Wednesday, February 25, 1998 - 1:30 p.m.
Speaker: I will now call the House to order.
We will proceed at this time with prayers.
Speaker: We will proceed with the Order Paper.
Are there any tributes?
Introduction of visitors.
Are there any returns or documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. Fairclough: I have for tabling two covering letters to the opposition members in response to their request for copies of contracts.
Mr. McRobb: It appears that the photocopier, or at least a gremlin in it, ate the final page of the commission's workplan yesterday, so I would like to table page 4 at this time.
Speaker: Are there any reports of committees?
Are there any petitions?
Are there any bills to be introduced?
Are there any notices of motion?
NOTICES OF MOTION
Mr. Cable: I give notice of the following motion:
THAT it is the opinion of this House that:
(a) to encourage new investment in the Yukon economy; and
(b) to create new jobs in Yukon businesses associated with that new investment, and;
(c) to diversify and stabilize the Yukon economy,
the government should immediately review the experiences of other jurisdictions with investment tax credit programs and, to meet the above goals, introduce an investment tax credit system.
Speaker: Are there any statements by ministers?
Export trade strategy and implementation
Hon. Mr. Harding: I rise in the House today to update members on developments in the export component of our trade and investment diversification strategy. This aggressive strategy is one of the keys to our government's central policy of creating jobs and economic opportunities that help diversify our economy. I'm pleased to note that an additional $500,000 has been set aside in the 1998-99 budget to advance the trade and investment diversification strategy.
The export component is focused on three main activities: forming partnerships to increase awareness about the value of export trade; delivering programs and services that support Yukon businesses and cultivate export trade readiness; and, increasing the export of goods and services beyond our borders.
Developing partnerships to share information and resources is important to our success
. Besides the cooperation agreement with the Yukon business community and the Council of Yukon First Nations and our links to provincial export offices, we have registered other significant successes in a very short time. We've established relationships with Taiwanese and Japanese businesses and their organizations. We've leveraged funding from Industry Canada for the Knowledge Network to complete video profiles on Yukon business excellence and product design for northern and remote areas. This production will be seen by an estimated 3 million viewers.
We have appointed Denny Cheng as the Yukon's first international trade ambassador for the Pacific Rim. Mr. Cheng has extensive Asian business experience and will represent the Yukon on a government-to-government basis, establish formal relations and promote trade and investment during his business travels. Next month, Mr. Cheng will be the Yukon representative on a Canadian trade mission to China organized by the federal government in conjunction with the Canada China Business Council. This is an excellent example of public-private sector partnership at minimal cost to the public.
As well as these initiatives, Mr. Speaker, we've used our membership in the Pacific Northwest Economic Region, (PNWER) to offer free access for several Yukon businesses to the CATALIST business information network.
As well, to prepare for the challenges of cultivating export trade and supporting local businesses, we are taking a number of other steps.
We are establishing a database of Yukon exporters and exportable products and services. This information is important to help clarify the forms of assistance we should be offering to local entrepreneurs.
We are launching the export readiness casework program, which will match business people with local consultants with export experience to companies preparing to export. This mentorship initiative will clarify the specific services that different sectors or markets require.
We are also sponsoring the ISO 9000 workshop tomorrow and Friday to assess the benefit of a world-class certification of quality for Yukon organizations to be competitive globally. Accredited companies can use the ISO program almost as a passport for world trade. ISO 9000 registration indicates a company's dedication to quality that gives them an edge in today's ever-changing business world.
We will also hold export-readiness workshops this spring and an Internet workshop in May to show companies how to market their product for export electronically.
Additionally, our export facilitator continues to work with local businesses to overcome any barriers they may be encountering in exporting or preparing to export.
We believe government can play a role in opening up new markets for our entrepreneurs to increase the export of Yukon products and services. In partnership with the Consulate General's office and the International Trade Centre, we are committed to running a mission of Yukon businesses to Alaska as part of the new exporters to border states program, NEBS.
This is a key export education tool that targets Canadian companies not yet exporting to the United States.
Preparations are also underway for the next Team Canada trade mission, which we expect will provide significant benefit to many local businesses. We are also encouraging partnerships of local businesses to explore trade opportunities in other Canadian jurisdictions.
Mr. Speaker, we do not expect that our efforts to increase the export of Yukon products and services will yield immediate results. The trade and investment diversification strategy is part of our government's long-term approach to economic planning.
Like the budget tabled earlier this week, it shows our government's long-term vision and our commitment to establish a strong foundation of growth and prosperity for the new millennium.
Mr. Ostashek: I would suggest to the Minister of Economic Development that he shorten his vision a little bit and exert some effort and financial resources into putting Yukoners to work in the near term, rather than concentrating all their efforts on external trade and exports.
Mr. Speaker, it seems that these ministers have acquired an addiction to foreign travel and believe that that's where all the energies of this government should go, rather than working on the 11 and a half percent unemployed in the Yukon today, which is going to go to 16 or 17 percent in the next couple of months.
Not only are they very good at talking the talk, they have to talk about things that they didn't even do, such as establishing relationships with Taiwanese and Japanese businesses. That was a trip that was made by me and the mining facilitator when the Yukon Party government was in power, and we had numerous meetings, Mr. Speaker, with Japanese businesses and Taiwanese businesses. Yet, this government is so void of new ideas and accomplishments that they have to sing the praises of the Yukon Party government. They should give us a little bit of credit for it in it anyhow.
Mr. Speaker, it is somewhat ironic that this minister stands up and makes this type of statement in the House today and qualifies it by saying they don't expect to see any immediate results. And I agree, they don't.
And while I laud them for any approaches they take to expand export markets in the Yukon, I find it somewhat ironic that one of the best ways that they could enhance those export markets would be to use Yukon products themselves, and we have just seen a perfect example of how this government treats Yukon businesses and Yukon products when dealing with the Old Crow school.
I would think that one of the best selling points for our businesses would be for them to be able to say the Yukon government demands Yukon products in construction of projects in the Yukon. But, no, we go and get them from outside, and then we want to be a player in the world market.
As I say, the government needs to have a certain amount of resources dedicated to an export trade strategy, and we applaud the government in those efforts, but I would urge this minister and this government to pay attention to some of the serious economic problems that are facing the Yukon under this government's administration in the near term and put some of their efforts there.
Mr. Cable: The Liberal caucus is supportive of the government's policy objective of diversification of the economy. We are also supportive of efforts directed at increasing exports as one of the tools in meeting the diversification objective. These government efforts involve working with and forming partnerships with the private sector, and I think we have to be supportive of that also.
I should indicate that the experience of government involvement in business in Canada is mixed at best. There is a long history of programs designed for job creation that started with job creation as a goal without any followup. There are large sums of money that have been spent over the years in Canada without feedback or tangible proof of long-term benefits.
So, what we'll be looking for in the budget debate is some justification for the expenditure of the several hundreds of thousands of dollars that have been spent and which are designed to be spent according to the budget to determine whether the feedback system is set up to guarantee that the taxpayers are getting some kind of return on investment for this money.
The ministerial statement is virtually silent on the after-the-fact benefits analysis.
Hon. Mr. Harding: Well, Mr. Speaker, I want to thank the members opposite for their comments. Typical of the Yukon Party official opposition, their view of the economy has no vision. It's a spend, spend, spend more government money approach to the economy - money that we don't have - and I find it so ironic to hear them now trying to support local hire or local purchase when they opposed it every step of the way when we put it forth in the election as an initiative that this government would undertake to try and create more Yukon jobs.
Mr. Speaker, I'm looking forward to when the recommendations of the local hire commission are responded to by Government Services, and I hope they will finally reverse their anti-local hire, local purchase stand, because they've fought us all the way on this agenda.
Mr. Speaker, two years ago, I knew that the Yukon Party formula for the economy was not sustainable. It was based on a huge mass of government spending. It was based on an artificial and false economy - Shakwak funding from the U.S. Congress, we had hospital funding from the federal government and overheated land development. We had a minister that had no vision for tourism beyond the anniversaries. We had a mining cycle that was at its highest end across this entire country, and the Faro mine was still the major engine behind the Yukon economy.
Now, Mr. Speaker, what do we have? We've got less government spending. The Shakwak money is not there from the U.S. Congress. The hospital money isn't there from Ottawa, and the huge land inventory is now built up. The anniversary is here and mining across Canada has taken a serious blow.
Mr. Speaker, on the VSE last year alone, the value dropped 50 percent as a result of Bre-X. We've had low base metal and low gold prices and now an Asian market crisis.
Those factors are not this government's doing. We did not create the Bre-X fiasco, the Asian market crisis, nor did we create the effects of El Niņo. However, we have to deal with it. We have the responsibility as a government to develop a plan. We have that plan, and we're going to work with what we have to try and move this economy forward. We will not, no matter how much the opposition wants us to do it, slash health care, slash education, raise taxes and run deficits in a knee-jerk response to economic downturns. We will not do that. We're going to foster and enhance the economic sector in this territory, the resource sector. We're going to broaden it from mining to forestry and oil and gas. We're going to look also at protected spaces - another important economic tool for this territory - for economic diversification, for economic certainty in this territory.
We've been undertaking other economic diversification initiatives, like the abattoir. We've been looking beyond the anniversaries for the first time.
Mr. Speaker, we've been developing new programs, such as the immigrant investment program, something the opposition that is now opposition, then government, could not afford to do, did not have the courage to do. We're going to deal with small business and their problems of access to capital. We're going to look at cultural industries. We're going to devolve programs from the federal government and we're going to settle land claims.
Mr. Speaker, we're not going to respond with a spend, spend, spend approach with monies we don't have, with a knee-jerk reaction of this economy. We've got a plan. We've got a vision. We've got an agenda. We're going to keep our eye on the horizon and we're going to deal in the short term the best way we can in a thoughtful, responsible manner.
Speaker: This then brings us to Question Period.
Question re: Internal trade agreement
Mr. Ostashek: Mr. Speaker, I must apologize to the Minister of Economic Development. I didn't realize he is so sensitive on his lack of accomplishments on the economic front.
Mr. Speaker, my question is to the Government Leader. I asked the Government Leader a question yesterday on his representative going to Ottawa to speak on internal trade, and the Government Leader tried to tell the House that I was confused and that his representative didn't go to Ottawa to speak on internal trade; in fact, he said it twice in his reply to me on the question. So I'm going to try again today because I believe it's the Government Leader who is confused.
There was an article in a local paper on Thursday, February 19, which clearly states that the Member for Whitehorse Centre was in Ottawa to attend the meeting on internal trade, and that he was putting forth the government's position of trying to maximize local employment and the use of local businesses, and if that position contravened the internal trade agreement he was against it and the government would stand against it.
So, I'd like to ask the Government Leader this: was in fact the government represented in Ottawa at the internal trade meeting by the Member for Whitehorse Centre, and was he there to lay out a government position?
Hon. Mr. McDonald: Let me make it clear for the member. I indicated yesterday that the Member for Whitehorse Centre spoke to the issue at the meeting on the multilateral agreement on investment. That's what I said. He spoke to the multilateral agreement on investment. He did not speak to the issue of the internal agreement on trade. He confined his remarks at the meeting to the multilateral agreement on investment. That's the MAI, and I made reference to the fact that the member had raised the issue in the Legislature and had spoken about the government's position, which was consistent with the position we took in the Legislature last November.
So, he spoke to the multilateral agreement on investment and did not speak to the issue of the internal agreement on trade.
Mr. Ostashek: Well, Mr. Speaker, it appears that the Member for Whitehorse Centre was sent to the wrong meeting then, because the meeting was called to deal with the MUSH sector on the internal trade agreement - municipalities, universities, schools and hospitals. That's what the meeting was called for.
There's nothing in the article and the interview that was done by the Member for Whitehorse Centre that speaks of the multilateral agreement - none whatsoever. It's not even mentioned.
Mr. Speaker, that's why I asked the question yesterday about if this government had a position and if that member was relaying that position. Now the Government Leader tells me they don't have a position, yet it was reported in other media that only two jurisdictions in Canada - British Columbia and the Yukon - failed to sign the agreement. I want to ask the Government Leader why.
Hon. Mr. McDonald: I caution the member to not repeat whatever mindless words are spoken to him from his right when he's about to ask a question, because they'll get him into trouble.
There are such things as ministerial meetings where there's more than one agenda item, and this is just one such meeting. In fact, most of the ministerial meetings that I've attended in all the years that I've been in government have had more than one item on the agenda.
Now, I can tell the member that there were at least two items on the agenda. One was the multilateral agreement on investment, and the other one was the internal agreement on trade. The Member for Whitehorse Centre spoke to the multilateral agreement on investment. He did not speak to, and did not represent the government's position with respect to the internal agreement on trade, for the reasons that I cited yesterday.
And I caution him to please think for himself because if he listens to the member on his right again, he may get into trouble again.
Mr. Ostashek: Well, I caution the Government Leader. He ought to be clear with the public about what his government is doing. We have a letter from the Minister of Economic Development that supports the internal trade agreement. It was written last July. Now we have another member of the same government going down there and saying that they're not supportive of it. I asked the Government Leader to clarify for the record and he stood up and he didn't do it.
Does he support the internal trade agreement or does he not support it?
Hon. Mr. McDonald: Mr. Speaker, I was perfectly clear yesterday and I'll be perfectly clear again today. The member has a confused jumble of facts and he's trying to make some sense of them. I'm telling him that the Member for Whitehorse Centre did not speak to the meeting on the subject of the internal agreement on trade. He did not speak to it and I said that yesterday and I say it again today. He spoke to the issue of the multilateral agreement on investment and that was what he did.
With respect to the internal agreement on trade, I told the member that we were going to be making a decision - a government decision - on that agreement shortly, but we have not said that we were not going to sign the agreement. We have not signed the agreement, but that we would be making a decision shortly. That's what I said. I say the same thing today. It's not that confusing.
Question re: Old Crow school
Mr. Jenkins: My question is for the Minister of Government Services and it's regarding the tender for the construction of the Old Crow school.
The largest capital project contained in the 1998-99 budget of this government is the construction of the Old Crow school and up to this point in time the minister has been extremely effective in awarding the design contract to a non-Yukon architectural firm. The trusses are being manufactured outside of the Yukon and the insulation is being manufactured outside of the Yukon.
In baseball, three strikes and you're out, but here in this political arena, the minister is still standing at the plate swinging his bat around, knocking out all the local contractors.
Can the minister assure this House that the contract for the construction of the Old Crow school will be tendered so that Yukon contractors will be able to bid on it? Can the minister give the House that assurance?
Hon. Mr. Sloan: I love the baseball analogy. I guess, if I was the umpire, I'd pull that player.
I assume that what the member is asking is for ministerial interference on a contract - is that my understanding? Because I can tell him that what we are trying to do, and what is our intention is, is to construct the contract in such a way as to maximize the benefits, not only for Yukon businesses, but keeping in mind our obligations under section 22. One of the things we're very cognizant of is the need to maximize opportunities for the folks in Old Crow on this important project.
I can tell you that we have done a number of things in that regard already. I suppose the member there is being somewhat selective in his choice of references because I do know that one of his constituents, I believe Arctic Inland Resources, got a substantial number of the contracts.
Mr. Jenkins: The minister failed to answer the question. I'm extremely surprised that at this point the tender for the construction of the school hasn't already been issued. The material for the school will be arriving in Old Crow very shortly via the turnpike that was constructed in there. In view of the minister's very dismal track record with this project already, will he clearly state for the public record that the construction of the Old Crow school will be tendered rather than having it built through project management?
Hon. Mr. Sloan: Of course we will be tendering the contract. As a matter of fact, we are generally looking at probably about an April tender on this. The design will be submitted this Thursday. There will be a review of the design and probably tenders put out on about a four-week basis. We're expecting that, by April, the tender will be put out and the materials will be assembled. We're doing a target date on that of March 20 to have the materials there. Certainly it will be tendered.
Mr. Jenkins: Thank you very much, Mr. Speaker. In the tendering package for the construction of the Old Crow school, what steps is the minister taking to ensure that we're maximizing employment opportunities for not just the people of Old Crow, but for Yukon trades people as a whole?
Hon. Mr. Sloan: I can assure the member that we are looking at a whole variety of ways that we can do, legally, within the existing contract regulations, to maximize the Yukon content. Certainly, one of the things that we will be doing is we are having our project manager meet with the Vuntut Gwitchin, both this weekend and early next week, to discuss various opportunities to both maximize the employment opportunities and the economic opportunities for the people of Old Crow, but we'll also be looking at how we can encourage contractors who bid on this job to make the greatest use of Yukon subtrades and Yukon labour that we can.
Question re: Mobile home owners, financial assistance to relocate
Mrs. Edelman: Mr. Speaker, my question is for the minister responsible for Yukon Housing. I recently attended a meeting at Takhini school for owners of mobile homes. Apparently, an invitation had gone out to all the mobile home owners in the Government Leader's riding and, indeed, the meeting was reasonably well attended.
Mr. Speaker, there's going to be a new mobile home subdivision built just beside Northland Trailer Park and this development is part of the new mobile home park strategy. Now, it's quite likely that the owners of older mobile homes will be allowed to move their dwellings into this subdivision onto titled lots. There are problems, however, moving the mobile homes. Some of those problems have to do with the decks and the sheds that are attached to the mobile homes. So, will the owners of mobile homes have access to monies to help them move their homes into the new subdivision, and how much money will they be allowed?
Hon. Mr. Fairclough: Yes, we have programs in place to address the issue of those wanting to move older mobile homes onto private lots. With regard to the amount of dollars, I can't tell the person how much there is. It will be looked at in regard to the unit itself - whether or not the unit is in good enough shape to be moved. We do have some barriers in regard to moving mobile homes at this point. We're working with the city to try and resolve some of them and we're making progress with them at this point.
Mrs. Edelman: Mr. Speaker, I'll assume, then, that if someone needs, say, $5,000, which isn't really a great deal of money if you're talking about a home, then they would have access to those funds to move mobile homes, which is a problem. Because, practically speaking, it is impossible for most of the mobile home owners in Takhini Trailer Park, for example, to move their homes out of the park and into the subdivision across the street because the streets are too narrow, the mobile homes are grouped so closely together that you would have to move other homes in order to move yours out.
What is Yukon Housing doing to address this very real, practical problem?
Hon. Mr. Fairclough: Well, this is an issue that has come forward from the mobile home owners. Our department has been looking at and working with a number of people to address this issue in getting these mobile homes out of the existing parks and into a new area. Again, it all depends on the unit - whether or not the unit is good enough to move and whether the construction of the unit will allow them to move it in one piece.
Mr. Speaker, we will be looking at a number of these things and taking care of them through the programs that we announced earlier in regard to the mobile home strategy. I know that this could be a major problem once we look at a number of units that are clustered together, especially in regard to the Takhini Trailer Court. This is the main issue that has driven us to put together the strategy: the health and safety issue.
Mrs. Edelman: I don't think I actually heard a positive response in there, but I would hope that this is basically an engineering problem. It's a very interesting problem trying to get people out of that mobile home park, and I have no idea how you're going to deal with it, but it does need to be addressed, and it needs to be dealt with concretely and soon.
Now, Mr. Speaker, I wonder if the minister could update us on the progress of a seniors' mobile home park development in the City of Whitehorse.
Hon. Mr. Fairclough: We have been working with the city to identify a number of areas where we could develop mobile home parks and subdivisions. We're continuing to work with Community and Transportation Services on this. We have not identified a specific area for seniors alone in regard to mobile homes.
Question re: Five-year financial plan
Mr. Cable: I have some questions for the Government Leader on long-term financial planning. During the last election, the NDP, as part of its platform, made a number of commitments in the financial area, and looking at the NDP platform document, A Better Way, there is a commitment that reads: "An NDP government led by Piers McDonald will," among other things, "with each annual budget present a five-year financial plan so Yukon people know what direction the government is moving in." Now, this commitment was confirmed during the last budget debate and again during Question Period in the previous session, when I think it was indicated that a financial plan would be provided in March.
Does the Government Leader intend to follow through on this commitment?
Hon. Mr. McDonald: Mr. Speaker, the short answer is yes.
Mr. Cable: Well, the commitment, of course, was to file it with the budget, and I haven't seen it yet, so could the Government Leader tell us definitively when we are going to see the five-year financial plan?
Hon. Mr. McDonald: Mr. Speaker, I knew the member wouldn't be satisfied with a short answer. I just wanted to make that point graphically.
Yes, Mr. Speaker, it is my intention to file the long-term projections we're able to make when we reach Committee in the main estimates for the budget itself.
Mr. Cable: Could the Government Leader tell us a little bit about this long-term financial plan? Is it being driven at the political level or at the public service level? Are there some terms of reference out that he can file in the House? Just what is going to be in this financial plan when it's finally provided to the House?
Hon. Mr. McDonald: Well, Mr. Speaker, I'll point out that the drive to want a long-term financial plan was initiated at the political level. As the member was reading out the campaign literature from a year ago last fall, it just made me warm inside all over again just hearing it, particularly as he said it with such sincerity, and I really felt quite invigorated once again. But certainly the impetus behind wanting the plan has come from the political level, yes.
In terms of the projections themselves, in terms of what we expect in terms of our revenues in particular, that will obviously be driven in large part by the technicians. What we intend to spend in terms of making expenditures in terms of O&M and capital funding will be a combination of both political input, naturally enough, and technical input, naturally enough.
I'm certain that when we get to the discussion in Committee, the member will be able to explore the projections that we're making, and we'll have a good, thorough discussion about it - the whole thing.
Question re: Whitehorse centennial anniversaries project
Mr. Phillips: My question is to the Minister of Economic Development, and it's regarding the Whitehorse centennial anniversaries project. Now, the minister indicated yesterday in the media that he's firing off a letter to the federal government concerning the proposed community centre. He said that, "It was time to fish or cut bait." We are all well aware of the minister's fishing practices, but I would like to ask the minister the same question of the federal minister: has the minister agreed to give the proponents of the Whitehorse community centre the $1.5 million, even if the project doesn't meet the centennial anniversaries program guidelines that every other community had to meet?
Hon. Mr. Harding: Well, we're used to the member opposite's cheap shots and, Mr. Speaker, I won't rise to the bait, so to speak. I've already denied the allegations the members opposite have made in the past. We're used to those kinds of attacks from the Yukon Party. They like to throw things out there with no evidence to support them.
Mr. Speaker, with regard to the issue behind the cheap shot, I will say to the member opposite that there were many communities that didn't fall within the exact guidelines. I can think of three: Ross River, Teslin, the Whitehorse CAP projects. We have tried very hard to find ways to accommodate successful projects for these communities. We were successful in Ross River; we are having some success in Teslin, but unfortunately, the Liberal government in Ottawa has, through both letters from the Prime Minister himself, Mr. John Manley and Mr. Pettigrew, sent us warm feelings and $200,000 instead of the $3.5 million requested.
So, we're waiting to see whether the federal budget has the goods in it for this important community centre that has a lot of support from many people.
Mr. Phillips: I noted in the budget before this House that the $1.5 million commitment by this government is not in that budget, and the minister told the media the other day that he would find the money somewhere. Can the minister tell us, if the federal government comes forward with their funding, where the minister's going to find $1.5 million? Is he going to increase the deficit by another $1.5 million?
Hon. Mr. Harding: Well, unlike the members opposite, we would like to maintain a sustainable bank account at over $15 million. In their last budget, they drew the bank account down to $7 million. We didn't think that was wise, so we wouldn't want to be following their course of action.
