Wednesday, November 17, 2004 — 1:00 p.m.
Speaker: I will now call the House to order. We will proceed at this time with prayers.
Speaker: We will proceed at this time with the Order Paper.
In recognition of firefighting success
Hon. Mr. Hart: I rise today on behalf of the Yukon government and the member of the third party today to pay tribute to the hard work and the dedication and the professionalism of all the people who helped safeguard our residents’ and visitors’ property and communities during the 2004 fire season, one of the worst in our history. The record-breaking hot, dry temperatures, coupled with a record number of lightning strikes led to 280 forest fire starts that burned over 1.8 million hectares of Yukon forest, just over six percent of the Yukon’s entire vegetated area.
Next to protecting lives, protecting our communities is our highest priority. By focusing our activities and resources in our high-priority areas, we were able to limit the fire starts in and around our communities.
Those fires that did start in these areas were attacked and extinguished before they could pose any serious threat. The fact that we were able to get through this extreme fire season with no loss of life, minimal injuries and minimal loss of property speaks to sound management, hard work and professionalism from the wildland fire workers and those who assisted them.
Specifically, I would like to thank the staff and firefighters of the wildland fire management, Yukon Emergency Measures Organization and the community EMO representatives, community volunteer fire departments and firefighters, Yukon First Nation partners and emergency fire crews, the RCMP, Energy, Mines and Resources and the staff of client service and inspection branch, the public information officers who came from all departments and agencies, fire crews and teams from all other jurisdictions, the cities and staffs of Whitehorse, Dawson, Watson Lake and other Yukon communities, our highway crews, the Department of Education — and particularly those in Dawson City for opening up the school as a command centre, and Yukon College in Watson Lake for opening as a public information centre — Klondike Placer Miners Association, the staff at Northwestel, local media and reporters, Yukon Electrical and Yukon Energy Corporation.
I apologize to those I may have missed. All these people did an amazing job. The wildland fire program is a new area of responsibility for the Yukon as a result of devolution. The 2004 wildfire season workers have proven that they are capable and prepared to manage this new area of responsibility.
I would also like to thank individual Yukoners and tourists for doing their part to adhere to the Yukon-wide fire ban. In an average fire season, half the fires are caused by people and half by lightning. This year, only a small number — 12 percent — were caused by people, well below the normal average.
I’m very proud of our collective efforts to manage the fires this past season and ask members of the House to join me in paying tribute to the wildfire workers for a job well done.
Speaker: Are there any further tributes?
Mr. Cardiff: I, too, would like to pay tribute to those people who worked on the fires, the wildland fire management team, and all the emergency firefighters who were out there working hard on behalf of Yukoners. We recognize this was an extreme fire season. We also recognize that the men and women who work in that service put their lives on the line daily, and often aren’t recognized enough for the work they do and what they contribute to the safety of our communities. So I’d like to take this opportunity to thank them on behalf of the official opposition and on behalf of all Yukoners.
In recognition of Children’s Book Week
Hon. Mr. Edzerza: I rise today to recognize Children’s Book Week. Children’s Book Week ran from October 30 to November 6 and brought the magic of books and reading to children all across Canada and the Yukon.
This national celebration is a very important event because it champions children’s books and the importance of reading. I would like to thank all the teachers, librarians, community organizers, authors and students who participated in Children’s Book Week. Their hard work and creativity made Children’s Book Week unforgettable this year.
Thousands of children and adults participated in activities held in every province and territory for Children’s Book Week. There was a flurry of activity in our schools around Children’s Book Week, and this included visits from the well-known children’s book author Elaine Becker to the communities of Whitehorse, Ross River, Faro and Carmacks.
Literacy is key to the acquisition of knowledge and it is integral for a child to read well to enjoy the magic of books and to succeed in school.
I commend the participants of Children’s Book Week in the Yukon for their enthusiasm and their commitment to literacy.
Thank you, Mr. Speaker.
Ms. Duncan: I rise today on behalf of the members on this side of the House to recognize Children’s Book Week. A celebration of the written word, Children’s Book Week introduces young people to new authors and ideas. It is also an opportunity to celebrate Canadian authors and our Canadian culture.
We paid tribute to our Canadian culture last week in recognizing Hockey Week in Canada. In recognizing Children’s Book Week, I would like to pay tribute to some wonderful Canadian books by Canadian authors, such as The Final Game and The Moccasin Goalie, both books by William Roy Brownridge; The Hockey Sweater by Roch Carrier, My Leafs Sweater by Mike Leonetti, and Hockey Card by Jack Siemiatycki.
Mr. Speaker, when you read to a child, you have a child who likes to read. When you read a book you both enjoy, you share your love of reading. Reading promotes literacy, and I encourage all members to share the joy, the wonder and the magic of books. Empower a child with the power of words and encourage a child to enjoy a lifetime of reading, not only in Children’s Book Week but throughout the year.
Thank you, Mr. Speaker.
In recognition of National Osteoporosis Month
Hon. Mr. Jenkins: I rise today to ask my colleagues in this Assembly to join me in recognizing November as National Osteoporosis Month. In Canada, osteoporosis occurs in about one in four women and one in eight men over 50 years of age. The disease can have a devastating effect on people’s lives, causing painful fractures and disability. Bone is living tissue, which is constantly renewed through the body’s natural processes whereby old bone is replaced by new bone. As we age, this process becomes less efficient, and some people begin to experience bone loss leading to fracture. Women are particularly susceptible to osteoporosis due to the important role that the hormone estrogen plays in keeping their bones healthy. At menopause, estrogen levels fall off dramatically, and many women experience an accelerated rate of bone loss. While there are several contributing factors to the development of osteoporosis, it is possible to prevent, delay or reduce bone loss through healthy habits. The inclusion of calcium and vitamin D in people’s diets, not smoking and plenty of physical activity is great for your bones. In short, a healthy lifestyle will help to prevent, and if not prevent, better deal with the effects of osteoporosis.
Mr. McRobb: I rise on behalf of the official opposition to pay tribute to Osteoporosis Month. Osteoporosis leads to fragile bones and fractures usually in the hips, spines and wrists of people over the age of 50. It predominantly affects women. In Canada, more than one million women suffer with this disease. One out of eight men older than the age of 50 also have the disease. Pre-detection of osteoporosis is difficult, and its symptoms are not always obvious until after deterioration of the bones is noticed. As with many diseases, prevention is the best defence against osteoporosis.
One of the best measures is to take calcium and vitamin D supplements, which help to build stronger bones. Exercise is important. Walking, running or dancing are all exercises that can be practised throughout a person’s life. As with all diseases and unhealthy practices such as smoking, the cost to society of this disease cannot be overlooked. Its cost is calculated within the health care dollars that are spent on care in hospitals, emergency rooms and long-term care facilities.
The Osteoporosis Society of Canada is the only national organization serving people who have or who are at risk of becoming afflicted with osteoporosis. The society works to educate, empower and support individuals and communities in the prevention and treatment of osteoporosis.
More information about the society can be found on its Web site. We applaud the efforts of those from the society and others who help to fight this disease.
Speaker: Introduction of visitors.
INTRODUCTION OF VISITORS
Hon. Mr. Fentie: I would ask the House to join me in extending a very warm welcome to special guests visiting here in the gallery today: Ms. Judy Daniels and Mr. Daniel Brant, representing the National Aboriginal Capital Corporation Association.
Speaker: Are there any further introductions of visitors?
Are there returns or documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Ms. Taylor: I have for tabling the Yukon Heritage Resources Board annual report for 2003-04.
I also have for tabling the Yukon Geographical Place Names Board annual report for 2002-03, as well as the annual report for the Yukon Arts Centre, 2003-04.
Hon. Mr. Hart: I have for tabling the fleet vehicle agency 2003-04 annual report. I also have for tabling the Queen’s Printer agency 2003-04 annual report.
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. Cardiff: I give notice of the following motion:
THAT this House urges the Minister of Justice to implement safety measures for territorial employees in the probation service that are at least equal to those of Corrections Canada.
Mr. Rouble: I give notice of the following motion:
THAT this House urges the Government of Canada to renew the Canadian wildfire strategy and invest $1.5 billion in that fund, as was requested by all provinces and territories.
Mr. Cathers: I rise in the House today to give notice of the following motion:
THAT this House urges the federal government to live up to its commitment to partner with the governments of Yukon, Northwest Territories and Nunavut, First Nations and other northern residents to develop a comprehensive northern strategy to foster sustainable economic and human development, preserve sovereignty, and promote international cooperation for the benefit of northern residents and all Canadians.
Speaker: Are there any further notices of motion?
Is there a ministerial statement?
This then brings us to Question Period.
Question re: Arctic National Wildlife Refuge
Mrs. Peter: My question is to the Premier. The Chief of the Vuntut Gwitchin First Nation is in Washington looking for support for the fight to save the Porcupine caribou herd. This is an ideal opportunity for the Premier to demonstrate some true leadership. It would take a very simple act.
Will the Premier sign the letter to President Bush that the two opposition leaders have already signed?
Hon. Mr. Fentie: We’re very pleased that the Chief of the Vuntut Gwitchin First Nation is in Washington. As a government we are very pleased that we are able to assist the Vuntut Gwitchin First Nation in this endeavour, and let me say to the Member for Vuntut Gwitchin that the government’s position is consistent. We maintain that the protection of critical habitat for the Porcupine caribou herd must be in place always. We support that position; past governments have. We continue to do that today.
However, if the members opposite would like to send a letter to President Bush, that is of their own choosing. The government has been very supportive of the initiative for Vuntut Gwitchin, and even as we speak we are resourcing the Vuntut Gwitchin First Nation to attend these types of initiatives.
Mrs. Peter: This critical habitat is in danger and it’s obvious that the Premier just does not get it. Alaska Senator Lisa Murkowski has stated that her number one priority is to open up the Arctic National Wildlife Refuge to drilling. Republican Alaskan senators are used to getting their way.
Yukoners need to get a message out loud and clear. The people who are so fixed on drilling in the Arctic National Wildlife Refuge need to hear the other side. A united voice from this House is very important. Will the Premier sign the letter that I sent over to him a few days ago?
Hon. Mr. Fentie: Let’s put this in context. The government of the Vuntut Gwitchin First Nation has requested that they be allowed to take the lead on the initiative for the protection of the Porcupine caribou herd. Who better than the leader, the Chief of the Vuntut Gwitchin First Nation to be in Washington representing that position, and the Chief of the Vuntut Gwitchin First Nation is in Washington with our support.
If the Member for Vuntut Gwitchin wants to send a letter, that’s fine. I urge her to do so. The government, far beyond sending letters, is resourcing the First Nation to make their representation on the protection of the Porcupine caribou herd. We are doing our part and it’s a $50,000 investment. I would say to the member opposite we’ve gone beyond writing letters; we are investing in this initiative.
Question re: Arctic National Wildlife Refuge
Mr. Hardy: What a very poor answer from the Premier. My question is: why will he not make this very simple gesture and sign a letter? This morning we heard some alarming statements from a senior senator from Alaska about oil and gas activity in the Arctic National Wildlife Refuge. According to Senator Stevens, who is one of the most powerful people in Washington, the Arctic National Wildlife Refuge will be opened for drilling this year. The Chief of the Vuntut Gwitchin First Nation is also in Washington today. He says that the next few months are crucial in terms of lobbying U.S. politicians to prevent this from happening. The Premier needs to stand up and be counted with the Vuntut Gwitchin people. Now why is the Premier refusing to sign the letter to President Bush that already has my signature on it and the signature of the third party? Why does he refuse to sign it?
Hon. Mr. Fentie: Because the government side, in adopting its position, is representing a position that was requested by the Vuntut Gwitchin First Nation. This does not preclude the members opposite from corresponding with anybody in the government of the United States or Alaska. They are free to do so. We are investing in this initiative for the protection of the Porcupine caribou herd by request of the First Nation. The difference here is the respect we have as a government for another order of government in this territory by following through with their request. I would ask the members opposite: where is that respect when they stand on the floor of this Legislature trying to make a case for something that is already being done by the government side? There’s a lack of respect by the official opposition to another order of government.
Speaker: Order. Those words will lead to discord, and I would ask the hon. Premier not to indicate or imply that either side has a lack of respect. Each side has their opinion; they may differ. I ask all members to respect that.
Mr. Hardy: I have to ask this question: does the Premier not have any respect for the MLA from Old Crow, the person who has been elected to represent the Vuntut Gwitchin from Old Crow? Does he have no respect for that person and the position she has taken on this issue, the letter she has drafted? Does that not count for anything?
To quote another First Nation leader, this Yukon Party talks the talk but it won’t walk the walk. We’ve heard that already.
Now, what part of the letter does the minister find so offensive? I’d really like to know that. All he has to do is pick up his pen, sign his name and show President Bush and the U.S. people that we in this House are in solidarity with the Gwitchin people.
Once more, Mr. Speaker, I’ll give him another opportunity here to come clean and do something we’re all asking for — a message from the Legislative Assembly. Why won’t the Premier perform this one simple act: sign the letter, stop refusing to do that?
Hon. Mr. Fentie: It’s quite simple: because the government side has already done much more. We have passed motions in this Legislative Assembly — unanimous motions — reflecting the position. We are investing in this initiative for the First Nation. We have 50,000 reasons to say we are doing something. We have invested $50,000, right now, today, into this initiative for the First Nation by their request. We are following through consistently with past governments’ positions. Nothing has changed.
If the members opposite want to correspond, fine. The members opposite can correspond. We are doing it through investment. That speaks volumes of our position, Mr. Speaker.
Speaker: Before the leader of the third party asks her first question, I’d just like to remind all members on each side of the floor of Standing Order 6(6): where a member is speaking, no member shall interrupt except to raise a point of order or a question of privilege.
Question re: Arctic National Wildlife Refuge
Ms. Duncan: I have some questions for the Premier. Last week I signed a letter, along with the leader of the NDP, asking President Bush and Lisa Murkowski not to move ahead with plans to drill in the Arctic National Wildlife Refuge. The Premier has refused to sign the letter and refused again today in Question Period.
Mr. Speaker, he is refusing because he is more interested in his relationship with the Alaskans than he is in speaking for Yukon people. He is prepared, quite clearly, to put his relationship with Alaska ahead of his relationship with Yukoners. The vast majority of Yukoners support protecting ANWR. They want leadership, and they want action.
The Premier has had time to look over the letter. The Premier has also had time to look over letters I signed, as a member of this Legislature and as Premier. He has also had time to examine the financial support that other Yukon governments have offered the Vuntut Gwitchin.
Having had a chance to review all the correspondence — letters I signed as Premier, the letter I signed last week — will he now put his signature to that letter, as he has been asked to do?
Hon. Mr. Fentie: The government is putting its position clearly on the table, on the public record, in discussions and correspondence, as governments have in the past, with the State of Alaska. Nothing has changed. This government will protect and support the position of the Vuntut Gwitchin First Nation, when it comes to the protection of critical habitat for the Porcupine caribou herd. That is consistent with past governments’ positions, and it is the same position we hold.
Nothing stops the members opposite from signing letters. This government has gone beyond signing simple letters. We are investing in the protection of the Porcupine caribou herd. That’s a significant position to take for any government. So we are confident, and we are very comfortable with the position the government is taking. And I applaud the members opposite for supporting the government position through writing to the President of the United States. That is a good thing.
Ms. Duncan: Mr. Speaker, writing to the President of the United States and having three leaders sign it from this House is an important action. I could sign a letter when I was the Premier, a very similar letter. I do not understand why this Premier cannot. Mr. Speaker, I wasn’t afraid to tell the Alaskans and the U.S. government that we were opposed to drilling. When I met with the Governor of Alaska, I told him we would actively oppose ANWR drilling, and we did. When I met Gail Norton, President Bush’s Secretary of the Interior, I told her, no, she could not expect our support for drilling in ANWR. When I met Alaska state legislators, I said we don’t support drilling in ANWR. The leader of the Yukon Party, the Premier of this territory, is not prepared to do that.
The Premier is speaking at a conference in Texas on December 2. He has an opportunity to —
Speaker: Order. Ask the question, please.
Ms. Duncan: Thank you, Mr. Speaker. I will.
Will the Premier now recognize he needs to sign the letter as a representative of this Legislature and sign it?
Hon. Mr. Fentie: Mr. Speaker, this is an opinion of the leader of the third party that signing a letter further enhances the position of the government and the Yukon people. What I’m trying to point out to the member opposite is that the government is very active in this area. We have informed the Governor of Alaska of our position. It is the same position that the members opposite are taking in their correspondence.
I again repeat: we the government side applaud the members opposite for working with and supporting the government’s position on the protection of critical habitat for the Porcupine caribou herd. This is a very positive thing.
Now, the third party is alluding to the fact that there will be a speech in Houston on December 2 regarding energy development in the north, and of course I will make every opportunity and take every opportunity to relay the Yukon’s position when it comes to the critical habitat of the Porcupine caribou herd. But I think it is important for all of us to understand that there is a significant difference between actually investing in getting people to Washington to lobby and talk to senators and all others on this matter versus sending one simple letter.
Ms. Duncan: The Premier is failing to point out to Yukoners that all previous governments of all political stripes supported and contributed to ensuring the Vuntut Gwitchin were represented in Washington and made financial contributions to that, that all the Premiers who preceded him have signed a similar letter on behalf of this Legislature. If the Premier is willing to state it in his speech, then why don’t we write it into the speech that I have to provide to all members when he delivers that speech December 2. Here’s a letter we sent — three leaders in this Legislature — to President Bush. The Vuntut Gwitchin has respectfully asked the Premier to sign it. Others have done it. It’s a consistent position. Will he now recognize and treat it with the same respect with which he has been asked and sign the letter? Others have done it; why can’t this Premier?
Hon. Mr. Fentie: The Vuntut Gwitchin, as represented by their government, have asked this government to allow them to be the lead on this initiative and we agree. This government continues to support the position of the Vuntut Gwitchin people and past governments’ and Yukoners’ view that the protection of critical habitat has to be maintained. Nothing has changed. The members opposite can write letters; that is their prerogative. The government will do what it must do to represent that position, and we are doing it. The point here is that government is not in any way, shape or form diminishing its position or the importance of whether we sign a letter with the opposition or we do things in our way through the requests of the First Nation itself. The whole point is that we are ultimately trying to achieve the same objective, and I think it’s a good thing that the members opposite, through correspondence, are supporting not only the Vuntut Gwitchin government but this government in its endeavours.
Question re: Arctic National Wildlife Refuge
Mr. Hardy: Nice try by the Premier but it doesn’t wash and people are watching and listening. He won’t sign a letter. It’s very obvious that he won’t back a position of this House.
One of the most bizarre statements we’ve heard from Senator Stevens this morning is that drilling in the Arctic National Wildlife Refuge will somehow help combat global warming. Don’t ask me to explain his logic because I can’t but it’s very obvious that we need to get the other side of the story out to some very powerful Americans who make these decisions.
