Whitehorse, Yukon

Monday, December 13, 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?

Introduction of visitors

Are there any returns or documents for tabling?

TABLING RETURNS AND DOCUMENTS

Hon. Mr. Fairclough: I have some legislative returns for tabling.

Hon. Ms. Moorcroft: I have some legislative returns.

Speaker: Are there any reports of committees?

Are there any petitions?

PETITIONS

Petition No. 11 - response

Hon. Mr. Sloan: Mr. Speaker, I’d like to begin my comments today on the petition regarding the group home at 5131 Fifth Avenue by thanking the individuals who signed the petition, including those who didn’t live in the area. They have given me an opportunity to provide some information about this matter in the Legislature and to all Yukon people.

As members of this House will remember, the petition addressed the use of the building at the corner of Fifth Avenue and Wood Street, at 5131 Fifth Avenue, and I’d like to provide some facts about this issue. The building is now the home of three young adult men who have serious developmental delays. They presently live and work, or attend school, in Whitehorse, where two of the three have lived for many years. They are and will continue to be supervised 24 hours a day. They live highly structured and sheltered lives and are never alone. These are real people with real disabilities, and they need our help and support.

One young man is involved in Special Olympics. Two have been recent attendees at the Wood Street Annex and F.H. Collins High School. At all of these activities, they are supported and supervised by staff. When the group home reviewers were in Whitehorse, they were introduced to our programming for these young men, and they were very impressed by it.

These three young men were born with developmental delays. That is not their fault. They are people with disabilities who need our care and our support.

I am, however, concerned about the publicity around this home and how it has affected the three young residents. They are people with the same right to privacy as every other citizen, and I urge everyone to respect that right. These three citizens have been singled out, and it is based on the fact that they have a disability; that is a disappointment.

This house is their home. They have lived in the downtown residential area for a number of years, and one of the young men, as I have said, has been a student at the Wood Street Annex, which is just across the street from the home. Another attended F.H. Collins. All three work at various Whitehorse locations. These young men have been and will continue to be part of our community. It is my hope that in this new home and with the support that they receive, they will do well and reach goals in their lives.

Neighbours were contacted before the program started. Households in the neighbouring streets were also asked by written invitation to an open house recently. Over the past two weeks, door-to-door visits happened again, and the response has been positive. There will be another open house at some point in the future, and I urge everyone to take advantage of the opportunity to meet these three young individuals and the people who work with them.

I know there are some uncertainties, and perhaps an opportunity to meet these kids would diminish people's fears.

The department has outlined a program to the professionals involved in the justice system, including members of the judiciary who have noted the needs of this group in society. This home has received many positive messages of support from the neighbours, and I would like to thank those people who had the courage of their convictions to come forward and support us.

Incidentally, there are three houses within sight of this building. It is an area with offices, with businesses, and with rather few homes. As a society, we have a responsibility to care for those less fortunate than ourselves, and those citizens have the right to live the same kind of life that we can live, in the same kind of neighbourhood.

Our work on fetal alcohol syndrome prevention is very important, and I hope it will eliminate this problem in time; however, we have a responsibility to care for those people living with the disability right now.

Just recently, Mr. Speaker, I attended an opening of a new residence for adults with FAS, who will be able to live independently. This was at a home organized by the Options for Independent Living group, and I would like to applaud that group, and everyone involved with it, for their efforts.

That home differs somewhat from the home at 5131 Fifth Avenue. The major difference is that the young men whom we are caring for need more support than the people who live at the new Options for Independent Living home on Fourth.

These young men in our care need help and support every minute of the day, and that is what we are providing to them, and it is likely that they will need that level of support for a good deal of their lives.

I believe that this petition came to light because of the request for the Youth of Today Society to use the building for the youth centre. I believe that another location for that youth centre will be found.

I have no doubts of this, Mr. Speaker, and I’m sure about this, because the youth centre task force that has been formed, which is a coalition of interest in this community, is working toward that. The group Bringing Youth Toward Equality, Teslin Tlingit Council, Lake Laberge Lions, MAD program, Youth Entrepreneurship Centre, City of Whitehorse, Crime Prevention, Yukon Learn, Health, Education, Justice and Community Services, and the RCMP have all been involved in bringing this project to fruition.

We have all been involved and tried to provide a sustainable, ongoing youth centre in Whitehorse, and I believe it’s very important that all parties work together to make this project reflect the needs of youth in this community.

And I’ve been very impressed by the efforts and achievements in this group. They have a vision, are prepared to move forward, and they’ve established a plan. That plan involves establishing their task force, recruiting members, and getting public support. It also involves funding, facility and program development, and implementation.

Since November, this group has been working very actively. They have had one planning session with a guest, Tom Patrick, who operates a youth centre in Ottawa. They have sought support and been given some support from the city. We, in YTG, have committed a $150,000 capital contribution. We have also committed to some operating and maintenance to the centre once it’s organized.

So, I believe that this centre will achieve many of those goals that are needed for young people in this territory.

But I’d like to come back again to the building at 5131 Fifth Avenue. At the end of February this year, the tenants at 5131 Fifth, which was owned by the Yukon government, closed their program and moved out of the building. We saw this as an opportunity to develop a group home for young adults with serious developmental delays. This was a group that was identified by a number of people within the law enforcement community and judicial community as having special needs, and we have an obligation to follow up on those needs.

The department immediately began making arrangements to renovate the building to accommodate this use. The building was originally built as a residence and the renovations have returned it to its original purpose.

As I said, there are three young adults living in this building in a supported and supervised environment. They are in our care as a result of court orders. We have done the necessary renovations and it’s now occupied by the program.

We believe that this program meets many of the needs that young people, especially young adults, have in the future, and we believe that there may be more needs in this regard for young people as they move from youth into adulthood. I was, quite frankly, surprised that many individuals — and when we checked, many of the immediate neighbours — told us that they had not been contacted about this petition. I am, very frankly, concerned that this issue has become politicized and I’m disappointed that some members have chosen to characterize these young people in our care as criminals and serious offenders. It is an unfair characterization and it is not worthy of members of this House.

I am disturbed that there seems to be an opinion that these young people with disabilities are not regarded with the same concern that we would have for other citizens. I am concerned that we are letting politics take, perhaps, control of our better angels. I would suggest that we all set aside the politics and let’s welcome these young people into our community and into our hearts and help them make their way in the future.

Thank you.

Speaker: 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: Alcohol and drug treatment services

Mrs. Edelman: My question is for the Minister of Health and Social Services. On March 23, 1998, almost two years ago, I tabled a petition in this House, with a number of individuals who protested the closure of the Crossroads Treatment Centre. This was a treatment centre for alcohol and drugs here in the City of Whitehorse.

Since the Crossroads Treatment Centre has been closed, there have been a number of promises made by this minister about some of the services that would replace the Crossroads Treatment Centre. One of those services was increased services for women. It has been almost two years. There are no increased services for women. Alcohol and drug treatment services for women are virtually the same as they were two years ago. Why?

Hon. Mr. Sloan: One of the things that we have identified in our alcohol and drug programs is taking a look at two groups that we felt needed some, I guess, targeted attention. One was youth, and the other one was women, who have some particular special needs in regard to addictions.

We have designed, using some community resources, a program that we have submitted for a review by some relevant groups, and we are taking a look now at how that program could be delivered. We're taking a look at some of the issues around that and how we could bring it forward.

Mrs. Edelman: The promise was two years ago and nothing has changed; $300,000 has sat there unspent. There are women in the territory who needed those services — alcohol and drug treatment services. They needed those treatment services. Nothing has happened.

One of the other promises made when they closed Crossroads was that there would be an increase of services for alcohol and drug treatment in the communities; that hasn’t happened either. Why?

Hon. Mr. Sloan: Well, the member is wrong. We have made the funds — $300,000 — available for submission of various ideas. We have, currently, five projects that have been submitted to us. I understand that there are another three that are coming forward. Two of those projects are at an approval stage right now. One of the projects we have sought additional information from, and one of the projects is related to an expected amount from the federal government’s healing fund. So we are at a point right now where we expect that within the next week, there will be two of those projects approved: we expect one to be at an approval stage very soon, and we’ve asked for some further information on the second. And, as I have said, we have been made aware of three more that are due to come in very shortly.

Mrs. Edelman: We’re talking two years, Mr. Speaker — two years — and nothing has changed. We’re talking about ideas, we’re talking about people putting in submissions, but nothing has changed — two years, $300,000.

One of the promises that the minister gave at the time they closed Crossroads — and he just reiterated it here on the floor of the House — was that there would be increased services for youth. There are no increased services for youth in alcohol and drug treatments, particularly in our Yukon communities. Why?

Hon. Mr. Sloan: Well, first of all, the member is wrong when she says that nothing has been done. Perhaps she wasn’t aware that we funded the Aishihik Lake treatment centre, despite the fact that the federal Liberal government hadn’t given any money toward it and largely have abrogated their fiduciary responsibilities to First Nation people.

Perhaps she is not aware of the fact that we funded the Tatlmain Lake centre, so I don’t know where she’s coming from when she says nothing has been done. What we have realized out of that experience is that we need to put more dollars in to allow a greater diversity of programs, and that’s what we have done. We have increased our funding.

However, as I said, we’ve currently got five projects in. We can’t oblige people. We can’t twist their arms to submit projects, but what we can do is work with them. For example, with the Aishihik Lake treatment centre, we worked with them to provide some resources in developing their board plan. We have assisted them with recruitment. We have assisted them with a number of other things to help them get their project up and running. We also provided major support to the Aishihik Lake treatment centre in their federal submission.

Question re: Protected areas strategy, mining claims within

Ms. Buckway: Mr. Speaker, I have some questions for the Minister of Renewable Resources on the protected areas strategy.

Last Thursday, we had a public announcement of the boundaries of the Tombstone Park and the Fishing Branch protected area. There was a reception, a number of guest speakers, and a number of lovely photographs. Some of them should go into next year’s visitor guide.

At this reception, the Minister of Renewable Resources said, "The NDP government recognized that mining companies, with mineral claims within Tombstone, have the right to do exploration work." He then went on to say that, if companies wanted to go into production, the government would stop them. So, companies can explore but not mine.

Does the Minister of Renewable Resources think this policy statement is good for the mining industry or bad for the mining industry?

Hon. Mr. Fairclough: Mr. Speaker, the member hasn’t been paying attention to what we have been doing in the past while with Tombstone. Exploration work does happen and is happening in Tombstone right now. Should further work be requested by any of these companies, they go through the regular environmental process like everybody else.

Ms. Buckway: Mr. Speaker, this year, under the Yukon mining incentive program, almost half a million dollars was granted to 35 prospectors and junior mining companies. The grants ranged from $7,000 to $20,000, and some of them were given to companies who were working within the boundaries of Tombstone and Fishing Branch.

The NDP government gives the company the money to help with exploration costs, and then turns around and tells the company, "By the way, if you find something, we are not going to let you mine it."

Why is one department giving miners money and another department telling them that they can’t mine if they find something?

Hon. Mr. Harding: Frankly, Mr. Speaker, with regard to the mining incentive program and the member’s allegation that she just made, it’s completely incorrect, and I would suggest that the high-paid taxpayer-funded researchers that are spin-doctoring out her questions for her in the Liberal offices should do some more complete research.

Mr. Speaker, the premise she made about YMIP funding in Tombstone is incorrect. Secondly, I would say that the land claim is very clear about respect for certain third party interests that we have had to respect throughout the process.

It’s also true that the federal Liberal government still controls the staking industry, the mining industry, staking rules and regulations in this territory, and it’s a complex process to work with all the parties involved.

We provide support for the mining industry extensively, in a very meaningful way, and we also have an environmental agenda, which has led to the creation of Tombstone Park and the Fishing Branch Ecological Reserve, which we’re extremely proud of.

Ms. Buckway: Mr. Speaker, I’m glad to see that the minister of everything has returned. My question was for the Minister of Renewable Resources, and it concerned the protected areas strategy.

We have talked before about the uncertainty this government has created for both mining interests and environmental interests. Last week’s announcement has done nothing to reduce the uncertainty on either side.

The NDP government will give mining companies money to go explore, and then tell these same miners that they are not allowed to go into production.

Does the minister believe this uncertainty is good or bad for the Yukon? Good or bad — a one word answer will do, Mr. Speaker.

Hon. Mr. Fairclough: Mr. Speaker, it’s clear, I guess, from the members opposite — from the Yukon Liberal Party — how they see the protected areas strategy and what it means for Yukoners. The leader of the Liberal Party said it doesn’t work. We sure came out to the public on Thursday with something that does work with Fishing Branch — final boundaries that will determine a protected area around Fishing Branch. Members opposite might not think that’s significant. We on this side of the House do.

There’s going to be exploration work that goes on all around the Yukon for many years to come. This government, these Yukon New Democrats, will continue to use the protected areas strategy as a how-to book and have protected areas and ecoregions throughout the Yukon. I think that we have approached this with a balanced agenda, and it has been proven in the north Yukon area where we looked at having some protected areas go ahead around the Fishing Branch area while there’s oil and gas exploration that could take place. It was announced in the Yukon that $20 million is going to be spent for oil and gas exploration in the Yukon. So, are we doing the right thing? We feel we are. We feel we have a balanced agenda.

Question re: Teslin Community Correctional Centre, future use

Mr. Phillips: My question is for the Minister of Justice. Last week there was an announcement regarding the Teslin Community Correctional Centre in which the Teslin Tlingit Council and the Government of the Yukon agreed to adopt a joint approach to determine the future of the centre. On the very day the agreement was announced, it was reported that the deputy chief of the Teslin Tlingit Council had expressed an interest in turning the jail into a healing centre, and it would be available to First Nation and non-First Nation people. I’d like to ask the minister if a decision has been made to turn the Correctional Centre into a healing centre, and what will become of the 20 or so employees at the Correctional Centre. With so much uncertainly out there regarding the future of this facility, there’s a lot of concern among the employees as to whether they’ll have a job in the new year or not. I believe these individuals deserve to know what’s going on, and I’d like to ask the minister what assurances she can give to the employees at this time.

Hon. Ms. Moorcroft: Mr. Speaker, the staff at the Teslin Community Correctional Centre do deserve to know what is occurring, and that is why I have met with them recently. It wasn't my first meeting, but I met with them recently, before we even considered the reopening of the memorandum of understanding, and had a meeting with the First Nation on that.

There was also a meeting with the staff held on Friday of last week. Their concerns are front and centre, as are the concerns of the community.

Mr. Phillips: The people working at the correctional facility are very concerned about their future and their jobs. There has been a lot of talk about what's going on with this facility, and the minister has had months — literally months — knowing that this facility was not functioning as it should.

I'd like to ask the minister, Mr. Speaker: what kind of timeline does she have with respect to the future of the Teslin facility, and will the decision be made next month, two months, three months, four months? What kind of future does the facility still have?

Hon. Ms. Moorcroft: Mr. Speaker, as I have indicated to that member in response to questions on the same issue, we're taking the time to do it right. The member might not remember the agreement that the Yukon Party minister signed with the chief of the Teslin Tlingit Council that calls for joint management of that facility.

The Teslin Tlingit Council has recently indicated to us formally that they are willing to renegotiate the memorandum of understanding. The staff has already been engaged in considering what some of the future uses of the facility might be.

If the member read the report of the community consultations that were held on restorative justice, he'll see that, not just in Teslin, but elsewhere in the Yukon, there's interest in having some form of a facility that supports restorative justice that serves the entire Yukon population.

We will keep the staff involved, and we will keep the community involved.

Mr. Phillips: Well, Mr. Speaker, the member likes to blame everything on the Yukon Party. The member should be reminded that it was the New Democratic Party government that built the facility in the first place, and, at that very time, we questioned the viability of the facility there, based on what they were going to do.

We inherited the facility, Mr. Speaker, and tried to run it the best way we could. Obviously the facility's not working.

Mr. Speaker, the question I have for the minister is — the government has made a decision to change the function of the facility. The employees in the facility, the people who work in Teslin, want to know what their future is — whether they'll be laid off, whether the facility will be shut down, and when.

I'd like to ask the minister again: will it be the end of this fiscal year, in April, when the facility will shut down, or is it planned to run for another year? What's the plan of the government with respect to maintaining the jobs in the community and operating the facility?

Hon. Ms. Moorcroft: I did not blame the Yukon Party government. I stood here and said that the Yukon Party critic was not familiar with an agreement that his colleague had signed. And, Mr. Speaker, he is not familiar with it; he doesn’t seem to know what he is talking about. The Yukon government is working with the Teslin Tlingit Council and is working with the staff of the Teslin Community Correctional Centre and the community at large on the future use of the facility. We will continue to involve all the parties in those discussions before decisions are made. I do not have a finite time frame that as of January 5, or March 31, or any specific date, we’ll make a final decision. We have just begun the consultations with the community, based on the resolution that Teslin Tlingit Council approved last week.

Question re: Canadian Airlines, passenger travel points

Mr. Jenkins: I have a question for the Minister of Community and Transportation Services. Canadian Airlines continues to fly in very troubled skies. It would appear that its current financial situation is very much worse than many Yukoners were originally led to believe, and the planned takeover by Air Canada is not clear flying either, as Air Canada is waiting to hear what regulations the federal government may bring in. The possibility that Canadian Airlines may go bankrupt in the interim is very real. Many Yukoners, like other Canadians, have amassed a considerable number of air miles and these Yukoners are becoming increasingly concerned that these points may in fact be lost. All the minister has to do is go and try and book a flight and use them; you can’t. It’s just about an impossibility to get through on the line. Can the minister advise the House if he has had any discussions with the federal government or other potential carriers about this situation and honouring Canadian points?

Hon. Mr. Keenan: Well, I can say quite categorically, no; I have not talked to the president of Canadian Airlines or Air Canada regarding points, but I can tell you what this government is definitely concerned about. This government is concerned about ticket prices, the frequency of flights, the capacity, the 737 issues, medevac services, the employees; that’s what this government is very, very worried about and will continue to be worried about. As I’ve said earlier, we’ll be working within the system; we’ll be working with the federal government and all the players there to ensure that Yukon skies are clearly open through these troubled times.

Mr. Jenkins: It seems like the minister has finally read his briefing notes. He has had a full briefing on this issue and he seems to have some sort of an understanding of it. But Murphy’s Law usually prevails, and the worst situation that could actually happen is that Canadian could stop flying. Yukoners could be left without a carrier.

The minister has elaborated on whom he has spoken with and what he has done. Could the minister advise the House what contingency plan his government has in the event that Canadian stops flying tomorrow?

Hon. Mr. Keenan: Mr. Speaker, I’ve said in this House numerous times — at least once a week — that we’ll continue to work with the players involved. We’re very concerned about employees, about the frequency. We do know that the Yukon is a very lucrative route. Within the report that was tabled in this House that has not been read by the Member for Klondike, obviously, it says that we will not have a problem in that area, that we can continue doing what we’re doing, and that’s what we will continue to do.

Again, we’re worried about it. We’re going to fix it. We’re going to work with the players to fix it. There are employees involved. There are so many things involved that we’re going to take the big picture and we’re going to move toward it and secure the skies for the Yukon Territory.

Mr. Jenkins: Well, the last time I looked out the window, the skies were very secure, but the minister is worried. Now, what is he going to do about it? Could the minister just advise the House what the contingency plan is in the event that Canadian stops flying? What is his government going to do?