However, Mr. Speaker, I would point out to the member that that $1.5 million for the project wasn't in last year's budget either simply because of the problems with regard to the coming together of the proposal.
I think there was about $700,000 identified in the centennial anniversaries program for this project and others. This year there's $400,000 identified. That's enough money to start the process and action. If the feds come through with the money, we will have to come up with an appropriate funding vehicle through the supplementary budget on capital if it's necessary to advance enough funds to cover us for the construction in the fiscal year - if the federal Liberals come through with their stated warm-feeling commitment to this project. I just really would like to see the cheque.
Mr. Phillips: Mr. Speaker, the minister didn't really answer my question. The tourism industry is extremely concerned about the loss of $1.5 million, very hard-to-come-by dollars for tourism infrastructure.
I would like to ask the minister again: if the federal government comes forward with their portion of the money - and even if they don't come forward with their portion of the money - what happens to the $1.5 million? If they don't come forward with it, is that lost to the tourism industry? And if they do come forward with it, where will the minister find the money?
Hon. Mr. Harding: Well, Mr. Speaker, I won't profess to speak for the Tourism minister, but I will say that the conversations I've had with the tourism industry is that they're quite happy with the commitment of the government toward tourism, looking beyond the anniversaries to the extra commitment of $200,000 in marketing you just saw in the budget over and above previous dollars the Yukon Party had been investing and the Air Transat deal that the minister concluded to bring more visitors over from Germany. I'm sure they're expecting a banner year.
Mr. Speaker, with regard to the money allocated for a Whitehorse project under the centennial anniversaries, that decision will have to be made at a point when we determine whether or not the Liberals are going to make good on their stated warm feeling and gentle coziness they've indicated, in that they might be interested in funding this $3.5 million for the Whitehorse community centre project.
Question re: Old Crow school
Ms. Duncan: I'd like to follow up on some questions that I asked earlier this session of the Minister of Government Services with respect to the Old Crow school replacement project.
Earlier this week, the minister committed to five things: verifying that meetings required between the contractor and Government Services regarding the government business incentive program, particularly locally manufactured goods, actually took place; providing a review conducted by the department of the naming by the architect of specific name brands, mainly Truss Joist McMillan; providing the technical information that excluded locally manufactured trusses and insulation; providing a detailed listing of supplier contracts issued to date and how many products could have been manufactured in the Yukon, and; the job opportunities provided to the people of Old Crow. Five pieces of information that the minister committed to providing me.
Would the minister indicate when I might expect this information?
Hon. Mr. Sloan: How about immediately? With the exception of the latter one, which I've got the department working on in terms of trying to hive out what could have been manufactured, et cetera, et cetera, but I can tell that, yes, the architect did meet with the business incentive officer prior to doing the design work. The design recommendations from the architect were vetted by the project manager and a team of experts, who provided feedback on local content and local maintenance standards. Such things as the truss joists and insulation passed the test of being available from local manufacturers and meeting the budget target.
With regard to the naming of a particular piece of equipment, that is not unknown. Tender specifications do not exclude alternatives. However, what happens is, very often, a particular brand is named as a standard of acceptance. So, for example, say on a lock, you may name a Schlage brand lock as a standard of acceptance. That does not exclude other alternatives and, as a matter of fact, in the contracting regulations it is very clear that it does not exclude such materials.
Now, I'm trying to think, in terms of some of the local hire initiatives that we've undertaken - initiatives under section 22 - local hire initiatives would include the following: we've hired a local Old Crow resident to be the project manager. This person is presently living and working at the Pelly Construction's winter road construction camp. Site clearing and construction of the gravel pad for the new school were done by VGFN workers. Six local people, including a cook, will be working for Pelly Construction on the piling foundation contract. There were some local people working as equipment operators for Pelly on the winter road and ice bridge construction. The gatekeeper, who is stationed at Eagle Plains to control access, is a member of the VGFN, and we're sharing that cost equally with the VGFN and ourselves.
As well, the VGFN will administer the freight unloading, marshalling and security of the school construction materials. In addition, the VGFN has purchased - am I going too fast?
Ms. Duncan: I asked the minister to provide those answers in writing as they are, as usual, somewhat incomplete.
When contracts name specific name brands as a standard, the difficulty that local manufacturers have is that they have to get the construction plans in order to meet that standard or better that standard. In this case, they weren't available to them. The minister knows that full well.
Would the minister indicate information to this House regarding the next key element of this project, which is the tendering for the general contract? The tendering for the general contract for the construction of this school has to have a number of things. The tender document must state what materials are in Old Crow, the as-built drawings, as well as the technical specifications. They have to be correct. This tender has to be done right.
Will the minister indicate when it will be tendered - the general contract for the construction of the Old Crow school? When will it be tendered?
Hon. Mr. Sloan: As I said, we are receiving the final design on Thursday. We anticipate that there will be probably two weeks in which we will actually be reviewing it to make sure that it's complete in every way. Then we'll be looking at tendering. If we're looking at a four-week period of time, that would put it into April. I have full confidence that the people who are working on this will be working on it, and working on it very diligently. I met with them today. I'm convinced that these people are working as diligently as they can to ensure that all of this is complete.
Ms. Duncan: The minister just stated that the complete tender document would be available in mid-April. We'll be looking for it.
I've asked the minister previously if this project would be on time and on budget. Yesterday, the minister committed that this project, at $8.5 million, would be on budget or under budget. He also stated that the project would be on time. Would he state for the record what that on-time date is?
Hon. Mr. Sloan: Well, Mr. Speaker, we've committed to completing this project by the end of the year. Quite obviously, the bulk of the construction will be taking place from the spring on. We would anticipate that, given the fact that most of the materials have already been marshalled at Old Crow by the time the general contractor comes on, they could start almost immediately, and the work would proceed from there.
It has to be recognized that there are certain things that would be out of our control. For example, an early thaw perhaps or, as has been the case, sometimes climate conditions where the road might be blown over and have to be cleared - but as much as possible, we're trying to complete it within the time frame. Our goal is to complete it this year.
Speaker: The time for Question Period has now elapsed, and we will proceed with Orders of the Day.
ORDERS OF THE DAY
GOVERNMENT PRIVATE MEMBERS' BUSINESS
MOTIONS OTHER THAN GOVERNMENT MOTIONS
Clerk: Motion No. 96, standing in the name of Mr. Hardy.
Motion No. 96
Speaker: It is moved by the Member for Whitehorse Centre
THAT it is the opinion of this House that:
1) Yukon people and businesses require a range of financial services to adequately meet their individual and commercial needs;
2) it grows increasingly difficult for small businesses to secure capital loans; and
3) the Access to Capital Forum, held in Whitehorse the fall of 1997, underlined the growing need and desire for greater access to capital options; and
THAT this House supports the efforts of the Yukon government to explore and encourage alternative banking activities such as (1) establishing credit unions and cooperatives, (2) providing for micro and small business loans, (3) creating services and assistance for small business start-ups and ongoing capital needs, and similar efforts aimed at empowering individuals, small businesses, and communities to diversify the economy and create new employment opportunities.
Hon. Mr. Hardy: Thank you, Mr. Speaker.
Some Hon. Member: (Inaudible)
Mr. Hardy: I'm not wearing my hat today.
I'm very pleased to sponsor this motion. Both in my role as the former commissioner of Yukon hire and taking the lead on behalf of the government in discussions on the MAI, I have adhered to my conviction that control of the economy is a basic democratic right and a key to a better, more secure future. We, as Yukon people, need to ensure that economic development proceeds in ways that meet our needs in accord with our vision that it will be sustainable and is in keeping with our love and reverence for the land.
We need the tools to shape this development, Mr. Speaker. We can no longer allow our economy to ride the rollercoaster of expanding and declining global markets, the boom-and-bust cycles that dependence on big mining has, unfortunately, subjected us to. We need to diversify. We need to explore a whole range of opportunities within a wide variety of economic areas.
To support us in this endeavour, we need a range of financial services and options. There is an increasing appetite for small-scale, sustainable operations, such as community-based forestry and wilderness tourism, artist co-ops, collectives producing and marketing a variety of products, locally based manufacturing of all sorts, as an example. So acquisition of small loans for business start-ups is in big demand, but so also is access to operating capital for existing businesses that wish to expand.
Our large banks don't always provide the financial help that individuals and small businesses require. Small businesses, in particular, often encounter great difficulty in obtaining the small loans they require, whether for start-up or expansion and diversification. The terms set by banks also make it difficult for the businesses to flourish. In fact, it appears to be the policy of many banks to strictly limit the number of business loans they make available, and there is a reason for that.
In 1992, the Mulroney government agreed to phase out reserve requirements as a kind of bail-out for the banks, which had suffered some serious losses. Reserves, of course, constitute the actual legal tender which the banks used to be required to deposit with the Bank of Canada as collateral for their loans. Eliminating this requirement provided the banks with well over $2 billion in legal tender. The government also accommodated the large banks by borrowing from them at high interest rates instead of interest-free from the Bank of Canada. Risk-free loans to government have proven enormously profitable. Loans to business, however, still require at least eight percent of the bank's own capital, so it's little wonder that they would rather cut back on business loans and load up on government bonds.
As we all know, bank profits are soaring. So are the CEOs' salaries, not the workers'. Service charges seem to be on a parallel track. The only thing on the decrease is employment for bank workers. I don't have current figures, but the Royal Bank cut approximately 4,000 jobs in 1994, and despite a 20-percent increase in profits, the Bank of Montreal laid off more than 1,400 workers in 1995. And the CIBC, which saw a 14-percent increase in profits that same year, laid off more than 1,200 workers. Profits continue to roll in and workers continue to be laid off and services to ordinary Canadians have not improved, and in many places, it's the small communities that lose the services and the unemployment increases.
Why don't we put some of the bank profits to work? Why not require chartered banks to start offering career-starter credit to young people, startup capital for jobs in new economies? Why aren't those requirements of banking?
Now we're facing a mega merger of one, possibly two banks in this country that could only intensify the impact of these trends. Mergers always mean mass layoffs, reduced competition and higher costs to Canadians - and usually reduced services.
What will the rural and small-town presence of the new megabank be? Will it consider it worthwhile to maintain branches in areas of small populations? How will a $450 billion megabank stay in touch with its community?
The federal NDP has called on the federal Liberal government to hold finance committee hearings so that all parties can review and debate this controversial proposed merger, but instead they have chosen to hand the matter over to a special Liberal caucus task force for study. One can't help but have low expectations of the outcome when we remember that the two banks in question donated a quarter of a million dollars to Liberal coffers in the last federal election. The Royal Bank was also the lead bank on the Liberals' $5 million to $6 million line of credit. In addition, a number of Liberal MPs received individual campaign donations from these two large banks.
Last night, on CBC's Venture, they did a show on bank mergers in the Netherlands. It wasn't a really in-depth show but it did point out some of the similarities with Canada and the debate about mergers as well as what happened there eight years ago, and I wrote down some notes as they were talking in the show. I found it quite interesting.
There were once six banks, non-foreign banks; now there are three, and the competition has definitely dropped between them. The mergers happened between four main ones and the one that refused to be involved in the merger was a co-op or a credit union. They stayed out of the merger game and they have prospered by that as well, so it does beg the question of why we are merging. Is it for the people, or is it for profits for the shareholders and for the banks' control over our democratic economy?
Since that time, 12 foreign takeovers have happened in that area.
After the merger happened, prices to the consumers, individuals and small businesses increased, and when they asked the CEO of one of these mergers why, he said, because the market can bear it. "It's not necessarily that we need the money, but the market can bear it and we can get away with it."
That's what happened. Four hundred and fifty branches closed and 6,000 jobs were cut. They started focusing more and more attention on the multinationals and less on the consumers, individuals and people who lived in the communities. Services suffered. They interviewed a few of the small businesses. That was made very clear - how their services had been affected in the way they do business and the costs it caused them.
Interestingly enough, the co-op - or the credit union - stayed on the same course, and now they have 85 percent of the local business in the Netherlands. The mergers have gone off in a different direction. Specialty banks have developed, as well. In a backlash, these mergers have caused other banks to become specialty banks. They've lost a lot of customers locally, they're not serving their customers locally, and this has been a boost for the co-operatives and credit unions. I have no problem with that, but it distresses me to see our money - because, in the end, the bank holds our money - taken as they head off somewhere else and cut our services and our jobs. That seems to be what the outcome was eight years ago of the mega mergers that they had in the Netherlands, which is something we're debating now and seeing within Canada. It's raising all kinds of concerns.
To return to local considerations, the lending policies of mainstream banks tend to support the low-risk mainstream variety of business enterprise. When access to bank financing determines whether an operation will go ahead or not, then bank policy becomes economic development policy and the small, innovative entrepreneur is generally left behind.
I know there was much discussion of possible alternative sources of financing at the access to capital forum last year. I think it was an excellent discussion. Some of that discussion focused on the need for more information about how to access investment capital, and the programs governments could offer or improve to assist businesses in this regard.
I'm going to leave that discussion to my colleague from Economic Development. He'll have a lot more to say on that and, definitely, he was a part of that process.
I want to talk about some ideas that are working elsewhere and that I'd like us to consider and explore. My focus is on the artist, the musician, the freelance writer or the consultant, the woodworker, or the would-be small manufacturer who needs just a little bit of financial help to get started on the road to self-employment. Who knows? Maybe eventually that person will be employing others.
These are the folks who seem to have the hardest time securing financial help to turn their plans into reality, and they're the people who have so much to contribute in our society.
I don't often look to the States for examples of more progressive ways of doing things but, when it comes to the banking system, they have us hands down here. Actually, they're attracting all kinds of attention from Canada, especially among those who would like to change the Canadian banking act.
The Americans have something called the Community Reinvestment Act. It's been around since the late 1970s, but it was just revamped and streamlined in 1995. The CRA - or the Community Reinvestment Act - is a federal law requiring banks to make credit available to meet the needs of people and businesses in low- and moderate-income neighbourhoods. It's based on the conviction that banks have an obligation to serve diverse neighbourhoods.
People rejected the image of the banker with a map on his wall with a red line around the neighbourhoods where he wouldn't do business.
Under this act, banks are required to make full disclosure of their lending practices. If their records show them to be non-compliant with this act, federal regulators can place severe restrictions on their activities, but most banks don't have to be coerced at this point. They found that putting money back into the community is making sense, and it's good business. In fact, lending to low-income communities has proven to be less risky than to higher income borrowers, and communities have benefited greatly.
The CRA has encouraged banks to invest in low-income housing tax credit developments, to make loans on affordable multi-family housing developments, to offer small business loans, and to support community development corporations.
Because of this approach, there has been greatly improved access to credit in less prosperous areas, including home mortgages, residential and commercial lending, small business financing and micro loans, and this has transformed whole communities.
We need to look at ways we can promote community re-investment here in Canada and here in the Yukon because it works. Mr. Speaker, in the United States, CRA has encouraged investment of some $80 billion in low- and modest-income neighbourhoods since it was enacted.
Now, I didn't hear Paul Martin mention anything in his budget that would suggest our federal government has any interest in promoting these kinds of community-friendly banking activities - far from it. Instead, we're confronted with the prospects of large banks getting larger.
Can a bank change? Everybody remembers that slogan. Yes, it can get bigger. It can haul larger profits. It can pay higher wages to upper management, lower wages to the workers. It can lay off more workers, and it can reduce service but increase service charges. So, in Canada, yes, banks can change. I think what we're saying is that there are other changes that can happen.
The practice of providing micro loans or support for micro enterprise is something I'm very interested in, and it's a rapidly growing phenomenon in the United States and around the world. It's been called the bubble-up economics, because small loans are made directly to individuals who can then acquire self-sufficiency and give back to their communities.
Mr. Speaker, micro enterprise as a concept actually got started in Bangladesh when an economics professor founded the Grameen Bank made very small loans to the poorest of the poor. In 20 years, it loaned more than $1 billion to over 2,000,000 people. Today, more than 8,000,000 are getting micro credit - half of them in Bangladesh - and 50 percent of the borrowers no longer live in poverty, and most of the rest are on their way up.
Versions of this program have spread to a number of Third World countries. Sometimes loans amount to little more than $30 or $40 for a second-hand sewing machine so a peasant woman can fashion bags or clothing for sale to tourists. Often cooperatives emerge that lift whole neighbourhoods and communities out of poverty. World-wide repayment rates of micro loans are an astounding 95 percent - and these are people who typically have little or no collateral.
The concept of micro enterprise has made its way to North America, where some banks and a number of credit unions and cooperatives are making micro loans available to individuals who never thought they'd ever be able to attain loans to start up a small business. The idea has really caught on in America's inner cities, like Chicago and Washington, where micro enterprise has been an enormous success. Some consider it a much-needed revolution in anti-poverty programs. It can't solve all our problems, but it can certainly go far toward encouraging greater self-confidence and financial independence for a great many people.
While it's low cost, it works best when programs are backed by technical and marketing assistance programs, which do cost money. But, of course, we all know the investment is well worth it. President Clinton has gotten on board and will ask Congress for an additional $1 billion or more to further develop micro enterprise in the U.S. over the next five years. We could be doing the same in Canada.
Going back to Bangladesh, or beside Bangladesh, last week when I was down in Ottawa - not attending the internal trade meeting, as some people seem to believe. They believe everything they read in the paper. All they have to do is ask the person who was there, but they're scared to do that. While I was down there, I listened to a speech by a woman from India, Nirai Chattegee. She was talking about, in their area, the extreme difficulty for women to start a business, or to get independently economically sustainable, or support each other. They had a problem with access to capital. So, what did they do? They started their own bank. They had problem with access to market. So, what did they do? They formed their own cooperatives, which became outlets. They had a problem with access to raw materials. So, they formed a collective to go directly out and get the raw materials. They had a problem with access to knowledge and skills. So, they formed groups to teach each other, to bring in the skills they needed.
It has had phenomenal success, and she was over in Canada to spread that word to us, to show us that there are ways to empowerment that are different from the standard that exists today. As a point, she pointed out that 95 percent of employment in India and her region is self-employed, which is a phenomenal degree. And I see that trend in Canada as well.
I guess it's my hope that, if we can encourage alternative banking activities here in the Yukon, if we can attract and support cooperators and credit unions, or encourage major banks to change their policies, then we could foster micro-enterprise programs here at home. We could come up with financial options that really meet the needs of all our communities and the people.
I'd like to say a few words about credit unions. There's quite an appetite for a credit union in the Yukon once again. We had one awhile back. People have been talking about it for years, and my colleagues have promised to look into it and what would be required to allow for credit unions and cooperators to once again exist in the territory.
In the south, we see credit unions doing very well. VanCity, which I'm a member of, which started out as a single office way back, is now an enormously successful enterprise with branches throughout B.C. and beyond, but it still does things like making share purchase loans available to low income people interested in joining housing co-ops - including single women on welfare. It still supports cooperative ventures wherever it can. It still is involved in numerous partnerships within its community. It still receives direction through its membership on how best to meet its needs. It still dedicates a percentage of the money earned back into the communities. It still dedicates a percentage of the money earned back into environmental causes, back into new initiatives, back into charities.
Most people know something about credit unions but I'll just supply a brief description. They are financial cooperatives which are owned and controlled by their members, by the people they serve. Deposits and profits of credit unions remain in the community and work for the community. Almost five million Canadians use credit unions, which, in addition to the special kinds of services I've been talking about, provide the usual range of financial services.
Now there was what I guess you'd call an unsuccessful experiment - I don't consider a credit union an experiment; I consider it almost a lifestyle in some ways - with a credit union in the Yukon some years ago. On a personal note on that one, when I was 14, I had a job and I got a paycheque and I needed to deposit it somewhere. I had never had a bank account and I went to Toronto Dominion, I remember, and the banks on Main Street. Somebody said, "Why don't you go to the credit union?" I went down and talked to each one and I went down to the credit union and, in the end, I was convinced that that was the best place for me to deposit my money. I received a loan from them when I was 15 years old to purchase a guitar and I paid that loan back. Whereas no other bank would touch me, the credit union was willing to believe in me.
No, I'm not going to play you a tune, Gary. The tune I'll play is the one of support for alternative banking.
That credit union, unfortunately, went bankrupt and we haven't had a credit union in the Yukon for many, many years, but I think the time has come again for us to revisit that, because credit unions are enormously successful. They number close to 1,000 across Canada with $50 billion in assets. They're making a positive difference almost everywhere you find them.
I'd also like to point out, before I close here, that there's an organization that has some interesting principles and it's called the Canadian Community Reinvestment Coalition. I was reading about their key principles. There are only three of them: all people have access to basic financial services, including payment systems and cheque cashing at a fair and equitable price; number two, financial institutions reinvest in locally and regionally based economic and community development, and; number three, the concentration and control of money in the hands of a few is not allowed to impede democratic decision-making on public issues. Those are key principles that I can believe in and stand behind and hope everybody in this House could also stand behind those key principles.
So again, I want to urge everyone to support and encourage a range of financial options for Yukon people and businesses, so we can create more opportunity and empower individuals and communities. I'd like to see alternatives to the status quo, which, frankly, is just not good enough.
Thank you, Mr. Speaker.
Mr. Ostashek: When this motion was put on the Order Paper the other day, we had some difficulty with it, and we probably still have some difficulty with it. I hoped to be able to speak to that and get my voice on the record, as my colleagues will theirs, to say that while we will support the motion without bringing in any amendments, I want to make it very clear to this Legislature and anybody listening to the Hansard debate that, while we support the Yukon government to explore and encourage alternate banking activities, this certainly does not mean that we endorse the Yukon territorial government getting back into the banking business.
If that was what was to come out of this motion - that the government decided to get back into the banking business - they can rest assured that there will be very vocal opposition from the opposition benches.
When I read the motion, and it says that it is the opinion of this House that Yukon people and businesses require a range of financial services to adequately meet their individual and commercial needs, I can agree with that wholeheartedly, Mr. Speaker. I don't have any difficulty with that.
"It's growing increasingly difficult for small businesses to secure capital loans." I have some difficulty with that statement, because I started business more years ago than I care to remember, when I started with a $500 loan that had to be co-signed by my father. It was far more difficult to get money from the banks in those days for small businesses than it is today.
That's not to say that we don't need alternative banking outlets. That's not to say that the big banks are doing a good job when it comes to small business. They're not. I agree with the Member for Whitehorse Centre on that.
But, I also am not going to stand up here and beat up on the big banks, as the member opposite did, because I think that they have a place in our society and they are also owned by shareholders. I don't know where the member opposite thinks those profits go, except back to the shareholders. A lot of the members of this Legislature own mutual funds that own shares in banks and receive great dividends from that money. That doesn't mean that the banking system is perfect, by a long ways, and couldn't be improved, but I am reluctant to get into the mode of beating them up and saying that all they're doing is making huge profits, because they're making those profits for the shareholders, the same as VanCity is. The bulk of the money is going back to those shareholders and those shareholders are millions and millions of Canadians, as well as other people around the world.
The fallacy that this is going into a big tank and nobody gets any benefit out of it I think is wrong.
Are banks receptive to small businesses? Probably not. Do they look for twice as much security as what they provide in a loan? Yes. But, I do think they have improved over the years. But that doesn't mean to say that we shouldn't be exploring other accesses to capital for our constituents. I don't have any difficulty with the government doing that. In fact, I think the government should be doing that.
