Whitehorse, Yukon

Tuesday, April 27, 1999 - 1:30 p.m.

Speaker: I will now call the House to order. We will proceed at this time with prayers.

Prayers

DAILY ROUTINE

Speaker: We will proceed at this time with the Order Paper.

Are there any tributes?

TRIBUTES

In remembrance of Dorreene Wahl

Mr. Cable: I rise to pay tribute to Dorreene Wahl. Dorreene passed away on April 17, 1999 after a long battle with cancer.

Ella Dorreene Flemming was born in Minnedosa, Manitoba, on March 23, 1926. She was educated as a teacher and obtained degrees in education from Brandon College and the University of Manitoba. She first taught in Manitoba, then, with the encouragement of her sister Anna, whose husband was stationed in Whitehorse at the time, she accepted an offer to teach school in Whitehorse in 1950.

There's a story that Dorreene found that the best way to heat was with wood, because this way there was always an excuse to invite young men over to lend a hand, and luckily, Herb Wahl had a strong back and could split wood with the best of them. They found that they shared more interests than splitting wood, which led to marriage in September 1953.

Dorreene spent her life committed to making this community a better place and worked tirelessly on a number of community activities. She ensured that young girls had an opportunity in group activities. She helped ensure that women curlers had opportunities to show men just how the game was to be played, and she was a strong advocate of women's rights and a feminist before that word had popular currency. She was also an athlete and, in 1989, was inducted into the Yukon Sports Hall of Fame. She was definitely a people person. When you met her, she would be genuinely interested in how you were, and when you walked away after talking with her, you'd be smiling.

She will be missed. Our condolences to Herb, her husband, her three sisters and numerous nieces and nephews.

Mr. Ostashek: I rise today to pay tribute to a long-time Yukoner and a former constituent of Porter Creek North, Mrs. Dorreene Flemming Wahl. Although I did not know Doreen on a personal level, I've come to know that she was an outstanding individual and a woman who stood true to her word, a good person with a love of the Yukon and a heart of gold.

Dorreene will be remembered fondly by members of the community to whom she gave so much over the years and will be missed by her friends and family.

Our heartfelt wishes and sincere condolences go out to Dorreene's husband, Herb, her three sisters and other family members.

Thank you, Mr. Speaker.

Speaker: Are there any introduction of visitors?

Are there any returns or documents for tabling?

TABLING RETURNS AND DOCUMENTS

Hon. Mr. Harding: I have some documents for tabling.

Speaker: Are there any reports of committees?

Are there any petitions?

Are there any bills to be introduced?

Are there any notices of motion?

Are there any statements by ministers?

This then brings us to the Question Period.

QUESTION PERIOD

Question re: Mining investment

Mr. Ostashek: My question is to the Minister of Economic Development and Yukon's mining industry.

Mr. Speaker, the Yukon business summit is telling the minister that there's a perception in the investment community that this government favours environmental protection over economic development. And let me give the minister an example of this, Mr. Speaker, of why this perception exists.

The following environmental protection proposal comes from the Mayo Renewable Resource Council, and concerns Mayo Lake. It reads in part, "Placer mine could be regulated out of sensitive areas, as could mineral exploration. Fish stocks could be inventoried to ensure that they're reproducible in the future, as could big game animals. Limits could be set on the number of animals taken from the area. The dam at Mayo Lake could be removed or curtailed." So much for YEC's power line from Mayo to Dawson, Mr. Speaker.

My question to the minister: does he not agree that this type of protection proposal discourages resource investment in the territory?

Hon. Mr. Harding: You know, Mr. Speaker, it's interesting. Yesterday the member opposite was saying that some miners are saying that there are too many parks, and yesterday and today we've heard a park analyst say that there are not enough parks fast enough. Now we, as a government, are not trying to satisfy all of these extreme elements. What we're trying to do is listen to special interest groups, but try to have a balanced agenda that deals with environmental protection of the highest order, but also a very aggressive economic agenda.

We can't ignore the world resource economy in those deliberations. That's why we're doing things like mineral exploration tax credits, like trying to get the federal government to improve their permitting process.

Mr. Speaker, there are essentially five permitted mines in the Yukon that are not operating now because of world metal prices. I think that the $25 million that the immigrant investor fund has attracted, the fact that we are actively working with mining companies on investment, the fact that we have a mill in Watson Lake - some $10 million in investment - I think speaks well for the reality of the situation and that we have a very strong, balanced agenda.

Mr. Ostashek: Well, Mr. Speaker, I wouldn't call the Mayo Renewable Resource Council an extreme element, as the Minister of Economic Development has done. This is supposed to be representative of the people in Mayo. The protection proposal for Mayo Lake is but one of 28 other proposals put forward by the Mayo Renewable Resource Council. These are ones that they are currently considering.

Mr. Speaker, there will ultimately be 14 renewable resource councils coming forward with similar proposals. Does the minister not see the need to have a mineral strategy prepared as quickly as possible to help counteract the negative perception that's being created in the investment community, that Yukon is more concerned about environmental issues than they are about economic development?

Hon. Mr. Harding: That's not the case. The perception exists with some. I've said, Mr. Speaker, that there are some extreme elements in the environmental community and some in the mining community that see things in a diametrically opposed fashion. Yesterday, we heard from miners; today, we heard some environmentalists say that there are not enough parks, not enough of an environmental agenda.

I'm not referring to the Mayo Renewable Resource Council at all. That is a public body that results from a land claims agreement.

Mr. Speaker, what we've been trying to do is deal with a very difficult balanced agenda while dealing with difficult world markets in the resource sector, trying to diversify the economy, living with a new land claim agreement, which does allow for the Mayo Renewable Resource Council to undertake some recommendations and actions, but that is something that we've constitutionally entrenched, and we will work with it, I think, for the betterment of Yukoners over the long haul.

Mr. Speaker, we are working in so many areas, both environmentally and economically, to deliver jobs and a good sense of environmental protection and a long-term vision for this territory, both economically and environmentally. I don't think that the two are not related and can't work in concert with each other. I believe that both the environmental agenda and the economic agenda can work together for good things for Yukoners.

Mr. Ostashek: Once again for the minister, it's quite clear that his economic agenda isn't working. Seventeen percent unemployed, and I heard this morning on the radio it could be as high as 70 percent in places like Ross River.

Mr. Speaker, if each of the 14 renewable resource councils develop environmental protection plans for their regions similar in number to the Mayo Renewable Resource Council, the Yukon could be looking at environmental protection plans covering the entire Yukon.

My question to the minister: does he not agree that this would create a tremendous negative perception problem in the resource investment community?

Hon. Mr. Harding: Mr. Speaker, we are working on a mineral strategy. We are working with the mining community on that. We've worked with them to develop a mineral exploration tax credit. We're working with them. We've got representatives from the chamber's board on this blue book process, where we're trying to kick-start the federal government to improve the regulating process.

Mr. Speaker, the renewable resource councils are in the land claims agreement that the member opposite signed. They have some constitutionally entrenched powers to make recommendations and to discuss issues, and I don't think it would be appropriate for the Government of the Yukon to snuff out their ability to discuss these issues and put initiatives forward.

Now, the government is free to respond in a manner that's consistent with the agenda, and ours is an agenda of balance - one of very aggressive economic activity in oil and gas, in mining, and in diversification initiatives and in forestry and in a whole range of areas, but, Mr. Speaker, it's also one that has a very aggressive environmental agenda dealing with protected spaces, the likes of which the Yukon has never been able to deliver on, especially since the commitment to the protected spaces agenda was made by the previous Yukon Party government and they did nothing on it.

Question re: Mining investment

Mr. Ostashek: Once again to the Minister of Economic Development: I know the minister is hurting today after his friends at CPAWS have given him a failing mark on their environmental report card. He not only got a failing mark from the CPAWS people - Mr. Peepre - but he also got a failing mark from the Yukon business summit.

So he's failed all around, Mr. Speaker. And Mr. Speaker, that's why we've been telling this minister that it's so important - so important - that we strike a proper balance between economic development and environmental protection.

The current level - Mr. Speaker, the Minister of Economic Development can laugh if he likes, but it's no joke - 17 percent unemployed in the territory because of the actions of this minister and his government - or inaction.

Mr. Speaker, the minister said he can't do anything about the renewable resource council, but they can certainly do something about protected spaces strategy and other pieces of legislation that they have in place to encourage environmental protection. Why isn't that offset? Why isn't the mineral strategy out?

When is the mineral strategy going to be available for the public?

Hon. Mr. Harding: Well, Mr. Speaker, we're working on the blue book process. One of the members was on the committee they were trying to utilize to work on the environmental regulatory process with the federal government, which they still control. That's part of the mineral strategy. And we've been working with the Chamber of Mines and others on the mineral strategy already. So it is underway.

Mr. Speaker, these kinds of issues are nothing new. These land use decisions that are - different positions are taken by environmental groups and miners. Just in Ontario, the brethren party of the members opposite - Mr. Speaker, I was just reading the Northern Miner, where they're extremely critical of the Ontario government for the work they're doing. There's a full-page ad, "Have you been parked by lands for life in Ontario?".

Mr. Speaker, governments across this country are trying to undertake environmental agendas because they believe it's in the long-term future of this territory and this country.

But Mr. Speaker, as a corollary to that, we also have a very aggressive economic agenda in this country, and Mr. Speaker, I didn't hear the business summit say this government got a failing grade. That's that member's interpretation. The comments I read and that I heard from the spokespeople did not say that.

Mr. Speaker, we're working very aggressively in a whole number of areas to encourage economic activity, both in the resource sector and -

Speaker: The minister's time has expired.

Mr. Ostashek: If that minister over there believes the economic business summit gave him a passing grade, he's really got his head in the sand.

Mr. Speaker, the Yukon already has three national parks, with another being proposed at Wolf Lake. There's a territorial park on Herschel Island, and the expanded Tombstone park. Add that to the protection plans being submitted by renewable resource councils under the protected areas strategy, and the minister can readily see why resource industries and the business community are concerned about the perception of imbalance and, whether the minister wants to believe it or not, the perception is there, and it's doing nothing to put Yukoners to work.

My question to the minister is, will he be addressing this imbalance in the yet-to-be-developed Yukon mineral strategy?

Hon. Mr. Harding: Balance attainment is exactly what the mineral strategy is about, and it's proof positive of our commitment to a balanced agenda, both economically and environmentally.

You know, Mr. Speaker, the members opposite, the Liberals and the Yukon Party, like to say they support the protected areas strategy. As a matter of fact, the Yukon Party signed us on to it as a government. But just listen to the words you hear from those benches about protected areas. When difficult decisions have to be made to move the agenda forward, when the rubber hits the road, where is the opposition on these issues? Nowhere to be found.

Mr. Speaker, we've been trying to deliver a jobs agenda and an environmental agenda, and we don't believe that the two are mutually exclusive.

Just yesterday, that member said that everything is wonderful in the Northwest Territories in mining. I want to read from the front page of the budget speech in the N.W.T. "The economy has been affected by the global downturn in demand for resources," the Finance minister acknowledged. "This is translated into slow revenue growth for the N.W.T." And it goes on to talk about the only thing cooking is diamonds.

Mr. Speaker, the member opposite has his head in the sand.

Mr. Ostashek: Well, at least they have some revenue growth. That's something that this government can't brag about.

Mr. Speaker, the minister goes on to say that we continue to criticize the protected areas strategy after supporting it. We did support it, and we told this government time and time again, you can't have an open-ended protected areas strategy.

You can't just say, like the Minister of Renewable Resources does, "Well, I can guarantee Yukoners 50 percent of the Yukon won't be protected." That does nothing to create a climate for investment.

What we need to have is a government that is going to stand by what they say, and do what they're supposed to do that's right, and protect 12 percent of the Yukon as Canada signed on to do, not 22 percent or 50 percent or 72 percent.

Mr. Speaker, there is an urgent need for this minister and this government to send a clear signal to all Yukoners that yes, we believe in protected spaces, but yes, we also believe in resource development and they're going to promote that and they're going to do a better job that what they've done in the past because this government has failed miserably in that area.

I want to ask the minister: does he not believe that this government should make a little amendment for the protected areas strategy?

Speaker: The member's time has expired.

Hon. Mr. Harding: Well, Mr. Speaker, I don't know who the member is speaking for. Here is a letter from the Chamber of Mines supporting the protected areas strategy. Here is a letter from the Canadian Association of Petroleum Producers, Mr. Speaker, the largest petroleum organization in the country that we've been working with on developing the oil and gas regime, supporting protected spaces.

Mr. Speaker, the member opposite thinks there's no environmental agendas going on across this country. Here's the member and his own party's brethren who's sparring with the mining industry over lands for life in Ontario.

These are challenging issues, and it takes a government with a vision for the future to work through them, to deal with the economic questions, to put forward a balanced agenda that includes the work we're doing that's seen millions of dollars of investment in forestry in the Watson Lake area, that has seen renewed interest in places like the Tintina gold belt, which has seen this government work with the mining industry to create the mineral exploration tax credit, and which has seen, Mr. Speaker, the most advanced protected areas strategy that this territory has ever seen that will allow economic activity to flourish - so says industry. As well, Mr. Speaker, it's going to allow other economic growth to take place.

Question re: World Wildlife Fund, endangered spaces evaluation

Ms. Duncan: Mr. Speaker, I have some questions for the Minister of Renewable Resources. The World Wildlife Fund has dropped the NDP government's grade to a C-minus for their dismal performance on protecting the environment. It's the fifth worst grade in the country, and it's nothing to be proud of.

I'd like to ask the minister: does he agree with the criticism levelled at the NDP by Yukon environmental organizations and the World Wildlife Fund?

Hon. Mr. Fairclough: Mr. Speaker, we're proud of our government's environmental record. We've worked very hard with the general public in the Yukon to put together the protected areas strategy. We spent a year and a half working to get input from communities, First Nations and organizations in developing the strategy, laying out for them how and what process we will be working with when we look at protecting representative areas of the ecoregions.

So, we've done a lot. We've got a very aggressive workplan in place for the next couple of years, and, Mr. Speaker, it seems to me that the Liberals are changing direction from the position that they take on protected spaces. At one time they say it's no good, it's not going to create jobs, and when we talk about the Tombstone park and mining, there was no support there for the park itself. It was just support for the mine itself. So, where do the Liberals sit on this?

Ms. Duncan: Good try on that spin, Mr. Speaker. I urge the member to go back and reread the Hansard. This is typical NDP arrogance. Everything the government does is perfect. How dare anybody ask any questions?

A representative of the World Wildlife Fund's endangered spaces campaign had this to say about the NDP government's performance: "We find this is not a balanced agenda. We don't see it as 'a better way', as they like to say. Really, it's a confused agenda, and we'd like to see some leadership." With leadership like this, it's obvious why the NDP environment committee has all recently resigned. When is the NDP government going to start showing some leadership and providing some certainty for both the environmentalists and the developers?

Hon. Mr. Fairclough: Mr. Speaker, our party has an environmental committee. The Liberal Party doesn't have one and neither does the Yukon Party. Our environmental committee is up and working and they are meeting.

Mr. Speaker, we have a big agenda in front of us in regard to protected spaces. We have been working with First Nations in trying to put management plans in place for their SMAs, of which Tombstone is one. I know the member forgets the fact that it is part of the land claims agreement and we should not be breaching the agreement.

In there, it states that it is an SMA and it should be developed into a natural environment park. The Liberals don't support that and neither does the Yukon Party in the comments that came from the Member for Klondike.

Mr. Speaker, we have a very aggressive agenda. We have been working with Vuntut Gwitchin and on the Fishing Branch. The Needle Rock habitat protection area, we feel, will be done in the spring. We have Horseshoe Slough, Nordenskiold wetlands - these fall under SMAs in the First Nation final agreements - Tombstone park, Tatshenshini Heritage River - and we also have amendments to the Parks Act in the fall.

We have a very aggressive agenda, Mr. Speaker, and we feel that there is lots of support from Yukoners.

Speaker: The minister's time has expired.

Ms. Duncan: Well, Mr. Speaker, the minister has talked about an aggressive agenda and other members of the front bench go around hyping a balanced agenda, respect for industrial development and respect for protected areas, and they've delivered on neither.

What we do have is a 16.7 percent unemployment rate and no new protected areas created in the last year.

When is the long-hyped protected areas strategy actually going to protect part of the Yukon?

Hon. Mr. Fairclough: Wow, that's a jump from back and forth across the line by the Liberals, Mr. Speaker. One day it's parks, the other day it's mines. No direction coming, no -

Some Hon. Member: (Inaudible)

Speaker: Order please. Order.

Hon. Mr. Fairclough: That's the Liberal way, Mr. Speaker.

We laid out a workplan for protected areas. We have the Fishing Branch and we're working on the Tombstone park. We have a planning team set up - will be set up - in the Wolf Lake area. We have a number of things we have been working on that I just listed out to the members opposite.