Hon. Mr. Keenan: It’s very obvious that the Member for Klondike has not read the report. What I will do is ensure, through the mail system here in the building, that we get him another copy of the report. If I have time during the break this afternoon, I will even try and highlight a few moments from that so that the member will be able to read it and get the basic understanding of what’s in the report.

The report says that this is a lucrative route, that there will not be a problem with it, no matter who takes over and does it. We’re going to work within that system. We’re even looking, for gosh sakes, to make more open skies and find other people who can come into the territory, as has been proven by our success rate with the charters, et cetera.

So, yes, right now the priority is to keep the skies open, to work with the employees, to make sure that our ticket pricing is not affected, that our airline medevacs are here, and the employees, too. That is our contingency plan; that is our goal, and that is where we’ll get.

Question re: Protected areas strategy, mining within

Ms. Buckway: Mr. Speaker, I have some further questions for the Minister of Renewable Resources on the protected areas strategy.

The boundaries for Tombstone and Fishing Branch are certainly significant, but the NDP government is saying one thing in this announcement and doing something else.

The Fraser Institute recently released its annual survey of mining companies. This report reviews the best place in North America to mine. There’s a section called, "Uncertainty concerning what areas will be protected as wilderness or parks." This comment — "Yukon’s protected areas strategy has strongly compromised its own outlined process" — came from the project manager of a junior mining company.

Does the Minister of Renewable Resources agree with the opinion expressed by this mining industry representative?

Hon. Mr. Harding: Well, Mr. Speaker, this is clearly a question for the minister responsible for the mining industry in the territory, be that as it may presently. As the members know, it’s still within the purview of the Liberal government in Ottawa, particularly the regulatory aspects.

I have got the Fraser Institute report here, Mr. Speaker, and it puts the Yukon on the investment attractiveness plane. We’re tied with Alberta, as a matter of fact, in the new report. There were some issues raised about protected areas. One of them is regarding Ontario, which is run by a Conservative administration, with some very damning comments there about the lands for life policies, and them having to give up several thousand kilometres of extremely prospective ground. That was in Ontario.

Mr. Speaker, we have said, with regard to the Yukon and the overall report, that we fare in a considerable number of areas fairly well. One of the biggest issues is the Liberal government’s problems with the permitting process and its inability to deliver any certainty in that respect. As well, there are also some problems identified in the report with some of the Liberal government’s inability to deal on some of the important land claim issues.

However, Mr. Speaker, we will continue to push for devolution and wrest the control of these important certainty questions from the hands of Liberals in Ottawa, who obviously don’t care about the Yukon economy.

Ms. Buckway: It’s interesting to note that the minister didn’t answer the question. Mr. Speaker, the Fraser Institute’s annual survey of mining companies has identified the NDP’s failure to follow the protected areas strategy as a major factor in creating uncertainty for investors. Does the minister agree with the opinion expressed by this mining project manager?

Hon. Mr. Harding: Well, Mr. Speaker, I’ll repeat for the member opposite that the Yukon scored a complete tie with Alberta, which is often held up, particularly by the Yukon Party, as the be-all and end-all in terms of investment attractiveness. Now, that’s just mining. Look at oil and gas and the $20 million in Eagle Plains and exploration expenditures right in the area of the Fishing Branch and Tombstone, which obviously shows that there is a good climate of certainty.

With regard to protected areas and where there have been issues raised — and there are big differences among some of the things that are coming out of the industry, from the Chamber of Mines and others that we talk to through the Yukon Mining Advisory Board in terms of their perceptions of the protected areas strategy. Most people we’ve talked to in the industry are pleased that the government is going to be looking at the issues with all of the stakeholders involved, including the conservation community, to continue to make improvements. There were growing pains in other areas of the country when they started protected areas. Unfortunately, when the Yukon Party was in they made no movement on that agenda, and we’ve had to work through the issues. In Manitoba, for example, there were two or three years of exceptionally bad growing pains. Look at Ontario, where there’s a lot of upset people about the Lands for Life. We’re going to have to continue to work through these issues, improve the process, work together with all the stakeholders and make it work for Yukon. I think we can do that.

Ms. Buckway: Mr. Speaker, it’s a pleasure to listen to the member opposite not answer the question. This question relates to the protected areas strategy. The Fraser Institute’s annual survey of mining companies says the Yukon is the seventh worst jurisdiction with regard to uncertainty over parks and protected areas. The worst is British Columbia, another NDP government. This government’s failure to follow the protected areas strategy has been identified as a major disincentive to economic development. Improving our competitive advantage means removing disincentives. The Minister of Renewable Resources has talked about making changes to the protected areas strategy. When does the minister think those changes will be completed so the uncertainty will be reduced?

Hon. Mr. Harding: Mr. Speaker, it's so good to be back to clarify things for the members opposite. Mr. Speaker, I have just got the report here, and it shows a huge disparity between what has happened in British Columbia and the Yukon. I think the scores are between 27 and 86. We're at 27. B.C. is way up at 86.

We have been working to deal with some of the issues that have been raised by the chambers of commerce, the conservation community, with regard to mineral withdrawals, and the mining industry. I must say that there are differences of opinion within the mining industry, depending on whom you talk to — whether they're prospectors, junior companies or majors — about the process.

A lot of the issues on certainty are beyond our control, though. They still rest within the purview of the federal Liberal government, and some of the most damning scores the Yukon got — even though, when it's all laid out, we still scored in terms of investment attractiveness the same as Alberta — were the regulatory processes and some of the uncertainty that has been created there, as well as some of the federal Liberal government's inability to resolve some of the tough land claims issues and settle them.

So, we're going to work on a whole range of issues to try and ensure that there's a good, level playing field, there's good certainty around the mining industry. What's really going to spawn the mining industry's rebirth here in this territory is, of course, a rebound in mineral prices. When we see gold and the base metals moving, you'll see more exploration dollars flowing back in, a lot of speculative capital.

Speaker: The minister's time has expired.

Question re: Education policy, discrimination in

Ms. Duncan: I have a question for the Minister of Education. The Education Act, section 28, states that the Canadian Charter of Rights and Freedoms and the Human Rights Act apply to the delivery of optional education. These pieces of Canadian legislation prohibit discrimination when offering or providing services.

Unfortunately, the distance education policy, as set out under the Education Act, has two sets of rules. There are students and there are non-students, and non-students are those young people who are home-schooled or enrolled in private school.

Why is it that the Education Act prohibits discrimination, yet the departmental policy clearly has two different sets of rules? In effect, the distance education policy, set out by the department, is discriminatory in that, on the one hand, the act prohibits discrimination when offering or providing services and, on the other hand, the departmental policy puts students enrolled in the school system in one group and those who have chosen alternative options for education in another group.

Is the minister aware of this discriminatory policy?

Hon. Ms. Moorcroft: Well, Mr. Speaker, the member’s facts, as she stated them in her preamble, are not accurate. This government is not discriminating against people, based on the Charter of Rights and Freedoms or on the Yukon Human Rights Commission. The term "non-student" is an unfortunate term that has been used in the guidelines for providing service; it simply means a student who is not registered in the public school system.

Ms. Duncan: The minister’s favourite answer is to stand up and say, "The members opposite are wrong." The act, section 31— home education — a parent of a student, a student, the parent and educational plan for each student — that’s section 31 of the act. The departmental policy refers to these same people as non-students, and does not offer them the same services that other students receive. That is clearly discriminatory, and the minister is fully aware of this because parents have written her. She hasn’t bothered to answer, mind you, but they have written to her.

How is it that students can be students under the act and non-students under the department’s policy? How can that be?

Hon. Ms. Moorcroft: The member has her facts wrong. I have met with the home-schoolers and I have replied to the correspondence on this subject. We are working with home-schoolers and we are not discriminating against home-schoolers. We are trying to ensure that those parents who choose to offer home-schooling rather than have their children participate in the public school system are supported by the department and by schools. Home-schoolers are linked with schools and have the ability to borrow curriculum resources. In some instances, they come to the school for some subjects. They often come and attend special events at the school, such as concerts and others. We can work to improve our relationship with home-schoolers, and we’re doing that right now.

Ms. Duncan: Mr. Speaker, the minister has said she has met with home-schoolers. I didn’t dispute that. The minister says she has responded to the letter of November 5. Well, as of this morning, the writer of the letter had not received a response. I challenge her to forward that to me.

The guidelines for distance education courses clearly do not allow these home-schooling non-students to receive the courses, and that’s the problem. It’s a discriminatory policy.

The B.C. curriculum — which we follow a great deal in the Yukon for much of our education — their eligibility requirements are very inclusive, as this act set out to be, as our own act set out to be.

Will the minister at least commit to examining this policy by her department, and will she commit to modelling it after the inclusive B.C. example and doing it forthwith, Mr. Speaker?

Hon. Ms. Moorcroft: Mr. Speaker, as I’ve indicated to the member opposite, I’ve had meetings with the Yukon Home-schooling Society. I’ve sent a letter of invitation asking home-schoolers to come in and meet with people from the department to look at ways we can make our policies more supportive of them. It doesn’t require that member standing there and being critical of the government in order for us to make progressive work with home-schoolers.

Some Hon. Member: (Inaudible)

Hon. Ms. Moorcroft: Mr. Speaker, could I ask you to call the member to order please, if she’s interested in hearing my answer? We’re working with home-schoolers.

Thank you.

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

ORDERS OF THE DAY

Speaker: We are now prepared to receive the Commissioner, in her capacity as Lieutenant Governor, to grant assent to the bills that have passed this House.

Commissioner enters the Chamber, announced by the Sergeant-at-Arms

ASSENT To BILLS

Commissioner: Please be seated.

Speaker: Madam Commissioner, the Assembly has, at its present session, passed certain bills to which, in the name and on behalf of the Assembly, I respectfully request your assent.

Clerk: An Act to Amend the Financial Administration Act; An Act to Amend the Legislative Assembly Act; An Act to Amend the Public Health and Safety Act; An Act to Amend the Chiropractors Act; An Act to Amend the Management Accountants Act; An Act to Amend the Workers' Compensation Act; An Act to Amend the Municipal Act; Fifth Appropriation Act, 1998-99; Fireweed Fund Act; An Act to Amend the Supreme Court Act; Third Appropriation Act, 1999-2000; An Act to Amend the Conflict of Interest (Members and Ministers) Act, the Public Service Act, and the Cabinet and Caucus Employees Act; Elections Act.

Commissioner: I hereby assent to the bills as enumerated by the Clerk.

Commissioner leaves the Chamber

Speaker: I will now call the House to order.

Special adjournment motion

Mr. Fentie: Mr. Speaker, I move

THAT the House, at its rising, do stand adjourned until it appears to the satisfaction of the Speaker, after consultation with the Government Leader, that the public interest requires that the House shall meet;

THAT the Speaker give notice that he is so satisfied, and thereupon the House shall meet at the time stated in such notice and shall transact its business as if it had been duly adjourned to that time; and

THAT if the Speaker is unable to act owing to illness or other causes, the Deputy Speaker shall act in his stead for the purpose of this order.

Speaker: It has been moved by the government House leader

THAT the House, at its rising, do stand adjourned until it appears to the satisfaction of the Speaker, after consultation with the Government Leader, that the public interest requires that the House shall meet;

THAT the Speaker give notice that he is so satisfied, and thereupon the House shall meet at the time stated in such notice and shall transact its business as if it had been duly adjourned to that time; and

THAT if the Speaker is unable to act owing to illness or other causes, the Deputy Speaker shall act in his stead for the purpose of this order.

Motion agreed to

Mr. Fentie: Mr. Speaker, I move that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole for the purpose of questioning witnesses from the Workers’ Compensation Health and Safety Board and the Yukon Development Corporation.

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 for the purpose of questioning witnesses from the Workers’ Compensation Health and Safety Board and the Yukon Development Corporation.

Motion agreed to

Speaker leaves the Chair

COMMITTEE OF THE WHOLE

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

Committee Motion No. 4

Motion re appearance of witnesses

Mr. Fentie: Mr. Speaker, I move

THAT Karen Ruddy, alternate Chair of the Workers’ Compensation Health and Safety Board, and Tony Armstrong, President of the Board, appear as witnesses before Committee of the Whole from 3:30 p.m. to 5:30 p.m. this day, December 13, 1999, to discuss matters related to the Workers’ Compensation Health and Safety Board.

Committee Motion No. 4 agreed to

Committee Motion No. 5

Motion re appearance of witnesses

Mr. Fentie: Mr. Speaker, I move

THAT Ray Wells, Chair of the Yukon Development Corporation, and Rob McWilliam, President of the Corporation, appear as witnesses before Committee of the Whole from 7:30 p.m. to 9:30 p.m. this day, December 13, 1999, to discuss matters related to the Yukon Development Corporation.

Committee Motion No. 5 agreed to

Chair: Committee will take an extended recess until 3:30 p.m. at which time the witnesses from the Workers’ Compensation Health and Safety Board will appear before Committee, pursuant to Committee of the Whole Motion No. 4.

Recess

Chair: I will now call Committee of the Whole to order. Committee will now be dealing with Workers’ Compensation Health and Safety Board.

Hon. Mr. Harding: Today it gives me pleasure that, as is the usual course of action in this particular sitting, we have representatives from the Workers’ Compensation Health and Safety Board and representatives from the Yukon Development Corporation and Energy Corporation come before the House and make presentations to the members of the Legislature and, as well, allow members of the House an opportunity in a public forum to ask questions about the direction that the board has undertaken, and other matters of concern to them.

Witnesses introduced

Hon. Mr. Harding: I’d like to introduce today Karen Ruddy from the board, who is the alternate chair of the Workers’ Compensation Health and Safety Board, and Tony Armstrong who, many of you know, also appeared before the House last year and is also the president of the board. We very much welcome you to the Legislature today.

The board, as most people know, is made up of two employer reps, who are selected by consultation with employer organizations, and two worker reps, who are selected by consultations with labour and labour organizations. There is an alternate chair and a chair, who are selected through consultation with both labour and employers.

The alternative chair, Karen Ruddy, is essentially now the acting chair as a result of the resignation some time ago of Mr. John Wright, who was the chair, and we’re engaged presently in a consultation process about the selection of a new chair.

The board makes policy on behalf of the workers and the employers that they represent, and, as well, they oversee the administration. The board also determines or makes recommendations, which have always been accepted under the act, for the placing of the president or the hiring of the president of the Yukon Workers’ Compensation Health and Safety Board and the legislation.

The board has been dealing with a number of very important issues over the last year or two, the smallest of which is not the new Yukon Workers’ Compensation Act amendments that were brought forward and passed unanimously in this House and just today were given royal assent. They will pose some interesting questions for the board members as they attempt to implement them, and they will also pose some challenges for me, as minister, in terms of trying to implement them. They will be the creation of a new adjudicative body on claims and elements of the legislation, which will have to be enacted over the coming months.

Having said that, I want to say that I think the employees at the board have been working hard on behalf of the people whom they aim to serve. There are always areas where the legislation and the policies can be improved, and I know that the board members — who are also just citizens who are coming forward to do a job on behalf of Yukon people — are more than prepared to be open to new ideas and new concepts. It has been a pleasure for me to work with Karen and others, as they put a lot of effort and emphasis on trying to ensure the situation is as good as it can be for injured workers and for employers who are paying premiums under the system.

So with that I would expect that the members of the official opposition will lead, in terms of the questioning, then the third party will have their critic do some questioning, and there is a member on our side of the Legislature who would also like to ask some questions.

So I want to turn it over to the board president and the alternate chair for some opening comments, and then invite the official opposition to begin with some comments and questions.

Thank you.

Chair: Before asking the board chair for his comments, I would like to remind all members and the witnesses to address remarks through the Chair and not address each other directly.

Thank you.

Mr. Armstrong: Actually I’d like to defer to the alternate chair of the Compensation Board first, and after she has made some remarks, then I would like to make a few.

Ms. Ruddy: I intend to be fairly brief in my opening remarks. I did simply want to give an overview of some of the major events that we had experienced over the past year. I joined the board January 1 of this year, so I am still fairly new to the organization. There have been a number of major events since I came on board, not the least of which, in my point of view, would be the resignation of Mr. Wright as chair.

Now, many of our ongoing initiatives began under Mr. Wright’s leadership. Most notably, there has been considerable work done with respect to developing a strategic plan for the future of the organization. That strategic plan is now complete, and we are in the implementation phase with respect to that plan. Primarily what we are focusing on is how to do what we do better. From the board’s standpoint, one area that we are continually trying to work on is increasing and improving our communication with the stakeholders. In that vein, we have, over the past year, had advisory committees set up with representatives from the various stakeholder groups. The committees have been experiencing some growing pains, but we are continuing to try to make them into a vehicle that serves the interests of both the stakeholders and the board in terms of opening that flow of communication.

In addition, in the area of communication, at the urging of one of our worker representatives, we did host another public information meeting this year, directed primarily at dealing with complaints and concerns about board operation. It is our hope to be able to do more of those in the future, over the next few years.

In addition, we have spent a great deal of time this year working on the assessment rate structure. I understand, prior to when I joined the board, that there was extensive consultation on this particular issue. We spent a great deal of time trying to incorporate the feedback into the new assessment rate structure, and we did find that we were able to increase the subsidy for many employers, but, more importantly, we were able to ensure that there would be no increases to any of the assessment rates in the near future. We're hopeful that we can maintain that position as long as possible.

In addition, Mr. Chair, we did deal this year with the act review and subsequent amendments arising out of that. That, as well, took up a great deal of our attention this year, and the implementation of those amendments is obviously going to be an immediate focus for us — one example of which is that we have, at the request of some of the stakeholders, put some of our policy development on hold until we can formulate a mechanism to consult, as we will be required to do under the new act.

We have received the message loud and clear that the stakeholders want to be providing their input in our policy development.

As a final note in my opening remarks, I did want to point out, Mr. Chair, that we do have the best funded board in Canada and it’s our hope, in implementing the act amendments and the strategic plan, that we will also become the best run board in Canada.

With those opening remarks, I would like to turn over now to the president, Mr. Armstrong.

Mr. Armstrong: I just would like to provide a little bit more detail on a few of the items that the alternate chair spoke on.

Development of the Workers’ Compensation Health and Safety Board strategic plan began in 1998. This work was completed in 1999, with the members of the board approving the final draft during the summer. The plan, titled Ideal Workplace — our journey begins, was printed and made available to stakeholders and the public. This plan sets the future direction for the Workers’ Compensation Health and Safety Board into the next millennium.

The Workers’ Compensation Health and Safety Board and the strategic plan adhere to the Meredith Principles while building on those principles through our vision and mission statements and our core values. These core values will guide the organization in our daily activities and they are commitment — our daily actions reflect the vision and mission; quality of service — we provide effective, timely and efficient services; communication — we actively listen and provide clear feedback; integrity — we are honest, ethical and fair; trust — we demonstrate sensitivity, fairness and respect in our interactions; growth and development — we support individuals who demonstrate leadership and assume responsibility for self-management; and, lastly, teamwork — we willingly work together to achieve goals.

The strategic plan has eight core strategies, each of equal importance. These core strategies are making prevention a priority, communicating better, managing information well, providing assured quality, staying on top of emerging issues, working in a clear legislative framework, managing our human resources and ensuring sound financial management.

