maybe the Legislature may not approve the funding level and would amend the budget. If that was the case, of course, then the consequences, I would argue, would be a little more serious for the government than they would be for the NGO. So, certainly that's what it's all about. That's what the commitment in the campaign was all about and that's what the statement was all about today. It is a big deal.
Ms. Duncan: I'd like to take a few moments to talk further about something I mentioned in my response to the budget. It's applicable to general debate, if you'd allow me a few moments to do that. I'd like to go through a bit of background and make myself perfectly clear. Maybe when I've had 14 years of standing on my feet, it will be clear the first time, but I'd like to elaborate a bit more on something that I said. I'd like to ask for the Minister of Finance and members of this House's full attention, because I think what I'm putting forward is honestly a constructive, positive suggestion, and I'd like it to be looked at in that light.
First of all, when I was speaking, I talked about capitalizing assets, and I talked about a trend in the rest of North America, and I mentioned this newsletter I had received - the Committee on Monetary and Economic Reform had talked about capitalizing assets. This was done in the United States. Subsequently, it showed a saving in one year of $49.9 billion, as opposed to $119.3 billion deficit. It's an interesting discussion. I noticed that the City of Whitehorse capitalize their assets, and I would table this document. It's the 1995 annual report of the City of Whitehorse, statement three, their balance sheet: they capitalized their assets.
The Canadian Institute of Chartered Accountants, in their public sector accounting recommendations, say that information about physical assets will help users understand that the difference between a government's liabilities and financial assets is represented in part by expenditures on physical assets with future service potential. It goes on to say financial statements should disclose information to describe a government's acquired physical assets on hand and available for use by the government at the end of the accounting period.
This is general standards of financial statement presentation for federal, provincial and territorial governments.
Now capitalization of assets is a big discussion. I think it's something that's way more complicated than me simply reading a couple of points into this House. That being said, the point I was trying to make, and that I would like the Minister of Finance and finance officials to give serious consideration to is, I would like to see information about our assets presented in these budget documents. For example, when we get to Community and Transportation Services, there's a line that says Horse Camp Hill, which is a C&TS radio site. It doesn't tell me how much that site's worth, how much we've spent on O&M over the years, or if we should even be replacing it.
Similarly, with Education, it would be helpful to have one page in here that lists the 26 schools, which ones are insured, what we bought them for, what it would cost to replace them - simple statements about the assets and buildings we have on hand. That's all I'm asking for - information, as a legislator, to help me make better decisions. I don't think that's an unreasonable request.
Now, that being said, as I understand it from my briefing by Government Services, they have a system, IBIS, which is going to track all of our buildings, and I would refer to the Minister of Finance's remarks about, "befuddled by whether or not certain expenditures on computing systems are absolutely essential."
So, I'm not sure IBIS is the answer. I'm not sure how long it's going to take. I'm not sure that it would best meet the needs. If it takes a summer student from our research budget or a student training employment program student, I think that it would be reasonable to present for members here information about the assets held by the government. That's my positive, constructive suggestion. I have a couple of other to offer the minister, but I'd like his response on that.
Hon. Mr. McDonald: Well, Mr. Chair, I may have assumed that what the member was talking about was wanting, in terms of her suggestion to capitalize assets, an attempt to fundamentally change the balance sheet in some way.
If it's as simple as saying, "Can we have more information with respect to the assets that we own," we could certainly make that available, because I do know that Government Services does catalogue everything and counts absolutely everything. There is actually somebody who does that. So, that information can be made available. I don't know what format it can be delivered in - it can be delivered in every detail or it can be delivered in summary form, but certainly the member can have that information. And if the member wishes, I can ask Government Services to provide information of the kind and type she thinks is essential so that it can be made available for the budget estimate process.
With respect to insurance, we do have an insurance policy, and perhaps the Minister for Government Services, when we get there, can explain the insurance policy for government buildings. They do life-cycle costing, so I'm certain that he can explain that process better than I can. Rather than my fumbling through it, maybe the person responsible can do that.