So, Mr. Speaker, we do have an aggressive agenda, and we are taking a balanced approach between the environment and the economic agenda that this government has.

Question re: Development assessment process

Ms. Duncan: I have some questions for the Government Leader on the development assessment process. Since the release to the responses of the draft DAP legislation, the Yukon government has been very, very quiet concerning this most important issue. Several of the responses were commissioned by the government and non-government organizations, at considerable expense. None of these have been formally responded to.

Does the Government of Yukon plan to formally respond to the concerns raised in the submissions?

Mr. Livingston: The government has not been silent. The member's wrong; the government has not been silent about the development assessment process. We've taken opportunities as recently as last week to speak to TIA members, the tourism industry, about DAP.

As the member points out, there's been a great deal of public interest, there's been a great amount of public consultation and suggestions about DAP, and our government is committed to ensuring that DAP is done well, that DAP is going to be practical and effective, and we're going to continue to work with Yukoners until the job is done.

Ms. Duncan: Mr. Speaker, the primary concern raised by almost every respondent was that of creating certainty - regulatory certainty, certainty in fairness, certainty on consultation, single-window approach, and certainty on the cost of implementation.

This is no time for silence on an issue, which is of paramount importance for the long-term survivability of the Yukon's economy, and the only chance at economic and legislative stability.

I attended the meeting to which the DAP commissioner refers. The government's DAP commissioner was asked questions specific to the application of DAP. The typical NDP non-answer contained no detail, and left everybody in the audience shaking their heads. It's obvious we're no further ahead.

The government announced that they're hosting a DAP workshop. The announcement doesn't give a new time frame for the legislation. Now, this government's one of the partners at the table. What time frame are they working under?

Mr. Livingston: Well, Mr. Speaker, the member's absolutely wrong. She says in her preamble to her question that the government has been silent on DAP. We have not been silent on DAP. We have spoken to a variety of members; we've talked to YCEE members. We've set up an advising group; the non-government working group is working, again, alongside our government. We have two workshops coming up. We anticipate that if the next federal legislative draft is completed, there will be opportunities for consultation on the next draft this fall.

If the member will keep her ear to the ground, there certainly will be more news on the workshops coming up. We've got one workshop coming up in three weeks.

We have been working on this. The fact of the matter is, Mr. Speaker, this is federal legislation. We're one of the three parties at the table. We're going to continue to ensure, Mr. Speaker, that Yukon interests are represented so that we have a certain process at the end of the day.

Ms. Duncan: Well, Mr. Speaker, this government talks about being one of the partners at the table, and they are being asked questions about what they're doing. Considering the mess that came from this government's previous consultation process, a process that left everybody involved feeling confused and frightened for their future, there is very little confidence in this government's ability to move this issue forward.

Now, the government issued a media release talking about a workshop scheduled for later this spring. How will this next round of consultations be structured to ensure that a positive step forward is taken? For example, how will this workshop help Yukoners reach resolution on the future of the Water Board under the DAP legislation? How is this consultation process going to move this issue forward?

Mr. Livingston: Well, Mr. Speaker, the member opposite wants me to take responsibility for what is federal legislation. She keeps saying the Yukon government, the Yukon government, the Yukon government.

Mr. Speaker, if this were a Yukon government project, if this were simply a Yukon government project, we would be done this process, and we would have a predictable, effective process. But the fact is that it's a three-party process. There are three governments involved. It's going to take some work.

And, Mr. Speaker, the member opposite wants me to predict and she wants me to define what the conclusions of the discussions at this next workshop might be about the Water Board. I can't think of anything more insulting to Yukoners than if I were to stand up in this House and tell her what the conclusion of the discussion three weeks from now is going to be. We're going to have meaningful consultation with Yukoners.

We do have some ideas about the Water Board. There are a number of ideas out there. We think that there are some good working models that can be put into place. We're going to wait for Yukoners to be fully a part of those discussions, and we'll come up with some good answers, I believe, Mr. Speaker.

Question re: Parkade proposal

Mr. Phillips: My question is for the Minister of Tourism. Mr. Speaker, the previous NDP government had a particular habit of constructing government buildings in locations where no one wanted them.

One of the classic cases was the Yukon Art Centre and gallery, which no one but the present NDP leader and the government wanted up the hill. Mr. Speaker, now we have this NDP government attempting to move the art gallery downtown by including it in a parkade proposal so that Yukoners and tourists alike would be able to see Yukon's art treasures. What a novel idea.

Can the minister tell this House what prompted this 180-degree turnaround to relocate the art gallery from up the hill?

Hon. Mr. Harding: Mr. Speaker, that's absolutely not the case. There were some discussions with the Department of Economic Development around the whole parkade proposal. The city has some ideas. We are simply listening to those ideas. The member opposite is wrong; no conclusions have been reached and there have been very preliminary discussions about it.

I know the member opposite would like to try and draw some conclusions, but there are none to be reached because we, at a political level, have not even discussed this with the mayor and council of the city. There has been one meeting, I believe, where some officials raised the issue but we have made no decisions and have had no discussion at the political level of government on this issue.

Mr. Phillips: It sounds like the cat's out of the bag. This is kind of like the coroner question the other day, Mr. Speaker, where the fellow came up just to visit but happens now to be interested in the job and probably will get it, because he's been hand-picked by this government.

Mr. Speaker, the question I have for the minister is, what involvement does the Government of Yukon have in the parkade? What kind of an investment is it looking at in amount of dollars? Can the minister give us that information?

Hon. Mr. Harding: No, I can't because those discussions haven't taken place. As I said, there have been some very preliminary discussions, I believe one between some officials. At a political level, we've had none with mayor and council, and we're not entirely sure what they might even be envisioning. However, we would want to ensure that it would be the appropriate fit with the Arts Centre and some of the objectives that they would have.

You know, Mr. Speaker, this member is famous for throwing out innuendo. I remember last year, one of the lowest moments of this Legislature was when he was going after those kids in the group home in Riverdale, accusing them of ripping up the neighbourhood and he was just attacking people on a regular basis in this House with nothing to back it up, same as the issue he raised last week in this House. I challenge him to produce any evidence or anything to substantiate what he talks of.

Mr. Phillips: If the minister wants to talk about the group home issue, I'll tell the minister, Mr. Speaker, it was kids in that group home who were ripping off homes in Riverdale. The minister won't admit it, but he knows it was, so I was right about what was going on in that particular group home at the time, and I think I'm right now, with the government discussing moving the art gallery downtown.

I'd like to ask the minister why the government would consider a 180-degree turnaround from all the arguments it made several years ago - the Government Leader made several years ago - that it had to be up the hill. Despite all the cries from the arts community and everyone else, the government argued it should be up the hill.

I support an arts gallery downtown. I supported the Arts Centre downtown, Mr. Speaker, and I think the arts community today supports that, but we're wondering how much this is going to cost the Yukon taxpayer, again, for the mistake of the former Minister of Education, who moved it up the hill in the first place, where it shouldn't have been.

Hon. Mr. Harding: The member is speaking nonsense. First of all, with regard to the group home, the member opposite branded all of the kids. He did a broad sweep, Mr. Speaker. He just did a broad strafe throughout that group home, attacking all of those kids - as usual, being the judge, jury and executioner from his seat on the floor of this Legislature.

Mr. Speaker, that's not the way that this government operates. We don't engage in that type of behaviour, like the Member for Riverdale North is so famous for, where he just stands up and throws out accusations and innuendo and slams citizens and attacks them on a regular basis.

With regard to this issue, the member opposite is, once again, putting the cart way before the horse. We don't even have a horse here; we don't even have a donkey; we don't even have a llama. There's nothing to this except some discussion, some interest raised by the city. It hasn't even been discussed at a political level of government - at a very cursory level within the officials. We'll have to follow up, if the report on the radio is true, and find out exactly what the initiative maybe being considered is.

INTRODUCTION OF VISITORS

Hon. Mr. Harding: Mr. Speaker, while I'm on my feet, I'd like to introduce Jud Deuling's class from Vanier Catholic School, and his students, who are here to witness the proceedings here in the gallery today. Join me in welcoming them, please.

Applause

Speaker: The time for Question Period has now elapsed.

Notice of government private members' business

Mr. Fentie: Mr. Speaker, pursuant to Standing Order 14.2(7), I would like to inform the House that the government private members do not wish to identify any items to be called on Wednesday, April 28, 1999, under the heading government private members' business.

ORDERS OF THE DAY

Speaker: We will now proceed with Orders of the Day.

GOVERNMENT MOTIONS

Clerk: Motion No. 171, standing in the name of the hon. Mr. McDonald.

Motion No. 171

Speaker: It is moved by the hon. Government Leader

THAT, pursuant to section 18 of the Conflict of Interest (Members and Ministers) Act, the Legislative Assembly reappoint Ted Hughes as a Member of the Conflict of Interest Commission for a three-year period effective May 2, 1999.

Hon. Mr. McDonald: Mr. Speaker, the purpose of this motion, as is clear from the wording, is to reappoint Ted Hughes as the conflicts commissioner for a further three-year term.

Mr. Hughes' first appointment took effect May 2, 1996, which was the date that the Conflict of Interest (Members and Ministers) Act came into force. The appointment proposed in the motion, therefore, is for the period covering May 2, 1999, to May 2, 2002.

Section 18 of that act requires that the appointment of the members of the Conflict of Interest Commission be made by the Legislative Assembly and that a resolution making such appointments be approved in a recorded vote by at least two-thirds of the members present.

Mr. Hughes has been contacted by the Clerk of the Legislature and has indicated his willingness to accept one more three-year appointment. Although the act permits the appointment of up to three conflict commissioners, Mr. Hughes has been the only one ever appointed.

The obvious issue for the Assembly in the next few years will be to address the selection of future conflicts commissioners, or a commissioner. And, as I'm sure other members are aware from our experience the first time around - identifying people with the ability to undertake these duties - getting agreement by two-thirds of the members to accept the appointment is not an easy task. We will have to put our minds, in the fullness of time, to considering successors to Mr. Hughes.

In closing, I would like to recognize and thank Ted Hughes for the work that he has done on behalf of the House, in his position as the conflicts commissioner.

Speaker: Before putting the question, the Chair must draw members' attention to section 18 of the Conflict of Interest (Members and Ministers) Act. That section requires the appointment of a member of the conflicts commission be supported by at least two-thirds of the members of the Legislative Assembly present for the vote.

In order to ensure that the requirements of section 18 of the Conflict of Interest (Members and Ministers) Act are met, the Chair will now call for a recorded vote.

Division

Speaker: 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 16 yea, nil nay.

Speaker: More than two-thirds of the members present have voted for the motion. I declare the motion carried.

Motion No. 171 agreed to

GOVERNMENT BILLS

Bill No. 75: Second Reading

Clerk: Second reading, Bill No. 75, standing in the name of the hon. Mr. McDonald.

Speaker: Mr. Speaker, I move that Bill No. 75 be now read a second time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 75, entitled An Act to Amend the Income Tax Act, be now read a second time.

Hon. Mr. McDonald: Mr. Speaker, I'm pleased to present this bill before the House today. This legislation will implement a number of important changes to the Yukon's tax regime. This is the first time in the Yukon's history that such a broad range of tax reform measures has been implemented. We've promised the people of the territory that we would not increase taxes, and this legislation is the embodiment of that promise.

In fact, of course, we are going far beyond that promise and, by means of this bill, are introducing a series of tax reductions that will assist the less fortunate in society and stimulate economic activity by promoting business investment in the Yukon.

While there are other new tax reduction initiatives in the budget, there are five initiatives contained within this legislation.

I would like to take a few moments to briefly describe each of them.

In the first instance, we are introducing a measure, the Yukon mineral exploration tax credit, that will encourage the search for mineral deposits within the Yukon. We are all aware of the difficulties that are presently being faced by the mining industry, and this initiative is designed to help that industry develop and expand its inventory of potential ore deposits.

Encouraging this exploration will, of course, immediately contribute to employment and economic activity within the Yukon, as well as set the stage for these same things in years to come. This tax credit is refundable at a rate of 22 percent of eligible expenditures for exploration in the Yukon and is the most generous in Canada. The credit will be available for two years, beginning this April 1.

Secondly, Mr. Speaker, we will be implementing a Yukon small business investment tax credit, beginning July 1 of the current year with a total maximum credit of $1 million per year being made available.

This will be an ongoing program and is therefore not time limited, as is the mineral exploration program. The credit is non-refundable at a rate of 25 percent of investments in eligible Yukon businesses. There is a ceiling of $200,000 in credits per business and the maximum credit any one investing individual or corporation may obtain is $25,000 in any one year. Depending upon the business in which the funds are being invested, the investment may be RRSP eligible.

This credit will provide local investors a vehicle for investing in the Yukon economy and thereby increasing the pool of capital available to local businesses, the lack of which has proven to be a problem in the past.

The two measures I have just mentioned speak to our economic agenda but we haven't forgotten our social responsibilities. To address those responsibilities, we are implementing two additional measures that will provide significant assistance to those at the lower end of the income scale.

The first is the low-income family tax credit effective starting this last January 1.

This credit is non-refundable and is aimed at those with net incomes of less than $25,000 per year. It will provide those paying tax with a benefit of up to $300 per year, a significant sum for individuals at the low-income level.

The second, Mr. Speaker, is a Yukon child benefit that will come into effect July 1 of this year. This measure is aimed at those families with low incomes, namely net incomes of less than $22,000, who pay little or no income tax and cannot thereby benefit from tax credits. The child benefit is designed so that it will not be taxable nor considered as income in calculating social assistance payments. The latter point is of importance so as not to nullify the impact of the measure on these families.

These two initiatives will put approximately $1 million per year into the hands of those in our society who need it most, and will go some considerable way toward combatting poverty and improving the lot of those Yukoners who do not enjoy higher incomes.

The final element of this bill flows out of the land claims process and is of great significance to First Nations citizens. Members will know that both the Yukon and federal governments have agreed to share, in favour of First Nations, the majority of their personal income tax room for individuals resident on settlement land.

This measure has come into effect as of January 1 of this year for several of the First Nations with final agreements, for 95 percent of the Yukon personal income tax that would otherwise be payable. Several clauses of this bill implement this important arrangement, and we are pleased to be able to introduce it to the Legislature.

Mr. Speaker, the tax reform initiatives I've spoken of are of obvious benefit to all citizens of the Yukon. They will go far to protecting the economic fortunes of our less affluent citizens, and they will help keep our tax regime and investment climate competitive.

Several of the changes being introduced today were the result of suggestions made by the tax reform table we convened last fall, and I would like to thank the participants in those discussions for the time and effort they devoted to this process, and I look forward to further fruitful discussions with them regarding the labour-sponsored venture capital corporation initiatives we will be implementing next year, and other measures they may propose that we implement.

Mr. Speaker, this is the first stage of the most aggressive, positive tax reform initiative this territory has ever experienced. In response to the need of those with low incomes - those in most need - it provides a much-needed stimulus to the mining and small business sectors of our economy. I commend it to the House.

Mr. Ostashek: I won't be long in speaking on second reading. I'm going to have a number of questions when we go through the bill, but there are a few comments I'd like to put on the public record about my thoughts on the tax reform bill.

We're supportive of the amendments to the Income Tax Act, and hope they will be of as good a benefit to Yukoners as the Finance minister would like us to believe.

I just want to say for the public record that it's not a very challenging task to come in with tax reductions when you're getting a largesse of money from Ottawa - far more than what has ever been had in the past and we are reaping the benefits of tax reductions in every other jurisdiction in Canada.

By that, I mean that as the tax rate goes down in Canada, ours moves closer to the national average by sitting here and doing nothing. Millions of dollars are flowing to this government because of tax reform in other jurisdictions in Canada. Not to say that I'm against tax reform, but I believe the minister could have gone a little bit further than what he did go in this bill.

And when it comes to the child tax benefit, while it's good to see that people earning $22,000 or less will have a substantial tax credit, what about the middle income Yukoners who could do with some help, too, when it comes to raising children? I would have liked to see a child tax benefit more in line with the motion proposed by the Yukon Party in the first year of this government's mandate.

Nevertheless, we're glad to see that the government has started on the path toward the lowering of taxes, and I would expect, Mr. Speaker, seeing next year is going to be election year, that we will see substantially more tax cuts in the next budget than there are in this one.

One area that I'm going to be looking for a little more understanding of and an explanation from the Finance minister is the First Nation income tax credit. I know we have an obligation there under the land claims agreements to put that in. I want to know how it's going to work. I want to thank the Finance minister for providing us with a technical briefing on this tax bill but, at the time, I asked his Finance people, when he came back to the House, to bring us a couple of examples of how it would work. I want to be sure that we're not leaving any holes in this where there could be abuse of the tax benefit.