The Premier can do exactly that when he is in Texas next month with Governor Murkowski at another oil and gas gathering. If the Premier isn’t prepared to speak up in support of the Gwitchin people, if the Premier isn’t prepared to sign a letter from the Legislative Assembly, I am sure the Member for Vuntut Gwitchin would be quite happy to accompany him. Is the Premier willing to take a spokesperson for the Vuntut Gwitchin people to Texas with him to give industry and government leaders the other side of the story on drilling in the Arctic National Wildlife Refuge? Is he willing to do that?
Hon. Mr. Fentie: In the first place, the Vuntut Gwitchin do have a government and they have chosen who will go and represent them in Washington on this matter. Furthermore, the Alaskans, duly elected, who represent a position on behalf of the State of Alaska — that’s also their duty and their obligation to that. Our position is the protection of the critical habitat. It has been maintained consistently over and over.
What is happening here is that the opposition is diminishing that position to one simple letter, ignoring all the efforts that are being put forward by this government and the Vuntut Gwitchin government in representing this very important position.
I would urge the members opposite to sit back and think about this. This is not about a letter to a president. This is about years and years and years of fighting for the protection of the Porcupine caribou herd. It has not changed one iota whether the members opposite write a letter or not. The position is the same; the fight is the same. We will carry on as a government supporting the Vuntut Gwitchin people.
Mr. Hardy: I ask the Premier to quit insulting the Member of the Legislative Assembly who was elected by the Vuntut Gwitchin people. I ask him to quit insulting her and her position.
The message this Premier is giving is that he’ll go anywhere and do anything to court the oil and gas industry but when it comes to standing in solidarity with the Gwich’in people, he won’t budge from his office. He won’t even pick up his pen and sign a simple letter, and that’s a shame.
With the new Republican majority in Washington, the next few months are crucial. The Chief of the Vuntut Gwitchin said it again this morning, and the MLA for Vuntut Gwitchin has been to Washington more than once. I am also prepared to go there to help, if needed, if I can lend some support. I put that on the table today, which is far more than what the Premier is willing to do.
What will the Premier do? Is the Premier willing to travel to Washington to add a strong voice from the Yukon government in the struggle to protect the Porcupine caribou herd from drilling in the Arctic National Wildlife Refuge? Is he willing to do that? That’s my question.
Hon. Mr. Fentie: We are willing to work with the Vuntut Gwitchin First Nation government. By request, they want the lead on this initiative. They have asked us for assistance. We have given them the assistance they have asked for. We are continuing to support the position of the Vuntut Gwitchin First Nation when it comes to the Porcupine caribou herd. Again I repeat, at the risk of being repetitive, that is the same position this government and past governments have taken.
I also take exception to the comments being made by the leader of the official opposition. The insulting factor here is diminishing all the years of effort that have gone into this initiative over one letter to a president of the United States. Besides, the letter may never even get to the President of the United States. We are getting to him by investing in people getting to Washington and being there to do the work necessary to make representation on behalf of the Vuntut Gwitchin First Nation — what a difference.
Mr. Hardy: Well, let’s put it on record, Mr. Speaker, that he didn’t answer the question. He would not step up to the plate and say he will take a member of this Legislative Assembly, a Vuntut Gwitchin person, with him. He won’t do it.
He has talked about the $50,000. Let’s put it into perspective, Mr. Speaker. He spent four times that much for a secret negotiator with Kaska. He spent two and a half times that much to send an observer to the B.C. Citizens’ Assembly meetings when all the information was on-line, Mr. Speaker. He has already spent one and a half times that much to install a trustee to run Dawson City’s affairs, and the meter still continues to run. $50,000 is a drop in the bucket when it comes to saving the Vuntut Gwitchin’s way of life, Mr. Speaker, and it’s time for the Premier to step up to the plate and hit a homerun for the Vuntut Gwitchin people. Go to Washington, go to Ottawa, go to Juneau and stand up for the Gwich’in people.
Now, is he willing to do that? Is he willing to do that and take other people with him?
Hon. Mr. Fentie: Well, at the risk of being facetious, if the member got any louder, nobody would have to go to Washington. They would hear us right from here.
Mr. Speaker, I have to repeat again all the efforts that are being put into this initiative, and that has been ongoing for years. Now the member brought up a number of other things, but he fails to mention the tremendous amount of investment we are making in the community of Old Crow for the Vuntut Gwitchin people, assisting them in all their endeavours, and this is one of them, among many more.
The member made mention of secret negotiations for the Kaska First Nation. Well, Mr. Speaker, what has been produced by those negotiations with the Kaska is increased own-source revenues in the oil and gas sector in the southeast Yukon. Not one dime of royalties flow to the Kaska Nation, but other First Nations like the Vuntut Gwitchin are receiving revenues from that exploration and production. That is another point that the member opposite conveniently avoids. As far as the position of Dawson City, the only reason there is a trustee appointed is because of the very serious financial position Dawson City is in, and that financial position is all about taxpayers’ money. That is why the trustee is there. There is no correlation with what is going on in Washington.
Let me repeat: the Yukon government supports the position of the protection of the Porcupine caribou herd’s critical habitat.
Question re: First Nations, government relations with
Mrs. Peter: I have a question for the Premier. The Premier has placed great emphasis on First Nation relations as a cornerstone of his government, yet the Premier is allowing his ministers to ignore the spirit and letter of First Nation final agreements.
His Minister of Environment recently received two letters from the Na Cho Nyäk Dun First Nation detailing how his department has ignored their final agreement regarding habitat protection areas and trapline designation. Why is the Premier allowing his minister to undermine his government’s relations with First Nations?
Hon. Mr. Fentie: I have a very short answer to that. The Premier is not allowing that to happen because it isn’t happening.
Mrs. Peter: Three letters have been received by the Minister of Environment. Under the Umbrella Final Agreement, renewable resource councils may establish bylaws under the Wildlife Act for the management of fur-bearers. This requires the Wildlife Act to be amended. The Yukon Fish and Wildlife Management Board has waited for more than a year for information from the minister about the minister’s timeline and the process for implementing this section of the final agreement.
Two Environment ministers in a row have ignored the board’s request. Tomorrow the Supreme Court of Canada will release two decisions reaffirming the need to consult First Nations and deal with them in good faith. Will the Premier now direct his ministers to do their job and honour their legal obligations to First Nation governments?
Hon. Mr. Fentie: The government is living up to its obligations and legal requirements under every final agreement. We are working on all of these fronts. In fact, when it comes to amendments to the Wildlife Act, the request by First Nations is to bring the Wildlife Act in line with the final agreements. That’s the work that’s being done today.
When it comes to habitat protection areas, we are working on those. We established Fishing Branch park and implemented a management plan. With respect to the final agreement, we’ve established Tombstone Park. With respect to a final agreement, we are continuing to partner with First Nations across the board with the Children’s Act review, educational reform, correctional reform.
We’re going even further than that in partnership, with violence against aboriginal women initiatives, home tutoring, native language instructor trainees. We are looking at the First Voices language program with respect to fluency. We’ve invested $500,000 more in First Nation curriculum. The list goes on and on. This government is living up to every aspect of the final agreements, as we are obligated to do, and much more.
We are working with First Nations in partnership and governance and in economic development. We as a government are helping to provide self-determination, economic empowerment and the building of capacity for aboriginal people — not that side of the House.
Question re: First Nations, government relations with
Mr. Fairclough: My question is for the Premier. We’ve just heard from my colleagues on how this government’s relations with First Nations are deteriorating under this Premier’s watch. It’s hard to find a First Nation in the territory that doesn’t have issues with this government — another court case filed on Friday, more being threatened.
The Premier has allowed his ministers to break agreements all over the Yukon. Some of the biggest headaches are in education. In Carmacks the advisory committee that the Minister of Education set up is falling apart. The First Nation members have all resigned because they feel that they are not listened to, and they certainly wouldn’t go against their First Nation general assembly resolution. The minister signed the agreement with the Little Salmon-Carmacks First Nation and then ignored that agreement. Why is the Premier allowing his ministers to break written agreements with First Nation governments?
Hon. Mr. Fentie: The Member for Mayo-Tatchun seems to be confused about the difference between an agreement and a process for planning and making recommendations. That was not an agreement with a First Nation; it was a process developed so that recommendations could be brought forward from the community, keeping in mind that we are responsible for a public education system and that the government is responsible for the public purse.
But let’s point out something when the member brings up education and what we’re doing with First Nations: aboriginal language teachers, $2.28 million; YNTEP, another $540,000; First Nation curriculum materials, $500,000 more; Native Language Centre, $352,000; department staff who work directly with First Nations curriculum and program, $200,000; aboriginal teacher trainees, another $111,000; curriculum development, another $100,000; First Nation elders in schools, $30,000 more; stay-in-school initiatives, another $10,000. In total, this government, in working in partnership with First Nations, building relationships with First Nations, has invested $4,143,000. That’s what I call a partnership.
Mr. Fairclough: The Premier avoided the question. It was about an agreement and why he allowed his ministers to break agreements. It is interesting how the Premier goes about listing off things governments normally do. Every government does those types of things.
Carmacks has signed an agreement and they signed it in good faith. They expected the minister to act in good faith as well. This is what the agreement is worth now — (sounds of paper being torn up) — and that is what the government’s word is worth now too. What will the Premier do to bring back integrity to the commitments his government has made with First Nations such as the Little Salmon-Carmacks First Nation?
Speaker: Before the Premier answers I would just like to remind members not to use props.
Hon. Mr. Fentie: There is no reason for us to bring back integrity to anything because, with what this government is doing, the integrity of governments and the relationship with First Nations has been dramatically advanced.
Let’s take some examples. When it comes to consultation, all past governments have dealt with that issue with First Nations. This government went beyond consulting with First Nations. When it comes to the Children’s Act review, one of the most important priorities for First Nation people in this territory, we didn’t just consult with the First Nations on the review; we sat down and structured a partnership and they are the architects of what will come: amendments to the Children's Act. First Nations are partners in that process.
When it comes to correctional reform, another area of the highest priority for First Nation people, we didn’t just consult with them: we made them partners. They will be architects of changes to our justice and corrections system. When it comes to the Education Act review, or the educational reform process, we didn’t just consult with them, we made them partners. They will be architects to changes in our education system that will better reflect the needs of First Nation languages, culture and requirements in our education system. Those are the things we’ve done.
For the member opposite to stand up and say that is not happening in this territory flies in the face of all the evidence. Where is the integrity problem?
Speaker: The time for Question Period has now elapsed. We will proceed to Orders of the Day.
ORDERS OF THE DAY
Motions other than government motions
Motion No. 275
Clerk: Motion No. 275, standing in the name of Ms. Duncan.
Speaker: It is moved by the leader of the third party
THAT this House recognize that the Yukon Party government may use a public/private partnership to finance the construction of the Dawson bridge and urges the Government of Yukon to conduct full public consultations to develop a public/private partnership policy framework before proceeding with any such plans.
Ms. Duncan: Mr. Speaker, it is a pleasure to rise this afternoon and address this motion. I would like to begin my remarks this afternoon by speaking to my reasons behind tabling the motion. In the motion I used the phrase, “the House recognizes that the Yukon Party government may use a public/private partnership”. That motion was originally tabled in April of this year, and it now appears that the “may” has become a reality. It appears that the government does intend to use the public/private partnership to finance the construction of the Dawson bridge.
The heart of the motion was to ensure that there is a full public discussion of the public/private partnership concept, that whole idea of the policy — what is the policy around a public/private partnership, how are they developed, and the whole concept of public/private partnerships. When I tabled the motion, I wanted to ensure that the government had a discussion with the public about public/private partnerships. Unfortunately there has not been one to date, and what I am endeavouring to do this afternoon is to ensure that at least part of that public discussion takes place by using my one motion day in this session to discuss the concept of public/private partnerships.
This afternoon we also have an opportunity to speak about the Dawson City bridge, and I would like to address that for a few moments before getting into the discussion about public/private partnerships, Mr. Speaker.
First and foremost, we have to consider in the discussions around a bridge at Dawson City whether it’s economical or not. Does it make economic sense? The Yukon Party platform in 2002 said the party would plan for the construction of a bridge to replace the ferry system when it is economical to do so.
The difficulty that Yukoners are having with this political campaign commitment is that the government hasn’t proven the economics of their case. The government has stated that the bridge is being built to save a million dollars annually in costs that are related to running the ferry, yet part of those costs — the majority of them — are covered under operation and maintenance and personnel costs. The Premier has said that all those people who work on the ferry will be given jobs, so where are the cost savings, given this remark on November 3 by the now Premier: “It’s simple arithmetic. It costs $1 million a year for a ferry; we have $1 million a year to debt-service a bridge. I think it’s a good thing.”
The math, as the now Premier and Finance minister has stated, doesn’t make sense.
Will the bridge improve tourism and the economy? The government has said and steadfastly maintains that the bridge will improve the economy and increase tourism. It hasn’t proven its case on these two fronts either. A bridge may well improve the economy in both the short and long term; however, it remains an unknown. The government has not proven its case. There have been no studies to prove the economic benefits of the project.
The government has steadfastly refused to do one.
I’ve asked that this be done as part of the preparation for the project; the answer is no. All we have is the rhetoric of the government and, unfortunately, Yukoners know the value of that — “the bridge to nowhere” as it’s being colloquially put on some Web sites.
Part of the reason the government cannot quantify the benefits of the project is they have no idea how many months of the year the bridge will be open. Why is that? Because the Yukon Party government is building a bridge with absolutely no commitments from the Alaskan government on their side of the road.
Alaska has not agreed to open the road year-round. We have an annual debate in this Legislature persuading the Alaskans, who do not spend money on their roads at the rate Yukoners do, to open their side of the Top of the World Highway for tourism and for the mining community. Correspondence from the current Minister of Highways to the Alaskans has proven that there is no commitment from the Alaskans to open their side of the road. The Yukon government has nothing in writing from the Alaskans on this.
The key question of a toll also remains unanswered by the government. I would note for my colleagues here in the Legislature that the cost of the resource road in the northeast of British Columbia, which the Minister of Economic Development has brought up repeatedly as a template for this project, is $40 million. It is a toll road with industry paying the bill. In the case of the bridge, the main group using it — if it’s open in the summer, as anticipated — will be tourists. Right now, the Government of Yukon provides a free ferry service to everyone, including tourists. Will we now be expecting our visitors to pay a toll on the bridge? Can the side opposite guarantee that there will be no toll on this road?
What is the cost of this bridge? After telling Yukoners for 18 months that the bridge would cost $25 million to $30 million, the government has now admitted on their Web site, in the request for qualifications, that the real cost could be as much as $5 million higher. There is some question in that request for qualifications as to where the interest costs are in that $35 million. They’re not added in. So how much is that bridge going to cost?
According to government, we’re looking at a project that will cost as much as $35 million. Before we have even started construction, before one shovel has turned to start construction, the project has already gone up $5 million — so much for the sound fiscal management the members opposite promised in their election campaign.
The government has clearly been lowballing the cost of this legacy project from the beginning. The members opposite know full well that the price tag is much higher, and they also know that the higher the price tag, the more opposition there is from the public and from voters.
Mr. Speaker, in June of this year the Yukon Party government announced that they were spending $540,000 to have UMA Engineering design the new bridge. However, according to documents that were released last week by the same government, any company bidding to build the bridge isn’t obligated to use the work done by UMA Engineering. It says that right in the request for qualifications. In other words, we’re paying twice to have the same bridge designed. Why is this? Why is the minister throwing away $540,000 of taxpayers’ money? I got no answer when I asked the minister this question in the Legislature.
Fundamentally, Yukoners are asking themselves why we are proceeding on bridge construction when we haven’t dealt with the fundamental issue of sewage treatment in Dawson. And not only sewage treatment in Dawson, Mr. Speaker, but sewage and water infrastructure throughout the territory is a priority that is well ahead of a bridge over the Yukon River, particularly when that transportation infrastructure is well-served by a ferry system.
Clearly the decision to build the bridge is a political one. It is based on doing what’s right for Dawson in the minds of the members and a legacy project, and ignoring the sewage issue, not only in Dawson but sewage and water treatment throughout the territory. The political priority is the bridge for the members opposite and it is being built. It is a sad example of the Yukon Party putting one riding and putting politics ahead of the people.
With respect to the public/private partnership issue, the government has no policy in place. There is no policy by the government, by the Yukon Party. There is no framework for the government to proceed in this direction. A year ago the Premier said, and again I quote: “We would never enter into a public/private partnership until a clear, transparent policy is developed.” — a clear commitment to Yukoners. The Premier himself used the word “never”, yet that is exactly what the government has done. That kind of statement, and the government turning around and doing something else, erodes the public trust in government. The Premier said they would never do it and they turned around and did it a year later.
What happens when we do things in this backward way without a policy in place? First of all, the cost of the bridge has gone up by $5 million. As I said in the request for qualifications, where are the interest costs? Secondly, because there is no policy in place, the taxpayer is on the hook to pay to design the bridge twice: $540,000 we already spent and now a request for qualifications that says you may or may not use the design. The government has thrown $540,000 out the window because they are pushing ahead without doing their homework, as the motion requested them to do.
Six months later, after spending this $540,000 to have a company design the bridge, six months later the government is telling companies that want to build the bridge that they can provide their own design. I can’t help but note that, with $540,000, we could have a recreation director in Dawson. We could have more than one. We would not have had to fire staff at the City of Dawson. It’s about people and people don’t appear to be the priority of the government.
I’ve had no answers about why the government is paying to have the bridge designed twice. The minister has commented several times about the use by the government of Partnerships B.C., and I’ve had an opportunity to review information from Partnerships B.C. I note that prior to the Government of British Columbia embarking upon the construction of a new capital asset using Partnerships B.C., they have something in place called a capital asset management framework. What they do, in short, is take a good, hard look at a capital asset in infrastructure before they start asking Partnerships B.C. to look at it.
They ask questions like: is there another way to meet the service delivery needs that could avoid new capital spending? Is there something wrong with the ferry that the government is not telling us about? Is there a way to better manage or use existing assets?
As tiresome as the ferry lineups can be for tourists, there is also significant public outcry about the lack of sewage treatment in Dawson, and that’s a bigger priority.
They ask questions in this capital asset management framework about ways to share the cost and the risk. Is there another way it can be done?
They also ask the significant question about effective, value-for-money comparisons. They say that these sorts of comparisons can only be made when all possible options are considered. They also note that capital asset decisions have to be driven by the need for this service. Again, Mr. Speaker, I point out that we have a ferry system that works.