The organization spent approximately $41,000 in 1998 in the development of the strategic plan. Further money was expended in consultation with stakeholders, along with the classification and assessment rate consultations, and, finally, a further $10,500 was spent in 1998 finalizing and printing the plan. One immediate outcome of the strategic plan was reorganization within the board.

There are several common threads that run through the strategic plan. One of these is customer/client service. We view our customers/clients to be our stakeholders or, more specifically, workers, injured workers, dependants and employers. Our reorganization saw the joining of branches and moving of units. This was done to facilitate close working relations, efficiency in sharing information and to reflect the flow of work and responsibilities through the organization — this, for the purpose of efficiently and effectively improving service.

In 1996 the Workers’ Compensation Health and Safety Board had six branches, each branch with a director. This made for a senior management group of six directors and a president. Between then and now we have moved the organization to the point where we now have three branches, one with a director and two with vice-presidents. This makes for a senior management group of three, and a president.

Another shift we made in 1999 was the implementation of service teams. These service teams, of which there are four, have five individuals as a core group. These are an education and training officer, a compliance and enforcement officer, an adjudicator, a rehabilitation counsellor and a financial services officer. Among these five individuals in each service team, the vast majority of daily needs of our customers/clients can be met. Each service team will deal with the same group of employers and workers. This is to facilitate the sharing of appropriate information among the different functional units and the effective and efficient delivery of services for workers, injured workers and employers. During 1999, staff changed offices in order to sit with their respective service teams rather than with their functional unit.

Another common thread throughout the strategic plan is prevention. We will work with workers and employers on three levels of prevention. First, we will work on preventing disabilities from happening. Right now the vast majority of workplace incidents that we handle, we believe are preventable.

It’s everyone’s responsibility to make prevention the centre of attention. Secondly, when accidents happen, we will put in safeguards to prevent a disabling condition from occurring again, and we will promote the recovery of the disabled worker. Finally, we will work to prevent the loss of an experienced worker from the workforce. Working with employers and workers, we will develop ways for injured workers to be reintegrated into the workplace.

To assist in accomplishing this, we have created the position of prevention consultant to work with workers and employers to identify, develop and implement programs and measures aimed at prevention. This position does not represent an increase in our overall staff complement but was accomplished through the reduction of the senior management group.

During 1998, a complete and comprehensive review of the state of the compensation fund was completed. This review confirmed that the compensation fund is in a strong financial position. In 1999, the compensation fund continued to be in a strong financial position with a funded ratio of approximately 135 percent. This is the most solid funding ratio in Canada and allowed the board to increase the rate transition reserve from $4,396,000 in 1997 to $22,807,000 in 1998.

The board also established a new reserve in 1998 — the prevention and benefit enhancement reserve — in the amount of $11,371,000. As a result of the financial work conducted in 1998 and 1999 the board has developed a comprehensive investment policy and is in the process of finalizing a comprehensive funding policy. During the year 2000, we will review our financial reporting to provide more meaningful information to our stakeholders.

A brief explanation as far as the 1998 expenditures go — and I’m referring, for those members who may have our annual report in front of them to page 31 of that annual report, a statement of administration and prevention expenses.

I’ll just give a second for people to find that page.

The most notable areas are on page 31. You’ll note consulting and professional services expenditures in 1997 of $641,000, and expenditures in 1998 of $1,000,161 — approximately a $500,000 increase. Most of that increase is reflective of one-time initiatives — or once-only initiatives — those being: three consultants were brought in, in the area of occupational health and safety, to assist and enhance training and enforcement capabilities within the unit, specific to a number of areas in the Yukon; our benefit liability was reviewed; our classification and assessment rates were reviewed; our funding was reviewed; an administration cost report was compiled; and a major court case was also included in the consulting and professional fees.

The next notable area is that of printing and publications — the 1997 expenditures of $73,000 and 1998 expenditures of $89,000. That increase reflects printing of consultation material.

The next, board expenses — 1997 expenditures of $146,000 and 1998 expenditures of $244,000. That is a result of the first full year billing of the office of the worker advocate.

Staffing and recruitment 1997 expenditures of $48,000 and 1998 expenditures of $72,000 — that represents one ad, run out of territory, for recruitment — an unsuccessful recruitment, I might add — and training costs to staff.

The last notable area is general administration — the 1997 expenditures of $38,000 and 1998 expenditures of $44,000. That represents a one-time transfer payment to the Association of Workers’ Compensation Boards of Canada on a research initiative that was shared across the country.

During 1998 and 1999, the board consulted with stakeholders regarding the classification structure and assessment rates. As a result of this consultation, the board approved a new classification structure and implemented this structure retroactive to January 1, 1999.

This new classification structure has four distinct, broad areas of classification. They are resources and trucking, construction, services and government. The first three — resources and trucking, construction and services — each have three rate groups within them.

Also as a result of these consultations, the board approved and implemented new assessment rates retroactive to January 1, 1999. These new assessment rates are in effect for 1999, 2000 and 2001. During this time, employers will not see any increase to their assessment rate. However, any employers whose assessment rate decreased as a result of the new classification structure and assessment rates realize that decrease retroactively to January 1, 1999.

Prior to these changes, assessment rates were subsidized at 35 percent. However, this rate of subsidization was not applied evenly across all employers. Some rate groups received subsidies much greater than 35 percent, while others received little or no subsidy.

The new assessment rate assures every employer a 45-percent subsidy on their assessment rate, while subsidizing some as much as 79 percent. These rates are in effect until December 31, 2001. After 2001, those industries receiving a subsidy greater than 45 percent will see changes to their level of subsidization. These industry groups may see their assessment rates increase, by no more than 20 percent per year however, as they are moved toward the 45-percent subsidy rate.

These levels of subsidy are maintained through the rate transition reserve. Our current financial projection suggests maintaining the current level of subsidies for three years — 1999, 2000, 2001 — then moving industries toward the 45-percent subsidy level, and thereafter moving all industries to unsubsidized rates. This approach would see the rate transition reserve tail off in approximately eight years.

Mr. Chair, it’s important to stress at this point that the rate at which the rate transition reserve tails off is dependent on the rate of return the board realizes through its investments and claims costs.

The assumed rate of return in the eight-year scenario is conservative. It is possible to see the rate transition reserve last longer than eight years. The greater the return on investments, the longer the rate transition reserve is maintained and assessment rates subsidized.

Also during 1998, all systems — hardware and software — within the organization were evaluated for Y2K compliance. During 1999, all identified Y2K systems issues were addressed and, to the best of our knowledge, we are now Y2K compliant.

In regard to appeals, at the internal review level, in 1999, we scheduled 57 appeals. Of the 57 scheduled appeals, 16 were either postponed or withdrawn at the request of the appellant. Of the remaining 41 appeals, 40 have been conducted, with the remaining one scheduled later in December.

Within the 40 appeals heard, 48 adjudicative decisions were reviewed and decisions rendered; 28 adjudicative decisions were confirmed; 14 were reversed in favour of the appellant, and six were varied in favour of the appellant.

At the appeal panel level in 1999, 40 appeal panel hearings were scheduled. Of the 40 scheduled appeals, 14 were postponed or withdrawn at the request of the appellant. Of the remaining 26 appeals, five decisions were confirmed; eight were reversed in favour of the appellant, and three were varied in favour of the appellant.

There are five decisions pending. The remaining are underway.

Work on the occupational health and safety review continued in 1999. The current Yukon regulations are specification based in most areas, and the first draft of these revised regulations continues to be specification based.

A first draft of the general safety regulations and mine safety regulations was circulated to employers and workers throughout the Yukon this fall. Follow-up meetings have been held throughout the Yukon to gather comments from the stakeholders on this first draft.

Currently, the draft is being reworked to take into account the comments provided by stakeholders, and we hope to have the second draft available to stakeholders by the end of January.

Mr. Chair, one comment we received from stakeholders in this consultation process was that the pace of the review was difficult for some stakeholders to respond within. In light of that comment, we’re considering lengthening the time frame for responding to the second draft.

Lastly, Mr. Chair, on Bill No. 83 implementation, implementation planning for Bill No. 83 is well underway. We do not anticipate any difficulties in being ready for those issues effective January 1, 2000 or April 1, 2000.

We have discussed and are pursuing printing a consolidation of the current act and Bill No. 40 and Bill No. 83. This will provide one easy reference point for stakeholders when using the legislation and should remove difficulties in knowing what sections apply.

Several areas in the new act will require policy development, and the board will have to consider this in establishing priorities in 2000. However, there is nothing to impede the implementation January 1 and April 1.

Initial discussions have been held with Pricewaterhouse and the Auditor General of Canada regarding the special examination. The board will have no difficulty in submitting an audit plan prior to March 30, 2000. We anticipate the plan will deal with most aspects of the operation within a three-year time frame, commencing March 30, 2000. One reason for projecting a three-year time frame is the inclusion of the appeals tribunal, which has yet to be established.

In undertaking our implementation planning, we have also conducted a costing for the implementation. This costing was done using assumptions based on current expenditures, our experience to date, experience based on other jurisdictions, and projecting these over the amendments provided for in Bill No. 83. Our costing is based on full implementation of Bill No. 83, and it reflects costs for a complete fiscal year, not graduated implementation.

We recognize that not all things will be implemented immediately, nor will the year 2000 reflect a full year of implementation costs. We also recognize that some items may be implemented at a later date, as they are discretionary in nature, such as increasing the Workers’ Compensation Health and Safety Board, including chair and alternate chair, from six members to eight members.

The bottom-line cost that we have arrived at is approximately $750,000, and that’s after offsets realized by the board. I’m perfectly prepared to go into detail on that costing should there be questions on that.

Chair: I’d like to thank the witnesses for their opening presentations. Are there any questions from the official opposition?

Mr. Cable: I’d like to welcome the witnesses. I’d also like to welcome some of the injured workers, a member of the board and the workers’ advocate.

An issue that has bothered me, Mr. Chair, was an issue that was brought into our offices by two injured workers — it made the newspaper the other day — where the injured workers have had a similar, unsatisfactory experience with the appeal system. They went through the appeal system and got a benefits award, and then at some juncture the award has been either cut or reduced. They have then gone to the appeal panel, and the appeal panel has ordered the benefits reinstated. In each case, there has been lack of compliance with the appeal panel’s order. The Workers' Compensation staff, the board, appear to have taken upon themselves to review the original benefits award. So the question I have for the witnesses, Mr. Chair, is, does the staff, in the witnesses’ view, have the opportunity to review the claim on the merits — in effect have a re-hearing — when the appeal panel orders that the benefits should be reinstated?

I tried to think of an analogy. Let me put this analogy to the witnesses: the government is in a fight with a contractor and puts an issue out to arbitration and the contractor gets an award. Then somebody doesn’t like it and they go into the court and the court says, "That’s the order. The arbitrator’s award is the order. You pay up." Do they then have the chance to say, "Well, there’s some new evidence around. Our calculator broke. We missed a decimal point. The arbitrator’s award really isn’t accurate. We’re going to change it around a bit"? Does the board have the right to do that sort of thing with an order that they’ve been given to reinstate a benefits award?

Mr. Armstrong: Mr. Chair, I’d like to say that the staff of the Yukon Workers’ Compensation Health and Safety Board to the best of their ability attempt to comply with the directions or orders or findings or decisions of an appeal panel of the board. And I say "to the best of their ability" in that when a decision is specific and an action is to be taken, the board, to the best of their ability, take and implement that or undertake that action. Where a decision directs staff to re-examine a situation, then the staff do precisely that and re-examine the situation, but staff do not have the opportunity to do something other than what an appeal panel decides upon, unless it is an issue where — and I want to elaborate for a minute — where new evidence does come to light and a new adjudicative decision is rendered on it. But that is not something that takes place during the appeal process. So I want to make the distinction that a decision rendered by an appeal panel stands and is to be implemented until such time, and only if, new information is brought to the organization and the organization is forced to re-look at the situation.

And now I’ll give an example of exactly what I mean. For example, an injured worker is provided a permanent impairment award, and perhaps the permanent impairment award isn’t as high as the worker would see fit or would see as being appropriate. They may appeal that, and they may go through the internal review committee level. The internal review committee may or may not, but may, for the sake of this, uphold the decision that the adjudicator made, and it goes to an appeal panel. The appeal panel may look at that permanent impairment award and say, "Well, yes, you may have said it was 15 percent; we’re saying it’s 25 percent." Board staff are then compelled and must award a 25-percent permanent impairment award.

However, it may be that, as time progresses, this individual’s physical condition declines, and that often is the case. That individual may bring new evidence to the organization saying, "Look, I believe" — and this happens — "that my condition has deteriorated since we last spoke on this." At that point, we would, in all likelihood, have another medical examination performed, and if we found that, in fact, the physical condition had deteriorated and was now at 35 percent, hypothetically, the adjudicator would be free to make that determination and say that the award is raised to 35 percent.

So, that’s an instance where the adjudicator may take action further on a decision that an appeal panel has made.

The worker, at the same time, may say, "Well, I disagree with that 35 percent," and he may go through the whole appeal process.

Mr. Cable: Is the president saying, Mr. Chair, that, in the presence of an order of the appeal panel to reinstate benefits, there is a right for the staff to sort of re-hear the benefit award, to have another kick at the can without going back to the appeal panel?

Can that start right down at the bottom of the appeal process without any further instruction from the appeal panel?

Mr. Armstrong: Mr. Chair, that wasn’t quite the scenario that I was putting forward. In the scenario that has been presented, if the order is to reinstate benefits, if the benefits aren’t clearly defined, it may be that adjudicative staff are then required to have a look at which benefits are being talked about.

Mr. Cable: Mr. Chair, the president mentioned that, in the presence of new evidence, just where does the board have the right to introduce new evidence in the face of — let’s say, the order is clear. The order to reinstate is clear. Where does the board staff have the right to introduce new evidence to shade that order?

Mr. Armstrong: Mr. Chair, I’m not suggesting that board staff have the opportunity to present new evidence in carrying out the directions of an appeal panel decision. My suggestion was — or my comment was — that new evidence is often brought to the board throughout the life of a claim, and that evidence may in fact be brought by an injured worker.

The board has an obligation — well, pardon me, the staff, so that we’re distinct about whom we’re talking about here — the adjudicative staff have a responsibility to consider that information when it’s brought forward. That’s what I’m talking about here.

As far as staff introducing new evidence in the decision of an appeal panel, that’s not the role that I’m talking about.

Mr. Cable: We have limited time, so let me move on to another issue. One of the elements of administrative costs is the cost of the vocational rehabilitation, and there has been a lot of public discussion on that. It was canvassed last year in some detail.

And I think the president indicated, Mr. Chair, that the costs of vocational rehabilitation drive up administration costs. This was in the context of some discussion on administration costs.

But in the long run they can reduce claim costs because the injured worker can get back to work, get back into the workforce, so the overall claim costs are reduced.

This is what the president said last year in this context: "I would point out that there are a number of factors that drive administration costs within every jurisdiction, and whether it drives the administration costs up or, in fact, has the opposite effect of bringing them down." And he went on to say a few lines later, "Case-management and care-management programs drive administration costs in this jurisdiction, but we can draw a parallel or draw an equation from that that the appropriate management of a claim, in fact, has the effect of reducing the cost of that claim."

Is this speculation, or is it based on an analysis of vocational rehab costs in worker placements in the number of people deemed as employable? Where does that observation come from? Has the administration some facts, or some spreadsheets that would prove that the appropriate vocational rehabilitation actions will, in fact, either match or reduce the administration cost?

Mr. Armstrong: I don't have reports in front of me, Mr. Chair, regarding the role of rehabilitation, or vocational rehabilitation, and their impact on either cost of claims or on the cost of the administration, so I'm going to speak in general terms.

Nationally and internationally, it’s recognized that appropriate and timely interventions in the management of a disability — be that a disability recognized in the workplace or a disability outside of the workplace — and that the appropriate delivery of interventions and treatment significantly impact the positive outcomes, or recovery, for an individual on that disability.

In managing the claim within a Workers’ Compensation context, we view — and certainly, I think, it is borne out from a national perspective — that timely intervention does, in fact, increase the likelihood of a positive outcome in the vocational or physical rehabilitation of an injured worker and return them to the workplace.

The sooner we’re able to return a disabled worker to the workplace, by logical extension, the less the claims cost. At the same time, the administration of that claim is, in fact, an administration cost.

So, yes, managing these claims and providing timely, appropriate interventions on these claims is an administration cost, but we think it’s an administration cost that’s well worth spending in that it improves, as I say, the likelihood of a positive outcome and the recovery from the disability and, consequently, also reduces the cost of that particular claim.

But I’d like to stress that that’s not the reason that you take that form of intervention.

The sole reason for doing that is not to reduce the cost of the claim; the reason for doing that is to enhance the most positive outcomes for that disabled worker.

Mr. Cable: The reason I asked the question, Mr. Chair, is that there have been a number of questions put in this House, and there has been a fair amount of public discussion, on the administrative costs of the board, and I believe the witnesses spoke to the issue of comparative cost analysis. So it’s somewhat surprising that there has not been some effort to track the vocational rehab costs, because I think in the last two annual general meetings there was an assertion made that an attempt would be made to track those costs. If I can read from the transcript of, I believe, the 1997 meeting, and it’s in the context of the vocational rehab costs, "Do we have the capability of reporting, today, on what is the situation currently, in 1997; or even could we say what it was in 1996?"

This is the president speaking: "No, we can’t. And that’s a terrible flaw within the organization. It’s one that the board has recognized and has encouraged the administration to deal with over the past couple of years. And for one reason or another, it has not been dealt with." Is it the intention of management to track those vocational rehabilitation costs — outside of the obvious benefit to the injured worker — so that we can determine whether there’s a return on those investments from the standpoint of the Workers’ Compensation Health and Safety Board?

Mr. Armstrong: I recall the discussion around the tracking of vocational and rehabilitation costs. Administratively, we have every intent and desire to do just that. When I was reading through the strategic plan and talking about management of information and being able to provide that information, our ability to track that within the organization is still somewhat wanting, and I readily admit that.

In 1998, in recognition of our need to manage information and be able to provide meaningful information to the stakeholders and the public, we undertook to put together a plan for putting just those types of systems into place. If we needed to right now, we would be able to do — although it’s an onerous task — an audit of files, physically, to be able to track those types of costs. However, it makes much greater sense to us to be able to develop the appropriate information system to track those costs in an ongoing way.

So, as I said, in 1998, we undertook to look at all of the information system’s needs within the organization. In undergoing the evaluation on those information needs, one issue came first and foremost to us, and that was our ability to be Y2K compliant. That drove the priorities within the organization in systems development. Our assessment system was not capable of being made Y2K compliant, and so all of our efforts in 1999 had to be focused on rebuilding the assessment system. That assessment system has now been built and went live on the weekend of December 5. We’re now confirming that all of the data that was transferred across was, in fact, transferred across appropriately. We have also had to deal with ensuring that our claims system was able to be made Y2K compliant, and those changes have been made.

So, what I’m saying here is that, as much as we recognize that there’s a need for us to track that information and there is a desire for us to track that information, the organization has limited capabilities in what it can deal with at any one time. We have had to be very careful in prioritizing those resources and applying them to the most critical areas. That’s not to say that this type of tracking isn’t important and doesn’t help us in making more informed management decisions. However, we had to deal with other priorities first.