Perhaps the member can explain if she talking about wanting to know the relative state of our assets to determine whether or not they are worthy of replacement. That is a laudable objective and I'm certain, to varying degrees, it happens even within the government. As a legislator, she may want that information for budget time and we'll try to get that. If she is talking about capitalization of assets for some other purpose, in terms of the financial balance sheet or anything else, maybe she could tell us and we'll consider those ideas.
Ms. Duncan: I'll take the last comment first. I think capitalization of assets that a body like the Public Accounts Committee could discuss in greater detail, because there's already been a vigorous discussion among some members about that. It's vigorous discussion among accountants.
With all due respect to the Department of Government Services, I asked for that information and didn't get it, and I think that it should be a purple page, if you will, in our budget documents.
Some Hon. Member: (Inaudible)
Ms. Duncan: It's the colour of change.
Some Hon. Member: (Inaudible)
Ms. Duncan: The reason I am suggesting it is because I don't believe in going through these documents so that legislators are able to come at this discussion from an informed perspective, if we have to wait to ask in line-by-line debate or in technical briefings by the department. I'm suggesting that it should be included in the budget documents. For example, in Community and Transportation Services, that is not my critic area, it should be a list of these radio and television communication sites. What are they worth? And then, when we are discussing the budget and discussing the line-by-line item, we can look and see an increase in O&M costs over the period of years or what the capital cost was and when we bought it. Maybe it's time it was replaced. I'm not asking the department to account for every snowmobile in Renewable Resources, although that might be a good idea.
I do think it's important - and particularly in Education, because that is one of my critic areas - to list the schools and their physical nature, and there are all kinds of statistics, but there are some that are missing. That is my point.
I don't want to belabour that. Perhaps I could - if the minister wants to respond to that at this point - move on to a point I have about capital projects.
Hon. Mr. McDonald: Well, Mr. Chair, I think that ultimately there is going to have to be some arrangement struck as to what assets we count, what assets we don't. The Government of Yukon has billions of dollars worth of assets all in varying state of repair, et cetera. The problem with counting all the assets and evaluating them is that it is a never-ending process. You never know where to stop. So, there will have to be some thought into precisely what kind of information would be useful and necessary in a budget book itself.
I would suggest that, just on the face of it, given the number of assets that we do have, depending on the amount of detail that we wanted, we would have to make a decision as to whether or not we put it in the budget book or put it in a supplementary information text. There are ways of doing it, I suppose. Even the supplementary information text might be quite huge if we counted everything, but when we get to Government Services estimates, I would encourage the member to take the matter up with the minister. The minister will be prepared to answer some questions at that time with respect to what they do count and how they count. The member can identify the information that she thinks she would like to see incorporated into the budget process.
Ms. Duncan: I thank the Minister for that. With respect to capital projects and the contingency fund, the Minister indicated that if the members opposite wished to provide some advice, he would invite us to give that advice, so perhaps I could provide you with some capital advice at this point.
The Porter Creek Secondary School renovations - and if he wishes, he can blame the previous administration - the design of the Porter Creek School gym has three change rooms. I don't know who or what planner envisioned that there were three sexes, but last I checked, there were two. Can we somewhere find the funds for a fourth change room on the Porter Creek School gym? It's not currently in the plans; it's not currently in the budget.
Hon. Mr. McDonald: I will take the matter up with the Minister of Education. I presume that there was a female and male change room and one for staff or something. I don't know much about the change rooms at the high school, but I will encourage the Minister of Education - when the member gets to the Education estimates - to raise the matter. It may be something that makes some sense and can be supported.
Ms. Duncan: Thank you. I appreciate the ministers involved giving that consideration, as it is not a staff change room, it was an error in the plans.
The minister also talked about the capital planning process in a discussion with my colleague. In that discussion and in your remarks, you referred to the process for the Education capital plan. Am I to understand from your remarks that we, as members of the Opposition, will be welcome to attend that public process that the minister has set up with school councils?
Hon. Mr. McDonald: Well, I haven't set it up, Mr. Chair. The Minister of Education is setting it up. I would ask that the Minister of Education respond to you. Perhaps, if this next meeting happens before we get to the Education estimates, the member could take it up with the minister, herself, right away.