So, if we can't do that in second reading, we could certainly get into it in Committee and get a better understanding of it. I don't see a lot of difficulty with it but I want to have a lot clearer understanding of it in my mind as to how it's going to work when we're going to be transferring a portion of our tax revenues to First Nation governments.

With that, Mr. Speaker, I will leave my questions on the details of the bill for Committee debate.

Mr. Cable: On behalf of the Liberal caucus, I also would like to thank the minister's staff for the technical briefing. The Liberal caucus supports the bill and will support it on second reading. We are particularly supportive of the proposed assistance to those in less fortunate financial circumstances.

The amendments in the bill are complex. The bill is quite complex, and we look forward to debate. We do have questions, and hopefully these will be answered so that we will be in a position to support the legislation on third reading.

In particular, we will want to know what the government is planning in the way of evaluation of the effectiveness of the two economic initiatives that are set out in the bill - the small business investment tax credit and the mineral exploration tax credit.

Speaker: If the member now speaks, he will close debate. Does any other member wish to be heard?

Hon. Mr. McDonald: Well, Mr. Speaker, I thank the members opposite for their comments, Mr. Speaker - the comments in respect of support for the bill. The Member for Riverside has stated the obvious that it is a rather complex bill with rather dense technical language, and I'll be happy to respond to the policy elements that support this bill and provide any technical response that I can, or that my officials can, to specifics of the bill itself.

With respect to the evaluation, Mr. Speaker, I look forward to the discussion. I look forward to, as well, any suggestions that members opposite - the Member for Riverside - have for how one would evaluate the effectiveness of the particular tax expenditure of this sort, because clearly the prospects for the mining industry at the present time with low metal prices are somewhat limited. We are nevertheless showing great faith in the long-term potential of the mining industry by putting money into essentially encouraging mineral exploration activity, identifying deposits that may or may not turn into mines in the long term.

It's the same kind of issue that the Department of Economic Development has to face when they are asked to justify why they would put forward funding for a prospector assistance program. Generally speaking, the response has always been that there is a general notion of faith in the long-term future of the industry that identifying mineral plays is a long-term project, and that some public expenditure in this area serves the future of the mining industry by identifying potential mineral deposits. This would fall into the same category.

So, if the member has some ideas on precisely the instruments that he would like to see us employ to test the value of the expenditures, I'll be more than happy to engage in a discussion with him about that subject.

Mr. Speaker, while I thank the leader of the official opposition, the leader of the Yukon Party, for his support, I must say that I don't agree with his attempts to minimize the accomplishment that this bill represents. He's indicated that there are greater revenues coming from Ottawa but fails to indicate that when he was faced with a similar situation back in 1983 and while he was introducing budgets that were, even by today's standards, very large, he did not choose, at the time, to lower taxes; he chose to raise taxes and chose the option of increasing capital expenditures.

Even in this Chamber, Mr. Speaker, all members in the opposition have been encouraging the Yukon government to, as a priority, raise expenditures, that raising direct expenditures is our primary task. We were not goaded into tax reform by the opposition. We have been working with the public and the tax reform round table to identify measures that would, in fact, not only stimulate the economy, but would also meet the needs of those who are in greatest need in our community.

Mr. Speaker, obviously this particular measure for us is a new venture for the Yukon government to be proposing tax reform. I think there are many creative ways that we can meet our public objectives through the tax system that can improve the economic and social life of this territory. We have a broader range of tools at our disposal, beyond direct expenditure, now that we have engaged in this subject with the community, and we believe that these strategic reductions found in this particular bill will serve the community well.

There will be further tax reform measures, of course, Mr. Speaker. This was referred to by many people as an election-year budget because it dealt aggressively with tax reform and tax reductions. Well, I can only say that the opposition hasn't seen anything yet.

There are lots of good things that can be done; there are lots of good things that we will do, because we know that the Yukon citizens from every corner of this territory are on our side. With their support, we will improve the economic social life of this territory.

Motion for second reading of Bill No. 75 agreed to

Bill No. 18: Second Reading

Clerk: Second reading, Bill No. 18, standing in the name of the hon. Mr. McDonald.

Hon. Mr. McDonald: Mr. Speaker, I move that Bill No. 18 be now read a second time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 18, entitled Second Appropriation Act, 1999-2000, be now read a second time.

Hon. Mr. McDonald: Mr. Speaker, in keeping with a precedent set last year, we are introducing supplementary estimates, which will enhance the budgeted spending for the 1999-2000 fiscal year.

The supplementary will see our spending for the year increase by almost $8.5 million. These expenditures, a number of which are merely the acceleration of spending that was planned for future years, will see a number of important, new, or enhanced projects take place throughout the territory.

In addition to the obvious benefits that the enhancement of infrastructure has for the quality of life for our citizens and the promotion of economic activity, these new monies will provide welcome employment for Yukon businesses and Yukon people.

This is especially important in view of the fact that there is presently some uncertainty surrounding the timing of the Whitehorse multiplex project.

The initiatives that are being funded as a result of this appropriation will have an impact throughout Yukon. They range from road and airport upgrades, recreational facility improvements, and community development through training funding, health expenditures, campground facilities, and tourism and heritage initiatives.

While far from being a comprehensive list, what follows will provide some idea of the breadth of the proposals envisaged by this supplementary.

The Department of Community and Transportation Services will be spending almost $850,000 on airport upgrading. This includes taxiway and runway paving at the Whitehorse Airport and access road construction and geotechnical work at Dawson City. The importance of airport upgrading will, I believe, be apparent to all of us and is a key ingredient in our plan to attract more tourists directly from Europe and elsewhere.

The same department will spend $1.2 million more on highway projects in the coming year. The projects to be initiated include work on the Old Crow Airport road, right-of-way clearing and gravel crushing for the Tagish Road, $500,000 more for rural road upgrading, and $260,000 for roadwork in the Carmacks area.

Community infrastructure has not been forgotten and C&TS will therefore also be spending additional funds for these purposes in the coming year. This will include $720,000 in Pelly Crossing for an arena, $100,000 for a fire hall addition at Marsh Lake, and $30,000 for the Ross River recreation centre.

The Department of Education will be devoting $500,000 to new capital spending in the 1999-2000 fiscal year. This sum is being set aside to enhance training trust funds and will make an important contribution to the development of Yukon's people.

Mr. Speaker, one of the most valuable tools we have for community development is the community development fund. Our main estimates for the current year contain $3 million for this fund and I'm pleased to announce that we will be increasing that sum by $2 million, for a total of $5 million, in 1999-2000. This increase includes an additional $200,000 which will be dedicated to the fire smart communities portion of the fund.

The importance of an attractive waterfront area for our capital city cannot be over estimated, and we are, therefore, through the Department of Government Services, investing $1.4 million more this year in the landscaping of that most scenic asset.

In addition to this significant initiative, the department will also be spending $200,000 for an addition to the gymnastics centre at Vanier High School in preparation for the Arctic Winter Games.

The Department of Health and Social Services will be contributing $125,000 in new funds this year to the mammography unit for the Yukon Hospital Corporation. I do not believe that I can overstate the importance of this expenditure to the health and well-being of Yukon women.

A number of small but important new projects will be undertaken by the Department of Renewable Resources. These include campground upgrades at Kluane, wildlife viewing, ecology interpretation at several locations, and monies for the fish hatchery and Hidden Lake recreational fishing development.

The Department of Tourism has been given almost $1 million in new monies for a variety of purposes, including the Beaver Creek visitor reception centre, millennium activities, and $400,000 in heritage funding for renovations to the Odd Fellows Hall in Dawson City. In addition to this, $200,000 has been set aside for tourism film development.

Mr. Speaker, the expenditure of these additional monies has been made possible as a result of increased funding that we will receive for the 1998-99 fiscal year under our formula financing agreement. New data received from Statistics Canada in March indicates that the provincial local escalator is higher than originally forecast, a result of improving fiscal situations in the provinces and a consequent loosening of their purse strings - meaning that their spending is going up.

In addition, the keep-up factor under the formula, which measures provincial tax rates, has decreased again, and this results in a slightly lower perversity factor for the Yukon.

Some of this adjustment also impacts on the 1999-2000 fiscal year, and members will note a relatively small increase of $2.4 million in the formula grant for that year. However, the bulk of the money being spent as a result of this appropriation stems from receipts in the 1998-99 year and must be viewed as an item of a one-time nature.

Given that these monies are available, we have made the decision - a pleasant one, I might add - that we should put the money to work for our citizens and that it was important that it be done now, rather than waiting for a fall supplementary.

While this supplementary still leaves us with a healthy savings account, it will be apparent to all of us that projected annual deficits cannot be sustained forever.

The balancing of our accounts, as shown in our long-term plan, must still be the target to aim for and is a target to which we intend to head.

Thank you.

Mr. Ostashek: Mr. Speaker, it probably won't come as any surprise to the Finance minister, but we won't be supporting his supplementary budget. It is not in keeping with the past at all. Last year when the government chose to bring in a supplementary budget while the main estimates were still being debated, the opposition parties were consulted and agreed with the Finance minister that it would be appropriate. We weren't given that courtesy this time.

Furthermore, I don't see this as in keeping with the stable control of finances, as the Finance minister likes to portray himself doing. This looks more to me like a knee-jerk reaction than good, sound fiscal management and planning.

The Finance minister ought to have known when he put his main estimates together that this money was coming. As he said, this is 1998-99 money, for the most part. There were no surprises. They know long before March every year the approximate amount of money that they're going to have. It may need to be fine-tuned, but not to the tune of $10 million. So, I believe that had he done a proper job in tabling the main estimates, this money could have been included at that time.

I also don't agree with the priorities of where this government is spending their money. We look at some of the areas and I'll just use a couple as examples and we'll get into more of them in detail when we get into it in the line-by-line debate.

Look at the community development fund. It's ending up being the be-all and end-all for all government departments. We heard the minister responsible for heritage stand up and say, it's fine to slash my budget by 33 percent, because we can get the money out of the community development fund.

That's not planning. That's not long-range planning at all. That's reactionary spending. We could maybe expand that and put the entire budget in the community development fund, and then just distribute it to departments, if that's the approach we're going to take.

We need to have the ability to question the estimates on the floor of this House and the government's priority spending. We don't get that opportunity under the community development fund and, while it's liked by communities, I don't deny that a bit - certainly it's liked. The government's going to be out there, handing out money, and they're going to like it, but there's a question of accountability and we would like to see a stronger accountability with the community development fund.

We seem to have money for every little wish and desire of this government, but when it comes to something that's really required, like a new floor in the gym of the Vanier High School, we don't have the money for it. Instead, we have children being crippled, seriously crippled, and yet we can't find $200,000 to replace the floor.

So, Mr. Speaker, we are not going to be able to support this supplementary budget at all, and I would suggest to the Finance minister that if he's going to provide stable and predictable funding for Yukoners, then he's going to have to do a better job than what he's done in the past.

I suspect what has happened, more than anything else, and what caused him to bring in this supplementary budget, is the fact that his projected $60-million surplus for next year has ballooned on him and he had to get that figure down somehow, so what better way than saying, "We'll do it with a supplementary budget" and "keeping with the past", because we did it last year.

Mr. Speaker, we don't agree with that approach at all.

We knew, long before this supplementary came in, that many Yukoners were out of work. Unemployment has skyrocketed under this government, and the government continues to say they can't do anything about it, they haven't got the raw spending power. Some 2,000 people have left the territory. We have a government that's sitting on a minimum of a $60-million surplus, watching people leave and not being out there aggressively trying to keep our talented, trained workforce in the Yukon for when the economy does recover.

So, Mr. Speaker, we cannot support this supplementary budget and we will not be doing so at second reading.

Ms. Duncan: Our caucus will have a number of questions when this moves into Committee. I'd like to bring attention, at second reading, to the lack of consultation from the government benches over the introduction of this important finance bill. Unlike the supplementary budget that was introduced last year, this bill was sprung upon the opposition without any consultation. The NDP government, in their arrogance, went so far as to deny members of the opposition an embargoed copy of the budget that we're discussing today.

So much for cooperation with the opposition. So much for following the terms of the memorandum of understanding, and so much for the open and accountable government. The "better way" clearly have lost their way.

There's a difference between the way the two supplementary budgets have been dealt with. Comparisons between last year's supplementary and this supplementary are quite appropriate. Last year, the unemployment rate, which was still too high then, was about half of what it is now, and that's up. It's about half of this one.

That was then, and this is now. This supplementary budget does not deal with long-term job creation. Diversification: we still have Harding hype and no substance; mixed messages from the government.

We join with all Yukoners in our concern over a 16.7 percent unemployment rate in the Yukon, and that number has grown dramatically since the NDP government took office. In the last year, thousands of Yukoners have voted with their feet, and left the Yukon, because of the economic ineptitude of this government. Those who remain have no confidence in this government's ability to play a constructive role in improving our economy.

The main budget introduced this spring does nothing to instill that confidence, nor does this supplementary. Our caucus will demonstrate our lack of confidence in this government's ability to manage the economy, and our lack of confidence in their spending habits. We will not support the supplementary, Mr. Speaker.

Speaker: If the member now speaks, he will close debate. Does another member wish to be heard?

Hon. Mr. McDonald: Well, surprise, surprise, Mr. Speaker. The opposition, Yukon Party conservatives and Liberal conservatives, don't want to support the NDP budget. Surprise, surprise. Am I disappointed? Not really.

Mr. Speaker, the Government of Yukon - the NDP government - has been working thoroughly with people throughout this territory every day of the last year, and every day of the last two and a half years. We have forged partnerships with community organizations. We have forged partnerships with the business community - the chambers of commerce, labour organizations, others.

We have undertaken a number of different measures, Mr. Speaker, to support not only the long-term fortunes of the economy in which we reside, but also the short-term fortunes.

Mr. Speaker, on top of this, we have, from time to time, listened to the mixed messages coming out of the opposition benches, just to see if once - once - we would have one constructive, consistent message coming from the opposition benches.

But, Mr. Speaker, two years ago they said, "You must engage in long-term planning." This year when we engaged in long-term planning, they criticize it. Last year, they said, "You've got to be thinking about direct job creation. This is the thing you must do. Spend your way out of this economic malaise." And yet, now the Liberal leader is talking about needing to deal with the long term.

Mr. Speaker, we are dealing with the short term and the long term, but we're doing it despite the opposition, not because of the opposition. There have been no constructive messages coming out of the opposition. All that the opposition has learned to do in the last year is vote together. On every significant budget measure, every significant economic measure that has ever been tabled before this House, they vote together. And so, it's fascinating. It's fascinating to watch the folks opposite try to maintain every position to please, literally, every single person in this territory, no matter what their view, and yet criticize all the measures that were brought forward into this Legislature that are the result of many, many community consultations.

Now, of the things that the members in the Liberal Party and the Yukon Party are rejecting - airport development. They have obviously decided that they are not going to support any further airport development, either in Dawson City or in Whitehorse. They are also saying that expenditures for work to be done - the $1.1 million that is going to be invested in roads throughout this territory - they don't support.

Mr. Speaker, all the work that we're going to be doing - the work in Pelly Crossing for the recreation centre - they are not going to support that. They're not going to support the fire hall addition at Marsh Lake. They're not going to support the gymnastics centre at Vanier. Now, I think that's part of the issue here, isn't it?

Now, Mr. Speaker, they had to find a way to reject this particular budget. Why? Because the Member for Riverdale South and the Member for Porter Creek North, the leader, took different positions on the construction of the Arctic Winter Games facility at Vanier High School. The leader of the Liberal Party send a letter saying that they supported this particular expenditure. The Member for Riverdale South clearly made no secret of the fact that she doesn't support the expenditure, so how do they resolve this? Well, do what they've always done, just vote against everything that's put forward by this side of the House. It doesn't matter where it comes from or how it's done.

The other things these members are rejecting are the training trust funds for people. Training trust funds, which the members love to criticize, are all about putting money in the hands of citizens so they can control their futures, have a say in the training programs that they will benefit from. That is what training trust funds are all about.

Mr. Speaker, the leader of the Liberal Party just keeps up a running commentary, as if she's speaking to herself, just constantly rambling on. She can harrumph her way into history when we get into Committee.

There are other things that the members on the opposite side are voting against. This is not magic. This is not something special. This is money going into the community this year to improve services, to improve facilities. The Whitehorse waterfront development - obviously they don't want to see that happen either. This is an agreement between the City of Whitehorse and the Government of Yukon to improve this signature piece of property in the territory, in this city. They don't want anything to be done there.

The mammography unit - no comment there, not even a comment in second reading saying, by the way, we kind of like a couple of things. No, everything, it's all down the tubes. They don't like any of it.

Mr. Speaker, they don't like campground upgrading in Kluane. I know that this is deeply disappointing to the Member for Kluane.