I do want to speak a little bit, as the Member for Whitehorse Centre did - he touched on the Whitehorse Credit Union, but he didn't elaborate on all the negativity and the cost to the taxpayers of that outlet. I have, in my hand, a page from Hansard, March 26, 1980, when a question was asked of the government by the Member for Teslin at that time, Mr. Fleming, as to what costs the taxpayer was going to end up footing for the bankruptcy of the credit union. Mr. Fleming stated that he saw it to be in the area of $1 million. Mr. Graham, who was responsible for the department at that time said, no, it wasn't $1 million, but it was $850,000, which the government had already paid out. That was
in 1980. That was a lot of money in 1980.
And this was a credit union that had operated from, I believe, in the 1950s, and it didn't get in trouble until 1973-74, when it started to try to compete with the banks. I have a report that was also done, Mr. Speaker - I can make it available to members of the Legislature if they would like to have it - on when the problems occurred, and it was from mid-1973 to mid-1976, when the then-manager pursued very aggressive lending practices.
So, as I say, I don't have any problem with exploring alternative banking methods, external loans. I have great difficulty if this is going to be another scenario where the taxpayer ends up picking up the bill on the failure of one of those outlets.
As for the concept of credit unions, quite possibly it can work in the Yukon, but I truly don't believe it can work, Mr. Speaker, unless it's affiliated with a larger organization, a larger credit union, somewhere else in Canada. I just believe that our population is far too small, at 30,000 people, to be able to support a lending institution that, I guess, would be a higher risk lender than what the banks entertain. So therefore, there are going to be more loan failures. Maybe there won't be. But I would hope that when the government is exploring this that they look at the possibility of a credit union, if it was to be established in the Yukon, to be affiliated with an outside credit union.
I think there are some economies of scale, and without them, I think it would be very difficult for a credit union to operate in the Yukon and be successful.
Micro loans and small business loans - again, as long as the government doesn't get directly into the loan business, we can support that.
Now, I'm quite sure that when the Minister of Economic Development gets up, he's going to say that one of my companies, in the past, took advantage of a grant from the government in marketing. So, let me explain to the member opposite why I'm so against government getting involved in the loan and grant business.
First of all, yes, one of my companies did take advantage of marketing grants for two or three years in the mid-1980s. What the government does when they set up those sorts of programs is to literally force people, like myself - who don't believe in the government being involved there - to go in there and apply, because you have to compete with your competitors on a level playing field. If your competitors are accessing that money and reducing their operating costs, then you are forced to do it yourself.
So, while they may find it ambiguous for me to accept a grant for one of my businesses and then be totally against the government being involved in that, I don't. Could I have gotten along without the grant? I probably could have. Would I have been able to compete as well with my competitors who were utilizing the grants? No, I couldn't have. So, that way, we force people who really don't believe in it to actually apply, in some instances.
The government was in the loan business, and there were some great difficulties with that, too. First of all, we have to hire a whole lot of people to administer loans, and we don't have the expertise. One program - that was wound up under the Yukon Party government, the business development fund - was supposed to be a lender of last resort. That's what the criteria was - a lender of last resort. Yet we found, over the years, people were using it as a lender of first resort. They were maintaining their lines of credit at the bank without drawing down on them and going to the business development fund to get working capital to do projects.
Now, all of them were not loans that were never paid back. A substantial number of them were, but I don't think there's anybody in this House - even the members opposite - who can say that those programs were successful.
I know that, when I was there, there was no record of what positive impact they had on the economy and job creation.
I can support anything. Yet, I guess the other major problem I had with it, Mr. Speaker, is that while there was a program there to give out money to people - the previous administration prior to the Yukon government administration even had loans officers in the community encouraging people to apply for loans - there was no mechanism for collecting the money.
And, Mr. Speaker, you know and I know and members opposite know that, when citizens owe the government money, they don't think they have to pay it back and, as a result, there were a lot of bad loans. I don't think there are very many examples that can be pointed to, with the millions of dollars that went into these programs, that we can point to now and say, "By God, there's something that was really successful."
That's not to say that small businesses don't need help. That's not to say that micro loans are not something that should be desired, but we need to look for a way to be able to provide that to the public without getting directly involved in the loan business.
And I think that would be good. It would help, to a certain extent.
One other point I would like to make on this motion is that, if we're talking about considering establishing credit unions again then, at the same time, we need to have legislation in place that's going to protect the taxpayer. I think that was one of the problems we had back in 1980 when this endeavour went bankrupt. They said there wasn't proper legislation to protect the taxpayer and, as I say, I think the Minister of Finance would probably agree with me today that he doesn't even have $1 million in today's dollars to bail out an operation like that, let alone what it would be if the 1980 dollars were extrapolated into 1998 dollars, which would be substantially higher.
I believe I did hear the Minister of Economic Development say a few months ago that the government wasn't in a position to get into the banking business and I hope that that direction is maintained by members opposite, because there are some things that government ought to be doing, but there are things that government ought not to be doing, and I don't believe they ought to be in the banking business.
So, Mr. Speaker, I'm not going to speak forever on this motion. I just want to make it explicitly clear that while we support the government's investigation and exploration and encouragement of alternative banking methods, we do not for one minute support the government getting back into the banking business directly.
Mr. Speaker, if there is a way that the government can find to encourage people to get into this market and be successful, if it requires some certain type of legislation for some company to be providing micro loans to small businesses or anything that would make it easier for small businesses to get started up and with ongoing capital needs, we would be very supportive.
I think one of the problems we had in the past was that while we made funding available to entrepreneurs - people who had some very good ideas in the Yukon, some businesses that I believe should have been successful - where we failed is we never provided these people with any business expertise. They didn't have the tools or knowledge of how private business had to operate. As a result, we helped to set them up for failure - that's what we did - and that's unfortunate because I can think of several operations that I know were backed with government funding that should have succeeded, that there was a market for and should have been very healthy, thriving businesses today, but have failed because there wasn't the management expertise or the management help that those businesses required.
So, I would advise the government, as they pursue this endeavour, not to forget the management side of the equation because all the money in the world will not make a business fly, whether it's a small business or a large business, if it doesn't have the management resources to make it competitive.
Thank you, Mr. Speaker.
Hon. Mr. Harding: I want to thank the Member for Whitehorse Centre for bringing this motion forward, because this is a very complex and difficult issue. It's also one that's very timely, given all the discussion nationally regarding our banking system, discussion surrounding bank mergers that have been proposed recently, and the recently announced quarterly profits of the big banks. There's a lot of concern that's been generated by Canadians about the direction of our banking system. Right here at home in the Yukon, we hear again a lot of questions and calls for solutions to the problem of access to capital, whether it be through some vehicle of government or whether it be through some vehicle of the private sector, or some combination of both.
So, as a minister, I do tend to struggle with the answers to this difficult question. I certainly have some philosophical viewpoints about government's involvement in the economy that some would probably not suspect from a social democrat. I do have problems with direct involvement of government in the granting and lending business. I've seen across the country so many examples of good things, but also very bad experiences. I think it does disservice to the public sector and the public government, because even though the banks face losses in their lending undertakings, they don't end up on the front page. When governments get involved in ventures, for good or for bad, the bad always ends up on the front page, and it does, I think, quite a disservice to public government.
The end result is usually disgruntlement from taxpayers and, normally, the media and the public do not get to hear the good-news stories about ventures that have been undertaken by government in the lending and granting venturing areas that do yield good results. That concerns me, because it makes it more difficult and more challenging for government to play a more involved role in the economy.
I think we have to be very careful about how we get involved in the economy so that we don't do a disservice to the public government's role, and so we can undertake initiatives that are well thought out and do provide a measure of stability to the economy and a measure of access to different players.
I myself have not ever received or been the benefactor of government assistance. I know that two members of the Yukon Party caucus have in their private business lives, and today we heard some of the experiences from the former Government Leader. I would say that I do think that, given the results of the access to capital forum - and I want to say to members that that was just a preliminary delving into the issue. We wanted to get some of the local people we considered to be quite knowledgeable on the issue from First Nations governments and businesses, from labour and from business, together to start to flesh out some ideas and identify some gaps. That's what we got out of the initial report - not a lot of concrete answers, but a lot of gaps identified and some suggested moves that we could make.
I'll begin by saying that one of the areas that was indicated as a concern was information, was knowledge, and that was also indicated by the leader of the official opposition. I think that we are correct when we say that business expertise has to be part of the package when we provide knowledge of business management and access to capital opportunities to local businesses. They have to know the sources, and they have to know the tools to access those sources of capital and, once they access them, they have to know how to generate that into working capital and cashflow and be able to generate profit and a living for themselves and for their employees.
We tried to answer some of that by participating with the Canada/Yukon Business Centre. We have many seminars planned on the issues of export so that we don't get people into exporting cold, so they do have some knowledge of the challenges they may face. We have also been, I think, quite proactive in terms of trying to work with the business community in improving our knowledge base in the territory.
I agree that, if we do not do that, we will not have the successes that we need.
One of the concerns and dilemmas that I face is, as the Yukon Party opposition has indicated - they strongly object to the Yukon government being in the direct lending business and they say that that is a business that the government should not be in. While, for measures of convenience and clarity and for accountability, I would like to agree wholeheartedly with that concept, I do find it somewhat a problem for me to watch, for example, as with the venture loan guarantee program, you have essentially the government taking the risk by backing a loan yet the bank becomes the lender and takes advantage of the interest. So, to offset any risk, the government does not even become a beneficiary of the interest income. So, essentially, you have the bank getting the benefit of the loan guarantee, you have the government taking the risk, and you have absolutely nothing to offset it in terms of income if there is a default later.
So, it is a difficult quandary to reconcile those two diametrically opposed concepts. I don't profess to have all the answers and that's why I am interested in hearing out the opposition parties and the government caucus in a very free-flowing debate on this issue. I do, however, and have, however, had it confirmed to me from the access to capital forum and from talking to people on the street that they would like to see some measures by government to provide more access to capital.
I talked earlier about the immigrant investor fund. In the budget speech it was announced. I announced it last year. We've been waiting on the federal government to make some changes to the initiative. They've put that off for a year. We've decided that we're going to move ahead. We've been watching very closely what's happening in other jurisdictions with this program. It is not fraught with an easy road but it does provide, if it's well done, some good opportunities for investment for infrastructure development in the territory and access to capital that otherwise would not be there.
So, we have to proceed in that measure as well.
The issue of micro loans, dealing with artists, artist cooperatives, cultural industries, people who want to do business startups, is also a difficult one, and I share the concern of the Member for Whitehorse Centre for these people who just need that bit to get started. I share his view, as well, but sometimes that's what it takes.
However, in terms of addressing that need, I want to think about it very carefully, find an appropriate vehicle to address it, whether it's through government or not. There are other alternatives flowing, some improved efforts for access to capital, through alternatives to government, and we have to think very carefully about those issues.
With regard to credit unions, our government is more than willing to commit to trying to investigate that in a more serious manner. I think there are a lot of Yukoners interested in knowing whether it is possible. I agree with the leader of the official opposition that an affiliation with some other bigger, larger credit union may provide us some economies of scale and make it more economically feasible to do it in the Yukon. And I think we also have to consider the legislative framework.
Mr. Speaker, as much as I want to be charitable in this debate, I must say that I listened quite intently to the former Government Leader's explanation of why he had to obtain a grant for his business. He indicated that he was forced to go for the government money. Mr. Speaker, I have the documents from the years surrounding that program, and his explanation that everyone else - all of his competitors - were heading for the money, so he had to go doesn't really hold water. I don't see swaths of outfitters heading for government grants in the pages of those loan and grant documents from those days.
I would suggest also that if the principles of the member were strong enough, he would have objected, no matter what the case was - if he felt that strongly about the fact that they shouldn't exist in the economy. So, I have difficulty accepting that explanation. As far as I'm concerned, he should just say he took the money, and he thought it was a good thing.
Of course, the Member for Klondike has similar experience with the BDF. I believe it's still outstanding. So, he obviously must have some warm feeling for the use of government in the economy and the access to capital. I'll be interested to hear what he has to say. Hopefully, he won't provide an excuse that everyone else was going for them, so he had to take one, too. I think that that would certainly be consistent with his leader, but not entirely acceptable to the public. I think the element of principles has to enter into this, at least in some of the discussion.
I also want to say that I didn't expect the leader of the official opposition to criticize the big banks or to bash the banks. Why would he? He gets campaign donations from them and he's got to be very careful about doing that - and so do the Liberals, for that matter. So, these are very strong supporters of their political parties and their direction, so one would think that they would be doing a very delicate tango if they decided to come out doing some bank bashing. So, Mr. Speaker, I would have to say that I wasn't surprised that they didn't come out and bash the banks, and I don't expect the Liberals to do it either, simply because of those large, large donations that help them fight election campaigns.
So, Mr. Speaker, with that I will wrap up my comments by saying that we'll be looking very intently at the recommendations of the access to capital forum. We will be listening to the comments made today by the members of this Legislature and we will be trying to come up with some options that we would hope would provide some economic stimulus to the economy, would deal with some of the concerns that have been raised by members in this Legislature, would deal with some of the concerns that have been raised by small business and would try and identify and fill some of the gaps that Yukoners have told us exist with regard to the issue of access to capital on a variety of spectrums.
So, Mr. Speaker, I look forward to the debate. I'll be supporting the motion and will be listening intently to the comments of the opposition and my colleagues.
Ms. Duncan: I'd like to begin my remarks this afternoon by stating what a pleasure it is to be discussing business development, financial services and the Yukon economy, and I would like to thank the Member for Whitehorse Centre for bringing this motion forward.
The Yukon Liberal Party is pleased to see the NDP government recognize the contribution of small businesses to economic growth and future of the Yukon. We believe that there is a need to encourage small business development within our territory. I would also like to acknowledge the work of the capital forum this fall and its concerns about startup and venture capital, working capital and local access to sources of capital other than the banks.
I cannot agree that opening or offering direct loans from government to business or opening a bank is going to solve all of the small business needs in the Yukon. Yukoners need more from their government than a bank to fund loans. Yukoners need a fully researched and designed program to determine the Yukon's most attractive investment areas and appropriate incentive programs to go with it. Yukoners need a comprehensive policy that includes business incentives, such as perhaps loan guarantees, venture capital or tax incentives and, possibly, highly specific research and development grant programs.
Any economic incentive programs must be conducted in cooperation with the existing programs. The opening of the Canada/Yukon Business Centre, as mentioned by the Minister of Economic Development, is a major step in the right direction, and is one that we supported. Each of the existing provincial/Canada business centres offers a full service facility with information on federal programs, pertinent provincial programs and educational opportunities necessary to run a small business.
Business initiatives need more than money. All of the provincial/Canada business centres and organizations, such as Western Diversification, offer online and print materials to help new and existing business owners develop business plans, learn to market and understand the legal and regulatory framework that applies to them. For example, Western Diversification offers print and online services that include an "Am I an entrepreneur" quiz, an interactive business planner, a small business workshop, a small business overview, plus regulations and Revenue Canada information.
I have seen and been witness to many Yukon businesses trying to sort out and find all these various pieces of information.
Some small businesses go under because the owner fails to understand all of the necessary components of running a business, not just because of a lack of capital. Some people - and often this applies to people starting a one-person shop - are unfamiliar with all of the necessary legal, regulatory and marketing requirements to running a business.
It would not be the best course of action for the Yukon government to simply open a bank and offer loans to individuals or small companies. Manitoba, for example, offers maximum loan guarantees of $10,000 through a bank or financial institution. The borrower must attend government-run educational courses on accounting, marketing and running a business in order to qualify for the loan guarantee. This allows the government some control in ensuring that the new business owners have some overall knowledge of the business world, and not just their area of expertise that led them to open the business.
The Yukon must compete with other provinces in job creation and business incentives, but we can't adopt a haphazard approach. While other jurisdictions offer loan guarantees and small business incentives, they are largely through arm's-length organizations, such as the Alberta Opportunity Company, which functions as a provincial equivalent to the Business Development Bank and is answerable to the Alberta government. It functions under the legal and disciplinary style of a bank.
Governments, we believe, need to encourage small business. They do not want to be in the business of administering and collecting on loans. The discipline of a chartered bank or credit union is a necessary link to ensure equality of access to funds and that appropriate financial checks are in place.
The Government of British Columbia offers ad hoc loans to support business through the Ministry of Employment and Investment. Ad hoc investment on a case-by-case basis involving the loan of public tax dollars is not the way to go.
It's also important that any business incentive program work with existing federal programs, such as the aboriginal business Canada program or possibly through Western Diversification. Almost all provinces have well-formed federal and provincial business development initiatives. We believe the Yukon is being underserved.
The Government of Newfoundland, for example, if you take the time to look at their website on the Internet - and this government seems particularly fond on occasion of surfing the Internet - has 21 pages of provincial and federal business programs with links and telephone numbers for further information.
This is the kind of one-stop shopping, one-stop effort, that's particularly useful to business.
All other provinces that have province-Canada business centres have extensive full program information available, in many cases on the Internet.
The Government of Yukon should be looking, in my view, with our business sector to maximize access to this information.
The economic development agreement and business development fund have been mentioned earlier in the debate today. The EDA ended in 1997. This program had some success and subsequent assessments also identified a number of gaps. A new and improved EDA program should be examined by the Government of Canada, the Government of Yukon and First Nations governments.
I'm not suggesting that Yukon and the Government of Canada, combined with First Nations, immediately establish an EDA modelled after the last one. I believe, as does our party, that there could be a well-facilitated discussion between these three levels of government, and the various political perspectives, to establish a new type of program. Let's learn from our mistakes and our successes - and there are some successes under these programs - and do it better the next time.
Doing it better the next time involves an overall strategy. There's an immediate example that comes to mind of a government-assisted enterprise, which was a loan situation that has been paid back, which has, for one reason or another and yet to be demonstrated, been then squeezed out of doing any work with the Government of Yukon. That doesn't make sense, and that's the kind of haphazard approach that doesn't work. We need to look at the larger picture.
To do it better next time, we need to set out a strategy for how we're going to generate business success.
Realistically speaking, the Yukon is unlikely to compete with the call centre province initiative, such as have been successful in New Brunswick and Manitoba. Yukon businesses know what our talents and strengths are, and I believe we should continue to seek their guidance. We must clearly establish that the role of government in economic development is to foster the appropriate fiscal and regulatory environment, and to ensure that economic activity advances the prosperity of all Yukoners.
The debate today and this motion focuses on the discussion of banking and support for the government to explore and encourage alternative banking activities, and a number of them are listed in this motion. I believe the key phrase, and one which we offer our support to - and the Yukon Liberal Party supports - is the efforts of the Yukon government to explore and encourage alternative banking activities aimed at empowering individuals, small businesses and communities to diversify the economy and create new employment opportunities. That's the essence of the motion and the important point in the motion, and the point which we are supportive of.
The focus on banking - the discussion has been quite interesting to date. I note that no one in the debate so far has mentioned the Four Corner Community Bank that's been established in British Columbia. This particular bank is established to empower individuals - the downtown east end residents - and provide banking services for those individuals who fall through the cracks. It serves a community that would not otherwise be served.
I, for one, as an individual member, would be interested in research and further information about that particular banking initiative.
I am curious to discover if it's the intention of this government to open the Bank of Yukon. If so, will the mandate of this bank include providing those who are genuinely disenfranchised from traditional bank services? Will this bank offer accounts without service charges to those living on social assistance or below a particular income level?
There are some other interesting examples that have come to the Yukon before. The Western Canadian Development Bank was here in the early 1990s and was interested in working with the government. I'm unclear as to what happened to that initiative and why it didn't proceed. There are a number of Yukon businesses that are still very supportive of that particular bank and its efforts, because they provided the access to capital for businesses that were unable to - Yukon businesses that have since generated jobs and generated much success in the community.
I would like to close my remarks by indicating that our caucus supports this motion. We do believe it could be enhanced if it does not specifically outline the three services in the latter part of the motion. However, I'm not going to introduce an amendment, I'm simply offering that constructive point to the government and to the member putting forward the motion.
I do, and our caucus does, welcome the opportunity to speak about small business and the economy, and look forward to listening to the balance of debate this afternoon. Thank you.
Hon. Mr. Sloan: I'll just take the opportunity to make a few comments on this particular motion. Before I do, however, one of the things that the leader of the third party prompted some thought about was that there has been one initiative that has been undertaken recently in the whole field of business, which I think I have probably been somewhat remiss in not mentioning in this House; that is the Yukon Entrepreneurship Centre over at the Wood Street annex. This is a cooperative project between my colleague, the Minister of Education and the Whitehorse Chamber of Commerce.
I had the opportunity to attend an information session at that and I was very, very impressed by what I saw with the young people there. In particular, the member mentioned small loans and these were student entrepreneurs that had very small loans and from that they've built up a measure of their own business expertise. They're doing some catering. Now they're doing some setup for events and things like that. I think it's a very laudable project and I think it represents an exemplary effort by the business community in trying to work with our young people in preparing them for the future. So, I just wanted to mention that right off the start.
I suppose much of the discussion around banking and financial institutions has been precipitated by the recent discussions of the merger between the Bank of Montreal and the Royal Bank in Canada. I do know that that has probably raised considerable interest among Canadians in this whole issue. We know, for example, that the banks are big business. They certainly have made some astonishing profits. I understand that, as of yesterday, one of the major banks was reporting yet an additional 14-percent increase over last year's record profits in the last quarter.
I think when we take a look at some of those individuals who are in the upper echelons of the banking industry, we have to realize that many of these people are in a very lucrative area. I think what I find particularly disturbing is when I see comparative rates between some of those banking leaders and many of the people in the teller positions. In fact, many of those individuals are women. To see the comparisons in salary ranges, I think, is quite disturbing.
I'm not going to use this opportunity to bash banks. I do question the rationale, however, that has been given on this particular merger that bigger is better. I'm not sure if that really holds true. For example, there are companies that are not huge, but they make very substantial profits. I think a company like Microsoft, which has one-twentieth of the sales of General Motors, yet has a market capitalization of more than three times that of General Motors, is an example.
The return for equity on banks isn't bad. It's about 15 to 18 percent, which is considerably better than what I've done in the last little while. But I think we have to keep in mind that our investments are the ones that the banks are benefiting from.
I think there are some issues that alarm me about this prospect, not the least of which are issues surrounding job losses, and particularly - this is where I'm going with this on the whole question of credit unions - I think there will be an increasing likelihood for a megabank to cream off much of the resources. It's my fear that the more remote areas in Canada - rural areas, in particular - will bear the brunt of these bank closures. I'm afraid that sometimes customers in these areas will see their banking options diminish very dramatically.
I also believe that it will have an impact on small businesses. I do believe that the larger the bank is, the more that it is going to seek to maximize their profits and minimize their exposure, often at the loss of other individuals, particularly small businesses.
In particular, this resonates for me because I have a riding in which there are a number of small business people. The one thing that I have heard is the whole question of access to capital. One group that hasn't been mentioned here, but a sector of the economy that I have heard a good deal from, in terms of access to capital, is that of the artistic community. Artists are a very unusual breed when it comes to capital. Often, their needs are so minimal that they're not particularly interesting to banks. As well, it is often very difficult for an artist to kind of quantify what their inventory is and what their business plan is. I've heard from many artists that this is a real difficulty for them - this whole ability to get small-scale loans.
