Whitehorse, Yukon

Thursday, November 9, 2000 - 1:00 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.

Tributes.

TRIBUTES

In recognition of Aboriginal Veterans Day

Hon. Ms. Duncan: I am pleased and honoured to rise today to acknowledge Aboriginal Veterans Day, Friday, November 10, 2000.

In recognition of the significant contributions made by Canada's First Nation citizens during three war efforts in the past century, in 1996 the Department of Indian and Northern Affairs established the aboriginal veterans monument project and the aboriginal veterans scholarship trust fund.

The monument is due to be unveiled on June 21, 2001, on National Aboriginal Day, and $1.5 million has been allocated by Indian and Northern Affairs to the scholarship trust fund, which is open to all aboriginal post-secondary education students studying self-governance and economic self-reliance.

Although unofficial, November 10 has been set aside to recognize aboriginal veterans in ceremonies across Canada. Here at home, everyone is welcome to observe this day at a venue named after an aboriginal war veteran and prominent leader, the Elijah Smith Building. The program is from 1:30 to 4:00 p.m. and includes a presentation of commemorative millennium medals, Two Veterans, by Ed Schulz, Grand Chief of the Council of Yukon First Nations. The Yukon government will be represented at the event by my colleagues, Minister Wayne Jim, Scott Kent, and Mike McLarnon. We have several aboriginal veterans in the gallery today, and my colleague, Minister Wayne Jim, will be introducing them.

In addition to the impressive contributions made to the Queen and the Allied cause by the Yukon Territory in general, the response from Yukon First Nations in particular was notable, given the isolation and communication limitations of the day. Those who did not answer the call of duty raised funds for the war effort. In Old Crow, the Vuntut Gwitchin donated hundreds of dollars to the orphaned children of London and money to buy clothing for shipment to the Soviet Union. These gestures were rewarded by King George VI with the presentation of the British Empire Medal for their leadership and loyalty, and yet another link of friendship was forged between Canada and England.

In the spirit of unity and respect, I urge the people of the Yukon to join me on November 10 to take a moment and turn your thoughts to the aboriginal people of our homeland who proudly gave their lives and service in the name of peace and freedom.

Mahsi' cho.

Mr. Keenan: On behalf of the official opposition I too arise to recognize the efforts of the many aboriginal veterans who have served for their country. Pete Sidney, young George Sidney, Bobby Austin, Edward Good, the McLeod boys, both Sandy and Malcolm, Harry Davis, who paid the ultimate price, Mr. John Adamson, Elijah Smith and the Van Bibber boys are just some of the warriors who come to mind. We should always be aware of the many people at home - men and women, elders and youth - who stayed at home to support the war effort by providing their knowledge of the land to build a highway in less than a year, to build a pipeline from Norman Wells to Whitehorse, to build airports so planes could be shuttled north. I always remember my mother telling my family of being out on the ice with her dog team, running the fishnet and being buzzed by some of these pilots. So, we also in some cases provided humour and comic relief.

In Old Crow the people gathered. They collected money to send to the homeless children in England when hearing of the devastation in that country. I'm also reminded of Charlie Craft, who, in 1914, lived and travelled with my family and, hearing of the war, walked out to enlist, to return with a medal. This was the first time in many years that he had left the Nisutlin Valley. And to all these aboriginal warriors and their families, I salute.

Gnilschish.

Mr. Jenkins: On behalf of the Yukon Party, I also rise to pay tribute to National Aboriginal Veterans Day.

We have much to thank our aboriginal veterans for. The freedom we enjoy today is in part due to the tremendous effort and contribution made by Yukon First Nations.

Thank you. Mashi' cho.

Speaker: I will proceed now with introduction of visitors.

INTRODUCTION OF VISITORS

Hon. Mr. Jim: It is my honour and privilege to introduce four First Nation veterans who sought excitement and adventure while serving their country.

Born in 1917, Mr. John Adamson is a well-respected elder of the Champagne-Aishihik First Nation. Mr. Adamson served four years during World War II with the Seaforth and the Third Scottish Regiment. Mr. Adamson is decorated with the Voluntary Service Medal and the Crown Over Crossed Rifles.

Mr. Alex Van Bibber, born in 1916, another well-respected elder of the Champagne-Aishihik First Nation, served two years during World War II with the General Service Infantry and the Seaforth Highlanders of Canada as an infantry machine gunner. Mr. Van Bibber is a member of the Order of Canada and was bestowed with the Commemorative Medal for the 125th anniversary of Confederation in 1992.

Also, born in 1914, Mr. Archie Van Bibber, a very well-known, respected elder of the Selkirk First Nation, served two years as a private with the Canadian Army during World War II. Archie is a recipient of the Canadian Voluntary Service War Medal, 1939-1945.

Mr. Daniel Van Bibber, born in 1913, is another well-respected elder of the Selkirk First Nation. Mr. Van Bibber served as a private with the Westminster Regiment, 5th Division, during World War II. Mr. Van Bibber was awarded the France and Germany Star and the Canadian Volunteer Service Medal and the War Medal of 1939-1945.

I would like the House to show its appreciation to these gentlemen.

Applause

Mr. Kent: Mr. Speaker, it gives me great pleasure to welcome two senators to our gallery today. There is the former member of the Toronto Maple Leafs and the Montreal Canadiens, as well as a member of the 1972 Team Canada, Senator Frank Mahovlich. As well, I would welcome former Commissioner and now Yukon Senator, Senator Ione Christensen.

Applause

Ms. Netro: I'd like to introduce to you today, in the gallery, Norma Kassi, who is one of our former MLAs for Vuntut Gwich'in, and Jackie Lindstrom, from Old Crow. I'd like you to help me make them welcome.

Applause

Speaker: Are there any returns or documents for tabling?

TABLING RETURNS AND DOCUMENTS

Hon. Mr. Eftoda:Mr. Speaker, I have for tabling a legislative return relating to a question raised by the leader of the third party on November 2, 2000.

Hon. Mrs. Edelman: Mr. Speaker, I have for tabling a legislative return relating to a question raised by the leader of the third party on October 31, 2000, and I also have for tabling a legislative return relating to a question raised by the Member for Kluane, also on October 31, 2000.

Hon. Ms. Buckway: I have for tabling the 1999 annual report of the fire marshal.

Speaker: Are there any reports of committees?

Are there any petitions?

Are there any bills to be introduced?

Are there any notices of motion?

NOTICES OF MOTION

Mr. McLarnon: I give notice of the following motion:

THAT this House urges the Yukon Government to:

(1) work in conjunction with the Federal Government, stakeholders and First Nations to create a fair and equitable Timber Harvest Agreement Process; and

(2) ask the Federal Government to actively seek and continue to obtain comments from stakeholders and First Nations on the draft Timber Harvest Agreement; and

(3) also ask the Federal Government to begin planning of the consultation meetings and workshops that will arise after the written comment period is complete.

Mr. Jenkins: I give notice of the following motion:

THAT it is the opinion of this House that the Parks Act should be utilized to create territorial parks rather than the Protected Areas Strategy.

I also give notice of the following motion:

THAT it is the opinion of this House that:

(1) mining claims that have already been staked when new parks or protected areas are created must be respected; and

(2) the claims staked by Canadian United Minerals, that were included in the much-expanded boundaries of the Tombstone Park, are legitimate, bona fide claims that should be allowed to be developed without fear of buy out or expropriation by the Liberal Yukon government.

Speaker: Are there any further notices of motion?

Are there any statements by ministers?

MINISTERIAL STATEMENTS

Yukon Development Corporation: directions for

Hon. Ms. Duncan: Mr. Speaker, our government is open and accountable, and part of that accountability means taking steps to define policies on proper and effective relationships between the government and its Crown corporations - corporations that are established by acts of this Legislature and managed by boards of directors.

Today, Mr. Speaker, I rise in this House to deal with four fundamental aspects of policy relating to the mandate and governance of the Yukon Development Corporation.

Firstly, there have been questions in the public and in this House about plans to change the mandate for the Yukon Development Corporation. I am announcing that the government will not modify the current mandate of the Yukon Development Corporation. The corporation will continue to focus on energy-related investments, infrastructure, research and development, and programs, and to act as the sole shareholder in the Yukon Energy Corporation.

Secondly, this government will ensure that the board of directors is clear on the government's energy policy expectations. In turn, the government will respect the governance role of the board of directors to oversee the business affairs of the corporation.

As members know, there has been confusion over the roles of the Crown corporation (Yukon Development) and its wholly owned subsidiary, Yukon Energy. This confusion has existed since 1986 when the two-tier structure was created to accommodate the devolution of NCPC assets. Over the years with various orders-in-council, and what must seem to outsiders as a continuous process of revisiting energy policy issues, the original mandates of the two corporations have become blurred. When Yukon Energy assumed direct management of its assets on January 1, 1997, the board of directors of both corporations and the government began to work to clarify their roles and responsibilities to guarantee effective governance and accountability to shareholders, the Legislature, ratepayers, and the public.

Since assuming office, we have carefully reviewed the written protocol between the Government of Yukon and the board of directors for the Yukon Development Corporation. This protocol was put in place just before the election.

We have concluded, like many Yukoners, that the current system is not clear about who is making decisions and who will answer for them. The last administration did not go far enough in providing clear accountability and an enduring governance framework that will solve the problems.

To this end, Mr. Speaker, I am announcing today that, during this term, our government will bring forward legislation to amend the Yukon Development Corporation Act. Our amendments will establish mechanisms for the accountability of Yukon Development Corporation to government, this Legislature and the public. It will also clarify the accountability of the minister to the House and to the public.

The legislation will clarify the mandate and the roles of all parties while respecting the duties of the board of directors to oversee the business affairs of the corporation. It will also establish the accountability of government for the overall direction to the corporation by requiring that all directives to the corporation be tabled in the Legislative Assembly.

The amended legislation will require the Yukon Development Corporation to submit an annual and multi-year strategic plan for government approval and review by the Legislative Assembly. It will state that representatives of the Yukon Development Corporation must attend this House annually to report on the corporation's activities and address members' questions. Finally, the legislation will ensure a coordinated approach to government energy-related programs.

My government also commits to consultation with Yukoners on these legislative changes. The process of developing new legislation will take time. Accordingly, the government will address the requirement for interim direction to the corporations through a letter of understanding that will be signed off with the board of directors of Yukon Development Corporation and then tabled in the Legislative Assembly.

Mr. Speaker, since taking office, I have devoted considerable time and resources to addressing this complex issue. Our plan will address the fundamental issues that have lingered over the last decade, once and for all.

Mr. Keenan: Mr. Speaker, the minister is speaking about consultation. I have to say that I have grave concerns about what the minister means by consultation. Here we go again. The Liberals already want to make changes without any consultation. They're going to throw away a protocol that involves stakeholder and public consultation, and replace it with a letter of understanding with no input from the public whatsoever.

The minister will still be held responsible for actions in this interim period. She cannot hide from the responsibility because she is waiting for legislation to come forward. She will be held accountable. There are many, many thorny issues that have to be dealt with - electrical rates, rate relief, governance issues, and the list does go on.

So how does this minister plan to improve the relationship between the territorial government, the YDC and the YEC? The Liberals say one thing and do another, Mr. Speaker. And what we've seen in the last six months is a Liberal government that says it's unhappy with what the last government did, then they turn around, they change the names of programs and initiatives, and in the end, they make no changes at all, but they call them their own.

I will be very suspicious of the minister's intentions until I receive more substantial information on this major disruption to the workings of the Yukon Development Corporation.

The key to this relationship between corporation and government is one that must ensure that the energy decisions are the sole property of Yukoners. From what we have seen recently, I would not be surprised if, in the end, the energy decisions will be the sole property of the Liberal Party and no one else, particularly the Yukon consumer.

When will this LOU be signed off with the board of directors of the Yukon Development Corporation? What, if any, input has there been from the stakeholders on this LOU? What policy changes will be made with this LOU? Without some public input to these changes, we will be setting the Yukon Development Corporation adrift.

If the minister says that legislation is forthcoming during her term, can she be more definite? If she is proposing legislation, she has to get the ball rolling right now on the consultation.

Thank you, Mr. Speaker.

Mr. Jenkins: On behalf of the Yukon Party, I rise to respond to this ministerial statement. I welcome this ministerial statement about the direction that is being provided to the Yukon Development Corporation. I am encouraged to hear that there are no plans to change the mandate of the Yukon Development Corporation that, since the Yukon Party's government regime, has been focusing on energy-related investment infrastructure, research and development and programs.

Many Yukoners and all ratepayers will never forget that $16 million of Yukon Development Corporation money was squandered on a derelict sawmill. This must not be allowed to happen again.

I also see that the Yukon Development Corporation will act as the sole shareholder in the Yukon Energy Corporation. How does that dovetail with current offers on the table to First Nations to assume an equity position? Will that equity position be provided to them in the Yukon Development Corporation, as the Yukon Energy Corporation appears to be totally held by the Yukon Development Corporation?

The Yukon Party also supports the inclusion of the Yukon Development Corporation Act - this - and the Yukon Development Corporation Act now. I welcome the mandate amendment in the Yukon Development Corporation Act.

I am concerned that the Yukon Energy Corporation management structure is becoming too top-heavy. The confusion that arose between Yukon Development Corporation and Yukon Energy Corporation appears to be over-played, because prior to the written protocol between the Government of Yukon and the board of directors for the Yukon Development Corporation that was signed by the previous NDP government just before the April territorial election, the boards and management of both corporations were one and the same people. I don't believe they had any confusion about their respective roles. Now we see the creation of another position of president for Yukon Energy Corporation, created out of the previous position of president, who was responsible for both. We now have two presidents, and we'll have two boards.

It appears that the supposed confusion over the respective roles of Yukon Development Corporation and Yukon Energy Corporation is being used to create a larger management structure, and we all know who ends up paying the price - the Yukon ratepayers. I welcome the accountability provisions that will be included in the amended act. Both the minister and the boards must be accountable for the operations of these corporations. I personally was recently criticized for making this point. So, I am pleased to see this recognition in the act's amendments.

Some of the recent decisions by the boards, such as the multi-million dollar Mayo-Dawson transmission line, are of concern, and I would ask the Premier to re-examine the financial viability of this project while work is going on to amend the act - my point being: don't let these legislative mandate changes be used as a smokescreen to hide a close scrutiny of the current projects being undertaken by Yukon Development Corporation/Yukon Energy Corporation.

Hon. Ms. Duncan: Mr. Speaker, thank you for the opportunity to respond. I appreciate the comments from the members opposite. I particularly appreciate the fact that the member for the third party has recognized that the accountability is a very important issue and one that we are moving forward on.

The speaker from the official opposition suggested that the protocol was good enough, that, in other words, things were great so why are we changing them, and that nothing should change. Well, the protocol did not go far enough, and the protocol did not clarify that roles have become blurred, because they have. When Yukon Energy assumed direct management of its assets on January 1, 1997, the board of directors began work to clarify their roles and responsibilities and to try to deal with these governance and accountability issues.

The members have asked some specific questions and have voiced some suspicions. I would encourage them to focus on the questions. And, in response to that, the Member for Ross River-Southern Lakes asks about timing for legislative changes. In that regard, I am hopeful that they would come before the next fall legislative session, so that would be fall 2001. The member is quite correct in that work must begin immediately, and we are working on that.

There has been a suspicion voiced by the Member for Klondike with respect to the Mayo-Dawson transmission line and its construction, and I would encourage the Member for Klondike to ask technical questions of the witnesses who are appearing before this House later this afternoon in that regard. Although I am also fully briefed on and aware of the details of the project, I would encourage those questions in precisely this forum. While it has been standard practice, Mr. Speaker, for members of the corporation to appear before the House, it wasn't a requirement. What we're proposing to do is to regularize and standardize that and to ensure that it happens and cannot be adjusted by other governments.

The ultimate goal for me as minister has been to increase the openness and accountability and clarify those lines of accountability to this Legislature and, most importantly, to the Yukon public. It's a very important issue for me personally and one I'm looking forward to ensuring happens, with the help of the people involved with the Yukon Development Corporation and Yukon Energy Corporation.

In terms of timing of the letter of understanding, I've had discussions with the chair about it. This is not a situation where the government proceeded without speaking extensively with people involved, and I would anticipate further reports to members of the House in that regard.

Thank you, Mr. Speaker.

Speaker: This then brings us to Question Period.

QUESTION PERIOD

Question re: Beringia Interpretive Centre, purchase of gift shop

Mr. Fairclough: Mr. Speaker, I have a question for the Premier. Will the Premier outline the normal conditions under which the Executive Council Office would get involved in another department's business and how this would come about?

Hon. Mrs. Edelman: Well, Mr. Speaker, plainly this is an attempt to get to the issue around the Beringia buyout, and the fact that there was a representative from the Executive Council Office, who served as a mediator during this process - it's not difficult to see the big plot underneath this.

Mr. Speaker, if the member opposite wants a written response to his question, we'd be happy to provide that, as we've actually mentioned to the Member for Kluane about three times now.

Thank you, Mr. Speaker.

Mr. Fairclough: Well, Mr. Speaker, the wrong minister got up to answer the question. It was a very simple question about the Executive Council Office and how they are involved in other departments' business. That question is for the Premier to answer, not the Minister of Tourism. Now, the Minister of Tourism has been stonewalling for days on our request for information about the government's purchase of inventory and equipment from Mike's North Communication. The Premier's principal secretary confirmed that the Executive Council Office had some involvement in this matter. He even named the individual who facilitated the final negotiations, yet the Minister of Tourism insists it was done by her department, Mr. Speaker.

Will the Premier confirm that the Executive Council Office did get involved in this matter, and will she tell the House when and how this took place?

Hon. Mrs. Edelman: Mr. Speaker, that information is going to be included - and has actually been included - in a legislative return today, as well as previous documents that we have forwarded to the caucus. Perhaps the Member for Kluane hasn't kept the leader up to speed on that.

We have not been stonewalling. We have been providing information, as it became available to us. We have been very open about it. Anything we have been asked for, we will be giving to the members opposite. We have committed to that and we have been very clear about that. We have nothing to hide - nothing to hide at all.

Mr. Hughes is coming up. There is going to be an investigation that starts on Monday. I invite the members opposite, who continually make these veiled innuendoes about the process, to take those allegations and talk about them on the floor of this Legislature, where they are protected. Even better, I challenge them to make those allegations outside the walls of this House.

Mr. Fairclough: Mr. Speaker, the ministers on the government side are confused about what their roles are and which departments they are responsible for. I see the Premier is prepared to let the minister twist on this one, despite the minister's efforts to stay detached. For the last two weeks, we have watched this government give non-answers to our questions here. They are open and accountable, they say, but watchers out there in the communities see, every day, the questions not being answered by the members opposite.

The Minister of Tourism is not responsible for the Executive Council Office. Really, the buck stops with the Premier. Once again, will the Premier tell the House if she, or anyone in her political offices, gave any instructions to the Deputy Minister of Executive Council Office with respect to this purchase?

Hon. Mrs. Edelman: Mr. Speaker, the member opposite is the one who is confused - extremely confused. First of all, all the information that has been requested is being collated. Most of it has already been given to the NDP caucus.

The members opposite are factually incorrect. They are saying that nothing has been given. There have been legislative returns today. There was a letter that the Member for Kluane already alluded to, which I gave him last week. Attached to that letter was a great deal of information. Part of that information was the contract that was signed by the former Minister of Tourism, Mr. Keenan, at the time.