Mr. Cable: What, Mr. Chair, does management estimate as the percentage of claims that would require vocational rehabilitation? Is it something in the order of 10 percent?

Mr. Armstrong: Mr. Chair, I’d be hesitant to just make an off-the-cuff estimate of the percentage of claims that would require vocational rehabilitation. I’d be more than happy to undertake to get that back to the Legislature, but off the cuff, I would be reluctant to make a guess.

Mr. Cable: I think that would be useful information, if the president would in fact provide that information to the members of this Legislature.

The reason I ask is, I’m not sure I understand why the tracking of these costs is difficult. I assume there are some outside consultants used, whose invoices assumedly would be easy to track, and I would assume that there are some inside personnel costs, which would be relatively easy to track.

What is the difficulty in accumulating that information? I don’t quite understand it.

Mr. Armstrong: Mr. Chair, it’s a matter of tracking a number of things. In sort of a quick first blush, one would look at it — surely there are invoices for vocational rehabilitation; surely those costs are known. And, for the most part, that’s true. Those costs are known although, as I say, I don’t have them at my fingertips today.

However, if we’re looking at a cost-benefit analysis — which is what, in fact, we’re discussing here — it’s how does the expenditure of those dollars impact on outcomes, and it’s that type of a measurement that really allows us to make appropriate management decisions. And that’s a much greater exercise than simply tracking the costs of vocational rehabilitation and tracking costs of claims and making some sort of an analogy. It may be, as a matter of convenience, that we can look and say, well, in the Yukon Territory, workers' compensation claims costs have decreased over the last three years.

And, for the most part, that’s true. It might be rather dangerous, however, for us to make assumptions about why those claims costs are decreasing. That, in fact, tends to be a bit of a national trend. I would want to be very careful in providing information that the information was accurate and reliable. So, rather than just doing a comparison of vocational rehabilitation costs compared to claims costs, I would want to track a fair bit of other information.

Also, from a management decision-making capability and, as importantly, from a board decision-making capability, I think that we would like to be able to integrate much more information than vocational rehabilitation and claims costs.

We have spent some time looking at what types of information, what types of statistics and what types of analysis are required to enable good decision making for management and good decision making for the board. And, although this is just one element that we’re discussing, it’s certainly something we view as critical and something we have every intention of moving on.

However, as I said, we did have to prioritize our resources both in 1998 and 1999, and deal at this time with business continuity issues. We felt it was highly important that the board be in a position to still function, from a systems and information management perspective, on January 1, 2000. We were assured that that would not be the case if we did not make changes to the claims system and to the assessment system, and we have made those changes, so we are Y2K compliant and have every faith in our business continuity.

The changes we have made to the claims system, however, are only changes to make us Y2K compliant. Further changes are required in order to do this kind of a cost-benefit analysis, and I think we’re all very interested in being able to do that. And, as soon as we can raise that to the top of the list of priorities, we’ll be dealing with that new claims system and the ability to do that type of a cost-benefit analysis — are those dollars being spent effectively, are they having the outcomes that we hope that they have, and, if not, then what do we need to be doing about it?

Mr. Cable: When is that going to be done? Is there a target date on that?

Mr. Armstrong: As I have said, we can certainly understand that the Y2K issue has been first and foremost in our mind from a business continuity perspective.

The year 2000 — we have certainly stated in our strategic plan and we have also looked at it from an operational perspective within management, of now stepping forward and developing a comprehensive management information system strategic plan or, in other words, prioritizing what we do around the management of information and the collection of that information within the organization. At this point, that work hasn’t been done. It is something that we’re undertaking in the first half of the year 2000, and we will be taking it to the board members for their approval as to what the priorities are in the areas of systems development.

So, the best I can answer, Mr. Chair, is we will be taking a management information systems strategic plan to the board in the first six months of the year 2000. After the board has approved that, we’ll know clearly then what the priorities are for the organization in developing those types of systems.

Mr. Cable: The number of injured workers who have come into our offices complaining about the use of what’s called the "deeming principle" — that’s where an injured worker is deemed to be employable, whether or not the injured worker has a job or not, and that’s enshrined in the policy number CS08, and there are a number of criteria set out in that policy directive.

I’ve been provided with an interesting article by this Paul C. Weiler, who is a labour professor from back east. And in his report of November 1980, entitled Reshaping Workers’ Compensation for Ontario, he was drawing a comparison between the theory involved with employment insurance and the theory involved with workers’ compensation — the idea being to provide some incentive for the worker to get back to work, to have a job.

Here are his comments: "There is a simple and direct response to this problem. The Workers’ Compensation Board should be empowered to determine whether the disabled worker is capable of doing suitable work …" — that’s one. Two is "… whether that work is available to him …" and, three, "… whether he had refused to take such a job. If the response to these questions is positive, the board will deem that the worker had earned the income payable in this job for purposes of calculating the actual wage loss for his injury. Such a judgment by the board would require a tangible indication that suitable work was in fact available to this worker, presumably through evidence that the employer, the board, or some other agency had made a specific job offer to him."

Does the board subscribe to that proposition from Mr. Weiler’s report?

Ms. Ruddy: What I do have to say with respect to the deeming policy is I can advise that the board is aware that it’s problematic. We have put it on the list to be addressed in terms of our policy development. Given the amendments in the legislation and our recent decision to halt policy development until we get into place our mechanism for consultation, I can advise that we would be going to consultation with respect to that particular policy.

At this point — the policy that you’re referring to is the current policy in place. That would be the board’s current position, but the board clearly recognizes that there’s a need to take a look in this area and consult in this area and to make some changes.

Mr. Cable: The present policy, of course, doesn’t adopt Mr. Weiler’s suggestions at all. It’s a deeming in a vacuum.

Does the board chair agree with Mr. Weiler’s comments personally, that it’s not just enough to say, "There’s a job out there somewhere in the ether. Go and find it."? There has to be a job that the worker can, in fact, get and that is offered to the worker before there can be a deeming as opposed to an actual employment.

Is that proposition not sound?

Ms. Ruddy: Mr. Chair, with respect to my personal views on that, I can give you those. I cannot speak on behalf of the board. We have not yet gotten to the policy discussion with respect to this policy. I can tell you my personal view; however, it is only my personal view, not the view of the board. My personal view is that I would agree with the comments of Mr. Weiler.

Mr. Cable: Well, that’s one down, five to go.

Let me ask a couple of questions on this KPMG cost-impact analysis. The president, Mr. Chair, talked about $700,000 as the cost of the amendments that were brought in by the minister earlier, and which we all agreed to, of course.

One of the comments in the KPMG report has piqued my curiosity. There was a costing of the independent appeals commission, and it’s stated to be that the costing involves an estimated approximately $50,000 in incremental costs for administrative staff and an additional $20,000 for resources and facilities.

Let me ask this question: is that, in the board’s view, a reasonable estimation of the additional costs of the new appeal process that we’ve just introduced?

Mr. Armstrong: I think the question of reasonableness may be best answered depending on what assumptions one makes.

As I said in my opening remarks, the costing that the board undertook was based on — and I went through the assumptions that we used. As it was pointed out, KPMG’s costing for implementing the appeals commission — or now the appeals tribunal — was a one-time cost of $30,000, and a cost of $9,000 for recurring training and a cost of $70,000 on an annual basis.

The board’s costing exercise does differ from the results of KPMG in this area. In the KPMG report, some assumptions are spelled out; some are not. One assumption that’s spelled out in the KPMG report, for example, is that the appeals tribunal would hold its appeals in the offices of the Workers’ Compensation Health and Safety Board.

In doing our costing we, in fact, have costed them having a space outside the Yukon Workers’ Compensation Health and Safety Board to hear their appeals. It’s our anticipation that the appeals tribunal may wish to enhance its separateness from the organization, and may wish to hold its offices, and may wish to hold, in fact, its appeals or its hearings outside the building.

I’m just giving that as an example of a difference in assumption. We assume that the appeals tribunal will wish to have that very clear distinction from the organization. We’ve done the costing based on 24 appeals per year, and the costing done on 40 appeals. Actually, for interest’s sake, I’ll run through the 40-appeal scenario, because if we look at the appeals statistics over the last couple of years, that’s closer to the mark than 24 — but if there’s interest, I can do both.

I’ll wait to hear if there’s interest for both, though.

Based on the 40-appeals scenario, for office space — this is for the tribunal itself — we have estimated 900 square feet of office space, at the cost of approximately $20 per square foot, or $18,000. We have estimated hotel space for appeal hearings at $500 per day for those hearings, for a total annually of $20,000.

We assume that the appeals tribunal will wish computers, furniture, and we have looked at that as an $18,000 expenditure — total office costs then of $56,000 annually.

For honoraria, estimates per appeal are one day to prepare, one day to hear, two days for a decision. That’s based on our current experience with appeal panels, so that’s four days. The per diem charge is $200 per day, times two members — that would be a worker and an employer. On 40 appeals, that’s $64,000.

For the chair of the tribunal, four days at $300 — these are the current per diem rates — for $48,000. Further, the amendment requires the chair to attend all board meetings. The board currently holds 90 meetings a year. The chair of the tribunal’s per diem would be the same as our chair’s per diem, at $300 per day. That’s $27,000.

We have also projected that the tribunal may wish to meet once a month to conduct business of its own. For 12 days a year at $300 per day — that’s the chair of the tribunal — times one person, is $3,600. For the rest of the tribunal members, 12 days at $200 per day times five — $12,000. The total honoraria is $154,600.

Office support — we have made the assumption that the members of the tribunal will wish to get themselves up to speed on workers’ compensation issues as quickly as possible and will wish to attend the Association of Workers' Compensation Boards of Canada, College and Congress, estimated at $5,000 times six — $30,000. We have estimated telephone/fax at $5,000. Program materials — I’ll just read through the list here. Program materials, contract services, legal counsel — we have based an estimate on that cost of legal counsel. Total office support of $184,000, less offsets of $110,000, and those offsets are: the appeal panel council, our current expenditure, 1998 actuals, for appeal panel council, $76,550. So we see that as an offset. Also, our current board’s honoraria, 1998 actual, only related to appeals — $34,375.

So the total offsets — $110,925, giving us a cost for the appeal tribunal of $284,525.

Now, it may be that a number of those areas, such as telephone/fax may in fact come in at less, and that would be fine. We certainly didn’t want to shortchange the implementation of the appeal tribunal or any other office.

It’s very difficult at this time to be able to speak to how close these estimates are, because, as we know, the appeal tribunal has not yet been established. However, the one area that I am able to speak in specifics on is the workers’ advocate office, and we have done costing in that area.

In regard to the workers' advocate office — I’ll just take a second to turn to the page, Mr. Chair — we had estimated, in our costing exercise, two workers' advocates at $117,000; administrative support at $39,000 — I’m rounding figures here — for a subtotal of $156,500.

Fringe benefits at 15 percent, as per the Public Service Commission — $23,500; total salaries — $180,000.

Professional development, we’ve assumed for those three individuals at $2,000 a year, for $6,000. Rent at $20 a foot, $18,000; supplies, $5,000; telephone/fax, $7,500; program materials, $3,000; copying charges, $5,000; total office cost, $44,500, for a total budget of $224,582.

The board currently has a budget approved of $82,300. This represents an incremental cost of $142,282. The only reason I raise this as an example is this one of the few areas where I have concrete figures to talk about.

Interestingly, in the proposed draft budget that we have just received for that office, the proposed budget is, in fact, $281,000. In our costing exercise, we had come in at $224,582.

The proposed budget of $281,000 — give or take $1,500 — is in fact an incremental cost increase of $200,000 for the board.

Thank you, Mr. Chair.

Chair: Do members wish to recess?

Some Hon. Members: Agreed.

Chair: Ten minutes.

Recess

Chair: I will now call Committee of the Whole to order. Committee is dealing with the Workers’ Compensation Health and Safety Board. Are there further questions?

Mr. Cable: When we took a break, Mr. Chair, we were talking about the costs that were attributed to the amendments to the An Act to Amend the Workers’ Compensation Act that we passed earlier this session. The president was going over the costs analysis. There was a whole barrage of numbers that came out. Is there a document around that can be provided to us, and does it differ materially from the KPMG report?

Mr. Armstrong: Yes, I’d be more than happy to provide the Legislature with a copy of our costing document. I think I would have to say that there certainly is a difference between the results of our document and the report that KPMG put forward. I would like to point out that that material difference is, in all likelihood, based on a different set of assumptions — the assumptions that KPMG worked with and the assumptions that we worked with.

But I’m more than happy in providing that document to make it very clear, as I did in my opening remarks, what our assumptions were when we went into that costing exercise.

Mr. Cable: I note from the numbers that I had a chance to scribble down, that your second costing does have an offset for the board honorarium, whereas KPMG did not, because I think the proposition was that there was going to be some variations on Parkinson’s Law and work was going to expand to fill the time allotted to it. But I gather that, in your analysis, you are in fact saying there will be a savings on board time. Is that accurate?

Mr. Armstrong: In doing our costing exercise, we felt that wherever there was a reasonable offset, it was our duty to identify that offset and point it out. In the case of the appeal tribunal, that’s exactly right — and if I might just take a moment so that I don’t cite the wrong figure.

In the case of the appeals tribunal, in 1998, members of the board were paid $34,375 honorarium directly related to either preparing for, sitting in or writing a decision from a hearing.

Now, with the establishment of the appeals tribunal, we’re very clear that, other than assessment appeals and occupational health and safety appeals, which will continue to come to this board, all those other appeals will go to the appeal tribunal.

It’s logical to assume and expect to see in the document, then, that identified as an offset, and we have therefore identified that as an offset.

I don’t disagree, however, with KPMG’s comment that the board has a long list of priorities and issues it wishes to deal with.

We need to remember that this is a board that has other things to do. It’s a board of citizens and takes on the responsibility of governance of the Workers’ Compensation Health and Safety Board in addition to all of those other things.

They have had to prioritize what they dealt with in any given time, recognizing that there was an obligation on them to hear the appeals in the most timely fashion that they could do, and they have done that.

Removing that claims appeal function from the members of the board, I believe, will allow them now to get on with dealing with some of the other priority issues that they have certainly been anxious to take on, but have not had the time to address at this time.

Mr. Cable: I just have one more question, and then I’ll turn the floor over to the third party critic.

Just before the break, Mr. Chair, the president got into talking about the workers’ advocate costs, and I wasn’t sure what context that was brought up in. Was he saying that the amendments to the act that we just passed will cause further funding requirements or need in the workers’ advocate office? Is that what he is saying?

Mr. Armstrong: Mr. Chair, the difficulty, I believe, that KPMG had in conducting their costing analysis is very similar to the difficulty we experienced in doing our costing analysis in that, for the most part, the amendments brought in with Bill No. 83 are forward-looking. They are not retrospective. We don’t necessarily have a history upon which to draw to make projections into the future on those financial issues. Nonetheless, both KPMG and we have, to the best of our ability, made those forward-looking projections in the costs.

The purpose in raising the workers’ advocate area was an example in that we had done a costing exercise in that regard. We had come up with a cost a little better than $220,000, and then, as chance would have it, we have in fact received a proposed draft budget, which to us indicates that our costing projections in that area were not far off from what the anticipated level of funding would be for that office.

So, I use that as an example, in that KPMG had said there was an incremental cost for the workers’ advocate office of $106,000. We have projected an incremental cost of approximately — and I want to be careful with my figures — $142,000, but on receiving the proposed draft budget, we see an incremental cost of approximately $200,000.

Mr. Jenkins: Mr. Chair, the opportunity to question officials from Workers’ Compensation Health and Safety Board comes before us but once a year, and we have about 110 minutes, if we subtract the break, in which to deal with the matter before us. I would urge the minister to come to some arrangement with his officials so that we can reduce the amount of preamble that spells out the operation of the board previously, to provide us with information that’s already known to us through other forums, and to keep the responses as brief as possible. This would facilitate the opportunity we have, rather than going on at great lengths.

With that said, I’d like to address a number of issues surrounding the operation of the board. The concerns that are expressed to me are, for one, about the ongoing and ever-increasing costs of administration. Currently, the total assessments amount to just in excess of $8 million. The total operational costs of the organization are over $5 million. We’re going to see a further increase of $750,000, according to the president’s own figures. So that will put us over $6 million dollars in O&M costs.

Every time it appears that we have a problem with the operation of the board, another level of bureaucracy is introduced, or another level — a panel or something — that has with it the associated costs. We don’t appear to get any further along to speeding up the process that the board is empowered to deal with, and that’s to address the needs of injured workers, to rehabilitate them, to put them back into the workforce, or, in the event that that cannot be done, to compensate them fairly in a manner that is appropriate.

That end of it seems to fall short of its goal on a continuing basis. But, just getting back to the amount that we’re spending currently on O&M and what we’re projected to spend, how much further can we go before we’ve reached an impasse where the total amount of assessment that we’re taking in equals the total amount we’re paying out in O&M costs? You know, if you just look at the past couple of years, Mr. Chair, we’re increasing at an alarming rate.

The only thing that’s keeping us solvent is the past experiences of the board and the past operations of the board. They have been done in a very diligent manner. The investments have been prudent, and we’re making it on the downstream side. We’re making it on the investment side.

But on the premiums that we’re collecting, we’re on a collision course with disaster in a very short period of time, if we keep incurring costs in this manner. Just how much longer can we go in this manner? Could I ask that of the officials from WCB?

Mr. Armstrong: We’re critically aware of concerns around administration costs within Workers’ Compensation Health and Safety Board. We have every desire to look further into those administration costs and, where possible, make adjustments to those administration costs and, if possible, reduce those.

We’re looking forward to the special examination, or operational audit, that now, in fact, is entrenched in Bill No. 83. We have no doubt that that special examination will certainly turn our attention to areas where we can enhance effectiveness and efficiency in the delivery of services for injured workers.

We recognize that there have been increases in the administration costs over recent years at the board, and we have no desire to see those escalating through. As a management group, we’re diligently looking at those expenditures and determining their effectiveness and their efficiencies.

But as I say, we look very much forward to the results of the operational auditor’s special examination in assisting us at looking in areas where we might realize some savings.

In speaking about assessment revenue — approximately $8 million or $7 million, depending on the year that we look at — we need to remember that assessment revenues — if we look at 1998, that represents only 45 percent of the claims costs associated with those very same industries. Drawing a comparison between assessment revenue brought in and administration costs out, without taking into account the investments, is a dangerous road. In 1999, the approximate assessment revenues are about $7.5 million. We have to recognize that that represents a 54-percent subsidy on those. Unsubsidized assessment revenues would be approximately $15.9 million, or close to $16 million. We wish to maintain the investment fund as best we can and continue with the type of rates of return that we have been experiencing, and continue being able to subsidize to the best of our ability those assessment revenues, and, at the same time, being mindful of not inappropriately increasing administration costs.

Mr. Jenkins: Well, it sounded good, Mr. Chair, but from a business standpoint it doesn’t make very much sense that you would spend that many dollars, and the president did mention the comparison of your total assessments in comparing it to your total O&M costs, that that’s leading us down a dangerous road. I take exception to that kind of an approach. In fact, I think it is a very, very good comparison, and it is a comparison used continually through the insurance industry.