We had a contest this morning to see whether or not there would be at least one expression of support for his riding from the opposition and, unfortunately, we struck out, Mr. Speaker. There was not any support for the campground upgrading in that area.

The Odd Fellows Hall in Dawson City, a heritage facility: this is for an upgrading of a facility in an important community in this territory - there was not even a word about that. That's receiving a lot of support from the Dawson City Art Society. This is a good project that virtually everybody in that community whom I have spoken to - and I've heard of no dissent - supports. Yet, when the members opposite have a chance to say something about a heritage project, have something to say about putting people to work in Dawson City, there is a blanket no. They won't support any of it; it's all wrong.

Well, Mr. Speaker, this budget is chockablock full of good suggestions, largely coming from citizens themselves, though I must say that there are quite a few good, original ideas coming from the government benches that do find their way into the budget process. But, Mr. Speaker, this does speak to the fact that the government knows how to work with the citizens. What we've had a hard time doing is getting an unreasonable opposition to agree to anything that the citizens and this government want to propose in this Legislature.

What this concern is really all about is that they wanted the government side to come and consult with them personally on the supplementary. It's all about a fit of pique that they weren't consulted to the extent that they wanted to be consulted. We've been consulting with the opposition for two months now. Everyday, we faithfully sit in our seats, we listen to the presentations by members opposite - albeit repetitious, we still listen to the opposition. They are being consulted every single day.

Yet that's not sufficient to meet their needs. They want some private consultations, too.

Mr. Speaker, we know that they don't like the community development fund. We know that. They've said it many, many times and, to be truthful, I didn't expect to get a lot of support for the community development fund enhancement. But the members opposite are right. The communities do support the community development fund because it's an efficient way of meeting their needs as they define them. They do support it, and they are completely out of sync with the members opposite on that subject.

I know the Liberal leader has described it - I don't have the exact quote here but it was a precious quote. The leader of the Liberal Party said, well, if you give them something, then they'll only ask for more. What a paternalistic comment, Mr. Speaker. If you respond to their needs and you provide some funding to the community development fund, you'll only encourage them to come back for more. They'll only expect that the government can actually be efficient. They'll only expect that the government can actually deliver on commitments that they make to the public. We wouldn't want that to happen. That would be quite unacceptable. That precious quote will go down in history as one of the most arrogant and patronizing comments that has ever been enunciated in this Legislature.

The bottom line, of course, is that the communities do support the community development fund because it does respond to their needs. It's an application-based program, and the applications don't come from government, they don't come from individual MLAs, they come from citizen groups - in every single case.

And, Mr. Speaker, those projects put forward by good citizens, many of whom are volunteers, are putting people to work in every community in this territory - in every one of those projects. Because the members have singled it out, every one of those projects the members are obviously disappointed in and don't support. If we could, we should be sending out information to every single one of those citizens to say what the Yukon Party and the Liberal Party have to say about this program and about their projects.

Mr. Speaker, I'm going to look forward to debating this. I think this is a good measure.

Mr. Speaker, the Government of Yukon is relatively cautious and relatively, dare I say, reserved - certainly responsible - when it comes to estimating its financial revenues - the revenue picture. There's no doubt about that at all. And, Mr. Speaker, when the government makes its spending plans, it doesn't spend money it doesn't have. We only make decisions about making commitments once we know the funding is there, and in this case it was March of this year.

Well, Mr. Speaker, when it comes to maintaining stable spending limits, this government is determined to stick by its plans to ensure that we do not face a situation of drought in terms of expenditures one year, simply because we couldn't contain ourselves in the spending frenzy of the year before.

I know that members opposite have said that they want us to spend now, spend hard, and don't even think about next year. "Keep as many people - through direct spending - in this territory as we possibly can, put everybody you possibly can to work, don't think about next year."

Well, Mr. Speaker, I intend to be alive next year. And I think there are people in the territory who expect the government to be more responsible and to think ahead at least one year.

Mr. Speaker, we have to think at least a year ahead; in fact, we are thinking many years ahead, because we want to ensure that there is a stable spending pattern that the services that people expect - whether it be education or health services, or even the capital spending plan itself - are relatively stable. People expect that from the government. They do not support the views of the opposition, both in the Liberal Party or in the Yukon Party. They don't support this vision that we should rush headlong into expenditures, and never mind tomorrow. That's irresponsible. We don't support it.

Mr. Speaker, when it comes to far-ranging and future thinking regarding the economy, this government is more aggressive than any government in Yukon history. Members opposite were only last year complaining that we were only thinking far ahead, we weren't thinking enough in short term. When we present a few measures that respond to job creation needs in the short term, they say we're not thinking far enough ahead. We can't win for trying, Mr. Speaker, with these folks across the floor, but what we care about is whether or not we're winning with the community we serve. We have developed good relationships, good partnerships, with people around this territory, and that will serve this territory well, and we're happy to be working with them, beside them and for them.

Speaker: Are you prepared for the question?

Some Hon. Member: (Inaudible)

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: Disagree.

Mr. Phillips: Disagree.

Ms. Duncan: Disagree.

Mr. Cable: Disagree.

Mrs. Edelman: Disagree.

Clerk: Mr. Speaker, the results are 10 yea, five nay.

Speaker: The yeas have it. I declare the motion carried.

Motion for second reading of Bill No. 18 agreed to

Bill No. 15: Second Reading

Clerk: Second reading, Bill No. 15, standing in the name of the hon. Mr. McDonald.

Hon. Mr. McDonald: Mr. Speaker, I move that Bill No. 15 be now read a second time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 15, entitled Fourth Appropriation Act, 1998-99, be now read a second time.

Hon. Mr. McDonald: Mr. Speaker, this supplementary sees our expenditures for the year rising by a little over $4 million. At the same time, our revenue inflow in the supplementary is shown as increasing by more than $10 million, the net result being a decrease of some $6 million in the deficit for the year.

We now know that these revenues estimates are low, but I will speak to the changes shown on the estimates first.

Territorial income tax revenues are shown as declining based on the most current estimates we have received from the federal government. These estimates are based in part on computer models that incorporate national indicators of tax yields that may not, therefore, be entirely accurate for the Yukon at this point.

This decline in income taxes is offset, to a certain extent, by an increase in our yield from oil and gas royalties as a result of increased production from the gas wells in southeastern Yukon.

The formula financing grant has increased, in large part, as a result of the formula failsafe provisions, which more or less compensates for declines in our tax yield.

Since our income tax revenue has declined, the formula grant automatically increases to cover the loss of taxes. Many other factors also play upon the calculations and at present, these are to our benefit for the current year.

Updates received in March now indicate that the formula grant will increase further for the 1998-99 fiscal year. This increase will be in the neighbourhood of some $9 million and results largely from revisions of the provincial local escalator and the measure of national average tax rates, which impact upon our perversity factor in the formula.

These additional revenues are the source of funding for the supplementary we have just introduced, read a second time and passed for the current fiscal year and which we will be discussing.

In Supplementary No. 3 for 1998-99, there is a relatively small increase in our operation and maintenance expenditures. It is due to only a few items.

Since our oil and gas revenues have increased, so, too, has our payment to First Nations for their share of these revenues. This payment of $326,000 is reflected in the Department of Economic Development.

Justice requires new money as a result of the report of the Judicial Compensation Commission and its impact upon the pay and benefits received by territorial court judges. This increase in judicial salaries has a consequential impact upon the salary of the ombudsman and that office, therefore, also requires additional sums.

The larger increase in capital spending is due to two line items in the Department of Community and Transportation Services. We are accelerating our planned contributions to both the Watson Lake and Whitehorse recreation facilities so that the projects can proceed more quickly from what otherwise would be the case. This will help stimulate our economy and make these facilities available to the residents of those communities in a more timely fashion.

In consequence of this decision, Mr. Speaker, you will note that the supplementary contains an additional $1 million in the current year for the first phase of the Whitehorse project and $2.5 million for Watson Lake's new complex. We are committed to improving the quality of life for Yukoners, and the availability of first-class recreational facilities goes far to achieving that goal. I'm proud we are able to help these communities with these substantial, extraordinary contributions.

Mr. Speaker, with this supplementary we are projecting a slight decrease in our accumulated surplus to $49.4 million at year-end. Upon publication of the public accounts for the year, this figure will undoubtedly be somewhat higher as a result of the capital lapses, and our five-year projection shows our estimate of those lapses.

While an accumulated surplus in the $50 million may seem large, I would point out to members that our population has declined and it takes several years for the full impact of this to work its way through the formula. As our projections show, our accumulated surplus will decline to a lesser sum over the next several years, and we must be mindful of this when making current spending decisions. Hence this supplementary we've presented before the House.

Thank you.

Mr. Ostashek: Mr. Speaker, I don't have anything to say on this supplementary in second reading. I will have some questions as we go into Committee debate on it.

Motion for second reading of Bill No. 15 agreed to

Bill No. 72: Second Reading

Clerk: Second reading, Bill No. 72, standing in the name of the hon. Mr. Keenan.

Hon. Mr. Keenan: Mr. Speaker, I move that Bill No. 72, entitled An Act to Amend the Municipal Finance and Community Grants Act, be now read a second time.

Speaker: It has been moved by the Minister of Community and Transportation Services that Bill No. 72, entitled An Act to Amend the Municipal Finance and Community Grants Act, be now read a second time.

Hon. Mr. Keenan: Mr. Speaker, I'm pleased to speak to the amendments proposed to the Municipal Finance and Community Grants Act.

The new Municipal Act signalled a new relationship between the territorial and municipal levels of government. It reflected our government's belief that, with more authority and flexibility, municipal councils can govern their communities better. The Municipal Act, however, does not address one major aspect of municipal government, and that is the funding provided each year to municipalities by the Yukon government.

It is the Municipal Finance and Community Grants Act that provides for various types of funding provided to communities, describes the formula used each year to calculate the comprehensive municipal grants, and includes various other terms related to such funding.

At the request of the Association of Yukon Communities and its member municipalities, our intention with this bill is to modernize parts of the Municipal Finance and Community Grants Act to create more freedom for municipalities in their financial matters.

Mr. Speaker, I will state at the outset that we do not intend at this time to change the formula for calculating the amount of the annual grants. We have assured the AYC that we will not consider changing the formula without a request that has the support and involvement of AYC and its membership.

While this continues to be a topic of discussion within the AYC membership, no formal request has yet come forward for amendments to the formula. The changes that we have before us deal specifically with section 13 of the Municipal Finance and Community Grants Act.

Section 13 currently requires municipalities to reserve at least half of the annual grant for capital expenditures and allows a variance from that direction only with the approval of the minister. The proposed amendment allows municipal councils to decide for themselves, on an annual basis, whether they wish to increase O&M expenditures and to what degree.

Municipalities want this additional decision-making capacity for a number of reasons. The previous 50/50 split was suitable for ensuring that municipalities maintained and/or improved municipal infrastructure, but some municipalities feel that they now have a suitable base.

Increased capital infrastructure in some municipalities has created a need to be able to allocate a higher portion of the annual grant to O&M, and municipalities want greater freedom to respond to social and economic program needs.

With respect to removing ministerial approval for re-allocation of the annual grant, municipalities are still required to make such decisions in the form of a bylaw. This ensures that such decision will be made in a public forum.

Municipalities are still required to submit copies of all bylaws and annual finance statements to the department, and I am confident that this information will allow the department to identify trends in municipal expenditures and advise municipal councils as needed.

These amendments follow through with the more progressive philosophy embodied in the new Municipal Act.

Thank you, Mr. Speaker.

Mr. Phillips: Mr. Speaker, we'll be supporting Bill No. 72, An Act to Amend the Municipal Finance and Community Grants Act. It is something that the municipalities and AYC - their body - has lobbied for, and it does allow, as the minister said, more flexibility with their funding.

We certainly support more local control of government in that way, and we'll be supporting the act.

Thank you, Mr. Speaker.

Mrs. Edelman: Mr. Speaker, this act goes a long way to giving municipalities the type of responsibility and authority that they've been asking for for many, many years.

What has happened in the past is that senior levels of government have come in and built facilities and left the O&M to municipalities to deal with, and that hasn't worked well. What this does is allow municipalities across the Yukon to have more self-determination in the way that they want to spend their money.

They are the government that is closest to the people; it makes sense to give them that authority, and so the Yukon Liberal caucus will be strongly supporting this particular piece of legislation.

Speaker: If the minister now speaks, he will close debate. Does another member wish to be heard?

Hon. Mr. Keenan: Thank you very much, Mr. Speaker. I'd just like to take the time to thank the official opposition, and the opposition of the third party for their support for this very important bill.

Thank you.

Motion for second reading of Bill No. 72 agreed to

Bill No. 73: Second Reading

Clerk: Second reading, Bill No. 73, standing in the name of the hon. Mr. Keenan.

Hon. Mr. Keenan: Mr. Speaker, I move that Bill No. 73, entitled Seniors Property Tax Deferment Act, be now read a second time.

Speaker: It has been moved by the Minister of Community and Transportation Services that Bill No. 73, entitled Seniors Property Tax Deferment Act, be now read a second time.

Hon. Mr. Keenan: It is with great pleasure to introduce to this House and to Yukon seniors the Seniors Property Tax Deferment Act. This bill represents a component of our Yukon seniors strategy and is intended to benefit Yukon seniors who own their own home in the Yukon. Eligible seniors will be offered an option to defer their annual property taxes until the property is disposed of or until some later date when they may choose to begin repayment.

We estimate that there are approximately 535 seniors, Mr. Speaker, throughout the Yukon who own and occupy their own home and who could become eligible. Including spouses, this initiative could affect the lives of over 1,000 Yukoners and provide for increased disposable income for senior citizens, especially as a supplement to those with a limited income.

The provisions of this act are straightforward and uncomplicated. Number one is that the tax deferment will be available immediately to seniors under the Yukon government's property taxation authority, who are currently eligible for the senior homeowners grant. The bill also will enable municipalities to adopt a similar program. We encourage all municipalities to adopt these measures, and we're prepared to work with them to this end.

Eligible seniors will be required to apply only once for the deferral, and enter into an agreement with the taxing authority. This provision is part of the government's red-tape reduction strategy and makes things much more convenient for seniors by not requiring them to apply annually. The agreement will remain in effect until either party cancels it or the property is disposed of through sale or an estate transaction.

Seniors will still be eligible for their present seniors homeowner grant of up to $500 and then have the option of deferring all or part of the remaining property taxes upon application.

While this legislation is intended primarily for Yukon seniors, widows or widowers who are 60 years or older and who own and occupy their homes will be able to continue with an agreement entered into by the deceased spouse.

The program will also include measures for surviving spouses who are younger than 60 years of age. Younger surviving spouses who own and occupy their homes will have the option of continuing deferment of the accumulated total but they will have to restart annual payments of taxes until they are at least 60.

Interest will be charged on the deferred tax balance at the bank rate. Essentially, this will be an annual simple interest calculation on the outstanding principal balance.

Mr. Speaker, in the spirit of the new Municipal Act, this legislation enables municipalities to adopt similar tax deferment programs for seniors living within municipal boundaries. Municipalities wishing to adopt their own seniors property tax deferment program will enact a bylaw which will take into consideration the needs of their seniors. That means that the provisions of the Seniors Property Tax Deferment Act could be available to all Yukon seniors living in both within or outside of municipalities.

The Yukon government is prepared to provide both financial and administrative support to municipalities to ensure the benefits of this legislation can be made available to as many Yukon seniors as possible.

Mr. Speaker, it is our intent to have provisions of this act in force for the current year, meaning Yukon seniors could defer their current 1999 property taxes.

I believe strongly that we should recognize our seniors in the Yukon and provide every opportunity to enhance their lives. This act provides tax relief for seniors on a fixed income, and in an immediate and tangible way, enhances their annual disposable income.

Thank you.

Mr. Phillips: Mr. Speaker, we'll be supporting Bill No. 73, Seniors Property Tax Deferment Act, that's before us here today.

As the minister says, this act only applies to senior taxpayers outside of any Yukon community for which YTG is the taxing authority, and he said he will work with the municipalities to put the act in place for seniors within municipalities.

The concern that has been raised with us - and the minister said today he's going to provide some funding and I'm not sure whether he's talking about funding to the municipalities themselves, but what we understand to be the concern of the municipalities is that YTG cover all administration and other costs and then have municipalities opt in, and the municipalities, I guess, would opt in by way of a bylaw. I know that is a concern in the municipalities.

The other concern I would raise to the minister is that he said the spouse is eligible if a senior over 65 passes away - the spouse is eligible at age 60, I think the minister said. The minister may want to have a look at this. Nowadays, people are retiring at a much lower age than 65, and some of it is forced retirement. In the federal government and even in the territorial government, people are leaving their positions earlier and this might be something that might allow them to stay in the territory, if they only have one pension for example - if they could opt in at an earlier age, say 60, or something to that effect. Many of the baby-boomers now are retiring. The old adage where people could retire at 65 is now changing and people are retiring at 55, 60 and in-between.