Mr. Speaker, this is getting a little off. It's getting a little off, because what the side opposite is trying to do is sprout all kinds of misinformation in the hope that it is going to make things look bad. Well, we have nothing to hide. Everything that was done in this process was above-board. The reason why the Member for Whitehorse Centre has asked Mr. Hughes to come up here and conduct an investigation is because he knows there is nothing to hide.

Now, the side opposite will continue along in this line and they will feel very smug and proud of themselves on this issue. But, to tell you the truth, Mr. Speaker, there is nothing to hide. We are doing the best job we can. I'm quite confident that, as a result of the conflicts commissioner's inquiry, the member's name will be cleared, and we will hopefully hear the end of these allegations on the protected floor of this Legislature.

Question re: Beringia Interpretive Centre, purchase of gift shop

Mr. Fairclough: There haven't been any allegations made, Mr. Speaker. Open and accountable, yet that minister could not answer one of the questions. The Premier could not answer any of the questions that have been asked of her, Mr. Speaker. And my question again, is to the Premier - not for premier Cunning, and not for the Minister of Tourism, Mr. Speaker. It's a simple, straightforward question, because the buck stops with the minister, at her desk, with the Premier.

Yukon people want and deserve to know if they got a good deal in this government's transaction. They want to know the business case. Is the Premier satisfied that the $68,000 purchase was necessary and in the public interest?

Hon. Mrs. Edelman: Mr. Speaker, the member opposite is once again factually incorrect. I have answered every question that has been put to me by the members opposite; and I have sent written responses. More are being collated, and they will come to the members opposite. There was a legislative return today. There was a letter that was written to the members opposite, which the member opposite acknowledged earlier in the week. It is impossible to state this over and over and over and over again, apparently - or it's impossible for the members opposite to listen to what has been happening in this Legislature. Because every day the members opposite stand up, ask for a response, and I stand up, I say, "You can have a response, and it will be in written form." And I have forwarded over half those responses already.

Some Hon. Member: (Inaudible)

Hon. Mrs. Edelman: And the Member for Kluane says, "Where are they?" Perhaps the Member for Kluane hasn't been aware of his surroundings lately.

Now, to be absolutely clear, he stood up on Tuesday and referred to the letter that I sent to him, which had part of a written response. Today, in legislative returns, I gave more answers to his many, many inane questions about this issue.

Now, the member opposite no doubt will get even more caught up in the detail of this issue. He has asked for virtually the size of the negotiating table. He has asked for minute detail on paper clips, et cetera, et cetera, in the inventory.

Now, I have forwarded all that information as it became available -

Speaker: Order please. Will the minister please conclude her answer?

Mr. Fairclough: Mr. Speaker, the minister said she answers all the questions. She never once mentioned whether or not they were satisfied with this $68,000 purchase and whether it was in the public's best interest. Not once did she mention that, Mr. Speaker.

This is to the Premier. The Premier is sloughing this off to the Minister of Tourism, and once again, the buck stops at the Premier's desk.

This is an expenditure by her government; it involved her department as well as the Department of Tourism, and it also involved one of her MLAs, Mr. Speaker.

Now, listen carefully to the question, as the Premier. Is the Premier satisfied that this transaction was conducted in the most appropriate manner in all respects? Answer the question, Premier.

Hon. Mrs. Edelman: Mr. Speaker, I love the way questions are asked in this House.

The department did the best job that they could. We are very satisfied with the work that was done by the department. The members opposite obviously have allegations about this process. That's what they do every day when they stand up.

Mr. Hughes is coming up on Monday. He is conducting an investigation. During that process, the Member for Whitehorse Centre will have his name vindicated. The process will be shown to be clear, open, accountable, and in the best interests of this government. But to be absolutely clear, the members pussy-foot around it. If they would like to come out with the truth, make their allegations, then I suggest they do it here in the Legislature. Come on out with it. Or, even better, if they have the courage - and they don't seem to have - they could do it outside the walls of this Legislature.

Mr. Fairclough: Mr. Speaker, I encourage the ministers opposite to at least talk to the reporters when they are being asked questions on this, and don't be hiding. Be open and accountable.

Once again, the Premier didn't answer the question. I asked if they were satisfied with this transaction, and obviously they are skirting away from the question, Mr. Speaker.

Well, this side of the House is not satisfied with the answers. The answers we have been getting are non-answers. There have been promises to provide information in writing. When? Sometime in the future, Mr. Speaker.

Mr. Speaker, I have a document for tabling, which is a letter from the Member for Kluane asking the conflicts commissioner to broaden the scope of his investigation of this matter, pursuant to section 17(1)(d) of the Conflict of Interest (Members and Ministers) Act.

Speaker: Order please. Will the member please get to the question, or do you have a question?

Mr. Fairclough: Having said that, Mr. Speaker, I will not be asking the Premier or the Minister of Tourism a final supplementary question.

Hon. Mrs. Edelman: Mr. Speaker, the member opposite has made the allegation and has been factually incorrect. He said that I have not spoken to reporters. There was a story in two papers where I spoke to reporters, and I've been very open on that. And the member opposite says that I have not answered questions. I have been sending written responses for days to the NDP caucus.

The members opposite are factually incorrect. They make allegations constantly. They don't have the courage to put it out in the open here, which is ironic, considering that they are protected within the walls of this Legislature, and they certainly don't have the courage to make those allegations outside.

Question re: Mining industry, commitments to

Mr. Jenkins: I have a question for the Premier on her recent trip to Vancouver to host a luncheon for the B.C and Yukon Chamber of Mines.

Mr. Speaker, I'm not sure that this was another "Welcome Back to Yukon" conference on resource development. It is a fact that mining exploration and development in the Yukon has plummeted 87 percent since the Yukon Party government left office, while in Alaska it has jumped 72 percent since 1996. It's a billion-dollar a year industry in Alaska, Mr. Speaker.

Canadian mining companies are investing in Alaska rather than the Yukon because of Liberal/NDP policies that affect mining such as the protected area strategy, which is being used to create territorial parks. While the Premier has delayed enshrining the protected area strategy in law until next fall, can she explain how she is going to use this time to address the concerns of the mineral industry about the continual removal of lands from mineral exploration? It is no secret that the federal government will be creating another park at Wolf Lake in the Teslin area. So I'd ask the Premier if she has an estimate of the total area of land yet to be withdrawn from mineral staking through the creation of more federal and territorial parks. The question is directed to the Premier.

Hon. Ms. Duncan:The member opposite started out his question by making veiled references as to why things were proceeding in Alaska, in terms of mineral exploration, at a greater rate than in the Yukon. I am very pleased to have an opportunity to share with the member opposite that I asked the mining executives and an investment analyst whom I met with in Vancouver precisely the same question so that I could stand on the floor of the House and provide the member opposite with an answer. And I asked permission, Mr. Speaker, to quote them, and the quote was: "Success breeds success. You don't have Pogo in the Yukon. That's the difference in exploration expenditures".

The other points that were made to me are some of the points that the member opposite has raised, in the fact that there is concern in the mining community about the Yukon protected areas strategy. There have been concerns expressed. Those concerns were expressed because the previous government, his new-found friends to the right of him, botched up the process. That was the problem, and we're trying to fix it, and we are going to fix it. I've made that commitment to the mining industry, and we will, as has my colleague, the Minister of Renewable Resources. It takes more than six months. We can't fix all the NDP mistakes in six months. We're working on it.

The other points were with regard to the Yukon mining incentive program that I made during my address to the mining community.

Speaker: Order please. Will the Premier please conclude her answer?

Hon. Ms. Duncan: There are a number of good initiatives to assist the mining industry, and they were well-received.

Mr. Jenkins: Well, we don't have a Pogo deposit here because we have created the Fishing Branch reserve area around it and the Tombstone Park. The deposit extends across the border. It's just like the oil and gas in southeast Yukon. They're drilling and exploring right up to the Yukon border, not across it. We have tremendous potential. Mining claims have been bought out in the Fishing Branch area, and I would like the Premier to report on her attempts to buy out Canadian United Minerals claims in the Tombstone area, and will she make a commitment not to use the protected area strategy to create more massive territorial parks?

Hon. Ms. Duncan: Well, Mr. Speaker, there were a number of issues bootlegged into that one question. The issue is attracting the mining industry back to the Yukon. That is what we're doing. The way we're doing it is by fixing the protected areas strategy. We're dealing with that issue.

I also made a commitment to the mining industry. I stated it in May. I restated that there would be no more goal 1 protected areas strategy until we had resolved the problems. That commitment is crystal clear.

We are also working to attract the mining industry back to the Yukon with our increase in the mineral exploration tax credit, which has been very well-received, particularly by Yukon companies who benefit from the increased exploration expenditures. Also, there is the Yukon mining incentive program, the increases in funding that we announced last year and the continuation of both of those programs. All of those announcements were well-received by the mining community - very well-received.

The member opposite might be interested in having a look in the Vancouver Sun of Tuesday, November 7, at the reporter's version of the address that I gave.

We're working on it. We will not accomplish it all overnight, but progress is coming.

Mr. Jenkins: Mining activity in the Yukon - the reason the Yukon was created as a distinct area of Canada - is at an all-time historic low in the over 100-year history of the Yukon.

Can the Premier explain why the Yukon Chamber of Mines and the Klondike Placer Miners Association would even want to participate in drafting the protected areas strategy legislation, when their voices are effectively drowned out? The Premier has stacked the deck against resource extraction industries in this review. There is very little opportunity for the mining community to be heard. Then, the Premier runs around buying out mining claims. That sends a very nice message. What is the Premier actually doing?

Hon. Ms. Duncan: Well, Mr. Speaker, I've tried repeatedly to answer the question for the member opposite. I'm not going to thank him for either the question or the patronizing lecture. What I will share with him for the third time is what this government has done to rejuvenate the mining industry and re-attract the mining industry in the Yukon - what we have done.

We have committed to completing and dealing with the Yukon protected areas strategy and to making sure we get it right. And the Klondike Placer Miners Association has committed that they will be back at the table, because, in their words, if you're not there, your voice isn't heard.

Also, there are many members of the mining community who have suggested that yes, they want to be there and they will help us deal with the Yukon protected areas strategy, and ensure it's right.

Some Hon. Member: (Inaudible)

Hon. Ms. Duncan: What else have we done? I've said to the member opposite - the Yukon mining incentive program. Not only did we increase the money immediately upon taking office, we've extended the program at the increased funding level and committed to it for next year.

We have increased the mineral exploration tax credit from 22 to 25 percent, and have committed that it will be in place for an additional year. The proponents of both Expatriate and Howard's Pass project have also stated their appreciation for our efforts, as have a number of small businesses that benefit from the fact that there are companies that are up here, exploring for minerals, and have a long-term view toward...

Speaker: Order please. Will the Premier please conclude her answer?

Hon. Ms. Duncan:...development of those projects.

Question re: J.V. Clark School, construction delay

Mr. Fairclough: Mr. Speaker, my question is to the Minister of Education, regarding capital priorities.

Capital projects in Education are planned well ahead and ideally involve all partners in education. Certainly, when we were in government, we worked closely with the school councils and others to determine what school construction projects should take place and in what order.

What is the current schedule for school replacements and other building projects during this government's mandate? And what process has the department been using to set the schedule?

Hon. Mr. Eftoda: Mr. Speaker, I do appreciate the question from the member opposite. As the member opposite is well aware, we just had school council elections in the early fall and they will be reconvening at the school councils meeting coming this November. It will be at that time that we will be asking for their input on any capital projects they see in their respective communities. As did the previous government, consulting with communities through community school councils is a very good way to seek input on the information direct from the communities. So, we will be following through on that as well.

Mr. Fairclough: Following the fire in Old Crow, the people in Mayo graciously allowed their school to be postponed for a year. Now, the minister has delayed the Mayo school project even further. He has given excuses but nothing consistent, nor a convincing reason for doing this.

Does the delay of the Mayo school mean that capital projects for schools in Carmacks and in Pelly, which are already on the department's long-range capital plan, have also been put back for a year?

Hon. Mr. Eftoda: I very much appreciate hearing from the member opposite that the school in Mayo is delayed. That is very encouraging. Obviously, the member is listening to some of the responses that I have provided.

The school is going to be delayed a matter of a few months before it's opened. I have been in touch with the department on the capital works program as initiated and, to the best of my knowledge at this particular moment, we're going to follow through on those plans.

Mr. Fairclough: Mr. Speaker, the Liberals made a political commitment to rebuild Grey Mountain Primary, "the little school that could". The Member for Whitehorse Centre has conveniently told the world what the government's game plan was for Grey Mountain Primary School and for Whitehorse Elementary.

Does this political commitment to rebuild Grey Mountain Primary School fit into the capital priorities list? Will it take place before or after the Carmacks and Pelly projects?

Hon. Mr. Eftoda: Mr. Speaker, I just want to correct the member opposite on one little aspect. There has been no decision made with respect to the Whitehorse Elementary School. That was a nice little slip that he put in there to create further apprehensions in the community, which they seem very adept at doing. We, as have previous governments, follow through on our consultations with communities, with school councils, with whatever means that we can in planning our capital works projects in the schools. This government, yes, during the last election had specified that we would replace the Grey Mountain Primary School. I have followed through on further correspondence to the school council, have met with the school council, have worked in following through on our commitment to replace that school, and we will.

Question re: J.V. Clark School, construction delay

Mr. Fairclough: I'm glad that the minister has committed to the priority lists that have been put forward by the school councils and has taken back control of the government priorities from the Member for Whitehorse Centre, who said that they were committed to this project of "the little school that could." Now, Mr. Speaker, yesterday, the minister changed his tone twice once again. The cost overrun is now $1 million. That's the new Liberal math. When the Hamilton Boulevard twinning project went overbudget, that was just the cost of doing business today. Can the minister tell the House what the business case is for delaying a school project when the health and safety of children and staff are at risk?

Hon. Mr. Eftoda: Mr. Speaker, again, one thing that this government is trying to do in being open and accountable is to build up trust relations. There have been several attempts, and I have followed through on several commitments that I have made with members opposite on issues that they felt were vital to their community. The Member for Ross River-Southern Lakes and I worked on resolving an issue that he specifically brought to my attention. We're working, as the Member for Vuntut Gwitchin has eloquently put, on how we consult through the Education Act review process. We are in consultations with her now on how is the best way to approach.

We, in front of Chief Hager, came to an agreement with respect to Mayo, with respect to the health and welfare of the kids there to lower the anxiety that's obviously being built up with these children, that we wouldn't politicize those issues on the floor of this House. We shook hands on it, and now he's bringing it up again.

Mr. Fairclough: Well, Mr. Speaker, it's the minister opposite who started this whole thing again, after we had a discussion upstairs. He didn't answer the question as to what the business case is for delaying the school project.

Now, this delay has cost children, staff and the whole community of Mayo, in terms of health, jobs and knowing where they fit into the whole government scheme of things. I ask the minister again to listen again to the question. What performance indicators is the minister using to determine the cost of not doing business in Mayo and not addressing the legitimate concerns of the people of Mayo?

Hon. Mr. Eftoda: Mr. Speaker, the member opposite knows well, as they are very familiar - or maybe they're not familiar, and that's why we're in this pickle with respect to the tendering process - with the cost overrun on the school, which is $1 million. We made that very clear. We have been in direct contact with them, with the residents in Mayo, with Chief Hager, with the band office there, with the school council, with the principal, with the mayor and with anyone else who wanted to find out the specific details.

With respect to the agreement that we came to with Chief Hager and with the interim leader of the official opposition on a handshake, he brought it to the floor of this House. I will refer the member to Hansard of November 1, where he brought it to the attention of this House, as I was going to honour the agreement that we shook hands on. He is the one who brought it up in the House.

Mr. Fairclough: Well, we're not getting any answers from the members opposite. We agreed to work on this together, yet there is no answer and no direction from the Minister of Education. I am sure, when we are in Mayo tomorrow, we are going to find out exactly how the people of Mayo feel about this government's priorities.

Now, the government has scheduled some political meetings with the community leaders to discuss Mayo's concerns. There seems to be some question as to whether or not the minister and the Premier are prepared to discuss these concerns with the whole community. They are meeting with the village and the First Nation, but they didn't want to meet with the whole community. Now, they've changed their minds.

Will the minister commit to a public community meeting when he and the Premier are in Mayo tomorrow, as he said they would? Will he commit to more follow-up meetings with the community?

Hon. Mr. Eftoda: Mr. Speaker, the member opposite knows full well that it is a full-blown community meeting that we're having tomorrow. And he has continually, throughout the week, shook a finger at me across the House and whispered, obviously loud enough for me to hear, "Just wait until I get up to Mayo. Just wait until I and the Premier get up to Mayo."

Well, we are looking forward to getting up to Mayo. This is our second trip up there. This is the member opposite's first trip up there since speaking on this issue specifically with the community as a whole. So no, we are going to go up there, and we are going to face the community. We will have answers for them. We have answers on health. The Member for Klondike keeps chattering on this way about carrying a bucket of bleach up there. Well, we take the health and welfare of the kids just a little more seriously than that member does, because we're going to go into full cleaning mode as we had indicated to the community, and that will be done as we are meeting up there.

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

ORDERS OF THE DAY

GOVERNMENT BILLS

Bill No. 3: Second Reading

Clerk: Second reading, Bill No. 3, standing in the name of the hon. Ms. Duncan.

Hon. Ms. Duncan:I move that Bill No. 3, entitled Third Appropriation Act, 2000-01, be now read a second time.

Speaker: It has been moved by the hon. Premier that Bill No. 3, entitled Third Appropriation Act, 2000-01, be now read a second time.

Hon. Ms. Duncan: I am pleased to introduce these estimates, which will update our spending plans for the current year and thereby enable us to continue or initiate a number of important services for the benefit of our citizens.

This supplementary will see voted O&M and capital spending for the current year increase by some $37.2 million. At the same time, for a variety of reasons, our revenue inflow will increase by over $27 million. When a reduction in the contingency is taken into account, the net result of these changes is an increase in the annual deficit of roughly $5 million.

Mr. Speaker, I'd like to speak to several of the major components of these changes, prior to discussing some of the new initiatives we are introducing by the way of estimates.

Yukon's own source revenue will increase by $5.3 million over that previously forecasted. While some of this is the result of increased investment income, the bulk of it is due to new projections of oil and gas revenues, which have increased substantially with the recent rise in energy prices.

This increase in revenue is, of course, shared with First Nations, and that offset is shown in the Department of Economic Development as an expenditure item. In addition, some of these revenues are used to offset the formula financing grants and thereby flow to the benefit of the federal government.

The increase in resource revenues is welcome, but we're concerned about the impact high energy costs are having on the prices Yukoners must pay for hydrocarbon-based fuels. It also has a significant impact on the operating costs of the government itself. To that end, we are investigating ways to shield Yukoners, particularly low-income earners, from these increases.

Our formula financing transfer has also increased significantly as a result of several factors. In the first instance, over $9 million of the increase is due to an adjustment made to that transfer to cover additional costs we will have to bear under the public service superannuation plan.

In essence, then, Mr. Speaker, this item is a wash. It's an increased inflow of funds that's accompanied by similar outflow of funds. The adjustment to the formula transfer was made by the federal government, because the increased cost of the pension plan resulted from the federal decision about its funding regime.

We have been encouraged by the federal government to explore the possibility of establishing our own pension fund, and work on this matter is ongoing within the government.