I was just wondering why the president would see it as taking us down a dangerous road. We’re ever increasing the O&M costs of the organization, the assessments are static — or the premiums paid by employers are static. In fact, this year they’re down significantly, I would believe. I just haven’t got my head around how much they’re down, but I’d suggest they’re down significantly over previous years. Our O&M costs are probably going to be in excess of $6 million, and we’re ever increasing the level of bureaucracy.

We have injured workers lined up at the door and virtually — well, some of them have been treated fairly but, when there’s a problem, it just seems to never end, and some of the excuses offered are pretty far-fetched as to why they are not treated in a very expedient manner, Mr. Chair.

So, I’d like the president to explain why he feels this is a dangerous road we’re heading down, comparing the assessments to the O&M costs and bringing them into line, Mr. Chair.

Mr. Armstrong: Mr. Chair, I’d like to apologize for possibly the way that that may be viewed. What I’m saying in that case is that, if we’re doing a comparison between the operation and maintenance costs of Workers' Compensation and assessment revenues brought in by Workers' Compensation, I believe the relevant, or the important — all figures are relevant — but the important figure to take in mind is that the assessment revenue that we bring in only represents 46 percent of what the true cost is within those particular industries.

So, if we’re doing a comparison between assessment revenue and operation and maintenance, it’s a comparison of five or, in the case of the implementation of Bill No. 83, anywhere around $6 million. That’s a comparison against approximately $15.9 million in assessment revenue, when we discount the rate of subsidy.

I’m not at all closed to us having a look and certainly discussing the relationship between assessment revenue and operation and maintenance cost. I merely meant to caution that, in making this type of an analysis, as in doing any type of analysis, it’s important to approach the question with as much information and look at it as fully as possible. So, if it was taken some other way, that wasn’t my intention, Mr. Chair.

Mr. Jenkins: Well, Mr. Chair, when we add up these numbers, I once again reiterate that we’re on a collision course with disaster unless we can get a handle on the administration costs of the organization.

I noted, Mr. Chair, that now the officials from WCB have bought into the concept of a management audit, now that it’s a legislated requirement. There’s a vast opportunity now, within the next six months before these areas are explored, to review internally the management of the organization, with a view to improving service, the speed of the service, and reducing administration costs.

I would hope that the president would share that opinion with me and would expedite this approach to WCB before the review is completed and it’s mandated by this Legislature.

Mr. Armstrong: Yes, Mr. Chair, I have no difficulty at all in agreeing, and, as I had already stated, the operational audit, or a special examination, is a golden opportunity and a timely opportunity for us to look at all the operations of the organization and to really ensure that we’re doing what we need to be doing, when and how, and at an appropriate cost.

Mr. Jenkins: I just have a few other questions; I’ll have to curtail my complete line of questioning. The recently completed review of the act, rather than a total comprehensive review of the act, kind of cherry-picked a number of the areas, and I’ve yet to find out how those areas were selected. Perhaps the president could share with us, if he does have an insight, what the involvement of the WCB was with respect to the areas of the act that were reviewed. Would he have some sort of an understanding as to how these sections were picked out and why they were selected?

Mr. Armstrong: My understanding of the process was that there was a task force established and that the task force met with stakeholder groups, looking to identify areas of concern that may be dealt with through amendments. It’s also my understanding that that was the process that, in fact, occurred.

Bill No. 83 came to you, and now comes to us administratively, as a result of that consultation process. I’m not really in a position to speak to the task force exercise or whom they may have dealt with and how those issues were brought forward. We’re merely able to say at this point that we’re glad to embrace Bill No. 83 and implement as quickly as possible and as fully as possible those amendments to the Workers’ Compensation Act.

Mr. Jenkins: What I was getting at was that this bill that was recently passed by this Legislature focused on a very few sections of the act.

Now, I’m not looking at the working group that was empowered with the review of those sections. I was looking at how those sections were selected, and who had input from WCB into the selection of these areas, and what was the involvement. Because at the end of the day it was a very, very narrow focus, a very narrow review, and there were a number of areas cherry-picked and a number of areas that were omitted that were also of a contentious nature.

Why was one selected over the other, Mr. Chair?

Mr. Armstrong: The task force in conducting its work around the amendments, now Bill No. 83, did meet and keep the board informed of the work that they had underway, but the actual selection of what areas would be dealt with through amendment was not something that the board determined, if that’s in fact the question.

That was very much, to my understanding, something that was done in view of the stakeholders. So the board did not participate in the selection of what would be reviewed, or what may not be reviewed, or in putting forward recommendations around those particular issues.

As I say, though, the task force did keep the board informed of the work that was underway.

Mr. Jenkins: Well, it’s pretty hard for one to get a handle on who did what, because the minister said that he hadn’t any involvement — that was arm’s length — and the board didn’t have any involvement, the review committee was given a task to perform, so who did what at the onset to determine the sections of the act that were selected for review is still up in the air as to who selected them, Mr. Chair.

But if I could move on to some of the recently implemented policies, Mr. Chair, and we seem to have quite a number of policy changes that are forthcoming from the board. It appears that every time that someone has gone for a review and has been successful, there is a new board policy that originates and comes forward out of the process and slows down everything for some time.

But one of the ones that has been brought to my attention and is somewhat contentious is policy CL35, and this surrounds the requirement of an individual to provide proof of their earnings for the prior year by way of either their T4 slips for that period or their tax returns for that previous period. Now, that is pretty confidential information. Why do we go to this extreme when someone could clearly demonstrate and swear out a statutory declaration to that effect — that this was my income for that period? Why do we have to go to the extent of providing all the tax returns to substantiate their income for that prior year?

Mr. Armstrong: As far as verifying earnings within CL35, there is a requirement that, yes, the earnings that a worker had prior to their disability occurring need to be verified. The organization needs to have some way of knowing, in fact, that those earnings were there and what they amounted to. We have used, in the past, a number of different methods to verify that. I don’t know for certain whether we have ever used an affidavit or not. I know that we have, in the past, accepted a notarized document from an individual, identifying their earnings, but there is a need for us to have some way of knowing what the earnings were of a worker prior to disability occurring.

Mr. Jenkins: Well, Mr. Chair, I don’t think anyone takes exception to the requirement that the worker would have to demonstrate their income for that prior year, but it’s the manner, and the board has gravitated more and more now to requiring a full disclosure of the income tax returns for that individual, or T4 slips, T5 slips, and all other income for that individual.

Now, would it be acceptable to the board to accept a statutory declaration to the effect that my income for this period was X?

Ms. Ruddy: I did want to address this particular question primarily because this particular policy is number one on our priority list of things to do. So, what I can say is I don’t have the answer to that right now, and the reason we don’t have the answer to that is because we’ve made a commitment to consult with the stakeholders on this, as we will be on all policies, but in particular on this one, before we go ahead with anything.

So, at this point, the position hasn’t been adopted in terms of what, if anything, will be accepted, because we’re working on it right now.

Mr. Jenkins: Well, do we have some timelines as to when we will have sort of a decision made with respect to this policy, Mr. Chair, and in the interim what will be acceptable — solely the tax returns of these individuals, and solely the T4 slips, or are they prepared to accept a statutory declaration at this point in time? Or do we have to wait for this full review to be completed, Mr. Chair?

Ms. Ruddy: I believe I can address at least a portion of that, and perhaps the president can address the secondary portion as to what’s acceptable.

In terms of timeline, however, I can advise that the current timeline is that the board will be deciding in January the manner in which we will be going to consultation on all of our future policies, including this one. Once that is determined, I anticipate that it would probably be a good couple of months of obtaining the feedback and of undergoing that consultation process, at which point it would go to the board and I would anticipate a conservative estimate would be probably summer, before we would be in a position to finalize a policy in this area, after we’ve gone to full consultation.

Mr. Armstrong: I will make an attempt to answer the second part of the question, that being, are things other than tax returns and T4s acceptable in proving earnings? Mr. Chair, yes, other things are acceptable. The board has — actually, given where we’re talking — the adjudicative staff have in the past accepted other forms of documentation, and we don’t have a difficulty in looking at that, but I’m not in a position, just off the top of my head, to be able to go through and list what types of documentation may or may not be suitable for proving those earnings.

However, any individual who might find themselves in the position of having to prove those earnings would certainly be in a position to discuss that with the adjudicator.

Mr. Hardy: I’d like to thank the people for coming out to hear our questions and hopefully supply some answers. I’d also like to recognize the many people in the gallery here who have a specific interest in workers’ compensation and some of the ongoing problems that exist with it.

Speaking on that — the CL35, the average weekly earnings policy statement application — before me I have a resolution, resolution number 10, that went before the Yukon Federation of Labour annual meeting. In that resolution there is some very strong language, very serious allegations about this CL35. Have you seen the resolution?

Some Hon. Member: (Inaudible)

Mr. Hardy: You have.

I could just touch on a couple of things. To be perfectly frank with you, there is absolutely no way in the world I’m going to be able to get through just the questions on this one area that I want to address in 14 minutes. I can see we’re going to be talking about this in March, so, if anything, it’s a heads-up of what’s going to be coming, because there are some very serious issues. I think you’re both aware of that. Would you agree with that?

Chair: Order please. Would the member please address his comments through the Chair and not address the witnesses directly?

Mr. Hardy: Would the witnesses please answer the question I just asked, please.

Ms. Ruddy: I would say that, yes, we are in agreement that there are some serious issues with respect to this policy. As a result of that — and it has been brought to our attention that the stakeholders have some very clear opinions about the direction that they feel we should be going in this area — we have made the commitment to ensure that there is consultation done on this policy before anything is done. So, yes, we do recognize that there are problems, that there is a lot of need to hear information from a broad range of sources before we take any steps.

Mr. Hardy: That raises a concern, because this was an application to a policy that was brought in, and my understanding is that there wasn’t consultation before this application to a policy — there wasn’t consultation with the stakeholders in the first place before this policy was brought in.

Ms. Ruddy: I think we have a bit of confusion in terms of what we’re talking about. There is currently an application of the existing CL35, a document called "Application of CL35". My understanding, and I’m unfortunately new to the board this year and I was not on the board at the time that that matter was raised, but it’s my understanding that that application document — the original of it — was signed by the then-alternate chair at the time that that was brought in.

So I can’t speak to the details of what happened or what occurred then. All I do know is that there is a signature that would give some indication that the board was aware of — or consulted — with respect to that policy. It suggests to me that the board had approved it but, as I say, I can’t say anything beyond that, as I wasn’t there.

Mr. Hardy: How would I find out the answers on what the process was for the introduction of the application to the policy? Maybe I can be advised on getting those answers.

Mr. Armstrong: The application document that we’re discussing is an elaboration of the existing policy CL35. Policy CL35 was first brought to the board in July 1993 and approved retroactively to January 1, 1993. Further submissions were made to the board on CL35 in 1995. A decision was made by the board at that time not to make changes to the existing policy CL35 and continue with its implementation.

Then, in 1997, again, the issue of CL35 was brought up at the board level, and on February 12, 1997, the board approved and signed the application document for CL35. We have still a number of concerns that have been raised both inside the organization and also by stakeholders around policy CL35. We have been aware of it. We were aware of it in 1998 and continue to be aware of it throughout 1999.

In May 1999, a new policy submission was brought before the board for consideration for changes to policy CL35. The board has had a great deal of discussion around policy CL35, and certainly stakeholders have made their opinions and concerns known to the organization and to the board around policy CL35. As the chair indicated earlier, as a result of those concerns and issues that have been brought forward, the board has determined that it will not make changes right now to policy CL35 but will go to stakeholder consultation on that policy, given the nature of the concerns and issues that have been raised.

Prior to being able to do that, though, the board wants to clarify its process for conducting consultations, as obviously this is not the only policy that’s going out.

But to answer, the brief history is that CL35 was signed off in July of 1993 with an effective date of January 1. It was reviewed but not changed in 1995, had an application document drafted, which was approved and signed off by the board on February 12, 1997.

Mr. Hardy: Mr. Chair, when was this implemented and become the action of the WCB?

Mr. Armstrong: Mr. Chair, the application of the application document would have been very close to that February 12 date.

Sorry, I should elaborate. I don’t mean to be sounding like I’m walking around the question. I’m not.

There would have a requirement or a need for the policy unit, or other claims staff, to meet, discuss, in other words provide training and direction, in the use of the application document — although it is a fairly straightforward document. So, although it was signed off by the board on February 12, I’m not suggesting that it was implemented on February 13, but the approximate date would have been close to that, Mr. Chair.

Mr. Hardy: Mr. Chair, it’s my understanding that it was quite a few months after that before it was implemented, and I guess, Mr. Chair, my question is, why weren’t the stakeholders informed of this change, or why wasn’t there more consultation?

There are a lot of documents here, and I’ve heard a lot of very good words and things that are encouraging, of course, about consultation and about bringing in the stakeholders and being an open process with lots of discussion and allowing input. But it seems that, around this one specifically, there seems to be very little sharing of information before it was implemented. Although the board approved it and then it was implemented, I think there was a timeline. I wouldn’t mind knowing what that timeline was, and also why, at the annual general meeting, it wasn’t necessarily flagged, and why many of the stakeholders haven’t been part of that process.

Mr. Armstrong: I’m not sure that I’m clear on all aspects of that question. I’ll try to answer those areas that I think that I am clear on.

My understanding of the question was, or is, that — why was there not consultation with the stakeholders regarding the application document? That’s a very good question. I would like to point out that, up until recently, the board of the Yukon Workers’ Compensation Health and Safety Board has been, and continues to be, comprised of worker representatives and employer representatives.

They are, in fact, just that — representative of the stakeholders. To them, the task of developing and approving policy falls. That’s a task that they have exercised since January 1, 1993. There have been a great number of policies developed and approved throughout that period, from January 1, 1993 through to and until today.

The question is quite correctly put, in that there was not consultation on the application document, nor was there consultation on the original CL35. We’re looking forward to the new approach that Bill No. 83 puts in place for us, and that’s an approach where we will be consulting on these sorts of issues. But it’s important to understand that the application document — its development, its approval and its implementation — was not any different, for the most part, than the development, approval and implementation of any other policy that the members of the board would put forward.

Mr. Hardy: Well, it’s in the act of 1997, and probably it says the same thing in the act of 1992, and all the other ones — 93H "make publicly available all policies of the board relating to claim procedures, assessments procedures and occupational health and safety."

Now, "make publicly available" — now, that can be construed as kind of a grey area. What does it mean to make publicly available?

Now, to say that it is the board’s role — as representatives from various groups — that it’s up to them to go back and tell the groups, that is not necessarily what we call "making publicly available." They will go back and inform their members — hopefully they will, maybe you better check that, vice-chair — but that doesn’t mean that it goes out further to the public. It means it may only be discussed in a small meeting and may not be heard.

So, this is a substantial, substantial change, I believe, and one that affects workers dramatically. It has had a tremendous effect upon some of the assessments of workers, and my belief is that, when you’re making a change that affects the very people that the whole board and the structure exists for, then they should be the first people to be informed and the first people who should be consulted. So the public should be consulted, the injured workers should be consulted, the representative groups that speak on behalf of the workers and the employers should be consulted, and it should not be something — and I do know you have talked about consultation and it has to be improved and that’s good to hear.

But it seems that in this one, there has really, really been a falling down, and it’s too substantial to allow it to happen.

Personally, I would like to see it removed, then have that public consultation, then have that input from the stakeholders and see what we come up with, because I think it’s an aggressive action taken by the board that has affected too many people already. And you see the outcome of that. Read the paper last week, and a few weeks ago there was another case. We can’t be having that.

I have many more questions. We have one minute left. I have many other issues as well, and I’m really sorry that we’re out of time because we really are. There’s no use continuing down this path because I haven’t even started touching on the CL35 stuff.

So, thank you for coming. I look forward to seeing you in March.

Hon. Mr. Harding: Just to make some final closing comments, I appreciate the alternate chair coming forward, Ms. Ruddy, who is, as pointed out, also a citizen and has another occupation and puts a lot of time in this, as the other board members do.

I want to thank the people in the gallery who came forward, the president, Mr. Armstrong, and the members for their good questions. There were a number of issues raised, but I won’t take the time on redirect. I’m sure there will be opportunities in the future to discuss them, and, of course, all members of this House can arrange briefings whenever we can arrange them with the administration, the board, should they wish to have further follow-up.

With that, I look forward to the implementation of the new bill and the act changes. I think some of the issues that have been raised here today will be somewhat addressed, if not all corrected, through some of the processes that will be established through that.

Thank you once again for coming, and thank you members for your questions.

Chair: The time being 5:30 p.m., I would like to thank the witnesses and would now excuse them.

Witnesses excused

Chair: Committee will recess until 7:30 p.m., at which time witnesses from the Yukon Development Corporation will appear before Committee, pursuant to Committee of the Whole Motion No. 5.

Recess

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

Committee will be dealing with Yukon Development Corporation.

Witnesses introduced

Hon. Mr. Harding: I won’t say much by way of introduction. I know that the opposition wants to get into some scintillating discussion about the Yukon Development Corporation/Yukon Energy Corporation. So, the gentlemen with us today are Rob McWilliam, who is the president of Yukon Energy Corporation and Mr. Ray Wells, who is in his second term now as president of the Yukon Development Corporation, as chair. He’s a citizen of the territory and has another occupation, as well. He spends a lot of time working on issues pertaining to energy in the territory for very little in the way of compensation. He’s the chair of quite a diverse group of Yukoners who sit as citizens, as well, on that board. So, without any further ado, I’d like to introduce him.

I think, perhaps, we should take the same tack that we did this afternoon, where we welcome the official opposition and third party to engage in some questioning. And then, perhaps, there’s a member or two on this side who might have a couple of questions. Should there not be, we’ll just keep going around until the members have exhausted their questions.

Before we begin, however, I understand there are some opening statements from the witnesses, so I would defer to them now to make those comments.

Mr. Wells: Mr. McWilliam and I are appearing on behalf of YDC, but we will also address questions for our subsidiary, YEC. However, I do expect that this year there will be more questions related to YDC since we are responsible for implementing the government’s new energy programs, rate stabilization fund, green power, energy efficiency and the wood turbine.

We will be pleased to deal with any question you may have on these programs.

As chair of the board of directors, I want to quickly review what we see as our responsibility, namely addressing high-level policy issues. We provide general direction for strategic planning and goal setting. We ensure that there is high quality management and that management has developed and is maintaining the integrity of the corporate processes and procedures. Beyond that, it’s the responsibility of management to direct the operation of the corporations. Mr. McWilliam is with me this evening to speak to any operational issues that you may wish to raise.

For YEC, we are in the second year of what is a planned three-year transition to direct management. We have dealt with the most critical issues with transition and have moved to dealing with more of the finishing details. That has allowed the board and management to focus more attention on the longer term.

The corporation has been dealing with transition at the same time as we have been confronting some other issues. For 1999, one key issue was ensuring that the corporation is ready to deal with the year 2000 problem.

The board has reviewed the action that the staff and management have taken to address Y2K, including having an external audit of our preparations. Management has advised the board that YEC mission-critical systems are year 2000 ready. The board is confident that all necessary steps have been taken by the corporation.

As we look to the future, the corporation has been trying to address a number of issues that it believes will contribute to YEC being better able to achieve its mandate of providing safe, reliable and cost-effective power.