Public/private partnership is a very interesting discussion. There’s a great deal of information on public/private partnerships. Briefly, I think one of the better definitions I’ve read is from a public administration textbook. It says: “Public/private partnerships are joint efforts on the part of local governments and the business community to plan for, generate public support for, and pay for and manage social programs or construction projects, projects that will be mutually beneficial.” That’s the essence of a public/private partnership.
We’ve had this discussion in the Legislature before, six years ago in 1998. It was a motion I brought forward at the time, and what I asked for was a debate and an investigation by the government into public/private partnerships. All I had asked for was an investigation by the government into this method of financing. That motion was supported by the Member for Klondike and, interestingly enough, the then Member for Porter Creek North, the former leader of the Yukon Party, also supported that Liberal Party motion. He said there’s no harm in investigating these options.
Unfortunately, the current Premier took somewhat of a different tack. What he said was: “Having been a small businessman and having incurred debt, I understand one fundamental issue here. No matter how you disguise it, how you label it, whatever the case may be, the common denominator is we must pay back the debt, whether it be now in the short term or whether it be deferred for the long term. I agree that governments have to look for innovative ways of creating jobs and stimulating the economy, but I’m not convinced that this one particular way, public/private partnerships, is the be-all and end-all.” He also had this to say: “I believe it’s a dangerous game to play to pre-commit future public sector revenues. We must not compromise the future in any way.” The now Premier went on to say, “…this government — ” and he was referring to the NDP government — “is committed to a pay-as-you-go regime, and that’s important because we believe, on this side of the House, that we should not compromise the future.” He said, “…I don’t believe going into debt today is the answer.”
He also said, “The risk factor is the critical one, Mr. Speaker, because if we were to proceed with the project, and should that project get into a situation where it is not solvent, for whatever reason, in this type of partnership, the public — the taxpayer — would have to absorb that risk. I think that is a very important consideration.”
The now Premier went on: “We must be conscious of the fact that spending the money is easy. Paying it back is the hard part — the ability to pay it back.
“Although I agree that looking at innovative ways is a very good step for governments to take, within this particular concept there are most certainly disadvantages…When we look at capital projects, we have to consider another fact. In this arrangement, if the private sector undertakes the project, instead of the government, there would likely be an overall increase to project cost due to financing charges. And that’s an important fact, Mr. Speaker, because no matter how you get the money, if it’s borrowed, there is a cost to that.”
The now Premier closed his comments by saying: “I support government searching and coming up with innovative ways but I don’t agree that public/private partnerships are one of them.”
And all of those quotes were taken from the MLA for Watson Lake in a speech he made in this House on April 8, 1998 on this very issue.
So the now Premier had one opinion, and, my, how times have changed. He promised a policy and changed his mind and decided to go ahead without a policy in place. He used to think P3s were a bad idea. He used to think going into debt and mortgaging our children’s future was a bad idea too.
Mr. Speaker, there are advantages and there are disadvantages to public/private partnerships. I do believe very strongly and very sincerely that we need to do our homework on this issue, that we need to have a full public discussion.
I fully anticipate that the members opposite, if they choose to respond to the motion, will argue and perhaps amend the motion. If they are prepared to amend the motion, I would ask that they consider the heart of the motion, which is that there be a public consultation on public/private partnership. Perhaps, in thinking about their address to the motion, they could, in the spirit of consensus and collaboration and cooperation, suggest that we have some form of a legislative task force on public/private partnerships and have some full consultation so that Yukoners know exactly what type of public/private partnership the government is proposing and precisely what the cost is.
Governments have embarked upon public/private partnerships in a limited way in the past — a very limited way. The NDP government embarked upon Connect Yukon and the former Liberal government embarked upon a very limited public/private partnership with the Northern Film and Video Industry Association in the purchase of the electrics package — it was a very small sum of money but very important to the industry. Connect Yukon has been much discussed in this Legislature and I won’t delve into the aspects of that particular one. The Northern Film and Video Industry Association was a third sector and non-profit sector organization working with government. As I said, it was a limited amount of funding and the public/private partnership was an opportunity to ensure that an industry was able to proceed with the infrastructure that they needed.
The current government is embarking upon a much larger, major financial commitment without a full discussion of the public/private partnership model they intend to use and the idea of public/private partnerships with the Yukon public. That’s a discussion I believe very strongly we should have.
I’ve already spoken quite broadly about the definition of public/private partnerships. There is also quite a variety of types of public/private partnerships. There are contribution contracts; there are operation and maintenance contracts; there is design/build; there is design/own/build; there is design/build/maintain; there is lease/develop/operate; build/transfer/operate; build/own/operate/transfer and buy/build/operate. There are all kinds of them.
There is quite an interesting array of literature, if one does a search, about public/private partnerships and, in particular, I would suggest a Canadian search of public/private partnerships, and it’s changing. In the brief opportunity I’ve had to look at some of the public/private partnership literature, the opinion is changing over the course of years. For example, there are papers. For example, the Saskatchewan Institute of Public Policy did a paper on public/private partnerships. One of the points that particular paper made is that a prerequisite for implementing a public/private partnership, or P3, is evidence that the project provides superior value for money than does a public sector alternative for delivering the same service.
The comparison has to involve the whole life analysis, so over the whole life of the proposed bridge — the whole life, including the financing costs and all the other costs — will it provide better value for money for Yukon taxpayers than owning and operating the ferry? That information needs to be known.
One of the points I neglected to make when I was speaking about Partnerships B.C. and some of the other information that the government has made available on the Web site, is that Partnerships B.C., when it considers a project, it is evaluated in such a way that there is a great deal of information about the assessment of whether or not the specific project would make a good public/private partnership.
I would like to challenge the government in my remarks to make sure that Partnerships B.C.’s assessment of the proposed bridge, and all the information associated with it, is made completely public. In other words, if they come back and tell us no, the public should know about it.
I would like the government to commit to putting that on the record. Also, perhaps, share with us the cost of asking Partnerships B.C. to do this task for us when we as Yukoners should also be considering and discussing and doing our homework on public/private partnerships.
Some of the other information that is out about public/private partnerships is available from the Canadian Federation of Independent Business: a very well-respected organization with a substantial number of Yukon members — information that they have made available to me and certainly available to other members if they choose to ask. Some of the information, discussion and comments that have been provided by their members to the Canadian Federation of Independent Business about public/private partnerships relates to these issues around tolls. Some member comments say that it depends on what the P3 is providing: yes to a user fee for highways; no to a user fees for hospitals.
Some members said government should handle certain areas but not as many as they do now. An example is military roads infrastructure. A private company should not own access to a town or area. Members also said that the giving away of public assets to private interests is immoral, if not unconstitutional. The public has never given a mandate to do this, and the comment is a quote: “It is treason.” P3s must be approached with caution. The same opportunity for waste and corruption exists.
Other members said a toll or user fee would be acceptable provided the quality of service remains the same or improved; also, if the toll or fee wasn’t horrendously expensive, especially in the case of monopolized services. Another member said user fees are only tax increases that the government doesn’t have to report — an interesting perspective in light of our Taxpayer Protection Act.
The other polls from the CFIB said — they polled their members — “Are you willing to pay a toll or a fee to a private company?” Evenly split, 49 percent say yes, 32 said no and 19 don’t know. Key factor, if the government is considering a public/private partnership as economic stimulus — the Canadian Federation of Independent Business asked their members, “Is there potential for your business to benefit from P3s?” Fifty-nine percent said no. Who is going to benefit from this public/private partnership as proposed by the Yukon Party and being researched for them by Partnerships B.C., as opposed to working with Yukoners on examining these options?
In doing a literature search out there, there is — and this idea of public/private partnerships comes up in a complete variety of areas, Mr. Speaker, not only in public administration or Canadian policy documents that policy analysts are very interested in, but it also comes up in magazines like Canadian Electronics. In March 2003, an advocate of public/private partnerships suggests that Canada could learn from the examples in the United Kingdom and makes reference to the Romanow report and the Rozanski report on education funding in Ontario. The article is very brief, and I had an opportunity to have a look at it. It doesn’t examine the cost to government. It is not so much from a policy perspective as it is an opinion piece.
Some of the other comments — newer papers, I should say, and the Saskatchewan paper I referenced is from 1999. In fall 2002, Elizabeth Moore asked in a document, a policy paper, whether or not the federal agricultural research in Canada going to a public/private partnership is going from public good to private gain.
There is, as I said, all kinds of literature, all kinds of comments, and there are a number of different worldwide examples of public/private partnerships. I would encourage legislators, Yukoners who are interested in the subject and us in our responsibility as Yukoners to examine the public/private partnership literature that is out there and have a full public discussion prior to entering into any massive, major undertaking such as the Dawson City bridge in a public/private partnership.
I don’t believe we should simply sign it over to Partnerships B.C. and say, “Here, you do it. You do the policy. You do the homework for us.” It’s inconsistent for us to sign that over to Partnerships B.C. and then turn around, on the national stage, and say, “But the north is different. But the north is special.” To advocate Yukon hire in every single one of the Public Service Commission job opportunities — “Preference will be given to Yukon candidates”. Shouldn’t we be doing our work on public/private partnerships? And the thrust of my motion is: shouldn’t we be doing this homework before we enter into a public/private partnership to build the Dawson City bridge?
The last article I’d like to briefly reference is, “The Economics of Public/Private Partnerships.” The executive summary notes that governments across Canada and around the world are looking for new ways to deliver public services at lower cost to taxpayers and users. Many have chosen to form public/private partnerships involving the private sector to a greater extent. This choice is often controversial, with the debate routinely driven by ideology more than careful analysis. All I’m asking for today is careful analysis before we enter into a public/private partnership on the Dawson City bridge. As far as I know, that’s the only undertaking I know of that the government is choosing to discuss in a public/private partnership. Should they be willing to share that they are looking for public/private partnerships for other major construction projects or the Correctional Centre or a hospital or a seniors care facility, I’m asking that they have that kind of public discussion in the Legislature and with Yukoners — have a full public consultation on public/private partnerships.
I recognize that Partnerships B.C. has developed some expertise in this particular area; however, I do not believe we should entirely abrogate our responsibilities as Yukoners or as legislators to Partnerships B.C.. We need to look at the idea of public/private partnerships in our financial situation and in the Yukon context. We do on everything else. We argue for Yukon context in formula financing; we argue for Yukon and northern context in health care funding; we argue that we’re different for economic development funding; we argue consistently that the north is different. So let’s be consistent and examine public/private partnerships in the Yukon context.
Mr. Speaker, I’d like to briefly summarize the arguments I’m asking members to consider this afternoon. As for the bridge — specifically the bridge in Dawson City — I’ve made the point that the government has not demonstrated the economics; the government does not have a commitment from the Alaskans to open the road on the other side; they have not proven a bridge will improve the tourism in Dawson City and, overall, the Yukon economy. They have not soundly explained to Yukoners why building a bridge is ahead of such fundamental health issues as sewage treatment plants, not only in Dawson City but throughout the Yukon, and sewage and water infrastructure as a whole.
They have not fundamentally lived up to the Premier’s commitment on the floor of the House that they would never enter into a public/private partnership until there was a clear, transparent policy; and we have many unanswered questions with respect to tolls, costs, the relationship with Partnerships B.C., what we’re paying. We have no commitment from the Government of Yukon, the Yukon Party, that they will make all the information from Partnerships British Columbia public, and we have had no public discussion among legislators, if they so choose, nor with the Yukon public as a whole, on the concept of a public/private partnership as it would relate to the construction of the bridge and public/private partnerships and their use in the Yukon.
There has been a very, very limited, small experience. We haven’t had that full public discussion with Yukoners, and we need to do that. There’s a great deal of literature out there. There is some Canadian experience, both good and very negative. We need to look and learn and know precisely what we’re doing, and do it with a clear, transparent policy in place.
So I’m asking members to support the concept, and if they choose to amend it so that it’s a full public consultation and a task force of this Legislature, I would welcome that kind of amendment. I want to see the public discussion. We owe it to Yukoners. That’s what we were elected to do. Do the homework. They don’t want to involve this side of the House — well, I would suggest that that negates their recognition and our commitment that brings us here in the first place.
Let’s do the homework. Let’s do it right and let’s ensure that there is a full public consultation on public/private partnerships before we proceed any further with the bridge at Dawson City. I’m asking the government: think about what you’re doing. Think about what the policy is, what the public/private partnerships are. Think about Yukoners. And the offer is there. Let your fellow legislators help on this particular issue. Let’s have the public discussion. No harm, no foul in knowing exactly what we’re doing and where we’re going.
Thank you very much for your time, Mr. Speaker.
Mr. Rouble: It’s indeed my honour and my pleasure to speak to this motion today. I would like to thank the leader of the third party for bringing it forward.
Before I begin, I would like to address one of the questions that she just raised. In the member opposite’s presentation this afternoon, one of the questions she asked was who is going to benefit from a public/private partnership. I can think of two people: number one, the taxpayer, and number two, the person who wants to get across the Yukon River.
The motion that this House recognizes that the Yukon Party government may use a public/private partnership to finance the construction of the Dawson bridge and urges the Government of Yukon to conduct full public consultation to develop a public/private partnership policy framework before proceeding with any such plans is indeed a very interesting one. It is one that I am pleased to talk to.
It’s very similar to a motion that I put forward in this Assembly and that was that this House urges the Government of Yukon to create economic opportunities by promoting public/private sector partnerships that will increase private sector investment in the territory and develop a much-needed infrastructure.
This is indeed a very important issue to discuss and debate. Public/private partnerships and their policies are going to have a significant impact on how our government and future governments work and operate.
In the last election when all of us knocked on the doors of Yukoners, we in the Yukon Party committed to restoring investor confidence in getting the Yukon economy back on track, giving Yukoners renewed optimism and providing a future for our children. I am pleased to say that we are well on track to doing that. We are restoring investor confidence because it is important that the private sector invest in our territory as well. Clearly the government can’t be and shouldn’t be responsible for everything. Having the private sector invest, whether it’s in the creation of their own business or expanding existing businesses or starting a new business, or providing additional services, additional products available to Yukoners, is important.
It’s also important to recognize that when we campaigned, we campaigned on the pledge that we would go to work for Yukoners and make decisions, and that’s the role of the Assembly, the members in Cabinet — to make decisions regarding governing the territory both on a legislative front and also from the issue of the services the government is responsible for providing.
One of the roles of government — and I’ve mentioned this before — is to facilitate a higher quality of life for all the people in the territory, and we do that by the provision of infrastructure and services. We do that by meeting the collective needs of Yukoners. The other role — our legislative role, so to speak — is to prevent anarchy in the territory.
We all need the infrastructure in our territory: roads, bridges, sewer, water, waste facilities — those are the typical pieces of infrastructure that many are familiar with. There are also things like recreational facilities, hospitals and schools. These are also pieces of infrastructure that are incredibly important in our territory and that we’re responsible for providing. In a lot of cases, we accept a responsibility, do it and then vertically integrate. If we need a load of sand, we hire a person to drive the truck. We buy a truck; we buy a gravel pit. In most cases we contract the crushing out of that gravel, but in a lot of cases, we vertically integrate. We go “down the pipe”, so to speak. We take control of all the processing and often we employ the people who do it and buy the equipment that does the work. We don’t need to do that for everything. We need to remember our simple economics role, and that’s the allocation of scarce resources. We only have so much to go around. The pie is only so big. We’ve got to figure out how to divvy up that pie and how to do the most with our limited resources.
Government is often like a household and, like a household, we have to use our resources wisely. I’m sure all of us in our own personal lives have made decisions about whether we buy something, whether we lease it or rent it, beg or borrow it from someone, whether we build our own or buy it off the shelf. There are benefits for all those things.
If we buy something, well, we have it forever. We buy things that we’re typically going to use more than once — over and over and over again. That’s how we get value out of it.
In the other case, we rent things. For example, if you need to put a fence around your house, you’re typically not going to need to have a motorized posthole digger for the rest of your life. So you typically go and rent something like that, or the other option is that we hire a contractor who probably has a posthole digger to come and dig that hole for us.
There are also benefits to doing it yourself — for example, if you need a hole dug in a special area, or you want to build up your own muscles by digging your fence holes yourself. There are other conditions or characteristics that people keep in mind in making their decisions.
So, Mr. Speaker, different situations call for different structures. We must analyze our own unique situations and then identify the different situations we’re in and identify the different solutions.
Now, when I was teaching business courses, one of the common concepts put forward was not to sell a product, but to sell a solution. You don’t necessarily need a hammer; you need a picture hung. It isn’t the physical asset we need — the hammer. It’s the result of it — we need the picture on the wall. Do we always need to buy the asset? No, what we’re after is the solution.
The issue here is: how do we get people from one side of the river to the other? What’s the best way to do that? Well, we don’t need to own a hammer to have a picture hung on a wall. We can find a different solution for that.
Mr. Speaker, P3s sounds like a new term but, like everything, old becomes new again and it has been used for years.
People are often afraid of the unknown, especially when people, for whatever purpose, want to instil a sense of fear or rile people up about something; often they might just spread confusion, which will cause people to worry. People often worry about the unknown. This new term “public/private partnership” has been around for quite some time but many people are still in fear of it or scared of it.
The term “public/private partnership” has a specific meaning in the Canadian context. First, it relates to the provision of public services or public infrastructure. Second, it necessitates the transfer of risk between partners. Risk is another one of those scary words that often cause a lot of fear for people. I will come back to that a bit later.
I found the definition for public/private partnership that the member opposite put forward a bit narrow. The definition embraced by the Canadian Council for Public-Private Partnerships, which was established in 1993, defines public/private partnerships as a cooperative venture between the public and private sectors built on the expertise of each partner that best meets clearly defined public needs through the appropriate allocation of resources, risks and rewards.
That’s a very interesting definition because it involves the public sector and the private sector working together, recognizing that each organization has its own strengths and weaknesses.
And like any good partnership, you find a partner who has a strength where you have a weakness. It also acknowledges that the solution needs to meet clearly defined public needs. So again we have to clearly state what the problem is. If I can go back to my analogy earlier, Mr. Speaker, the problem isn’t that we need a hammer; the problem is that we need a picture hung. So again, we need to clearly define the public need.
Then there is the appropriate allocation of resources, risks and rewards. Where are the resources coming from — resources meaning money, equipment, skill, the labour pool, the materials, the risks — there are risks associated with everything, and I will come back to risks — and the rewards? What is motivating the organizations to get involved and to do this? And there has to be a reward. The reward to a private enterprise is often the profit. Mr. Speaker, profit is not a four-letter word. Profit is the concept that makes our economy go around. It is profit that drives businesses to stay in business, to accept risk, to learn new skills, to take on new projects and to solve the needs of consumers.
Now, public/private partnerships often span a very broad spectrum of models that progressively engage the expertise or capital of the private sector. At one end, there is the straight contracting out as an alternative to traditionally delivered public services. At the other end, there are arrangements that are publicly administered but within a framework that allows for private finance, design, building, operation and, possibly, temporary ownership of an asset. Simply put, a public/private partnership — a P3 — is a partnership between the public and private sectors where there is a sharing of risk, responsibility and reward and where there is a net benefit to the public.