The general formula transfer has increased by more than $12 million, or four percent - a significant and welcome increase. The formula is subject to a number of variables, which are constantly being updated by Statistics Canada and the conference board.

These variables are dependent upon changing circumstances in the Canadian economics scene and, to a lesser extent, circumstances prevailing in the Yukon.

The Canadian economy and provincial finances are performing very well at present, and this performance is reflected in the latest releases from StatsCan and the conference board. These have been used in the present forecast. I should mention that the formula remains very sensitive, and the amount of money that we get can get down as well as up.

On the spending side of the equation, almost $20 million of the increase is accounted for by revotes of lapsed 1999-00 spending and the new dollars required for the higher superannuation costs. As I mentioned earlier, this superannuation increase is accomplished by special adjustment to our formula financing grant.

The remaining requirement for new funding is a result of a host of factors, which range from volume increases in existing program spending, to new initiatives that we, as a government, are undertaking in order to deliver on our contract with Yukoners.

At present, I will only speak to the larger, more significant new spending since we have ample opportunity in general debate to examine every line. Each department has been granted increased funding for the new collective agreement with the Public Service Alliance of Canada. This increase includes additional monies for the Hospital Corporation and Yukon College.

I know the opposition supports this increase, and I look forward to their support when it comes time to vote.

This amounts to over $4 million, and our contingency fund is thereby reduced by a similar sum. Included in the request for the Executive Council Office is $150,000 for legal work and public forums associated with the Yukon Act review. I need not emphasize to this House the importance of this review, and the impact that a new act will have upon constitutional development in the Yukon.

There is also $448,000 in severance payments for former political staff of the NDP government. The Department of Community and Transportation Services requires almost $380,000 for various road washouts, mudslides, brush and weed control and for fuel price increases. This is the first step in reversing the years of cuts under both the NDP and the Yukon Party governments.

There is also additional recoverable funding of $50,000 for sports and recreation groups included in the department's supplementary operation and maintenance requests. The new monies required for capital in this department consist largely of revotes and the transfer of budgetary responsibility in the amount of $2.9 million for the Connect Yukon project from the Department of Government Services.

Given Community and Transportation Services' responsibility for communications and infrastructure, it was felt appropriate that the department should administer this project rather than Government Services. The Department of Economic Development requires $375,000 more in operation and maintenance funds as the share due to First Nations based on the increased oil and gas royalties reflected in this supplementary's revenue calculations.

Included in Economic Development's capital vote funds are, among other things, the microloan program, at $105,000 announced when the current year's main estimates were tabled and costs in the amount of $300,000 associated with the NDP's proposed purchase of port facilities in Haines and Skagway.

We are also asking for $612,000 to establish a unit to deal with activities and issues surrounding the Alaska Highway pipeline. Mr. Speaker, this is an interesting line item, and I can't wait to see the members opposite vote against that one.

Some Hon. Member: (Inaudible)

Speaker: Order please; order please.

Hon. Ms. Duncan: The opposition, Mr. Speaker, has been talking out of both sides of its mouth on that issue. They are for the pipeline; they're against the pipeline. The Member for Kluane has spoken out clearly against the pipeline in his efforts to bring the members of the green wing on board for his leadership campaign. He's called the pipeline a flop that could leave the territory in ruin. He has also called the project a one-time wonder that could leave a big black hole in its wake. The Member for Watson Lake has half-heartedly endorsed the pipeline and said they're going to promote it if they, too, were re-elected. Of course, he has also referred to it as "a far-off pipe dream". So it's obvious the member's doing an NDP flip-flop because he doesn't have a position.

We'll see where the Member for Watson Lake stands, and we'll see if he votes against jobs for his constituents.

This money is critical if we are to have a significant influence on the pipeline's routing. We are fulfilling our contract and our commitment to continue to promote the Alaska Highway pipeline. Our contract stated that we would aggressively promote this project, and that's what we're doing.

The benefits of this project to the Yukon are self-evident, but this is not to say that there will not be some environmental and socio-economic impacts. These will require special, careful examination and thought. The pipeline office will therefore also be heavily involved in facilitating discussion of these important matters among the various communities of interest - citizens, First Nations and municipal governments.

The operation and maintenance funding request for the Department of Education contains a number of items. Among them, there is $400,000 for the increased utilities costs and over $700,000 for student financial assistance awards. The latter item results from increases in the number of students benefiting from the program and in the cost of travel. It is also in keeping with an election commitment that we made to increase student grants by 20 percent. Both opposition parties voted against this item in the spring, and I expect that they will do so again.

Over $100,000 is also being requested for additional educational assistance to provide in-classroom support for students with learning needs, and $200,000 more is needed for substitute teachers' salaries. I am certain that the NDP will support this money.

As well, monies have been requested for a weekend and evening supervisor for the Whitehorse Public Library. This expenditure will see much-needed security increased during these hours.

Finally, there is the provision of $25,000 in the supplementary for testing that will lead to individualized education plans to eliminate the current backlog.

In capital, Education will receive $220,000 from the Gates Foundation for public libraries' computer access. This is a welcome and important project in this age of Internet. This money has, of course, already been announced.

In addition, $200,000, which is totally recoverable from the federal government, will be spent on the older workers pilot project, a program to provide support to reintegrate displaced older workers into sustainable employment.

Funds are also being requested for design work for the Porter Creek Secondary School roof replacement, and classroom expansions for the Catholic elementary schools. There is also a small but important sum, $20,000, being provided for a school-based information technology Web site to provide students with employment and career information.

These important education initiatives are an indication, Mr. Speaker, of our commitment to the students, parents and educators - our partners in education - throughout the Yukon. We intend to make our already excellent education system even better, and I can promise Yukon parents, educators and this House that further innovative ideas and the funds to implement them will be forthcoming from our government in the coming years.

The Department of Government Services is requesting additional operation and maintenance monies for several items. One of these is for increases in property insurance premiums of almost $100,000. Over $100,000 is needed for legal and consultation costs associated with the CRTC hearings, and $120,000 is also required as a contribution to the waterfront trolley operation.

On the capital side of the ledger, the department is transferring $2.9 million to Community and Transportation Services as a result of the change in responsibility for Connect Yukon. That's the matter I spoke to earlier.

As well, the information system infrastructure upgrade requires some $500,000, and more than $300,000 is needed for business incentive rebates due to an increase in qualifying projects and our commitment to Yukon businesses.

Mr. Speaker, one of the highest priorities of Canadians and the people of the Yukon is the maintenance of our health care system. We are all well aware of the pressures being placed on this system as costs continue to escalate at an ever-increasing pace due to ageing populations and rapid advances in technology of health care.

The Yukon is not immune to these trends and this supplementary budget reflects their impact upon our small jurisdiction. Fortunately, Mr. Speaker, we are able to afford to fund these increases and thereby maintain the excellent quality of health care which we, as Yukoners, enjoy. I want to assure this House that maintaining that standard will continue to be one of the most important priorities of this government, and we will be successful in doing so.

This supplementary sees more than $7.2 million in new operation monies flowing to our Department of Health and Social Services. The opposition has been making a lot of noise about how they support health care. I know they will be supporting this increase in what is obviously a priority of all members of this House.

While some of this increase is for superannuation and the collective wage settlement, over $4.5 million is for price and volume increases in the department's programs. The minister responsible will, of course, be speaking to these matters at some length in budget debate. But, I'd like to give members an indication of the nature of the items that are making up this sum: medical travel, $800,000; reciprocal billings, $755,000; Yukon doctors contracts, $255,000; contributions to the operations of the Canadian Blood Services, $250,000; adult residential services, $234,000; volume increase in residential programs, $832,000; price and volume increase of child care costs, $288,000; chronic disease and pharmacare increases, $1,000,000; increase in pioneer utility grants, $80,000; increased costs in ambulance services, overtime, auxiliaries and dental contracts and so on, $338,000; and extension of child care operating grants to communities, $218,000.

We have had to direct , therefore, considerable monies from our accumulated surplus to fund these needs. We are fortunate, Mr. Speaker, to have an accumulated surplus to draw upon and this shows just how valuable being in a surplus position can be for any government. Of course, the opposition now wants the government to spend the surplus down to zero. We intend to manage the taxpayers' money carefully, to ensure that there is a savings account to meet critical, urgent, unplanned expenses.

With this supplementary, we have been able to correct a number of budgetary deficiencies, which we inherited from the previous NDP budget, and to begin a number of new initiatives, in keeping with our election platform and promises.

Let's review for a moment what has been addressed in this supplementary budget - a budget the NDP has said addresses nothing of importance to Yukoners.

The budget addresses the following: First Nation relations, revitalizing the economy, maintaining and enhancing quality health care, expanding tourism opportunities, improving highway maintenance structure, increasing financial and educational assistance for our students, providing housing for our seniors, tackling legal aid, and many other priorities.

These are important issues for Yukoners, issues that have previously been ignored. This government is addressing these priorities and will continue to do so in future budgets.

The Department of Justice, Mr. Speaker, is also requesting funds beyond those needed for the Public Service Alliance of Canada collective agreement and pension plan purposes. Over $1.1 million is required as the additional cost of our contract with the RCMP for territorial policing costs. The largest component relates to salary increases resulting from a new wage agreement the RCMP have arrived at with their members.

Additionally, the police require funds for a community justice coordinator for the Dena Keh tripartite agreement, auxiliary policing costs and the community constables program.

Monies for the RCMP are also needed for a number of community justice initiatives, search and rescue operations, and several other new or ongoing programs.

Mr. Speaker, we promised to enhance legal aid funding and the supplementary reflects our actions in that regard. Included in the Justice vote is an additional $300,000 to bolster that program's funding.

Legal aid volumes have been increasing and the program was clearly underfunded. This enhancement will ensure that legal aid can continue to provide its essential services to those requiring such assistance.

The NDP, during four years in office, sat on their hands. "It's a federal problem," they said. "We can't do anything about it." Unlike the previous government, we're acting. Six months into office, we've delivered on $300,000 in new funding for legal aid. We also paid off the debt of $287,000 that had accumulated under four years of NDP mismanagement.

Legal aid was such a priority of the NDP that they didn't bother to pay off the Legal Aid Society's debt. Monies in the amount of $75,000 are also included in these estimates for an increase in the amount of training provided to our justices of the peace.

The Public Service Commission requires funds for several purposes, the principal one of which, at over $200,000, is to cover increased premiums for workers' compensation purposes. In the Department of Renewable Resources, there is $49,000 set aside for climate change analysis. The majority of the money in this department is for superannuation and collective agreement increases.

Mr. Speaker, I do not believe that there is one person in this territory who does not recognize the crucial importance of the tourism industry to our economic well-being. Tourism has sustained our economy through many difficult times, and its importance continues to grow as we penetrate new visitor markets.

Our government is anxious to further encourage this growth, and this supplementary reflects our first steps in so doing. These estimates contain $200,000 in operation and maintenance funds to begin a stay-another-day marketing program. The objective of this program is self-evident from its name. The additional economic benefit the Yukon could receive by our visitors staying with us for another day is enormous, and it is time we devoted resources to this end.

The estimate also contains operations money for a number of other initiatives that the minister and her department are undertaking. Among these are monies for a number of winter festivals and events, including the Yukon Quest and marketing support for the Thunder on Ice event. Capital in the amount of $50,000 is requested to support our foremost winter festival, the Yukon Sourdough Rendezvous.

The department has also made a number of internal reallocations of funds to support other initiatives, including improved air access to the Yukon, and Convention Bureau and museums funding, to mention but a few.

The minister will speak at some length on the new direction the department is taking, and I am certain that it will be of interest to all members of this House.

The Yukon Housing Corporation and its important programs have not been forgotten. This supplementary contains $250,000 to establish a seniors housing trust. Our seniors deserve this trust, and they deserve the best. This fund is the beginning in providing for seniors' future housing needs by improving the quality of their living environments.

The minister responsible for the Housing Corporation will of course be providing the House with more complete details about the program during supplementary debate, and I'm certain that members and Yukoners will be pleased with the direction our government is taking.

Mr. Speaker, there are a great many other important items contained in these estimates; time does not permit me to address them all at present. Suffice it to say, Mr. Speaker, that they all contribute to the well-being of Yukon citizens and are part of our plan to improve the lot - economic and social - of Yukoners.

The end results of the bill I've introduced today is an annual deficit for the year of over $33 million. Admittedly, there will be lapses, as there always are; and a deficit there will be. This is on top of a deficit of over $16 million incurred by the previous government last year. We are expecting to end the current fiscal year with an accumulated surplus - a savings account - of slightly over $30 million before any lapses are taken into account. The government's operating expenses for one month are between $35 and $40 million. This is considerably less than it was several years ago. The main reason it has dropped so dramatically is the pre-election spending spree of the previous government.

I promised earlier in these remarks that we would always maintain an adequate savings account for the Yukon and its people. This we will do, and it's therefore obvious that annual deficits of the magnitude of the last several years cannot be sustained.

We have a plan to turn this trend around, and we will adhere to that plan, so that Yukoners will never have to face the spectre of debt to finance the government's operations. This, Mr. Speaker, is a promise we made when elected, and it's a promise we will keep.

I'd like to make a few comments on the long-term projections that were tabled with this budget. The long-term projections contain personal income tax cuts announced earlier. On January 1, 2002, the territory's personal income tax rate will be 44 percent of the federal income tax rate. This represents a reduction of six points, or 12 percent, in personal income tax since this government took office.

That's less than the Northwest Territories or Nunavut. They are at 45 percent. These are real tax cuts, not phantom tax cuts that were talked about but never implemented under the NDP. The NDP talked about and promised to reduce taxes, but they never actually did it.

In terms of additional long-term projections, net capital expenditures are projected to be $56 million for the next three years. This is an increase of $8 million per year over the previous government's projections.

Mr. Speaker, this budget contains spending measures that focus on our seven priorities, including over $7 million for improved health care services, and I look forward to support for these initiatives from all members of this House.

Applause

Mr. Fairclough: Mr. Speaker, I would like to reply and make comments on the supplementary budget that was tabled by the Liberal government.

First of all, it is not a budget about the economy. The biggest thing that's facing the Yukon right now is the economy that we're in. It's basically a budget about government. It's not about steering the ship of state; it's about rearranging the deck chairs, Mr. Speaker. There is no forward vision and no forward moving as promised by the Liberal government.

Mr. Speaker, we had three and a half years of listening to the Liberal Party not take sides, sit on the fence, promise Yukoners that they will be taking a direction, they will have and give positions sometime in the future. "Wait until the election." That's what they said to Yukoners. The Yukoners waited until the election, and all during the election and the campaign, "Wait until we get into government because we don't know what we're doing yet; we don't have a position and we need guidance." I guess that's what they were saying.

The one thing they did to give certainty to Yukoners was to adopt the NDP budget, because that's the only way the Liberals could have given certainty to Yukoners, Mr. Speaker. That's the only way they could have given certainty to Yukoners. They said publicly that they would adopt the budget and that they would pass it in its entirety. People believed them, Mr. Speaker. People voted for that Liberal government because they were not messing things up and bringing in anything new, because Yukoners knew the hard work that the NDP had done in consultation with the public and consultation with the municipalities, communities and First Nations to put this budget together. And the Liberal government wanted to carry that forward, promising Yukoners certainty by bringing this budget forward.

And what do we have today? Broken promises. In every department, Mr. Speaker, there are broken promises from this Liberal government. They cried poverty since they got into government - for the last six months. There was no money; projects were cancelled because they were slightly overbudget, by two percent. That was only in rural Yukon, Mr. Speaker. But projects in Whitehorse get approved. A $2.3-million project on Hamilton Boulevard went over $500,000 - a way bigger percentage than the Mayo school, yet it was approved by that department. It was okay; it was just the business of the day. And that government is being inconsistent with the private sector, with those who are putting money forward to develop their lands, and I think about Lomak, which had to pay extra dollars for its intersection on to the highway. But this government is willing to foot the bill for the City of Whitehorse when it comes to intersections, and then it's like mortgaging the future, Mr. Speaker. They will collect the money back from those people who buy lots in the future, jacking the price of the lots up to pay for this.

This is according to the Minister of Community and Transportation Services, Mr. Speaker, and she said it in public.

That's where we got our information on this. It's a shame that that's the approach this government is taking. It's not different or better from previous governments. It's the worst it has ever been. They are certainly not living up to their promises of even small things like being open and accountable. They won't answer questions in the House when they are asked. They are certainly hiding from something and are not wanting to bring out what is being asked of them in this House.

The Tourism minister answers questions for the Premier. This certainly doesn't seem right when it is a straightforward question to the Premier.

They have been crying poverty for the last six or seven months. They have no money and cannot do anything for communities. There is no creation of winter work. I guess, therefore, they have no vision, no forward direction or forward movement for the Yukon at all, except for the future. According to their platform, it's all about the Future. According to their throne speech, it's all about the past.

The biggest issue that's facing Yukoners right now is the economy. What does this government do in their supplementary? It is all about the future again - pipeline jobs, not now, but years down the road. There could be many jobs. I know we all know approximately what the project could be and what it would mean to the Yukon. It could double or even triple the population here. There will be a huge impact on the Yukon like we've never seen before.

One interesting thing, though, about the pipeline is the pushing and pushing and pushing for jobs and creating an atmosphere out there that everything is okay in the Yukon. I heard the Member for Whitehorse Centre say this. They looked at the project, and everything was good. At first glance, flipping through the pages, everything was good.

And what is this, a 25- or 30-year-old project that was put together? It was okay for the members opposite. They said it was good, not even thinking about the people in the Yukon at all when it comes to the environment. It was okay for the members opposite, but the environment - just railroad it through, put a pipeline through and not have any discussions with Yukoners at all. And the government position is that it's okay. I think not, Mr. Speaker. I believe communities and Yukoners are going to be questioning this project and how it affects them in a lot of detail.

Just recall when the big PR work came to Yukon and how people reacted to that - questions about migrations of animals, caribou herds, moose and everything else, possible damage to our water. This pipeline goes under lakes. It goes under the lakes. It doesn't go around or across them. It goes under them. And it's a major impact to the people in the Yukon. It goes right down the highway. It will be seen every day by people.

Yukoners know that there are going to be changes. There have been tremendous changes over the last 20 years, Mr. Speaker. One of the big ones is the settlement of land claims. Well, the Member for Whitehorse Centre said everything was just fine. He flipped through it, and I guess he was satisfied that First Nations may have made comments in the past, but now they have agreements in place, they have settlement lands, and they're concerned. In the agreements, Mr. Speaker, there are clauses about compatible land use and so on. So, are First Nations going to be interested in the particular project? Of course.

They'll be very interested in the impacts to the environment. They will also be very interested in job creation, their involvement and how they could buy into this. The list is probably endless for what First Nations would like to see in regard to this pipeline. I hope that the Liberal government doesn't take that lightly.

As a matter of fact, Mr. Speaker, when it comes to settlement of land claims and the different First Nations, there are lands that are selected specifically for development, whether it's mining, oil and gas or forestry. There are lands selected for protection. There are wetlands. There are special management areas. There are lands that are for traditional use - hunting only - and there are lands that are selected just for the fact that they produce medicines.

So, I was a bit, I guess, shocked at the Member for Whitehorse Centre just coming out and saying everything was just fine, and if they had their way the pipeline would have gone right through without consultation with communities, like they're doing with many other things in this House - many other things.