When I talk with them and ask what kind of loans they're looking at, they're often in the hundreds of dollars or the low thousands of dollars, but - particularly for individuals in the artistic community - these are the kinds of things that make the difference between whether their particular enterprise makes it or not.
That's why I think that the idea of the credit union option is one that we should be exploring and is one that we should be looking at. I think that credit unions make sense - the fact that they are non-profit in many ways, that they are cooperative institutions, and that they are owned and operated by members.
I think the idea of having a volunteer board gives a greater community accountability. Credit unions are something that have had a long history, particularly in Europe, and I know my colleague from Whitehorse Centre will probably make some reference to some of the European experiences in that. In North America, they have been operating since 1909, and I think they have established themselves as very viable.
Interestingly enough, credit unions are rated number one in customer satisfaction of any financial institution. I think something that we also need to consider is that credit unions often have a greater commitment to an ethical basis for business, perhaps moreso than some of our major financial institutions, which often invest in economies and in countries where issues such as human rights, ecological concerns, et cetera may not be as high a priority.
I would think that this would be a relatively good place for a credit union to establish and invest. Yukoners, if Stats Canada is to be believed, are some of the country's leaders in RRSP savings. I think that Yukoners have good incomes, and I think that implies access to funds to invest, and I think that would help support the establishment of a credit union here.
I spoke a little bit earlier about the concept of making access to capital more available, and I spoke a bit about the young people. There was an interesting program on W5 last evening that talked about the ability of young people to get access to capital, and it followed the experience of a group of young people who were doing a renovation project. In that, they openly admitted that they were not probably the best investments and certainly it wasn't something that the chartered banks were interested in taking on; but, however, credit unions did in this case - this is a group of young people in Vancouver - and did give them a chance, and they were able to take advantage of some of those opportunities.
I believe that this is something that we have to do. I believe it's something that we have to take a risk on - our young people, our future. I think that a credit union option is something we should be pursuing. I think a credit union would address some of those issues of small entrepreneurs, the needs of artists, crafts people, consultants, some of those people who have a great deal of difficulty getting access to capital.
I would encourage that we investigate this capacity. I would encourage that we pursue the idea of contacting perhaps financial institutions of this nature to see if they would be interested in coming here.
As well, I also think we need to take a look at options for entrepreneurs to have access to risk and venture capital, because I think this is the thing that would make a difference. I think we have to encourage that, and I think we have to consider that we need to take risks on people. Sometimes those risks aren't always as readily quantifiable in terms of collateral and things like that, but people are our future.
I think that the budget that was brought down by this government reflects that; that people are our future and I think anything we can do in terms of trying to encourage people and trying to support people in this regard is worthwhile. Thank you.
Mr. Jenkins: I rise in support of this motion, in general. I see a lot of benefits accruing to Yukon from the motion before us and the implementation of a lot of the areas that are suggested in this motion.
I want to make it abundantly clear at the onset that I do not support the Government of Yukon getting directly into the business of lending, although I have some sympathy for loan guarantees if they're funneled through a major lending institution.
Much has been made of the past programs that the Government of Yukon has had in place with respect to loans and grants and what has existed in the Yukon previously and those of us who have availed ourselves of these programs. When one is on the business side of the equation, one looks at one's business plan and, in order for it to succeed, a level playing field is necessary.
When you invest in any opportunity here in Yukon or, indeed, anywhere in Canada, you put together your business plan; it is based on a number of known factors and projections. That business plan is also based on some speculation and risk. As an entrepreneur, you take that risk.
If you look back at what has happened in the Yukon, a lot of individuals have gone out, put their own money, borrowed money, friends' money or monies acquired through whatever means, into the development of their business. Then that business, hopefully most of the time, succeeds. But then along comes some of these incentives, with outright grants, or grants that are repayable with low interest - or with forgiveable interest, or no interest - and major capital infusions are made into parallel industries, which really distort the playing field. The only way then to be competitive is to look at accessing these programs oneself. When one does that, one is locked into one of these government grant programs and a repayment schedule, or whatever one can negotiate with government.
So, it's an unequal equation. I know; I've been there; and I'm still there, Mr. Speaker. I don't want to be there, but it's the only way I can make one of the businesses I'm involved in succeed.
The Member for Faro took it upon himself to name both our party leader and myself as being recipients of past grants in these areas. I'll freely admit that I have been a recipient of two programs from the Government of Yukon. But
if you look at the hospitality industry and you look at the money that I know I invested at the outset into the hospitality industry, of three other properties in my same community, one received an outright grant from the government of approaching half a million dollars, another one of some quarter million dollars, and another one received two grants.
And you're sitting there with your own money on the line, with your own terms of repayment to your lending institution that you're tied in to. The playing field is not level. I think, as do members of the business community, we all want to see a level playing field and equal access to capital.
Let's look at the other area today, Mr. Speaker, and that is access to capital. I want to send compliments to the government of the day for staging the fall forum on access to capital. I think it was a very worthwhile exercise and a very needed exercise. I think we're going to derive benefits if we follow through on this program and the information here gathered in the House today.
I look at the other concept that's advanced and the Member for Whitehorse Centre's motion, the establishment of a credit union here in the Yukon, and I believe that this will be a very beneficial undertaking if we explore this concept. But let us have a look at what has happened to the previous Whitehorse Credit Union and what caused its demise. If we're going to do it, let's do it right.
We are too small of a population base to justify a credit union of our own.
It would appear reasonable, Mr. Speaker, for a credit union here in the Yukon - and let's call it the Yukon credit union - to be affiliated with the B.C. Central Credit Union or some other institution that has been successful.
B.C. is a success story with respect to credit unions, as is the Province of Quebec. They are two financial lending institutions that keep checks and balances on the major chartered banks. In fact, if you look at Quebec, the Caisse Populaire is very, very competitive, and the chartered banks in that province are extremely competitive as a consequence of their existence. The same holds for the areas in British Columbia where the chartered banks go toe-to-toe with the credit unions.
So I really believe, Mr. Speaker, that much can be gained by the establishment of a Yukon credit union, but let us not fall into the traps and make the same mistakes that cost the Government of the Yukon almost $1 million. It's a worthwhile exercise, and I will table this report. It's the Whitehorse Credit Union Background Report on Failure, and it is worthwhile reading for all of us if we're going to undertake this endeavour.
I really don't have much further to add, other than to thank the Member for Whitehorse Centre for bringing forth the motion, and indicate to this House that it is a very worthwhile undertaking to not just explore but to actually encourage alternate banking activities, and the establishment of a Yukon credit union is one. The need to provide loans - I'm opposed to the government getting directly involved in loans to business, or grants. I think we can look at loan guarantees.
But there is much that we can do as a government to put in place these areas of alternate banking services. So, I will look forward to supporting this motion when it comes to a vote, Mr. Speaker.
Thank you very much.
Hon. Mr. Fairclough: I rise in support of this motion and would like to thank the Member for Whitehorse Centre for bringing it forward today. I think that it is timely to be debating this motion just a few weeks after the announcement of the biggest planned merger in Canadian history, between the Royal Bank and the Bank of Montreal.
The Yukon is served by a number of banks now, and if this merger is approved, that will mean fewer sources of financing available to business communities here as well as the likely loss of a number of jobs when operations are combined.
This kind of development concerns me. I think that we need access to more sources of financing and not fewer. If the trend of the banking industry is going to be toward bigger banks and more international competitiveness, service to small communities like ours could easily be forgotten. Some would say that the banks are already forgetting service in the interest of profits.
As the report on business financing forum sponsored by the Department of Economic Development pointed out, existing bank lending policies support only low-risk, highly secured conventional business ventures and exclude most ventures that do not meet these criteria. As the report also noted, because of these policies, they cannot meet all or even most of the business financing needs.
For people in my riding, the barriers to financing are even higher. Most of the banks don't have a presence in Carmacks, Pelly or Mayo - although we do have CIBC. As a result, most Whitehorse bankers don't know the communities and don't know the people, and I don't think that they understand the kind of business ideas that can make sense in small communities.
Banks, especially banks that are focused on mergers and international capital markets, are not going to solve the financing needs of small businesses and people in the Yukon communities, let alone Whitehorse. There used to be other sources of financing offered by the government through government economic development agreements, but the Yukon Party government, which talked a big small-business line, presided over the end of the EDA funding in March of 1996 and discontinued the business development fund at about the same time.
This combination of developments in both banking and government helps to explain the observation in the motion that it is becoming increasingly difficult for small business to secure capital loans. I think that it is constructive and significant that this government has recognized the need for new and varied sources of financing and is working with the business community to explore alternatives. And I'm pleased that the Department of Economic Development, under the able direction of my colleague, the minister, the Member for Faro, took the initiative of convening the business financing forum last fall. The discussion at that forum provided advice and has suggested a number of avenues for action, which are being actively followed.
This motion suggests exploration of alternative banking activities such as cooperatives and credit unions, and I think that these are constructive ideas. As banks focus on world markets and governments pay close attention to their bottom lines, we need to explore community capabilities to meet community needs.
Both credit unions and cooperatives have their roots in communities, and I believe that there is real potential for Yukoners to work with established credit unions or cooperatives to offer those types of services here. Organizations that are focused on service and dedicated to the communities they serve will be far more responsive to the financing needs of Yukon people than banks or governments ever can be. I know that I constantly hear from my constituents, who are frustrated with their own attempts to get new enterprises underway, that the lack of financing has limited these businesses in communities.
Alternatives are needed, and I support this motion's call for action and the efforts already underway in the Department of Economic Development. I think it's also important that the motion touches on the needs for services and assistance to small business startups. The business financing forum also identified this need. If we are going to empower people to equip themselves with success, we need to develop educational packages to equip them with the tools they need. Given the high fixed costs of conducting feasibility studies and preparing business financing plans, it is important to explore new measures that might help individuals put these pieces together to support their enterprising ideas.
Measures which help individuals, small business and communities should diversify the economy and create employment opportunities and are critically important at this time. The broader the base of our economy, the better we will withstand the ups and downs of the new global economy.
Mr. Speaker, I support this motion and the direction which it suggests, and I encourage all members in the House to do the same.
Mr. Fentie: I'll be brief. I think we can repeat a number of the things that have been said here today. I think we all agree in this House that there is a need to explore and look at options as far as accessing capital for small business here in the Yukon. So, I most certainly support this motion. It's a much needed motion. It's a timely initiative to be looking at here in this territory.
I'll close by just talking a little bit about my personal experiences as a small businessman in this territory. There are, of course, a number of factors that make this work. To access capital, number one, you have to have an acceptable business plan. I'm aware of the fact that out of the access to capital forum, the need to educate, train and help people in that area was an issue that must be addressed. Obviously, cashflow, the ability to repay loans, is a very important part of a small business and its ability to get capital and financing from the institutions we have available here in the territory.
I always found that one of the biggest struggles here in the Yukon is that much of what we do in small business is seasonal, other than the service sector. Cashflows are not consistent. They rise, they fall, and it's very difficult to prove to a financial institution that you, the small business, the entrepreneur in the Yukon, are capable of repaying these debts.
Another area that's very difficult for most operators and small business people in the territory, Mr. Speaker, is operating capital. It's not just the need to access funding for startup, but there's also a need to ensure that in downturns and in times of minimal cashflows, you do have a cushion that's there with your bank that allows you to keep operating.
Those are all major areas for small business in the Yukon when they try to access loans and capital from the banks we have today.
I believe that a credit union may very well be a viable option for the territory, but I also look at the fact that we have a very small population, which translates into a very small customer base, so a credit union that may be a satellite or part of a credit union established outside the territory may be the answer.
I would just like to reiterate, Mr. Speaker, that I do support this motion. I'd like to applaud my colleague, the Member for Whitehorse Centre, for bringing it to the floor of this House.
Mrs. Edelman: With an unemployment rate of 11 percent and rising and over 800 people per month on social assistance, there is no question that it's time to get proactive with the economy. The history of the Yukon is mining, but the growth industry right now is tourism. In addition to that, we have a workforce that is made up primarily of government workers at the municipal, territorial, federal and First Nations levels. In the days of diminishing tax dollars, we know that we cannot count on a growth in the public sector employment, so we need to look elsewhere for jobs. Small business in Canada is the number one generator of jobs.
This government put on a forum to examine Yukon business financing last fall. Findings from the forum noted that there is little question that the Yukon's small and medium business enterprises face a number of gaps in business financing. Many of these gaps exist throughout western Canada, where others appear to represent a particular need only in the Yukon Territory, and the gaps identified are the startup and venture capital, particularly in the amounts of $50,000 to $250,000, working capital in virtually all business sectors and phases, and local access to virtually any source of capital, other than the banks, friends or relatives.
The motion as presented today is a request to look at alternative ways that we can finance our number one job generator in the Yukon - small business. Problems getting financing for business is not a unique problem. Provinces across Canada have been dealing with this issue, and some quite successfully, for quite some time. The dramatic economic turnaround in both New Brunswick and Manitoba are examples of good government policies focused on making small businesses work.
Generally speaking, a province becomes economically successful when it becomes attractive to invest in that jurisdiction. The Yukon Liberal Party strongly supports an investment tax credit for the Yukon. Why should Yukoners' RSP monies flow out of the territory when there are perfectly viable small businesses in the Yukon that could benefit from the investment of those capital dollars locally? In the NWT, the new investment tax credit has just recently been adopted, leaving the Yukon as the only jurisdiction in Canada without an investment tax credit. Clearly, when looking at a range of options to provide capital dollars to Yukon businesses, we have to look at the concept of some sort of investment tax credit and other ideas to raise capital dollars or loan guarantees for small businesses.
The federal government does direct loans to small businesses, so there is no reason to put our small tax base at risk in order to raise capital dollars. In Manitoba, for example, the province has chosen to guarantee loans instead of to give out loans, so that the province can avoid the administrative and collection costs associated with direct lending.
The federal government is also doing one-stop shopping for business development. The federal government makes it easy for a small business to get their GST number, municipal and provincial business licences, et cetera, all in one spot, and it makes sense for the territorial government to partner with the federal, municipal and First Nations governments in order to set up one-stop shopping here in the Yukon, as well.
Lastly, in Manitoba, in order for the government to guarantee a loan to small business, the entrepreneur must take a two-day seminar in order to learn about legal liability, marketing strategies and administrative costs. This sort of education initiative, which is similar to the one offered locally through the EI program, would be of critical importance if the territorial government decides to go into the loan guarantee business.
Government needs to be innovative and creative in providing funding for small business. After all, small business is where the jobs are.
Hon. Ms. Moorcroft: I'm pleased to rise to support this motion this afternoon. This government is aggressively supporting economic development initiatives to help diversify the Yukon's economy. These include the trade and investment diversification strategy that my colleague, the Minister for Economic Development, announced today, with an amount of $500,000 budgeted for it. In addition, the budget includes significant resources for training, including $1.5 million for training trust funds that can be used to support the forestry and other sectors.
As well, we have seen the Youth Entrepreneurship Centre established, which has been a very successful partnership between the business community, the Department of Education, and Economic Development, to ensure that young people are learning important entrepreneurship skills.
At New Beginnings, a symposium for women in the middle years held in November 1996, over 100 women attended and discussed many aspects of finance. They looked at how to access bank financing, questions about the difficulty many women face in getting loans. It is not uncommon for women to still be required to have a spouse or partner to co-sign a loan and the fact that banks often propose credit far in excess of their needs.
Women discussed the fact that women entrepreneurs are 50 percent more successful than men, partly because they tend to be more conservative in their expansion plans, expanding their businesses in small steps rather than overextending themselves. Nonetheless, a major difficulty for new businesses, as was identified at that forum and others, is access to capital.
Women also discussed the problem of not understanding the basics or first steps in financial planning. One of our government's responses to this need for basic financial information was the survival skills for women program that was put on by Social Services to help low-income women gain some financial independence.
We are also implementing gender impact analysis and looking at the economic equality indicators for women, including their income, their paid and unpaid work and their education.
Many of the successful small businesses that are being started today have been started by women in the area of home-based business. Again, in March of 1997, there was a women in leadership conference, where many women attended a seminar on starting home-based businesses, and one of the main reasons for operating a business in the home is a lack of capital. Women have difficulty raising capital for their enterprises. When they put those businesses in their homes or in a studio or garage, they are then able to get started. Their major source of capital is often personal savings.
Home-based businesses include the service sector, personal services. There are also many self-employed professional women. Writers, publishers and other artists have home-based businesses, and they look for different ways for finding the capital they need to succeed, besides using their personal savings.
One interesting initiative that has helped many borrowers is micro loans. Micro credit has been developed to provide small loans for very small cooperatives who are interested in projects ranging from weaving chairs or making pots to providing community services. Groups of five borrowers meet weekly to critique each other's business plans and support each other. They make loan payments at commercial interest rates and are cut off if one borrower defaults on their loans. Grameen Bank, which founded the first micro credit program, claims a higher repayment rate than traditional banks and is reporting a profit.
Micro credit is now at work in 43 countries. Small loans have supported hair salons, gardening businesses and artist co-ops.
We can create new employment opportunities by encouraging alternative banking models, as this motion sets out. There are many possibilities for improving the availability of financial services to Yukon citizens.
I'm pleased, Mr. Speaker, that the Member for Whitehorse Centre has brought this motion forward. Our government will continue to encourage alternative banking activities, and I look forward to that having a positive effect in our communities.
Mr. Livingston: I'm pleased to rise to support the motion in front of the House today. Clearly, Yukoners are calling. They called for it at the recent trade investment and diversification meetings prior to Christmas. They called for a fuller range of services. They identified gaps that need to be filled and noted how difficult it is to access capital and loans as small businesses.
Yukoners have had lots to say on this particular matter.
While the members opposite have talked a bit about banks, credit unions, and what the appropriate role for government is in those areas, clearly, government does have some role in terms of trying to set the stage for a vital and vibrant small business sector across the territory. As well, consumers and all Yukon residents can benefit from that kind of a good economic climate.
The Yukon businesses were quite clear, at the forum that was held just prior to Christmas, about the difficulty they had in accessing capital, particularly for business startups, for new products, and in rural communities. There was a good representation at that meeting, from the labour sector, from business, from First Nations, from government and from the financial industry. There was a great deal of common concern expressed about the access to capital and how difficult it was in the Yukon for small business purposes.
I guess that caused us to sit back, take a look and ask ourselves the question: why is this such a problem? What are the difficulties here? Of course, we can't separate this discussion from the primary lenders in this area, those being the big banks. Of course, we're well-aware of the proposed merger between two of the largest banks in Canada - the Royal Bank and the Bank of Montreal.
I think it's worthwhile asking ourselves what the benefits for Canadians and for Yukoners will be in looking at this kind of a merger. Are we going to see some benefits for Canadians or, in fact, will there be some costs?
I think that one of the things we have to recognize about the banking industry in Canada is that it's very tightly controlled; it's a small club. It's a very small club that is making record profits year after year after year. The record profits are rising, and announcements yesterday and today indicate that their quarterly profits are up another 10 percent over last year. And last year, was a year over year over year record for most of the banks.
Right now, we see the banks out spending money to buy influence in an unprecedented $20 million advertising campaign, trying to improve their public image after losing battles to sell insurance in their branches and to break into automobile leasing. We see companies that exercise a great deal of control over their particular sector, and now they're trying to influence us through a significant advertising campaign.
I think we have to ask ourselves, after the first year of record profits in 1995, did the banks cut chequing fees or interest rates on credit cards? No, they did not, Mr. Speaker. After the second year of record profits in 1996, did they rush to expand credit to small business owners? No, they did not. After their third year of record profits in 1997, did they leap to fatten the pay packets of their average employees, many of whom are going to be laid off as a result of this merger? No, they didn't, and I would suggest that, after record profits in their first quarter in 1998, there is no evidence that this merger is going to improve the record of banking service charges or compensation to average employees.
I think this is a fact. It is a fact that this is a financial situation that small businesses and consumers alike are fighting to try and influence and have some voice.
This is not a situation that is without precedence. This kind of a circumstance has existed in a variety of places at a variety of times over the last century or so. Reference has been made to the credit union movement in Europe, and, of course, the credit union movement also has a very strong set of roots in Canada, as well.
We see them in Nova Scotia, particularly in the northern parts of Nova Scotia. We see them in Quebec in the form of the Caisse Populaire. We see them in Saskatchewan. We see them in British Columbia. We see them really across this country.
Credit unions, Mr. Speaker, are based on a one-member, one-vote structure, and it gives members the power to direct their credit union policy in an effort to meet member needs. And this structure is vastly different. I know some comments have been made about, "So, big deal. The banks are making big profits." Well, it's vastly different from the for-profit sector, the bank sector, where I would argue that relatively few Canadians, in fact, receive the benefits of those profits. Certainly, some through mutual funds and probably even fewer through stock holdings, but the numbers are fairly small.
But maybe more significant even, Mr. Speaker, is the ability of communities to be able to direct those resources toward community needs. That, in addition to the profits remaining from credit unions and those kinds of structures, in addition to those benefits of those resources, those profits remaining in the community, the other significant advantage of the credit union structure is that, from a local board of directors, decisions are made about their resources and lending practices and all of the rest of it that will, in one way or another, benefit local needs.
Now, I'm well-aware of the - not well-aware; I'm going to become more acquainted, I guess - history of the credit union in Whitehorse. Members opposite are going to be providing a brief, and certainly I think all of us have been informed in a variety of ways about the experience of that particular credit union.
But this is not the only credit union experience. Indeed, as a youngster growing up in Saskatchewan, as my family moved from one small community to another - and we lived in a variety of small communities in Saskatchewan - that's where my bank account would reside; it would be at the local credit union. And those credit unions, Mr. Speaker, would serve markets in most cases smaller than this market, and in most cases those credit unions would hold millions and millions of dollars in assets, in both loans as well as in savings, and indeed, when we look at the network of credit unions across the Province of Saskatchewan, those holdings, those assets, exceed that of any of the banks in the Province of Saskatchewan.
So, one of the matters that needs to be addressed is this notion of whether or not credit unions can be successful, and indeed they have proven that they can be successful in Saskatchewan, Quebec, British Columbia and elsewhere.
If we looked at a small business failure somewhere and said, "Well, small business is sure not going to work because there's been a small business failure," we wouldn't get very darned far. Of course, we can always point to small businesses having some challenges in terms of getting startup funds and that's one of the issues that we're trying to address by identifying some alternative types of arrangements, loan possibilities, and in the case of credit unions, alternative kinds of financial institutions in our community.
One of the experiences that I had in a community not so long ago was a credit union loan that was given just prior to Christmas. Now, it was peanuts, in a sense. It was a small loan. It was, I believe, a loan of up to $1,000, which in the scheme of things is not a particularly large loan, but it was a loan that was available at no interest to members from within the community if they purchased locally with that, if they spent those dollars locally. The impact, particularly during recession times - times frankly when banks and credit unions were still making profits - on the local community was significant, because what we saw in that pre-Christmas rush when people do tend to do a lot of buying, those dollars were directed back into the local community.
Now I'm not suggesting that that's the kind of program that we'd want to see from a local credit union, but I use that as an example, Mr. Speaker, of the kind of influence that a local board of directors can have on the kinds of policies, the kind of lending practices and so on. Basically, there's an opportunity for a locally elected board of directors to explore and identify means by which local needs can be met.