Ms. Duncan: The minister had talked about involving the public in the capital planning process. That is why I brought it up at this point.
My last question has to do with NGOs. Perhaps it is in the minister's statement today or in the policy document tabled today. There has been a lot of talk about the funding side. I am concerned about the reporting side, as well. Is that contained in the policy document or is that going to be under discussion at some future point in time? Will somebody be assigned to, in turn, review the financial statements of NGOs?
Hon. Mr. McDonald: Indeed they will, Mr. Chair. The NGOs are going to have to provide justification for the receipt of funds. In many cases, it is a contractual arrangement, with certain service expectations that are held by the sponsoring department. Those service expectations have to be met in order for the funding to continue, whether it is one year or three years, so there is a written arrangement that has to be struck between NGOs and the government. There is right now.
This says we're going to be talking about it in the slightly longer term. So, to address the Member for Riverdale South's concern with respect to paperwork, there will be some, but there has to be some because we have to make sure there is an accountability chain that follows through the department, through the minister and back to this Legislature as to how the money is spent and for what purpose.
Mr. Jenkins: Thank you, Mr. Chairman. I just have a few questions of the Minister of Finance dealing with his budget address.
I take the minister's attention to page 1, "...we have been mindful that territorial revenues from the formula financing agreement have been severely constrained by the federal government."
That statement would lead one to conclude that there has been, in fact, a reduction in the monies flowing through the formula financing to this government. When one adds up the numbers, one concludes the opposite. In fact, the formula financing - if you want to kick in the perversity factor, we're going to see a considerable gain in revenues - adds up to $17 million more federal dollars flowing to this government than under the previous government.
Why are we putting out that information to the public, when, in fact, it's false information and the opposite is true?
Hon. Mr. McDonald: Well, Mr. Chair, first of all, the $17 million figure that the member referred to does include devolution, and there's no additional - I presume it covers devolution - service being offered, there is no change in service being offered, there's no net change to the territory from the transfer, in terms of economic impact, it's simply a transfer from federal accounts to the Yukon accounts. Money is still spent in the territory for precisely the same purposes, so that does not create a net change at all. That's the point. That's why one factors out devolution.
Secondly, Mr. Chair, in terms of the statement in this budget, what we are essentially saying is that the level of financing that people have come to expect over the years can't be sustained, in part because, in this one factor, $19,600,000 was cut from the government's operations. That is something that the territory as a territory has to learn to live with over time, and that's the point of the statement.
Mr. Jenkins: I did learn how to add, Mr. Chair. Without devolution factored in, there's a three-percent increase in the funds that flow through to this government, and with devolution there's a six-percent increase in the funds that flow through to this government. So, the minister's statement is obviously wrong. Why would he want to take this tack? I can understand the minister making a statement to the effect that the major capital projects that have been undertaken through Shakwak and the Whitehorse Hospital are coming to a conclusion. They are finished, and there are no major projects of that magnitude on the horizon for the next few years, but the basic dollars that are being transferred through to this government have increased, whether you take into consideration devolution or whether you do not take devolution into consideration. Why is the minister waffling around this issue and not addressing it head on? Obviously, there's got to be a different way of counting on that side of the House than is normal accounting procedure.
Hon. Mr. McDonald: I don't have a clue what the member is talking about. I don't think the member does either. I've made it very clear what the precise numbers are. I've read them out. I've had finance officials do the calculations. The three-percent figure that the member has, I just delivered to the member's colleague. I have provided all the information. The growth in the transfer payment is due to prior years' adjustments. There is no natural growth. The cut that I referred to was the cut that was experienced last year, which people had gotten used to, and that was the point that was being made there. Apart from that, I don't know what the member's talking about.
Mr. Jenkins: Well, we're getting right to the point now, Mr. Chair. The minister has 'fessed up and he has admitted that there is, indeed, an increase in the amount of money that is flowing through from the federal government to this government. That's what I was wanting to get at and that's what the minister, after a long time, has confirmed.