This isn’t a new concept. The concept gained favour in the United Kingdom in the 1980s, where they refer to it as the private finance initiative. Budget cutbacks throughout the western regions of the world made it necessary for many governments to develop new relationships and new procurement strategies where the profits and costs of different ventures were shared with the private sector.
At the college I attended in Ontario, I just witnessed a very successful public/private partnership. The student association there recognized that it had a need for a new rec centre — a new gym, weight room, that type of thing. The traditional approach, or the old-school approach, back in the 1970s when governments were flush with cash or willing to go into significant debt, would simply have been for the college to build a new structure. But as we’re all eminently aware, we now live in a new fiscal reality and governments simply don’t have the cash to be able to put in structures like that.
But the students still had a need, so they partnered with the college, which provided land, with the local YMCA, another organization in town that was responsible for providing recreation services, and they partnered with a bank. The student association received a loan in partnership with the college, the building was constructed and the local YMCA managed the facility. The students received the benefits they were looking for. They were looking for an on-site gym and rec centre, which they received. Also the YMCA received a new facility, a new structure it could use, and indeed they do open the facility to non-students during some times of the day. The taxpayer of the area also won, because they weren’t on the hook for paying for the structure.
We’re seeing these used all across Canada. Many of the organizations out there — the umbrella organizations, such as the Canadian Council for Public-Private Partnerships — put out best practices. They put out the hundred best public/private partnership projects. They provide many other reports that illustrate many of the success stories that are out there.
Now not every project, though, is suited to be a P3. In order to be considered a P3 project, a project should demonstrate some very important characteristics. It happens when the public and private sector partners are brought together and there’s a meeting of the minds, where they work together toward shared goals or objectives. That could be the provision of the service; that could be the gaining of the expertise; it could be in gaining exposure. One other example just of government in general is that many advertising companies choose to lower their prices when dealing with governments in order to gain a prestige account. There’s a situation where the government is working with a private sector firm, the private sector firm is reducing their rate for a perceived benefit, and that’s having a prestige account. And they can use that in their promotional efforts to prove that they’re better than their competition. It’s just a small part of it, but it shows how partners can work together toward their own goals and objectives.
In a P3, each partner contributes time, money, expertise and/or other resources. The decision-making and management responsibilities are shared among the partners, and that’s an important point to make: the decision-making and management isn’t just with one of them. As they both assume some level of risk, they both need to be involved in the decision making.
The private sector takes on meaningful risk as does the public sector and, most importantly, the taxpayer receives value for money. That has got to be the number one priority of this — that the taxpayer receives value for money. I’m sure all members of this Assembly are well aware of situations where government has procured something where it didn’t receive its expected level of value. It is planned for in this type of structure that that value for money will be there.
The essential components of a P3 are that a meaningful share of the risk is transferred to the private sector and, again, that value for money, from the perspective of the taxpayer, is obtained.
Now, risk — risk is often a scary word. Risk implies danger. But without assuming some kind of risk, one can’t reap a reward. That’s just how the system works: unless you risk slipping on the floor, you can’t get out of bed in the morning.
In terms of infrastructure projects, the major categories of risk are: design and construction risks; commissioning and operating risks, respecting availability of materials and equipment, operating costs, performance and maintenance costs; demand risks relating to utilization; risks respecting residual value, such as when transferring ownership after many years; risks resulting from obsolescence or changes in technology; regulatory risks, including changes in taxation; and financing risks.
Everyone out there wants to mitigate their risk. Whenever you enter into anything there is usually a calculation, whether conscious or subconscious, of the risk involved and you take steps to mitigate that. When the private sector enters into a relationship and there are risks present, how do they mitigate that risk? They typically do that by increasing the price: the contractor comes out, doesn’t know exactly what he or she is getting into, and typically the price is going to go up.
You can mitigate that risk by giving a hand in design, allowing greater identification of the needs, a greater role in the solution, and a more flexible cost structure. For example, if you hire a carpenter to come in and move a wall, unless they explore the inside of that wall, they don’t know what they’re going to get into. They might have to move plumbing or electrical, or they might have to — well, find a wallpaper that has been out of style for the last 50 years. The list of risks goes on and on. So you need to take steps to involve them in the decision and the management of the project, and typically that will cause a decrease in the price.
Now I’d like to go back to value for money, which is the most important factor in this. P3s were designed as a way to do more with less, offering an alternative way for governments to provide their citizens with infrastructure and other services at a lower cost. The concept emerged when increasing public demand for high-quality infrastructure and services was coupled with pressures to reduce spending, lower taxes, and reallocate resources to core areas of government that could not be handled by the private sector.
This is why achieving value for money is a primary intent of P3s. In order to capture the private sector efficiencies caused by competition, a sufficient number of competitive bids is generally necessary.
Now, Mr. Speaker, another very important aspect is the protection of the public interest. Whether using the P3 model or not, government’s first responsibility is to the public. All aspects of a P3 arrangement, from conceptual planning through to implementation, must be capable of withstanding public scrutiny. However, public sector values of accountability, transparency, democracy and neutrality are not always a natural fit with the business emphasis on confidentiality and the bottom line. Indeed, Mr. Speaker, structures must be designed to take those into consideration. Governments typically pursue partnerships with the private sector to harness private sector economic efficiencies and mitigate government cost and risk, avoid debt or financing restrictions, enhance social equity, establish experimental pilot projects or mitigate small market size. P3s or substantive partnerships are viable only for reasons of economic efficiency, risk mitigation or financing restrictions. Other forms of partnerships that are not primarily propelled by financial motivation tend to use partnerships to enhance social equity, establish experimental pilot projects or to mitigate small market size.
Mr. Speaker, in the past, the Yukon government has primarily used partnerships to mitigate small market size by lessening private sector costs and risks.
Now, Mr. Speaker, as we heard from the mover of the motion, there are several different models of public/private partnerships. I think it’s important to shed some light on these, because the more people know about these, the less fear they will have over them. And as I indicated earlier, there is quite a broad spectrum of types or structures of public/private partnerships.
You could have a design-build partnership. In this case, the private sector designs and builds infrastructure to meet public sector performance specifications, often for a fixed price. So the risk of cost overruns is transferred to the private sector. There’s an operation and maintenance contract where a private operator, under contract, operates a publicly owned asset for a specified term. In this case, the ownership of the asset remains with the public entity. We see these used all the time, Mr. Speaker.
Moving on in the spectrum, you come to the design-build-finance-and-operate partnership. In this case, the private sector designs, finances and constructs a new facility under a long-term lease and operates the facility during the term of the lease. The private partner transfers the new facility to the public sector at the end of the lease term. That’s an important thing to point out as the asset does become the property of government at the end of the contract. Also, with having the constructor of the building operate it, it also encourages the designer, or the builder, to take into consideration many of the full life-cycle costs that are important in running a business. I will get to that in a bit more detail in a moment.
The next type of public/private partnership would be the build-own-operate-and-transfer. In this case, a private entity receives a franchise to finance, design, build and operate a facility and to charge user fees for a specific period, after which the ownership is transferred back to the public sector. There’s a buy-build-operate type, which is a transfer of a public asset to a private or quasi-private entity usually under the contract that the assets are to be upgraded and operated for a specific period of time.
In this case, public control is exercised through the contract at the time of transfer.
Next on the spectrum is an operation licence where a private operator receives a licence or right to operate a public service, usually for a specified term. We have seen this on many of the attractions throughout the Yukon. I am not sure of the current state, but in past years the operation of tours on the SS Klondike was contracted out to a private enterprise. It was clearly a public sector asset. We needed tours, so a private firm was allowed to operate the tour concession.
Then the last model of a public/private partnership is where the only thing that is provided is financing, where a private entity — something like a bank — provides funds for a project directly or uses various mechanisms such as long-term leases or a bond issue. For example, if the government was to lease a photocopier, the photocopier company sells it to the leasing company and then the leasing company provides that asset to the government for the government’s own use.
A moment ago I mentioned the full life-cycle costing and why that’s an important characteristic to mention. When we build something for our own use or build something that we are going to maintain ourselves, we usually put a lot more thought, a lot more time, and a lot more of an investment into it. I believe it was even mentioned in this House that there were buildings that were built for the territorial government that didn’t include insulation. When you are building your own house and if you intend to live there for quite some time, I think you have a tendency to make sure there is an awful lot of insulation in there. In fact, you would quickly sit down and do the math and say: if I spend a little bit more on insulation right now, what is the payback? If I spend an extra dollar on insulation today, how much oil or gas will I save next year? You have a tendency to make a better investment in the asset so that the ongoing operations and maintenance costs are reduced.
Looking at the full life-cycle cost of something is very important. Typically — and unfortunately in many of our projects — when we look at building a new building we only look at the capital cost — how much is it going to cost to build this new building?
But what we don’t do is say, “How much is it going to cost to maintain it year after year after year?” Once you build it, you have committed to those future costs for as long as you own the asset. Often, if we looked at the long-term cost, we might actually spend more on the upfront capital costs — over-build at the beginning, in order to reap the rewards of lower operation and maintenance costs throughout the life of the asset.
I think we’ll see that when we get to the bridge. In the situation at Dawson, we have an ongoing operation and maintenance cost of — we’ll call it $1 million per year. So, for the next 75 years, we’ll pay $1 million per year. And without doing the present value calculation, taking interest into consideration — which should be done — that works out to about $75 million. You then add in the capital cost of the new ferries, because a ferry doesn’t last forever. The situation that we’re faced with in Dawson right now is that the ferry needs to be replaced. But if we replace one now, in 40 years, and then at the end of the 75 years, well, that’s three more ferries to buy. If you add that in to the cost, the cost quickly escalates past $75 million.
We need to sit down and ask: what are the full life-cycle costs of this? The other factors —
Some Hon. Member: (Inaudible)
Mr. Cathers: Pursuant to Standing Order 3(2), there does not appear to be a quorum present in the Assembly.
Speaker: Order please. According to Standing Order 3(2), if at any time during the sitting of the Assembly the Speaker’s attention is drawn to the fact that there does not appear to be a quorum, the Speaker will cause the bells to ring for four minutes and then do a count.
Speaker: I have shut off the bells and I will do a count. There are 15 members present. A quorum is present. We will now continue debate.
Mr. Rouble: It is my pleasure to debate this and discuss this with so many smiling faces. As the leader of the third party stated in her address, the issue of YTG entering into agreements with the private sector is nothing new. Participating in public/private partnerships has occurred in the past, whether they were recognized under that banner or not. The Yukon territorial government has partnered on countless projects and the Yukon government has engaged in these partnerships primarily to mitigate the small market size risk. The justification for this type of government involvement is that the territory’s small population often requires more government assistance to mitigate private sector risk so that products, services and infrastructure requiring a larger market and subsequent larger economies of scale can be developed.
I am sure that we can all agree that most Yukon businesses out there wouldn’t be in existence if it weren’t for the purchasing power of the Yukon territorial government.
To date, the Yukon government has not made any deliberate attempts to engage in P3s other than the Connect Yukon project. In this case, the government was involved to mitigate small market size. Financial risk, however, was not equitably shared between the Yukon government and the private sector partner. I believe that the territorial government’s responsibility in this was $23 million compared to the $3-million investment by the private sector; however, other types of risks such as design and construction, technological obsolescence and regulatory risks were assumed by the private sector company.
I believe this House has seen many debates regarding whether or not that was a good project and if the government was on too much of a hook. The Yukon government has also pursued partnerships to promote and transfer new technologies to the private sector, such as the Watson Lake district heating system. Although the Yukon government has an established history of funding NGOs to deliver services based on social considerations, these have predominantly been non-partnership situations.
As the leader of the third party commented, this isn’t really anything new. Let’s take a look at some of these examples. The Yukon territorial government entered into a build-own-and-operate project with the Connect Yukon program. The reason for this project was to provide public infrastructure where there was no business case to provide for private provision. This project had a high risk to government and a low risk to the private sector. The partnership was between the Yukon government and a private sector firm to build a telecommunication infrastructure. Now, as we mentioned earlier, there was a significant cash injection from the territorial government, and that also was spread out over many years as another way of financing this type of project. I believe the government that initiated it wasn’t actually the government in power when the final loan payment was made, so this is a situation where previous governments found a way to saddle future governments with a significant debt and a significant cost commitment. Mr. Speaker, I really question where the public consultation was on this project.
Now, Mr. Speaker, there have been some very positive projects out there — for example, the Polarettes Gymnastics Club at Vanier school. Now, this was done for social considerations. The reason or the rationale for the project was to provide an appropriate space for gymnastics. It had a high risk to the government and a smaller risk to the NGO. In 1994, the Government of Yukon entered into an agreement with the Polarettes Gymnastics Club to build a gymnasium onto what is now Vanier Catholic Secondary School. The project was designed by the club and turned over to Education and Government Services for construction. In this phase, the total project cost of over $400,000 was funded by the government. And then in 1999, the government entered into a $330,000 contribution agreement with the club to construct a new addition. The club was responsible for design, tendering and construction. In 2000, YTG had to install a new emergency exit to correct a building code issue created by the original addition. So, Mr. Speaker, in this case, government worked with a private sector organization to satisfy a need out in the community.
The waterfront trolley system, Mr. Speaker, is an example of a contributory partnership. That’s one where government agrees to fund an organization to carry out an activity or project over which the government has little control. So the government contracted with a local organization to establish a waterfront trolley as a tourist attraction — again, Mr. Speaker, an example of partnering with a local organization. Government does this over and over again. We do this with service organizations where we have contribution agreements with NGOs and other service organizations to undertake efforts and put on promotions that the government has an interest in.
It’s nothing new for the government to partner with the private sector. Previous governments have entered into these agreements, but they have done so without a strategy. Again, I need to ask, in the past, where was the public consultation on projects like Connect Yukon? Where was the consultation on initiatives like the lease on the 9010 Quartz Road project — a significant long-term investment? Where was the consultation on those?
The Yukon government is committed to following best practices for P3 implementation, and we’re planning to use the Dawson bridge as a pilot project. Let’s take a look at that project in a little more detail. Let’s take a look at the current situation.
Mr. Speaker, people need to get across the Yukon River. That’s not the debate, or at least I didn’t think that was the debate. I’ve just heard the leader of the third party describe the future bridge as “the bridge to nowhere”. Does that mean we currently have a ferry to nowhere? Are the members opposite advocating for the territorial government to discontinue the operation of the ferry? Is that their position? Do members opposite not recognize the value in having that link?
I recognize the value in having that link. People need to get from one side of the river to the other. I don’t believe that’s the debate any longer. If we can all accept that there’s a need to get from one side of the river to the other, let’s look at what the best solution is for this — what makes sense?
We know the ferry costs about a million dollars a year to operate, and we know the ferry we have now is almost at the end of its lifespan. The situation we’re in right now is this: do we plan to build a new bridge or do we want to buy a new ferry? The members opposite need to be clear on this. They need to be clear as to whether or not they oppose getting from one side of the river to the other or, if they do agree we need to get across the river, how do they want to see that done? Do they want to see that done with a bridge, or do they want to see that done with a ferry?
I think the math clearly lays out that a bridge is the far more economical way of getting from point A to point B.
Now, the government has taken a look at this and put together a request for qualifications. They’ve stated that the purpose and challenge of this project is to deliver a high quality bridge at the lowest life-cycle cost solution, using proven cost-effective technologies in a way that meets all of the government’s objectives. That sounds to me like a very clear, concise, straightforward project description — high quality bridge, lowest life-cycle cost solution, using proven cost-effective technologies in a way that meets all the government’s objectives.
The Government of Yukon is looking for someone to build and finance a bridge over the Yukon River at Dawson, and the objectives that they are looking to accomplish are that there will be year-round access between west Dawson, Sunnydale and Dawson City, that it will promote economic development in west Dawson and the Klondike region and, in particular, provide opportunities for Yukon and local businesses and employment opportunities for Yukon and local residents, that it will provide a quicker access for emergency vehicles, provide a second land-evacuation route in the event of a natural disaster, accommodate both existing and future increases in local tourist and commercial traffic on the Top of the World Highway, accommodate the possible future expansion of Dawson City, and prepare for the eventual retirement of the George Black ferry.
Additionally, the government would like to achieve, through its procurement process, a solution in terms of bridge design, construction, financing and capital rehabilitation that achieves the following objectives: (1) that it minimize the bridge’s life-cycle costs, including costs associated with construction, delays, capital rehabilitation, so that there are meaningful, long-term cost reductions over the projected 75-year lifespan of the bridge; (2) that it would transfer the risk of investing in and maintaining a bridge structure to a private sector partner; (3) ensure the bridge complements Dawson City’s heritage environment and is an asset to the community through a collaborative relationship with local stakeholders; (4) fulfill commitments to the Tr’ondëk Hwëch’in First Nation and provide them with opportunities to participate in the project; and (5) that there would be protection for public safety, both during construction and after when the bridge will be available for use, and protection of the environment.
The government is seeking a concessionaire to design, build and finance the bridge, to carry out capital rehabilitation of the bridge so that it remains available for public use to a prescribed standard and with an appearance that complements the community and its heritage environment.
Clearly, strong objectives — objectives that, when met, will significantly benefit the people of the Yukon and the people of the territory.
The government contemplates a concession agreement of up to 30 years during which the concessionaire will be able to service and amortize its investment and to cover other costs incurred under the agreement. Time payments will be made to the concessionaire provided the bridge is available for use and maintained to the prescribed standard. The government expects that ownership of the bridge will remain with the government and that all rights the concessionaire has with respect to the bridge will terminate at the end of the concession agreement term. The bridge will become the property of the territorial government.
The essential characteristics of this business opportunity, for the provision of this service, this asset, are the following: that the concessionaire will design the bridge. Now, the concessionaire assumes design risk whether it elects to use the UMA design or use their own. It’s important to give the builder of this bridge the flexibility if they can find a better design that meets all the established criteria, that they can do so in competition with others who might use the UMA bridge design. We’re going to have a competition between different potential suppliers.
So they’ll have to sharpen their pencil when looking at this. But they’d have the flexibility to choose their design or the one that’s being provided. They will construct the bridge according to the standards set out in the concession agreement and make it available for service by fall of 2007, and for a period of up to 30 years inspect the bridge and carry out capital rehabilitation as required to keep the bridge at the standard stipulated by the concession agreement. We’re asking for a solution; they’re going to provide one.