The example I've just cited, of course, is an example focusing more on consumer loans. So that's just one example. I think that clearly there needs to be a well-supervised kind of a structure, one that's going to avoid the kinds of difficulties that existed in the 1970s with the credit union in Whitehorse, and that's clearly a matter that would need to be addressed.
But I think that this is an opportunity, as we look ahead, an opportunity to at least lay the groundwork for a community type of financial institution, one that is responsible to the community and, I believe, could have a great deal of success, as has been shown in many other parts of this country.
Mr. Speaker, the community base does not have to be a large one. In many, many cases, the communities served by local credit unions are, in some cases, market areas of 6,000 people or 10,000 people, but once again, millions and millions of dollars in assets for any of those particular credit unions.
One of the strengths - and I think it's been mentioned before - is that over the years and during my short years, I've seen credit union structures evolve to the point where the affiliation with other credit unions has grown and has strengthened, and I think that even since the experiences in the 1970s here, we've seen that evolve. That, of course, adds some strength to the credit union model, because it means that any individual community is not standing alone but rather is in a larger pool. Certainly some constraints are expected to accompany that kind of a model, but it does make sense for a stronger financial institution.
That, Mr. Speaker, is what this is all about: providing opportunities for small businesses to access micro loans, to access medium-sized loans for their ventures.
My colleague from Whitehorse Centre talked about the micro loans program that was begun in the area of Bangladesh and has now expanded to 43 countries across the world, and it's amazing. It's amazing what can emerge from that kind of a community-based initiative. It's an initiative that was not particularly highly funded but rather one that was local, was non-governmental in this case, and certainly offers us some innovative ideas and creative ideas about how we can proceed.
I note, Mr. Speaker, that we have one of the parties from the right, the Reform Party, in the federal House, that is putting ideology before common sense, recklessly and, I would suggest, irresponsibly, bidding to end the small business loans program. They're wanting that program eradicated on April 1 of this coming year.
I know that a great many small businesses across the country receive small business loans. I think Manning's party is showing its true colours as a mouthpiece for big business. They're supporting the merger of the banks and also wanting to eradicate this particular program that supports the small business sector when and where it counts.
Frankly, Mr. Speaker, you can't finance a startup business with ideology. What we're looking for are practical, commonsense vehicles to support small business in the various means in which they would want to do that.
I think what we see here in this particular motion is our commitment to community. Communities are built on a lot of different kinds of things. Having a vital economic sector that's not built on one particular cornerstone, that has a variety of small businesses that are taking place, is how a good solid economy is built. Yukoners need a range of services. They've indicated that it's difficult to access capital and loans. We heard that from the forum.
Mr. Speaker, I support this government's efforts in exploring and encouraging alternate banking activities, especially in credit unions and cooperatives, as a means of ensuring that we have a stage from which they can operate. I think that we want to explore further the micro loans and other small business types of loans and the means of making them available. We want to create the kinds of services that will assist small businesses in their startup and ongoing costs. Indeed, we want to empower our community, or find ways of empowering our community, and laying the foundations for empowering our community that will help to diversify this economy and create new employment opportunities across the Yukon.
Thank you, Mr. Speaker.
Mr. Phillips: Mr. Speaker, I rise today in support of the motion as presented by the Member for Whitehorse Centre, but not without some reservations and some qualifications of the support. Many of the other members of the House have expressed their views here today about some of the things the credit unions have done. I know my colleagues, the Member for Klondike and the Member for Porter Creek North, have expressed some reservations about some of the things that have happened.
I would be, first and foremost, with respect to credit unions, in support of that initiative, but I would want to make sure that, before we went much further, we had some type of consumer protection legislation, or legislation with respect to credit unions in the territory, to possibly avoid some of the pitfalls that were experienced before by people that were involved in that.
As well, I would suggest that there may be an opportunity here to capitalize on the successes of our neighbouring credit union - the B.C. Credit Union - and partnering somehow with them and utilizing their expertise and possibly their knowledge of how the system works in setting up any system here, and maybe even being a division of, so to speak, that particular credit union, because it has a lot of experience and has recently been extremely successful.
I'm sure that if a credit union did come to the Yukon we would see similar things happening here that happened in other jurisdictions, where the banks would become a little more competitive, and the consumer, of course, would benefit from that.
With respect to providing for micro and small business loans, that one has a few more pitfalls than the credit union initiative. I just want to lay out a couple of concerns that I have. I think some have spoken a bit about them before.
The experience we've had before with loans from the Government of the Yukon hasn't been a very good one. Some businesses have benefited, but some businesses have received the money much more easily than they would have from any kind of a bank. In fact, for some, it's got them in trouble because they didn't have the expertise or background knowledge to run the business, they hadn't done their homework and, in fact, they ended up getting into a lot of trouble. Some of the people who took some of these loans out ended up losing everything in the end. That would be unfortunate.
One of the points that I would like to make, and I would like the government to keep this in mind, is that there are a lot of people out there who have got into businesses in the past 20, 30 or 40 years and have done it on their own. Some have not gone to the banks. Some have used their own personal savings. Some have now had to go to the banks and now have fairly significant mortgages or payments to make on capital improvements to their business.
There is always the problem when you're granting money that if you ease the restrictions somewhat, or significantly, and you start up a business that might be in competition with one that's already there, it does create an unfairness in the marketplace. Some people have invested their life savings in various businesses and are hopeful that a government doesn't come along and set up a business across the street or next door to them and finance them under totally different terms or much easier terms and, in fact, make them non-competitive, because they are stuck with the payments or mortgages they have and cannot get out of.
Sometimes, these kinds of programs are made easy to get into. As I think the Government Leader said earlier, they do force other people to get into them and draw on them simply to compete.
I'd like to see people doing a lot of it on their own merit. I know that there needs to be some access to capital. I've been in small business myself and I've experienced the same concerns, trying to get capital. If you go to some of the large banks, you virtually have to mortgage everything you own or everything you have to get a small amount of money. In fact, it's sometimes easier to get a personal line of credit and then draw from your personal line of credit and loan it to your company than it is to go and ask for money for the company, because the companies don't seem to have a lot of borrowing power from the banks. So, it creates some problems that way.
So, I would be concerned with respect to loans, that the government be very careful with that one and do a lot of consultation with the private sector who were going to be affected by any loans that are given out, and set up a system that I think, most importantly, is somewhat independent from government. In some of the previous programs that the Government of Yukon had, I believe that if a loan was turned down by the loan committee, they could appeal to the minister and the minister could overrule the loan committee. I would be concerned about any program that did that.
My preference would be that it would be totally non-political, that there are no politics involved whatsoever in it, that it have strict criteria right from the beginning, and we do something that we didn't do in the last loan program, and that is to set up a process of repayment. And I'm leaning more toward, I suppose, a loan guarantee from the government than the government itself setting up a huge bureaucracy to actually administer the handing out of the loans and administering the collection of the loans. The government hasn't been great at doing that, and maybe the government could work with some of the existing banks or even the new credit union, for example, in setting up a process by which they handled the lending and the repayment.
Those are some of the concerns that I have. As I said, I support in general the motion that's before us. I know that assistance for small business and startups and ongoing capital needs are a real need in the territory. I think we have to be very careful on the criteria we set up because we don't want to get people into trouble who don't have the background knowledge and aren't equipped to run the type of business that they're trying to get started. It's going to involve a lot of training and a lot of background work before we get into the actual process of the loan programs.
So, Mr. Speaker, having said that, I do support the motion that is in front of us with the previous qualifications about the credit union and the consumer protection, and, as well, the concerns about government getting into the lending business. I have strong reservations about the government getting into the business directly and would hope that after consultation with the private sector we might be able to find another alternative that might achieve the same results, with the government and the private sector to develop some kind of a program where capital access might become a little easier.
Thank you, Mr. Speaker.
Hon. Mr. Keenan: I rise today to support this motion. I think this motion is going to enable people to develop. It's going to enable Yukon to develop. It is going to be very, very good and exciting, if I add, if it does happen, for the tourism industry.
So many people that I have spoken to within the tourism industry - and just yesterday on the street last night after the House, I ran into a person from Old Crow who was asking this very same question: how do I do this? How do I go about to develop and improve, based on traditional lifestyles? That is the beauty of what this motion could do.
I do believe that we should be looking, and it is incumbent upon government to explore, exactly the establishment of credit unions and cooperatives, to encourage the small business loans and to provide support for the new businesses.
Mr. Speaker, as we move through developing tourism as the number-one industry in the Yukon Territory, I feel that we can only do it with the people. I feel that what we have to do is that we have to involve the traditional economy. As we look at the focus group test results that we have done around America and different places, focusing on the different countries that we wish to see come here, we ask them, "What is it that you want to see?" First of all, they want to see the land. They want to see nature at its best, and that is what the Yukon has to offer. They want to see the people. They want to see the indigenous people in indigenous cultures of this country of ours, of Canada and of the Yukon.
How can we best do that? We can do that by providing access to resources, to startup costs for those very people, because those are the people that tourism wants to encourage to come to see.
We're looking at the bigger bank mergers. What will that do and show rural Canadians? If you look at Yukon, we have many, many communities. Only one is not a rural community, and that is the capital city of Whitehorse. Yet, population-wise, we have a vast, great number of people in the community, and we have approximately 14 different communities functioning and working out there. These are the communities and the people within the communities that do need access. They need it, and can they get it from larger banks and with the merging of larger banks? Absolutely not. They are considered to be very high risk, yet if you look at what the people want to give and what the tourists want to see, those are the ones that deserve the startup capital and access to that type of capital.
So, we must work with all Yukoners to encourage this development and make sure that it's financially sustainable. We're not talking about knee-jerk reactions. We're not talking about a boom-and-bust economy, but an economy with continuity, an economy that is going to involve all people and focus on what people want to see.
So, Mr. Speaker, I see this motion as exactly doing that.
I've seen it from the access to capital forum that was held, and the recommendations that came out of that. They speak about the three different recommendations: insufficient information and sources of capital; the need for education and training in business planning and business management, and; insufficient sources of investment capital.
Well, Mr. Speaker, if we can implement this motion, and we can start the focus, it will go a long way to ensuring my dream that tourism will become the number-one industry in the Yukon Territory, because I do believe it is reflective of what people want to see and what we have to offer.
So, Mr. Speaker, I thank you for the time and I thank you for the support.
Mr. Cable: I'm supportive of the motion brought forward by the Member for Whitehorse Centre. The motion is responding to concerns raised in the business community. In the motion, the concerns are expressed, and some of the solutions to be examined have been set out.
We, in the Liberal caucus, share the concerns. We share the view that the government can lead the debate in finding solutions, and we share the view that competition in financial services is good. We share the view that there are some services that government can provide - services that will improve access to capital.
We do share the reservations expressed previously by previous speakers in relation to government getting involved in the loan business, particularly in those segments of the economy where there are competitors present in the market. With that caveat, the motion is generally supportable, and we will support the motion.
If I could visit some of the particulars. The mover of the motion has talked about credit unions and cooperatives. I think we can safely say that all members of this House are of the view that competition is good, particularly in the financial services, and that banking oligopolies are not good.
We sometimes get the impression that the banks exist in two worlds. There's a world that deals with the big borrowers - the billion-dollar borrowers, the Indonesian politicians and businessmen on the take, the Dome Petroleums and the Olympia and Yorks.
That's an area of banking that's conducted out in the ether - or out in the ozone, depending on your point of view. Then we have bank presidents talking about merging so they can go to the U.S.A. and kick certain parts of their bodies, and we have to ask what's in that for us. Then there's our world, where we pay the large monthly service charges and loan review fees that back-stop the bad debts that are made to some of those big borrowers.
Now, it's my personal view that the answer to the problems of access to capital doesn't lie in direct government involvement in the loan sector. It's also my view that very few of our constituents would feel comfortable with the government getting into the banking business. The answer, in my view, lies in competition. In the long run, the market will be a more effective tool in meeting people's wants in the area of access to capital.
I'm fully supportive of the move to examine credit unions and facilitating their existence, and I don't think we should be discouraged by the experience of the Whitehorse Credit Union. As long as the appropriate regulatory framework is there, as long as the proper disclosure requirements are there, and as long as the security requirements are there, the people of the Yukon should be entitled to invest their money in a credit union, if they see fit, and to take their risks. That should be their right.
I would like to see the legislative framework restored so that the opportunities are there for people to form a credit union. The Whitehorse Credit Union, before it got into trouble, worked for several years, when the population was much smaller. There is no reason why it can't work now, in some fashion. The repeal of the credit union legislation was, in my view, an over-reaction and a simplistic solution to the problem.
Another part of the motion I am also supportive of relates to the provision - this isn't the verbiage used, but I think this is the direction that the mover is going in - of educational assistance, directly or through the college, in financial planning, purchasing, marketing and market research.
There is also a role for government to do market research, in a general sense, to identify areas for possible economic activity in the Yukon, and there's a role for marketing research - the techniques of marketing - and marketing assistance, particularly in the export area where governments have the channels of communication that many individuals do not have.
I would like to say in closing that the banks - all financial institutions, all lenders - will be much more inclined to loan money when the investment climate is stable and when the rules attached to investment are known. Two of the factors affecting the investment climate are the unknowns associated with the land claims and the protected area strategy. While the government, of course, is moving in both of these areas, let me suggest that maximum efforts need to be applied to both to bring them to an early conclusion. This will improve the investment climate and should be part of any investment strategy, any strategy aimed at improving investment and improving access to capital.
Having said that, I would like to thank the Member for Whitehorse Centre for bringing the motion forward. There are at least two very important points that I think are worth the government spending some considerable time on.
Hon. Mr. McDonald: I will join the discussion this afternoon agreeing, along with all other members, that the motion before the House is deserving of our support.
As many members have indicated, diversifying our economy is not something that politicians, or anyone, just simply mandates. It's something that requires a lot of work. It requires a good understanding of the economy that we have and its needs, and, as the previous member has just pointed out, it involves the creation of an appropriate investment climate that will encourage people to invest their own funds in expanding and diversifying our economy.
This territory faces some substantial challenges over the next decade. This economy, as people have mentioned over and over again, is heavily dependent upon public spending. Whether one works for the government or one works for contractors who build public works, the fact that the public sector is such a large player in the economy demonstrates just simply how vulnerable the economy is.
We have, in the past year or two, faced a substantial reduction in public spending, largely due to the completion of some very large - in Yukon terms - capital works. We've also unfortunately faced, combining with that impact, a downturn in the mining cycle, which has, in part, left the largest private sector employer temporarily closed.
On top of that, we also have an economy that is largely service-sector oriented. Clearly, the fact that there is not wide experience in our territory in entrepreneurial experience in other sectors - outside of the tourism industry, the heavy equipment industry and the mining industry - presents a major challenge for this territory and for the entrepreneurs in this territory to seek activities and opportunities elsewhere.
But that is precisely what we must do. That is precisely the course of action that this territory must take to truly be in a position to avoid boom-and-bust cycles and truly take advantage of the many opportunities that do exist, in their rawest form, in this territory.
I won't speak long because I do, of course, support this motion. I will undertake, on behalf of all members, to review and have reviewed the legislative framework surrounding either the creation of or the allowance for the operation of credit unions.
Mr. Speaker, people in the small business community have consistently raised the issue of access to capital as being a major impediment to growth in this territory. Certainly the banking community here has provided substantial support to many businesses and, despite what some members have said on the floor of the Legislature today, the business development fund has provided substantial support to working viable businesses in this territory that have created jobs and are keeping the private sector alive today, but clearly much more has to be done. It'll be a combination of ensuring that investment opportunities are available, that there are investors who wish to take a chance on Yukon's future. It involves the potential of investigating some ideas that some members have raised regarding encouraging Yukoners to invest their savings in the future of this territory. It also involves ensuring that people who are going to be receiving the funding and receiving that support have whatever education they require to ensure that they put the funding to best purpose. There are many factors that would be necessary to ensure our success.
So, I would close by saying that I support the motion. I will do what I can as a member of the government to pursue it, along with my colleagues, to live to the spirit of the motion, and I'm looking forward to a brighter future for this territory.
Mr. Hardy: It is quite refreshing to hear the comments from all people of the House concerning this motion. Often we can have philosophical differences, especially when it comes to financing and roles of governments and business and worker participation, but in this matter I believe that we all recognize the needs, the alternatives that are necessary to have an impact in the Yukon and to give people the choice. I think the discussion that has been going on about the credit unions is very refreshing, knowing that the past history in the Yukon has been troubled, even though it was 16 or 17 years ago. People are willing to overlook that and recognize the importance that credit unions do have in our society within Canada and the role that they play.
So, I believe that with that kind of support we'll be able to move forward quite comfortably and address many of the concerns and maybe, in the near future, be able to see an alternative banking system in the territory as we had at one time. As I mentioned earlier, I was a recipient of the goodwill and it gave me a start in my life.
But this is not totally a debate about credit unions, and I know that we've gone back to the credit unions a lot - and the cooperatives - but there are a lot of other mechanisms out there. And often we get caught in a debate about what we have now and how we can kind of adjust it or shape it, and we don't go out in our view and look at alternative methods or different varieties of financing or economic benefits for people.
That could be a symptom of living so far north and often feeling a little out of touch, at times, with what the south is doing. But it's not necessarily that we always look to the south for answers either. We have to look around the world for solutions in this matter and how we can stimulate entrepreneurship, how we can increase activity in small business, which I believe is the future of the Yukon - I truly believe that - and how we can give some signals to the youth of today that there will be a future for them tomorrow.
What's been mentioned has been mentioned by the leader of the Liberal Party and the leader of the opposition, and I totally agree with what they say, and that's training. Training has to be a big part of any type of micro loans or banking - training for people who wish to be entrepreneurs, people who wish to open a small business. I believe it's a role that we have the ability to play, through our educational systems, jointly with the successful business people out there, to pass on that knowledge, pass on the encouragement, and put systems in place that will allow them to succeed. Training is a huge part of it.
I was a small business person for quite a few years, and I entered into the small business world by just the need to have a job, and there were no jobs out there to work for somebody. So I went down and got a business licence and hung out my shingle, and started contracting. To be honest, I had absolutely zero skills when it came to having a good understanding of business, but I had fine skills to build. I considered myself a decent carpenter and was able to sell my labour that way.
But when it came down to dealing with customers, clients, getting accounts together, dealing with the banks, so I have some type of cashflow - I never did try to access loans - I started very small and slowly built, but there were many, many opportunities for me to bid and do work that was beyond my scope because of the financial needs, yet I was never comfortable enough to go out and borrow the money to do it, or had the knowledge to do that. I sure could have benefited greatly from having a mentor, or having a course offering that would have walked me through the process, the pitfalls, the successes, the directions that I could go in, and that would have helped me expand my business.
As it was, it was a good little business and I was quite successful. It was limited in its size. I had up to six employees, but still it was very difficult to do that as well as run a payroll with no skills, very little skills. So I do know the hardship, Mr. Speaker. I really do know the hardship of trying to walk that line, walk that path, trying to gain the knowledge by trial and error when you don't have the margin to make too many errors, or else you won't be in business, I'll tell you, very long. You sure don't have any type of cushion to fall back on if you make a mistake in any of that.
I only closed my business because we moved to the south for one year, my family and I, and when I came back at that time I didn't open it. I came back because I had another job offer here to come back to.
But that experience was very valuable, but it's kind of like the school of hard knocks and I don't think people should have to go through that if we can step in and assist them in that manner, and I believe all the people in this House agree that training is a huge part of it. I know my colleague from the ministry of education also spoke about training and some of the programs that are in place, and that's really good to hear. Hopefully, we'll continue to build on that and we'll have the support of the whole House in developing these programs.
Micro loans and micro enterprises have been talked about, and I know there have been some fears raised about them. People have mentioned venture capital loans, loan guarantees, tax incentives. I think they all have a place in stimulating the economy. What place it is, we have to define.
The motion didn't directly speak to that. I believe there's another motion that's being brought forward by the Member for Riverside, and I look forward to the debate on that one as well. I think that complements this one. I think what we're seeing in here is each party bringing forward excellent ideas that are going to be an incentive for employment opportunities and growth in the Yukon, and I really look forward to the debate on the motion that the Member for Riverside brought forward and tabled today.
I do know that venture loans and loan guarantees were also mentioned, and I profess my knowledge of that is not as extensive as what I've been looking into concerning micro loans, startups, credit unions and cooperatives. But I look forward to learning more from my colleagues and discussing that, because if it can serve the people of the Yukon, then it is something that we should do. If there is truly a benefit to the Yukon people, then it is something we should do, and we should put aside our differences - sometimes put aside our ideological differences - and recognize the benefits that these loans will give to the people of the Yukon.
Within Canada alone - the leader of the Liberals mentioned the Four Corners Bank that has been started in Vancouver. I know the person that was instrumental in starting it up years ago. He's quite an activist, quite outspoken, and he has stepped aside to allow it to be run now that he's got the initial project up and running. I'm sure we could probably access him quite easily. I can give him a call.
It is a wonderful project, and I'm glad he mentioned it. It's part of the many projects that have happened throughout Canada. It seems to be a success.
It was under a lot of criticism when it was brought in. But, putting aside the criticism, it has met a need in the east end, and it was a need that the major banks did not want to fill.
That is often what we look at when we are talking about this. I don't mind bashing the banks because I think the banks are big enough to take a little bashing. I think they've also done some - what I would say - not so beneficial things for Canada, so they can take a little bit of it. I don't feel like I have to tiptoe around them.
But they don't meet all of the requirements - anywhere near it. We hear it constantly, day in and day out, from people - the frustrations of trying to get a loan from the bank, the frustration of trying to borrow even a small amount of money and what they want in order to get that small amount of money. It could be a startup business, but they want so much that it's impossible for the person to meet the requirements.
If the bank is not going to do that, and the government is not going to step in to make the banks fulfill a mandate, or a goal, for all people, then we have to look at alternatives.
Alternatives can be credit unions and that's where they came from: they arose from the needs of communities. We can only look into the history of Manitoba and Saskatchewan, Alberta, the Prairie provinces, where every community had a credit union and the credit union was the community, it was created out of that community and was supported by that community and gave back to that community. That's as micro as you can get for size, but it met a need and it was an identified need.
Now a lot of them are still there, but a lot of them have closed their doors as towns have died and people have moved on and finances have dropped, but a lot of them have survived and some of them have merged with communities that are close together to strengthen each other.
There is no reason we can't support that process. There is absolutely no reason in the world we can't support an alternative banking system. I think, in a country as open as this country, we should have those alternatives and people should have that choice. I've heard today that people support that type of choice. That goes to benefit the individual, the youth going for their first loan, like I did, the small business person who may think that they won't have a chance to get a loan, but goes there and finds that they can, or the larger business that wants to do work in that manner, and wants to deal with this type of bank instead of the traditional banks.
In a comment that was made earlier, this will put pressure on the large mainstream banks to change a little bit, to change for our benefit, for the citizens of the Yukon's benefit.
There is a question we have to ask: how much money is given back to the Yukon and how much money is taken out by the banking system? There's no harm in asking that question.
Maybe we should get an answer for that. How much money does the Yukon government invest through the banks, and how much do they put back in the Yukon? There's no harm in asking that question. We should be able to get the answers, and if the answers are not good enough, then maybe we have to push for something different, and maybe by pushing, we'll get change.