Their economic priorities are all about the future. The pipeline and the forestry jobs are all about the future. Now, can the Liberal government tell us when they went out to support communities when they were in need of support by their government, particularly the industry in southeast Yukon, in and around Watson Lake? This Liberal government didn't even go up to see them, Mr. Speaker. This was about jobs. This was about money that supported families.

And it was more or less a revitalized industry; things got moving. The Yukon started to produce more and more of its own lumber for export. Instead of having our raw logs disappear out of the Yukon, we were doing it ourselves here. And that Liberal government did not lift a finger to help the people in Watson Lake. So what happens? What happened is that people left. People are leaving Watson Lake, and that's why I say, Mr. Speaker, that it's all about the future. Because this Liberal government relies on things that could and might happen, like devolution.

If only we had control of our resources, then maybe we could make decisions about jobs in the forest industry - if only we had control of those resources. Now, that was a big thing, when the Liberals first got in. Now, it's a delay. And what do they say about devolution now? "Oh, it's okay, it gives us time to work on negotiations." That's what they say. There's more time to work on negotiations. Well, that's all done, Mr. Speaker, and it has been done for a long time. It's in the federal hands; we're working on the Yukon Act. We're trying to devolve this down to the Yukon level now, and I have not heard one mention at all by the Liberal Party about being prepared and getting ready to have the responsibility of this resource - none.

The previous government had worked on some of these in the department. The Renewable Resources department, for example, has been working with the federal government because it is one that is more greatly impacted as a department. But is there any continuation of this work? Are we prepared now? Have we done all our homework? There has been none of that to give reassurance or certainty to Yukoners at all.

The Liberal government had said that they would pass the budget in its entirety. When it came to the hard work of making decisions, there were none there, for example, with the school. No one paid attention to the contract. Was it in trouble? Did it need some political attention? Could it have used some political direction? Nothing - it was too late.

The project started; the money was in the budget. The concrete is poured, the foundation is done and the sub-floor is on. And to the people in Mayo, that meant the project was going ahead. The impact of that one particular project is tremendous for the people in Mayo, not just to the students and staff of the school, who are now forced to live with the conditions of that school for another year. Not just to them, but to the community - the Village of Mayo and the First Nations, who had worked together on putting training programs in place. I didn't hear very much from the members opposite in regard to training. They put training programs in place to get their carpenters up to speed and ready for the project.

They planned projects in the future, so that once the school was finished, because there's very little activity in the communities, they can take one project, move the carpenters over to another one and to another one three years down the road.

Now, it all floated around this whole school project. The First Nation, for example, and the administration building they wanted to build was on the part of the ground where the old school was or is now. So, it delays that project, as well, unless the First Nation finds a new spot for this project. And then they're basically faced with a community that doesn't have all their members up to speed with skills that could be used on these types of projects. That's what they're faced with.

And the village, which wants to plan a building for their 100th anniversary of the community - where is that going to be now? Is the government ever going to be funding two projects in one community that are fairly large? I don't think so. So they see that slipping away.

Not only that, but the businesses in that community, which, because the tender was let out and was out there in the public, started planning about how they could provide services to the workers who come into the community, building that school - hotels, gas and that type of thing. That has gone now, and what the government is asking them to do is to provide that service, but in the summertime. Now, they're going to have to make a decision here on whom they have their facilities available for. Are they for the workers or the tourists coming in? What little they have, they would like to house and take care of. That's a pretty major impact for a small town like Mayo, which is basically at the end of the road, except for Keno, which is at the end of the road, and where they don't get a whole lot of tourists coming through.

That school construction, Mr. Speaker, wasn't about putting people to work now, this winter, like it was intended. We know that times are tough right now. People need to work in the winter, and part of the reasoning for bringing this whole thing forward was to keep people active throughout the winter. It didn't happen.

So, it wasn't about this supplementary in the delay of the school. It's not reflected in there - about holding monies back or anything. It still has an expenditure there. But it wasn't about creating jobs this winter. There is nothing in here about winter works at all.

It's a big expenditure - $37 million when government cried poverty that there was only $14 million in the kitty. And now they come out with a huge supplementary that makes government bigger. Bigger O&M, creation of more government workers - that's what this does. There are some small good things in there, too, of course.

What about the mining community? This Liberal government wants to go out and promote mining, revitalize the industry out there, and get more activity going. Well, there are other problems we have out there with those companies that want to develop a mine - the permitting process, for example, where things should have been streamlined and could be worked on and helped out by this government. I don't believe that the Liberal government even sees that as a problem right now. We have four or five mines that are fully permitted and ready to go, and they're just waiting, basically, for investors and the price of metals to go up, both precious and base metals.

Communities have worked with the mining industry and different mining companies to try and create their own activity in the communities. But what we have been seeing lately is some bad management out there - with BYG, for example, and it not paying proper attention to the everyday goings on at this particular mine. The federal government has stepped in. They stepped in, Mr. Speaker - this is the Liberal government - to basically contract out the cleaning of this mine, and in doing so, they ignored First Nation final agreements. This little step, which I never heard the Yukon Liberal government even pipe up about, breached the final agreement. No one on that side of the House Mr. Speaker even said anything to their big brothers in Ottawa about this - no one.

What could be happening is that people come in, do their work and leave. The final agreements were put in place for a reason. What we have is our Premier heading down to Ottawa and Vancouver, promoting mining, oil and gas. Those things are fine and dandy to do, but there are mixed messages when she comes home to the Yukon. She hasn't done her homework; she hasn't spoken to the people of the Yukon.

It was okay to go out and promote land sales, and north Yukon, but they forgot to talk to First Nations about it, with final agreements and with communities. They just forgot about that, but they'll do it later, once the sale is over.

That's Liberal consultation, and we've seen it over and over and over in this House. It's a sad thing to see, when people were expecting something different and had a lot of expectations of this Liberal government, in that they haven't been in government in the Yukon before.

Promoting mining and increasing the dollars that we put forward for exploration - that's what we need in the Yukon. People want that. Even First Nations are not against mining at all, Mr. Speaker, and I could tell you that the three First Nations in my riding - Nacho Nyak Dun, Little Salmon-Carmacks, and Selkirk First Nations - all have selected lands that are directly related to mining. The Selkirk First Nation, for example, has a land claims settlement that's right over Minto Explorations, and it's all with good reason. They didn't do this just on their own, and "The heck with you, mining company." It didn't happen that way. It was through close, working relationships with these mining companies that this happened, and governments agreed to it.

That's a new move and a big one by the Selkirk First Nation. They want in on the action. The mining companies would like to deal with them. They're very much looking to the future, Mr. Speaker, and maybe this Liberal government could take some advice from them from time to time, rather than going out of the Yukon, talking up a storm, without really knowing what Yukoners really want.

Now, there's lots of potential out there in and around Mayo. To some people, Keno's dead; to others, it is just waiting. Everything's in place. Go through the mill and the machine shop. It's still being taken care of. Pretty sad future.

It looks pretty dark, but there's still a lot of potential in Mayo in regard to mining and lots of potential around Carmacks in regard to mining. Agreements, as a matter of fact, have been put in place with mining companies, Mr. Speaker, with the Carmacks First Nation, in getting people to work. But still, as things have gone bad, this Liberal government did not even look at final agreements.

Now, the Liberal government has made mention that one of their directions is to have all departments, as did the previous NDP government, make sure that they are fully aware of what the final agreements are spelling out. That's a good thing. Everybody needs to do it. First Nations need to go back through that, too. There are new people coming in, and oftentimes this important, historic agreement is left aside.

And it's a sad thing to see, because First Nations are self-governing nations and they are senior governments. As a matter of fact, they have control of more land than the Yukon government has, Mr. Speaker.

The Liberals have also said - and it's in their supplementary again, Mr. Speaker, and it's also in their throne speech - that one of the seven points of their top priorities to be graded on in the future is land claims, and I certainly agree that it should be a priority. But their explanation about land claims is about settling outstanding land claims. That was their point, and that's what they would like to be graded on, and, Mr. Speaker, that's a very, very small part of First Nation final agreements. The big job is to get these final agreements implemented, to make sure that all governments abide by the clauses that are put forward in that final agreement.

One of the reasons - the main reason, and it's in the throne speech - that the Liberal government had put settling outstanding land claims in there was that it was key to increase economic activities, not that it was important to First Nations to get up on their feet and be responsible for the resources and the people of their First Nation. That wasn't the reason. And I was shocked to hear the Premier say that it was because it was key to increase economic development.

That would give certainty to the investors out there, to the general public, and to the First Nations and non-native people around the territory if we have settlements of agreements and ratified final agreements. We're only working with a couple here, Mr. Speaker. The rest have basically had extensive negotiations and have very minor issues to deal with. Some have put on the table some real ones that could be resolved, like section 87 and the loan repayment. I asked the members opposite if they would ask the Finance minister in Ottawa if he would forgive this loan that was given to the First Nations to negotiate these final agreements - if he would forgive it in the same manner that he had forgiven millions and millions of dollars to countries like Uganda and so on that owe money to Canada. They're forgiving that, but the first peoples of this land, of this country, were not even given that consideration.

I asked the Premier to suggest and recommend that the Finance minister in Ottawa do exactly that. Basically, what that would mean is that the $70-plus million - I don't know what it's at right now, Mr. Speaker, between $70 million and $100 million - would be going from Ottawa to First Nations, and it would be monies being spent in the Yukon. Now, some are in trust funds and put away for 15 years. Others have gone to pay for elders and some have been used for economic development.

I would think that would be a very positive thing, given the special relationship we have - or that government has - with the government in Ottawa to get that done.

First Nations are very interested in this. They have suggested many ways of how this could happen. The other one, of course, the section 87, which, yes, was an issue to the Liberal government - but where do they go with that? What do they do with it? There's nothing, other than it's outstanding and they are working on it.

But we had an Income Tax Act passed through the House. It was an opportunity for the Liberal government to act in good faith and do their portion when it comes to First Nation wanting at least that section - section 87 - to be forgiven until such time as they ratify the agreements. That is for those First Nations that don't have final agreements. There are not many of them right now, but it would put them in fair playing grounds, as other First Nations had with the break that they got when they ratified their agreements. So, as a top priority, is it really a top priority of this Liberal government? I would think not, because their inability to do and act upon - and given the opportunities that they have - suggests that there is no action and it's not of that much importance to the members opposite. But maybe it's a good thing for promotions and promoting mining, that they're pushing hard the land claim agreements. It's key for certainty and increased economic activity. If that's the case, Mr. Speaker, it's a shame, a crying shame that that type of approach is taken.

The implementation of land claims agreements are really important, and they could move the economy in the Yukon a lot further ahead than where it is right now. We have seen a huge increase in activities with First Nations when it comes to them wanting to implement their final agreements.

The training that has been taking place, the setting up of their offices - this is not an easy job. I don't think any government can come in and just set up that quickly, without a huge injection of dollars.

You look at Nunavut, which is obviously getting a whole pile of money for setting up their offices, and they're basically taking a model from the Northwest Territories. But here we have individual First Nations trying to set up a government structure. Now, how do you go about doing that and try not to duplicate what maybe your neighbouring First Nation is doing? The Northern Tutchone, the three First Nations - how do you set up a lands office and make available to the public information that's readily available, with regard to maps that have been agreed to and passed through the final agreement? Laws that need to be passed, whether they're hunting laws or whatnot - it's a difficult thing for a very small population, and it needs help, and it needs the respect of this territorial government and of the federal government, and it's not happening.

Devolution was another big point that this Liberal government wanted to do. It's one of their seven points, and they wanted to be graded on achieving devolution. We've heard over and over again - even from the Premier - about the delay that is basically taking place now. We're not going to have control of our resources in April 2001. It's a year from then - April 2002.

But what was said was that it basically gives us enough time now to negotiate this devolution. Mr. Speaker, that negotiation is already done, and it has been done for awhile.

The federal government is working on the Yukon Act, Mr. Speaker, so that they can have the tools to pass through the House to bring that responsibility down to the Yukon level. Of course, the federal election has thrown a wrench into this process, but I did not hear the Premier say to the public out there that they'd be pushing hard to make sure this is the first item on the agenda. As a matter of fact, the Liberals said if they get back into power - which they probably will, but maybe with a minority government - they would reconvene Parliament immediately. I did not hear the Premier say at all - or pressure the federal Liberal government to make sure devolution is on the table. I did not hear that, but there was a willingness to wait for another year.

Mr. Speaker, that's two years already. Now, we'll be going through a change of ministers. If it ended up as a minority government, then there would be a lot more discussion from opposition parties in passing this through the House of Commons.

It's a scary thing - when there is an opportunity, you go after it. There was an opportunity. They didn't take it upon themselves to see devolution as important, and I think it's a shame. First Nations, on the other hand, have been working hard on this. They have worked hard with the previous government to have some devolution take place, and that was oil and gas. It's the first time we have ever had control of oil and gas in the Yukon; it was the first time in 20 years that there was a land sale under the NDP.

I noticed in the throne speech and in the budget speech that the $20 million that Anderson Exploration is going to be spending here came up again. It's the same money as the previous year, Mr. Speaker, so there's nothing new in that respect.

First Nations are working hard on PSTAs. They want to be implementing their agreements. I haven't heard a whole lot coming from the Liberal side from Education or from the Premier about this very important matter. I thought it would have taken place, because it really could affect the different departments in government. If First Nations, for example, are not satisfied with the standards or the school system that the Yukon government has had in place for many years, they have the option to negotiate and draw that down to their level. Like a school board, they could hire their own staff, their own teachers and principals and so on, and set their own standards and create their own curriculum.

Well, in my view, Mr. Speaker, I think that governments should be working very close with First Nations so as to not have two schools in one community or duplicating programs that we have in place. The First Nation realizes this, too. They are willing to work with our present system, but if things don't move, they will move the other way. And the people, of course, that will suffer the most out of this whole thing or could benefit the most, would be the children.

Out of all this talk about oil and gas, mining, development and forestry, I haven't heard the Liberal government talk about land use planning at all - nothing about land use planning.

This is a pretty important tool, Mr. Speaker, and it could create a lot of good things for Yukoners, if we move at the speed we should be moving. It will give a lot of certainty to Yukon, and to investors who want to invest in the Yukon. Yet I haven't heard a whole lot coming from that Liberal government at all, on this very, very important item.

There is a lot of frustration building up right now, with First Nations wanting land use planning to take place. It's part of their final agreement. We have to do it, and delaying it is not the way to do it. Vuntut Gwitchin is putting its team together, and moving ahead. Teslin - although they have overlap issues - is moving ahead. Northern Tutchone - three First Nations that take approximately 25 percent of the total land base in the Yukon, putting all their territories together, 20 or 25 percent - that land use plan is not taking place. They want it done. I haven't heard anything coming forward from the members opposite about support, or giving new advice about how to make this happen. Things change from day to day, and this is very important to Yukon for the development of Yukon, for increased activity in the mining sector, and oil and gas for the Yukon.

There is also another one that's important, and that's the protected areas strategy. Now, the Liberal government has said that they are going to review the protected areas strategy, and that they will do it through - get this, Mr. Speaker - mining exploration. Those are the words from the Premier. The words from the Premier are that YPAS will be implemented through mining exploration.

That's the words out of Hansard, anyway, that I see.

I think it's a shame, Mr. Speaker. They said it didn't work and that it was no good - voted against it when they were on this side of the House. They did not want to see protected areas. The Tourism minister voted against that. They couldn't see the importance of having that type of strategy in place, a tool to work with for looking at important places in the Yukon, whether it's calving grounds or habitat protection of some type, and having the tool to deal with it.

It was a bad thing. It was no good until they got in government and saw the benefits that took place with the fishing branch. Then, all of a sudden, it was a good thing and they smiled in front of the camera as they cut the ribbon. That was a flip-flop. They voted against it, but when they really looked at the details, they knew it was a good thing.

One of their priorities as government was to review YPAS, to make sure that the Chamber of Mines had a bigger say on the process for developing protected areas. They were going to take it out to the people who developed this. It wasn't the NDP government that developed this strategy, Mr. Speaker. It was the organizations out there - people in the Yukon, in the environmental community and the mining community. They all developed this strategy together. Yet, that Liberal government did not like it. They said it did not work. It didn't work, until they had to cut a ribbon and then it was okay. But they promised Yukoners that they were going to do an extensive review of the strategy.

I haven't seen a team put together. I would think that if they're really serious about doing a review and if what they have been proposing changes the strategy tremendously, they would take it back out to the people and make sure that everybody has input into how these changes are being made. Maybe it's going to evolve into the Yukon mining strategy or something like that. I hope not.

There was a lot of discussion about how this government will be moving forward in southeast Yukon, looking for a protected area there, but there has not been one mention since they have come into this House about that - not one mention.

We have Wolf Lake and Y2Y still to deal with. People would like to know what's next on the list. Where are they working? They want to know if there's input. They don't want it to be snookered in with, "Oh, we've done this and now can I have your comment", as they have been doing in the past. They don't want that to happen.

Mr. Speaker, the Premier said that this supplementary budget of $37-million spending is on top of the $500 million that has been spent - it's all about the future. That's what she said.

A few months ago, they were crying poverty and shut the school down because it was $500,000 over, but they are spending $37 million in addition. They couldn't do it on the Mayo school but that's what they're doing. They're going back to the future and they're spending the money on themselves - on government - making government bigger, with more O&M. I can remember the debates in this House about O&M bad, capital good.

Now, the increases are over six percent - 6.4 percent - in O&M. That's a pretty large jump. On a supplementary budget, that's a large jump. That's probably setting a record. I've never seen a supplementary budget that high in pushing the O&M that high in government.

What's being promoted here by the Premier and the Liberal Party is a lopsided government - focus on mining and oil and gas and little else as far as development. And I could tell you that people in the Yukon are looking beyond that. We've always depended on the resource sector in the Yukon, particularly mining, and it has always been a boom-or-bust economy - we're doing well, then we're down in the hole the next year, and then we're doing well, then we're down in the hole. People wanted to move away from that. Do we have more to offer the world than our minerals? There's a lot we have to offer, and I haven't heard this Liberal government say at all what they're supporting, what they can support, any new thoughts or any new initiatives put forward with regard to the economy.

There's nothing about diversification. They mention it a couple of times. Even in their supplementary, they've mentioned diversification. Maybe it's just to have that word in the supplementary budget. But what does it mean to them? Trade and export was just a no-no with the Liberals when they were in opposition. Now, the Premier has booked a flight to China.

So we have the Tourism minister, who was going to be concentrating closer to home, dealing with Alaska and B.C., trying to increase road traffic. We have a Premier who was going to be dealing closer to home, same thing, Alaska, B.C., Canada. And what we've seen is increased travel. I would like to see the travel budget of these members opposite in their first six months.

The very first day after being sworn in - the same day she was sworn in - the Tourism minister was off, heading to Calgary, without any instruction. Maybe she had a few written words, but without knowing her department and without being given good direction by Yukoners, she was out there promoting, or trying to promote, Yukon. What we heard was that she did like to fly, and liked to see different places, and of course, she enjoyed the meal.

We've seen the Premier accept the Prime Minister's private jet to the Yukon, which cost $30,000, to pick up the Premier and take her to Ottawa for a dinner and fly her back. That's what we've seen.

And the Premier accepted it; she thought it was a wise way to spend taxpayers' dollars. It wasn't Yukon money, but it was taxpayers' dollars. And it was okay for that. It was okay for her. But at the same time, before she left the airport, our MP - who happens to be NDP - was waiting for the same plane, waiting for a ride. She was not offered a ride to the same destination as the Premier. What a shame.