So, the minister may want to look at that in the future. If the bottom line here is to create a healthy community and allow our seniors to stay here and live in the Yukon longer and build stronger family ties, then that might be something they may want to consider in the long run.

I'll leave that with the minister and advise him that we will be supporting the bill that's before us here today.

Thank you, Mr. Speaker.

Mrs. Edelman: Mr. Speaker, what the minister is talking about in this act is essentially reverse mortgage. And this is a policy that's been used in a number of different jurisdictions in Canada and the United States, and in some places it's been very successful. In other places it's been absolutely disastrous.

For example, in Toronto, and in parts of eastern Canada, there have been significant problems with areas where there have been huge, huge taxes because the value of the property, particularly in the downtown areas of very large cities in Canada, has been very, very high.

So the value of the property is high, so the municipality charges huge, huge taxes in order to make a fair assessment and a fair taxation on that.

Then what happens, of course, is that there's an inevitable drop in the market, and then the value of the home goes down, and the taxes that have been taken off in the form of a reverse mortgage take away from the value of the home that the senior is left with.

So what you end up with is basically penniless seniors in some of the larger cities in Canada because of the reverse mortgage program. And that is a real concern.

We have an assessment program for land and for taxation here in the Yukon that isn't sensitive to the huge highs and lows that our economy goes through. That's a real area of concern.

Although we will be supporting this bill, we have strong concerns that we are going to end up with seniors who are ending up in homes paying huge taxes and losing the value of their homes in the long run. And this has happened in Nova Scotia, this has happened in Toronto, this has happened in Vancouver, this has happened in three jurisdictions in the United States - this has happened. And it has left a lot of seniors and many generations thereafter without the original homes which they had had in their family, in some cases, two or three hundred years in parts of Nova Scotia, and they've lost them because of reverse mortgages.

So, we have concerns, and very valid concerns.

The other concern that I have is that, by putting this bill forward, the government is essentially forcing municipalities to do the same, and the minister has talked about - and I'll quote. He said that he's prepared to offer financial support to Yukon municipalities. To what extent is he prepared to offer that financial support? Is he prepared to pay for the administration of this, and is he prepared to work with municipalities to make it work within their tax system? Because that would be an additional cost for municipalities as well. What is the extent of the financial support that the minister is willing to offer to Yukon municipalities?

The minister also talked about 1,000 Yukoners who are outside municipal boundaries in the Yukon. I'd sure like to know where the minister got those figures. They don't jibe with anything that we've seen out of the statistics branch here in the Yukon.

As I say, we have some serious concerns about this bill. There have been tremendous problems in other areas of Canada because of reverse mortgages. However, it is something that the Association of Yukon Communities has supported in the past, but they have asked the government to make it Yukon-wide and to have one administrative bureau in order to work with this, so that everybody is treated equally within the Yukon Territory.

As I say, the Yukon Liberal caucus will be supporting the act, but we have some reservations.

Speaker: If the member now speaks, he will close debate. Does another member wish to be heard?

Hon. Mr. Keenan: I'd like to take this time to thank the official opposition for their thoughts. I will put the thoughts, as directed, into our thinking.

As the member is quite categorically correct, it is for only within our taxation authority, and whatever we do within the municipalities will be in partnership or in help to them within their jurisdiction.

I can say to both members, at this point, that it is not a reverse mortgage system. It is only for the value of the taxes.

I appreciate where the Member for Riverdale South is coming from but I would like to calm her down, if I may. We are not forcing municipalities, as she had said - not forcing them at all.

I have a lot of respect for the municipalities and their jurisdiction and will continue to do, as we have proven over the last almost three years that we can, that we're very much a government that wishes to work at recognizing other levels of government, whether it's First Nation, whether it's municipal or even whether it's the federal government. We will work with those different jurisdictions within a partnership.

So, it will not be at a cost to the municipalities. If they want to opt in, they can. What I had meant by no cost to them, is that the monies that they get in taxes within their own system, within their own jurisdiction, is what we as the territorial government would front to them so that it would not take away from their base. So, it would be a recoverable item for us as it goes through the budgetary process. So, we would not be in any means to do that.

We are looking, of course, to help them for a time in setting up and working with them on the administration of it.

As to the specific question from the Member for Riverdale South - as to 1,000 people - I had stated that there are approximately 535 seniors, but if you include their spouses, then it could initially affect the lives of over 1,000 people. That's where the figure comes from.

So, I'd like to thank both of the opposition parties for their support - qualified, by some - and for supporting us in this.

Thank you.

Motion for second reading of Bill No. 73 agreed to

Bill No. 74: Second Reading

Clerk: Second reading, Bill No. 74, standing in the name of the hon. Mr. Keenan.

Hon. Mr. Keenan: I move that Bill No. 74, entitled An Act to Amend the Assessment and Taxation Act, be now read a second time.

Speaker: It has been moved by the Minister of Community and Transportation Services that Bill No. 74, entitled An Act to Amend the Assessment and Taxation Act, be now read a second time.

Hon. Mr. Keenan: Today it is my pleasure to discuss amendments to the Assessment and Taxation Act that will allow rural residents to enter into an agreement to defer the local improvement tax for electrical and telephone service extension if they do not choose to hook up to the service immediately.

Last year, this government approved a new rural electrification program and rural telecommunication program policies and guidelines, to encourage the extension of those services into rural Yukon. There have been a number of successful installations since these changes were made. By providing for the deferment of the local improvement charges, as was outlined in these new guidelines, property owners are encouraged to support the service extension.

This tax reform initiative is somewhat similar to the seniors property deferment tax, which I introduced earlier. However, in this case, tax deferment will be linked directly to the uptake of electrical or telecommunication services. Property owners who do not want the service immediately can still vote in favour of the service, but can choose to defer 100 percent of the local improvement tax for the period of deferment until they hook up to the service, or until the property is sold.

Mr. Speaker, although this is a relatively minor amendment to the Assessment and Taxation Act, it represents a fundamental change of approach for the rural electrification policy and the rural telecommunication policy.

Property owners who do not intend to subscribe to an electrical or a telephone service extension program at the time of installation often feel it is unfair to have to pay a local improvement tax on their property immediately. This amendment will allow a measure of relief for those property owners.

Mr. Speaker, I do believe that, with this amendment, we can remove some earlier disincentives to the service extension program. This policy change may result in a larger uptake of the electrical and telecommunication services in the future.

Thank you.

Mr. Phillips: Mr. Speaker, we'll be supporting Bill No. 74, and the critic will have some comments during Committee.

Mrs. Edelman: Mr. Speaker, the Yukon Liberal caucus also supports the bill. I know that this goes far to move along some of the changes in the rural electrification telephone program that the minister has tried to bring through this Legislature on a number of occasions.

Some of the questions that we're going to be having during Committee of the Whole are issues around the aerial access rates for utility companies when it comes to paying municipalities or paying the local authority, and that will be one of the questions that we will be bringing up during Committee of the Whole.

Thank you, Mr. Speaker.

Motion for second reading of Bill No. 74 agreed to

Bill No. 76: Second Reading

Clerk: Second reading, Bill No. 76, standing in the name of the hon. Mr. McDonald.

Hon. Mr. McDonald: Mr. Speaker, I move that Bill No. 76 be now read a second time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 76, entitled An Act to Amend the Legislative Assembly Retirement Allowances Act, 1991, be now read a second time.

Hon. Mr. McDonald: Most of this bill is to ensure the continuing compliance of the pension plan and members of the Assembly established by the Legislative Assembly Retirement Allowances Act, 1991, with the requirements of the federal Income Tax Act.

It is necessary to provide a brief description of the process, Mr. Speaker, by which the members' pension plan is administered.

The Members' Services Board of the Legislative Assembly, which includes in its membership the Speaker, the three party leaders and the Minister of Economic Development, is required, pursuant to the Legislative Assembly Retirement Allowances Act, to "ensure that part 2 of this act is accepted by the Minister of National Revenue as a registered pension plan, pursuant to the terms of the Income Tax Act (Canada), and continues to qualify as a registered pension plan."

Also, subsection 4(5) of that act states that "If in any respect part 2 does not comply with the terms of the Income Tax Act (Canada) applicable to registered pension plans, the Members' Services Board may administer the provisions in part 2 as if it were amended to comply."

The Members' Services Board, then, is the body responsible for the administration of the plan and, accordingly, for providing direction on the contents of this bill. Although it is a practical necessity for this bill to be brought forward as a government bill and for me to be the sponsor, it is being done on behalf of the Members' Services Board and, therefore, is more properly considered a House, rather than a government, initiative.

Mr. Speaker, the Legislative Assembly Retirement Allowances Act, 1991, as is obvious from its title, was passed in 1991. Since that time, changes have taken place in the federal law that make it necessary to update this legislation.

The Members' Services Board has, during the years since 1991, been diligent in administering the pension plan in a manner that has ensured ongoing compliance with the Income Tax Act. The effect is that the provisions of a number of the amendments found in Bill No. 76 are not new in terms of the administration of the plan. They are simply making clear, in our law, what is already being done.

There are some additional amendments being made at this time. Some provide clarity, in reference to the buy-back provisions and the indexing of benefits.

These amendments do not change anything; rather, they codify the procedures that have been in place since the inception of the plan. Another amendment allows pension benefits to be paid on a bi-weekly basis, instead of monthly, as is now the case. This is being done for administrative reasons, as it will allow more compatibility with the government's payroll system. There is also an addition being made to the sections covering lump-sum payments to designated beneficiaries on a death of a member or former member. This is being done to correct an oversight in the original drafting.

A point that needs to be made, so that there is no misunderstanding, is that none of the provisions in Bill No. 76 affect the level of pension benefits payable. To repeat, pension benefits now being received by former members, and those which at some time in the future will be received by current members, are not changed by this bill.

One final note: these amendments have been submitted to Revenue Canada, and a letter has been received from that agency, indicating that they satisfy the requirements of the Income Tax Act, and will permit the continued registration of the pension plan set out in the Legislative Assembly Retirement Allowances Act, 1991.

On behalf of the Members' Services Board, I commend this bill for the consideration of the House.

Mr. Phillips: Mr. Speaker, the Yukon Party caucus supports the bill, which primarily is accommodating the request of the federal government, and some minor changes that do not affect, in any way, the remuneration that will be received by members in the pension plan. So we support the bill.

Ms. Duncan: Mr. Speaker, the Yukon Liberal caucus supports this legislation, as we have previously indicated in discussions.

And, as noted by the Government Leader, the main intent of this piece of legislation is compliance with Revenue Canada requirements. The Government Leader has also articulated there are a few provisions that simply make this legislation better for people, namely the provisions, for example, in payment schedule, and so on. There are no provisions and no changes, as the Member for Riverdale North has noted, to the remuneration, and we support this legislation and the desire to comply with Revenue Canada requirements.

Motion for second reading of Bill No. 76 agreed to

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

Speaker: It has been moved by the government House leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Motion agreed to

Speaker leaves the Chair

COMMITTEE OF THE WHOLE

Chair: I will now call Committee of the Whole to order. Is it the members' wish to recess?

Some Hon. Members: Agreed.

Chair: Fifteen minutes.

Recess

Chair: I will now call Committee of the Whole to order.

Bill No. 14 - First Appropriation Act, 1999-2000 - continued

Yukon Housing Corporation - continued

Chair: Committee is dealing with the Yukon Housing Corporation. Is there further general debate?

Mrs. Edelman: Mr. Chair, the minister and I, during the fall supplemental budgets debate, had quite a conversation around territorial agents. There is a new program that Yukon Housing Corporation is a partner in, where there will be territorial agents out in a number of communities - four communities in particular - who will be providing a number of territorial agent or territorial representative services.

Now, it's been six months, and actually for some of these communities it's been a little bit longer. Can the minister - and I know he doesn't want to do a complete review until the program has been in existence for a year - give us any preliminary ideas of how well or not well this particular program is working?

Hon. Mr. Fairclough: From the reactions I've been getting from the community, they wanted to see the territorial agents have additional services because not everything was offered there with regard to renewing licences, and so on, but we're trying to get the territorial agents up and going, to offer as many services as they possibly can within their capability.

Mrs. Edelman: Mr. Chair, the infrastructure necessary in order to deliver those services in the rural communities, some of those small office items, for example - the picture machines that you use to put the drivers' licences together and for liquor ID - have those all been installed in the various communities?

Hon. Mr. Fairclough: I have to check on that. What we wanted to do was change that equipment. The Liquor Corporation wanted to bring in a better camera so that we can have the picture as part of the card and also have a metal strip so that you can have more information on the card itself. Presently, we don't have that technology here, so we wanted to basically change over the cameras that we have in Motor Vehicles. It's compatible with what the Liquor Corporation has.

Mr. Phillips: I have a couple of questions. Mr. Chair, in Question Period a few days ago, the Yukon Party critic asked a question of the minister about changing the policy of the Yukon Housing Corporation with respect to child support payments being included as part of the social housing rent.

The minister had a pretty feeble excuse. I think he said that the feds had changed quite some time ago, but the reason we hadn't done it is because we can't do everything right away.

There are a lot of single moms out there and people in need who need the minister to do this fairly quickly. It's a simple policy change and a recalculation. I just want to know from the minister: has the minister got some kind of a time frame that he wants to do this in?

I mean, this is something that can be brought forward very quickly to Cabinet. A policy change can be made or recommended to the board, I suppose, asking the board to look at something like this. I mean, how long is this going to take to make this necessary change that I've heard the minister even agree with? It has been almost a year now since the federal government has changed, so how long is it going to take the minister to act on it?

Hon. Mr. Fairclough: Mr. Chair, we have looked at the situation. We know that making this policy change is going to affect not only the Housing Corporation, but also the rest of our government. We have been working with Health and Social Services and Justice on this matter.

Mr. Phillips: Well, Mr. Chair, that didn't help me at all. The minister's been working on this then, I guess, for over a year. My question to the minister: does the minister have a target date? Do we have an idea of when we might make this change?

I mean, this isn't complicated. The Government of the Yukon isn't the Government of Canada, where it takes forever to do things. This is something that this government has talked about. The poor in this territory - who it claims to have a captive audience of, that they're the only ones who want to do something for them - well, this is something that would have a profound effect on a lot of the people who are not that well off. And I would have thought that this would be a fairly significant priority of this government - to deal with it.

So I'll ask the minister again. I know he's working with these departments, but do they have a target? I mean, surely they could come up with something in 30 days. We know what the problem is. We know how we have to solve it. We just have to get the right people in the room to deal with it. And so would the minister give us that undertaking - that he'd do it within 30 days?

Hon. Mr. Fairclough: Mr. Chair, we don't have a timeline.

Mr. Phillips: Why don't they have a timeline. Is it not a priority of the government to do this, that it doesn't matter to the minister how long it takes? It might take to the end of this term, and it may not even get done then. Why isn't there a timeline to this issue?

They talked a lot about poverty. They talked a lot about doing things. This is something that they know the federal government's done. What's the holdup? Is there another reason, or is there a problem, that they can't get through here, that the minister would like to enlighten us on?

Hon. Mr. Fairclough: I told the member that it doesn't just affect our department. It affects other departments within government, and we are working with Health and Social Services and Justice on this matter.

Mr. Phillips: This doesn't affect a lot of other departments. I mean, the departments aren't exactly a hundred miles away. I mean, some of them are in the same building. Some of the people are in the same building.

All I'm asking the minister to do is to step up the process in which they make this change, and the minister doesn't have a timeline. Why doesn't he have a timeline? Why wouldn't the minister want to sit down with the Minister of Health and Social Services and the Minister of Justice and say, poverty - remember our A Better Way? - was a priority of this government.

We've been here two and a half years and we haven't done anything about it. Mind you, the federal government just changed it just a little over a year ago, so really, there hasn't been much time to do anything about it.

Mr. Chair, a year is a long time to deal with this matter. Every single month, those single mothers have had to pay 25 percent more for their rent, and I'm asking the minister to get serious about this and not just brush it off as if it doesn't matter.

Give us a timeline; tell us he's going to meet with the other ministers and get on with it; do the job.

Hon. Mr. Fairclough: I did tell the member that we are working with other departments on this matter.

Mr. Phillips: Mr. Chair, maybe the minister can tell us what the problem is. What's the holdup? Is it Health or Justice that's holding it up?

Hon. Mr. Fairclough: Mr. Chair, this matter is being dealt with government-wide, and we're working with the two departments to try to resolve this because it doesn't just affect our department.

Mr. Phillips: Mr. Chair, who's holding it up? It sounds like the minister's Yukon Housing - let me put it this way: is the Yukon Housing Corporation supportive of a change in policy?