Key issues that I would like to speak to briefly are these: addressing governance, or, in more basic terms, resolving the complex relationships among the government, Yukon Development Corporation and the Yukon Energy Corporation; and developing a long-term infrastructure vision that will guide future investment.

On the subject of governance, the corporations fully appreciate the public’s concerns about how complex the relationships are. We are working with the government to make the two corporations more distinct, and to ensure that the relationship between YEC and the government is clearly arm’s length.

With the move to direct management, the arrangements that worked for the holding company are no longer appropriate. We are currently working with the government to implement a new relationship that will address many of the concerns and questions that the public has raised.

The other issue that I want to mention specifically is the corporation’s work to pursue a longer-term vision of the Yukon’s electrical infrastructure.

While our system is very volatile, and, realistically, investment decisions are going to continue to be challenging as long as we have an isolated system with a small customer base, there are steps that can be taken to stop being so reactive and to do a better job anticipating system needs.

While our efforts on Mayo/Dawson transmission line are part of our effort to take a long-term view, we recognize that more work is needed to complete a long-term vision. This planning will address future options for electrical and related service infrastructure. It will provide defined criteria against which supply options can be evaluated — criteria such as reliability and power quality, cost-effectiveness, and the level of uncertainty or risk that can be tolerated.

But while the corporation completes the transition and manages the challenges of operating the utility, we are very conscious that we must deal with the challenge of restructuring operations to reflect the reality of operating without the Faro mine.

When we appeared last year, I spoke about the corporation’s efforts to get out of the box that relying on the Faro mine has created for the electrical system. We all need to keep in mind that losing the Faro mine meant that we lost 40 percent of our revenues. While the corporation made many expenditure cuts, including voluntarily reassessing a fair rate of return and recommending reducing our return on equity, it still has fixed costs that could not be reduced over the short term. It’s important to remember that when Curragh closed, rates went up 30 percent. When Anvil Range first closed in 1997, rates increased by 20 percent without even addressing all of the costs of that closure.

Rates are now 18.5 percent higher than they were when the mine was last operating and, without fundamental change in the way we do business, they can be expected to remain at those levels. While the RSF, or rate stabilization fund, has provided a subsidy for ratepayers so that most customers’ bills have only increased by nine percent over January 1997 levels and they are now guaranteed stability at least until 2002, we need to take advantage of the breathing space that this provides to look at ways to increase the revenue base and/or lower costs so that customers will not experience substantial bill increases in 2002. We refer to this exercise as "closing the gap", and the board and management are devoting much of its time and attention to this challenge. Clearly there are no quick fixes, but we believe that the gap can be significantly reduced, if not completely removed, by 2002. We are addressing opportunities for both increasing the revenue base and/or reducing expenditures. Since the Mayo/Dawson transmission line would permit us to achieve both these objectives, we are giving it serious consideration.

I should also add that the analysis that has been done to date on the Mayo/Dawson line has been financed by Yukon Development Corporation and not the ratepayers, as part of Yukon Development Corporation’s mandate to promote economic development through electrical infrastructure investment. If the system design study, which is currently being awarded, concludes that the project will produce the savings for ratepayers that the feasibility study identified, then Yukon Development Corporation will also be looking at how it can contribute to ensure that ratepayers see those benefits at the earliest opportunity.

Other revenue options have been vigorously pursued and include efforts to connect Atlin to the WAF grid, which B.C. Hydro unfortunately has declined, and, after dealing with the Government of Canada on the flex-term note, proceeding to initiate an aggressive secondary sales program to start in the year 2000.

On the expenditure side, we are looking at ways whereby operations could run more efficiently, such as the following: the construction of the Aishihik third turbine, which would provide more efficient use of water and provide cheaper backup capacity; refinancing company debt to take advantage of lower interest rates for capital investment; and by holding the line on current expenditures, which has meant that we were able to commit to the YUB that we would not be filing a GRA for 2000, which would likely result in increased rates due to the estimated half a million dollars in costs just for a GRA process.

These are examples of efforts that the corporations are making to close the gap. I’m sure that we will be going into these matters in more detail over the course of the evening. I just wanted to give you a sense of some of the things that the corporation is working on, and the fact that we are very aware of the challenge we face to close this gap by 2002.

In closing, I’d like to acknowledge the efforts of the president, the management team, and all the staff of YEC who are working hard and long to implement direct management to meet the corporation’s objectives of providing safe, reliable and cost-effective electricity for Yukoners.

The board recognizes their collective commitment to achieving these goals.

I would also, as chair of the board, like to assure the Legislative Assembly and, through you, all Yukoners of our commitment as a board to closing the gap and ensuring long-term rate stability while maintaining safe and reliable power.

Thank you, Mr. Chair.

Chair: I’d like to thank the witnesses for their remarks. I would also like to remind everyone to not address each other directly, but to route your comments through the Chair.

We will now turn to the official opposition. Are there any questions?

Mr. Cable: Thank you, Mr. Chair. The chairman touched briefly on the Dawson/Mayo inter-tie, and I have some questions. I would like to thank them for the fairly extensive briefing book they gave me. I haven’t gone through it all, though, I have to confess, but I have gone through part of it. I’m curious as to whether the 69-kilovolt line will blend in with the Henderson’s Corner line. Is that one of the reasons for choosing the 69-kilovolt voltage?

Mr. McWilliam: Perhaps I can address that.

The 69 kV line is being looked at in terms of the forecast for long-term consumption in the Dawson area. It was felt that 69 kV was large enough to carry the energy that would be required for the foreseeable future.

If the line proceeds, the routing likely would be straight into Dawson from around the Klondike River crossing area, not hooking into the Henderson’s Corner line. Henderson’s Corner line basically is a distribution line.

Mr. Cable: Where does the consultant’s report sit? I see the initial feasibility study was done internally by Mr. Campbell, and I gather a consultant’s contract has been let, and I think the chairman alluded to that in his remarks.

Is it going to be finished in the near future — the review by the consultant?

Mr. McWilliam: There are several levels to the planning work that we’re doing on this. Mr. Campbell was coordinating the feasibility work, as Mr. Cable said, internally. But during that phase, we were also using a number of consultants and contractors. We used Mr. Andy Sturton, who had been used back in 1992 when the project was first looked at. We also used B.C. Hydro to look at a number of the technical aspects.

That document that Mr. Cable referred to was not a briefing book; that was the feasibility study that was done. Included in that is work from Mr. Sturton and B.C. Hydro, as some of the appendices.

Where we’re at right now is that we did a call for proposal for the system design study, which is the first phase of the engineering. Essentially, what we want to do is ensure that we have addressed all the issues around reliability and dealt with all of the technical concerns, as well as confirming that the estimate we have in the feasibility study of $23 million is, in fact, an accurate estimate. Once we have that, we would go back to the board of directors, seeking approval for the project to proceed.

As I said, we have called for proposals. We have received nine proposals from serious contenders. We have shortlisted those and Mr. John Maissan, our director of technical services, and Mr. Dave Wray, our electrical engineer, are in Calgary and Vancouver this week to meet with the three shortlisted firms to decide to whom we will award the system design work. The target is to have that completed by April.

Mr. Cable: The reason I ask is that the executive summary in the feasibility study states that the project could be completed by the fall of 2000, if the work is started this winter. It would seem that that schedule doesn’t hold now. I was wondering what the projected start date is for the work, if the project goes ahead.

Mr. McWilliam: The most optimistic scenario we have is that if the board approves the project at the end of April, and it’s then submitted to government where we receive approval as well, we would be doing things like the centre-line clearing over the summer. There are a number of projects, such as archeological assessment, that have to be done. That would be done over the summer.

The full-scale clearing work would be done after the tourism season, late fall and through the winter of 2000. The target would be to have the line energized by the fall of 2001.

Mr. Cable: Looking at the debt financing chart in the executive summary, it appears there is a back-end load on interest, which is not conventional financing, but I suppose it’s not unknown. Has the market been tested for that? Where is the corporation, Mr. Chair, expecting to get its financing?

Mr. McWilliam: Yes, as he points out, the financing that is being looked at in there is not conventional. Basically, what we are looking at is YDC financing the line and essentially taking the same type of model that the federal government took on the fourth wheel at the time of the NCPC transfer where there was flexible-term financing arranged. The reason for looking at that is to ensure that there is no short-term impact on ratepayers.

The final financing package is still part of what the board will have to deal with when we come forward with the system design study and can demonstrate that, yes, the line is technically viable and that the money is still as we had forecasted.

Mr. Cable: Where is the Yukon Development Corporation going to get the money? Assumedly, they would have to have the same sort of arrangements somewhere down the pike, either in the market or with the government.

Mr. McWilliam: I think this is where, you know, governments can point to their foresight in the past in terms of developing money in Yukon Development Corporation for infrastructure.

The Yukon Development Corporation has been accumulating money through dividends and intercompany loans precisely for these types of purposes.

Mr. Cable: Mr. Chair, is there $21 million in the kitty?

Mr. McWilliam: No, there is not $21 million in the kitty. By the end of this year, there will be approximately $11 million that has been accumulated in Yukon Development Corporation for infrastructure projects. With that type of money, and looking at refinancing some of our long-term debt, we do not anticipate we will have problem financing the project.

Mr. Cable: I gather from the study that the Mayo turbine should meet the full Dawson load and that, I assume, the diesels will be there but simply for standby. Is that correct?

Mr. McWilliam: Yes, that is correct. We would be looking at basically having the diesels there for black-start if there were a problem with the line going down. Obviously, any time you have a transmission line there are reliability issues, so you have to have capacity in all of your communities to back up.

Mr. Cable: I’m a little out of date, but just correct me if I’m wrong. On the first thousand kilowatt-hours, these are postage stamped, I gather, around the territory, and then we kick into either the hydro or diesel zone, and I assume that Dawson is now on the diesel zone. No? The president, Mr. Chair, is shaking his head. I’ll let him explain.

Mr. McWilliam: I could sort of verbalize the shaking of my head. My understanding is that, at the last GRA, both Watson Lake and Dawson were included in the large diesel rate zone where the run-out rate is basically the same as for the hydro zone. I can’t give you the rationale for that, but we have the same run-out rates in Dawson and Watson Lake as we have for the hydro zone.

Mr. Cable: The reason I was asking is, in the executive summary, there is a chart showing the forecast impact on customer rates, and in the first five years it’s anticipated that the rates will increase and then they’ll decrease over the remainder of the life of the project.

I assume that those are the rates for the whole of the Yukon? It’s not the Dawson rates. Am I reading this chart correctly? It doesn’t specify.

Mr. McWilliam: Yes, that’s correct. These are impacts on all ratepayers, not just Dawson.

Mr. Cable: So, in the first three or four years, the whole system, then, will see rate increases between one and one and a half percent. Is that correct?

Mr. McWilliam: No, this goes back to the point I was trying to make with the fact that YDC is looking at some type of flexible-term financing to ensure that there is no short-term impact on ratepayers.

What you see in that summary, the chart that you’re referring to, is if this were dealt with as a conventional utility project where the ratepayers were picking up the cost, there would, in the first number of years, be a rate increase that would be offset by rate decreases further out. We’re not proposing to do that. We’re looking at YDC through some flexible-term financing arranging to ensure that there is no short-term, negative impact on ratepayers.

Mr. Cable: On another subject, there was a renewable power system market survey put out recently. I believe the corporation retained a consultant to put the survey out, and it had a number of interesting questions in it.

Is the survey being completed, and the results provided to the corporation?

Mr. McWilliam: Yes, there was a survey, and I would just like to acknowledge that we had Ms. Cathy Cottrell-Tribes do the survey. She did an excellent job for us in pulling the information together, and we have just received the survey results. I have scanned them quickly myself, and that’s about all I have had the time to do.

But there certainly is interest out there. We found a couple of points that we want to follow up on. One, there is interest in bigger units than we had thought there would be. We were essentially looking for something that would basically be support for a mining camp or a seasonal operation or what we called a "light residential load". There is considerable interest for a heavier residential load. So, we would be looking at scaling units bigger, if we proceed with the project.

The other thing that was a pleasant surprise was that there was a lot of interest in a lease-to-purchase option. That was one thing that people sort of volunteered when we asked them what kinds of suggestions they would have. But we did find that there was a considerable amount of interest in leasing one of these units, partly because of the capital cost upfront. Also because there are some concerns about people sort of having different perceptions of solar power and whether it will work in the north or not, and this is a way to share the risk.

Mr. Cable: Are the connection policies in place to permit this to happen? I know we had that policy for large generators that were going to hook into the sole source, but do we have policies in place now that would permit me, for example, to buy one of these things and hook up to the system?

Mr. McWilliam: I believe, Mr. Chair, that what Mr. Cable is referring to is what we call "net billing", which is something else that we’re working on through YDC, as part of the green power program. That would essentially allow people to have their own renewable systems, whether it’s solar, wind, microhydro, or whatever, and when they could produce power in excess of their consumption, they could sell it back into the grid, if they had a grid connection.

We have Mr. Dorward working on the technical standards for these net billing interconnections, and we’re pursuing that right now. There are a few utilities in North America that are already into it, and it’s being done quite extensively in Europe. So, the technology is there. It’s simply a case of making sure that the equipment that’s hooked up is compatible with ours, and that’s the work that Mr. Dorward is doing for us now.

Mr. Cable: I think there’s another issue, though, beyond the quality of the electricity. There’s this issue: does the corporation want this electricity fed back into the system? Are we at that point yet? Does the corporation have those policies in place that would permit a feedback into the system?

Mr. McWilliam: Yes, through the green power initiative, the corporations, YDC and YEC, have committed to pursuing and making it possible for people to get into net billing situations.

Mr. Cable: On another topic, the second wind turbine at Haeckel Hill. Where do we sit on that, how many kilowatts are we looking at, and have we beaten the turbine icing problem?

Mr. McWilliam: Yes, one of the reasons why the government contributed $2 million toward a commercial-scale wind turbine is that there are obviously still some questions out there around whether we have dealt with the rime icing problem effectively. We know that we dealt with it on a 150 kW-scale machine, which is basically — in terms of commercial generation — a toy.

We have done a number of things that lead us to be confident that we can extend those into a bigger machine. We did a call for proposals. We had a false start when we were dealing with an American company that made commitments that they couldn’t live up to. We did a second call for proposals, and we are now at the point where we have just entered into a letter of commitment with Bonus Energy out of Denmark for them to supply a commercial wind turbine, a one-megawatt size machine.

This is going to require the money that the Yukon government has committed to the project, plus up to another $1 million, which YDC has committed to the project. The result will be that we have a fully functional commercial-scale turbine up there, a one-megawatt unit.

Mr. Cable: What is the projected power cost for the one-megawatt turbine? What will it cost to put that into the grid here, in terms of cents per kilowatt hour?

Mr. McWilliam: I guess the issue there is that, first of all, $2 million is being gifted by the Yukon government, and that will not be going into rate base. What we are looking at doing is trying to develop a wind rate, if you will. The terminology there is kind of loose. I’m not talking in terms of a GRA-approved rate, but we’re looking at creating a green power rate and giving people the opportunity to voluntarily accept a higher rate to essentially have wind power. So, we will be trying to recover some of YDC's cost in that way, but it’s not in rate base.

Mr. Cable: Factoring in all the free money and whatnot, what, in fact, would be the cost per kilowatt hour?

Mr. McWilliam: I can’t tell the member the exact cost that we will be charging. Obviously, we’ll have to cover our O&M costs, but, beyond that, it’s basically that whatever energy we’re displacing would have to be less than that.

Mr. Cable: What I’m working up to, Mr. Chair, is this: are we at the point where the site and the size of the turbine will be competitive with diesel?

Mr. McWilliam: As long as somebody’s prepared to provide the capital, it’s very competitive with diesel. The question is how much of the capital are we going to try and recover through a voluntary green power rate. That’s something that we’ll be working on through the next few months in anticipation of having that addressed before the turbine construction is completed next fall.

I think we also have to acknowledge that this is still at the research and development stage. For us to be able to go out and say that, you know, wind is competitive with diesel, right now we couldn’t do that. That’s one of the reasons why the government and the YDC have contributed the money toward this, rather than looking at doing this as a YEC project with ratepayers involved.

Mr. Cable: On another point, the chairman touched on the flex-term note and the off-hour sales. Where do we sit on that? Have we negotiated a deal with Ottawa?

Mr. McWilliam: We think we have the makings of a deal with Ottawa. The officials that we have been dealing with in DIAND have indicated that the Department of Finance requires a Treasury Board submission that they’re working on. Now, we’re at the point where we’re also looking at other options if that doesn’t come through. We feel that secondary sales is an important enough issue that we’ll go head to head with them on it if we have to. But, you know, we had indicated that we would be supportive of what the DIAND proposal was — which was essentially to exempt secondary sales from the flexible-term note, but then half of any revenues that we created through the secondary sales program would go to accelerated paydown of the flexible-term notes. So, Canada would get a benefit as well as the territory.

Mr. Cable: Just a couple — three — other questions. Where do we sit on the Anvil Range mine appeal, the $3 million and some-odd dollars of bad debt that was not allowed by the Yukon Utilities Board? Where is that court action?

Mr. McWilliam: That action is before the B.C. Appeal Court. All the parties have filed their factums, and it is now an issue of when the court schedules a date to hear it. The best estimate I have from our legal advisors is that we’d be looking at late spring, early summer before the court actually hears the appeal.

Mr. Cable: The president will recollect that there was a big wind storm here a few weeks ago and one of Yukon Energy’s lines blew down over top of one of Yukon Electrical’s lines, and there is a suspicion that one of the lines was energized and blew out a lot of appliances. Is the corporation going to pay for those appliances?

Mr. McWilliam: Well, I would suggest that that question would be better addressed to the distribution utility, Yukon Electrical, which was responsible for both of the lines in that case. You’re dealing with two different distribution lines. Neither of those lines that were involved in that one were Yukon Energy’s.

Mr. Cable: We’re saying that the high voltage line that was down at the bottom of Boswell Crescent is a Yukon Electrical line?

Mr. McWilliam: That’s correct, Mr. Chair.

Mr. Cable: Well, that puts a whole new complexion on things, Mr. Chair.

I have one other constituent-type question regarding the noise coming out of the diesels when they’re running. Has the corporation received any complaints and requests for baffling the exhaust?

Mr. McWilliam: We haven’t received any complaints recently. Back when the diesels were running extensively in, sort of, the winter of 1996-97, certainly we were dealing with complaints from some of the residents of Riverdale.

We did upgrade the mufflers on some of the older units at that point to the best we could. We haven’t had any complaints this fall when the diesels were running. I don’t know whether that was the time of year — in fact it wasn’t cold enough that sound was carrying quite as much — or if people recognized that the diesels were running essentially because we had a frazil ice condition at the hydro plant, which basically meant we had to shut down hydro for 30 hours, and I would suggest that there was some comfort in hearing those diesels run because that’s what your power was being generated with.

Mr. Cable: I’m not sure if somebody who can’t get to sleep in the middle of the night would be overly comforted, but I’ll pass along that information.

What are the current power projections? Are we looking at the diesel staying off the system here in the city for the immediate future, and if so, for how long into the future do we think that the hydro capacity will handle all our grid demands?