What we have is a Liberal government now that's pushing oil and gas and really relying on decisions being made outside the territory. Pushing for oil and gas, the pipeline and promoting it are all good things, but the decision is not going to be the Yukon government's at all. It will not be Foothills Pipe Lines that makes the decision. It is the other companies involved, that have the dollars, that are going to make this project work. The member knows that but does not give that proper information to Yukoners.

She knows full well that, sure, the mining industry is very important. There doesn't seem to be a whole lot of support for placer miners of the Yukon, but we're basically relying on mineral prices that may or may not go up in the future. It's all about "back to the future", Mr. Speaker.

They said they wanted to focus on efficiency and to spend our money wisely. The Member for Whitehorse Centre said, "We just don't throw money at things." That's what was said. Well, I think there was a problem here, and money was thrown at things, Mr. Speaker, many different times.

How do you resolve all the support you have out there, the front-line workers in the campaign? Well, you give them a job, a high-paying job with taxpayers' dollars.

You don't need to go through a proper process. Just give them a job. Take care of your own instead of looking at Yukon - throwing pork chops out there, Mr. Speaker.

Yet, when it comes to really important issues and programs in the Yukon that provided jobs to communities, that provided winter work for many of the communities inside and outside of Whitehorse, they cancelled it or scrapped it. They call it "under review." What does that mean, Mr. Speaker - "It's under review"?

The community development fund is under review. There is no assurance by this government that it would be continued. We have urged the government over and over and over again to make sure that this important fund continues and that communities do look at their priorities and have it funded by this one mechanism that we have out there, this program, when you can't find monies anywhere else to fund their priorities. And I think the Liberals across the way just don't agree with one another. The Member for Whitehorse Centre says that we are not going to be focused on recreation centres, that we don't see that as important to communities. That's because he hasn't gone to the communities to see what the communities want.

Another member stands up in support of recreation facilities. In putting their budget together, you have to wonder how they come to a conclusion on the supplementary, because every day in this House - in Question Period, even - they say two different things.

In the response to motions, backbenchers have something different to say than what Cabinet is saying. It's quite obvious that they're not talking with one another, particularly when it comes to recreation facilities. They say they don't see the benefit of CDF. Well, the Minister of Health and Social Services said that he was in Mayo and had a little pool game with one of the youth in Mayo. Well, that project was a CDF project - the youth centre. They hadn't had one for so long; it was a priority. They put that project together, and the Minister of Health and Social Services enjoyed that.

What I would like to see the Premier do, if she wants to do a review of CDF, is review some of the CDF projects that are out there and see what could be enhanced now. Quite often things change. Recreation centres and youth centres in particular can always use improvements. So I would like to see more dollars go into that, and doing improvements to what is out there now. There are day cares and there are cooking courses that communities have enjoyed through the CDF. I remember going to the final day in Carmacks, where they had a cooking course, and they had students from Carcross taking that course. It was fantastic, and they loved it. And I was amazed at what they can do. This was a camp-cooking course, and it took a couple of thousand dollars of CDF money - a few thousand dollars of CDF money - to help make that happen, and the community appreciated that.

We have others under review. The trade and investment fund and tourism marketing fund are under review; fire smart program is under review. It's basically attached - separate, though, but attached - to the CDF, because applications get approved or rejected through the same mechanism as a CDF, but that's under review.

And I can remember the Liberals, in opposition, talking about the importance of having safe communities. This is as a result of the Minto fire, of the Fox Lake fire, the threats to communities that took place, and maybe communities really needed to have some sort of protection or sense of protection that, yes, they do have a fireguard and it's basically a starting line to fight the fire and put it out - not that it would stop a fire by any means. But that was cancelled and scrapped - projects half done. The applications that came forward from Carmacks, from Mayo and other places across the territory were in phases, because you couldn't do it all at once; the cost was too high. What it did do was provide people with winter works and get a project going. Now it's half done, and it's okay for this Liberal government to cancel that important fund. Why is that? I can tell you right now that the people in the community are upset about initiatives such as this, which benefit communities, disappearing, and disappearing quickly with no hope in sight.

What about really important projects, or bigger projects than we have, that I have mentioned, like Connect Yukon? Connect Yukon is disconnected. This important project did not cost governments any money. It would have taken the immigrant investor fund and invested it in an important project that benefits everybody in the communities, bringing their telephones and Internet access up to the same speed as Whitehorse.

Well, he may not feel that that is important, but between the businesses in Whitehorse, it's important. We want to communicate well to the communities. It's important. To the people in Keno, it is very important. Businesses are run out of that community by access to Internet, and it's slow and cumbersome. They go through Mayo. And, of course, people were very happy to see this project go ahead. And all of a sudden, Faro and Ross River are cut out of the loop because of changes being made by that government - a lack of information between one department and the other.

Now, the NDP had worked on important projects out there, and it takes a lot of energy to get some of these things done. The Liberal government had said that they are promoting and pushing mining. What happens if we have the Minto mine, for example, open up - or the one on Prospector Mountain - the Casino mine? What happens if the Casino mine opens up into production? That would require a road to go into it - a major road. If it's a small one, it's either going to be a highway or a road. If they were hauling the ore out toward Carmacks, up to Whitehorse, to Skagway, they would be hauling three to four times the ore that was hauled out of Faro. It is a huge, huge deposit, low grade, and they would have to basically have to mine it in massive amounts to make it work.

Where would we take it to - down the highway, Skagway or what? Right now we don't have proper port access. This government has been trying to negotiate and get something in place, basically, forever to make sure that our industry has tidewater access, and today it has been scrapped. It's not even under review. That's how bad it is. It's not even under review. This is really important. I thought there was support for the mining industry and for Yukon and it's all about the future. What happened to this really important project? Scrapped, not even under review. Talks didn't take place; there wasn't enough interest in it. What we have is a $37-million supplementary budget and no thought about the Haines and Skagway ports - nothing at all.

Now, the Liberal government cried poverty when coming into government six months ago. There was no money, nothing they can do. Any little project that went over gets delayed or cancelled, like the Mayo school, which was $500,000 over, and now it's $1 million over. Maybe in a week or two from now, it might be $2 million over. That's not counting what the community suffers from this. That's not counting that at all. I wonder if they're adding the cleaning of the school to that.

All along we had mentioned and made the public aware that there was at least $56.2 million in surplus, exactly what the Premier said in this House when she had her financial advisor from the Finance department here with her. That's what she said, on the same day that the rest of her caucus and Cabinet members were screaming, "$14 million" - the same day. That Premier allowed the ministers and the backbenchers to give misinformation to the general public out there and allowed them to cry poverty.

We underestimated what the surplus was, Mr. Speaker. It's $64 million. It's larger than we thought. The Liberals were left with a very good and sound financial position in taking over this government. It was very good - too sound - because they don't know what to do with the money. What they would like to do is make government larger. When everybody else in the Yukon is talking about the economy, they put money into creating bigger government. They had the opportunity and blew it.

The projected surplus for the current fiscal year has gone up, of course, from $15 million plus lapses to $30 million of actual lapses, and could likely move higher to $45 million. Now, what does that mean? Do we continue to get increases from Ottawa?

If we have a surplus of $45 million and all our projects are cancelled across the Yukon, or cancelled outside Whitehorse anyway, we could end up with a $100-million surplus. Then what would the government do? They'd be in trouble, because they don't know how to spend wisely and properly and spend to benefit Yukoners. They don't know how to do it and they have proven it here with this supplementary budget.

Now, they had a $20-million increase to the federal grant, which of course is going to be carried on into the future with at least a three-and-a-half percent to four-percent increase every year afterwards. Revenues, of course, are expected to climb, particularly revenues from the Kotaneelee project in southeast Yukon because of the increase in gas prices, and we're going to have that.

And, of course, these two wells are producing a lot more than the average wells are producing in Alberta. But, of course, the local revenues are expected to drop next year and to remain, basically, level. And according to the Premier - the Finance minister - she's expecting the local economy to rebound over the next few years. But according to the figures that she provided in this supplementary, the total revenues in 2003-04 are dropping, and they drop after next year, from $80 million to $74 million. And these aren't just numbers thrown out there. How did you arrive at $74 million, two consecutive years in a row, and then go up $1 million to $75 million? They must have very, very close calculations to do that.

I would think that, in any projection, that would have remained the same right across the board. But it went up in that final year, so the revenues jumped up in the final year, even though they're going down. And we have increased spending every year, higher than it has ever been, to 2003-04, with less revenues.

We have less revenue, a smaller deficit - well, that's nice to see a small number in there, as far as the deficit goes. Also, when it comes to surplus, here we have $64 million in surplus, and what we have done in the NDP is to make sure that we have at least $20 million in surplus to take care of emergencies, whether they're floods or fires or whatever. There's at least that $20 million there in the kitty all the time.

According to the Liberals' projections, in the years 2003 and 2004, we're right down to $12.5 million, and that's low, Mr. Speaker, very low. But that's their long-term projection, and that's what they see as far as a brighter future for the Yukon in four years. That's what they see: smaller surplus, smaller revenue and increased government spending.

Well, they're going to have to do that, Mr. Speaker, because, with this supplementary budget, it's already making government grow by 6.4 percent. With the bigger budget, it sits around 1 percent or 1.5 percent. Already we've seen it jump that high.

Mr. Speaker, the time being around 3:45 p.m. and pursuant to the agreement of the House leaders, debate should be now adjourned and the House move into Committee of the Whole for the purpose of having witnesses appear. I move that the debate be now adjourned.

Speaker: It has been moved by the leader of the official opposition that the debate be now adjourned.

Debate on second reading of Bill No. 3 accordingly adjourned

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

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

Motion agreed to

COMMITTEE OF THE WHOLE

Chair: I'll now call Committee of the Whole to order. Do members wish to take a brief recess until 4:00 p.m., at which time the witnesses from the Yukon Development Corporation will appear before the Committee, pursuant to Committee of the Whole Motion No. 1?

Some Hon. Members: Agreed.

Recess

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

Committee will now be dealing with the Yukon Development Corporation. I would remind all members to refer their remarks through the Chair.

Witnesses introduced

Hon. Ms. Duncan: It gives me great pleasure today to introduce the chair of the Yukon Development Corporation, Mr. Ray Wells, and the president of the Yukon Development Corporation, Mr. Rob McWilliam.

Mr. Wells, as chair, is also a member of the private sector in the Yukon. He does a challenging task, as a contribution of his public service, to Yukoners, serving as chair of the Yukon Development Corporation, and we appreciate his time. Mr. Rob McWilliam is president of the corporation. Neither of these individuals are strangers to this House, and it's a pleasure to welcome them back.

Earlier today, Mr. Chair, I announced that, during this term, our government will be bringing forward legislation to amend the Yukon Development Corporation Act and that our amendments would establish mechanisms for the accountability of Yukon Development Corporation to the House, to government, to the Legislature and to the public. It also clarifies the accountability of the minister to the House and to the public.

The appearance of witnesses today is one of the items that I certainly appreciated as a member of the opposition, and I'm proud to introduce them as the minister responsible today and also to reinforce our commitment that, as part of the legislative changes, we would be requiring the appearance of these individuals, as this is a very opportune time for members to pose questions of these individuals. I believe Mr. Wells is going to introduce some of the discussion with a brief statement to members of the House.

Mr. Wells: Mr. McWilliam and I are appearing on behalf of Yukon Development Corporation. We will attempt to address general questions you may have on our subsidiary, the Yukon Energy Corporation.

This is the fourth year that Yukon Development Corporation has appeared before you. In preparing this year, I was struck with the fact that for the first time we are not dealing with coping with the closure of the Faro mine, or preparing for direct management on a six-month transition, the fire damage at the Whitehorse Rapids hydro plant, the Y2K bug, or any other crisis that the corporation had to deal with over the past four years.

Instead, we're here to talk about the progress that the corporations have made toward achieving many of the goals that we could only identify previously.

In previous appearances, we had talked about our three-year transition plan for direct management. We are almost through the third year and have accomplished most of those transition objectives so that YEC can turn its full attention to addressing operational issues.

There are still those who question the decision to go to direct management, but I would point out that, while YEC has maintained or improved upon performance indicators such as safety and reliability, it has also been able to absorb all of the inflationary pressures and to deal with extraordinary events, like preparing to address the Y2K problem, without having to go back to the Yukon Utilities Board for general rate application.

When we appeared before you last December, I raised a number of issues in my opening remarks. I indicated that we were addressing the issue of corporate governance, developing a long-term infrastructure plan that would guide future investment, and we were looking at ways to close the gap created by the loss of the revenues at the Faro mine.

I indicated at that time that we were examining the Mayo-Dawson transmission line as a major component of our efforts to reduce the costs and increase revenues. Today, I would like to focus primarily on these issues.

In dealing with governance, I would note the minister has just issued a ministerial statement on the subject. The board of directors of the Yukon Development Corporation will be meeting with her on November 30, 2000, to set out a realistic process and a schedule to implement a new governance structure.

While the final timing for legislation to enshrine that structure is obviously a matter that will be discussed with the board, I can say that there has already been considerable work done to clarify the relationship between the government, the Yukon Development Corporation and the Yukon Energy Corporation that should help expedite that process.

One of the primary roles of the board of directors - of any board of directors for that matter, but for our board of directors - is to always be looking forward. Mr. McWilliam and his team have done an excellent job of managing the transition to direct management. However, in looking at the Yukon Energy Corporation moving forward, the board felt it needed to recruit a new president and CEO who have extensive background in the electrical industry. The separation of management for the two corporations helps to remove some of the public confusion that joint management always caused. Eliminating the schizoid relationship allows the respective managers to focus on the very different tasks that the two corporations are expected to achieve.

The Yukon Development Corporation's mandate is to focus on the big picture. As stated in the 1993 order-in-council, the Yukon Energy Corporation is to deal with energy-related activities designed to promote the economic development of the Yukon.

Yukon Energy is a regulated, public utility that is responsible for the delivery of safe, reliable, cost-effective electricity, and it needs to focus on operational issues that ensure it can achieve those objectives.

Another step that the Yukon Development Corporation has taken that will expedite work on clarifying the governance structure is that it has initiated work on a new strategic plan for the Yukon Development Corporation.

There have been questions about whether or not separating the two corporations will result in duplication and additional bureaucracy. The board of directors has no interest in seeing the corporation expand beyond that which is essential to deliver its core functions. However, there needs to be a common understanding of what the function of the corporations will be held accountable for. Once this has been done, and there is agreement with the owner, the Yukon government, about what is expected of the corporation, the board of directors will address issues such as the necessary staffing to adequately carry out the corporation's mandate.

The board of directors initiated the strategic planning exercise at its July meeting. It will be working with the government over the next few months to ensure that there is common understanding of the roles that the Yukon Development Corporation will be expected to perform, and then the plan will be finalized. The corporation looks forward to being able to discuss this strategic plan with you when we next appear.

While governance is a critical issue, the corporation does not want to lose sight of the fact that its mandate is to deal with energy issues in a way that can promote sustainable development for the Yukon.

Both Yukon Development and Yukon Energy Corporation have been working the on development of a long-term infrastructure vision that will guide future investments. While part of the plan is ensuring that we stay abreast of emerging technologies in the energy field and actively promote applied research in the Yukon on new forms of generating or transmitting energy, which is why the Yukon Development Corporation is supporting the wind program and has invested in other research on new energy stations such as hydrogen, the primary thrust in the infrastructure plan is to complete a Yukon electrical grid.

As we have said in relation to the Mayo-Dawson project, this is just the first phase in implementing the much larger vision of providing Yukoners with electrical infrastructure that we believe will help stimulate economic development. While the tender process is proceeding for the Mayo-Dawson project, Yukon Development Corporation is also initiating planning and permitting activities on the Carmacks to Stewart Crossing inter-tie. The corporation recognizes that the planning and permitting phase can take two to three years to complete. We want to be in a position to respond when the need is identified, so that the Development Corporation is prepared to undertake the upfront cost to ensure that we can respond promptly.

A priority that emerged out of our infrastructure planning was the Mayo-Dawson transmission line. As we stated last year, this project is a high priority, because it offers the potential to reduce rates for all Yukon ratepayers. After I was appointed chair of the board, I met with James Smith to get his perspective, as a former chair of the Northern Canada Power Commission. In sharing his thoughts with me, Mr. Smith talked about NCPC's interest in a Mayo-Dawson line.

In the early 1990s, the project became a high priority for Yukon Energy Corporation. Alberta Power did the engineering and costing. The transmission right-of-way was submitted for environmental assessment and was approved. The corridor was being protected in land claims negotiations with both Nacho Nyak Dun and Tr'ondk Hwch'in. It was addressed by the Yukon Utilities Board in the capital plan hearing of 1992. It was recommended that no further work be done on the project until the Dawson demand increased.

In 1998, the corporations, in looking at options to close the gap, decided to review the Mayo-Dawson project. What a change between 1993 and 1998. The electrical load had grown by 25 percent, and the corporation was now becoming concerned about the Dawson plan to cope with demand. At the same time, fuel costs had gone up by 25 percent - and I would add that currently they are 82 percent higher - and interest rates, which had been the main reason the project had not proceeded back in 1992, have gone down by 37 percent.

The corporation initiated a feasibility study that looked at all of these factors plus what alternatives it had to expanding the Dawson diesel capacity, which would be the status quo alternative. It concluded the project was viable and could have a significant, positive impact on rates. In our base case, which used fuel at 35 cents per litre, or roughly $22 U.S. per barrel, there would be a positive impact on rates by year 6, and that would increase in value thereafter.

The feasibility study also demonstrated that there were measures that could be taken to ensure there was no negative impact on ratepayers over the short term. In conducting the study, the board of directors wanted to ensure that very conservative assumptions were made on variables such as cost of diesel and interest rates. Sensitivity analyses were done on many different scenarios, but the final conclusion was that the project was worth reactivating.

Once the feasibility study was completed, the corporation initiated public consultation with the affected communities. It met with the municipal and First Nations leaders in both Mayo and Dawson; and while trying to avoid creating unrealistic expectations because there were still may issues to resolve, it did initiate discussions about the project. Public communications on the project is continuing. For example, public meetings are planned in Mayo, Dawson and Whitehorse later this month.

All of this, I emphasize, is occurring with the board of directors providing a strong caveat that, if the project cannot be done for the approved budget, then it will not proceed.

Given the size of the project, the board wanted to ensure that the feasibility study was subjected to rigorous scrutiny. YDC commissioned B.C. Hydro to conduct an independent peer review. The conclusions of that study were also positive. The board then concluded that, rather than make a final decision at that point, Yukon Development would finance the system design study to ensure that the costing was accurate and that all the technical issues were adequately addressed.

This work was done in 1999 and early 2000 by B.C. Hydro, who will stand behind the design, and I want to emphasize that we ensured that the contract with B.C. Hydro included the requirement that B.C. Hydro would provide errors and omissions insurance for the project.

With this information at hand, the board of directors looked at how they could maximize the project benefit for Yukoners. Yukon Development Corporation has committed to providing flexible financing for the project, so ratepayers are protected in case there are any short-term negative impacts, and has further provided a $4-million contribution from YDC that will result in ratepayers seeing a positive impact on rates two years sooner than would have otherwise been the case. Actually, with increasing diesel prices, the economics of the project are looking better all the time.