Bear in mind there has been an increase in funding flowing through to the government. I could take the minister to the text: page 16, municipal block funding. That has been frozen for 10 years or so. Why has this area not been addressed? Operating costs for all municipal governments are rising. Why hasn't there been an increase in municipal block funding, at least indexed for inflation?
Hon. Mr. McDonald: First of all, Mr. Chair, the sleuths didn't need to go any further than last Thursday's Hansard to get all the figures themselves. I'm glad that he thinks he's now come to some understanding about things. Whether he thinks that he's wrestled information from me or not is immaterial.
With respect to the municipal block funding, or with any other expenditure that we make - Yukon College, the Hospital Corporation, the NGOs, the Art Centre - although they're getting a little bit of an increase, most NGOs and organizations, governments, are getting the same as they did last year. One of the reasons for that was we were trying to maximize capital expenditures. That was also something I understood the members opposite wanted to see happen. Maybe not; maybe so. It goes back and forth.
The point is that the reason why we wanted to restrain operation spending - in fact, it shows a slight dip this year from the forecast of last year - is precisely because we wanted to have as big a capital budget as we could, within our means.
Mr. Jenkins: I take the Minister of Finance to the bottom of page 16. The statement is made, "We will continue to work with the community of Dawson City regarding capital projects that can be undertaken in future years, once community priorities have been determined."
Can the minister elaborate on what he means by "once community priorities have been determined"?
Hon. Mr. McDonald: Well, Mr. Speaker, this is an example of what we want to do with all communities. The next sentence indicates that we want to work with all communities to determine community priorities over coming years.
Dawson City is one example, just as we put in other examples for expenditures we make in the budget text. What we're going to do is work with the community government to talk about what kinds of commitments we can make in the longer term to meet their highest priority projects to the fullest extent that we can within our budget limits.
In Dawson's case, there are a number of projects that they have identified that they would like to see funding for. I can't make any commitments to them at this point. I can't make any commitments because the decisions have not been made, but I do know, for example, that they're interested in doing everything from building a rec centre to water/sewer works to other things. When we understand what the top priorities are, we'll make a decision at that point as to what funding or what support we can give.
Mr. Jenkins: Thank you, Mr. Chairman, but it does appear that this "once community priorities have been determined" is being used as an excuse by this government for not funding very, very important priorities that need to be undertaken immediately, specifically in Dawson and I refer to the request to the government for extra funding under the Municipal Act for addressing the requirements placed on this community by the Yukon Water Board. That is a request for an amount approximating $400,000 that has been recently declined by the Department of Community and Transportation Services. The excuse given was community priorities haven't been determined.
The rec centre is another issue, yes, but there's a statutory requirement under the Inland Waters Act, under the Water Board, that they have to meet these guidelines and that financial burden that would be vested or dumped on that community is way in excess of their financial wherewithal. It would virtually increase their operation and maintenance on their water and sewer system by 50 percent if it was recovered in the year that it was expended, and there's no means to amortize it over a longer period. So, while it comes through abundantly clear here, Mr. Chairman, it is in rural Yukon, from what I can see, being used as quite an excuse. Perhaps the minister would care to comment further?
Hon. Mr. McDonald: Thank you, Mr. Chair.
I would first of all point the member to the community projects list that accompanied the main estimates documents. That community projects list will identify very substantial expenditures to be made in the Dawson City area, so there is no such thing as a lack of commitment by this government to the City of Dawson or to the region around it.
With respect to the notion of this being used as an excuse, I beg to differ very substantially with this member. I point out to the member, first of all, that the Mayor of Dawson has made it very clear that the priority is a community recreation centre. The member has stood on his feet today to make it very clear that the water/sewer system is the priority. This is a classic opportunity for us to observe the fact that community priorities are not unanimously held by the MLA and the mayor.
Now, we want to respond to community priorities if we can, if we have the financial ability to do so, if we, as the government on behalf of all taxpayers in this territory, have the financial ability to do so. We do want to be able to respond, but we have to have a clear sense of what the priorities are. I would invite the member, if the member wants, to promote the water/sewer project in this Legislature. The best time to do that would be to do it when we get to the Community and Transportation Services estimates and the Minister of Community and Transportation Services is able to respond.