Mr. McWilliam: Certainly the challenge we have, as Mr. Wells was speaking to, is trying to deal with the loss of demand that we had when the Faro mine went down. Our challenge now is that we are in a surplus situation. In terms of doing the forecasts for energy consumption, we are not projecting any diesel capacity on the WAF, the Whitehorse/Aishihik/Faro, system other than for, possibly, some peaking diesel in extreme cold situations in winter.

Mr. Ostashek: Mr. Chair, I have a few areas that I’d like to explore with the witnesses tonight. I want to thank them for appearing in front of the Committee and giving us some direct insight into what’s happening. I will just give an overview of where I want to go with this. I want to talk a little bit about the direct management of the corporation and I want to talk about rate relief. I have a few questions surrounding the grid to Dawson and a few around the wind turbine and a few around the green power project, so I’m going to try and cover those bases in the short time we have this evening.

I’m going to start with the direct management agreement. One of the selling points of going to direct management was that, once we had assumed some upfront costs, there should be a direct savings of some half a million dollars a year to the ratepayers by going to direct management rather than to a management agreement. I would like to ask either the president or the chair, have we in fact had a half-a-million-dollar-a-year savings?

Mr. McWilliam: I think, as Mr. Wells pointed out in his opening remarks, we are into year 2 of transition. We see transition as being a three-year process before we’re sort of into a steady state operation. I would suggest it would be too early to be looking for the type of savings that you would experience when you were sort of operating under normal conditions.

We have been tracking our costs closely and comparing them against the system costs in the past, as well as tracking employment. Basically, at the time that we went to direct management, the commitment from the management of the corporation was that we felt it could be done for no more money, and we certainly thought that there was potential for savings going forward.

I think we have been able to achieve the fact that we’re doing it for no more money than the system was costing, and we do see where there are potential for savings into the future.

Mr. Ostashek: Well, I know that aside from what the president has said, one of the selling points of direct management was that there would be an eventual savings to the ratepayers of the Yukon. There was a substantial amount of money or upfront costs that were given to the corporation for the transition — some several million dollars, $2 million or $3 million in upfront costs for transition costs — in the first year of the contract.

We are now almost at the end of the second year of direct management, and I would have thought that the corporation would have — and maybe they do have — some sort of a handle on how they’re coming in relationship to the management agreement.

Mr. Chair, the management agreement was running some $800,000 a year. Some of those costs are still ongoing. We understand that, but there was a projection that there should be a savings in the neighbourhood of $450,000 to $500,000.

Mr. Wells: Mr. Chair, I was not a part of the decision that was made to go to direct management, but I would like to echo — and then if Mr. McWilliam would like to add any comments — the issue that this corporation, from my perspective, is still going through a transition period, and when you compound on top of that some of the issues related to the fire and other things, I think it is premature to start to try to measure whatever benefits there may be from going to direct management.

I would suggest that perhaps a year or two years from now would be a better time to take a look at this. I would also question how valid that sort of exercise might be at this point in time, given that I don’t think that there would be a real business opportunity for us to consider reversing this at this early a stage. I would think that it would make more sense to review this perhaps after a five-year period and take a look at it. I don’t know if you wanted Mr. McWilliam to speak to any of the numbers specifically.

Mr. McWilliam: Perhaps I could just add — Mr. Ostashek was talking about the money that Yukon Development Corporation committed for direct costs of transition. Yukon Development Corporation’s contribution for transition was approximately $1 million for capital, which went into the additional space that was required for staff as well as vehicles and some other capital items that weren’t charged into rate base, and $950,000 for O&M-related expenditures.

Mr. Ostashek: Yes, I knew it was a couple of million dollars, at least.

I guess I have just one further question. I would say that one of the things was to get rid of that management agreement because that was seen as an additional cost to ratepayers that shouldn’t be required with direct management. So, I would be hoping that the corporation could have some cost savings, but I would like to know if the corporation is tracking it, and when can we really get a grasp on what it is costing us vis--vis a management agreement? It ought not to take five years.

Mr. Wells: I wasn’t suggesting that it would take five years to figure that out. I was suggesting that perhaps it may make more sense to look at that in year 5 as opposed to at the end of year 2 of a transition.

I’ll make a couple of high-level observations. One is, as you heard this evening, the corporation is not going to be applying for rate increases — hasn’t in 1999, won’t in 2000. The objective of the board is to ensure that, in fact, we do not increase rates and, in fact, find a way to close a gap that is going to likely show up in 2002 once the RSF runs out.

That, at a high level, says to me that, with rates not increasing, the corporation is doing a responsible job of managing the business. The other observations I would make are with respect to reliability and safety. I would think that the figures we’re seeing now, with the direct management of the corporation — because there’s obviously more to managing the corporation than just rates. There’s also the issue of reliability and safety, which have a balance to rates, and that, in fact, those figures are very positive, as well. So, I would say that the corporation is doing a reasonable-to-good job of direct management. I would suggest that at year 5 it would perhaps be worth taking a look at where we stand relative to the original, direct management contract.

Mr. Ostashek: The chair may be quite right — liability is one thing, but also power rates are the key indicator as to how the consumer feels about the job that the Yukon Energy Corporation is doing. We did have reliable and safe power under the management of Alberta Power. There was no doubt in anybody’s mind that we had that. Nevertheless, I will leave that for now, and we can get back to it another time. That could be a debate in itself.

I just want to ask a few questions about the grid that I didn’t hear the answers to in the exchange with the critic for the Liberal Party. My first question to the witnesses is, before the grid goes ahead, does the corporation not have to appear before the Yukon Energy Board for a capital hearing?

Mr. Wells: Unless this project is going to have a negative impact on ratepayers, I believe that we do not have to appear before the YUB. But I did want to take this opportunity, if I could, because a lot of the questions have been giving me an indication that there’s a view that this project is a fait accompli. As I said, last year at this time, I was going back through the Hansard. I said that this project is far from a go.

We still need to go through the feasibility assessment that we will be beginning shortly to determine whether this project is truly economically feasible as well as technically feasible, both from an operating and reliability perspective. So, I just want to be on the record and make it clear that we’re not going willy-nilly down a road of a $23-million investment unless those hurdles are cleared.

Mr. Ostashek: I thank the chair of the corporation for clearing that up, because the indication from the feasibility study is that we’re going full steam ahead, where it says here that the project could be completed by 2000 if work started this winter. So that leaves a wrong impression — in my mind anyhow, as I’m sure it does with the general public — that there are a lot more i’s to dot and t’s to cross before the project gets a final go-ahead.

On the hearing before the Utilities Board, the witnesses have said, Mr. Chair, that they don’t need to go unless there’s going to be an impact on rates. There is going to be an impact on rates, either directly or indirectly. Even from what the feasibility study says, there’s a shortfall of $2.4 million a year. It has to come from somewhere, and at some point, the money has to be paid back to somebody if there is a different financing arrangement made where a lot of the costs are back-end loaded.

Are the witnesses telling me that they can go ahead with this project without going to the Utilities Board as long as the rates aren’t being increased in the immediate future and that there is still the real possibility of back-loading charges on this line at the back end of it?

Mr. McWilliam: No, we’re not telling you that we were looking at back-loading the rates. Basically, what we were proposing with the flex-term arrangement between YDC and YEC would be that the YDC would take a lower rate of interest than commercial rates during the early years to ensure that there was no negative impact on the project. Then the benefits that are projected for the project — and you will note in the feasibility study that, by later on in the project, there’s a potential for up to a six-percent reduction in rates.

What would happen would be that that rate reduction would occur more slowly, because YDC would be recovering some of the money that it would have lent out at lower rates up front.

There is another thing I just want to make a point about. Mr. Ostashek was commenting that, based on the feasibility study, the project looked like a go. The feasibility study that the opposition was referring to was an internal document that was done that we provided to the parties when there was a request for the information. It was not something that we were out there touting as, you know, "This is a done deal."

If you look at the public information that we put out around — for example, when we came up with the request for proposal on the system design, we were very careful in saying, "There are no decisions here." What we were trying to do is avoid having people start packing their lunch boxes and getting a whole bunch of enthusiasm worked up before the project had gone through all of the tests.

Mr. Ostashek: Thank you, Mr. Chair, and I’ll thank the president for that.

Mr. Chair, the president said earlier that he believed that the Mayo dam could provide all the power required in Dawson without the utilization of diesels, except in the case of a power failure.

What do the Dawson demands peak at now?

Mr. McWilliam: In the interest of moving along, Mr. Chair, I can look for that information. I don’t have it immediately at my fingertips. I can undertake to provide it later.

Mr. Ostashek: Thank you. I’ll come back to that then once the witness has found the information on that.

There was an experimental burn being done with Northern Cross, Mr. Chair. Can the witnesses tell me where that’s at today? How did the burn turn out, and are there any ongoing negotiations with Northern Cross about providing fuel to the Energy Corporation?

Mr. McWilliam: Yes, the corporation has done two burns with Northern Cross, neither of which were particularly successful. These were done in engines, which we felt had the best capacity to burn crude fuel without extensive modifications. The EMD units that we have here in Whitehorse.

Based on those results, we talked to Northern Cross about possible fuel additives that they might want to try in terms of carrying on the experimentation. Northern Cross decided that, rather than do that and carry on sort of testing various combinations, they would be more interested in bringing in a unit that had been converted to burn crude. They purchased such a generator from the N.W.T. power corporation from Inuvik and relocated it to the Yukon.

They’re looking at doing that as an independent power producer to be able to demonstrate that they can effectively use crude to generate power. We are talking to them in terms of their plans as a potential IPP. We have offered support to them in terms of them using their engine to test the crude.

At the same time, we have been encouraging — and here I would speak on behalf of the board as well because the chair has gone to Calgary to meet directly with the president of Northern Cross — them to pursue the option of looking at a topping plant or a small-scale refinery, rather than pin all their hopes on being able to generate revenue from using crude for energy generation.

Mr. Ostashek: The witness has stated that they were talking to Northern Cross about Northern Cross being an independent power producer for them. Could the witnesses tell me if there are any negotiations or discussions going on at this time?

Mr. McWilliam: Yes, we have had discussions with them. We provided them a copy of the independent power producer guidelines, which Mr. Cable was referring to earlier for the large-scale generators. We had our electrical engineer meet with Northern Cross staff in Calgary at their convenience to discuss a system design study that would have to be done to look at how they could hook into Dawson, which was their preferred community to do this in. There are some real limitations in terms of being able to set this unit up out in Callison and send power back into Dawson. The infrastructure there would need fairly substantial modifications for it to be done but, you know, we are working with them in terms of what would be required if indeed they wanted to do it at Dawson. I might add that we also offered that if they wanted to put the unit in Faro that we have an empty bay at the Faro power plant — we indicated that they could set the unit up there and plug directly into a transformer, which would eliminate a lot of their issues and would allow them to demonstrate that crude could be used to cost-effectively generate power

Mr. Ostashek: I want to turn back to the wind turbine and wind power. During the exchanges among the Liberal critic and the witnesses, I didn’t hear the witness come forward with a clear, concise cost per kilowatt hour of wind power. Let’s take all of the subsidies — all of the donations from YDC, the government and whomever — aside, what does it cost, capital costs included, to produce a kilowatt hour of power using wind generation?

Mr. McWilliam: That has been done sort of on an academic basis as we look at the 150 kW machine and sort of say that, well, if we could generate at those costs, this is what we would expect the cost to produce power to be from a commercial-scale windmill. We do not have commercial-scale experience, and that’s why we’re at this second stage of R&D.

The work that has been done on the basis of the 150 kW unit indicates that we are — with the way diesel prices are increasing — probably close to the break-even point between wind and diesel. But that’s if you load in all of the capital costs, et cetera, et cetera. And, you know, right now, when we’re only dealing with one 150 kW machine, that’s pretty academic.

Mr. Ostashek: Well, I still haven’t got an answer, but surely we must be able to draw on experiences in other jurisdictions of what it costs to generate a kilowatt of power using a wind turbine. That’s the figure I’m looking for.

Mr. McWilliam: If what Mr. Ostashek wants is to know the cost of generating a kilowatt of electricity using a one-megawatt machine elsewhere, we will get that information for him.

Basically, what I was trying to explain is that we don’t have, based on our experience, enough data to be able to say that it is going to cost us X cents per kilowatt to generate with wind in the Yukon, and that’s why we’re looking at this as, again, research and development.

We haven’t tried to put this forward to the YUB as a project that the Yukon Energy Corporation should be undertaking as an investment.

Mr. Ostashek: Well, I appreciate what the president is saying, and I’m not trying to be antagonistic on this, but if we’re going to be promoting green power, at some point we have to come up with a cost — a long-term cost — not for the fact that YDC or the good graces of the government contributed a couple of million dollars in capital costs so we don’t have to write them off.

If we’re going to go down the road of wind power, we have to know what it’s going to cost. And I think Yukoners are entitled to know what it has to cost when we’re comparing it vis--vis other sources of energy. So I would look forward to getting that figure from the witnesses.

I want to turn now a little bit to the amount of money that’s in YDC. The witnesses said there was $11 million in YDC for capital infrastructure. Is this over and above the money that’s in YDC for rate relief?

Mr. McWilliam: The $11 million that I was referring to is — as of the end of 1999, we’re projecting that, based on dividends and intercompany loan repayments, there will be approximately $11 million. As Mr. Ostashek is aware, that money was prioritized for electrical infrastructure development in the territory. The RSF — the rate stabilization fund, the $10 million that the government put into that — is separate from that. That is the government’s money, and that’s being accounted to for the government in terms of expenditures that are coming out of it.

At the end of the day, as Mr. Wells pointed out, in 2002 when the RSF is basically run down, there are going to be issues there about rates again, and if the corporation has been unable to reduce rates in other ways, I suspect we’ll be back to looking at some YDC money being applied against some form of rate stabilization. But right now the $11 million that I was referring to is separate from the government’s RSF money.

Chair: Do members wish to recess?

Some Hon. Members: Agreed.

Chair: Ten minutes.

Recess

Chair: I will now call Committee of the Whole to order. Committee is dealing with the Yukon Development Corporation. Are there any further questions?

Mr. Ostashek: Mr. Chair, before the break, I asked the witnesses a question on what peak demand was in Dawson City, and I was wondering if the witnesses had that number for me now.

Mr. McWilliam: I appreciate Mr. Ostashek giving me the opportunity to go back and check. The peak demand, both winter and summer peaks — Dawson, being an interesting community, where we have two peaks — is 2.7 megawatts.

Mr. Ostashek: Mr. Chair, the reason I wanted that is that I have some real concerns, and I’m sure they’ll probably come out in further studies of the line. And, as the members opposite said, the line won’t go ahead unless it’s viable, reliable and everything else. But with Dawson peaking at 2.7 megawatts, and the Mayo dam putting out 5 megawatts of power, and we have line loss, along with about three-quarters of a megawatt of power that’s being used in the Mayo area now coming out of there, so I fail to see how the Mayo dam is going to be able to provide the power for Dawson without having to utilize default generation to meet peak demands. Maybe the witnesses can enlighten me.

Mr. McWilliam: I think Mr. Ostashek is bang on that that’s the type of thing that we’re looking at through the system design study. The feasibility study — and it is somewhere in these many pages. I’d have to go back and look for it. But, you know, based on projected growth for Dawson, I believe there was an identification that peak capacity could become an issue later on if Dawson growth were to occur at the projected rate that we have. I think the earliest we would see that is in about five years. There are some suggestions in the feasibility study of where we could get additional energy, including looking at, sort of, some Mayo upgrading. We would then be in the happy situation of actually having markets for our power and would be looking at where we could get some more generation.

Mr. Ostashek: Well, I agree, but we’ll also be looking at quite substantially more in capital costs as well, so it’s all got to be taken into the mix.

Earlier in the debate, I asked the witnesses — and they have been so gracious, as I say, to get back to me with the costs of producing a kilowatt of wind power. What I’m looking for is that I want that cost of producing a kilowatt of wind power based on the standard utility accounting practices, whether you are doing it for diesel, whether they are doing it for hydro, or whether they are doing it for wind. That’s what I would like when the witnesses come back with that.

Mr. Chair, I want to get back to rate relief. The witness has said that there is a separate fund for rate relief that they’re administering on behalf of the government. At one time, the rate relief under the previous administration was being funded by the dividends from the Energy Corporation. Is that no longer the case?

Mr. McWilliam: That’s correct, Mr. Chair. The rate stabilization fund is the $10 million that the government put forward to provide rate stability for a four-year period. That is different from the previous rate relief program, which did take money from YDC to fund the program, and between 1993 and 1997, there was approximately $9 million in YDC money that was put into rate subsidies.

Mr. Ostashek: Well, Mr. Chair, what I’m trying to get my head wrapped around is the rate stabilization fund. That seems to say to me, Mr. Chair, that that ought not to expire in four years; that ought to be an ongoing project that is going to be there to stabilize rates, to take out the ups and downs in rates all the time.

If we’re going to use up the $10 million over four years, the rate stabilization fund will be depleted and we’re going to be back into the same old scenario we were in before. Can the witnesses enlighten us, please?

Mr. Wells: I have a couple of points I’d like to make. We’re required in 2001 to review the RSF and look forward to see what has to happen to ensure that there is a level of rate stability continued beyond the value of the fund that exists there today that Mr. McWilliam talked about.

The other point I’d like to make, and emphasize even more than that, is last year when I was here I talked about this gap analysis, and the corporation and the board are working together to look at some creative ways beyond just the continuation of flowing money back from some source into a rate stabilization — some creative ways of growing a revenue base, and we talked about the Mayo/Dawson potentially. Or reducing operating costs through efficiencies like the third turbine in Aishihik, and seeing how much we can close the gap between where rates need to be to give a reasonable and fair rate of return to the corporation in 2002, and where we will be from a revenue perspective.

My hope is that we will close that gap significantly and get us out of this cycle. If, in fact, that gap can’t be closed totally, then we will have to look at sources of revenue perhaps from things like YDC.

But the intent here is to try to get us over this period of breathing space that we now have through the RSF.

Mr. Ostashek: So, the rate stabilization fund has no source of revenue other than the $10 million that was injected by the government?

Mr. McWilliam: Yes, it’s the $10 million plus the interest on that money, which has accrued to it, and out of that is coming the payments for all the customer groups that are currently getting it. Looking at the end of the program, and based on current consumption, there would be about $1.5 million remaining in that fund.

Mr. Ostashek: Mr. Chair, this is what causes me great concern and causes many Yukoners great concern. We have heard the witnesses talk time and time again about closing this gap. Well, we have got a monumental gap to close. First of all, we have a rate relief program that has reduced the increase in 1997 from some 18 or 19 percent down to nine percent. That’s being subsidized directly by the taxpayers of the Yukon. Yukon residential users are only paying 65 percent of the cost of service, whereas governments are paying 145 percent of the cost of service, or something in that range — 65 or 70 percent of the cost of service.

So, the residential users in the Yukon really don’t understand that, with all of the subsidies, not paying the full cost of service, what their actual power bill would be without any of these services. Now we have a government that has frozen the rates until 2002. At that time, we’re going to have a rate relief fund that’s depleted. It’s going to have $1.5 million in it. There is no money coming into it from any source other than the $10 million that was injected by the territorial government. And the corporation is going to be faced with a real shortfall in revenue, so I don’t know how they can make it up in cost reductions and still provide the reliable power that the chair of the board just spoke of awhile ago, without a massive increase to the ratepayers of the Yukon.