Hon. Mr. Fairclough: Since taking over the CMHC program, we did say we had the flexibility to do things. We have been working with communities to try and change some policies and try to be more flexible with them. With this particular policy, we are working with the departments to resolve it.

Mr. Phillips: Has the minister taken it to the board of directors yet?

Hon. Mr. Fairclough: We've had some discussions with the board of directors on this matter in very recent times, but the department has been working within government to try to resolve this so that we can take something a bit more solid to the Housing Corporation Board.

Mr. Phillips: Mr. Chair, can the minister give us some idea when this might happen? To just say that there isn't a timeline on it, I mean, is inexcusable. This is a serious matter. It's a matter that we raised almost three years ago now. The federal government changed over a year ago; there has been plenty of time for the departments to get together and address this matter. This is something that puts more money in the pockets of single moms so they don't have to claim their child support payments as part of their income. Now the federal government allows it. The Yukon government supports that but hasn't done anything about it in a year. That's really dragging your feet, Mr. Chair.

I'd like to ask the minister if he could give us a timeline, that within a month or two months, he will try to get the thing changed. Can he do that?

Hon. Mr. Fairclough: Well, we like to do things properly and think things through before going out and giving direction. We want to be able to work with Justice and Health and Social Services on this matter, and come back with some solid direction to the corporation should there be changes. I don't know whether or not, in the most recent talks between the department, they've talked about timelines. What I can do is go back and check to see what they have been looking at as far as suggestions for completion or a change to this policy.

Mr. Phillips: I'd like to see that, and maybe the minister could provide us with any correspondence that's gone back and forth from Yukon Housing Corporation to Health and Social Services and Justice regarding this matter. Could he do that? Could he give us a commitment he'll provide us with the correspondence addressing this issue so we can get a handle on what the problems are - and any correspondence from those other two departments back to Yukon Housing Corporation - so we know what the problems seem to be?

Hon. Mr. Fairclough: This, of course, has been a lot of internal discussion but I can bring back to the member what has gone back and forth - and to the Liberal caucus, too.

Mr. Phillips: Well, Mr. Chair, hopefully the government will finally move on this one. We'll just have to wait and see, I guess.

The rural housing needs survey - can the minister update us on that? The critic left me a note here to ask the minister that question, and I wonder if the minister could update us on that?

Hon. Mr. Fairclough: We've had, for this year, Carcross, Ross River, Dawson City and a combination of Destruction Bay, Beaver Creek and Burwash Landing doing a community study. Now, that's what's included in this year - to have a study done and completed this year.

Mr. Phillips: Mr. Chair, I'd like to ask the minister what the policy is with respect to retrofits or repairs on homes. I've had some reports of a home in my riding. Some individuals are living in it. It's a Yukon Housing home and had a retrofit some years ago - three or four years ago or five years ago. Recently, this winter, it had another retrofit and several thousand dollars, I think in the neighbourhood of $20,000, was spent on it.

The report that I received is that much of the work done in the home was to repair damaged cupboards, repair smashed doors, repair virtually - damage in the house, vandalism, damage in the house.

The individual that I talked to said the person who had been living in the house since the first retrofit was still there and was actually accommodated in a hotel for a short period of time while the retrofit was done and then moved back into the unit again afterwards.

It seems to me that if an individual were in a Yukon Housing home and had damaged it there would be some retribution or we wouldn't be moving the individual back into the house. I could see us doing an energy retrofit, upgrading the windows or upgrading the exterior doors or that kind of thing. But if we're actually fixing damage - holes in walls, cupboard doors ripped off, other things that are happening - is there a policy in the department where we deal with that? Or do we just not say anything and just fix them all back up again, and then go back in three or four years from now and do it again? What's the policy of the department?

Hon. Mr. Fairclough: Well, I'd have to look at the details of this specific matter, but normally the tenants are liable for damage. Now, I believe you're talking about social housing - a person in social housing? Yes, they are liable for damages done to the units, and in cases where it has gone on, they have been evicted.

Mr. Phillips: Well, after this session's over, Mr. Chair, I'll get the details and pass them on. I don't want to name names or house numbers on the floor of the House, but I just wanted to know what the policy is.

I'll certainly bring it to the attention of the minister. Maybe there's another side to this story where some action was taken. So I'll look forward to talking to the minister about that.

Mr. Chair, another area that I want to bring up in the last area I have questions about is 100 Lewes Boulevard, the condominium project. It's an area that I wrote a letter to the minister on. It's in my riding, and there are 96 units in that area that are in dire need of retrofit, an upgrade.

They were built many, many years ago. At that time, the standards were lower than they are now, and I believe that that building was not really built the best way it could have been at that time. It was a spec builder and a rush job, and I think the residents in the building, the owners of the building now, are paying, big time, for the mistakes that were made in the past.

But they are caring owners and they want to upgrade and improve the facility. It also is a facility that, several years ago, I think, was initially heated with electrical heat. Then, when it was stratified, or made into a condominium project and sold, the owner at the time put wood heaters in all of the units. It is probably the largest single source in Riverdale of the wood smoke at the present time. There are 96 units in there, and probably about 90 of them, or 85-plus, are still burning wood in the wintertime, because they have electrical heat in the units. Some of the people have now switched to the more energy efficient Toyo stoves or those small, little oil stoves.

They still are faced with a fairly large heat loss problem because of the earlier construction of the building. They went to the Yukon Housing Corporation and applied for a loan to upgrade to R-21, and they have been basically encouraged all along that it was a viable project. Then, at the last minute, earlier this spring, they were told that the board was reviewing it to see whether the condominium qualified the same as houses did, and maybe it would have to be a separate category for them, and the board's going to make a decision.

The concern I have is, this is a project that's going to take all summer to do, if it goes on at all. It will create a great deal of employment in the territory. It will solve a lot of the problems with respect to wood smoke in Riverdale and greenhouse gases and it will reduce significantly the consumption of electricity and fuels in those units. Those 96 units are probably the single most energy saving project that is on the books of Yukon Housing at the present time, I'd be willing to bet.

We seem to be having some foot dragging going on with respect to the board dealing with the matter so that these people can get on with it, get approval within the condominium corporation to go ahead, with the support of Yukon Housing, and employ a bunch of Yukoners and reduce the energy costs for everybody there and actually do something very, very positive.

I think that it's a good program that the minister's got but if there ever was a candidate for this program, this is it. This is one of the projects in Whitehorse that I believe is in need of that kind of thing. So, what I'm doing is appealing to the minister to do whatever the minister can to accelerate the decision on this project so that, hopefully, we can get on with a retrofit on 100 Lewes Boulevard this summer. Will the minister do that?

Hon. Mr. Fairclough: Mr. Chair, the Housing Corporation has been working with the Lewes condominium to try and see if they can use the program through the Housing Corporation, and it has been going on over the past year. We've basically given direction to the Housing Corporation to go out and work with these people to see if we can get something going.

I think it's timely that the member has asked the question because, as of today, this afternoon, the corporation's board of directors has approved the project. Now, what is going to happen is they're going to wait for the Lewes condominium members to look at and approve what has been offered by the Housing Corporation through the joint venture program. So, things are moving along fairly well.

Mr. Phillips: Well, I'm pleased to hear that, Mr. Chair. This is the first time in this House in the 15 years that I've been doing my job that I accomplished something immediately upon asking the question. So, I'm pleased that we've gotten beyond that stage, and I'm glad that it was finally approved today. I know that I'll be talking to some of my constituents tonight who will be very happy to at least move this on to the next stage.

I'm glad that they've seen fit to make the decision quickly, and we'll look forward to hopefully this project being approved by the condominium owners and the project going ahead this year, because I think it's a very worthwhile project. It would solve many of the concerns that have been expressed by the minister with the green plan, as well as the concerns expressed by the residents with the very poor insulating qualities at the existing building and improving that. I'm pleased that's happening.

Hon. Mr. Fairclough: As the member goes and spreads this news around, I think a lot of congratulations need to go out to the corporation, the board of directors and the staff at the corporation, who have been working a lot on this project to make it happen. Today was proof of that hard work.

Chair: Seeing no further general debate, Committee will proceed to operation and maintenance.

On Operation and Maintenance Expenditures

Chair: Is there general debate?

Mrs. Edelman: Mr. Chair, on occasion, I wonder if the minister would give us some detail on lines upon request. There was a very lengthy briefing from the Yukon Housing Corporation but I just wanted to verify some of the information that was received during the briefing.

On Administration

Administration in the amount of $5,276,000 agreed to

On Program Costs

Program Costs in the amount of $7,288,000 agreed to

Operation and Maintenance Expenditures for Yukon Housing Corporation in the amount of $12,564,000 agreed to

On Capital Expenditures

Mrs. Edelman: Mr. Chair, some of these expenditures are actually partly back in O&M, but the rural native housing program that was taken over from the feds had some really poor quality housing stock. Is there any estimate on the total cost to bring that housing stock up to a relatively good standard?

Hon. Mr. Fairclough: We haven't taken over the rural native housing, but those that have mortgages through CMHC, we have, and they are very few.

Mrs. Edelman: Mr. Chair, it was my understanding that many of the houses that were taken over were in relatively poor shape and that there will be substantial expenditures, so I'm wondering if I can get some more details as to the actual cost.

Hon. Mr. Fairclough: I don't know whether the member is maybe confused with some of the medical services houses that came over. Some of them were in poor shape and the corporation is attempting to upgrade them.

Dollars? I don't have it in front of me. I'll get back to the member.

Mrs. Edelman: Mr. Chair, also along the same lines, has the foreclosure occurred on Faro Real Estate?

Hon. Mr. Fairclough: It's in the process, and the board is dealing with it. With regard to the numbers, we have $605,000 that's directed to upgrades of these units.

On Repair and Upgrade

On Home Repair Loans

Home Repair Loans in the amount of $3,100,000 agreed to

On Mobile Home Repair and Upgrade Loans

Mobile Home Repair and Upgrade Loans in the amount of $125,000 agreed to

On Home Repair Enhancement Loans

Home Repair Enhancement Loans in the amount of $75,000 agreed to

On Energy Management Loans

Energy Management Loans in the amount of $270,000 agreed to

Repair and Upgrade in the amount of $3,570,000 agreed to

On Home Ownership

On Mortgage Financing Loans

Mortgage Financing Loans in the amount of $3,200,000 agreed to

On Owner Build Loans

Owner Build Loans in the amount of $700,000 agreed to

On Home Completion Loans

Home Completion Loans in the amount of $500,000 agreed to

On Mobile Home Initiative Loans

Mrs. Edelman: Mr. Chair, can I get detail on this line? Is this one of these in-and-out items that went from one area of the budget to another - from the supps into the mains?

Hon. Mr. Fairclough: These were basically re-introduced, because the mobile home park wasn't completed, and they are for the relocation and home repair, and that type of thing - the programs that go along with the mobile home initiative.

Mobile Home Initiative Loans in the amount of $2,420,000 agreed to

On Land Development

Land Development in the amount of $1,500,000 agreed to

Home Ownership in the amount of $ 8,320,000 agreed to

On Private Sector Partnering

On Rental Suite Loans

Rental Suite Loans in the amount of $60,000 agreed to

On Joint Venture Loans

Joint Venture Loans in the amount of $500,000 agreed to

On Mobile Home Park Enhancement Loans

Mrs. Edelman: Mr. Chair, we spoke earlier in general debate on the department about the problem of dust in mobile homes. One of the other longstanding issues in mobile home parks, particularly in Whitehorse, is the issue of lack of playgrounds or poorly maintained playgrounds. Are there any initiatives within the Yukon Housing Corporation to look at that issue?

Hon. Mr. Fairclough: This particular line item is focused strictly on health and safety issues, and roads was one of the issues, whether they're moving units around to make them, I guess, a little more safe for people living in the parks.

That's what it is directed at. It wasn't directed at playgrounds or that sort of thing. We don't have a line item or dollars available in this budget that is strictly for that.

Mrs. Edelman: I would venture to say that there are some real safety concerns of children playing on some of the equipment in some of the mobile home parks in the City of Whitehorse - very serious concerns, because they are not maintained and they are not safe and they don't meet the standards of any other place in the city, for example. They don't meet the standards for our playgrounds in our schools and they don't meet the standards of the playground equipment that we have in our day cares and day homes. So, is there anywhere else that the department is working on this issue with the mobile home park owners?

Hon. Mr. Fairclough: I'm not sure if that would qualify under this, specifically, but basically those parks that are developed as mobile home parks are the responsibility of the park owners, but I can check to see if this particular line item could be focused on that, whether it's putting a fence around the areas or keeping children away from driveways, I don't know, but I'll get back to the member.

Mobile Home Park Enhancement Loans in the amount of $1 million agreed to

Private Sector Partnering in the amount of $1,560,000 agreed to

On Non-Profit Housing

On Repayment of Long-Term Debt

Repayment of Long-Term Debt in the amount of $518,000 agreed to

On Renovation and Rehabilitation Existing Stock

Renovation and Rehabilitation Existing Stock in the amount of $416,000 agreed to

Non-Profit Housing in the amount of $934,000 agreed to

On Staff Housing

On Repayment of Long-Term Debt

Repayment of Long-Term Debt in the amount of $49,000 agreed to

On Renovation and Rehabilitation Existing Stock

Mrs. Edelman: Can the minister give a little bit more detail on where these major projects are, because that's a considerable amount of money?

Hon. Mr. Fairclough: I have a draft list of what has been looked at. There are some dollars going to be spent in Dawson City, and that would go toward painting and replacement of windows and carpet; foundation repairs for $15,000; and carpets again. In the nurses residence, there's foundation and the building envelope; in the nurses sixplex, again, there's just painting of the bathroom, bathroom retrofit, handrails, and so on.

In Haines Junction, there's some upgrading and electrical. In Old Crow, it's painting exteriors; Pelly, interior painting; Ross River, retrofits again; Teslin, interior painting; Watson Lake, replacing a furnace; and that's it.

Also, in regard to all of the communities, I guess, with the Health transfer is the $210,000.

Renovation and Rehabilitation Existing Stock in the amount of $605,000 agreed to

On Prior Years' Projects

Prior Years' Projects in the amount of nil agreed to

Staff Housing in the amount of $654,000 agreed to

On Central Services

On Office Furniture, Equipment, Systems and Space

Mrs. Edelman: Mr. Chair, are these changes to the financial system that took place last year?

Hon. Mr. Fairclough: Yes, that's a part of it. It's also to implement the management and operating systems, the new financial management system and also the new property and client management system, and to develop and implement a property and client management system - that one is the big ticket item. It's $175,000, and the rest is a bit lower at $30,000. And there is also listed here $28,000 for new personal computers to bring them up to the year 2000 compliance.

Mrs. Edelman: Mr. Chair, I wonder if the minister at some point can quote me a more detailed explanation of what the new client management system is, and where the expenditures were on that particular project.

Hon. Mr. Fairclough: Yes, I can do that.

Office Furniture, Equipment, Systems and Space in the amount of $245,000 agreed to

Chair: Are there any questions on the recoveries?

Central Services in the amount of $245,000 agreed to

Capital Expenditures for Yukon Housing Corporation in the amount of $15,283,000 agreed to

Yukon Housing Corporation agreed to

Yukon Development Corporation

Chair: Is there general debate?

Some Hon. Member: (Inaudible)

Mr. Ostashek: Well, the minister says to fire away, but the minister has disappointed us in the past by sort of refusing to answer questions on this department or saying, "I'll get back to you". So, maybe I could start out by saying to the minister, since he doesn't believe that he needs to have an official here with him to answer questions of the opposition on his department, could I put in my pitch now to ask the minister to bring the president of the corporation and the chair to appear before the House in the fall session?

Hon. Mr. Harding: I believe they were here in the last fall session, so I think it would make sense to bring them here again.

Mr. Ostashek: Well, I'll take that as a "yes". I believe it's very important because I do have a lot of questions in regard to us doing in-house management now and how the cost of that will relate to the previous management contract that we had.

There are a few questions I want to ask in this department, and I hope the minister will be able to answer them for me. If he can't, at least we'll get them on the public record and get a letter back.

I've received several complaints in the last few days that the diesels are still running at the dam. Can the minister tell me why?

Hon. Mr. Harding: Well, one of the problems we had was with the fire. We had to drawdown Aishihik Lake water to replace it this past summer, which is unusual. We also are doing a test on Northern Cross right now, or the utility is, and that could be another reason. Actually, those are two reasons that I know of.

Mr. Ostashek: The minister is saying "that could be". I'd like to be a little more certain than that. I want to know if we're burning diesel now to produce energy because we don't have enough water to do it, and how long are we going to be burning it? Are we going to be burning it all summer, or are we going to have water that's going to be able to produce the energy requirements that are required here now?

This is a very serious situation, because we don't have any economic activity going on right now and, if we're burning diesel fuel to meet the energy demands without any economic activity, what are we going to do if something starts up?