So, I don't mind bashing a little bit. Like I say, they are big and they are strong and they don't pay much attention to somebody like me making those comments.
Some Hon. Member: (Inaudible)
Mr. Hardy: Yeah, I can imagine.
The Quebec solidarity funds - a wonderful fund that invests back into communities, invests back into the businesses to help the growth within the communities, to help businesses that are struggling, that are going through change, especially technological change, to help the workers. We should look at that. They're an investment. They're like the RRSPs, like the pensions - getting workers' money going back into the community. There's no harm in that. There are lots of ideas out there.
I mentioned ideas from India. This is where people that had zero created a bank. They had no access to the markets; they created a cooperative. They had no access to raw materials; they created a mechanism to be able to go out and bring the raw materials in - direct dealership and skip the middle person. These were all women, and now they're successful and they're growing. Those are models that we can look at.
There are all kinds of models. You know, when you think about it, we shouldn't just limit ourselves - and I use some of the models in the United States, and I believe it's quite easy for us to access that information and take a look at how we can get that information, how we can apply it here. Does it have a value here? Maybe it doesn't, but it doesn't cost that much to ask the questions to seek the answers.
There is the Mondragon network of cooperatives in the Basque region of Spain - hugely successful - and it has created sustainable communities where it was complete devastation 20 to 30 years ago.
For the last 20 years, they've had this. It's a phenomenal success story. They've created jobs for over 20,000 citizens. In Eastern Europe, former state-owned companies have been converted into employee-owned companies, or worker cooperatives. How do we encourage that kind of activity? Israeli kibbutz cooperative communities own industrial firms and employed 18,000 workers in the late 1980s. All working, all successful, but all different. They all have a slightly different approach, and they're definitely not connected to the mainstream structure that we have, that we have set up in Canada, with the loaning agencies and the banks - the business goes to them and has to bow down to their models and fit their schemes.
Now, I'm not saying that that doesn't have a role in our society. It does have a role. It has a huge role, but I'm saying there are a lot of people out there who need other models to be successful. We can't just tie ourselves to one model and make everything - all these ideas - kind of fit that one model. Why don't we take that model, fine, accept it, find the way it works, make it accessible for people, but also look at other ways that have worked throughout the world and try to encourage those.
Community-developed corporations in Canada are working. Community loan funds; that's a different type of structure. These are operated by community boards, and they focus on mobilizing local and external capital that can then be loaned to small private businesses, community enterprises and cooperatives on reasonable and sometimes consensual terms. Community loan funds have been established by governments at all levels, community organizations, churches and business groups.
In some cases, they set up their own loan funds with different boards and staff to spread it out a little bit.
Cooperatives, cooperative enterprises - and that would include the credit union idea, where each person has an equal vote share and they elect their directors and they set their policies. I may be a member of a credit union in the Yukon. I can set the policies that will reflect the people in the Yukon. I am not sitting down on Bay Street, not even thinking about the Yukon, setting policies that will have a direct effect upon the bigger majority. But having some local control on the financial institute, as a member of the board, as a voting member, allows me to think about my own community and to have direct impact on it.
Micro financing loans -
Speaker: The member has two minutes.
Mr. Hardy: This happened the other day, too.
I've heard the concerns about them and I also share those concerns. We have to be careful. I'm not a person who feels that you just give money if somebody asks for it, that you just give money with very few safeguards to ensure you get the money back. We have this money in trust for our government. This is taxpayers' money, so we have to be responsible in that manner. But we also have the responsibility to try to stimulate this economy to create work, to benefit the people of the Yukon and make them successful in their life because, if we don't, we pay a different way, and that's often through the tragedy of broken families, impoverished children, reduction in social programs and services, and very unhealthy communities. So the investment that we can make by stimulating and encouraging the growth of small business, of entrepreneurs, of even medium-sized businesses will come back and pay dividends to us all in the end.
Speaker: Are you prepared for the question?
Some Hon. Members: Division.
Speaker: Division has been called. Mr. Clerk, would you poll the House.
Hon. Mr. McDonald: Agree.
Hon. Mr. Harding: Agree.
Hon. Ms. Moorcroft: Agree.
Hon. Mr. Keenan: Agree.
Hon. Mr. Sloan: Agree.
Hon. Mr. Fairclough: Agree.
Mr. McRobb: Agree.
Mr. Fentie: Agree.
Mr. Hardy: Agree.
Mr. Livingston: Agree.
Mr. Ostashek: Agree.
Mr. Phillips: Agree.
Mr. Jenkins: Agree.
Ms. Duncan: Agree.
Mr. Cable: Agree.
Mrs. Edelman: Agree.
Clerk: Mr. Speaker, the results are sixteen yea, nil nay.
Speaker: The yeas have it. I declare the motion carried.
Motion No. 96 agreed to unanimously
Speaker: Is it the wish of the members that the time be deemed to be 5:30?
Some Hon. Member: Agreed.
Speaker: The Speaker will leave the Chair until 7:30 tonight.
Speaker: I will call the House to order. Government bills.
Bill No. 9: Second Reading - continued
Clerk: Second reading, Bill No. 9, standing in the name of the hon. Mr. McDonald. Adjourned debate, Mr. Ostashek.
Mr. Ostashek: I rise tonight to speak in reply to the budget that was tabled by the Finance minister a couple of days ago in this Legislature. I wish I could rise to speak to a budget that I could have more confidence in and could be more supportive of than the budget that has been tabled by the members opposite.
The budget is the second budget of this administration. They have one more budget - possibly two at the most. If they do have a second one after this, it will be at the tail end of their mandate, prior to the next general election.
This budget comes at a time when Yukon is facing some very serious economic times, and I'm disappointed in this budget because it doesn't show any economic leadership, and doesn't give Yukoners any hope that there's a light at the end of the tunnel. The budget has been stated in the budget speech by the Minister of Finance, the Government Leader, as a jobs budget.
Well, Mr. Speaker, in my presentation tonight, I'm going to lay out in front of this Legislature why I don't believe this is a jobs budget. Quite the opposite: it's not a jobs budget at all. In fact, if anything, it is going to kill jobs in the Yukon.
Mr. Speaker, I want to start my presentation tonight by going through the budget speech and pointing out some of the discrepancies in the budget speech, which we understand is a political document, as all budget speeches are.
But the statements that are made in the budget speech we have real difficulty correlating with the numbers that are presented by the Finance department. There are many statements in this speech - and I will get to them as I go through it - where we believe the government, being so void of new initiatives, so void of any idea of how to deal with the economic crisis that's facing Yukoners, is quoting dollars as if they are new dollars, which are ongoing dollars in each and every budget. They're not new dollars at all.
Mr. Speaker, the Minister of Finance said that this budget is about jobs and balancing the priorities and about a vision for the future. Well, I have had Yukoners tell me, since the Finance minister delivered this budget, that he ought to get his eyes examined if this is his vision of the future of the Yukon, because it's been a very disappointing budget for almost every sector of Yukon society.
I don't know if the members opposite realize how demoralized the Yukon public is by the lack of economic leadership by this government. This government, which made a lot of promises in an election campaign some 18 months ago on what they called A Better Way. Yukoners are yet waiting to see that better way, and they haven't even been given any hints on what that better way is.
This budget is a budget by a government that is afraid - afraid to go forward with any new initiatives. It's a government that makes excuses for why they can't go ahead. It's a government that says it's a jobs budget, yet they've increased the operation and maintenance costs of government - once again - and have really abandoned the unemployed in this territory.
Mr. Speaker, when the government says that there will be approximately a $15-million surplus and that this government believes it's unwise to draw down the reserves below that level, I have difficulty with that statement - great difficulty with it. Because I don't think that the budget is totally honest with the figures that it gives to the public. When we had the financial briefing by the Finance department, we asked some very specific questions. One such question: were there allowances made for collective bargaining in this budget? The answer was no, that would come out of the contingency.
Well, we have a government who has failed to reach an agreement with the public sector for last year. We have a government who is now going to go back into negotiations for the teachers for a new year. We have a government who is going to have to be negotiating with the public sector for this coming year and years in the future.
Even if the settlement is a small percentage, it's going to be a substantial amount of dollars, and it's going to eat very quickly into that $4.5 million contingency fund that the Finance minister has set aside.
Another question that we asked in the lockup: have there been any allowances made for the increased electrical cost that's going to be faced by government departments because of the Faro mine closure and the fact that electrical rates will be going up? The answer, again, was no.
So I would suggest to the members opposite and to the Yukon public that we are going to be looking at a very healthy supplementary budget on the operation and maintenance side to make up for the shortcomings that weren't budgeted for in this budget.
So, therefore, even though the Finance minister says it would be unwise to draw down the surplus below $15 million, he, in fact, is quite likely to be doing that. Now I know there are going to be some lapses. There always are, but as the members opposite have always stood on their feet and said, the lapses are getting smaller.
They are getting smaller. We know that, because the capital budgets are getting smaller and most of the lapses are on the capital side.
Mr. Speaker, the government was so sensitive to the criticism that they knew they would endure from the Yukon public when this budget was tabled in this Legislature that they crafted a fairly political budget address speech and used drafts to project expenditures that have never been used in the Yukon before, such as the one on capital expenditures by jurisdictions.
Well, the capital spending in the Yukon has always been high on a per capita basis. This is nothing new. What is new this year, if they were being totally honest about it, is that we have less per capita spending than we've ever had for many, many years - capital spending that puts private sector people to work in the Yukon.
Another thing, when I look through this budget speech and how craftily it's worded, is under other items - and that's with regard to the capital expenditures on road improvements, which was never right out in the public like this before - including major bridge repainting, which would bring the total capital spending on the territory's principal roads this year to almost $9 million. Well, as one contractor said on the radio the other morning, in the past that was only one highway contract: $9 million. This is the total expenditure on capital. This is the total expenditure by this government on Yukon highways.
Now, I will speak more to that when I get in Tourism and Economic Development - as to why there should be more expenditures on Yukon highways.
The Finance minister once more spent a substantial amount of talk in his budget on the community development fund and how this was their area of job creation that was going to reduce the unemployment figures in the Yukon. Well, he may think so, but from the comments I heard on the radio, there's nobody else in the Yukon who does.
Not to say that the community development fund isn't liked by the communities, but if this is the only initiative that this government has to deal with unemployment in the territory, Yukon workers are in for a rough ride, a very rough ride.
Mr. Speaker, this government talks about this budget as building the foundations for the future. Well, I think they should go back to the drawing board and build stronger foundations, otherwise we're going to have a future that's going to crumple, because if this budget is to be the foundation for the future of the Yukon, the future of the Yukon is in for a very rough time.
He speaks of diversifying the economy, yet there is really nothing in this budget that leads me or any other Yukoner to believe that we're going to see any diversification in the economy outside of a whole lot more hearings, a whole lot more consultation, and nothing done; absolutely nothing done.
Mr. Speaker, as we go through the budget speech and I look at some of the areas of inconsistency and the areas of flip-flops, I need only to look at the one highlight of this budget where it says, "One of options that we are examining is the feasibility of interconnecting the Yukon's electrical grid with our nearest neighbours."
Well, what do you think about that?
Some Hon. Members: (Inaudible)
Mr. Ostashek: You think it's great. Well, the member for Teslin thinks it's great. Well, I'm glad to hear that. I will have much more to say about that when I get to the Economic Development portfolio.
And they're going to spend a whole $100,000 for that feasibility study. This is their answer to the energy needs of the Yukon. They don't have any ideas about what to do with energy in the Yukon, so they're going to make another study. That's all that they're going to do.
Some Hon. Member: (Inaudible)
Mr. Ostashek: We hear the kibitzing from the Member for Faro, but wait, we'll get to him in this budget too, Mr. Speaker.
Mr. Speaker, there are a number of things in this budget that I can support, and it's unfortunate that I'm going to have to vote against the budget as a whole package because it doesn't do the job it was supposed to do.
One of the places that I can agree with what this government is doing in this budget is putting more money into home care. It's a program that was initiated by the Yukon Party government, and I'm glad to see that the members opposite see merit in that. I'm happy to see that the Minister of Health and Social Services is continuing with that.
I do have a little bit of difficulty with the $128,000 that's going to be spent for a two-year pilot project on community-based mental health care. That's not to say that we don't require some, but again, when we've got a budget, I think, of Health of $111 million, we've got to look at how those dollars are spent and what's the best use of those dollars, and a lot of these services that we deliver can only be delivered through economies of scale. No matter how nice it would be to have all these services in every community, I just don't think that this government is rich enough.
We have this budget speech that speaks quite extensively about a youth strategy. I don't know if they're putting more money into it or not. If they are, it's very little. But here we have a government that's speaking about a youth strategy, yet it's the same government that failed to support the YES program, a program that showed it was working. But it wasn't their idea, so they threw it out. Now, they're coming in with some other youth strategy so they can say, "This is the NDP way." I have great problems with that, and so do a lot of Yukoners.
I'm glad to see that they're continuing with some of the initiatives in the areas of justice and community policing and working with community groups on Citizens on Patrol and other projects like that that were started under the previous Justice minister. I'm glad to see they saw some merit in some of those programs and are continuing with them.
Mr. Speaker, I spoke earlier where I believe they were announcing money that's been ongoing in the budget every year for different projects. I just want to give a couple of examples. I think, as we go through the line-by-line debate, department by department, we'll find out many, many more. But these are addressed specifically in the budget speech, and I think they need to be answered.
We have the Minister of Finance saying that Renewable Resources will spend $134,000 this year for the final field work on the Aishihik caribou recovery program. That's a program that's been ongoing for many, many years. That money was committed many years ago. So, what is the great initiative? What is the great foresight of this government? In fact, the Member for Faro was going to kill it during the election campaign. He was going to kill it.
Then, in Community and Transportation Services, we're announcing that we're going to spend $290,000 on dump facilities around the territory. Now, Mr. Speaker, did we never spend money on dump facilities before?
We have a government so void of ideas they have to announce ongoing funding as new initiatives by this government.
Mr. Speaker, it speaks of the Tombstone area along the Dempster. It is without a doubt one of the most scenic wilderness areas in the world, and it has the potential to become a major recreational attraction for Yukon residents and visitors. I couldn't agree more. But yet, here's a government that I believe a year ago said it was going to expand the study area. They were going to stop staking. What did they do, Mr. Speaker? They didn't stop staking; they created a staking rush, where hundreds and hundreds of new claims have been staked because this government sent a signal to the prospectors that they were going to withdraw it from staking. That's what they did. Staking's going on right now in that area, in the proposed expanded study area.
So what they have done is they, in fact, attracted interest to the area, not curtailed it.
Another area: "This budget provides for $400,000 for land and mineral assessments associated with the identification of protected spaces and special management areas." Mr. Speaker, if I recall, there's been a figure every year in the budget for mineral assessment of the protected spaces. This is not new. Absolutely nothing new. I just can't believe it.
Mr. Speaker, one of the other areas that I can commend the government for, and that's setting money aside for the Canada Winter Games in the year 2007. If the Member for Faro wants to be honest about it, that was a program that was started under the Member for Kluane during a Yukon Party government. That's where the idea came from. So I'm glad to see they're continuing it. No, I'm not criticizing them for it. I'm not criticizing them at all.
I'm happy to see that they're putting some money toward the Arctic Winter Games, but, again, that's something the government has done every time there have been Arctic Winter Games, Mr. Speaker.
So much for the budget speech. So much for the vision of the Yukon. The people of the Yukon can't even say that this government's vision of the Yukon is being looked at with rose-coloured glasses, because there's absolutely nothing in here that's going to give any encouragement to investors to invest in the Yukon.
Just one other point on the budget speech that I found remarkable and I just couldn't believe it - in fact, I went through the speech twice: land claims and devolution doesn't get mentioned until page 26, I believe. Page 26 of a 27-page speech, and then there's only a couple of paragraphs. This government, I believe, has abandoned their desire to settle land claims forthwith. The Government Leader, upon being elected, devastated the land claims department, fired all the corporate knowledge, brought in a whole new team of players, and they were going to solve land claims in a hurry. They were going to fast track land claims.
Now we hear First Nation governments complaining that they can't even get a hold of the Government Leader when negotiations are going on and that the people at the table are being very hard-nosed. They're taking a B.C. approach to settling land claims. This is the government that campaigned and swung the native vote because they were going to settle land claims in a hurry. They made much to-do 14 months ago and called a huge press conference on a couple of cooperation agreements with the First Nations, where they were going to fast track land claims. They were going to work quickly on devolution at the same time. Now we don't even hear about devolution. We don't even hear about that.
One of the things that this government could have done to create some optimism in the Yukon is to have done a better job on settling land claims.
Some Hon. Member: (Inaudible)
Mr. Ostashek: See? I'll just say to the kibitzer from Faro that, had we stayed in government, had we been elected, I'm sure that we would have been a lot further down the road to finalizing claims than where this government's at today.
We wouldn't have fired all the corporate knowledge in the land claims department and all the people that knew what they were doing and brought in newcomers. So much for the budget speech and the hour and some minute that the Finance minister had delivering it.
I want to turn to a few of the numbers now in the overall budget. They talk about money being tough and tight. Yet, the Finance minister said this budget is only $10 million less than last year's budget - not an alarming sum in a $441 million budget - almost half of a billion dollars. Ten million dollars is not an alarming amount. But what is alarming is that this budget, while the Government Leader and the Minister of Finance call it a pay-as-you-go budget, is not a pay-as-you-go budget. It is a pay-as-the-government-grows budget. That is what it is.
I think what concerns me and concerns most Yukoners is not the fact that there is a deficit. I believe that we can handle the deficit as long as we have surpluses. This government started out, when we left, with over $40 million in surplus, I believe, after the revotes took effect last year. They are now reducing that surplus to $15 million.
The other part that's scaring Yukoners is that we have a government that is halfway through its mandate in this budget - maybe not in days, but in budgets - and have brought in two consecutive deficit budgets. What was contained in the last budget and what's contained in this budget don't give any hope to the Yukon public that next year they can come in with a surplus budget.
I want to point now to an article that was put forward by the Canada West Foundation called, "Red Ink: Back from the Brink", and where it states that in the Yukon, in the past nine years, the Yukon territorial government has achieved five surplus budgets and four deficit budgets, and the 1997-98 deficit is estimated at $10 million, which now we know is much larger than the $10 million that was forecast in the main estimates. But if we look in those nine years from 1990 to 1998 and look where those surplus budgets occurred, two of them were under an NDP administration back in 1989-90 and 1990-91. One was $3.4 million; the other was $7.1 million. Then the NDP government went to a $9.6-million deficit and then on to a $64.1-million deficit.
Then a Yukon Party government took over and had three surplus budgets in a row, and the fourth one was a deficit budget. It was a $34.6-million deficit, but it was against, Mr. Speaker, a $60-million surplus - very sustainable. While the Government Leader and the Finance minister talked today about their budgets being sustainable, I don't believe they are sustainable, because they are increasing costs that are going to increase every year, and that's the operation and maintenance costs of government. Those costs are not going to go away with this budget. In fact, they are going to get worse.
I believe that by the time we get around to an election, we'll be lucky if we have any surplus left at all. The only way that could happen is that there would have to be a dramatic change in the philosophy of the members opposite, when they only have, at the very best, two more budgets, and the economy of the Yukon in a downturn.
So, Mr. Speaker, this is not a pay-as-you-go budget. It's a pay-as-government-grows budget, and that's been said not only by me, it's been said by many people out in the Yukon that this is not sustainable.
Again, they say that this budget is a jobs budget, yet we need only look to the operation and maintenance budget, let alone the capital budget. Let's leave the capital budgets out of it for now, because there's not enough there to even talk about really.
But if you look at the operation and maintenance of this government, how can the Government Leader, the Minister of Finance, stand there and say that this is a jobs budget when in fact, when you look at it, the operation and maintenance expenditures of the Executive Council Office have increased by 16 percent in one year. Yet, at the same time, when we have the economy of the Yukon in a tailspin, the Economic Development budget is cut by 17 percent. How is this going to put Yukoners to work?
Another point I want to make on some of the facts that are not facts in this budget is that I heard the Minister of Finance on the radio the other morning saying that they have put additional financial resources into Health and Social Services and Education. Well, Mr. Speaker, we're going to be looking for that government to explain where those extra resources are in Education because, when I look at the operation and maintenance side of this budget, the Education budget has gone down, not up.
The members opposite, when they were in opposition, criticized us severely, saying that we didn't care about education in the territory, that we weren't putting enough money into it, and yet we increased the Education budget each and every year we were in government. Now they cut the budget and go out and tell Yukoners that they've put more money into it.
Mr. Speaker, I fail to see, and I hope that the members opposite, when they have their chance to speak to this budget, can point out to me where I am wrong, that this is a jobs budget, when you cut Economic Development by 17 percent and you increase the Executive Council Office by 16 percent.
Well, that's what the numbers say. The Member for Faro is laughing, Mr. Speaker, but I can read, and that's what the numbers say.
Mr. Speaker, I don't know if members opposite really do realize how demoralized Yukoners are, how Yukoners were looking for some economic leadership in this budget to help offset the devastation that is being caused once again by the Faro mine going down.
Now, the Minister of Economic Development went on a huge tirade today when I criticized him on his ministerial statement on exports, and I said we find it laudable for a government to be working for exports. But this government needs to work harder on the near-term problems that we have, or we're not going to have a workforce to export anything.
Mr. Speaker, we have heard some business people out there, people in the construction business and the engineering business and that, where among them they employed in the neighbourhood of 600 people for the last five years. Their employment -
Some Hon. Member: (Inaudible)
Mr. Ostashek: The Member for Faro can make all the excuses he wants, but he's sitting in that chair over there. It's going down to less than 100 people. That is going to be devastation to the Yukon. That's a huge payroll that we no longer have.
We don't expect that the government can look after all the problems. They can't look after low metal prices; they can't look after Anvil Range going broke; they can't look after low gold prices. But what this government can do, and should be doing, is putting out some policies that encourage investment and don't discourage investment. That's what this government should be doing, and if they were a responsible government, that's what we'd be doing. They pay lip service to it. As I said today, they can talk the talk, but they can't walk the walk.
They make all kinds of promises to the public. The public has yet to see any of those promises bear any fruit or bear any jobs for Yukoners.
Mr. Speaker, as I said in my interview with the press, if I were a heavy equipment operator in the Yukon looking for work out of this budget, I'd be very disappointed. If I were a small contractor in the Yukon hoping to be able to survive and get a government contract or two, I'd be very disappointed. If I were a trades person, I'd be very disappointed.
In fact, Mr. Speaker, tonight at supper time we even heard that their own constituency - the union people - are very demoralized by the lack of work that's being created by this government. That's their own constituency, not the Yukon Party constituency.
So it's unanimous. They have unanimous support for their budget. Everybody in the Yukon hates it and thinks they've done a really poor job on it.
Mr. Speaker, I want to refer to a couple of other articles that I think this government should listen to very, very closely, take heed from, roll up their shirt sleeves, start burning the midnight oil and trying to make some changes in how they're dealing with the economy of the Yukon or we're going to go the route of British Columbia.