In terms of the basic proposition here, in the budget speech, we do intend to work with communities around this territory to try to respond to the greatest need, not just the greatest need between projects in a given community, but the greatest need within the territory, and we'll have to make many of those judgments. We'll have to try to respond to as many needs as we can, but, as I've already indicated, we've already made some long-term decisions. People don't believe it, but we already made some long-term decisions about maintaining services, support for NGOs, no tax increases, which will limit the envelope under which we're going to be operating for the next four years.
Mr. Jenkins: Mr. Chair, I am quite well aware that there is no difference in the opinion as to a priority shared by the mayor of Dawson and me. One is a statutory requirement to address the sewage discharge and that has to be dealt with. There is no choice. There is no choice whatsoever. Now, if the City of Dawson has the wherewithal to address its needs in that area, the priority is indeed the recreational complex, because they have virtually exhausted all of their funding for the past number of years on maintenance and upgrades to the existing water and sewer system.
What I am suggesting, and what is a very, very valid point, is that the Minister of Finance is hiding behind this statement, "Community priorities have not been determined. We are not going to do anything until such a time as they have been done."
If I could take the minister further into page 18, in the last paragraph: "The government is also prepared to enter into partnerships with municipal and First Nations governments, the private sector and the individuals to expand the options available to mobile-home residents." Could I ask the Minister just to expand on what is envisioned as the type of partnerships they would be entering into?
Hon. Mr. McDonald: First of all, Mr. Chair, the point the member was making that this was an excuse not to put even more money into the City of Dawson is a point that I think is quite suspect, particularly given the fact that we are investing large amounts of money in Dawson City right now. But, I would point out to the member that if he can just, for one second, look beyond the city boundaries of Dawson and think about Mayo and some of the other communities - even some needs in Whitehorse, the much-maligned city seat of the government - there are some needs that exist elsewhere, too.
After listening to the member during the supplementary estimates, my breath was taken away by the sheer volume of suggested expenditures that the member thought we should invest in immediately. We did a calculation of $70 million. Somebody said, "Stop, stop, stop; we can't handle it." Now, I know the member has all kinds of ideas on how we can spend money. I would appreciate if he would understand that there are budget limitations and that we are not going to go into debt and we are not going to raise taxes. So, before he gets out the wish list again and engages in the same kind of bidding war that he practised during the election campaign, I would caution him that, if it is not realistic - not reasonable - it is going to fall on deaf ears and his credibility is going to be questioned.
Now, the question on mobile homes. This particular initiative will be announced, hopefully, during this sitting, within the next two months, and deal with a variety of issues facing mobile-home residents, particularly mobile-home residents in rental parks.
Now this initiative will do a number of things. It will address health and safety needs of people who live in mobile homes, particularly the old ones. It will address the need for mobile homeowners to, or the desire of many mobile homeowners, buy property on which they can move their trailer, so they can have a pure home-ownership situation. It will also deal with, in the longer term, the rights and responsibilities of both tenants and landlords.
So, a number of things are going to fall out from this new initiative, and I'm hoping that the residents of the mobile-home parks, particularly, wherever they exist in the territory, will see this as a positive improvement to their living circumstances.
Mr. Jenkins: Well, thank you, Mr. Chairman. At the Minister of Finance's request, I did pull out and review, once again, the gross estimate of expenditures, by community, and looked at Dawson.
If the Minister of Finance would also take the time and review it, he will find that the majority of expenditures are on the Dempster Highway and the Top of World Highway, with the exception of $57,000 worth of capital in McDonald Lodge and $1.1 million for the Han cultural centre.
So, you start looking at where the money is being expended for all of Yukon, Mr. Chairman, not just Dawson City. The benefits will accrue to all of the Yukon by upgrading these highway systems, and the Dempster Highway, to a great extent, will enhance the opportunities for getting into the remote wilderness areas.