The government will pay the concessionaire a monthly performance payment provided in accordance with the terms of the concession agreement. The concessionaire will finance the cost of building the bridge and of capital rehabilitation. Under the terms of the concession agreement, Highways and Public Works expects the concessionaire to provide proof of its best efforts to provide employment opportunities in the local areas and to use local and Yukon businesses. In addition, the concessionaire may be required to contract with the Tr’ondëk Hwëch’in First Nation or assume contracts with the Tr’ondëk Hwëch’in First Nation or to integrate work carried out by the Tr’ondëk Hwëch’in First Nation into the project. More information on that will follow. Clearly there are policies and practices being followed here. Clearly this is based on best practices for preparing something of this nature.
Now, during the procurement process, the territorial government has requested that Partnerships B.C. assist in the procurement process for this project. We recognize that we might not have all of the capacity in-house to do this, and rather than reinvent the wheel, we’re working with a very established, internationally recognized organization that will work with the territorial government to implement best practices, recognizing the unique situation that we find ourselves in in the Yukon.
It is also important to know that the bridge will become the property of the government at the end of the concession.
Clearly, this process that I’ve outlined — and I’ve only gone over a short version of it — the request for qualifications is available on-line, and it provides many more details regarding this project. But, clearly, best practices are being followed.
A partnership with Partnerships B.C. is being fostered and followed, and it allows us to apply best practices in our own unique context.
Significant work has been done to work with Yukoners regarding P3s — public/private partnerships. This isn’t anything new. Many of the business organizations in the territory are already familiar with this and more are taking advantage of training programs and conferences every day.
The writing is on the wall. It has been there for some time about the Yukon government entering into this type of relationship. I think all previous governments in the last decade or so likely looked into this. We are recognizing that this is the way that we need to go in order to provide infrastructure to Yukoners.
The Yukon needs infrastructure and the Yukon needs private sector involvement. It needs this in a fiscally responsible manner. We have done our homework on this. We have partnered with the right organizations. We are using this project as a pilot project in order to further define our best practices for our own unique situation.
Perhaps the member opposite wasn’t aware of all the work that had been done around this when the motion was put forward, and the member opposite has also indicated that this motion is time-dated, that it was tabled some time ago and that the situation has changed.
Mr. Rouble: Now, Mr. Speaker, in keeping with the progress that has been made on this issue, the work that the government has done in communicating with people about P3s, the work that the government has done in working with Yukon contractors to educate them on what public/private partnerships are all about, Mr. Speaker, I respectfully make the following amendment to the motion:
THAT Motion No. 275 be amended by deleting the expression “before proceeding with any such plans” and substituting for it the following:
“while proceeding with plans to use construction of a bridge at Dawson as the pilot project for public/private partnerships involving the Yukon government.”
Some Hon. Member: Point of order, Mr. Speaker.
Point of order
Speaker: Leader of the third party, on a point of order.
Ms. Duncan: Mr. Speaker, on a point of order, we have had several rulings in the past and discussions in this House as to whether or not an amendment changes the intent of the motion. Now, I have only had the opportunity to hear the amendment. In examining the amendment, I would ask you to consider, in light of those rulings, whether or not the amendment changes the intent of the motion — the intent of the motion being public consultation prior to the construction of the bridge. Would you consider that in your ruling on the amendment, please?
Speaker: Yes, I will. In fact, I’d like to point out to the leader of the third party that I just had several conversations with the Table Officers with regard to the propriety of the amendment. Based on my listening to your presentation and the consultations with the Table Officers, the amendment is in order.
On the point of order, go ahead.
Ms. Duncan: Could I just ask you to elaborate on your understanding as to why it is in order, Mr. Speaker? I was unaware you had already received the amendment prior —
Speaker: I just received it.
Ms. Duncan: You’ve had discussions already with the Table Officers, though, on how —
Speaker: While the member was in the process —
Ms. Duncan: You’re saying that it doesn’t change the intent of the motion, and I’m asking why — if you would just elaborate on your ruling for me, please.
Speaker: All right, the Chair is comfortable doing that. You indicated in your introductory speech to the motion that if members were to amend the motion — if I’m recalling correctly — you would then urge them to maintain the public consultation perspective in the motion. That is the information I gleaned from your introductory speech to the motion. Then, in consultation with the Table Officers, we have come to a consensus that the amendment is permittable.
It has been moved by the Member for Southern Lakes
THAT Motion No. 275 be amended by deleting the expression “before proceeding with any such plans” and substituting for it the following: “while proceeding with plans to use construction of a bridge at Dawson as the pilot project for public/private partnerships involving the Yukon government.”
Speaker: The Member for Southern Lakes, on the amendment.
Mr. Rouble: As I stated at the beginning of this debate, I appreciated the member of the third party bringing forward this very important topic. Indeed, public/private partnerships are going to be a very important tool for government to use in accomplishing the objectives that the people of the Yukon want us to accomplish.
I agreed with the member opposite’s motion, but it did not recognize the significant work that has been done since the member tabled the motion and our current situation.
The motion will now read:
“THAT this House recognizes that the Yukon Party government may use a public/private partnership to finance the construction of the Dawson bridge and urges the Government of Yukon to conduct full public consultations to develop a public/private partnership policy framework while proceeding with plans to use construction of a bridge at Dawson as the pilot project for public/private partnerships involving the Yukon government.”
I think that’s in keeping with the intent of the motion — that it include ongoing public consultation work, that it include public/private partnership policy work. As we all know, the development of policy is an ongoing issue. It certainly isn’t something that’s stagnant. We learn from every project that we have. Indeed, it’s often very difficult to learn anything without actually doing something.
So, as the Yukon Party government has stated on many occasions, we intend to go forward with this project. We will use it as an exercise, not only to satisfy the well-founded need of replacing the ferry and linking one side of the river with the other, but we will also use it to learn more about public/private partnerships and how they will work in our own unique Yukon context.
I think this is a good motion. I think it’s a good amendment that recognizes the current situation we’re in, that recognizes the hard work that the territorial government and its officials have done in working with Yukoners and Yukon businesses to educate them about public/private partnerships, and I would ask that all members of the Assembly support and endorse the amendment and the motion.
Ms. Duncan: I am pleased to rise to address — Well, actually I’m not pleased to rise to address the amendment. I’m not going to disagree with your ruling; however, I will point out that the motion now makes absolutely no sense as it’s worded and, as I’m advised by the Table Officers, quite frequently that’s the case. All this has done is point out that this is yet another Wednesday where we have failed to have a thorough debate about an issue of importance and it has degenerated into partisan gamesmanship on the floor of the House. The fact is this is not a debate about public/private partnerships. The member opposite, in his amendment — and it will be a dispute between members — has suggested, well, where was the consultation on Connect Yukon, a previous public/private partnership. Well, good question. Ask the government that dealt with it. That issue was raised on the floor of this House.
The consultation on the public/private partnership, the lease arrangement — which was an entirely different arrangement from what is being proposed by the government — had significant consultation, including a transparent public tendering process and 800 employees of the Government of Yukon who provided input into that particular initiative. The member also said that the homework has all been done, that there has been public consultation. There has not been public consultation on the public/private partnership related to the bridge, and the intent of the motion was that there be public consultation before the construction of the bridge, that there be public consultation on the public/private partnership model before the bridge construction.
Now the amendment, as it now reads — the motion — says that this House recognizes that the Yukon Party government may use a public/private partnership to finance the construction of the Dawson bridge and urges the Government of Yukon to conduct full public consultations to develop a public/private partnership policy framework while proceeding with plans to use construction of a bridge at Dawson as the pilot project for public/private partnerships involving the Yukon government.
Any member of the public reading that has to look at it and say that it doesn’t make sense.
My point this afternoon when I stood and asked the members to give consideration to this was to have the public consultations, have the Yukoners do the homework, not just sign it off to Partnerships B.C. and say, “Well, they are going to do it for us.” Do our homework in a Yukon context.
If they were going to bring forward amendments I said, “Involve us, help us do the homework” — clearly before we proceed on this. Now they want to do the homework while we are doing this project. I can’t support that. This is a huge undertaking. $35 million, $50 million — who knows how much this is going to cost us. The government’s own estimates have changed over the course of 18 months. Before embarking on an expenditure of that proportion in a public/private partnership method, the government should be having consultations with Yukoners.
The Member for Southern Lakes said that has happened. That has not happened.
Where has it happened? Where has the government said: “Here is the model we are going to use; here is what it will cost to finance this bridge; here are all the different models of public/private partnerships that are possible; here is the one we selected and why.”
To the best of our knowledge, according to the information on the government’s own Web site — Partnerships B.C. is going to even assess whether or not this bridge is able to be or should be subject to a public/private partnership. Maybe it’s not. I challenge the government to make the information they get back public, to have a public discussion. They want to proceed without that public discussion, to embark upon a pilot without the full public discussion.
I can’t support the amendment. I fully respect your ruling. I don’t believe this amendment improves this motion. I don’t believe that it helps make it more understandable or does a service for Yukoners as a whole. I can’t support the amendment. It hasn’t helped the debate and it hasn’t helped the motion.
Speaker: Are you prepared for the question on the amendment? No. Leader of the official opposition has the floor.
Mr. Hardy: Thank you, Mr. Speaker. Well, there is obviously a lot of discussion that needs to happen around public/private partnerships. I think back in 1998 we had this discussion before, and we talked about P3s, and it was brought forward by the leader of the official opposition at that time, I believe it was, and she brought forward a motion on P3s and we had this discussion, and quite a few people contributed, including the Premier as well as the Deputy Premier, and they made some strong arguments. Definitely, the Premier made arguments against P3s. However, time rolls on and, six years later, now everything has to be P3, pretty well.
There are a lot of questions we need to ask. Although I have some concerns about the motion that was brought forward, the initial one, we are talking about the amendment, and I will come back once we have a vote on that and address that. But it doesn’t make sense not to have a policy in place around something that can have such a profound impact upon how we do business with the private sector, how the government does business, how the government spends taxpayers’ money, or how the government may mortgage the future of future governments and future citizens of the territory. It doesn’t make sense not to have a public discussion around that. The member opposite has indicated that there has been that discussion in the public. There has not been that discussion in the public, Mr. Speaker, and I think he needs to review some history before he makes those kinds of statements, because I contend that that hasn’t happened. Obviously, in the Legislature, we haven’t had a thorough debate about using a P3 model for the building of a bridge. We haven’t even had a debate; we haven’t even had public discussions about whether the bridge is actually that necessary for the public.
Why is that? We have to question why this government is so secretive about these kinds of initiatives. If they are so proud of them, if they feel this is the future, this is the way to go, you would believe that they would quite happily go to the public, have the forums, have the discussion, have the debate, bring in experts — whether local or national — inform the public and have that very, very important engagement with the public, but we don’t see that.
Instead, what we see on a continual basis with many of the initiatives is trying to slip it in the back door, trying to bring forward initiatives that I have to wonder whether they are actually that proud of, because if they are, they would do it.
The debate around the Dawson bridge is one that should happen. It should happen in Dawson; it should happen in Whitehorse; it should happen in other communities, because it will have a very profound effect upon the finances — long-term, if they use P3s, and if they don’t use P3s, it is still a substantial amount of money. Interestingly enough about the money is that this government still has not been able to prove what it is going to cost. They haven’t even come anywhere near it. They seem to think it is all right to have $10 million off the margin when they talk about it. I’ve heard the Economic Development minister use figures that were $10 million apart and thinking that is perfectly fine and accurate; that’s good accounting procedure; that’s very accountable — it could cost $20 million, possibly $30 million. Well, guess what? I don’t think that’s acceptable.
Then, of course, just recently, yesterday I believe, there was a report that has jacked the price up again. But the Minister of Economic Development still wants to use the lower figures. Why? If it’s going to cost $35 million — if that’s what the estimate is — use that figure. At least the people of this territory would have something to hold on to; something to hold this government accountable to. Don’t try to mislead the public in this regard when the figures are presented in a different light.
That’s not fair. That’s not good government. The location of the bridge — that’s a big debate. What’s happening around that? Is the government engaged with anybody out there, any Yukon public out there, to discuss the location of a bridge in Dawson City, or is this once again one of their ways of sliding in what they like and where they want it to go, similar to the Carmacks school? Override, overrule and enforce their decision. That’s the impression I’m getting more and more with this government — override, overrule and enforce their opinions, their direction, on the people of this territory. And if anybody — anybody — dares to have a different opinion, they’re wrong. They’re not part of the team. They’re not part of Team Yukon — how dare you have a different opinion — and if you’re not part of Team Yukon, of course you know where that puts you in the pecking order with the Yukon Party. We’ve seen that time and time again on all their lovely little appointments they’ve been rolling out.
We haven’t had a discussion about the location. We haven’t had a discussion about the need for the bridge. It hasn’t been proven. We haven’t had a proper discussion about the cost because they cannot come up with consistent figures. We haven’t had a discussion about why. Many people have coined this “a bridge to nowhere”. There’s a reason why they coined that. The highway is not even open for a large portion of the year. It’s closed. I have heard members of the Yukon Party say it’s to enable more activity with Alaska. Alaskans aren’t even interested in keeping the highway open. That argument doesn’t wash. So what are we at? $35 million. That might be the figure today. One year from now it might be more. I doubt if it will be less. Generally they don’t come in less.
There are questions that have been raised about the heritage designation. Has this government addressed those concerns?
That has a substantial impact in any town. A UN heritage designation is amazing for the economic benefits it gives to a town. This bridge has the potential to compromise that designation. Has the government investigated that? Have they looked into it? Have they responded to it? Have they responded to any questions about it? Obviously not.
Now, we have this bridge they want to use — this could be a mouthful. I was trying to figure out where we’re at with this one. I think it was the Member for Southern Lakes with this amendment, because he has basically upped the ante with respect to this. We’re not in some ways debating a P3. We’re almost a P6 or P7 now, the way it’s being proposed now. This is a proposed public/private partnership policy pilot project. That’s what’s being put on the table.
Some Hon. Member: (Inaudible)
Mr. Hardy: Please don’t ask me to say that again.
With this lovely amendment, if you look at it and start adding up all of the p’s, we’ve broken new ground and it’s getting kind of risky out there. You know, we could even add an eighth. The way they’re going with this one, it could be built on Pluto.
But the question now is: is this the best model to use? If it is the best model, then why don’t we have a policy around it? This government has been in place for two years now. The Premier has indicated for quite awhile that P3s are the way the government wants to go. Of course, the bridge has already been identified. That’s what the Premier has said. The jail has been indicated as a model. We could possibly be looking at delivery of a school. No idea — there was never a clear answer from the Premier on that one.
The Partnerships B.C., which I should get back to later but will just touch on it right now — I have limited time — has already been involved with delivery in hospitals. So, knowing full well Partnerships B.C. — and this is a relationship with them — is that a possibility? Is that something this government is looking at?
Are they looking at all the offerings from Partnerships B.C. and are they considering them for the territory? If so, put it out to the people; let’s have that debate. But don’t sneak it in. Don’t try to put a façade up and make it look like something different.
There is a need to have this debate publicly and there is no rush. I’d like to indicate to the members opposite that there is no rush in this; there is no massive need. The ferry is not going to break down next year with no way for people to get across. The only timeline that I can imagine for why this government is trying to fast-track this through without having a policy, why this government is trying to go with P3s without having proper consultation with the general public, why the government — from my perspective — is trying to sneak this one through, is the timeline of elections. They have less than two years in their mandate if they decide to go right to the end. This is one of those things they want to try to get in without doing the proper consultative procedure.
The Yukon Party has been accused of acting first and consulting later. Usually that is the worst thing that can happen to any government, and they always feel the wrath of the electorate when they start to do that. This Yukon Party government is doing it, and it’s to their detriment. Even if the P3 model is a better model for delivery of the Dawson bridge, it has become far too controversial and symbolic of the way this government behaves and acts, and the project itself is now tainted.
But if we are going to consider P3s, there are a lot of questions we have to ask. The Member for Southern Lakes — I listened to him for as long as I could and I have to admit that it took me back to some of my teachers in school who used to lecture and the students would sit, and sometimes they would sleep, and sometimes they would pay attention. But that is what it was like — it was like a history lesson. The eight or nine minutes spent on risk and what risk management is — it is questionable whether that is applicable to the motion.
But I don’t mind hearing his opinion and his viewpoints. I know the Member for Southern Lakes has recently graduated from a program and wants to share that knowledge. I applaud him for sharing the knowledge. However, when you are trying to put yourself in the position of laying out the facts, the best thing you can do is lay out the facts completely, not just the nice side, not just the negative side of the pros and cons, but lay them out, put them both out there. P3s have a dismal track record in a lot of areas. They have some successes, and P3s are not everything that is mentioned every time the government does something with the private sector or every time the government puts out a tender. That’s not a P3. I think most people in the world know that’s not a P3. It is very clear what a P3 is; people know what we’re talking about there. So there is no use trying to blend it with everything else.
But there are some very strong concerns about P3s. There are extremely strong arguments about why P3s do not work in certain sectors, in health care for instance — very strong arguments. Of course, on the other side, there are arguments for them. Jails — very strong arguments and proof of why you should not enter into P3s: the building, the delivery of the program, the housing of the inmates and also the policing and arrests have now become part and parcel of some P3s in the United States. This is an example. Well, what you have, interestingly enough, and what a lot of states have found out about the P3 model in that case is that, by having the business be the police of a city or a state — they are paid on the building of the jail, but are also paid per criminal or incarcerated person in the jail, and are also paid on all the other programs that are offered — you find that there is an incentive for the private corporations to have everybody end up in their jail. Whether there are alternative treatments, whether there is a misdemeanour or anything, they want that person in jail as fast as possible, of course, because they collect $200 or $300 a day while that person is within their facility.
So you have this massive growth industry in building of jails and more people being incarcerated with criminal sentences — totally innocuous stuff, should not be there. There are other ways to treat it. We in the Yukon have tried that very much. And it’s of course the exact same thing with hospitals — the building of hospitals, the delivery of hospital services, the doctors on staff of businesses, and the government just shells out the money depending on the patients. And, of course, there’s more of an incentive for any doctor to have more people under surgery because they get paid the percentage of surgeries, so you end up starting to see — and it’s documented — surgeries being conducted that were never necessary. Now I’m describing the con — and it is a con, I guess — but I’m describing the bad. That’s not saying that all aspects of it are wrong. But I’m describing — since the Member for Southern Lakes only painted one picture, I would like to balance it a little bit — the building of bridges. Within Canada there is evidence that bridges have cost up to $4 million, $5 million more on a $30-million bridge going with a P3 because of course there are factors that we have to consider. One is profit. If you go with a P3, where they finance and they build, there’s a matter of profit. Now they can’t even borrow the money. Businesses, contractors or consortiums that are involved with P3 projects cannot borrow the money at the same rate as a government. They’re usually 2 percent or 3 percent higher. Well, that’s added to the cost. Right away you’ve added that percentage. But there’s a profit margin on top of that that is often spread over so many years. That’s added to the project. There are accountability factors around it that have to be considered.