Mr. Speaker, this is an article I read just a few days ago, where it speaks of MacMillan Bloedel and their cutback. Mr. Stevens announced on January 21 that he would fire 2,700 of the firm's 13,000 strong workforce by the end of the year - 1,300 of those layoffs would be in British Columbia. The CEO will sell, spin off and close several company-owned operations, including the firm's vaunted research and technology centre in Burnaby. The company's dramatic convulsions sent shock waves across B.C., but it is just one sign that the province's former robust economy has fallen on sorry times. Punitive NDP fiscal policy, combined with a legion of anti-business and pro-preservationist government initiatives actually started taking their toll more than two weeks ago. I caution the Minister of Renewable Resources that he doesn't fall into the same trap with his protected area strategy. I caution him.
It is a pretty sorry state down there. Mining exploration expenditures totalled $75 million last year, far short of the $200 million that they feel they require annually in British Columbia to keep the mining industry going. In the first half of last year alone, 46 firms relocated into a low-tax, business-friendly Alberta.
Now, Mr. Speaker, we have the same scenario playing out in the Yukon today, where many firms are talking about packing up and moving their offices to Alberta, not because this government hasn't spent millions and millions of dollars on capital projects, but because this government is not doing its job in creating policies that are going to encourage investment in the Yukon.
They could live with a smaller capital budget if they could see a light at the end of the tunnel that this government was serious, really serious, about attracting investment to the Yukon and not bringing forth policies that are going to discourage investment.
And, Mr. Speaker, for this government to sit there and say that they can't do anything because it's not their fault that metal prices are low, it's not their fault that gold prices are low - well, I'm sorry. I don't accept that, and Yukoners don't accept that.
This government could do a lot and it doesn't take a lot of money. What it takes is the initiation of some very friendly policies so that people and businesses will want to invest in the Yukon and create jobs in the Yukon. It doesn't take a lot of money, but they certainly don't want to see government continue to grow, Mr. Speaker.
I have another report here, from the Fraser Institute, and this is a survey of mining companies that are operating in Canada. I think the Minister of Economic Development ought to pay heed to it, and if he hasn't got the report I would be happy to make a copy available to him. It's got some very interesting information in it.
There's a series of graphs in it on the mineral potential index of the different regions of attractiveness. In mineral potential, the index rates the Yukon as number three in Canada. Very good. Only the Northwest Territories and Ontario come in ahead of the Yukon.
Then, the policy potential index goes on and rates the policies of government. The policy potential index is a composite index that measures the effects of government policies, including taxation and regulation and land use on attracting new exploration investment. While Alberta rates poorly on the mineral potential index, it is the most attractive province for new investment in terms of its policies. It scored 90 out of a possible 100 points, Mr. Speaker. On the other hand, British Columbia is a region that is rich in mineral potential yet its policies are the lowest rated in the country by a substantial margin. The next worst regions are the Northwest Territories and Prince Edward Island, but they're still three times more likely to attract investment than British Columbia.
The Yukon is way down the list and is only number five from the bottom. Government policy has a lot to do with investment in the Yukon.
Now, I realize that the Yukon government doesn't have full control of resources and that the federal government policies do have an effect, but there are things that the territorial government could do and should be doing to help alleviate that.
So, right now - I'm sure this information is a bit old; it's not up to date - but we rank third for investment attractiveness for mining exploration when you figure in all the different scenarios. We rank third despite our eighth place rating on policy, as a result of our excellent mineral potential.
I wonder what the cost to government is of all this if we continue on the path that this government has started on of putting roadblocks in front of mineral development in the territory. Mining companies are sending signals to the government now to be cautious of how they proceed with the protected areas strategy, to hurry up land claims - it's one of the biggest barriers, and I'll get to that here - and to get the land tenure certainty in the Yukon, so we could create a lot of jobs in the mining industry. We need to work very hard on it and very diligently. We can't slip backwards.
From the people I've talked to out there now, that's exactly what's happening in the Yukon. We are slipping backwards as a place to attract mining investment, and that is unfortunate, because we were heading in the other direction just a very short time ago.
Another point they make in here for the Minister of Renewable Resources is the most serious threat of investment, which is the uncertainty about protected areas. It is one of the most serious threats.
Environmental regulation - this is something that the federal government is responsible for yet, but the territorial government is moving in that direction at some point. We're not rated that bad. Well, yes we are. This is rated as a deterrent exploration. They've switched it on me. B.C. had the greatest deterrent with their environmental regulations. The Yukon is number four from the top. So, these are areas that I think are very serious areas that the government has to work on.
On overlapped: we don't have to deal with that because the federal government does.
Land claims uncertainty - we're in the top half of a deterrent to the investment of exploration dollars. That does not bode well.
All of these things, Mr. Speaker, really aren't that important when everything is going well. When the economy is perking along and everybody's working, we can live with some of these negatives. Where we run into the difficulty is when we have the economy going into a tailspin now. These things are then brought to the forefront and, as a result, it hampers in attracting that investment. The members opposite know that investment dollars will go where they figure they get the best bang for their dollar, so we need to be very cognizant of that.
Here is another one I want to draw out for all members of the government, and why we continually say that they should be spending money on infrastructure and not on bigger government. The percentage of those who rated lack of infrastructure as a strong deterrent to exploration investment in the Yukon is number two in Canada as a deterrent. Our infrastructure - no matter how good the members opposite may think it is - is the second worst in the country. That's how it's perceived by the mining communities who spend their dollars here, and that's why we said all during our mandate, and we continue to say, that investment in infrastructure will pay back to the Yukon many, many times what they put into it, Mr. Speaker.
Social economic agreements come in the middle of the pack.
So these kinds of things are areas that the government needs to be very cognizant of and continue to work on, because every dollar that we can attract now is needed to be invested in the Yukon.
I point these things out, Mr. Speaker, in this budget debate because of my disappointment in where the dollars have been allocated in this budget. I have not once asked this government to go into debt. I have not once asked this government to cut spending on health care, education and social services. We have not said that at all, but we did say and we continue to say that they have to control the cost of government and they have to find financial resources from other parts of their operation and maintenance budget when their health or education costs are increasing.
Not once has the Yukon Party said that we should cut those, even though we're accused of it almost every time the Member for Faro gets on his feet, but there is no basis to it. If you look at all the budgets we had, we put more money into health care, more money - I'm talking about operation and maintenance dollars, not capital dollars.
Well, Mr. Speaker, the one big difference between my administration and this administration is, when we were in power and we took over the first phase of the hospital transfer, we didn't increase the size of the operation and maintenance budget of the government. Take a look at it. From the time we came into government to the time we left, the operation and maintenance costs were down and we took over devolution. We didn't increase the cost of government. Those are the areas that we need to really be looking at.
Mr. Speaker, those are the kind of problems that government can do something about and by controlling the cost of their own shop, they've proved that they are a responsible government and that alone attracts investment to the Yukon.
So, some of the things that this government could do in the near term is to develop some policies that are more conducive to private sector investment in the Yukon.
You know, Mr. Speaker, when we have a budget that comes down and is condemned by the private sector and has raised alarm bells by union employees who work for private sector firms, there is something wrong with that budget. That's the message that we're getting in the few short days that that budget has been out there in public.
Mr. Speaker, when we look at the Community and Transportation Services budget, which creates a lot of activity in the Yukon, we're disappointed in the size of the capital budget. It is one of the departments, I will say, whose operation and maintenance costs have dropped minimally. That is one good thing I can say for it, but I believe that the government should have found more dollars for capital projects.
I say to this government, if you were to have only found an additional $10 million to put on the capital side of the ledger - take it away from the operation and maintenance side - you would have created some optimism in the Yukon. The Member for Faro is shaking his head. He doesn't want to believe it. Well, Mr. Speaker, he ought to get out there and talk to Yukoners. He says he always consults with Yukoners. Well, I'm sure that Yukoners are telling them the same as they're telling us. They're not happy. They're not happy at all.
As I said earlier, Mr. Speaker, this government seems to have abandoned the settlement of land claims. We hear no mention of devolution any more, none whatsoever. We have commissions working on policies that don't seem to be going anywhere. I can remember being severely criticized by the Member for Watson Lake for not having a forestry policy in place in less than a year when we started working on it. Yet he's been over a year, doesn't have a forestry policy. I don't think he's even any closer to having a forestry policy than we were.
Mr. Speaker, the commissions themselves have been a great controversy in this Legislature, and I think that they are a very expensive way of developing policy. I believe that Yukoners have seen that they are a very expensive way of developing policy, and that money could well have gone to creating capital projects, rather than being spent on policy development that seems to be going nowhere.
I have been criticized for not respecting the Cabinet commissioners in this Legislature, not asking them questions when they give statements. I want to put on the record now why I don't ask questions of the Cabinet commissioners.
I had people come to me over the last six months - several people with complaints of various Cabinet commissioners with perceived conflicts of interest. So, since we have a conflicts commissioner, I wrote to him and asked him for his interpretation of what guidelines Cabinet commissioners were covered by in conflict of interest.
I received a letter from Mr. Hughes the other day. I will table them, Mr. Speaker, if the members opposite want them. I really don't have any difficulty with tabling them.
"With respect to the Cabinet commissions, I have been advised by the government" - this is what Mr. Hughes says, he has been advised by the government - "that Cabinet commissions are advisory in nature. They are, in essence, interdepartmental policy working groups, headed up by" - get this, Mr. Speaker - "headed up by a deputy commissioner" - that's what the government told the conflicts commissioner - "who reports to one of the government MLAs. The commission has no operational responsibilities. They will provide advice to Cabinet, but will not make any final decisions or implement the decisions of Cabinet. Ministers remain responsible for decision making."
I don't have any difficulty with Cabinet commissions giving reports in this Legislature on where they're at with policy development. I do have difficulty when I'm given commissioner's statements that are treated in the same respect as ministerial statements, w
hen the government itself has told the conflicts commissioner that they don't have any powers.
Mr. Hughes goes on to say, "As I understand the position of the Cabinet commissioner, it has no statutory base or authority, nor do those holding such positions have any operational authority or responsibility. Cabinet commissioners are MLAs designated by Cabinet to advise its members on specific subjects. The background work, policy preparation and research into four specific areas are carried out by employees or others in a contractual relationship with the government, working as a commission, with the head of the group being designated a deputy commissioner."
That person reports to the Cabinet commissioner, who, in turn, advises Cabinet. The sole responsibility of the Cabinet commissioner is, as such, an advisory capacity and he holds no decision-making authority for either Cabinet or the Legislature as a whole. What Mr. Hughes is saying is that the Cabinet commissioners, by what the government has told him, are nothing more than a messenger between the commission and the Cabinet. Like a courier service. I would suggest to the government that he investigate getting Loomis or one of those courier services, because they would be a heck of a lot cheaper.
That is my difficulty with the Cabinet commissions and the fact that there doesn't seem to be any product coming out. I'm not the only one to say that. Many Yukoners have said that in the last few weeks.
I want to move on to some other areas that I need to cover in my presentation to you this evening. I want to spend some time on the Economic Development portfolio. I want to speak about rate relief - or, should I say, the lack of rate relief - that this government has implemented.
But I want to turn first to the phrase in the budget speech of the $100,000, which the Member for Ross River-Southern Lakes - the Minister of Community and Transportation Services - kibitzed in the background was a great idea. Now, this is the beauty of Hansard. I took the opportunity, after seeing that phrase in the budget speech, to go back and review Hansard from when the Member for Faro was in opposition. I want to share with some of the members who weren't in the Legislature at that time what his thoughts were on an inter-tie with our neighbours when I was a Government Leader and the minister responsible for energy.
Here's one quote from April 3, 1996: "We all remember the laughable motion the Government Leader tabled about the interlocking power grid among Alaska, British Columbia and the Yukon - this wonderful visionary statement of the Government Leader's, which had the people in Alaskan and British Columbia legislatures falling out of their chairs as they realized what the Government Leader here was proposing."
This is the Member for Faro: "It was a system whereby all three jurisdictions sold power to each other. He did not have a clue about the foundation, the cost or the economic viability. It was just some airy-fairy concept of what he wanted to see in the future."
This is the Member for Faro:
"It was ridiculous. We pointed out the folly of the motion. Jurisdictions that all had surplus power at the time could not sell power to each other. The motion was never heard about again. That has been the vision of the Yukon Party when it comes to energy.
"The government's approach to energy policy has been to pump and pump coal in every speech that we hear, whether it is the throne speech, the budget speech, or any economic speech, as such the Department of Economic Development energy action plan.
"The words do not match the action we've seen on coal."
Again, they're criticizing us for coal, which they now say they support, Mr. Speaker. Now, all of a sudden, this seems to be a great idea to the Minister of Economic Development: "We're going to do a feasibility study." When we were going to do a feasibility study, it was pure folly.
Here's another statement he made on January 4, 1995, on the same subject: "Everyone will all remember the interlocking power grid between B.C., Alaska and the Yukon, and the Government Leader had a special meeting with the Governor of Alaska when we were there on a legislative exchange. Of course, the big vision man - our Government Leader - was told that that particular proposal was much too expensive and not feasible. The editorial says, 'And Ostashek has never mentioned it again.' That particular motion the Government Leader tabled in the Legislature has never been brought back. Why? Because it was a dream scheme and we proved it."
It was a dream scheme. Now, they've got it in their budget. That's the hypocrisy of the positions of the NDP. It wasn't good when they were in opposition, yet when they're in government, it's the greatest thing since sliced bread - we're not against coal, we're not against an interlocking power grid, we're not against any of these things.
Mr. Speaker, he called us - what - "The band of the loony right. Ideologues. We live in a hazy world of railroads to Carmacks, pipelines to Watson Lake and interlocking power grids between Alaska, B.C. and the Yukon with all three jurisdictions selling power to each other regardless of the cost to hook up to these jurisdictions." That was the Member for Faro when he was in opposition.
Mr. Speaker, now they don't have any idea of how to solve the energy problems of the Yukon, so all of a sudden those ideas from the loony right look pretty good to the loony left.
This is unbelievable. It's no wonder that the people of the Yukon have lost faith in this government. I can't believe it, Mr. Speaker. They have no vision. They have no idea what to do, so they have to go back, and they can't even go back and pick on some of the things that they might have been able to support a little bit. They've got to go back and pick everything that the Yukon Party was doing, everything that was stupid that the Yukon Party was doing, and now, it's great. We're going to solve all the problems for Yukoners. My God.
Some Hon. Member: (Inaudible)
Mr. Ostashek: I don't think I'm getting carried away at all. I think just going back to Hansard proves it.
Some Hon. Member: (Inaudible)
Mr. Ostashek: I'm just getting warmed up, Mr. Speaker. That is right.
Mr. Speaker, as I said, there are some things in the budget speech that we do agree with and we don't have any difficulty with. We do support them. But there are other things that we don't support, and I will continue to point some of those things out. I had another document here that I can't find right now, but it doesn't matter because I know exactly what it says. It was another quote from Hansard, but it was one of mine. I want to clear the record right now, and maybe the Member for Faro will listen this time so that he wouldn't be bringing it up again and accusing the Yukon Party of going to kill rate relief, and then in fact that's exactly what the NDP government has done.
They've killed rate relief. They campaigned on having reasonable and stable power prices. They campaigned. They took a petition around saying that the Yukon Party was going to kill the rate relief and they were going to be the saviours if they were elected.
Mr. Speaker, the member opposite knows. He's stood on his feet several times and said that. I'm going to put the member on notice now: the next time he stands up and says that we're going to kill rate relief, I'm going to call him on a point of order because he knows it's not true. He was in this Legislature. I don't have the Hansard copy with me tonight, but on April 25, 1996, I said in this House to a question from the Member for Riverdale South at the time that if we didn't have a policy in place to get rid of rate relief over seven to 10 years, that after December 31, 1996, rate relief would be extended. How much clearer can you say it than that? So, I just put the member on notice. The next time he stands up and says that we're going to kill rate relief, I'm going to call him on a point of order because he knows that that's not true and he continues to say it.
Well, I'm disappointed in this government, which promised the Yukon people in their A Better Way - and I will go through the A Better Way when I sum up my speech here - that they were going to be the saviours to those on electrical rates. I don't know what it is and I hope that when we get into line-by-line debate, I can find out what it is, but I've had more complaints from people this winter that their power rates have already gone up and they don't know why.
They don't know why, but I do know that I wrote a letter to the minister responsible for the Energy Corporation - to which I have not received a reply yet - of where, because of their new and improved rate relief program, they're only going to put a portion of the money that we were putting into in this fiscal year, I've had complaints from several constituents that they're being ripped off by the Energy Corporation. And how are they being ripped off, Mr. Speaker? By the billing days being extended to 34 days, and I believe in some cases, 37, 38 or 39 days. Yet these people, once they've exceeded 1,500 kilowatts of power no longer get rate relief. Well, if you're going to extend the billing period by 10 days, you're automatically going to go over the rate of 1,500 kilowatt hours if they're close and get no rate relief.
I'm still waiting for a reply to that letter from the minister and hope that he will be able to straighten it out for my constituents, that this is ridiculous, that they've not only raised the bar so high that it's hard for the constituent to stay under it, they then raised it higher yet by increasing the billing period by some 25 percent in some instances. I don't think that's fair. I don't think that's fair at all, Mr. Speaker.
Mr. Speaker, when we look at this budget, and it talks about a jobs budget, and we look at the fiasco that's been caused by Government Services with the Old Crow school, the only major construction project that this government has going this year, a government who campaigned on putting Yukoners to work, said that the Yukon Party wasn't doing a good enough job, that we were hiring too many people from outside when, in fact, our track record was better than the previous NDP government, they blew it. They totally blew it and they're doing nothing to correct it.
Now, we have the Minister of Government Services wobbling all over the place saying, "Well, we just bought $1.5 million worth of contracts here from Arctic Inland Resources and Dawson City has got the bulk of those contracts." What he failed to say is that Arctic Inland Resources is acting as an agent for outside suppliers. And they're going to get a few bucks off it but not near the bucks had we manufactured the trusses and that insulation in the Yukon, especially at a time when our unemployment is high and going to go higher.
The NDP has failed. It has failed the people in that respect.
Yet, we have asked questions for two days and I'm still not certain that this school is going to be offered out under a fair tendering process. The minister says, "Yes, no, maybe. We have to get as much local employment in it as we possibly can." And we fully support local employment.
All kinds of caveats can be written into the tender, so that there is local employment. Percentages can be set. But, in a time when we don't have any major projects going in the Yukon and we have a lot of contractors that are looking for work, I think it's very important that this government give everybody a chance to bid on this job.
Mr. Speaker, I heard the Government Leader yesterday, I believe, in Question Period, say that they're not going to break the law, because they don't have a Yukon hire policy in place yet, even though they promised Yukoners in the election campaign that they would have one in 90 days. Oh no, we didn't promise that. We only promised we'd have a process in place in 90 days. We didn't say anything about having a policy in place. So, we're not going to break the law. We're still working under Yukon Party rules.
Well, Mr. Speaker, let me clear the record. The Government Leader knows that they're not working under Yukon Party rules. He's been in this Legislature for many, many years. He also knows that they're working under rules that were put in by a previous NDP administration - his rules. We did a review and put more Yukoners to work than what was under those rules, but it wasn't our policies; it was their policies.
They also tried to say that we didn't let contractors bid on the hospital. Wrong. The hospital was handled like any other major project, where they prequalified, and Yukon contractors, unfortunately, didn't prequalify.
Now, the members opposite, if we had moved in, would have accused us of political interference. Now that we didn't, they accuse us of not allowing Yukon contractors to bid on the job. Utter nonsense.
This is again from a government that has lots of words and no action for the Yukon people.
Mr. Speaker, when we get into the Government Services debate, we're going to have many questions for the Government Services minister on contracts, contract tendering and how things go in those areas.
Mr. Speaker, I want to turn a little bit here to Renewable Resources, and I see that the Renewable Resources budget is up by some five percent on the operations and maintenance side.
Some Hon. Members: (Inaudible)
Speaker: Order please. Order.
Mr. Ostashek: Thank you, Mr. Speaker. I was just going to tell them that they're going to get their turn. I would appreciate it if they'd allow me to finish.
Mr. Speaker, Renewable Resources operation and maintenance budget is up by some five percent, and we will get into the details as we get into department-by-department debate, but I do want to say to the Minister of Renewable Resources right now that I'm still waiting for the results of the audit that he said he was going to order last December on a $25,000 alleged misappropriation of funds. It seems to me that we've waited an awfully long time to get an answer to that. I hope that we're going to get that answer in the next day or two. I also hope that we're going to get a more timely list of contracts from the Government Services minister this time around than last time. Have we got them already?
Mr. Speaker, at this time in my budget debate right now, I just want to make a few comments on how he handled the situation last fall, how he stonewalled us until the last day of the session, and then he finally caved in and gave us a list that was there all the time. Then, when we wrote back to another minister requesting contracts, he waited - his Department of Health and Social Services - until the day that this session started, and they delivered a bundle of contracts to our office that morning.
Unbelievable. This is a government that says it is open and accountable. We got the contracts. Our staff is still working overtime going through them.
When we look at Tourism, my Tourism minister, when he's giving his budget speech, will speak more to it, but we believe that the Tourism budget has gone down, not up.
Some Hon. Member: (Inaudible)
Mr. Ostashek: Sorry, my Tourism critic.
There will also be a lot of questions on the Yukon Housing Corporation, as to what they're doing and what benefits there are to Yukoners.
I have taken considerable time going through this, and I just want to wrap up by going through this document that makes the Government Leader warm and fuzzy, as he said today. Isn't that what he said today? This document, A Better Way, makes him warm and fuzzy. I think that's what I heard him say.
We critiqued A Better Way after this government had been in power for one year. What did they say in A Better Way? "Conclude all outstanding land claims as quickly as possible." What has been accomplished? Zilch. Nothing. They didn't mean that. It was somebody else's fault.
"Make the negotiation of the DAP process a top priority in implementing the Yukon land claim." We haven't heard a word about DAP in days and days and days. I think they've given up on that one, too. "Settling land claims must come first and not be jeopardized by an unrealistic federal timetable on devolution. Negotiate in good faith and work with the Yukon First Nations as willing and cooperative partners." We hear all kinds of criticism now from First Nations on how this government is not serious about land claims and about how this government is not putting forth the energy into land claims, in spite of the cooperation agreements that were signed last January by the Government Leader with the big press conference and all these great things that were going to happen in the Yukon. Nothing is happening. In fact, things are going backwards in those areas. I say that there is a real lack of leadership.
"Establish a community development fund". They did that, and we remember the Elsa curling rink. We remember it.
Here's a good one: "Revise contract regulations and procedures so Yukon businesses get their fair share of Yukon government contracts, rather than the Yukon Party's policy" - get this, Mr. Speaker - "of building Alberta's future."
What a disaster.
If I were members on the opposite bench, I'd hang my head in shame. They have failed miserably.
Another one they say is: "New Democrats support the healthy mining industry." Another slip. As I said today, they can talk the talk, but they can't walk the walk.
The mining industry is still waiting to see what this government's going to do for them. Where's the policy? "Assist Faro." Well, they did do a lot of work in Faro, and it was unfortunate that they put all their eggs in one basket and didn't have any other idea of how to deal with the economy, except the operation of the Faro mine.
Here is a great one, Mr. Speaker. This one makes me warm and fuzzy, too. Unbelievable. "New Democrats believe the unemployment in the Yukon is simply too high (September 1996, 7.8 percent). We need strong positive action from a territorial government to focus on job creation." They have abandoned job creation.