My question dealing with the mobile homes - I listened, but I didn't get an answer Mr. Chairman - is what the partnership opportunities are going to be, and, if I could, ask the Minister of Finance to spell out what these partnership opportunities are going to be for the First Nations and the various private sector and municipal governments.
Hon. Mr. McDonald: Well, to enhance something that the member said, I would think that the centennial anniversaries project will enhance the quality of life for all Yukoners, too. Everyone who goes to Dawson City will take advantage of it, too. I know that I will have the member's support when it comes to a new community development fund, which will target even more expenditures into rural communities, beyond block funding, et cetera. So I think we will have a meeting of minds when it comes to targeting expenditures into rural Yukon. It may not be supported by the member's own colleague, who may find some of those expenditures to be immoral, in his terms, because they we give those communities hope, but I think investment in rural Yukon is wise and I would support the member's general approach there.
With respect to the partnerships referenced on page 18, for anybody who's really familiar with this issue, this makes specific reference to the opportunity for municipal governments, First Nations governments and others to get involved in land development. What is traditional here, as the member will know, is that the Yukon government does much of the land development in the territory. It doesn't need to be that way. The others, private sector people and other governments, can get involved in land development, too. What we would be prepared to consider, particularly if the land development is to be undertaken by government, meaning a municipal government or a First Nation government, is to provide the financial resources to front the costs of the development and then have that recovered back to the Yukon government, in total, through lot sales.
But the offer is on the table. The member may remember, as a mayor, that, years and years ago, I made a suggestion as Minister of Community and Transportation Services to have municipalities consider doing land development themselves and be the general contractor just the way the Yukon government acts as kind of a general contractor. The municipalities replied, "Well, we can't finance these major developments. The carrying cost for this money is very significant to us." So I indicated at the time that that's something we may be prepared to undertake through an agreement, government to government. We would undertake to front the cost, as long as the other government returned those expenditures back to the Yukon government through lot sales.
So, we are prepared to consider that option.
I think it's an innovation that might help get more land developed of the right kind in the right communities.
Mr. Jenkins: Well, if I did hear the Minister of Finance correctly, he's prepared to look at partnership arrangements with municipal governments, with the private sector, with First Nations, for land developments for mobile-home parks.
Hon. Mr. McDonald: No, not for mobile-home parks - for lot sales, for the sale of land for people to purchase. That's the concept. Nobody in the business community, as far as I'm aware, has come to the government. No other government has come to the government asking for the government to construct mobile home parks - rental parks. What they have come to the government to do is to finance the development of lots which mobile-home owners, who live in parks, could move to. That was a very, very vocally raised request over a number of years, and we are prepared to respond to it. There was an open house sponsored by the Yukon Housing Corporation a year and a half ago, I guess - an open house which I, as the MLA for the area in McIntyre, at least, helped to support. Of the people who came to the open house, they all requested information about lot purchase. All the people who came who lived in mobile-home parks wanted to talk about lot purchases, because they wanted to own their own lot. At least in the City of Whitehorse, as an example, there is a restriction on older trailers being moved outside of mobile-home parks. This issue may be resolved, and an announcement will be coming out in the next couple of months on the full details of our strategy.
Mr. Jenkins: The next question I have of the Minister of Finance follows on the items he commented on in his budget address on page 21, and it deals with the Department of Education, the total expenditure of capital of $13.2 million, as to school construction and renovations. Virtually all of this is for the Whitehorse schools.
Some Hon. Member: (Inaudible)
Mr. Jenkins: Well, that's fine, but when one looks at the status of the schools in other areas, one would conclude that the government has done their homework and would anticipate expenditures in the five-year capital forecast. Yet, when I turn to Education's multi-year capital project, I see the only mention made is a continuous reference to Whitehorse grade reorganization and Porter Creek Secondary School.
Why isn't the need for upgrading of other schools in the Yukon, specifically rural Yukon, not even envisioned or made allowance for in the multi-year capital project?