Some of these models are fundamentally flawed. As I said, most P3s — all the studies that have come through and contrary to what might be said on the other side. I hope they do read alternative viewpoints or different viewpoints and other studies instead of just the ones that are promoting it. I try to read both and try to find the best.
Speaker: The member has two minutes.
Mr. Hardy: Thank you, Mr. Speaker. I only have two minutes left.
Basically, just running through it, generally, in most cases, it costs more — in Canada definitely, if we’re talking about that. That’s because of profit margins, borrowing rates, legal and consultative agreements — we’ve already seen that: $500,000 plus, for a design proposal that might or might not be used. That’s $500,000 that could be chucked out the window. I hope this government doesn’t think that it’s that rich that they can so easily throw money out. There is the quality of service and all we have to do is really take a serious look at prisons, schools and hospitals. Those are real risks and real costs.
There is a loss of flexibility and accountability when you are locked into a 20-year or 30-year agreement. There is the secrecy behind them all. The accountability does not end in here; it ends up on some deal.
Seeing as how I have no more time, Mr. Speaker, thank you very much.
Hon. Mr. Kenyon: On the amendment, I find a few holes, shall we say, on some of the things I hear from the member opposite: simplistic things like doctors right now work for themselves. To suggest that it’s a private facility and they would therefore find more disease makes about as much sense as a carpenter trying to build redundant buildings just to be able to get the work. I don’t think that he was going there but that is certainly where his argument leads. We have some real problems with that.
The other thing that bothers me I suppose the most on this is that what I listened to opposite just now was probably one of the best demonstrations yet of how people do not understand what a P3 is, what a public/private partnership is. Let’s take a look at some of that.
The original P3 was actually termed “private finance initiative” and it was a concept that gained favour in the United Kingdom in the 1980s in response to budget cuts. We’re not reinventing the wheel. Similar budget cutbacks through westernized nations made it necessary for governments to develop a new type of relationship in which the profits and costs of different ventures were shared by the private sector.
The word “share” there is very much an operative part of this. Of course, the challenge is always to do more with less, and the Yukon is no exception to that.
The whole concept of a P3 is based on contract. It is not based on letting out a job and dealing with cost overruns; it is potentially sharing the profit — again, profit by my count still isn’t a four-letter word, as the previous member has said. It also shares the risk. It is a risk-sharing exercise. Consequently, when that contract is arranged by negotiation — request for proposal and negotiating to accept that proposal — the government agrees and comes into a binding contract of what it will pay for that price. It may be a little bit more expensive up front in the beginning because the private sector is guaranteeing to come in on that price. They are guaranteeing, probably by bond and by insurance — which is common in the industry — they are guaranteeing that they will come in on that level. So when that contract is struck, we know what the cost of the bridge is. If there is an overrun, the overrun is shared or perhaps probably completely borne by the private sector. It comes into their profit, it comes into whatever the contract states. It is a contract.
That is the whole thing on this. The government’s role is to create the environment that allows Yukoners to freely take advantage of those opportunities and deliver those programs within the required time frame, because that is part of the contract. The contract may specify that the project be completed by a certain date, otherwise there are penalties. That can’t be done in the current way. It is something that can easily be done within a P3. It has to be done within a time frame and an achievement of value for money. These are all integral values and elements of that strategy of sustaining a strong economic growth and a strong P3 relationship.
As I say, governments everywhere are looking for more ways to deliver more services with less money, by finding innovative means of creating greater value. This is one that has been done for many, many years and many, many projects, and it guarantees what the cost will be and what the timeline will be. As I say, if there are overruns or problems, they are borne by insurance, borne by bonding, but they are borne and shared by the private sector.
One of the members opposite a few months ago — I believe it was the leader of the third party — was reading from Hansard from 1998. But I found some of the things in that debate that weren’t read. An NDP member — I understand I should not name them, and I don’t know their ridings, unfortunately. I remember the Liberal Party in the last election campaign in the Yukon talking about just such a thing with the Dawson bridge, where they would have a toll booth on the bridge. Now, I don’t think that NDP member at the time was serious. I hope not. I don’t remember the Liberals at any point suggesting a toll, or at least I hope not. It’s certainly not anything that has ever been suggested here.
That member continues in Hansard: “You take the Liberal commitment on the Dawson bridge. You break away as a government in the Yukon from the notion of paying as we go. Money is put up by somebody — it doesn’t matter by whom. It’s really not that different whether it’s the private sector or a bank. It’s just finding money through one vehicle or another. That private sector proponent is going to want to make a profit; a bank is going to want to make a return. What you have, in fact, is the money has been procured one way or another, or has been made available; the project is built, one way or another.” Again, very much a misunderstanding and very much outside of the P3 concept. It is not simply money. It is a contract — a performance contract. It is a guaranteed sharing of risk between the two groups.
It is much more than money, Mr. Speaker. The discussion in 1998 continues in some respects, and it is rather interesting. A Liberal member at that time, also on April 18, 1998, on the municipal level: “We have to look at ways to build needed projects and help support local business. It is business, after all, that pays the big taxes to support the municipality. It is also on the municipal level that we find the services to support tourism, the industry that supposedly is going to save our economy in a time of low metal prices and mine closures. We need good roads to bring tourists through the Yukon. We need bridges and highways that are well maintained and well built.”
Mr. Speaker, we totally agree with that. You know, again, we are not reinventing the wheel here, which is exactly where the Liberal member in 1998 was going on April 18, 1998.
There are a number of examples of successful public/private partnerships across Canada. In Furry Creek, British Columbia, the transportation financing authority and the Tanac Development Canada Corporation built a new road: the Mission Interchange, in 1997, an agreement for construction of a new interchange on Highway 11 near Mission, B.C. — and I will just jump down and take excerpts out of here: a new ferry freight service on Williston Lake in northern B.C.; Lion’s Gate Bridge — I hope that rings a bell for some members here; a new bridge across Burrard Narrows, inviting public/private partnership proposal; upgrade to Highway 407 near Toronto; the Confederation Bridge — I think some people have heard that was a public/private partnership. All of these — we can go into New Brunswick. We can go into telemedicine. We can go into a wide variety of ranges here, and all of these are contracts based on performance and based on knowing exactly what we have.
Mr. Speaker, one of the things that really comes out of Partnerships B.C. — it brings together a lot of different groups in a very wide variety of areas, but Partnerships B.C., which has already to date executed $3.5 billion worth of projects, serves as the B.C. government’s centre for expertise for establishing policies and best practices for successful partnerships. Mr. Speaker, we are developing the policy with perhaps one of the best, if not the best, organization in the world that has the widest breadth of knowledge of this area and certainly the deepest knowledge of this area.
We are not prepared to sit in isolation and develop a policy without the expert advice of these groups. It is very, very important that we do that.
Some of the other things that come out — one of the members opposite keeps referring to “the bridge to nowhere”. Going back historically, the Dempster Highway was referred to as “the road to nowhere”, but as we look at the potential of pipeline development, we look at the economic impact that Inuvik is having right now, the car dealerships that have more sales in the Northwest Territories than they have in the Yukon over the last year, it is certainly not a road to nowhere. I even found references many years ago to people referring to the bridge at Pelly Crossing as being “the bridge to nowhere” because who’d really want to go to Stewart. Well, it’s an integral part of our highway system. It is essential that that infrastructure be there. I had the good fortune to attend the federal-provincial-territorial meetings of ministers of northern development in Chibougamau, Quebec, and one of the things that came out of that — in talking to every minister with any responsibility for northern development, the biggest question on the table for every single jurisdiction is transportation corridors, transportation links. That bridge is the last link in the corridors in the Yukon highway system. It is essential that that be completed and put there.
There are a number of different reasons and we can go on and on about some of that. The member opposite — again it just shows an abysmal lack of understanding of what a P3 is. I hear things like that there’s evidence of cost overruns on P3s. It is a contract. Cost overruns are covered by bond, they are covered by insurance, they are covered by pledge of assets of the contractors. There are so many ways that we can get into assuring that that never happens, so again it’s the value of that contract and the value of how that comes.
One of the things that is also very interesting about this whole thing is that the members keep claiming that the target changes. Well, let’s go into a little bit of that. We have had claims from the other side comparing it to construction of a bridge in another territory. Nobody mentioned that the river was twice as deep and almost twice as long — that one never made it onto the floor of the House — so it’s not a valid comparison.
There have been references back into the Clinton Creek mine, which operated from 1967 to 1978. At that point in time the government of the day had made the decision that they would invest in the ferry and not in a bridge so the necessity of keeping that road open and everything else over into Alaska was exorbitant because of the mine activity. It was not a normal year, so it’s not a really valid criticism.
We hear criticism that the Yukon River bridge is perhaps the brainchild of the MLA for Klondike. Well, the Yukon Party supported the Yukon River bridge at Dawson and first expressed that view in 1992 in our election platform, of which I am suspicious that the members opposite all have copies. The Member for Klondike was in fact elected in 1996 — four years after that was part of the party platform.
The present George Black ferry has been in operation since 1967. The expected life of a ferry is about 40 years. That ferry will reach that age in 2007 or 2008. The average annual ferry cost is just shy of $1.1 million. I have seen some documents that when you start factoring in the fact that the engines have to be replaced after so many years, that they have to be completely overhauled — there is a whole schedule for all of this — the annual ferry figures could actually be substantially higher than that, in the $1.4-million range.
A new ferry is estimated to cost just shy of $5 million. Because of current steel prices and everything else, I have also seen figures as high as $7 million but we wouldn’t know unless we actually went out to buy them. But if you take the lower value of just slightly under $5 million, you can begin understanding that we already are paying a large amount of money annually. We are not looking at floating a loan and paying interest on something that isn’t already going out of the budget. That has to be put on the floor, Mr. Speaker.
The replacement ferry would probably be larger because we have to remember that there could be future growth if the life of that ferry has 40 years. Now we have problems that the crew may need additional certification; they may need additional qualifications to operate; it may be more difficult to get crew members. There are all sorts of permutations on that.
But if you look at the other side, the expected life of a bridge is 75 years and therefore, during the life of the bridge, three new ferries would have to be bought at the beginning, at the middle and toward the end of a life cycle. It should also be noted that a single ferry might not serve the traffic, as I mentioned. So if we make a mistake in terms of what our estimates are we might need two ferries and have them criss-crossing back and forth. Maybe it’s not likely but it’s something that we have to plan for.
A 1994 preliminary design and environmental assessment report by ND LEA Consulting indicated strong local support for the bridge. At that point they looked at an estimated cost of just shy of $20 million. My recollection is that the UMA report was in the range of about $28.1 million and they gave a 20-percent contingency fee, which is, I believe, better than twice the industry standard, which would raise it to $32 million plus. So when the members opposite continually say that there is an escalation in cost, we are dealing with figures of what has been extrapolated as the cost and what that 20 percent, twice the industry standard contingency fee, could be. It gives us a range.
What’s the actual cost of the bridge? We’ll know when the proposal comes in. We have put out — the members have mentioned in the $500,000 range — for designs and studies and everything else, and all of that is good work and good value. All the request for qualifications says is that we will not lock a proposal into that 100 percent. If they have another way of looking at it — a different technology, a different way of cutting money and still getting us good value and everything else for that bridge — we’ll look at it, but that has to be within the existing envelope.
For members opposite to go off on a tangent and say we’re doing to get a second study and we’re going to look at it again and then maybe they’ll be a different design — do they expect us to lock proposals into one existing design? There may be variations, but it has to come within the existing envelope, it has to meet the standards that the City of Dawson expects, it has to make sense in terms of historical perspective wherever possible, and it has to fit in with the historical world heritage.
Perhaps people in the Yukon aren’t really familiar with the world heritage designation, but my understanding of the current designation is to designate the entire gold rush route. That would include Seattle; that would include Skagway and Dyea. I don’t think Haines falls into there. The Chilkoot Pass, possibly Carcross, right up through the Yukon River. So we’re dealing with potentially two states, two countries, a number of national parks, territorial parks, provincial parks. I’m not saying that it’s not possible, but let’s look at the overall game plan.
As Minister of Economic Development, I really have a hard time shutting down economic development on something that is possible, but there’s a difference between possible and probable. That’s possible, but I have a real problem that it’s perhaps not probable. Given inflation and everything else, the design actually came out amazingly from 1994 to where we are now. Construction of the bridge today is estimated around $28 million. If we simply took half of that and said that we could recover that through the Canada strategic infrastructure fund, for instance, and take that potential capital out of what we can utilize and try to go it the normal way, it ties up funds that could be used for other areas. A public/private partnership has the very strong possibility — and high probability — of being served by the existing money that’s going out — the existing money for ferry operation, maintenance and everything else. Again, we will know when the requests for proposals come in; we’ll know as the requests for qualifications come in who has the interest in that, and we’ll see where that goes.
But it is kind of interesting going back to see the machinations over the last few years and the fact that the Liberals were arguing in favour of a partnership and the NDP were arguing against it.
I think this is a good thing. We will develop the policy as we go along with the best organization in the world to do it.
That’s the way we should do this, Mr. Speaker.
Hon. Mr. Hart: I’m proud to stand in favour of the amendment. I wish to respond to a few of the comments made by members opposite, but let me say that this bridge is about the future. I invite the members opposite to look at it in that context.
When I was in Dawson recently, I was moved by the endorsement the Tr’ondëk Hwëch’in First Nation gave this project of building a bridge across the river. As many of my colleagues have stated earlier, one of the key ideas of the bridge is to get across to the other side. The First Nation sees the future and they clearly see themselves and others taking advantage of the opportunities that lie ahead if this bridge goes ahead. I applaud the First Nation for looking at the future and seeing the vision for themselves and the citizens of Dawson, and we look forward to working with them to realize the possibilities with this bridge.
Mr. Speaker, what is being lost in the numbers that are being tossed about are the many tangible benefits that will accrue to the First Nation citizens and all Dawson residents. For example, property owners on the west side of the river will have a much more enticing environment, creating year-round access for country residential, recreational, agricultural and other lots. Having a fixed link will eliminate the access limitations of the freeze-up and breakup periods, adding further enhancement to the rural residential living on the west side, particularly for those citizens who have children.
We all saw the wildfires mow through the Dawson region last summer, and there’s no denying it caused considerable fear.
Wearing my hat as Community Services minister, I want to ensure we do all that we can to protect the safety of the community and the citizens. Adding a bridge will provide an additional exit option in the event of a catastrophe of fire or floods, and it will offer residents of the west side year-round access to emergency services. Last year, for example, on the west side of Dawson, our fire season, which was fairly small the previous year — our first fire was on the west side of Dawson and the only way to get there was by helicopter.
As the First Nation clearly noted in their statement endorsing the bridge, there is a potential to expand the electrical grid to the west side, while opening up that side offers alternatives for other services — future expansion of the airport possibly. Over a longer period of time, Mr. Speaker, there may be opportunities to enhance the Top of the World Highway and broaden the connections with the Alaska tourism and commerce. There may be resource development opportunities, a potential that we may not have envisioned yet.
Mr. Speaker, this is about grasping the future and making it ours now. When this bridge was first envisioned in 1972, the project cost was $8 million. With time, infrastructure costs tend to go in one direction, and today we are looking at a cost in the neighbourhood of $30 million. Mr. Speaker, I say in the neighbourhood of $30 million because we simply don’t know what the final figure will be.
We will not know the final costs until the final proposals are in and the agreements are negotiated. Anything up to that point is the best estimate on our part and based on careful but not definite projections. The leader of the third party has said that the cost of the bridge is escalating. But what is happening, in fact, Mr. Speaker, is that we are being very prudent in our projections. A request for qualifications document does indeed contain —
Some Hon. Member: Point of order.
Point of order
Speaker: Order please. On a point of order, the Member for Mayo-Tatchun.
Mr. Fairclough: Mr. Speaker, I believe the member opposite is speaking to the main motion and not to the amendment that has been put forward, and I ask that his debate in this House be directed to the amendment as put on the floor by his colleague.
Speaker: The Chair finds no point of order. However, it is prudent for all members to keep in mind that we are speaking to the amendment.
Hon. Mr. Hart: Mr. Speaker, for the member opposite, we indicated in our option that we’re looking at moving forward as we go along and using the bridge as our example, and I believe that the case that I presented is doing just that.
You know, the request for qualifications document does need to contain a projected $30 million to $35 million for the cost of the bridge, as I indicated. We have built in a generous contingency since we simply do not know how our current economic conditions will impact the future price of steel and other materials, as my other colleagues have indicated previously.
Moreover, Mr. Speaker, in dealing with this, the Alberta economy, for example, is booming. British Columbia has a strong list of infrastructure projects and investments on the drawing table, getting ready for 2010.
In addition, other areas in western Canada are also in an economic boom process, which makes it difficult to have competitiveness in our project this far north. We all know that through our projects we are attempting to plan for contingencies and paint a very realistic picture for businesses and the future they see for themselves in this project as well. The cost of the bridge has gone up as the member opposite contends, but rather we are being prudent with our planning procedures to try to keep them within a realistic venue.
The member opposite indicated we were not addressing the situation of local content, but we have addressed that issue. We have provided that in the concept. We do have a requirement, as mentioned earlier, of having to meet the First Nation requirements under the Umbrella Final Agreement, which is under there. They have to collaborate with regard to the design. That’s indicated. Again, a local factor. We are working with the citizens of Dawson on the design in relation to the town itself, and I believe that’s a very positive aspect that we’re dealing with, Mr. Speaker.
In dealing with Partnerships B.C., I believe that this is a very important process. Partnerships B.C. has the expertise, as my colleagues have expressed in the past on this motion. I think that we have to look at all the issues as they relate to the citizens of Dawson and all Yukon taxpayers.
This public/private partnership that we’re proposing is going through the RFQ stage. We anticipate a good response. We’re hoping it will be reasonable, and we’ll take it from there. You know, value for money looks at a number of factors, including the opportunity to achieve overall capital cost savings, ongoing operations, maintenance cost efficiencies, greater cost certainty through the transfer of risk to the private sector, as well as innovation, creativity, and sound management of all through financial activities and a competitive selection process.
Partnerships B.C. concluded that this project, where a private partner is retained to design, build, finance, and operate a bridge — the public/private partnership has the potential to reduce the capital and operating costs, the transfer of financial risk from the public sector to the private sector, to encourage innovation and ensure on-time completion, a very important aspect.
Again, another aspect deals with the issue of — in other words, the real winner is us, the Yukoners. We have to deal with the issue, and we’re going to get there. We’re using B.C.-Yukon as our main aspect to ensure that, as we move along — using the bridge as an example — this is a positive aspect, and they have the expertise to show us what we’re doing.
So I would like to take a few minutes to explain how we can achieve some value for our money. First off, we have the potential to enjoy lower capital costs. The competitive bidding process should attract companies that will use their expertise and innovation to meet the cost requirements at the lowest possible price.