The base case, which would have required four years for the project to break even in annualized cost, was based on 35 cents a litre, or $22 U.S. a barrel. The corporation is currently paying 51 cents per litre, or $35 a barrel, which means it would generate a savings for customers from year 1.

Over the 40-year life of the transmission line, that means that the project savings would go from roughly $14 million on a net present-value basis to more than $24 million. The corporation does not expect that diesel prices will remain as high as they currently are. However, the break-even point of the project is fuel at 17 cents per litre, or $5 a barrel, and no analyst expects to see diesel prices ever go back to that level.

Even at 35 cents a litre, or $22 per barrel, it is very optimistic under the current predictions.

In assessing the project, the corporation looked at other potential energy demands for the Mayo system. What if the United Keno Hill mine resumed operation? What if a new mine at Dublin Gulch opened? The conclusion was that there's adequate energy for Dawson, even if UKHM were to reopen. Out of the 40 gigawatt hours that Mayo is currently capable of producing, Dawson would require 16 gigawatt hours. The corporation also considered other alternatives to the transmission line.

The bottom line is that the status quo involves a significant investment in new and larger generators, plus expensive fuel, and that begs the real question: do we spend money on the Mayo-Dawson line, or over $42 million to continue to rely on fossil fuels in the same period of time? All of the options that were reviewed were more expensive than the transmission line and don't provide potential for long-term reductions in electrical rates for Yukoners. The transmission line can provide reductions in electrical rates, which goes a long way toward closing the gap that we earlier talked about. In addition, we believe that the transmission line will facilitate the development of additional energy sources since we will provide a conduit to move energy to communities where there is demand.

While Yukon Energy's focus is on electricity generation, Yukon Development Corporation is looking at the general impact of the project on the economy. If the project proceeds, it will result in more than 70 person years of direct employment over two years, and over $11 million in Yukon expenditures.

There is a benefits agreement with both First Nations that commits maximizing First Nation and Yukon benefits.

Mr. Chair, I have gone on at some length about the Mayo-Dawson transmission line, but I'm sure that this is an issue that the members want to discuss in detail. If I have gone into too much detail, I apologize for taking up too much time here in the Legislature.

The corporation believes that this is a win-win story and is pleased to discuss it whenever we do get the chance. For additional information, I have brought copies of the handouts that we will be providing to our public meetings later in the month.

Mr. Keenan: On behalf of the official opposition, I would like to welcome Mr. Wells and Mr. McWilliam to the Legislature. It's always a privilege to speak with the folks and to be able to get a deeper understanding. It was a very, very good introduction by Mr. Wells, if I may. Mr. Wells has inadvertently answered every question I wanted to ask him, so I am going to take Mr. Wells one more time through some of those questions.

Mr. Chair, on the news today, it was brought forward by the minister that they will eventually create new legislation to amend the Yukon Development Corporation Act. What are the Yukon Development Corporation's expectations with respect to this announcement and what interim measures are required to ensure the workings Yukon Development Corporation are not adversely affected?

Mr. Wells: I don't believe in the short term that there needs to be anything done to ensure that there's no negative impact on the operations of the Yukon Development Corporation. We have met with the minister previously and will be meeting again, as stated, in November to make sure we have got a clear understanding of the direction of the government. I apologize. You had two parts to that question. What was the other part of the question?

Mr. Keenan: Have any interim measures been identified ensure what we have now is a governance agreement that is gone, and we are going to go over to a letter of understanding. There is going to be a gap.

Mr. Wells: I guess to repeat then, no, I don't think that there need to be any interim measures to ensure that the corporation continues to operate effectively.

Mr. Keenan: Thank you very much, Mr. Chair; that answers the question. I'd like to know also if we have a final dollar figure per year with respect to the costs of direct management.

Mr. McWilliam: Just for clarification, I believe Mr. Keenan is asking about the cost of direct management of Yukon Energy Corporation as opposed to using contract management. Is that correct?

Mr. Keenan: Yes, Mr. Chair.

Mr. McWilliam: The costs of operating Yukon Energy Corporation are as reported in our audited financial statements. At the time that we went to direct management, there was $1 million for capital that Yukon Energy Corporation approved to spend that, as well as, I believe, we spent $950,000 on operation and maintenance costs to implement direct management.

Those dollars came from Yukon Development Corporation, rather than being passed on to ratepayers. So, I'm not sure if that answers the question, but those were the costs.

Mr. Keenan: Yes, it does answer the question. There were one-time costs of $1 million for capital and $950,000 operation and maintenance costs. Thank you.

Mr. Chair, I'd like to move on, I guess, and get, before I get into the Mayo-Dawson gridline, an update on the status of the hydro sites that are out there now, such as, of course, the Mayo, the Aishihik, Marsh Lake, Tagish, et cetera.

Mr. McWilliam: In terms of providing an update, I'm not sure exactly how much information you want me to go into, but in general we have three hydro sites - Mayo, Whitehorse, and Aishihik. All three were sort of up for licence renewal. During the last year, we have renewed the licences for both Mayo and Whitehorse, and Aishihik is going through a much more involved process.

We have filed our environmental application. It's currently going through a screening, which is led by the Department of Indian and Northern Affairs and the Department of Fisheries and Oceans.

That screening is going on. There is a Water Board hearing that is tentatively scheduled for April to deal with the Aishihik licence.

Other than that, I think the only other bit of information I could provide is that we are at high water levels with Aishihik, certainly much sooner than we anticipated being there because of the very wet year we've had. So our reservoirs are refilled; and we have lots of power but, unfortunately, not a lot of people to sell it to.

Mr. Keenan: So I take it that it will be concluded after the Water Board meets in April.

Mr. McWilliam: That's correct.

As I said, the date for the Water Board hearing is tentatively scheduled for April. The screening report, which is something that is a responsibility of DIAND, has a bearing on that as well, but we have a date in April when we're supposed to be before the Water Board, and hopefully that will conclude it.

Mr. Keenan: If I could, Mr. Chair, I'd like the witnesses to get into a little more detail on the Mayo to Dawson grid.

I met earlier with the distinguished members, so I have a little bit of a knowledge base on this, and I'd like to get it on the public record. I'd like to get a breakdown as to the tendering processes and how they will play out. I understand that the pre-qualification process has been done, and that six companies have been short-listed. Could you elaborate a bit, please, Mr. Chair?

Mr. McWilliam: That's correct. The process that we are going through to enter into a contract includes design, engineer, procure, construct. So it will be one large consortium that bids on the whole package. It was being done in two stages. The first stage was pre-qualification. One of the requirements of that was that any company that was interested had to come up and partake in a tour of the line, including meeting in both the communities with the local businesses. That occurred in early September. We received proposals back. The pre-qualification indicated that we would go with the six best, and we will be shortly issuing request for proposal documents to those six firms. The information that we passed out, as Mr. Wells mentioned, is for use in the public meetings that are coming up. At the back of it, there is a list of the six consortiums that will be bidding on the project.

Mr. Keenan: Could the witness provide when the contract could be awarded?

Mr. McWilliam: I believe that the schedule currently calls for the request for proposal to close in early January. There would be an evaluation then of the bids and I would expect there would be an award by early February. That would be my sense.

Mr. Keenan: I'd like to get from the witnesses just a short explanation of the work that has been done to date, including the First Nation governments and, I would say, the municipal governments in the tendering process, as well as what guarantees there might be for the First Nation participation and also the municipal. And I shouldn't restrict it just to the municipality, because there are certainly others that are in the surrounding areas, but I'm sure the distinguished members know what I'm talking about - or guests of the Legislature, pardon me - and any local hire when that actual construction begins.

Mr. McWilliam: Yes, as Mr. Wells was indicating in his opening remarks, as soon as YEC had completed the feasibility study and decided that this was a project worth pursuing, we undertook meetings with municipal leaders and First Nations in both Mayo and Dawson. The early meetings we would have to characterize as having some scepticism. Certainly we heard that people had heard these things before, and there were references to lunch boxes that had been packed back in 1992 and the sandwiches were getting awfully stale. So, there was a certain amount of healthy scepticism that the project was actually going to go this time.

However, we did get from both municipalities what kind of conditions they would like to see the project proceed under and we then entered into negotiations with both of the First Nations for a benefits agreement. This was something that we were doing under chapter 22 of the land claims, which speaks to strategic investments.

While it might not have been absolutely necessary with this particular project, we felt that, in developing good working relationships with the communities and the First Nations, it was an important aspect of the project.

We conducted a series of negotiations that resulted in a benefits agreement, which has both First Nations as signatories to the same agreement. It does speak to benefits for not only First Nations but for Yukon citizens and businesses. Among other things, it creates a steering committee with the two First Nations on it that develops criteria for assessing the local content. We indicated that, in terms of the bidding, 20 percent of the criteria for determining the successful bidder would be the local content of their proposal. We worked with the First Nation representatives in terms of clarifying exactly how the criteria would be spelled out and applied. They will be involved in terms of evaluating that criteria. It breaks down in terms of there being certain points that are awarded for a First Nation business, and there are points that are awarded for being a Yukon business, and if somebody is able to maximize by having First Nation and Yukon businesses collectively in it, they can get the maximum number of points.

There are other things in the benefits agreement that are addressed, including training, some scholarships for both Nacho Nyak Dun and Tr'ondk Hwch'in youth, and there is a provision for the First Nations to exercise a provision that is provided under the strategic investments chapter of their land claim agreements. We are offering them an opportunity to participate in this project by essentially taking out a debenture on the project, which will have a very attractive revenue stream. We have indicated that they can exercise up to 49 percent of the value of the project, if they so choose, and there is a six-month window for the First Nations to determine if they feel this is an attractive enough investment and to exercise that option.

Mr. Keenan: The member, with his detail, has answered three more of my questions. I appreciate that also.

The training initiatives that are happening and are contained in the benefits agreement - will we be getting a copy of the benefits agreement? Is it part of the attachment here? That's just a sidebar to what I'd like to know. I'd like to know how much employment is being created with this. How many person-years or FTEs or whatever are we looking at?

Mr. McWilliam: The benefits agreement is not attached. This is just summary-level information. It does speak in here to the fact that there is a benefits agreement. The release of the agreement is certainly something that we'd be prepared to do. But before we actually submitted it for tabling in the Legislature, I'd want to make sure that we had the concurrence of our partners - the Nacho Nyak Dun and the Tr'ondk Hwch'in. We can speak to the general principles in it, and if there is a desire to see it here, I would undertake to go back and request their permission to table it.

I believe that Mr. Wells, in his opening remarks, referred to the fact that we're looking at approximately 70 person-years of employment over the two years of construction activity in the Yukon. There are obviously additional employment opportunities, but a good deal of the design, for example, would be done outside by the firms that are bringing their expertise to this. So, we're looking at approximately 70 person-years of direct employment.

In addition to that, through the business opportunities, we would expect there to be spinoff employment, as well. Through the benefits agreement, we have committed to provide information sessions in both Mayo and Dawson about direct employment opportunities. We will be taking representatives from both First Nations out to view a transmission project that's under construction so they can get some sense of the scale and the speed at which this type of work is done.

And we provided a list of all the employment opportunities related to the project; that's out there now. Yukon Energy Corporation has retained a gentleman, Mr. Ted Staffen, as a business facilitator for the project. While we have commitments to maximizing Yukon benefits in the project, our concern was that if we didn't do something to actually get out and encourage people to take advantage and give them some assistance in terms of learning how to deal with some of these companies, the opportunities might not be taken up. So we've retained Mr. Staffen to work with local business people. Those are examples of what we're doing to try and maximize local benefits.

Mr. Keenan: Again, Mr. Chair, I applaud the witnesses for providing the detail and the ability to work with communities and to go the extra mile to get the communities involved. It's certainly very much appreciated.

I'd like to know a little bit about - I guess from start date to completion date, what would the time frame be?

Mr. McWilliam: The project, basically, once you're in the field, is approximately 18 months. This is looking at the clearing of the right-of-way. There may be some areas of particular sensitivity - you know, permafrost-rich areas that we would want to clear earlier in the spring before breakup, but the majority of the clearing we would see happening probably in the following fall, and then construction happening in the winter. The schedule would be for us to be into the final commissioning stage by the fall of 2002, with power being on by the end of the year.

It's roughly a two-year process.

Mr. Keenan: I'd like the witnesses to provide me, if they could, Mr. Chair: do we have the capacity within the Yukon Territory, and will we have the capacity within the Yukon Territory, through the training initiatives, to complete this job, say, in-house? Now, I understand that there are six short listed, and they're being invited, and I take it that most of them would probably be from outside. But I'm kind of concerned that Yukoners will be stuck running a chainsaw or a skidder, or something like as such, and that will be the bottom line on it.

So, could you fellows provide some type of a percentage of what would happen in-house, in the Yukon, through what's needed for training, and if the training would supply that capacity?

Mr. McWilliam: Certainly we don't have the capacity to do all of this within the Yukon. There is a large component of it, which is very technical - the engineering and the design work, for example. Even a lot of the transmission work would certainly tax the resources of existing firms. You know, we have a couple of firms such as Arctic Power, to mention one, that could certainly work on this project, but they couldn't do the transmission line construction by themselves. It's just too big a project.

In terms of training, there are a number of positions, which, essentially, are journeyman trades. These are the types of things in which you go through an apprenticeship, and there's quite a lengthy sort of training period.

So, it's unlikely that Yukoners could get trained and access those. I'm not sure that we would even want to recommend that they do go after some of those jobs, because, as I mentioned, we have 18 months of construction here, and then these people are on to the next big project, not likely in the Yukon.

There are, I think, better opportunities, particularly in some of the business opportunities. And that's where I think we'll see more of the Yukon activity. But certainly firms like Arctic Power and the construction firms have a considerable amount of expertise that can be used on this project.

Mr. Keenan: Thank you again for the witness' answer, Mr. Chair, because even if one or two individuals got a start on a journeyman ticket here in the Yukon Territory and carried on, wherever they went in the journey of their life, it would certainly still be of benefit to the Yukon Territory.

On the investment opportunity, that's open, I guess, on a government basis. Is it also open on an individual basis for citizens of the First Nations?

Mr. McWilliam: If I could, just before speaking about the investment, one thing I should mention about the journeyman positions - I mentioned that the benefits agreement does address training. One of the other things that we have in there is a commitment to the First Nations that YEC will provide an ongoing apprenticeship for one First Nation member, the concept being that we will bring somebody on. They could train as an electrician, a lineman or a heavy duty mechanic - any of the trades which YEC provides - and once trained, then they could move on and the other First Nation has the opportunity to put somebody forward for an apprenticeship training opportunity.

So, that's an ongoing training opportunity that the two First Nations will benefit from under this particular agreement.

In terms of the investment opportunity, this is being done as a strategic investment under chapter 22 of the First Nations land claims agreements, so it's very much us dealing with the First Nations in meeting our obligations under land claims.

So, I don't get to invest in this project either.

Mr. Keenan: Mr. Chair, when we negotiated chapter 22, I always had a nagging feeling that I was leaving something out and now I have discovered what it is. Thank you.

I'd like to ask about the environmental aspects and the environmental screening process of what has gone through. Could you elaborate on that for a bit, please, Mr. Chair?

Mr. McWilliam: The environmental screening was done back in 1992. At that time, DIAND undertook the screening. At the end of it, we were issued a certificate, and we subsequently received a licence of occupancy for the transmission line.

So, we will have to apply for specific permits for access roads, timber cutting, et cetera, but those would be done in the normal course as we proceed with construction, and we're not anticipating any problems on those. The benefits agreement also speaks to our sharing information with the First Nations on all aspects related to the environment and has a number of provisions in there that meet the First Nations' interests in protecting the environment, as well.

Mr. Keenan: Mr. Chair, I'd like for the witnesses to provide that. After the power line is completed and Dawson becomes mostly diesel-free - I understand that Dawson will never be diesel-free, as a backup. I'd like that confirmed, yea or nay, if I could. In terms of energy consumption, what type of savings will be realized from this, and when will those savings be realized? Will they be realized 30 years from now, or will there be savings immediately?

Mr. McWilliam: Just to speak to Dawson being diesel-free, it will be diesel-free in the way Teslin's diesel-free. You continue to maintain diesel units as backup. If you have an outage on the line, then you have the diesel there for reliability and security of supply. But, yes, the diesels will not be operating very much, similar to the situation here in Whitehorse.

In terms of when customers will see savings on rates related to the project, that really depends on what happens with diesel prices. I think Mr. Wells had mentioned in his opening remarks that if diesel prices stay where they are, there will be savings arriving very quickly. Under the 35-cent-a-litre scenario, which we use in trying to be very conservative, those savings would be appearing in year 4. The savings would build over time. It's not a case where you would see full savings within the first year, but it gets better as it goes along.

Mr. Keenan: It sounds like my personal bank account, and then it backs up again.

When we're talking about these savings now, will these savings be reflected to the consumer, or will these savings be directed toward infrastructure development?

Mr. McWilliam: The information that we have provided to the Yukon Utilities Board indicates what type of savings we're anticipating, and they have a role in determining where those savings go. So, it's not something that the corporation can do by itself. That's a matter for the YUB. They will also ultimately be looking at what we propose to put into rate base and then deciding whether or not that's an appropriate figure. So these are issues that they have to address.

Mr. Keenan: I was wondering if the - and I know it was talked about in Mr. Wells' opening remarks. But I'd like to find out what the oulook is, I guess, for the near- or long-term vision, with respect to the Carmacks and the Stewart inter-tie.

Mr. McWilliam: Yes, as Mr. Wells was saying in his opening remarks, we have initiated some planning work. The intention is that we would proceed with the planning and environmental permitting on that line, so that we can get it out of the way. In fact, it will be very much the same as the Dawson project, where the planning and environmental work was done almost a decade ago, then the project went on the shelf until the economics were right, and we're now able to proceed in relatively short order.

We would like to be in that position with the Carmacks-Stewart extension, so that we have the ability to respond quickly when there is a need. One of the concerns we had was that when we talked to mining firms, such as Minto Explorations - they were talking about their time frame, saying that from when they get financing to when they are in production will be two years. Well, if it's going to take us three years to get through the planning phase, then we're not going to be in a position to support their activities. So, we have initiated the work. YDC has budgeted for the work, so that's not a cost that's being passed on to ratepayers through YEC.

The plan would be that, at such a time as we proceed with the project in the future, those costs would become capitalized. But there is no cost to ratepayers for us going out and doing planning studies. We would fund that through YDC.

Mr. Keenan: Mr. Chair, I understand that Mr. Wells, in his opening remarks, had spoken about it, but there is concern with respect to the available capacity that the Mayo dam can produce to service both Mayo and Dawson. Now, we know there is some concern that if industrial customers were to appear along the route, such as mines, sawmills, et cetera, there would not be sufficient power to service these roads. I guess, to some folks, it makes it seem that it's not a worthwhile project. Again, I understand that was spoken to earlier, but I would like to get some assurances on this line's ability to service the future industry along that line. So, I guess, in essence, just what is the upper capacity?

Mr. McWilliam: Yes, this is something that was addressed. Actually, the material we handed out earlier for the public meetings contains a chart that has the Mayo grid energy requirements and available energy. I think, as Mr. Wells mentioned, there are 40 gigawatt hours of energy that are currently available through the Mayo plant. We have looked at a variety of scenarios - UKHM coming back on, new mines opening, et cetera - and we have the ability to handle what we can anticipate as the load. There is also some ability to expand production at Mayo, with some modifications to the equipment there. Relatively low-cost modifications would get us approximately another half megawatt. In comparison, the Mayo plant is a five-megawatt plant, so we could get another half megawatt out of that with some tuning up, if you'll forgive my non-technical language. So, when there is a need, we can expand there.