Hon. Mr. McDonald: First of all, in the budget estimates, if the member's taking the capital plan from the budget estimates book and is looking at the multi-year funding levels in the estimates book, that's not the government's plan for expenditures. There's identification of $500,000, for example, for planning the Old Crow school. It's not incorporated into the budget estimates book because the total cost of the school has not yet been established. Once it is established, it will be shown as a multi-year cost for a particular school. That's not the plan. The long-term plan is not the item on page 5-10 in the estimates book.
The second thing that I'd like to point out is that it is very difficult for a brand new government to identify, plan, make decisions, do the engineering work, the soils work, blueprints and construction, in six months. I know the member has high expectations of us, but even he - a reasonably minded man, presumably - would not be thinking that the Yukon government can build a school starting in the summer construction season in a place like Mayo, for example - a school that has received top awards for the school most in need through a number of studies. The reality is that we simply cannot deliver these projects in that period of time.
With respect to the capital planning process for school construction, as I mentioned previously, the attempt is being made - given the high expectations of schools to be built all over the place, and there are some very real needs out there - to try to build some consensus among the school representatives from around the territory - duly elected people, as we are - and the ministry of Education to establish priorities. So, that is the next step for all the next building plans, but certainly we couldn't put anything in for this budget, even if we wanted to for this summer, because it simply would not be spent.
Now, if the member is expressing some concerns about the size of the capital budget itself, the projects that were underway are projects that should be completed. As I mentioned before, it doesn't matter what one thinks of grade reorganization, of it's wisdom or whatever. The point is that the decision was made. We have to live up to that decision. We have to make the decision work and, apart from the concerns about not enough washrooms at Porter Creek Secondary School, we are trying to make the decision work. This means that there has to be capital expenditures in the Whitehorse schools.
If the member's concerned that $13.2 million is not enough, that there should be even more, then I'd just go back to the discussion we just had. We tried to find as much money for the capital budget as we could, maintaining services, et cetera, without cutting back on municipal block funding, or anything else, and this is as much as we could put together.
But, in any case, we simply don't have projects to spend it on until the preliminary engineering work is done.
Mr. Jenkins: Well, thank you, Mr. Chair, but once again the Minister of Finance has skirted all around the question.
The question was of the capital monies on education being expended on the Whitehorse schools. That's a given. I'm not taking exception to that fact. There was a survey done of all of the schools in the Yukon, and if you want to look at the rural schools, the worst one in the rural school survey was Old Crow, the second one was Mayo, the third one was Carmacks. Previous governments, when they tabled a budget, tabled a five-year capital forecast. I was probably misled by this multi-year capital projects as being a new terminology as to what you are calling it these days, but if that is the case, I apologize. There has to be a game plan in place as to what is planned down the road.
Could the minister table his five-year capital forecast as to the timetable for capital works in these other schools that are sadly requiring upgrading or replacement?
Hon. Mr. McDonald: As I indicated already a couple of times, the priorities for new school construction are not going to be determined by consultants; they are going to be determined in consultation with the citizens of the territory. Those citizens especially include the elected representatives of the schools from around the territory.
Now, as the member quite rightly noted, the Old Crow school was given a high priority billing as something that needs to be replaced. Under normal circumstances, I would say at this point, if the school had not burned down, it probably had a very good chance of being top of the priority list, because the consultants would be recommending that the school be replaced because of its state of repair, and that this will be understood and recognized by others. But it's our view that the public should be involved in this process, and that's what we're going to do.
Now, the member mistakenly suggested that the five-year capital forecast has been tabled by previous governments. It's never been tabled by a previous government - not the NDP, not the PC, not the Yukon Party, never. So, I don't know what he's referring to there.
With respect to the capital works in terms of setting the school priorities, I've already outlined in general terms what the process will be and who will be involved. The Minister of Education can provide the member with more details about how she's intending to establish priorities for the future - apart from Old Crow, which has already been decided - and then the member can get a better picture of what the Government of Yukon's direction will be.
Mr. Jenkins: Thank you, Mr. Chair. It sounds like the priorities of the Old Crow school replacement have been predetermined and we didn't have to go through this charade of review process to get to