Unless they’re going to pull a rabbit out of a hat somewhere, that lays a golden egg, or something like that, I think we’re in for a real problem when the rate relief program expires in the year 2002. The fact remains that under the old program, at least there were revenues coming in to replenish the fund all the time with some of the dividends from the Yukon Energy Corporation going into it. My question to the witnesses, Mr. Chair: do they not believe that we’re heading for a monumental problem in the year 2002, to try to close this gap and be able to provide the customers of the Yukon not only with reliable power, but with reasonably priced power compared to other jurisdictions?

Mr. Wells: The comment I would make is that, I believe, relative to comparable jurisdictions, our rates are not unreasonable. I would make the point that I have, I think, more faith in the capability of the members of the board and the management team of the corporation to substantially close this gap through increases, as I said before — to potential increases in revenue base and cost reduction. I wouldn’t suggest for a moment that we have a vision right now of closing that gap totally or of how much we could close that gap, but I don’t want to give up on putting a concerted effort into seeing how we can, in fact, close that gap.

The finances, as far as the funding — I think the point the member has been making is that historically, this stability fund, or rate relief fund, has come through the dividends out of Yukon Development Corporation and, as a matter of fact, those dividends are still going to be there. Because those dividends are not being utilized today for rate relief or stability, they will be significantly larger than if they had been used.

So, I don’t think that, in 2002, we’re going to be on the edge of a cliff and going to have significant problems there. I believe, again, that the management team and the board are quite aware of this. Believe me, it’s at the top of our agenda to make sure that there’s not a huge rate shock at the end of this program.

Mr. Ostashek: I don’t want the witnesses to get me wrong. I’m not questioning the competence or the dedication of the board or their workers in the utility. I’m just trying to point out the monumental task that is facing them. That is not something that has been created in the last three years. This started back in the late 1980s, and it has not been a solution; it has been a deferment of the problem to the future. And we are just going through that whole process again of deferring the problem to the future, to the year 2002. At some point, somewhere, we’re going to have to address this issue.

It’s fine for the chair — I’m talking about the chair of the board now — to say that we’re going to look at increases in the revenue base and we’re going to look at cost reductions. Maybe I would feel more comfortable if he could give me some insight into how he expects to increase the revenue base to the point where we’re going to be able to eliminate — how we’re going to make up that shortfall gap that is very, very substantial today, based on what the consumers are paying for their power in relation to the total cost of that power. There is a substantial gap there, and maybe the chair of the board could enlighten us as to where he sees these increases in the revenue base coming from.

Mr. Wells: As we discussed before, one of the areas that we’re looking at — and I think we need to size the gap as it exists today, and if you take the nine-percent increase that has been put in place on the 18.5, you roughly, arguably, have a 10-percent rate gap. So, we’re not talking 40 or 50 percent figures here, and through initiatives. For example, if the Mayo/Dawson does turn out to be viable — I think we saw some longer term reductions in the five-six percent range there — I would expect that there would be efficiencies potentially gained, as I mentioned, if we do go with a third wheel for the Aishihik. There are other areas. We talked about debt restructuring as leverage through major capital investments.

I can’t sit here and name all of the potential areas, but I’d like to repeat that, as the chair of the board, I’m not just going to throw up my hands and say that there is no answer, therefore we’d better find more money to provide rate relief. And, I’ll say again, in 2001, this is subject to examination, so this will be open for review by the public, and I would expect that he would support any actions that the board and management can take to close this gap.

Mr. Ostashek: Well, Mr. Chair, the chair of the board is now talking about a 10-percent gap. I beg to differ because there is a 35-percent gap on 65 percent of the cost of service that residential users are paying here.

There were instructions from the Utilities Board, at one point several years back, to move all customer categories closer to the cost of service. Has that been given up by the Energy Corporation now? Is that a non-starter and have they received permission from the Utilities Board to abandon that?

Mr. McWilliam: No, we certainly haven’t abandoned that and I don’t believe the Utilities Board has abandoned that as a principle.

With the situation that we found ourselves in with the loss of the Faro mine, the Utilities Board, I think fairly rightly, was not going to pursue the rebalancing issue at this point.

There are a number of cross-subsidies. Mr. Ostashek is very correct. There are cross-subsidies between classes. The residential class is not quite as bad as Mr. Ostashek mentioned. It’s basically just under 80 percent of cost of service that residential ratepayers are paying. However, there is cross-subsidy there. There is also cross-subsidy territory-wide through rate equalization. I think that was one of the things that the energy commission was trying to address, and there was some very good work done for the energy commission that described in detail how all those cross-subsidies worked.

As Mr. Wells has indicated, we are certainly looking at areas where we can go after additional revenues as well as reduce costs. We mentioned things like secondary sales being pursued aggressively. There are some that we’ve also tried such as the Atlin project, which unfortunately is not going to proceed because of B.C. Hydro’s sort of unwillingness to be a party to that.

But you know, there are a number of areas that we are pursuing.

Mr. Ostashek: Yes, I stand corrected. The 65 percent was after all the subsidies were in; take that out and it’s about 80 percent the cost of service — still heavily subsidized by other classes of users of the utility.

The president just spoke of an increase in revenues from secondary sales. My understanding of the secondary sales was that they were — at one time anyhow — going to be offered to the public at basically the cost of producing that power as secondary sales. Interruptable power — 24 hours’ interruption was going to be provided just so that there would be more revenue but there really wouldn’t be — I don’t know if there would be any profit in it.

Mr. McWilliam: Yes, on the secondary sales, there is a rate that was established by the Utilities Board that, you know, when it loads in all cost, including fixed cost, it does provide us with revenue. The big impediment there has always been, to date, the federal flex-term note, where we push beyond the threshold on which we have to pay interest and principal. If there is no change to the federal flex-term note, or we find another way around that, then we wouldn’t pursue it because it would be costing the utility. We’d basically lose half a cent a kilowatt.

But if the federal flex-term note issue can be wrestled to the ground, yes, we can generate revenue beyond our direct operating costs through an aggressive secondary sales program.

Mr. Ostashek: Mr. Chair, the witnesses said there would be $1.5 million left in the rate relief fund at the end of the program. How much is in the rate relief fund now?

Mr. McWilliam: I would have to get that information and bring it back. I hesitate using a number unless I know it’s accurate. We certainly have most of it still in the fund. I believe it’s somewhere in the area of $9 million, but I would want to verify the figure.

Mr. Ostashek: Mr. Chair, the witnesses may also have to get back to me on this. I don’t know if they can tell me the answer now, but I will put it on the record, because I really would like an answer to the questions.

I would like to know how many residential customers qualify for rate relief using less than 1,000 kilowatt hours. I also want to know how many residential customers use more than 1,000 but less than 1,500. I also want to know how many residential customers use more than 1,500 kilowatt hours. I would like this basically broken down. I don’t like to put the utility to a lot of work, but I really would like it for the winter months, because that’s when rate relief applies. I’m not as confident as some people are that the consumers are getting the rate relief that they used to get. I also would like to know how much is being spent on rate relief, in total number of dollars, broken down on a year-by-year basis since the new rate relief program came into effect.

Can the witnesses see that I get that information?

Mr. McWilliam: Yes, Mr. Chair.

Mr. Ostashek: Mr. Chair, I want to turn to green power for a few minutes. I have some questions in the area of green power. The circular was sent around — I don’t know if it was sent around to all Yukoners, but it was certainly sent to Yukoners who aren’t hooked up to any of the grids. I know I got one for my property at Burwash. I believe it’s the Solar 2000 program that the Yukon Energy Corporation is pushing or appeared to be pushing. In that questionnaire, it asked a number of questions. I filled out the questionnaire, but I haven’t had a reply from Yukon Energy Corporation on it to see where we’re at. From what I could glean from the questionnaire, Mr. Chair, it appeared that the Energy Corporation or YDC was going to get into the business of leasing renewable power units to customers if there was a market there. Is that the intent of the Energy Corporation — to get into the leasing business of solar power units?

Mr. McWilliam: Actually, this study is the one I was addressing in response to Mr. Cable’s questions. The study was distributed to, sort of, all off-grid customers that we could identify through assessment records and other mechanisms, to try and get to as many as possible. It is a YDC initiative, not a Yukon Energy Corporation initiative — as part of the green power program. The exercise is to promote the availability of alternative energy systems, particularly in isolated situations where a grid connection is impractical.

The decision as to whether YDC would get into the leasing of these units has not been made. Essentially, we have the survey results back. The first effort will be to try and look for some private sector interest in taking that initiative forward. We’re certainly prepared to share that with the private sector.

If there is no interest there, we will look for private sector partners, and Yukon Development Corporation would participate, perhaps as a minority partner. It would only be in sort of a worst case scenario where there is no one out there in the private sector who wants to take on this initiative, where Yukon Development Corporation would be looking at getting into the leasing of these units. Then the reason that we would be getting into it at that point is to try and provide some more practical demonstrations of how renewable energy can work in the Yukon.

Mr. Ostashek: Am I correct that is called the solar 2000 system?

Mr. McWilliam: Yes, it was called the solar 2000 unit. It was built by a local solar firm for us. We have one as a demonstration project. Basically, this survey that was done — and the interest we are showing in it now — came from the fact that we had a prototype portable solar unit that we had built to try and showcase some solar opportunities. When we started taking it around to things like the Gold Show in Dawson, the feedback we were getting was that there was considerable interest in that type of technology, but not a lot of interest in people willing to put out the capital to buy one of these when there were still questions about the applicability of solar in the north and, you know, some of the issues around how complex it is to run a solar unit. At that point we started thinking that perhaps there was a vehicle through a lease mechanism to try and promote this more effectively.

Mr. Ostashek: Mr. Chair, I wish I’d kept a copy of the information, and maybe I can get another copy from the Development Corporation, but I sort of raised my eyebrows when I was reading it. It seems that, if the documents were correct, this system stored a huge amount of power. Was that a misprint or was that, in fact, true? I forget what the figure was now but it was a huge amount of power.

Mr. McWilliam: Yes, there was a typo in that, and Mr. Ostashek was one of the first people to bring it to our attention. There should have been a decimal point in there, which got dropped. We are not developing a unit that has a two-megawatt capacity.

Mr. Ostashek: Could the president enlighten me? What is the storage capacity of the unit?

Mr. McWilliam: I’m being informed it’s 18 kWh.

Mr. Ostashek: So, Mr. Chair, this circular was just a feeler, then, to see what interest there was in solar power and what people were prepared to pay for it, and that the Development Corporation would only be getting into it as the supplier of last resort?

Mr. McWilliam: That’s correct. We wanted to find out how much interest there was there. We were looking for input from people who might be interested in one of these units in terms of what their needs would be. As I indicated, part of the feedback we got was that heavier residential load is what people were looking for. So, if somebody is getting into the leasing business, they had better be building a bigger unit than the one we currently have.

Part of the study that we also did was to look at what has been happening in other jurisdictions, and that was one of the things that was flagged by some American utilities that we contacted; there was interest in larger units than they had available.

We are going to be circulating the results of the survey and encouraging people to act on the business opportunity, and we will provide copies to the members of the Legislature here shortly.

Mr. Ostashek: I have a few more questions yet. Aishihik Lake — what is happening with the water levels at Aishihik Lake, and is the system at Aishihik now producing at capacity?

Mr. McWilliam: The water levels are coming up. That’s a combination of two things: the reduced draw on the system with the Faro mine being down, but also the fact that we are back into more normal precipitation patterns.

In this current year, we were slightly under. I think our inflows were in the 90-some percent range, which is a considerable improvement over what they have been.

Mr. Ostashek: When the witnesses were here a year ago, we spoke a little bit of the relicensing of Aishihik Lake. I’d like to have an update from the witnesses on the relicensing, and is the corporation still applying for the relicensing based on the same draw-down as was in the previous licence?

As the witnesses will recall, there was a government-imposed change to that draw-down, but I would like to know what stage the licensing is at now and what levels of draw are we going for.

Is it the same as in the old licence?

Mr. McWilliam: It’s not exactly the same as in the old licence. There are several things that are different. We have eliminated the emergency top storage. We have eliminated the bottom draw-down — emergency draw-down. We are looking at the nine-foot range, but we’re proposing a managed range as well, so that if you have a succession of dry years during the life of the licence, the company may, if there is an impact on whitefish, voluntarily reduce demand for a period of time.

That, in a nutshell, is the difference from the current licence we have. The impact assessment statement was filed with the federal government back in January of this year. We’re still trying to deal with DIAND, in terms of getting the environmental screening report through. The best indication we have had from them is that it will probably be at least February before they get their screening report done. We have filed the documents with the Water Board, and we have recently — very recently — asked them to schedule a Water Board hearing.

Mr. Ostashek: Mr. Chair, the witnesses said earlier in the debate that they’re dealing with the federal government on the flex notes so that they could go to secondary power sales, and I agree with that wholeheartedly. When do they expect they will hear from the federal government if it’s a yea or nay as to the change in the terms of the flex note?

Mr. McWilliam: I would expect within this month. The commitment we had from DIAND was that they were working on the Treasury Board submission as of the beginning of December, and I’ll be following up with them next week, just to see where it’s at. If the Treasury Board route isn’t bearing any fruit, we have some other weapons in our arsenal that we’re prepared to pull out early in the new year, if necessary.

Mr. Ostashek: I just have a couple more questions, Mr. Chair, and I want to turn now to the energy supply. It would seem to me that one of the best and most feasible ways of reducing the cost of power to the corporation, to Yukoners and everything would be to find a cheaper energy source. We heard the chair of the board talk about the other turbine at Aishihik. Is the board investigating any other sources of supply? Is the board considering — I understand that we can double the capacity of the Mayo dam for a very reasonable cost. The only problem is that we’re not going to have a grid to feed it into because the corporation has chosen to go to the isolated grid from Mayo to Dawson, rather than from Mayo to Carmacks. But there is the ability, I understand, to increase the capacity of the Mayo dam to almost double the capacity at a very reasonable cost.

Are there any other cheaper sources of energy that the board is exploring, rather than the use of diesel generation?

Mr. Wells: I have a couple of comments, and then my colleague would like to add a couple of points.

I just want to make one point clear. As we go through the infrastructure longer term planning process that I mentioned in my opening remarks, we will be looking at a long-term grid for the territory, which would tie in, ultimately, I’m presuming, when we see this plan, the territory in total, of which this is but one leg, and you have to start at some point.

The other piece of that is looking at the sources of supply, and we will be examining various opportunities for power generation, and I don’t know that we would necessarily rule anything out in that process, and perhaps natural gas may be on the horizon and other opportunities. I’m glad to hear that he’s got some potential creative solutions as well to help us fill this gap, so I’m glad to get that input.

Mr. McWilliam: If I could just add to those comments — Mr. Ostashek is correct in that one of the things that we need to be doing is looking at cheaper sources of supply, and we are dealing with that, not only through the infrastructure planning, which is the long-term visioning exercise, but there are some fairly immediate things that we’re currently looking at under the green power initiative. There will be more opportunities for independent power producers, and we expect to get some proposals for microhydro, for example, through there.

I was remiss when I talked about what we were applying for on the Aishihik relicensing. Part of what we also want to get — as the new licence includes the Aishihik third wheel and, to us, that is an extremely important project. It allows us to use the water much more efficiently than we can now without consuming more water.

It’s a project that we could move forward on very quickly if we can get the new licence. Some other examples of things that we’re tracking — one of the issues that constantly confronts me every day I look out my window during the summer and watch the water flowing over the dam is the amount of energy we’re losing. We are in discussion about some possible R&D on energy storage. There are some things we think we might be able to pursue there.

In one of the other areas where we’re tracking developments very closely is in some of the new technologies — you know, specifically, fuel-cell technology. We have offered that Yukon would be quite prepared to be a host jurisdiction for a pilot project testing a fuel cell in a northern climate. So, those are examples.

Ms. Duncan: I have a number of questions for the witnesses, largely flowing out of the annual report that was presented to the House. However, in light of the lateness of the hour, I would like to suggest that what I would do is forward these questions to the chair and to the president in a written letter and ask that when there is an opportunity, they would provide me with some of the information. Largely, these are specific questions related out of the annual report.

So, I would like to thank you on behalf of the Liberal Party for appearing before us tonight, and I look forward to speaking with you again in the near future.

Hon. Mr. Harding: I, too, would like to thank the witnesses and folks in the public gallery tonight, and the members for their questions. I hope they found it informative. I appreciate Mr. Wells and Mr. McWilliam coming forward. With that, I thank them for coming.

Chair: I would like to excuse the witnesses.

Witnesses excused

Chair: The time being near 9:30, I will rise and report.

Speaker resumes the Chair

Speaker: I will now call the House to order.

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

Mr. McRobb: Mr. Speaker, at 2:18 p.m. Committee of the Whole passed the following motion:

THAT Karen Ruddy, alternate Chair of the Workers’ Compensation Health and Safety Board and Tony Armstrong, President of the Board, appear as witnesses before Committee of the Whole, from 3:30 p.m. to 5:30 p.m. this day, December 13, 1999, to discuss matters related to the Workers’ Compensation Health and Safety Board.

Further, at 2:19 p.m. Committee of the Whole passed the following motion:

THAT Ray Wells, Chair of the Yukon Development Corporation, and Rob McWilliam, President of the Corporation, appear as witnesses before Committee of the Whole from 7:30 p.m. to 9:30 p.m. this day December 13, 1999, to discuss matters related to the Yukon Development Corporation.

Pursuant to Committee of the Whole Motion No. 4 passed earlier this day, Karen Ruddy, alternate chair of the Workers’ Compensation Health and Safety Board and Tony Armstrong, president of the board, appeared as witnesses before Committee from 3:30 p.m. to 5:30 p.m.

Further, pursuant to Committee of the Whole Motion No. 5 passed earlier this day, Ray Wells, chair of the Yukon Development Corporation, and Rob McWilliam, president of the corporation, appeared as witnesses before Committee from 7:30 p.m. to 9:25 p.m.

Mr. Speaker, on behalf of everyone, we’d like to wish you and all Yukoners a Merry Christmas, Happy New Year and all the best in the new millennium.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

Before calling on the government House leader, I would extend my Christmas greetings to you all, on both sides of House, and wish you, in the year 2000, the best.

Mr. Fentie: I move that the House do now adjourn. A Merry Christmas to all.

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.

The House adjourned at 9:27 p.m.

The following Legislative Returns were tabled December 13, 1999:

99-1-124

Agricultural land: availability; game farming considerations; estimated agricultural production value (Fairclough)

Oral, Hansard, p. 5633 to 5634

99-1-125

Fur harvest: value of harvest and number of animals harvested from 1987-88, 1989-90, 1992-93, 1996-97 and 1997-98 (Fairclough)

Oral, Hansard, p. 5635

99-1-126

Waste oil: volume of waste oil collected from 1994 to 1998; number of litres used in waste oil furnaces (Fairclough)

Oral, Hansard, p. 5663

99-1-127

Sustainable development: ongoing interaction with DIAND regarding policy (Fairclough)

Oral, Hansard, p. 5656

99-1-128

Wildlife export permits: availability; obligations relating to export provisions (Fairclough)

Oral, Hansard, p. 5903

99-1-129

Timmers inquiry: expenses as at December 1, 1999; CYFN invoice still outstanding (Moorcroft)

Oral, Hansard, p. 5622