The other thing that we look at in terms of the transmission line is that it's basically a way to convey energy from point A to point B. It doesn't care where the energy comes from. If we were in a situation where we had a sudden increase in demand because there was a new industrial activity that came along - a new mine that we hadn't anticipated - we would go looking for additional supply, and this line gives us more flexibility around where that supply can come from.

Mr. Keenan: Mr. Chair, I have worked with the witness years before - in other lives and in this life here, too - and the witness understands that non-technical words like "tuning up" are very much suited to me and, I think, to the majority of Yukoners, so certainly, in non-technical slang, I prefer it that way.

I'd like to, I guess at this time, insert a question. I understand that, identified within many of the First Nation final agreements, there are hydro sites that are identified as hydro sites, I was wondering if there are any time frames or are these hydro sites being identified at this time for development?

Mr. McWilliam: This actually gives us an excellent opportunity to speak about another project that Yukon Development Corporation has that we're quite proud of, and that's the green power program. We will be issuing a call for expressions of interest from independent power producers here fairly shortly. The documents are pretty close to being ready to going out.

The target is really microhydro and we've spent a lot of time talking with First Nations about some opportunities that they may want to participate in. As you say, a number of sites that have been identified as having potential are in areas where First Nation governance is now applying. They could be sites that would be developed fairly early on in that green power program.

Mr. Keenan: Thanks very much again, Mr. Chair, for the witness' answer. I guess if I could at this time, I would like to move on and get an update from the witnesses on the Northern Cross initiative and the attempt to burn the crude oil and diesel generators. Have you got an update for us on that, sir?

Mr. McWilliam: Mr. Chair, I'm not sure how much of an update this is, but the current status is that we have tried twice to use the light crude in generators here in Whitehorse. Neither times were we successful in being able to burn it. With Northern Cross, we're looking at possibly trying some additional additives, but then they chose to go a different route. They acquired an old generator from the N.W.T. Power Corporation that had already been modified to burn crude. This is something that they purchased from Inuvik when it was surplused there.

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They brought it down to Dawson, and their thought was that they would go into the business as an independent power producer, produce and sell electricity to Yukon Energy Corporation. That plan, basically, went on the backburner when they decided to look more closely at the feasibility of a small-scale refinery. They'd been working with Economic Development, and we have provided some assistance in terms of information on our fuel requirements, et cetera. My understanding is that the feasibility study is expected to be out sometime in December, and at that time I'm sure we'll have more discussions with Northern Cross about what their future plans are. I know that in looking at a refinery, they were considering the possibility for what's called "cogen", where you can produce electricity through the operation, as well. However, they were also looking at a site that would be on the Whitehorse-Aishihik-Faro system. That's their preferred location for any refinery capacity.

Mr. Keenan: I'd like for the witnesses to provide me - what's the status of the rate stabilization fund, and how much is in the fund? I understand that it's going to be expiring in March 2002. What are the plans for it after that?

Mr. McWilliam: Well, if Mr. Keenan wants an exact number, I would have to make an undertaking to provide that back to him. I don't have that figure at my fingertips, so I'll undertake to provide that information. There is sufficient money in the rate stabilization fund now to, with the foreseeable contingencies in there, get the fund through to April 2002, when it is due to expire. There is a requirement for public consultation on the future beyond 2002, and that would be undertaken next year. I would expect that it probably would occur in the first quarter of next year so that plans could be made well in advance.

Mr. Keenan: Mr. Chair, that would be fine. The witness' offer to provide a written response would be fine.

Is there an idea of when the YEC/YDC will be going in front of the Utilities Board?

Mr. McWilliam: Obviously, that's not something that we do lightly, because there are substantial costs to a general rate application. You're looking at $500,000-plus just to hold a GRA, and normally a utility only goes there when they're looking at increasing the rates. I know, from discussions that we have had with Yukon Energy that they're trying their best to control costs so that they would not have to apply for a rate increase. So, at this time, they're not anticipating going forward. I can also tell you that, from discussions we have had with YECL, they're trying to do the same thing.

So, there's certainly no schedule for when either utility would be appearing before the YUB with a GRA.

Mr. Keenan: I just have a few more questions of the witnesses, and then I'll be turning it over to the learned Member for Klondike for his input.

Right now, I'd like to know what the status is of the energy solution centre proposal?

Mr. McWilliam: Actually, this is one of the areas where Mr. Wells, in his opening remarks, was referring to trying to keep the YDC operation as lean as we could. This is one of the opportunities we think that's there. There have been successful negotiations with the federal government, the Department of Natural Resources Canada, NRCAN, to fund a three-year program. We're looking at setting up an energy solution centre, which would allow us to share the cost of YDC office space and the energy solution centre, and also share some staff and equipment.

The expectation is that the centre will be operational by the end of this year. As you can appreciate, with federal elections going on, there are certain delays in the process.

Mr. Keenan: Yes, Mr. Chair, let's not get me dragged into political responses here, and then my level goes this way.

I just have one final question, and that is if the witness could provide me with a written response, a progress report on the implementation of the energy commission's final report by YEC and YDC.

Mr. McWilliam: I can certainly undertake to that, although YEC and YDC both contribute to the status report, which is coordinated by the Department of Economic Development. My understanding was that such a report would be tabled this session. But I can provide you with the information on what YDC and YEC have been doing on the recommendations that are specific to them.

Mr. Keenan:Mr. Chair, I'm finished now, and I will turn it over to the Member for Klondike. And I understand that the Member for Kluane may have some follow-up questions at the end, if time permits. I'd like to thank the witnesses for appearing.

Mr. Jenkins: I'd like to thank Mr. Wells and Mr. McWilliam for spending the time with us here this afternoon. I have a few questions about the current and forecasted financial position of YDC/YEC. Just what are they? What have we done with respect to our loans to Canada? Are we paying them down? Are we in a position where the demand for energy is such that these are being paid down, or are they static? What position are we forecasted to be in at the end of March 31, 2002, given that that is the timeline for when the rate stabilization fund will expire?

Mr. McWilliam: I'm not sure I can answer all of what the member is asking in one fell swoop, but I'll try.

In terms of the YDC finances, we have - and this goes back to the Ostashek government days - been accumulating funds in YDC for primarily energy infrastructure projects. There is approximately $12 million in that now. What the board has approved for the Mayo-Dawson project is a $4 million expenditure out of that.

At the same time, we're receiving an annual dividend of roughly $4 million a year from Yukon Energy Corporation, depending on what the year is like. But approximately $4 million a year is what we receive.

The loans with Canada - as Mr. Jenkins knows, there are two loans there. One we have actually gone and refinanced with the Toronto-Dominion at a better rate, and that's being paid off. That's not an issue there.

The one which continues to be somewhat problematic is what's called the flex-term note, for the fourth wheel at Whitehorse. Currently, we are not paying all of the interest on that loan. The provision of the loan is that the forgiveness of interest is tied to one threshold level. If you fall below another threshold, then principal and interest is forgiven. We are sort of caught in between those thresholds, so we have some interest relief, but we still are paying interest on the note, basically because the system demand increased beyond what was supposedly the threshold level, which originally was designed as a figure that was never expected to be exceeded, unless the Faro mine was on the system.

So that has been a bone of some contention with the federal government for some years. There is another issue that we've had some head-butting with the federal government over, and that is the requirement for the corporation to have to pay interest on any secondary sales that it may make, where we are selling power at three cents a kilowatt on an interruptible basis. We've taken the position with the federal government that the flex-term note does not speak to secondary sales and that we should not be paying for any secondary sales that we're able to generate. That's a position we've taken after some legal review of the issue, so we are not paying interest to the federal government on any of the secondary sales that we have at the present time.

Mr. Jenkins: So would it be the opinion of the management of Yukon Development Corporation that we are in arrears with respect to the flex-term note with Canada?

Mr. McWilliam: No, we're not in arrears. And while this dispute goes on about the application of secondary sales, we're simply holding that money, in effect, in trust. If someday they were able to prove to our satisfaction that the note did require us to pay on secondary sales, we would pay it at that point. However, our secondary sales program at this point is fairly small. It's not a significant amount at this time.

Mr. Jenkins: What is the order of magnitude of the interest that we're talking about that's in dispute, Mr. Chair?

Mr. McWilliam: I stand subject to correction here, when I have an opportunity to look at the details, but it's in the order of magnitude of $30,000 to $40,000 a year.

Mr. Jenkins: Let's look at what we're forecasting for this winter. Will we be able to supply most of the demand in the WAF grid, using hydro, or are we going to have to be peaking with diesel, and if so, to what extent?

Mr. McWilliam: Yes, our business plan and the dispatch that has been done up for this winter is looking at us using hydro. We may require some diesel peaking for extremely cold mornings, but it would be a fairly minuscule amount.

Mr. Jenkins: I'd ask that probably a paper outlining this area, that's quite extensive, be provided to the Legislature with respect to green power. I'd like to know just the total expenditure to date on the wind generation, which we have spent in O&M, and the total kilowatt hours of generation that we have received to date, and whether there are any other costs associated or incurred with respect to the green power provisions. Just where are we at in the totality of that? Could I have that undertaking, Mr. Chair?

Mr. McWilliam: Certainly, we'll undertake to provide that in writing.

Mr. Jenkins: I'd like to switch gears now and go to the Mayo-Dawson transmission line. I'd like the business plan for this overview tabled also. Would the management provide an undertaking to do so, please, Mr. Chair?

Mr. McWilliam: Perhaps we could just have some clarification. Last winter when we were in here, we had provided a copy of the feasibility study. I believe we also provided a copy of the peer review. If what Mr. Jenkins is looking for is the system design study that was completed for us, we would be happy to provide that. I just want to make sure that we're providing exactly what it is that's looked for.

Mr. Jenkins:The cost takeoffs from the design study, Mr. Chair, are what I'm looking at.

Mr. McWilliam: We will undertake to provide that.

Mr. Jenkins: I'm also looking for the cost breakdown associated and the extrapolation of those numbers over the amortized life of the project. I'm also looking for the management to table the economic impact agreement with the Nacho Nyak Dun and the Tr'ondk Hwch'in. Would the management agree to do so, please?

Mr. McWilliam: First of all, on the economic analysis, the information that Mr. Jenkins was referring to is built into the document that we already agreed to provide, so he will be receiving that. Certainly on the benefits agreement, I would, as I indicated earlier, like to consult with our partners on this to ensure that they have no objection to it being released. I will undertake to recommend that it be released, but I would first like to seek their concurrence on it being released.

Mr. Jenkins: Well, the Nacho Nyak Dun and the Tr'ondk Hwch'in have been offered a 40-percent equity. Now, I can't get a firm handle on whether that's the transmission line, whether that's into the Yukon Development Corporation or the Yukon Energy Corporation? If it's in the transmission line itself, where's the rate of return going to be provided, given that it doesn't start to even amortize or pay for itself and it requires a front-end capital loading for at least four to six years, depending on whose numbers you use?

Mr. McWilliam: What is provided for in the benefits agreement is essentially a debenture opportunity for the First Nations to participate in the financing of the Mayo-Dawson line. The provisions of chapter 22 of the land claims agreement speak to it: if we enter into partnership with a First Nation, it would be on the same terms and conditions as we would finance. So, effectively what we have done is arranged a debenture, because we're not providing equity here. This is a debenture related to the Mayo-Dawson line.

The provision is that, of that amount, they would receive a return equivalent to what we would get as our return on equity for 40 percent of it. The balance would be at whatever rate we were financing it at. So they're on for the same ride that we are.

As I said, I will undertake to make the request to the First Nations that the document will be tabled in here, and then Mr. Jenkins can have a look at it himself.

Mr. Jenkins: Well, given the front-end loading that this initiative is going to take, Mr. Chair, there is an inherent risk. Is there any risk associated with the debenture holder, or is it going to be totally guaranteed by YDC, YEC, and Government of the Yukon?

Mr. McWilliam: That's one of the reasons why it's a debenture, so the risk is to YDC.

Mr. Jenkins: Well, does that mean that, ultimately, there's no risk at all and they would have the same rate of return as allowed by the Utilities Board, Mr. Chair?

Mr. McWilliam: That's correct.

Mr. Jenkins: And just for the record, that currently is what type of rate of return?

Mr. McWilliam: Currently, YEC's rate of return is just over nine percent.

Mr. Jenkins: Has this project been subject to an analysis, in light of the potential for changing technology - the advent of fuel cells that might come into fruition in the foreseeable future? We're looking at a very, very extensive period of amortization for this initiative. The advent of fuel cells might solve the problem of energy supply here in Yukon - especially in rural Yukon and remote areas of Yukon. Has this even been dealt with in the equation, Mr. Chair, given the long amortization period of this initiative?

Mr. McWilliam: Yes, it's certainly something that we spent a good deal of time considering. It's also the type of question that has been raised with us by folks such as the new president of the Yukon Chamber of Commerce, who has shared some information with us in terms of what financial advisors are recommending around the electrical industry.

We are quite familiar with where the technology in the electrical industry is going. One thing I think is important to remember with things like fuel cells is that, first of all, people have been working on fuel cells since the 1950s. We're still not at the point where there are working prototypes of the type of units that we would require for large-scale energy generation.

They're looking right now at markets for a residential-type unit. One of the things that the fuel cells are targeting is the very high-cost areas - and by that, I'm not talking about the places that have access to power, whether it's diesel or hydro. I'm referring more to the isolated sites - the microwave sites that Northwestel has, for example. Those would be the first targets for the fuel cell companies, and this is based on discussion that we've had with both Ballard Energy and Stewart Energy, which is another fuel cell developer.

So, that technology is still some way off. When they talk in the industry about going to distributed energy systems, which is where fuel cells and some of these new technologies really have a niche, they're looking at having a system in place that these plug into and supplement. So, certainly what we think we're doing with the Mayo-Dawson line is quite appropriate.

One of the other things that has given us a bit of comfort is that Alaska is starting work on what they call the southeast Alaska inter-tie.

They had a study done for them by Acres that addressed a lot of these issues about what's happening with new energy sources, et cetera. That was fairly well-analyzed. The decision at the end of the day was to proceed with a multi-billion dollar transmission line to hook together the generation sites within southeast Alaska, and that fuel cells and other technologies that are coming on would actually plug into that very effectively.

Mr. Wells: Mr. Chair, if I might add a comment - I'm feeling somewhat redundant here this afternoon. It's not such a bad feeling, but I would like to add one point that Mr. McWilliam didn't mention.

The payback period - while Mr. Jenkins is quite correct that this is amortized over an extensive period of time, as major transmission builds are upwards of 40 years, you're looking at roughly - depending again on the fuel prices, where we end up with fuel - anywhere from nine to 14 years on a payback. So, it's not quite as long term an issue as you may be inclined to conclude, because of the life of the line. So, in fact, the payback of this investment, I would estimate, is going to be in the 11- or 12-year period.

Mr. Jenkins: There's somewhat of a difference between transmission line initiatives in the State of Alaska and in Yukon. Usually, the Corps of Engineers constructs them in the State of Alaska and they are transferred, with no capital costs associated with the grid, to the state or the power authority in that area. Unfortunately, we don't have that luxury over here.

But I am concerned with the impact of changing technology, given the long period of amortization of this line. You know, we can look at it through two scenarios. We are looking at fuel costs and interest rates, but the bottom line is that the period of amortization is very, very lengthy. Normally, you don't go over 25 years, even for a hydroelectric project. This one appears to be longer, and it requires an upfront capital contribution to make it pay. Small hydro are 25 years, and the effective life is 75 to 100 years.

Given the changing technology, I do have some concerns. I'd appreciate receiving the terms of reference of your review in that regard from the Yukon Energy Corporation and Yukon Development Corporation and the analysis they performed or obtained to conclude that technology wouldn't overtake this initiative - that it would still be useful in 30 or 40 years, the period of amortization. If I could have that undertaking, Mr. Chair.

Mr. McWilliam: First of all, I would agree completely with Mr. Jenkins that the U.S. government - the federal government - is looking at putting over $380 million into the southeast Alaska grid. If we could get that kind of a contribution from our federal government, some of these projects would go real fast.

However, I think it is also indicative of the fact that, if it's being looked at, it's infrastructure. There is a role for government and for a Crown corporation such as YDC to support this. That's why YDC is putting money into this project without expecting a rate of return on it. So, I think that the parallels are there.

I would point out that 40 years is the standard for amortizing a transmission line in the electrical industry, not 25 years, so that's one of the reasons why we have referred to the 40-year period. That's what the standard is. Certainly, we will undertake to provide the information. But I would note that one of the things that Mr. Ogden, the new president of the Yukon Chamber of Commerce, provided was a copy of a Merrill Lynch report on power technologies and what was happening with them. I think that one of the issues that we have to deal with here is semantics. When people are talking about power systems outside, that's where there are grids already in place - fairly massive grids in most cases. We're talking about a much smaller project where we don't have the type of infrastructure that currently is available.

In the Merrill Lynch report - and this is a quote from it: "From a hardware perspective, we think smaller and more efficient power production technologies, collectively referred to as distribution generation, will emerge as attractive incremental activities."

So, they're not seeing it as, you know, you roll up your power lines and go away. One complements the other.

Mr. Wells: Mr. Chair, if I could just repeat the point. Maybe I wasn't clear in what I was trying to say earlier.

While we may be amortizing this project over a 40-year period of time, I would agree 100 percent with Mr. Jenkins, that if in fact my discounted payback period was somewhere out 35 or 40 years, I would also have an issue with this project.

The issue of amortization is really irrelevant when it comes to looking at the economic viability of a project like this. It comes down to a discounted payback period. So in other words, while this project has a positive MPV of anywhere from $14 million to $24 million or $26 million, depending on the price of oil, its discounted payback period is under 15 years, and I would suggest it's going to be somewhere around 11 years. That's the risk issue you have to consider when you're looking at this project - not from the perspective of amortization.

Mr. Jenkins: The amortization period mentioned - 40 years for a transmission line - the 40-year period, to the best of my knowledge, is usually associated with steel-poled transmission lines of very high voltage vis--vis wooden-poled transmission lines. Their period of amortization is considerably less than 40 years. That's to the best of my knowledge, Mr. Chair, and I'm sure that that can be confirmed in-house.

But if we could just look further into this initiative - this Mayo-Dawson transmission line - I guess what we're told is that it has a potential to reduce rates for all Yukoners. Just what is that potential?

Mr. McWilliam: As Mr. Wells indicated, we're looking at savings anywhere from $14 million to $26 million, depending on fuel prices. In reference to an earlier question from Mr. Keenan, I was pointing out that the Utilities Board has a role to play here, in terms of deciding rates. It would be rather presumptuous of me to indicate where they were going to set the rates. We have talked about the fact that there is potential for rate savings in the neighbourhood of five- to 10-percent reduction of rates over time.

Mr. Jenkins: Well, given that this is probably going to be the largest expenditure undertaken since Yukon Development Corporation/Yukon Energy Corporation became an entity here with respect to power, power generation and power transmission, does the executive of these two companies not think it's wise to subject it to Yukon Utilities Board approval? Now, I know the answer is going to come back that it's not going to impact on the race, and all we're doing is putting a whole bunch of money upfront so it does not have an impact on the rates, Mr. Chair. If normal investment procedure were followed and normal utility practices were adhered to, this would result in an impact on the race; it would force them upwards.