Hon. Mr. Harding: Well, I don't agree that we have no economic activity, but I'll save that. We just had it in Question Period. The member lost that one and continues to lose.

But anyway, Mr. Chair, there is diesel being burned because of the fire and the drawdown on Aishihik Lake.

There are also diesels running occasionally, because we're burning - I don't know if I have the litres right, but I think 40,000 - I may be wrong - litres of crude from the Northern Cross and the utilities are doing further test work.

Mr. Ostashek: Are we going to have to run diesel all summer to meet the energy demands? Or when does the minister expect we'll have enough water to meet the energy demands?

Hon. Mr. Harding: No, we certainly won't. As usual, the spring thaw's going to double the ability to produce power from the Whitehorse generators - hydro. This has been a slow spring, so the runoff is slow, but it's starting, or it was until it started snowing. But we will have plenty of power this summer.

Mr. Ostashek: Awhile back, the Energy Corporation was advertising - a couple of years ago now - in relation to the licensing of Aishihik Lake. They put out a request for people who had claims against the lake. Can the minister tell me what's the status? How many claims were there? How much money's involved? And what is the status of those claims at this time?

Hon. Mr. Harding: I don't have the exact details on that, but the utility did undertake that. I will get that information for the member opposite.

Mr. Ostashek: I appreciate that, and while the minister's at it, could he also include in that letter whether they have reached an agreement with the federal government to pay for any disbursements.

When the Energy Corporation went out to the general public, and was criticized by me - and I believe the Liberals, I'm not certain of that - for opening the door, opening the floodgates. We were told not to worry, because the federal government would have to pick up the bill.

In the minister's reply, I would like to know - or maybe the minister knows now - if they have reached an arrangement with the federal government for the potential liability?

Hon. Mr. Harding: That's still the position of the utility, as I understand it from them. I will try and get more detail on that for the member opposite. However, the member opposite will know, the Champagne-Aishihik have ongoing challenges to the federal government on this whole issue. The federal government, as it takes in many positions, has taken a standoffish approach but nonetheless, it doesn't change the fact of who they feel is liable for any of these concerns.

Mr. Ostashek: Well, I understand that that's the position that the Energy Corporation has taken. The fact remains, we took over the assets from NCPC in 1987 and for the outstanding claim of the Champagne-Aishihik and I was under the impression that those were dealt with in the land claim negotiations, which have transpired since we have taken over from NCPC.

So, I know that the position of the Energy Corporation is that they believe the federal government is responsible, but I'm asking the minister: has there been correspondence regarding any outstanding liability or has the federal government agreed with the position of the Energy Corporation that if there is any liability to be paid out, that it is their responsibility? Is there any correspondence on that?

Mr. Hon. Mr. Harding: I told the member opposite that I will get him the details on that.

Mr. Ostashek: Mr. Chair, could the minister give us, now that we've gone into self-management, a brief overview of how it's working and the number of employees that are employed at the Energy Corporation now?

Hon. Mr. Harding: Yes, well, I think the corporation has done quite a good job, given that they've had a fire to deal with and they've had to deal with taking over an entire utility, two Faro mine shutdowns - 43 percent of their revenue; twice losing that. I think the board has taken a step toward more autonomy - well, I know they have. They manage their own affairs on almost every initiative. I rarely meet with the president now. I usually meet with the chair of the board, and I think that they've done quite a good job.

In terms of the employees, I think the number is 54 that we took over, and I don't think that has changed substantially, but I will check and see, from the utility, on any of those details.

Mr. Ostashek: We've got a year of self-management under our belt now. The management contract was in excess of $800,000. We were led to believe that self-management would be cheaper. Is that what's happened? Is self-management cheaper than the management contract was?

Hon. Mr. Harding: Yes, I think there has been pretty good success in terms of that. Some costs have occurred as a result of the fire, which they're having some difficulties over with the insurance company, and that kind of thing. But for the most part, I think, it has been very good. I think that citizen board told the members opposite what they believed, and I think that's still the case.

Just in terms of the details on the staffing, I have them here. Yukon Energy Corporation started its first year with 54 permanent position and one two-year term position. Three additional term positions were added in 1998 - two in program support services, which expire at the end of 1999, and one Y2K coordinator, which expires in the spring of 2000.

Mr. Ostashek: So, is the minister saying, then, that these term positions will expire, they won't be renewed, and that we're going to be back down to the staffing we had at takeover of 54 employers?

Hon. Mr. Harding: I can't make that commitment on behalf of the chairperson of the board, but I will endeavour to find out what they are thinking in terms of their administration.

Mr. Ostashek: The corporation works on a December 31 year-end, I believe, do they not? The minister can correct me if I'm wrong. It's been awhile since I was over there. I don't believe we've got the year-end report. When can we expect it? Am I right in assuming that the corporation still works on a December 31 year-end, and that there should be a report coming out some time in the near future?

Hon. Mr. Harding: I believe the member is right in terms of fiscal reporting, and I'll get the details for the member on when they expect that report to be out.

Mr. Ostashek:Can the minister update me on what's happening with the grid expansion proposal from Mayo to Dawson?

Hon. Mr. Harding: I had a discussion with the board chair a couple of weeks ago. They have been doing some further economic analysis on it. They've invited some other utilities to look at the numbers to try and verify them. My understanding is that they'll be in a position within the next six weeks to make a recommendation, which would have to go to Cabinet to see if it would be approved or not.

Mr. Ostashek: What I can glean from what the minister has told me, then, is that he's expecting a recommendation from the board for a go-ahead with the grid expansion, if it's going to Cabinet. Why would they be making a recommendation if it wasn't for a request for the go-ahead with the grid expansion?

Hon. Mr. Harding: Well, if they decide not to recommend to do it, then it won't go to Cabinet.

Mr. Cable: The leader of the official opposition asked for a number of pieces of information. I'd like copies of those - the minister is nodding his head, so I'll expect to get copies of those.

In that the House is going to be rising in the near future, I would appreciate that that be by way of letter, so we don't have to wait until the fall for a legislative return. Is the minister on that same wavelength? The minister is nodding his head again, so I'll read that into the record.

With respect to the fire that took place a couple of years ago, the minister mentioned, or alluded to, some dispute between the insurance company and the Energy Corporation. How much money is at stake? What's the argument about?

Hon. Mr. Harding: Well, I think in a big claim like this there's always areas of conflict in terms of what costs would actually be assessed as a direct result of the fire, and issues have been arising, such as the use of Aishihik water because of the loss of some of the generation ability.

I don't have the specific details. I think for the most part it's been a fairly good marriage with the insurance company. For the vast majority of the resources and the costs that were accrued, it's worked quite well. There are still some outstanding issues. I'll try to get an incremental dollar amount that's still being sorted out in terms of the gap between what they've already got agreement on and what they're still arguing about.

Mr. Cable: Could the minister, when he's doing that, provide us with the amount of the total loss that will have to be absorbed by the Energy Corporation - that would include any deductibles that are under the policies - together with the amount that's in dispute, so we can see the magnitude of the loss that might have to be borne by the ratepayers? Can the minister do that?

Hon. Mr. Harding: Yes, and I will tell the members opposite, though, that we have a very lean administrative staff who are extremely busy over there, and I'd just ask them to be somewhat patient in terms of these numbers, because they are working really, really hard, putting a lot of stuff together that is very technical in nature, and if they could be patient and give them a little time to produce, that would be helpful.

Mr. Cable: I'd like to ask some questions on the Aishihik directive that was given to the Yukon Development Corporation - that is policy directive no. 2 - where the minister requested that the corporation not use the bottom two feet of the licensing range. How was that two feet figure arrived at?

Hon. Mr. Harding: The government made a clear commitment to take mitigating action about Aishihik Lake and the drawdown of water. It was felt that, in the absence of further environmental analysis, the seven-foot level would the safest, proper level of water to approach, given the commitment that was made to the people of the Yukon and the fact that there was a significant cost that was borne through the Yukon Development Corporation to cover off that two feet.

Mr. Cable: Yes, I realize that there was a commitment made, but I was wondering how the two feet was backed up. Were there any environmental studies, like fish studies or other studies, done to support the two feet?

Hon. Mr. Harding: Just an analysis of the existing licence.

Mr. Cable: Could I ask the minister what he just said? What did he mean by that?

Hon. Mr. Harding: Well, the existing licence had a nine-foot bottom level, and with certain criteria that people felt should be considered around drawdown to that level - that it shouldn't be done. It was on an emergency basis, and their new environmental assessment impact statement that they filed recognizes this.

It was decided that seven feet would be a level, in the absence of the new licensing process, that would be prudent for the government to purchase through the Yukon Development Corporation without the ratepayers having to bear the brunt of it, and that's what we did.

Mr. Cable: Let's look at the future. When is the re-licensing application going before the Water Board? Is the minister aware of that?

Hon. Mr. Harding: Well, it works just like a mining company with the federal government. There's this initial impact done, and they have to go through CEAA for an environmental assessment, then they have to go to the Water Board. So, there are quite a few steps.

In terms of them filing it, it's going to depend on the federal government's timelines, after having received their environmental assessment - or environmental impact study, which they've already given to the federal government.

Mr. Cable: What's the minister's best guess? When are we going to see a Water Board hearing? Later this year, or early next year? Or just when? What's he and his officials targeting as the date to get ready for the Water Board application?

Hon. Mr. Harding: The Energy Corporation doesn't really have a timeline, because they're waiting on the federal government. I don't have a best guess for the member opposite, so we will have to wait and see. I know the environmental impact assessment was only filed as of February 18, so there's quite a bit of information they're going to have to sift through. It's going to take some time. There's no rush, and that's why they filed it quite early in advance of the expiration of the existing licence.

Mr. Cable: Does the minister and his government intend to be an intervener in the Water Board application?

Hon. Mr. Harding: That role has not been determined.

Mr. Cable: What is this government's intention with respect to the policy directive No. 2? If, in fact, the Water Board re-licences at the same water range, is the government going to carry on with policy directive No. 2?

Hon. Mr. Harding: That's a hypothetical question, Mr. Chair.

Mr. Cable: Certainly it's hypothetical, but what is the government's intention? Surely that's one of the options that has to be considered? That could be what comes out of the Water Board hearing, and it will come out after a number of studies are presented to the Water Board.

Is this government prepared to accept those studies as being definitive as to the proper licensing range?

Hon. Mr. Harding: It might be what they agree to and it might not be. There are a lot of options. There are a lot of things to consider. I don't intend to speculate on that at this point.

What I have said to the member opposite is that the OIC is in place, and they filed an environmental impact assessment. We'll have to take a look at that.

Mr. Cable: So, what the minister is actually saying is that this corporation can go through all these hearings, jump through all these hoops, but the government is going to hold its options open on determining the final licensing range. Is that what the minister is saying?

Hon. Mr. Harding: Mr. Chair, I've told the member opposite that the utility is doing its business as it would, and we will have to wait to see what the federal government says about the environmental impact report that's been filed.

Mr. Cable: The leader of the official opposition asked some questions on the financial statements. In the last financial statement that we have, the 1997 annual report, which is for the year ending December 31, 1997, it appears that the amount that was set aside under the second paragraph of policy directive No. 2, whereby the Yukon Development Corporation was ordered to cover the extra operating cost occasioned by the compliance with the reduction in the operating range, it was something in the order of $4 million, if I'm reading the statement correctly.

It was $4,033,000. Is the minister aware of what amount will have to be protected by the Development Corporation for the fiscal year ending December 31, 1998 - the one that ended four months ago?

Hon. Mr. Harding: There is no cost to that.

Mr. Cable: Is the minister saying, then, there was no cost associated with the reduction of the licensing range in the substitution of diesel.

Some Hon. Member: (Inaudible)

Mr. Cable: Okay, we're having a vigorous sub voce debate here. Could the minister just fill us in here?

Hon. Mr. Harding: If you used the water last year or the year before, it wouldn't be there now, so there is no incremental cost.

Mr. Cable: Okay. We had some discussions on the inter-tie between Mayo and Dawson. From what the minister said over the last few weeks - that it's under active consideration and they're inching toward a decision - I gather that there's a heritage inventory, if I've got the right verbiage attached to it, being talked about as being done shortly. Is the minister aware of that? This is mitigation work that would be associated with artifacts at First Nation sites that may be in the line of a transmission line.

Hon. Mr. Harding: That very well could be. The discussions I've had with the chair recently said that they had some discussion. He said that they've had some discussions with Tr'ondk Hwch'in and the Nacho Nyak Dun First Nation. It's quite possible and more than likely that heritage considerations would be factored in.

Mr. Cable: Is the transmission line that's being proposed going to go through First Nations lands that they've acquired under the settlement agreement?

Hon. Mr. Harding: I don't think, if they decide to go ahead, or to recommend to go ahead, that it does cross settlement land. I think it's all non-settlement land.

Mr. Cable: On the transition cost between the management by Yukon Electrical Company Limited and the self-management by the Energy Corporation, have those costs all been accumulated to date in a definitive fashion?

Hon. Mr. Harding: Yes, there has been an accounting of all those costs, and every cost, frankly. It is somewhat difficult always to come up with the incremental cost, but I think that they've taken some stabs at it, and I know, from talking to the board, they feel quite comfortable about the work that has been done.

Mr. Cable: I'd like in the letter the information the minister is going to provide to us that the final accounting of those transition costs be given to us. In that we won't get that today, could the minister indicate to us what order of magnitude these transition costs are? Are they $20,000, or $2 million, or $10 million?

Hon. Mr. Harding: The original estimate was around $800,000 to $1 million, depending on if you factor in some new capital they had to buy and how you amortize that, but somewhere in that ballpark.

Mr. Cable: That's the original cost. Is the minister saying that that is the present cost, as calculated?

Perhaps the minister could fill us in here.

Hon. Mr. Harding: That's the incremental cost that I'm referring to. In terms of the cost right now that are being borne as a direct management utility, we don't believe that the ratepayers are being charged any more than if they had the utility being run by Yukon Electrical, in fees and staffing costs, et cetera.

Mr. Cable: Is that $800,000 to $1 million, is that like a one-shot cost? The minister's nodding his head, saying yes.

Are there any outstanding disputes between the Energy Corporation and Yukon Electrical Company, relating to the management agreement, or the sale of power?

Hon. Mr. Harding: Well, there were obviously some very tense moments after the breakup, as there is in any divorce. I think that both the head of the Yukon Electrical Company and the president of the utility are trying to work through any difficulties they may have.

There are always issues that arise. The public utility now earns a lesser rate of return than the private, and there's differences between the two utilities, but I don't think there's anything major right now.

Mr. Cable: When does the minister and his corporation anticipate that the next general rate application will be filed?

Hon. Mr. Harding: I don't have that information of when the utility's intending to file. I don't think they are for this year, but I'm not entirely certain of that.

Mr. Cable: I'll look forward to receiving that information. I gather from what the minister said, and from what I've heard, the Yukon Energy Corporation is taking a lower return on equity than what it's entitled to under the regulations.

How long is that expected to go on?

Hon. Mr. Harding: Well, the utility is taking a lower rate of return. They argued to reduce the rate of return. The last rate hearings they had before the Yukon Utilities Board, the board allowed the private utility to have a higher rate of return.

I would argue that, as a public utility, that is a prudent perspective for them to consider.

Mr. Cable: Well, whether it's prudent or imprudent, surely the minister is aware of what the corporation's intentions are. It seemed to be taking the position that it didn't need the return on equity to fund all these things that it's been asked to fund. Just how long in the future is that going to go on? I know that there is money needed to keep the rates stable over the years, and that assumedly will reduce its liquidity. That can't go on forever. Where is the corporation heading down the road?

Hon. Mr. Harding: Well, given existing interest rates and debt rates, the rate of return that they are receiving is, I think, 9.75. I don't think that's inordinately low, given the climate that they're operating in. So, I don't quite understand what the member is saying or what he wants to recommend.

Mr. Cable: Well, all I'm saying is that the Utilities Board, presumably, sets a fair rate of return for the private corporation and, in the past anyway, it's been thought that the public corporation could get by with whatever it was - a half a percent less than that. Whatever it was under the regulations. So, if in fact the Yukon Utilities Board has made some sort of decision that they are entitled to that and that that's a fair rate of return, it's curious as to why they would accept, over and over for year after year, a lower rate of return. That's the only question I'm asking.

Hon. Mr. Harding: Well, because they felt it was legitimate, given interest rates and debt where it's being financed at in this climate. As well, they felt that they would be good corporate citizens and that they could live with less, and that's what they did as a public utility. Of course, the public didn't rain down upon them with platitudes as to what a wonderful move it was, but they didn't feel that they needed the level of return that the private utility was asking for. That's all it was.