In this type of partnership agreement, the private sector company could be responsible for maintaining the bridge over its entire life. In that type of arrangement, the private company has the incentive to keep the operating costs as low as possible. This will be reflected in the price they bid for the delivery of the bridge operation and its maintenance services.
Under a P3 arrangement, this project has the potential to transfer risks such as those related to the design, construction and the final condition of the bridge, from the private sector to the private sector. For example, if there is a problem with the design of the bridge that increases operation and maintenance costs in the future, the private sector partner would be financially responsible for fixing those problems.
Under a fixed price construction contract, the type of arrangement you have when you ask someone to build you a building for X dollars, the private sector takes on much of the risk of completing the project on time and to a set budget, but they take very little risk on the design factor and bear limited risk, if any, of the long-term costs of the maintenance and rehabilitation of the building.
When a private sector partner is selected through a competitive process, there is an incentive to apply world-class expertise and innovation to the project proposals. On this bridge project the challenges associated with the design and construction, such as weather and location challenges, provide an excellent opportunity for innovative solutions. In addition, the competitive process for selecting a private sector partner to design, construct, finance and operate the bridge means that the private sector will submit proposals with the best possible overall price for the project.
We will also enjoy the increased efficiency that the private sector brings to all aspects of the project, resulting in a lower cost. For partnership projects, it is important that the private partner has a significant amount of capital at risk as this enables the public sector to achieve greater cost efficiency.
Speaking of efficiencies, the leader of the third party contends that we will pay twice for the design of the bridge. This is not so. Last spring we contracted with the UMA group to review the ND LEA design of the mid-1990s and recommended a design to carry us forward. Having done that, and working closely with UMA, we have initiated the environment assessment cycle, which members of this House know can be protracted and very complex. We have notified the responsible environment review agencies and we have taken the steps to ensure the project is known to them and is under consideration.
We had to have the design details to take to the environmental agencies for their preliminary review and, with the work UMA has done and ND LEA did before them, we have a solid presence with the preliminary feedback from the key environmental assessment agencies.
That said, we have indeed invited interested companies to give us their thoughts on the design but, at the end of the day, we will have to preserve the fundamental features that are being reviewed through the environmental process. To significantly change the form of the bridge we may have to start the environmental assessment from square one — a delay that could set the project back years. But by inviting interested proponents to cast their minds to the innovative changes to the UMA design, we may achieve the additional cost savings on other features of the bridge that will not impact environmental assessment outcomes, or the expectations on the understanding the project that the local residents are developing through the current design consultation process.
P3 process is about value for money and we welcome all of the ideas that will help us achieve the highest possible value with the lowest possible investment.
We are looking for the most cost-effective way to build this bridge and we are working with Partnerships B.C. to ensure we have a strong project, a strong presence in the marketplace to attract bidders and a strong agreement that will give a Yukon bridge that will endure for many decades to come.
Embarking on a major project like a bridge at Dawson is not without its critics, but we have taken steps and will continue to take steps to engage Dawson residents in a dialogue about how this exciting new development will integrate into their community and add value to their region. We have been asked for feedback and we have gotten it. We are using the comments we are hearing to shape the design of the bridge so that it will flow well with the heritage and history of the town. The process is intact. We will carry the design consultation process through, and since the project was announced in March, we have had numerous stakeholder consultations with a range of groups and representations to receive additional comments. This work is continuing.
We have had three open-house sessions and a public meeting to listen to residents. We will conduct additional meetings in the weeks and months ahead as we go forth.
Another reason that our amendment is necessary is to deal with, again, the issue of using the bridge as an example of a pilot to carry forth with a P3 policy.
We have also established an advisory committee with diverse opinions so that we can receive different and at times contrary views from still other sources. Our government is building this territory and giving our citizens hope and potential in the long range. We are taking the tough decisions and making investments to build our economy, not for this year and next but for many years to come.
The Dawson reality is that the George Black ferry will not endure forever and, as many of my colleagues have indicated, a ferry will have to be replaced several times over.
This is about making the future today and making it ours, Mr. Speaker. Through prudent investments and strong partnerships on the Yukon River bridge at Dawson, we will be providing safe, reliable, year-round access for the future. We simply have to look at the development of the Dempster Highway to see how tough decisions and forward-thinking leaders created something very special, and I believe this we will be doing again.
Thank you very much, Mr. Speaker.
Mr. Cathers: Mr. Speaker, it gives me pleasure today to rise to address the amendment. I thank the member for the third party for bringing forward the original motion, and I would like to thank the Member for Southern Lakes for moving the amendment. I think the amendment is needed. It is, as expressed in the original motion, important to move forward with public involvement in developing the policy for public/private partnerships to affect anything that the Yukon government undertakes and gets itself involved in. However, it is necessary to recognize the changes that have occurred in the work that is taking place since the member of the third party originally tabled this motion some time ago. Plans are in place at the moment and in progress to use construction of the bridge at Dawson as the pilot project for a public/private partnership policy and to work hand in hand with Partnerships B.C., the arm’s-length corporation of the B.C. government that is set up to deal with public/private partnerships and has undertaken — I believe it’s approximately $3.5 billion since the current Government of British Columbia took office.
So they do have quite a bit of experience, and I am a little baffled and disappointed by suggestions from the member of the third party that the Yukon should be developing a policy in isolation from that experience. I don’t see why we should reinvent the wheel.
I refer to past statements that the leader of the third party and other members of the Liberal Party have made in the past. I have a quote from Hansard made by a member of the day from, I believe, the riding of Riverdale South, Ms. Edelman. In reference to public/private partnerships, it said: “Now is the time to take up that opportunity and that challenge. It’s not like we’re going to be reinventing the wheel here.” That’s from Hansard, April 18, 1998.
The member of the day went on to say, “There are a number of examples of successful public/private partnerships across Canada, and I’d like to list some of those for the House today.” I’d encourage members to go back in Hansard and read that list. It’s longer than I’m going to get into reading at this time. But the Liberal Party, in the past, has certainly taken the position that public/private partnerships were a good thing and that, in fact, it was time to move forward instead of dragging the feet in developing a policy.
I also point to an article from the Yukon News from Wednesday, September 18, 1996. It’s an article entitled, “Platform of Promises: Price Tag to Follow.” That’s on page 4 of that edition of the paper. It goes on to list the Liberal Party’s promises and says, “But their biggest single investment in the industry will be to build a bridge across the Yukon River in Dawson City, he says.” This was a quote from the leader of the Liberal Party of the day, Mr. Ken Taylor. “We don’t look at this as a bridge for Dawson City. It’s a bridge for the whole territory.”
Well, the member of the third party currently was part of that election team, under the leadership of the person making that remark. I will repeat the quote again: “We don’t look at this as a bridge for Dawson City. It’s a bridge for the whole territory.” I’m puzzled to see how the member of the third party could have run on that election platform in 1996, yet we’ve heard comments in the House this session, and in other sessions, of it being “a bridge to nowhere” at Dawson City. It’s a little bit puzzling.
Again, going back to this article, Mr. Taylor said that there are people driving by this turnoff because they don’t want to wait hours for a ferry ride. That can’t be good for tourism. This is an investment in tourism but there are lots of spin-offs. That is the only way Dawson City can expand in west Dawson. It’s a growing community and it needs room to grow. There is a big chunk of the Yukon over on the other side of the river. There are many development opportunities over there. We looked at this bridge as an investment in the Yukon. Again, that was the position of the Liberal Party in 1996.
I looked through a number of articles from that campaign and since that time, and quotes in Hansard. Certainly, back in 1996, the Liberal Party seemed to feel that public/private partnerships had been well-proven in other areas of the country and it was time to get moving on this to roll with things. So, the position this government has taken is that absolutely it’s necessary to have a clear policy for public/private partnerships involving the Yukon government and to have that policy be geared to ensuring the maximum benefit for the Yukon people.
We also feel that it is a very prudent move to work with the experts in the field. Partnerships B.C., the Crown corporation set up in our neighbouring jurisdiction of British Columbia, has a tremendous amount of experience in this field. Personally, I think we would need to have our heads examined if we didn’t want to move forward with Partnerships B.C. and take advantage of their expertise.
Now, the member of the third party has referred to having a desire to have this a made-in-Yukon policy and specific to the Yukon. Of course, this government recognizes the need to have the policy reflect Yukon interests and Yukon values, to be tailored to the interests of our citizens and to all Yukoners.
But the fundamental aspects of having a public/private partnership work are matters involving finance, contract stipulations, various mechanisms in the agreement between whatever company undertakes a public/private partnership and the government itself to ensure that the government gains the maximum benefit out of that agreement that it possibly can. We don’t need to reinvent the wheel on that area. We do need to add changes around the edges to tailor it to our needs, but the fundamental aspects regarding finance and contract terms are not things that we need to try to reinvent ourselves without any experience. Why not find out from B.C., which has run $3.5 billion through this corporation? $3.5 billion — that’s a lot of money. You look at the Yukon’s total budget — somewhere in the neighbourhood of just over the $700 million mark in this year — and we’re talking about a Crown corporation that has dealt with investing $3.5 billion in infrastructure.
So they do have a considerable amount of expertise and I would quote the oft-said saying of “You need to learn from other people’s mistakes because you don’t have enough time to make all of them yourself.” We don’t have enough money to make all the mistakes ourselves, so to move forward in developing this policy for public/private partnerships while proceeding with plans to use this as a pilot project, to learn from this experience how the Yukon’s experience is, based on B.C.’s expertise, based on the structure we put in place and based on what we learn from this contract, then we will move forward to fine-tuning the policy after that point and to establishing it in a more permanent form.
Personally, I feel that it would be very ill-advised for us to sit around in rooms and even in public consultation and discuss how we think we should put in place financial safeguards in a public/private partnership instead of actually finding out from somebody who has done it — what you do, what works and what doesn’t. We even have the New Democrats, on the whole issue of building the bridge, keep saying things like “a bridge to nowhere” and inflating the projected numbers of the bridge up to $50 million, which is far beyond what any projections would come into the realm of suggesting.
I have here from a survey that the Tourism Industry Association of the Yukon did in 1996 — and it’s the 1996 election campaign and was published in the Yukon News on September 25, 1996. In response to a question that TIA had put to all the political parties, they have the response here that the Yukon New Democrats recognize that Dawson City will need a bridge at some time in the future. That was their party’s policy back in 1996.
Why has it changed? The leader of the opposition was a candidate in that election.
You go down to the Yukon Liberal Party’s response to the same survey. The Yukon Liberal Party is committed to issuing a proposal call for the construction of a Yukon River bridge at Dawson. The Liberal Party is committed to working in partnership with major capital projects. They are committed to issuing a proposal call for construction of a Yukon River bridge, so how can they suggest that it’s ill-advised for this government to do that same thing some eight years later?
It simply boggles the mind, Mr. Speaker, how the members opposite have flip-flopped on their party policies on this issue.
But as stated, with the amendment that was brought forward, we feel it’s necessary to reflect what the wise steps and prudent measures are in moving forward. Public/private partnerships have been used in many jurisdictions. They’re used in most if not all jurisdictions in Canada at this point, and the cost-savings that we will see through looking at a public/private partnership are very significant through this, Mr. Speaker. As one of my colleagues pointed out earlier — I believe it was our first respondent to the motion, the mover of the amendment, the Member for Southern Lakes — he referred to the projected costs for building a bridge of approximately $25 million to $30 million and that bridge is expected to last for at least 75 years. Over that time period, the projected costs for operations of a ferry go well over $100 million. This is sound fiscal management, Mr. Speaker.
As has been stated, one of the things that has been looked at is the possibility that, in structuring this, the Yukon government might end up over a yearly basis not expending any more money on buying back the bridge from whatever corporation were to build this than we currently expend now in operations and maintenance on the ferry. So that would leave our yearly cash position no worse off by building a bridge than operating a ferry. In the long term, we would have a tremendous net savings through the fact that we would actually own a piece of infrastructure rather than continuously throwing more money into buying fossil fuels to operate a ferry.
Now, I could go on actually at quite great length on this motion. There are a large number of reasons that I feel it’s necessary to modify this as in the amendment by the Member for Southern Lakes. However, I look forward to hearing from other members of this House on the amendment and on the motion, so I will close on that note and thank members for their attention.
Mr. Fairclough: I was just reading an interesting article in the paper, an editorial. It was much more interesting than hearing the debate here.
I would like to speak to the amendment proposed by the Member for Southern Lakes. I believe that he believes that this amendment is not his best work, because it really doesn’t make a lot of sense in the way it is written. From what we’ve been told, that’s also the way a lot of amendments take place in this House.
I was hoping that perhaps the members opposite had a bit more time to look at this a lot more carefully and, if they wanted to do an amendment, to have one that really is solid instead of the way in which it was written now. I say that because I feel this reflects a lot of how the Yukon Party has worked and done things in this territory. There are a number of projects and initiatives that the Yukon Party went ahead with and did and then said, “How do you like us so far? We think we should consult with you now. We think we should do it. We made a decision but I think we should consult with you now.” And that’s what the Yukon Party wants to do right now. They’re going to be building the bridge — the private sector is going to be building the bridge, and we’ll develop the policy. What happens if the general public doesn’t like the way in which the government has been doing some things on P3s?
It’s too late; the bridge is being built, and that’s the way they want to operate, and that’s the way we have seen things done in this House. We have seen the Yukon Party back away in the past — the Minister of Health and Social Services with Macaulay Lodge, for example. We’re going straight down the same road. I didn’t think he had done enough homework at the time. He had to pull out, and now it is in its present state and hasn’t been changed. I don’t believe the general public knows exactly what P3s mean to them. The way in which the Yukon Party wants to build this bridge across the Yukon River in Dawson City, I think there are a lot of questions they could answer for the public beforehand, to clear the air, to show the public that this is beneficial. “Let’s just build it, and they will come across the river.” It just doesn’t happen that way any more. People want to be consulted. They want to be talked to about this. They want to know the design; they want to know location, all that kind of stuff. It is only common sense to do that. The Yukon Party is not doing it. They want to develop a policy while the plan proceeds. What are they afraid of, that a policy would be different perhaps from what they have been thinking of? Is that it, or can, in fact, the Yukon Party develop a policy, say, during this winter, bring something forward in the spring sitting of the Legislature and present it to this House? What’s wrong with that? What’s wrong with doing the hard work?
I thank the member of the third party for bringing this motion forward, Mr. Speaker. It does clarify a lot of things. We on this side of the House think that it could have been worded more strongly than the way it is. It is amended now, and we feel that it is actually weaker than it was originally written.
It uses the word “may”, first of all: “may use a public/private partnership”. In that same sentence, as it was amended, they say they may use a public/private partnership while proceeding with plans to construct a bridge as a pilot project for public/private partnership. It just doesn’t read right and I think the Member for Southern Lakes knows that. Perhaps, by the way it looks, they might even amend this again, but I don’t think so. I think the attempt today is to talk this out.
Isn’t it obvious that this is what is taking place? What is next on the agenda to talk about? I think it’s one that the Yukon Party doesn’t want to see because it reflects things like hard work, legislation light in this House, this session, and so on.
What the members opposite did not say is what effects this would have on Yukoners and on Yukon taxpayers. They keep bringing up the fact that yes, they made a little bit of a mistake at the beginning and it has gone up in price, the bridge has gone up from the original cost — up to $30 million. That’s the number I hear the members opposite saying now. Mr. Speaker, 10 years ago the projected cost of this bridge was between $25 million and $30 million. That was 10 years ago. The Yukon Party’s price tag on this bridge is lower than that right now. It is lower than that. Does that not cause concern to the general public? How much Yukon government money is going into this and how much private sector money is being spent on this bridge?
I did notice that the Yukon Party is saying “involving the Yukon government”. That hasn’t been fully explained by members opposite, by each one of the speakers — how involved the Yukon government will be in this project. We’d like to hear that. None of the members opposite have said that.
How is the bridge going to be operated — just a bridge across the Yukon River like the one in Carmacks?
You just cross the river and back any time you want. Is there going to be a toll? Will you pay as you go? The way things happen in the south is exactly that. As a matter of fact, on the privately owned highways, for example, you pay a toll — $10 to drive down the road. It’s a good highway but it is money that has come from the average Yukoner that would be taking place. There was a highway — I can’t remember where it was but it was on the news a few days ago. I only caught the tail end of it but I did hear some of it. The local people had to use the highway constantly because they had to get from one place to another. It’s a privately owned highway. If you’re not paying the toll, then what does the private company do? Does it just let you go? You have to pay. They take pictures of your licence plates and they make a big thing of it, to the point where people were not allowed to drive on their highway. That’s in the United States. That is one example of public/private partnerships that I think has potential problems we should be addressing here for Yukoners.
My colleague from Whitehorse Centre raised another issue with regard to — when we talk about P3s and the government’s initiative to build a bridge, this is a pilot project but it’s not the end of any public/private partnership projects that the Yukon Party wants to do. It’s not the end of it; this is the beginning, as I understand it now. I haven’t heard any objection from the members opposite. They want this to be a pilot project. So how do you evaluate this as a pilot project? Do you give it five years to see how it is working, or two years, one year, 10 years or 50 years?
It can go from right up to the end of the lifespan of the bridge, which they say is 75 years. There are a lot of things that people don’t understand — the involvement of the government. The other thing is that this company has to borrow the money and the longer term and the longer time it takes to pay off the money, the more interest you pay on it. I think the members opposite all understand that, if they have a mortgage for example. A $50-million price tag on this bridge is not one that should be excused by the Yukon Party. Take that number, for example. How do mortgages work and loans from financial institutions, banks and so on? Well, the longer your mortgage is, the longer the number of years it takes to pay off the loan, the more interest you pay. So do you pay double the cost of the project? Well, you could, but it’s more like triple or more that could happen here. So if the bridge is at $50 million, we could end up paying back $150 million before the loan is paid off. But who pays that? It is the public who pays it, our tourists and the people in Dawson who are probably most affected by this and the general public. Three times that — plus you’re going to have to give some profit to the company. After all, if you’re building a project like this or entering into any type of a business deal, you’re going to want to make money. That’s why people make investments in mining companies, and so on, and that’s why we see the shift in big companies shifting away from resource extraction and into things like computers and high-tech equipment — they’re making money at it, and it’s all about that. Anybody who is going to build a bridge in Dawson City is not doing it out of the goodness of their hearts. They’re obviously going to make money at this.
I think those types of questions need to be clearly understood by Yukoners. And then what’s next? I believe that this bridge project is just a smaller part of a larger project. It has to be. How can the Yukon government just build a bridge over the Yukon River and say that’s it. People have homes and lots on the other side of the river.