Can you imagine, Mr. Speaker? Eighteen months in power; these are the promises they made to the Yukon people. "Increase the number of tourist attractions." Now we're going to build a community centre with Tourism dollars, on the waterfront in Yukon - only if the Liberals give them a big cheque.
"Quality health care and strengthen home care and outpatients." I give them E for effort in those areas. They've worked very hard in those areas, and have made some accomplishments. They have also made some headway in stronger and safer communities. They have done some things there.
No matter how bad a government is, it can't be all bad.
"Pay down the social debt." Well, they may be paying down the social debt but their refusal to introduce a child tax credit for lower income families, despite other provinces taking action, certainly wasn't the right way to go. And I think that, while we pay down that social debt, which we feel is very, very important, they'd better start thinking long and hard about how they're going to pay down the economic debt that this territory is facing because of their mishandling of the economy.
Here's another one that my Justice critic really likes: "create a Yukon police commission." We haven't heard a word about that one.
Some Hon. Member: (Inaudible)
Speaker: Order please. Order.
Mr. Ostashek: We haven't heard a word about that one.
Some Hon. Member: (Inaudible)
Speaker: Order please. Order.
Mr. Ostashek: And we talk about affordable housing for all Yukon people through well-planned land availability and supply. Good words. People are still waiting to see something happen. They've started on a mobile home strategy. We've yet to see how they implement it.
"Housing is a basic need for our citizens and government must be prepared to support these programs to meet this need." Again, we're going to see how they progress with that.
"Caring for our resources - exercise leadership by working with Ottawa, First Nations, industry and other interests on an interim allocation of forest resources in order to get the loggers back in the woods." Well, we're still waiting. I think they're lost in the woods studying beetles, bats and closed sawmills, Mr. Speaker. That's where they're at. I shouldn't say the commissioner's job was useless. He was doing something. He was practising to be a tour guide.
Another part that concerns me about that, though, is that the forestry commissioner has refused to participate in forestry meetings that were held by the federal government, for the reason that the Yukon government is becoming more aware of its rights as a government. I think that's wrong, totally wrong. I think he should have participated in those meetings even if only just to observe what was happening.
All they have done so far that I can see in those areas is hold a workshop that was almost identical to what was held by the Council on the Economy and the Environment when we were in power. Again, a reduplication of what was going on.
While they did have some support from First Nations to start with, now we see the First Nations developing their own forestry policy. Yet, here we have the Government Leader talking about the high level of cooperation in the agreements that he signed with First Nations some 14 months ago. So I think we would have to give them a failing grade on their development of forestry policy in the Yukon.
"Commitment to impose an immediate moratorium on the Aishihik caribou recovery program." This is in black and white in that book, A Better Way, that makes our Government Leader warm and fuzzy.
Some Hon. Members: (Inaudible)
Mr. Ostashek: "Full wilderness protection of the Arctic National Wildlife Refuge to protect and preserve the Porcupine caribou herd." They can't even look after the problems in the Yukon and they're going to go and solve the problems in the United States - such arrogance.
Something tells me they didn't intend to be elected when I read this document.
Some Hon. Member: (Inaudible)
Mr. Ostashek: Mr. Speaker, they go on to say they're going to protect wildlife habitat. Well, that's a very interesting one because we've watched the fiasco while the Minister of Renewable Resources' department murdered - what - 14 grizzly bears in Whitehorse last year. That's one way to protect the habitat - kill them all, get rid of them, auction them off, sell the hides.
Why? Because they didn't have a comprehensive plan to deal with this. I'm going to be asking the minister in this session: does he have a plan to deal with it this year or are we going to continue to destroy these valuable animals? I just think that's incomprehensible. It's just totally not acceptable.
Some Hon. Members: (Inaudible)
Mr. Ostashek: Territorial parks and protected spaces - he says here "work with the mining industry to conduct mineral assessments of candidate parks or protected areas as part of the definition of boundaries." Mr. Speaker, we heard the minister say that he's going to fast track the protected areas strategy. We fully support a protected areas strategy. We don't have any difficulty with it. But I caution the minister as to how he goes about it, and I urge him to keep the mining community fully involved because they don't believe they're involved now. They believe they're being consulted after the fact, not before the fact. I caution him as to how much area he's going to put into interim protection.
"We have been working toward a target date of the year 2000. I don't think we need to fast track this issue, especially not at a time when we are trying to attract mining investment to the territory." I think the departments are working against each other here. These sorts of initiatives do cause concern to investment dollars coming to the territory.
Well, then we go on to energy supply planning, "promote energy conservation." That's what they say. What did they do to do that? They use more diesel. They shut down Aishihik Lake because the Member for Kluane couldn't launch his boat any more; the water was too low. He wants to be able to launch it from his doorstep, so they shut down the power generation and let the water level build up.
That cost the ratepayers $4.5 million. It cost the ratepayers $4.5 million to buy that extra diesel fuel, and also then their big supply. These are things - I mean, the Member for Faro has the audacity to accuse me of being on dream when I talked about an inter-tie. This is what his dream is to conserve energy - supply energy planning, introduce a $2 million loan program to enable residents with electrical heat to switch to diesel. I don't know what problems he solves there.
Is this showing some respect for the environment? Here we've got the minister responsible for energy introducing a $2-million loan program to tell people to switch from electricity to diesel. We have the minister responsible for the environment going down and chastising people at a conference on global warming and saying that we have to be careful about how much CO2 the rest of Canadians pump into the air, not what Yukoners pump into the air.
Mr. Speaker, the inconsistencies in this government are just unbelievable. It's about as consistent as the Member for Faro, in his capacity as the Minister of Economic Development, writing us a letter supporting the internal trade agreement, then having the Member for Whitehorse Centre go down and kick the heck out of it at a meeting in Ottawa and say, "I ain't going to sign it." And the Government Leader not knowing whether he was in Ottawa and for what reason.
Then, as we get on to this - this document that makes the Government Leader warm and fuzzy is a great document - "stabilize and make affordable power rates". What has happened since the NDP government came to power? We've had three power rate increases - substantial ones. We've had little, minor decreases that still have to be made up for somewhere. The only reason we had a decrease is because the minister's idea of a three-percent surcharge for another year got turfed out, and they wouldn't allow him to put it in interim, that's why. I've had constituents phone me and tell me about their power bills.
Then, the next one is the best one: "continue and improve a rate relief program". I don't know how many days I stood in this House and was chastised by the members opposite, accused of the most wild accusations of us wanting to get rid of rate relief. They campaigned on it.
Yukon people have told me that if there's one reason that they'd never vote NDP again, it's because of the misinformation that they spread on rate relief and the fact that they went and did exactly what they accused us of doing, when we had no intention of doing it. They came in and have killed the rate relief program.
Now, they're talking about studying it and coming back with a targeted rate relief program next fall. I urge this government to put partisan politics aside, admit your mistake, and bring in a rate relief program for all energy users to offset the increases that are going to be coming with the Faro mine shut down.
Now the Minister of Economic Development, responsible for the Energy Corporation, says they're not going to be 30 percent - a figure that I used - but it could possibly be 30 percent. I've heard rumours on the street it could be higher than that, and the minister assures us that they're going to be lower than that. Well, they could possibly come in at 29.5 percent so that it wouldn't make a liar out of the minister. But I don't know whether they will or not. Nevertheless, whatever they come in at, I urge this government to seriously consider bringing in a rate relief policy that will apply to all users.
We need to do that, because this is going to have a devastating effect on the economy of the Yukon. They were in a rush to get out of the House on December 15 last year because they had some pretty terrible announcements to make. One of them was an OIC they put through, which said that the Utilities Board could consider a lower rate of return in times of need in the Yukon when there were power problems.
Well, that is just going to make the problem worse if, in fact, the Utilities Board ever gives it to them. I doubt that they will. I really doubt that the Utilities Board will use that option. But if the government feels that the Energy Corporation is making too much money, they have the ability to give that money back to the ratepayers through rate relief. They don't need the Utilities Board to lower the rate of return by a couple of percentage points. They can quite easily do it through rate relief, through the dividends that are paid to them by the Energy Corporation. But, no, they won't.
"Mitigate the destructive environmental effects of water use for hydro at Aishihik Lake and throughout the southern lakes." Well, we've already said what the rationale was for trying to build up the water levels in Aishihik Lake.
The next one's collective bargaining. I spoke of it a little bit and said there's nothing in the budget to allow for it, and I can understand why the government didn't put a figure in there, because then it's a big target for the unions. But nevertheless, it still has to be dealt with. And what have the teachers said? "The honeymoon is over."
Now, I want to speak a little bit on this, Mr. Speaker, because this is very important. We were chastized by the members opposite when they were in opposition for tax increases. They said they were absolutely not required. They continue to say that, yet they're not prepared to give any of that money back to the taxpayers. If it's not required, why don't they give it back?
How can they stand there and say it's not required and then go ahead and spend it? Not required - they can get along without it - then they ought to give it back to Yukoners, if it wasn't required. That was the same complaint that the unions had. They also said that the two-percent increase wasn't required. It didn't have to go in, yet they weren't prepared to give it back to the unions.
They have to understand when they stand here day after day after day, in the opposition benches, chastising the government and saying that it's not required, those union people have a legitimate right to expect that, if an NDP government was elected, that money would be returned to them. They told everybody in the Yukon, time and time again, that the rollbacks weren't required and tax increases weren't required, yet they were not prepared to give them back to the Yukon public.
Now, they can't say that they can't give them back because we raised the operation and maintenance cost of government, because we didn't. The figures in the budget book, if you turn to the addendum in the back of the budget address and look at the total cost of government - but the operation and maintenance costs are the ones that are the most revealing. If you look at 1993-94, this was the first full budget that the Yukon Party had. The operation and maintenance costs of government were $352,485,000. In 1996-97, when we left office and after the NDP government came in, but with our 1996-97 budget, the operation and maintenance costs to government were $346,821,000. So, the Member for Faro can't say that the operation and maintenance costs went up under our administration. They didn't; they went down.
Along with this, we did have devolution from Ottawa. The numbers speak for themselves. The main estimates are here for a historical comparison.
Some Hon. Member: (Inaudible)
Mr. Ostashek: He says table them. They are in the budget address that the Minister of Finance read the other day.
I'm comparing historical main estimates from year to year to year to year. The 1998-99 main estimates are $370,360,000 - the NDP government. That is almost $28 million more than the first year that the Yukon Party government was in power, and it is more than $30 million more - about $35 million - than our last year in office, Mr. Speaker.
So, they're going up quite dramatically under an NDP government, and that's why I say that these two budgets that have been brought down by an NDP government are typical NDP budgets, which concentrate on large government, lots of government, and nothing for the private sector.
One of the other things they were going to do was restore confidence in the Workers' Compensation Board - another area I believe they've failed in miserably. They haven't restored any confidence; they haven't cut the costs. I believe our critic said in the last session that we had some of the highest administration costs, if not the highest, in Canada. They haven't done anything to correct the problem.
I'm not saying that these things are easy, but they chastised us day after day after day in this Legislature because we didn't have instant solutions to the problems. They had all the answers when they were in opposition. Now that they're in government, they're telling Yukoners, "We can't do anything about it. We can't control metal prices."
Mr. Speaker, I said before, and I say again, there are things that government can do. It's up to government to create a climate for investment. It's up to government to create optimism in the Yukon and have people want to invest. How does a government do that? By creating policies that are conducive to private sector investment in the Yukon.
This government is not doing that, and as a result, we have a very demoralized bunch of constituents in the Yukon.
This budget is not a good budget. It's not good for Yukoners, and as we talked to Yukoners, I have raised it time and time again over the winter, from the time that the Faro mine announced that it was shutting down. The Member for Faro continues to call me an alarmist. I suggest to him that he go out and talk to some of the people in those communities and see how demoralized they are and why they're demoralized, and they'll tell you why. They look to the government for leadership. They don't only look to the government to supply health services, which have grown astronomically as well - far more so than I think they should have and our critic will be speaking to that when he speaks as to trying to find out why they are growing. They look to the government to set the framework for development in the territory.
I have not, in the 25 years that I've been in this territory, ever - even in 1982 - gone through a period where people were so demoralized and didn't see a light at the end of the tunnel. I have spoken this winter on many occasions on companies telling me that they're talking about pulling up stakes. Now the members opposite may want to dismiss it but you're doing so at your peril. It's not funny.
Companies that employ hundreds of people every year are now laying off staff. I talked to one construction guy tonight who has absolutely no staff. Several years ago he had over 200 people employed. And a lot of it has to do with government policies.
Now, what we're faced with is not only that the government has not put a lot of money into capital. Now we know the government doesn't have a lot of money, but they could have made an effort to spring a few more dollars into capital projects. Some communities didn't get very much of anything.
Some Hon. Member: (Inaudible)
Mr. Ostashek: Now, the minister from Faro says it's pathetic, but I think what's pathetic is the lack of concern that those members opposite have for the unemployed people have for the Yukon and businesses that are on the verge of bankruptcy. That's what is pathetic - that he doesn't even have the common sense to see it, and he's the Minister of Economic Development. He's quite content to sit on an airplane and fly around the world and talk about something five, 10 or 15 years down the road, and is doing absolutely nothing to put the unemployed in the Yukon to work today. That's what is pathetic, and he ought to be ashamed of himself.
Mr. Speaker, my time is about up, and I know that there are other members wanting to speak, and I've about covered off everything that I can cover off in this budget, and -
Some Hon. Member: (Inaudible)
Mr. Ostashek: You want more. Well, where shall I start? I'll turn to my advice on the right, as your Government Leader says.
Mr. Speaker, I think things are bad in the Yukon now; there's no doubt about it. There's eleven and a half percent unemployed, with the figure going to be going up dramatically. But I don't believe that we're going to feel the real effect of this downturn until next fall. The only thing that's going to save this government is if, in fact, a whole lot of the unemployed Yukoners do leave the Yukon or we're going to be experiencing very, very high unemployment figures. That's the only thing that they can hope for because they sure haven't done anything to encourage people to stay here.
They talk about what they've done in tourism, they talk about the Air Transat thing. They're talking about nickels and dimes.
They turn around and say that they're increasing the budget by $200,000. What about the cuts they put in the budget? What about the increased exchange rate that isn't accounted for? How in the world can they sit there and say that they've increased the budgets? How can the Government Leader say, through the media, that he's increased the health budget or the education budget when, in fact, operation and maintenance is down? Capital certainly isn't up. I know the Old Crow school is going to cost a fortune. To say that they are putting more money into education is just not right. It's not being totally honest with the public.
Mr. Speaker, we haven't heard anything from the Minister of Education on the excellence awards program. Maybe that's going to be cut out. Maybe that's why the budget went down. Maybe they're going to can the excellence awards. Hopefully, she'll speak to that when she gets up to have her say in this Legislature. The Member for Faro says that's an airy-fairy idea. I've got a whole bunch of quotes here from the Member for Faro where he thought ideas were airy-fairy that he's now promoting with great zeal.
When I talk to Yukon suppliers - I talked to one here a couple of weeks ago who has already laid four or five people off. We heard another supplier respond to the government's budget the other day, saying that this budget wouldn't create jobs; in his opinion, it was going to cause job losses.
These are very serious times in the Yukon, and this government has not delivered a budget for the times.
Mr. Speaker, I, for one, will not be voting for this budget. I cannot, even though there are some things in the budget that I can support, such as I spoke of earlier in the areas of home care that I think are much needed in the Yukon, the areas of community policing and citizens on patrol - programs that I think are very worthy programs. Those I can support. I can't support a budget that claims to be a jobs budget but doesn't substantiate it with the numbers.
I have difficulty with the Minister of Health and Social Services closing Crossroads without thorough thought. It's a government that prides itself in consultation, but if you're going to consult with the people, you've got to listen to the people, and I think that's where this government is failing. They may consult. They do have numerous meetings. Lord knows we only need to look at the costs of travel. But unless they're going to listen to the public, it's not going to be a good thing.
Some Hon. Member: (Inaudible)
The Liberals are listening. Well, the Liberals are fairly good listeners, so we don't have much difficulty with that.
Mr. Speaker, in summation on this, we have a deficit budget, the second in a row, halfway through this government's mandate as far as budgets go - not in days, but as far as budgets go. They are working against a smaller surplus each and every year. There is nothing in this budget - and I hope there is in the rhetoric that we hear from the benches opposite when they get up to deliver their speeches, or when we analyze this budget in detail. I would like them to point out to me somewhere where there's optimism for the people of the Yukon that we will not see another deficit budget again next year against a still smaller surplus.
If they can do that convincingly, I would be very, very happy, and so would Yukoners, because I can't find it in this budget. I can find it in the budget speech, where we have the Government Leader saying that they're delivering a pay-as-we-go budget. Not true. It's not a pay-as-we-go budget. Maybe, pay-as-we-go-broke.
Mr. Speaker, I will not be supporting this budget. Thank you very much.
Hon. Mr. Harding: Well, Mr. Speaker, if this is a typical NDP budget, that speech was a typical Yukon Party speech. Prehistoric.
efore the member even got up, I could almost write down in my book what the member was going to say. Basically, the thesis is: O&M bad, capital good; ugh, ugh.
I want to ask the member opposite: are protected spaces bad?
Some Hon. Member: (Inaudible)
Hon. Mr. Harding: O&M?
Some Hon. Member: (Inaudible)
Hon. Mr. Harding: I don't think so, Mr. Speaker.
Speaker: Order please. Order.
Hon. Mr. Harding: Is hospital and health care over? Is that an overexpenditure in health care, or an expenditure to try and improve hospital and home care in O&M? Is that bad?
Is more money in tourism marketing, O&M, to try and bring more tourists here to create a vision beyond the anniversaries, something the Yukon Party couldn't get their mind wrapped around - is that bad?
Mr. Speaker, is it bad to try and promote more Yukon export for Yukon businesses to create more jobs and more Yukon investment to try and create more jobs in the Yukon? Is that bad?
Mr. Speaker, is more money in oil and gas development to complement the new Yukon Oil and Gas Act bad? Are teachers in the schools not real jobs; teachers who are teaching the children, who are the future of this territory? Those are not real jobs in the minds of the opposition?
The nurses who are working in the hospital providing health care, the people who are going into homes to provide home care - that's O&M. Is that not a real job? Is that not a real contribution to the economy and to the society?
Mr. Speaker, I have to ask these questions because I really can't believe the comments I hear from the members opposite. They are so basic. They are so devoid of any vision that I think they must be embarrassed to actually cling to the big taxing, big spending Yukon Party ways, even in the midst of the fact that the Shakwak Project funding did not come through this year. Can they not get that through their heads?
That's where the recoverable funding came for the big $9 million projects for highways. It was from the US Congress. Well, hopefully, next year, we will have some more, but we don't want it to be the mainstay of the economy. We want it to be a bonus when it comes. Unfortunately, the Yukon Party's version of the world was big budgets, big spending, massive tax increases, and then put that money into roads, when they had a little bit of it to complement the big money they got from the US Congress.
The member opposite said that the Yukon government, under his administration, did not increase operation and maintenance expenditures. Mr. Speaker, here are the 1992-93 estimates for the last New Democrat budget - $314 million operation and maintenance. Here's the first Yukon Party budget operation and maintenance gross budgetary expenditure: $353 million. From $314 million to $353 million in O&M. Now, I'm not one to say that all those expenditures were bad - O&M, bad; capital, good. I'm just pointing out that the member is not telling the Yukon public the whole story. I could table that.
I also want to talk a little bit about the issues surrounding the investment climate. This government has created a tax-rate freeze. We have some of the lowest corporate tax rates in this country - I believe they're second - even with the massive increases by the Yukon Party in 1993-94. We have worked very hard to ensure that we do have pay-as-you-go budgets.
I want to table something else, Mr. Speaker. This is the 1996-97 election year budget of the Yukon Party. You'll notice that they projected a current year deficit of $25 million, to hand out a few election goodies in the election year. At the bottom of the page, you see that they targeted in that election year, in an extremely irresponsible fashion, an estimated accumulated surplus of - what? - $7.5 million in the bank account. That's what they were going to leave for Yukoners: $7.5 million. And they have the audacity to stand here and criticize the Yukon New Democrats who, for two years in a row, have put forward budgets of $15 million, four bank accounts, in successive years through a sustainable spending pattern and a responsible approach to budgeting in this territory - something they did not know how to do. It was a rollercoaster ride from hell for Yukoners, Mr. Speaker, and they threw them out of office.
Mr. Speaker, I also want to talk a little bit about the member who spoke to the issue of the capital budget. I want to say that he's wrong. The graph we put in there that shows the Yukon has the highest percentage of capital budget of any jurisdiction in this country was in the budget last year. That's not the first time. It's the second time, and we do that because we want to show that we have an economy that, thanks in large part to a lack of initiative to provide for more self-sufficiency for Yukoners, created a very artificial economy under the Yukon Party.
It was based, Mr. Speaker, on massive government spending, on taxing Yukoners, digging their hands deep in their pockets, pulling their money out and then putting it into the capital and saying that was good for them.
Mr. Speaker, that was killing jobs. That approach has gone, and that's why you have the tax-rate freezes under the Yukon New Democrats.
Mr. Speaker, I want to say that I think, in terms of our approach to budgeting, we have tried very hard to take an approach that we said in the election campaign was stable, was responsible, it left a solid bank account, it found the right balances between protecting services and education, which are important for our children and for the future of this territory. We said we would protect health care. Mr. Speaker, we've done more in health care than protect it. We've actually enhanced it. In two successive budget years, we've increased our contribution to the hospital to try and get that up off its back, a situation that the Minister of Health and Social Services inherited from the Yukon Party. It was in complete disarray when he took over the reins. He's had to straighten that situation out. He's had to invest a lot more money into it, Mr. Speaker, and that was something we did because we care about health care in this territory. We couldn't let it be destroyed by the forces of the Yukon Party and the Conservatives in this territory who felt that it wasn't important to try and improve and enhance our health care in this territory.
Mr. Speaker, I think in terms of education - I want to talk about that a little bit, because it's obvious the members opposite in both quarters who have been asking us to do all kinds of things, from spending more O&M, spending more capital, spending more all together, that they don't know what their priorities are.
Our priorities are clear. Our priorities are education, health care, people, communities, jobs, and I think it's very, very clear in the approach that we've taken to not try and do it the old Yukon Party way, which was have a big election year spending spree and pump up the capital budget, Mr. Speaker. What we've tried to do is to take a sustainable approach to economic forces in this territory, to not have knee-jerk reactions to economic problems.
We have a situation in the territory right now that is very, very much like the situation in 1993-94. We had 18-percent unemployment then under the Yukon Party. I'm getting tired of being lectured by the members opposite when, if it wasn't for the formula financing perversity factor and two agreements - the Shakwak and the hospital construction - they would have had nothing in the way of ideas except tax increases and a gambling casino.
Speaker: Order. The time being 9:30 p.m., this House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:30 p.m.
The following Sessional Paper was tabled February 25, 1998:
Cabinet Commission on Energy Final Workplan, 1997-99; additional information (see SP 98-1-96) (McRobb)
The following Legislative Returns were tabled February 25, 1998:
Contracts provided to the leader of the official opposition by the Department of Renewable Resources (Fairclough)
Contracts provided to the Member for Klondike by the Department of Renewable Resources (Fairclough)
The following Document was filed February 25, 1998:
Credit Union (Whitehorse): background report on failure (originally tabled as SP 80-3-3 on March 24, 1980) (Jenkins)