Mr. Cable: Well, let me ask this question. The last annual report for the two corporations for the year ending December 31, 1997, sets out a certain amount of liquid capital for the corporation. Has there been any change in the liquid assets? Is the liquidity of the Energy Corporation, for example, been damaged by all these things that have been asked to be done?

Hon. Mr. Harding: No, not to my knowledge.

Mr. Ostashek: Mr. Chair, I just want to follow up on a few questions.

First of all, I want to put on public record that the Liberals have asked for some information I didn't ask for, but I would appreciate receiving a copy of whatever comes out. The minister is nodding his head, yes.

I want to go back to the Aishihik Lake for a minute, and the re-licensing. This government made a political decision not to draw down the bottom two feet of the licence that was given to the Energy Corporation. My understanding is that the Energy Corporation, in the re-licensing, is applying for the same level of drawdown as was in the old licence, and the minister is saying here that he's not prepared to answer a hypothetical question as to what this government is going to do if, in fact, they are awarded the same licensing range as they've been awarded in the past.

Why can't the minister state it here - it's not a hypothetical question at all. This government made a political move not to draw down the bottom two feet of the licence. If the corporation spends thousands of dollars - maybe even hundreds of thousands of dollars - arguing in front of the Water Board for the same licensing range as they had in the past and it's approved on current information, I think it's a very valid question for us to be asking the government. What is their position going to be on that bottom two feet if the corporation is re-licensed for the same licensing range as they have now?

Hon. Mr. Harding: Well, it is a good question, and I don't dispute that. I would be surprised if the member opposite didn't ask it, but the reality is that we didn't draw down the bottom two feet. We referenced environmental impact assessment; we referenced the environmental studies, and that jury isn't in yet, so it's too early to comment on what the member says and what the utility is going to file on. They haven't formally filed yet for their water licence.

Mr. Ostashek: Now, Mr. Chair, they may not have formally filed for it but it's public knowledge that they are going to file for the same licensing range as they had in the past. The president of the corporation has said that. I believe it was the president or the chair - somebody has said that.

The Champagne-Aishihik has responded to that already - publicly, in the media - that they weren't happy about it. So, I think it's a very valid question that deserves an answer from the minister.

If, after all the impact studies are done and the Water Board says that the licensing range, as in the past, is fine, that there is not going to be environmental damage even though there may be public pressure saying that they believe there is, as there has been since the licence has been in effect over the years, if that now goes through another hearing, which it has to for the re-licensing, and the other studies that the minister has just cited are all taken into consideration - and the corporation is spending hundreds of thousands of dollars to go through this re-licensing exercise - and if, in fact, they have to go there and fight for the same re-licensing range that they had before, I think it's important for Yukoners to know what this government's going to do in that respect.

Are they going to continue with the OIC and say, no, you can't draw down the bottom two feet of that licence, even though you spent hundreds of thousands of dollars of ratepayers' money to get re-licensed and you've proven your case, that they're still going to impose this restriction on you that you can't draw down the bottom two feet? I think the minister should be able to answer that.

Hon. Mr. Harding: Well, the member opposite answered it in his question, when he said, "If the federal government looks at the environmental impact, and if the federal government says this, and if the federal government says that" - that's the whole point of this. That's why I can't answer the member's question definitively.

Environmental impact assessment may say, "We don't think that the proposed desire, or stated desire, of the utility is manageable, given the environmental impact," which changes the whole thing. They haven't asked for the exact same criteria; they've asked for no emergency bottom two feet. Conceptually they're looking at a managed seven to nine foot range, no top storage - so there are some changes in what they're ballpark-hoping to achieve, but it has to go through that environmental impact assessment by the feds.

It's a good question; the member's just a bit premature with it.

Mr. Ostashek: Well, the reason we're asking the question is because they went through that process once and were licensed, and this government politically interfered with that licence and told them they couldn't use the bottom two feet of the licence; they passed an OIC.

They didn't respect the public process under which the corporation was licensed. That's why we're asking the question. There was political interference, whether the minister wants to believe it or not. That's what it was.

They didn't go to the Water Board and ask for an amendment to the licence. They didn't make their case in that forum. They just said to the Energy Corporation, "We put through an OIC, and you're not going to use the bottom two feet of the licence."

So that's what I want to know from this minister. You go through the hoops again, they're spending hundreds of thousands of dollars to get re-licensed; the Water Board says it's fine to use the licensing range. What is this government's position going to be with regard to the OIC that they have in place now?

Hon. Mr. Harding: It's a good question. The member's right - Cabinet made a decision, made an election campaign commitment to mitigate the bottom range of environmental impact on Aishihik Lake. I don't hide that from anybody. I think the Liberals promised the same thing.

I think the Yukon Party even promised the same thing - in 1992 they certainly did. They were going to stop the environmental devastation of Aishihik Lake. So that just begs a whole range of other questions, but - the member has an excellent question I'm sure he's going to enjoy asking me in Question Period, sometime in the future, maybe even tomorrow. I'll be happy to answer him, and even more happy when there's actually something coming out of the federal government.

Mr. Ostashek: Well, Mr. Chair, if we can't get the answers in Committee debate, we may have to resort to Question Period to get the answers. I don't think we're going to get them there either, but at least then the public will be reminded of the political interference of this government into a licensing process.

That's the whole issue here. It's not about the environmental damage to Aishihik Lake. Political interference is what it is. It's this government being judge and jury, as they always accuse the opposition of being, over a licence that was issued after extensive hearings were held in public.

Now the minister won't answer. If in fact the Energy Corporation does go ahead with their publicly stated plan of asking for the same licensing range as they had in the past, this minister won't go on the public record as saying what impact that's going to have on the OIC that they have in place now obstructing the Energy Corporation from using the bottom two feet of that licensing range. And it's regrettable that the minister doesn't feel that it's important enough to tell Yukoners what this government's position is going to be into - the minister is great at always accusing the opposition of being a judge and jury. They always do that. They always accuse of us of being the judge and jury, yet they feel it's quite all right for them to do that, and there ought not to be any repercussions over it.

Mr. Chair, I want to turn to another issue now - the appeal that was filed by the Yukon Energy Corporation on the decision by the Yukon Utilities Board not to allow the money they lost in the Faro mine closure to be passed onto the ratepayers. I understand that a judgment has come down on that appeal. Can the minister enlighten the House and the Yukon public what the judgment was in the appeal?

Hon. Mr. Harding: I haven't read it nor been briefed.

Mr. Ostashek: How convenient for the minister, Mr. Chair. Let me enlighten the minister. The corporation wasn't as successful as it would have liked to have been in the appeal. My understanding of the judgment, even though I haven't read it either - and I notice that the minister or the corporation aren't trumpeting it all over town so anybody can read it - is that they allowed them to appeal the decision but they very narrowly defined where they could appeal. My understanding of it is - and I want to ask the minister if I might on this, because I'm certain he knows about it - that the judge said they could appeal on the basis of whether the Utilities Board applied the right test - not whether they're entitled to the money or not, but whether the Utilities Board applied the right test.

Is the minister aware of that?

Hon. Mr. Harding: No.

Mr. Ostashek: Well, why isn't the minister aware of it? He's the minister responsible for the Energy Corporation; he's responsible for the policy; he's supposed to answer questions in this House.

There's a dollar line item in the budget book and it's our opportunity to ask questions, and the minister should be informed. If he doesn't know the answers, he should bring somebody in with him so we could get some answers.

Hon. Mr. Harding: One day I'm micro-managing the utility, the next day, Mr. Chair, I'm supposed to be keeping it completely at arm's length.

Mr. Chair, I'm sure the chair is very knowledgeable. The chair and the board make the decision to go forward with this appeal. I will ask the Energy Corporation what the status of this is. I will ask them for an interpretation of the decision, then he can feel free to contact the chair of the board and get their understanding from the citizen board, which made the decision to make the appeal.

Mr. Ostashek: I'm not satisfied with the answers the minister is giving. This board is a public utility. They used the ratepayers' money to appeal this decision of the Utilities Board. I believe they have a responsibility to the ratepayers in the Yukon and this minister, who is speaking on their behalf in this Legislature, to be able to inform the ratepayers as to what the judgment was, what they've been granted by the appeals court and when the appeal is going to be heard.

Those are all questions that are important. There's a couple of million dollars involved here, I believe, and it's an issue that the ratepayers of the Yukon have a right to know what the corporation is doing on their behalf and what the results are of what they're doing.

The minister is looking at his briefing notes. I'm hoping he's going to be able to find it in there so he can enlighten us.

Hon. Mr. Harding: Well, the member is out of luck. The briefing note states that the case will be heard in the fall, and that's all it says. The court granted leave to appeal in December, so that's the understanding I have from the Energy Corporation in my briefing notes.

Mr. Ostashek: Mr. Chair, I would also like a letter from the minister on that because my understanding is that, while the court granted leave to appeal, they narrowed the grounds of appeal down to whether the Utilities Board applied the right test when they made the decision that the utility couldn't reclaim that money from the ratepayers.

So, I'll be looking to get that letter from the minister. That's an important enough issue that I think the utility should be making a public announcement on it, and maybe the minister could pass that on to the utility. That's an important issue, because it's going to have an impact on ratepayers in the future, Mr. Chair.

Mr. Chair, on the grid expansion, if the decision - and I know this is hypothetical and I don't want the minister to get into hypothetical situations - but if the decision is made to go ahead with the grid expansion, then my understanding is that an EARP has to kick in before it can go ahead. Am I correct?

Hon. Mr. Harding: My understanding from the utility, and I will investigate this further, is that they already have a route permitted. It was permitted some years ago, and the permit still exists for that route.

Mr. Ostashek: Is the minister saying that the permit is up to date, is in order and that there wouldn't be an environmental process required, even though there is a new process in place now since it was permitted before? I mean, there's a totally new process for permitting these things now.

Hon. Mr. Harding: Well, I'll have to check on that. My understanding is that if there were to be an environmental review, many of the existing rights that the utility had on that route would still exist today.

But I'll check on that. I've asked that question myself and I've been given the understanding that they would not have to go through a full environmental assessment again. So, I'll investigate that further.

Mr. Ostashek: I'll ask the minister a further question while he is getting back to us. This could be a long letter, but we'll have lots of time to read it over the summer, I'm sure, since he can't answer the questions in the House, Mr. Chair.

Some Hon. Member: (Inaudible)

Mr. Ostashek: It's conveniently arm's length when the minister wants it to be arm's length.

Is the minister saying, then, that we have a right-of-way set aside, that the land's been transferred from the federal government to the territorial government, that there is a right-of-way there and that it is owned by the Energy Corporation? Is that what the minister is trying to tell me?

Hon. Mr. Harding: Well, I want to choose my words carefully here. The general concept that I understand is that there is a route that was permitted, I think, in 1990 or 1991, for this grid extension and that there are some existing rights still in order.

That's what I'm trying to tell the member, and I will get him more details as to the existing legal rights that exist.

Mr. Cable: Could I make a suggestion to the minister? I know it's an arm's-length corporation, but having an official beside him isn't going to destroy that arm's-length relationship. I know the minister responsible for the Housing Corporation has an official with him when his budget is debated and, of course, that's helpful.

And the Housing Corporation has an even longer arm from the minister than the Energy Corporation has from this minister. So, could I encourage him to bring an official with him next time so that we can get some answers?

Hon. Mr. Harding: Well, I've given the member answers. He just, I guess, doesn't think they're detailed enough. It's a utility that's very arm's length from the government, and I will be bringing in the chair and the president in the fall. The member will be free to ask them questions, as they did last time.

Mr. Cable: One of the things that is ongoing with the Energy Corporation is a look at future supply options, and to look at them sensibly they have to know what the rules are. One of the recommendations from the Cabinet Commission on Energy was recommendation No. 39, which dealt with how projects are to be evaluated. In the energy commissioner's final report, there was a fairly lengthy discussion on the possible adoption of what's called a multiple accounts evaluation method of looking at new projects, and the government's response to this recommendation was to do a number of things: (a) examine energy supply project assessment processes from other jurisdictions, and (b) write an options in Yukon specific issues paper. There were some other additions to that, but those were the two that I'd like to refer to.

The energy commissioner's recommendation was termed as medium term, which is two to four years. Now, if the Energy Corporation is to sensibly plan over the next two to four to six to 10 to 12 to 20 years, it's going to need some firm direction as to how its new projects are going to be evaluated. What is the government planning to do with this recommendation of the energy commissioner that the full economic and social costs and all other costs are taken into account and that projects are looked at?

Hon. Mr. Harding: Well, that's a living, breathing recommendation that's being put into force, in terms of the utility analysis of options they're looking at presently.

Mr. Cable: The minister's getting good, but he's not quite that good. What does he mean by that?

Hon. Mr. Harding: Maybe the member could be more specific about his question, because this was very broad, Mr. Chair. We're acting with lightning speed, in terms of implementing that recommendation. We've got the utility doing all kinds of due diligence on economic and social costs, and all other costs. So that's what we're doing.

Mr. Cable: Here's what the recommendation says. I'll read it out nice and slow here, "Establish a set of social, environmental, economic and technical criteria by which proposed supply options should be evaluated" and that's termed as a medium-term recommendation.

That sort of analysis generally flies under the rubric of multiple-accounts evaluation, and I think - if I'm not mistaken - British Columbia has looked at that and perhaps uses that. And the government has committed to examine energy supply project assessment processes.

When are we going to see that examination, and when are we going to know whether that multiple-accounts evaluation system is going to be used?

Hon. Mr. Harding: It's funny the member mentions B.C. Hydro, because that's one of the utilities that's utilizing a model to evaluate, and I'm sure it's very similar to that model the member just mentioned.

Mr. Cable: Back to the question. When will this government be dealing with that particular recommendation? When does the minister think that, as a matter of policy, which I assume his Economic Development department will develop, are we going to know whether the recommendation from the Energy Corporation is going to be accepted?

Hon. Mr. Harding: Advice doesn't necessarily have to come from within government. Advice can come from other utilities, from consultants who can measure projects by different criteria. The report doesn't say that we have to generate all the criteria internally within government. So, that is being done right now. That evaluation work is being done right now.

Mr. Cable: Well, eventually the minister is going to have to give some suggestion to the Yukon Utilities Board, presumably by way of statute. They're not just going to jump up and down because some papers are flying back and forth within the government.

Does the minister not see that, down at the end of the road, there will have to be some formal adoption of that recommended process for examining new supply options?

Hon. Mr. Harding: Well, Mr. Chair, I could see the point of the member's question if I didn't tell him a few times already that there is severe scrutiny being placed on any proposal, internally, within the utility. That will be the basis of anything brought before the Yukon Utilities Board to justify any case that may or may not be made. Again, we're not even sure if it's going to be made, and particularly in the case of the Mayo-Dawson. They're still working on it. They are still applying models. They're still crunching numbers. They're still looking at criteria and how it measures up.

Mr. Cable: Well, I think what the minister is saying is that the energy commissioner was wasting his breath. Assumedly, the Yukon Utilities Board will have to be given some instruction. It's not, on its own instance, going to in effect change the statute. Is the minister saying that the Yukon Utilities Board can adopt the multiple-accounts evaluation system on its own instance?

Hon. Mr. Harding: Mr. Chair, we are responding to the energy commission recommendations in accordance with the schedule we set out, and I don't want to get into too much detail because we're not fully done with our response. We set up short-, medium- and long-term objectives, and we are committed to trying to meet them.

Chair: Seeing no indication of further general debate, we will go to line items.

On Operation and Maintenance Expenditures

On Gross Advances

Gross Advances in the amount of one dollar agreed to

On Less Internal Recovery

Less Internal Recovery in the amount of one dollar agreed to

Operation and Maintenance Expenditures for Yukon Development Corporation in the amount of one dollar agreed to

Yukon Development Corporation agreed to

Mr. Fentie: Mr. Chair, I move that you report progress.

Motion agreed to

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

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

May the House have a report from the Chair of Committee of the Whole?

Chair's report

Mr. McRobb: Committee of the Whole has considered Bill No. 14, First Appropriation Act, 1999-2000, and has directed me to report progress on it.

Speaker: You have heard the report from Chair of the Committee of the Whole. Are you agreed?

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

Mr. Fentie: I move that the House do now adjourn.

Speaker: It has been moved by the government House leader that the House do now adjourn.

Motion agreed to

Speaker: This House now stands adjourned until 1:30 p.m. tomorrow.

The House adjourned at 5:26 p.m.

The following Legislative Returns were tabled April 27, 1999:

99-1-94

Immigrant investors fund: information related to (Harding)

Oral, Hansard, p. 4364

99-1-95

Community development fund: decision-making process for the four tiers (Harding)

Oral, Hansard, p. 4387

99-1-96

Yukon Unity Foundation: letters from Government of Yukon to federal government and Yukon Unity Foundation re federal funding (November 1997 to September 1998) (Harding)

Oral, Hansard, p. 4389