Now, given that there's going to be a capital contribution so that we slide in under the door, it's still a very delicate balance, Mr. Chair, as to the financial viability of this initiative and whether it does indeed have a potential to reduce rates. It's very highly predicated on the price of fuel, and the price of fuel a year ago was 30 cents a litre; now it's 50 cents a litre. Next year, it could be 40 cents a litre, or it could be back down to 35 cents a litre. It has historically swung quite considerably. So given that this requires a tremendous amount of capital upfront to slide it under the door, so as to say, would it not be wise to take this initiative and subject it to the Yukon Utilities Board?

Mr. McWilliam: Where to start? In terms of whether or not this project should be subjected to the YUB for further review, I guess there are a few things I would point to. First of all, this was part of the capital plan that was addressed in 1992. There were recommendations that the YUB made at that time, which we have followed through with, in terms of dealing with it now. The YUB will be addressing this project when we propose to take it into rates, which would happen in approximately two years. At that point, they will be able to assess whether or not it was prudent for us to make the total expenditure. They may decide that, no, the owner should have absorbed more; although I think that, given the mechanism that we put in place, we have a fairly strong argument for this being a realistic project.

So, if we were at this point to say, "Well, let's just hold everything, let's go to the YUB and do yet another review," then first of all, there are significant costs involved in doing such reviews and there is delay. As Mr. Jenkins has pointed out, it's costing us 51 cents a litre to burn diesel in Dawson now. If this project is delayed, there's another year that we're going to be burning diesel that we don't need to be. So, we felt that if there's risk in terms of the YUB decision, the risk would be to Yukon Development Corporation, and that was something that the board of directors discussed when they were looking at this project.

Mr. Wells: If I could just add a couple of comments from the perspective of the board, the upfront investment by Yukon Development Corporation is $4 million, and, as Mr. McWilliam mentioned early on in some of his comments, for that, the people of the Yukon end up at the end of the day with an infrastructure investment worth well over $20 million, so it's a well-leveraged investment from our point of view. As importantly, this is the type of investment that helps us deal with a long-term reduction of rates, as opposed to pouring Yukon Development Corporation money into rate relief, which ultimately ends up accomplishing nothing in the long term. So, I think this is a very prudent investment on the part of the Yukon Development Corporation.

I would also suggest - and to echo a couple of comments Mr. McWilliam made - that the board feels it has done - and I think management at times felt - perhaps a little too prudent a job of ensuring that we have put this through a very rigorous assessment. As we mentioned, B.C. Hydro has been very involved in this, both by looking at the technical feasibility of this and by double-checking the work that we have been doing. We, also - and I'm not sure if the members are aware - have an advisor to the board who is an ex-vice-president from Trans Alta who does advise the board on issues such as this. That has given us clear guidance that this project does make good sense, both technically and from an economic perspective.

We feel that the costs of putting this through yet another series of reviews outside of what is the normally accepted practice of going to the Utilities Board once you are going to put something into rates would, in fact, cost ratepayers in the territory probably well in excess of $1 million. So, we feel that we have done due diligence on this project, that we have had it scrutinized by outside parties, and that this is, in fact, the right process to follow - the process we are following now.

Mr. Jenkins: I stand on my case, Mr. Chair. It would appear that they're going to go ahead and take this initiative, spend some $20 million, and two years hence it will be subject to the review to see if it's going to impact on the electrical rate-making base or not. It's kind of late, isn't it? After the fact? So, at that juncture, what we're faced with is that either the ratepayers or the taxpayers are going to pay for it. What we have to recognize is that it's the same individual.

The ratepayer and the taxpayer are the same here in the Yukon. We don't have the benefit - in spite of this wonderful relationship we were promised between the Yukon Liberals and the Liberals in Ottawa - we don't have this wonderful relationship that the State of Alaska has with Washington, D.C. where the Corps of Engineers come in and build these transmission lines. We have to rely on our own means and we have to be very fiscally prudent, especially when it comes to paying back, even given the situation with respect to the flex-term note with Ottawa - when Yukon acquired the assets at considerably less than book value of the Northern Canada Power Commission.

I do have some serious reservations, and I'm sure the Premier, the Minister of Finance, is listening in and I would urge her, as minister responsible for these areas, to submit this process to a Yukon Utilities Board overview.

What I have concerns with, Mr. Chair, is that there have been some initiatives extended to the Nacho Nyak Dun and the Tr'ondk Hwch'in that they have grasped. They see it as producing a lot of opportunities, but the opportunities are very short term. Other than stripping and equipment, it will be primarily outside suppliers supplying the transmission poles and supplying the wire, and that's the bulk of the cost. The substation transformers - that again is a considerable amount of the cost.

The amount of work that would end up coming into the hands of First Nation residents in Mayo and Dawson of the total expenditure is not very significant. And at the end of the day, I'd like to ask the management of Yukon Development Corporation and Yukon Energy Corporation the question: what will be the total staff complement in Mayo and Dawson as a consequence of this transmission line being built? How many employees will we have in both areas two years hence versus today? Would there be an increase or decrease? I suggest that there will be a decrease.

Mr. McWilliam: I'll try to deal with a number of the points that Mr. Jenkins has raised. If I don't capture them all, I'm sure he can remind me of the ones I've missed.

In terms of the benefits agreement, certainly there are opportunities for employment and business opportunities during the construction of the project, but we have not been trying to blow that out of proportion. The types of cautions that Mr. Jenkins is making are exactly the types of cautions that we have for both First Nations and for the business people in those communities.

We think this may be an opportunity for a number of service businesses, for example, to get a start or to at least get a fairly healthy injection into their bottom line that would help them to carry on, whether it's something like McKenzie Petroleum Products, which Tr'ondk Hwch'in has an interest in, or a construction company, catering company. This project could help to get those types of businesses set up and healthy.

But the construction period, in and of itself, is fairly tight, as I talked about - 18 months. So we hope we're not out there creating any unrealistic expectations, and that's why we have the steering committee that we're working with to try to get information out into the communities about what is realistic.

There are things in the benefits agreement that go far beyond the 18 months of construction. I mentioned an apprenticeship. That is a commitment that we have to those two First Nations as it carries on for the 40-year life of the project. I mentioned scholarships. We have committed to provide scholarship money from YEC for both Tr'ondk Hwch'in and Nacho Nyak Dun for the life of the project. The debenture that we talked about is a 40-year debenture. This is an investment that they can make, which is going to have a real return for them for a 40-year period.

The other question that was asked about employment - our assessment of our employment requirements at this point is that the numbers are going to stay the same, but they're going to be moving. We will need more resources in Mayo, dealing with the hydro facilities, and less in Dawson, where we currently have several people operating diesel generators. So, we see through this that there will be a redeployment of some staff between Mayo and Dawson. Just off the top of my head, I believe we identified two positions.

Mr. Jenkins: Well, Mr. Chair, I don't believe that the totality of this situation has been analyzed and that the impact on ratepayers in Dawson City specifically has been looked at. Currently, the potable water supply for the municipal government is heated with heat supplied by the generator sets. Previously, the swimming pool was heated in the summer with heat from the generator sets. That is going to add significant cost to a water and sewer system that currently costs approximately $1 million per year to operate.

Now, the heating of the water will be required on an ongoing basis. The water comes out of the wells at about one degree Celsius. It's raised to five degrees Celsius and pumped around town in a loop. The return temperature is monitored, and if it comes back at just over freezing, it's okay. If it drops below that, they have to add more heat. Currently, they're even having to fire the boilers because there isn't enough heat coming from the generator sets. That also looks at additional costs associated with the operation of their office and garages in Dawson, which are currently located remote from the plant and heated with jacketed waste heat or heat from the diesel generators.

All of this, in my opinion, has not been factored into the equation, and the bottom line impact might save something somewhere, but at the end of the day, what you have to look at is that maybe all we're doing is transferring some of the costs from our electrical bill to our water bill in our community. I don't believe a full analysis has been done, but I'll look forward to seeing it.

That's why I'm urging that this project be submitted to the Yukon Utilities Board. It is the largest project ever undertaken by this entity since its inception. It's significant in its size, order of magnitude, and it should go through a full public review. That's what the Yukon Utilities Board was set up for and set up to do - review these kinds of initiatives and capital undertakings.

What is occurring here is that this initiative has just been slid under the door, with an upfront capital contribution.

The other area that I have some grave concerns with, and this is one of my final questions, Mr. Chair, is the total cost of the new management. We have set up now two separate presidents and two separate entities. At the end of the day, how much more are the taxpayers and the ratepayers going to pay for another complete board? We have created another, I guess, deputy minister level position, which we know goes from about $90,000 to $130,000 plus all of the associated costs. What is going to be the total cost of this whole new management structure, given that now we have two, whereas before we had one board that looked after both areas, Mr. Chair?

Mr. Wells: A couple of points of clarification, I think. We are not, at this point, going to be splitting into two boards. We are going to remain with one board. In fact, there always have been two corporations, and we'll continue to have two corporations. We have added, at a presidential level or deputy minister level, one person and a secretary.

As Mr. McWilliam stated and I also covered off in my opening remarks, we need to go through a strategic planning process for the Development Corporation. Pending the outcome of that analysis, we will then take a look at what is the business plan or what are the deliverables coming out of that strategic plan process, and what size of an organization we need.

So, ultimately there could be minimal impact, if you will, from an overall perspective.

I did want to put this in context, as I mentioned in my opening remarks, that Mr. McWilliam and his team have done - and I think nobody would argue this point - an incredible job in moving this corporation from basically not existing into a fully operational power company, dealing with a number of critical situations in the early years, everything from fires to closures of mines and the Y2K issue. They have done an incredible job and I did want to publicly recognize that at this point.

However, in conversations with Mr. McWilliam as early as the early part of 1999, it was recognized that to move the corporation forward, we did need a president with extensive knowledge of this business. And with Mr. McWilliam's support in this process, we have recruited a new president to help ensure that the operational issues related to the corporation and moving the corporation forward - to Mr. Jenkins' point, you know, with a large project like this, we're going to have to make sure that it's managed very well to ensure that it comes in on schedule and on budget, and that's going to require someone who has had experience in that sort of project management before.

So, at the end of the day, it's difficult to answer the question as far as what the impact will be on ratepayers/taxpayers. I can say clearly there will be no impact on ratepayers. There could be some impact, depending on the size of Yukon Development Corporation at the end. But Yukon Development Corporation will be fit, will be structured in size to the extent that it needs to cover off and deliver on the mandate that it's ultimately given through consultation with the government, with the shareholder.

I know Mr. McWilliam had a couple of comments.

Mr. McWilliam: If I could just speak to some of the questions that Mr. Jenkins was raising in terms of cost to the municipality, the City of Dawson. That was certainly one thing that was raised at the very first meeting that I had with Mayor Everett. We recognized that the City of Dawson has been receiving free waste heat off of the generators. As Mr. Jenkins points out, they're not getting as much as they used to, because new generators are much more efficient. They don't give off the same type of jacket heat, so when we put the Caterpillar in there a number of years ago, the City of Dawson was getting less heat, and that's why they're now running their boilers. I think you would find that, if we continue to use diesel up there and as we replace engines, they will be with more efficient engines, so there will be less waste to go around.

The other point that we've made to the City of Dawson on a number of occasions is that the agreement that is in place now expires in 2002.

The agreement provides for them to have free use of that waste heat. This is a commodity that people are selling in other jurisdictions.

The point that we were making with the City of Dawson was that - we first approached this because we have to find ways to either increase our revenues or lower our costs. If we're going to be continuing to burn diesel in Dawson, I have got to be looking for ways to offset. That means I am not going to be prepared to enter into an agreement for another 10 years to supply that heat for free. It has a value. We would be negotiating a much different deal than is currently in place if we were to continue to rely on diesel up there. The YUB would require us to look at ways that we could reduce cost to ratepayers and giving away a commodity for free doesn't really deal with that.

We did, however, point out to the City of Dawson that, under all of our projections, we are still going to have a significant amount of surplus hydro available once the line is built. We have a secondary sales program, which is available to customers that have interruptible requirements. Something like the heating for the water and sewer system in Dawson fits into that very nicely. We have provided the City of Dawson with information on a new program that Yukon Development Corporation has just put in place, which is trying to get more sales of secondary energy. We've basically tried to address the city's issue there.

We recognize, though, that it is a significant issue to the city; however, the city also has other concerns, such as the fact that those diesel generators are right at the entrance to town and are not a terribly attractive entrance to a community which is trying to emphasize a tourism product. One of the things we have indicated is that, in acquiring a site out at Callison, where we'll put the substation, we're going to acquire a large enough site so that we can phase our in town operation out of there. So, not only will the diesels not be running, which is a source of pollution and an irritant to Dawson residents, but, over time, they will effectively disappear from the entrance to town.

Mr. Jenkins: Mr. Chair, all of these issues were dealt with at great length by the Yukon Utilities Board back in the days of Northern Canada Power Commission, when the City of Dawson was using waste heat. There is either a cost associated with transferring it, which is totally borne by the city, or a cost associated with dissipating it by way of fans and radiators, which is a cost associated with the power commission. So, the equation is a wash.

That's why I submit, Mr. Chair, that this whole exercise and this whole review must be submitted to the Yukon Utilities Board for their overview, and public input must be sought and obtained before a program of this magnitude is proceeded with.

I have many, many more questions. We could go on for a considerable length of time, Mr. Chair, but I will relinquish the floor to the Member for Kluane.

INTRODUCTION OF VISITORS

Mr. McRobb: I would like to thank the Member for Klondike for leaving me about 12 minutes. I do have 12 questions here, so I will try to make them short snappers. I'd like to also welcome the witnesses to the Legislature. It's a pleasure to see them once again. I would also welcome three members of the executive of the Utilities Consumers Group, who are in the gallery tonight.

My first question relates to direct management, especially the billing system. Can the witnesses update us on what's happening with the billing system? I understand there were some negotiations with an Atco company for use of their billing system. What's happening on that? And is YEC still under contract with West Kootenay Power? Have they examined moving the billing system to the Yukon?

Mr. McWilliam: I'll try to answer that short question as shortly as I can.

Currently, we have contracted with Atco's Single Point. That's the same Atco company that supplies billing services to YECL and other Atco subsidiaries. They also provide billing to the City of Red River and a number of other municipal utilities.

So we're pleased to be able to enter into that. That is, if memory serves me, a two-year contract, because Atco is looking at putting a new billing system in place, and there are concerns that it is going to be a fairly expensive product. What we are doing within that two-year period is looking at what the other options are out there for possibly having a Yukon-based billing service. There are other utilities and cable television companies, et cetera. There may be opportunities for us to collectively support a Yukon-based billing system, and we are pursuing that.

The contract with West Kootenay Power expired at the end of last year; however, we had contracted with them for some overlap, in case there were transition problems with going to Single Point. In fact, there were no problems, but we very much appreciated West Kootenay's support over that transition, and in fact, their willingness to come in and help us out during the transition period. They provided an excellent service at that time.

Mr. McRobb: The federal government has made it known that it's interested in investing about $150 million over the next 10 years for infrastructure development in the northern three territories. Was the corporation asked to identify some projects for that, and if so, what were they?

If it's too extensive, I would accept something in writing.

Hon. Ms. Duncan: Mr. Chair, I appreciate the Member for Kluane's question, and I appreciate that the Member for Kluane also had a number of questions to ask. I empathize because I was in the same position a year ago when the witnesses were here, running out of time and not being able to ask questions. I would encourage him to submit them in writing.

In light of the time, Mr. Chair, I would just like to express, for the record, our thanks to the witnesses. And I would also like to thank members of both opposition parties. They have asked a number of questions that members of the Utilities Consumers Group would like to ask, as well, and I appreciate them asking them.

I would like to thank the members of the Utilities Consumers Group for joining us in the gallery today. Ms. Roberts, Mr. Rondeau, and Mr. McCormick, thank you.

Again I appreciate members' questions and encourage them to submit additional questions in writing to the witnesses. The witness have offered to also brief the opposition extensively.

Again, my thanks to Mr. Wells and Mr. McWilliam for appearing today.

Mr. McRobb: I notice there are still seven minutes, so I assume there is about five minutes for questions. Is there time for more questions? Maybe you can clarify, Mr. Chair?

Chair: I believe there was one question on the floor that was not answered, and it's only fair that, since that question was asked, at least Mr. McRobb should receive the answer.

With that, there is a time limitation, but I'd expect the answer at least on that one question.

Mr. McWilliam: In terms of the program that Mr. McRobb is referring to, I can't give you a lot of information on it. That's something that Economic Development has been dealing with in terms of the leadership, negotiating what I understand is called a modern northern economy initiative with the federal government.

You're correct. We have provided a wish list of a number of infrastructure projects. Back to the exchange with Mr. Jenkins, if we can get federal money, there are a number of other projects that we would certainly like to undertake, as well.

Chair: Thank you, Mr. McWilliam, and thank you, Mr. Wells, for coming. The witnesses may be excused.

Witnesses excused

Ms. Tucker: Mr. Chair, I move that the Chair report on Committee of the Whole Motion No. 1.

Chair: It has been moved by Ms. Tucker that the Chair do now report on Motion No. 1 that Mr. Ray Wells, chair of Yukon Development Corporation, and Mr. Rob McWilliam, president of the Yukon Development Corporation, appear as witnesses before Committee of the Whole from 4:00 p.m. to 6:00 p.m. on Thursday, November 9, to discuss matters related to the Yukon Development Corporation.

Motion agreed to

Ms. Tucker: I move that the Speaker do now resume the Chair.

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

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

Chair's report

Mr. McLarnon: On Wednesday, November 8, 2000, Committee 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 4:00 p.m. to 6:00 p.m. on Thursday, November 9, 2000, to discuss matters related to the Yukon Development Corporation.

Pursuant to Committee of the Whole, Motion No. 1 passed on Wednesday, November 8, 2000, Ray Wells, chair of the Yukon Development Corporation, and Rob McWilliam, president of the corporation, appeared as witnesses before the Committee from 4:00 p.m. to 5:58 p.m. this day.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

Ms. Tucker: I move that the House do now adjourn.

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

Motion agreed to

Speaker: This House now stands adjourned until 1:00 p.m., Tuesday, November 14, 2000.

The House adjourned at 5:59 p.m.

The following Sessional Papers were tabled November 9, 2000:

00-02-28

Fire Marshal 1999 Annual Report

(Buckway)

00-02-29

Conflict of Interest Commission (Yukon): letter from Mr. McRobb, Member for Kluane (dated November 9, 2000) requesting broadened scope of inquiry re purchase of materials from Mike's North Communications by the Government of Yukon

(Fairclough)

The following Legislative Returns were tabled November 9, 2000:

00-02-05

Outfitting industry (Yukon): steps being taken by Government to save this industry

(Eftoda)

Oral, Hansard, p. 215

00-02-06

Air Access relating to international charters: responses to questions raised by the Leader of the Third Party, after Ministerial Statement was given; Request for Proposals for Yukon Air Access Study

(Edelman)

Oral, Hansard, p. 152-153

00-02-07

Air Access Study: responses to questions raised by the Member for Kluane, after Ministerial Statement was given

(Edelman)

Oral, Hansard, p. 152