Originally it was to utilize the Top of the World Highway and, by the numbers that have been floating around, to properly upgrade and construct the Top of the World Highway is, again, in the millions of dollars. I think the number that was floating around was around $60 million, not to mention the fact that the Yukon government will have to maintain that highway and the additional costs for maintenance. The Yukon Party has not said anything about that, so there are other projects related to this bridge project that have not been talked about. I have to say that one of the members did say one thing and that was about the electrical grid being expanded. Not much of a cost has been given for that.
So, once again, the Yukon Party has come forward on the floor of this Legislature, made an amendment, and said, “We want to do this project. We are going to consult with people later about policy development. This is only a pilot project.” They didn’t say when the evaluations would take place. We think there are definitely many questions that need to be answered.
I’m sure that the First Nations have many reasons to support this project. Land development and land selections on the other side of the river, possible involvement with governments, but what does that mean today, anyway? We have seen agreements being signed and broken constantly by the Yukon Party government, and I wouldn’t doubt that that would happen again, Mr. Speaker. It is too bad that the government is faced with court challenges and so on, on things and agreements that have been made and signed with First Nations by the Yukon government, and then they proceed to the point of going to court without proper consultation. That has been part of the problem. We see the same thing with this railroad development, Mr. Speaker. That is pretty controversial right now, because people haven’t been talked to before the deals have been made.
Even the municipality: why weren’t we notified that this was going to happen as an impact to the community? Maybe they could have given some good suggestions to the Yukon government on this matter, Mr. Speaker. On and on we go on this, and I think that the Yukon Party is going to use their majority here and pass the amendment, thinking this is the best thing that will be happening in the Yukon and try to get to 6:00 p.m. so that they won’t get to the next motion.
I don’t support this amendment, and I think the Yukon Party should do a lot of thinking before bringing amendments like this to motions on the floor of this Legislature.
Hon. Mr. Edzerza: I find it important to maybe put a few things on the record here today also with regard to this motion.
I do support the motion and the amendment to this motion, Mr. Speaker. After listening to the Member for Mayo-Tatchun, it appears that that member was struggling very hard to find something wrong with building a bridge. I would suggest that it is because it is a very positive and much-needed infrastructure.
The Member for Mayo-Tatchun was mentioning the Yukon government making the bridge at Carmacks a toll bridge and making citizens pay to drive on roads in the territory. This also makes me want to believe that the member opposite is attempting to spread unnecessary fear among the citizens at large which, again, I think is an odd way to try to present something — an opinion.
I would like to say that, in my experiences in the Yukon Territory, driving to Dawson has always been a very frustrating thing for me as a citizen: to go to Dawson and sit there for two or three hours waiting to go across on the ferry. For that reason — I believe that I’m probably not the only citizen in the territory who avoids going that route because of that. In my opinion, I think that a bridge at Dawson is a very much-needed infrastructure.
I find it very interesting that the opposition does not hesitate to criticize this government when it suits them, when it comes to First Nation involvement in issues, but when a First Nation is in support of a project, it is not mentioned.
I believe that the opposition owes it to the public at large to also bring up the issues when First Nations support them. I believe that is the case with the Tr’ondëk Hwëch’in in Dawson, and they’re probably looking forward to having this infrastructure go ahead.
I also found it interesting for the leader of the third party to make reference that this money could be spent on the sewer in Dawson. The member of the third party seems to forget that she was a Premier for two years plus, and it wasn’t an issue then. The sewer at Dawson was not an issue. I’ve never heard of it being an issue. To start adding all kinds of different scenarios about why this bridge shouldn’t be built and all the things that the Liberal government failed to acknowledge when they were in government all of sudden now become an issue. I guess that’s politics, playing politics with this issue.
It’s an infrastructure that I feel is dearly needed.
There was some mention about risks. There is always risk in a lot of things that are built. When the government does something a little bit differently there usually is some risk involved, but at the end of the day I believe this would be a very positive move for the whole territory, not only Dawson. I believe that it will and could be a real tourism benefit because again, like I said, I’ve been in Dawson a few times and I’ve seen cars lined up for a mile plus in the distance. It’s not uncommon, especially in the summer months, to see cars and mobile homes parked for a very long distance on the road to the ferry.
So I do support these amendments and I encourage the opposition to also support them.
Deputy Speaker: Are you prepared for the question? Are you prepared for the question on the amendment?
Amendment to Motion No. 275 agreed to
Deputy Speaker: Is there any debate on the main motion, as amended?
Mr. Hardy: We have heard from a few people in here — not everyone — and I hope everyone gets a chance to speak. It’s an important issue. The government, with their majority, pushed through their amendment and I have to say that I’m disappointed about that. I don’t think the amended motion we have before us at the present time addresses the concerns that have been expressed in the Legislature today by the opposition. And it’s just one more example, of course, of the Yukon Party government not working with the opposition to find common ground. But so be it. That’s what we’ve seen and have to deal with on a regular basis in any kind of debate.
There are a lot of issues and I talked about some of them when we were discussing the amendment, but there are a lot of issues with regard to two topics that are part of this motion. Of course, that is the bridge and that is public/private partnerships and definitely the way this government is going about public/private partnerships. It just astounds me that this government ran on a platform of open and accountable, conciliatory, consultative consensus — all those lovely words. And everybody likes to hear those words but, as usual, we are finding that that’s all they are — words.
And I hear in public that they’re not going to get fooled again. They’re really tired of listening to politicians, especially during an election period — they mouth off a bunch of platitudes and promises only to immediately start to break them.
I have to agree with the public in that regard. Watching the behaviour of this government and using this as an example, this one issue: the total lack of consultation, the total lack of accountability on this, and frankly a big waste of money so far, does nothing to enhance any kind of confidence in the general public in regard to believing that politicians will live by what they say. It is really disappointing.
This is just an example, as far as I’m concerned. You know, the government is not going to go bankrupt building this, whether they build it with P3s or they build it using the traditional method under which they tendered it out — design the project and tender it out, and allow free bidding on it. They’re not going to go bankrupt over it. Obviously there is enough money in the kitty to be able to do this project, if that’s what the government wants, but it is just the way it is being handled, and it is just the way that members in government respond to any kind of concern or expression on this side in regard to something that the government is doing. It is our job to try to analyze and criticize, and offer constructive input. It’s our job to try to shine a light on some of the activities of government, and it is our job hopefully to hold them accountable to ensure that they don’t become too disdainful in their actions toward how it is expected a government should act.
That’s our job. I can assure you, Mr. Speaker, I always find it odd to be introduced as leader of the official opposition because I don’t believe my role is always just to oppose. I know for a fact that we haven’t. We’ve brought forward many motions. We’ve brought forward bills. We’ve introduced amendments. We’ve offered suggestions. We’ve questioned — with integrity, from our perspective — the supplementary and main budgets, and we try to give our best possible input.
Unfortunately, that title is out there — I know the Americans, for one, have a hard time understanding what that actually means. When I was in Juneau earlier, I had to explain it quite a few times. They thought it was quite amusing. So, I don’t normally introduce myself as “official opposition.” However, it is our title, and it is a role that we play. We are expected to do it with vigour and intelligence and to definitely try to assist the government with our own criticism. But the failure seems to be that it’s always taken that, if we have a differing opinion, it means we are opposed to everything — the government can’t absorb any kind of criticism whatsoever and struggles with that.
The issue before us today — the motion that was brought forward by the leader of the third party — is a good issue. As I said earlier, it was debated in 1998. I believe it was debated, but it wasn’t necessarily around the bridge; it was around the concept of public/private partnerships. The NDP government was looking at that as an option. It had no commitment to it. It was exploring avenues that a government may want to follow and gathering information. That kind of information, that kind of study and investigation, and possibly developing a policy out of it, would have given following governments the ability to build upon that.
The NDP government was looking at that. The leader of the official opposition at that time brought a motion forward and there was debate around that.
I’ve read through the debate. It is quite interesting. I do not necessarily agree with the member of the third party in this regard but I am really quite willing to engage in a debate and share ideas and perspectives. Some of the things she has said are definitely worth considering and I will take them with me to contemplate as I continue to explore the idea of P3s.
You don’t just dismiss it outright just because it’s not your motion, it’s not your idea or because it’s here in the Legislature and therefore you have to behave in a certain manner. That’s what I see a lot of — the behaviour as predicted by the Premier, maybe, or the Deputy Premier.
However, just going through that — for instance, I have, without a doubt, a big concern around P3s, especially when it comes to health care, education or the structure of our judicial system. There is no question about it. I have not seen evidence to date that indicates that it would serve the people of Canada well. I believe that the system we have, with its warts and all, is still the best system that we can possibly have, that we can improve on. Shifting into a private delivery is not something I feel is wanted or necessary by people of Canada.
I look at the Partnerships B.C. and I have heard the Minister of Economic Development in the House during Question Period come up with some pretty extreme and wild figures. There’s no proof, substantiation, no evidence of what he is saying or facts to back it up — and he makes a big deal about Partnerships B.C., as if Partnerships B.C. is a 50-year old corporation.
Well, Partnerships B.C. is in its infancy. It’s very new and it has done a few projects. There is no real record how successful they are or not because there has been no true comparison on what it would have necessarily cost from a traditional delivery to this one. But there’s no question about it, it’s a direction that the Liberal government of B.C. wanted to go in and they created it, and so be it.
But the impression that’s left with us is that this is an organization within a government body that has a tremendous amount of experience based on history. It doesn’t. It’s a new field. It’s a new area. P3s aren’t new, but the model that’s being used in B.C. is fairly new.
There are some proposals out there, but I also recognize, in reading some of their literature, that they are definitely looking at privatization within the health care system. I have to assume, if the Minister of Economic Development is so high on the Partnerships B.C. people and their programs, that the minister is also very supportive of the private delivery of health care. I think this government owes it to the people of this territory to come clean on that. If this is the direction they want to go in, so be it. That’s not a problem, but put it out there. Let the people decide. Ultimately, let the people decide. Give them an opportunity to have input.
Same as this bridge. Same as the direction on P3s. Why is it now — this is a question that the leader of the third party asked — why is it there’s no policy? If the government is so far ahead of developing any policy, you have to ask the question why.
Some Hon. Member: (Inaudible)
Mr. Hardy: Now the Member for Klondike —
Speaker: Order, I have to remind the government House leader of Standing Order 6(6), that when a member is speaking, no other member will interrupt. The leader of the official opposition has the floor.
Mr. Hardy: I won’t explore the comment that I heard from the other side.
The question I’m asking, the question that has been asked on this side is: what is the resistance to develop policy? What is the resistance to engage the public if there is such a fundamental shift in how this government is going to bring forward major, I could say, infrastructure projects, it could be roads, jails, bridges, any type of building they may want to build — schools, hospitals; it could be small ones in communities. If the P3 model is what they want to use, if they want to shift it into the private sector hands, whether it’s a lease or an ownership, and it’s a long-term debt that they wish to put the territory in, then let’s put that out to the public. Let’s have that debate; let’s put it out there. I have no problem with that.
If a case can be made, if they have enough evidence that this is the best way to go, then I’m sure they will win in public opinion. But if they don’t, then maybe they should listen to the people and back off.
I have heard today that one of the reasons why governments started using P3s is because they were in a financial hardship and they needed to build infrastructure; there were needs within society but they didn’t have the ability to do it financially. So, they looked at public/private partnerships. That’s one reason; just a very simple one: that certain governments believe that governments should be downsized and the private sector should do more and more that, traditionally within Canada anyways, has been done by the public sector. That’s where you see a bigger shift toward private delivery. That’s where you see members like the Yukon Party often talking about the positive programs offered in the States, such as their health care system. Very few people outside of that think the health care system in the United States is better than the Canadian system.
But that is an opinion. That is a position they want to take. They run on that platform — that’s great. But you know, Mr. Speaker, they didn’t run on this platform. That’s not what they ran on, and that also worries me.
I don’t have the quote out of their campaign promise that they made in regard to the building of the bridge, for instance. But if I remember correctly, it was along the lines that they would be looking at it and would proceed ahead if it was financially feasible. That argument hasn’t been made yet and it hasn’t been proven. They’ve just gone ahead and done it anyways. And that is a concern, as well. And I know the Member for Klondike has been fairly silent on that. I haven’t heard of many discussions in Dawson City around this issue, nor have I, from my visits up there, heard many people who have had an opportunity to have an open forum that explores the viability of it. But it’s not just a Dawson issue. It does have a pretty profound impact on the rest of the Yukon, financially as well as the whole idea of shifting toward the delivery of services and structures to the private sector from a traditional manner in which we used to do it.
Mr. Hardy: Mr. Speaker, I have an amendment I would like to introduce at this time.
THAT Motion No. 275 be amended by replacing the words after the phrase “full public consultations” with the following words: “to determine if it is in the public interest to pursue a policy of public/private partnerships for this or any other public infrastructure project.”
Speaker: Order please.
For the sake of brevity at this time, with 20 minutes left in the day, the Chair will permit the amendment to proceed. However, the Chair has some concern with the amendment and the amendment will be subject to further review.
The leader of the official opposition has moved
THAT Motion No. 275 be amended by replacing the words after the phrase “full public consultations” with the following words: “to determine if it is in the public interest to pursue a policy of public/private partnerships for this or any other public infrastructure project.”
Leader of the official opposition, you have the floor for three minutes.
Mr. Hardy: It is always a wonderful and good thing to see within this Legislature some flexibility for members and for their conduct. We have had quite an interesting debate this afternoon and even over the last few days. I know for a fact that some people on both sides have been fairly upset about it. We have to move on — we can’t take it personally — and do the best we can for the public good. I think that’s what we are all here for.
Anyway, the amendment was brought forward to remind the government that there is still work to be done before a project such as this goes forward. There are still some unanswered questions in regard to P3s, in regard to the bridge that is being proposed, and we really want to see those questions answered before we commit a substantial amount of money and what I consider possibly a portion of our future in one single project without some assurances.
I believe the kind of consultation that needs to happen around P3s is absolutely necessary in order to get a better handle on what we’re going to be doing.
With that, I’m going to sit down and allow other people to give their comments.
Hon. Mr. Jenkins: I rise in opposition to the amendment to Motion No. 275, as amended, as proposed by the leader of the official opposition. The bottom line with a Yukon River bridge crossing at Dawson City being constructed is that it will complete the loop and complete a road system around the Yukon.
It will show a net saving to the Yukon.
Let us look at what is currently transpiring with respect to the George Black ferry. It was constructed in 1967 and the second ferry, or the old ferry, remained in service as backup for quite a number of years after that. It was purchased by Canada, Indian and Northern Affairs, and went into service. From what I could glean, the first year of operation of the new George Black ferry, the total O&M cost for that year was under $100,000. That included the operating of the skyline, which the Yukon government had to put in and maintain, and some of it was billed back to Cassiar Asbestos Corporation. It also included the ice bridge, which had to carry a big load.
In fact, the Yukon had the heaviest laden trucks, GVW, of any jurisdiction in Canada right up until Lomac was operating out of Faro. In the last fiscal year, for 2003, the O&M costs of the George Black ferry stood at $1.1 million annually and the lifespan of the ferry is some 40 years. It was built in 1967 and that would mean the time expires in 2007.
A ferry of that nature operates half a year. There are 8,400 hours in a year. It operates about 4,200 hours a year. That translates into a total replacement of both engines and both marine gears about every two and a half to three years if you can max them out at 12,000 hours. The last year they start to experience problems and there is downtime; 100 percent reliability is very, very hard to achieve given any piece of equipment, let alone a ferry.
Mr. Speaker, we hear right away about it when one of the B.C. ferries or the Alaska ferries has an engine problem or a slight difficulty right away. You hear about it when the George Black ferry goes down, and it does go down on a regular basis, but it was just repowered with new marine gear and new steering just a few short years ago. But we’re coming up to year three next year, which means we can anticipate further difficulties with reliability.
Let’s look at the bridge costs, and there couldn’t be a better time for a government to take the O&M cost of the ferry and use that O&M cost at today’s level, the $1.1 million, to debt-service under a P3 initiative of a bridge. Interest rates are at an all-time low. Long-term interest rates are even lower. The cost of money is quite reasonable.
Let’s look at a bridge costing $25 million. At today’s prevailing interest rates, amortized over 25 years, we’re looking at $8 million of interest. That comes out to $33 million. Given the 75-year life of a bridge, that would show a net savings at the rates in effect today for O&M costs for the George Black ferry of some $50.5 million. If we take the bridge and say it costs $30 million, interest would rise to $9.6 million: $39.6 million over the life of debt servicing and paying for that bridge. The net savings at that rate over a 75-year effective life would be $43.9 million over the life of the bridge. Let’s take a bridge costing $35 million. Interest would be $11.2 million. That would translate into $46.2 million. Net savings to Yukon $37.3 million over the life of the bridge.
Those are significant cost savings for Yukon. It would remove the unreliability of the ferry system and an ice bridge system. It would translate into easier access to vehicle traffic and our visitor industry is heavily reliant on that ferry — so much so that every evening at about 3:30 or 4:00, you look across the Yukon River and you can see the lineup going all the way up the hill some days, and some mornings going out of Dawson you can see the lineup going all the way down Front Street.
The backup means hours and hours of delay. Then we have a motorcoach that has to cross, and given that the ferry has a limited capacity for passengers, you can only put one motorcoach on because you’ve maxed out on the number of passengers you are allowed to carry. But then we will have a loaded fuel truck coming in from North Pole, Alaska, and given the regulations, we are only allowed to carry one fuel truck with no other vehicles on that ferry at that time.
These are all areas that not too many people are aware of. But when you live with this on a day-to-day basis for six months of the year, you begin to recognize the shortcomings.
We only have to look at the studies that have been done. One of the most important studies that the members opposite have not referred to is the study of the impact on the fishing industry and fisheries. It clearly demonstrates in this study that the impact of a bridge on fishing and salmon enhancement will be extremely positive given that the approaches on both sides of the river require a tremendous amount of material to be dumped into the river on a continuing basis. They also have to go into the river with backhoes on a regular basis and pull it back out so that the ferry can land.
The water does go up and down on the Yukon River. We have high water right after spring breakup, and then we have spring freshet, which is usually in the first week of July.
So we have two high waters, and there is a significant rise and fall in the water level in the Yukon River at Dawson on a regular basis, Mr. Speaker. So if we want to do something that is environmentally sound and environmentally friendly, the construction of a bridge can be justified on that facet alone, never mind net savings to Yukon, just on the savings to the environment, because the ferry currently burns about $75,000 worth of diesel fuel a year. The Government of Yukon gets one heck of a fine price on diesel, but that is still a significant amount of money.
Mr. Speaker, we start extrapolating all the other studies that have been conducted, the ND LEA study on the bridge, which was done back in the mid-90s — 1994, 1995 — some of the studies were done under the previous Yukon Party government, and they were continued on through into the next NDP government and, without exception, they support construction of the bridge.
Now, if the bridge were constructed in the conventional manner that the Yukon government goes about these capital projects, this would in itself be a monumental project to undertake, and government needs the flexibility, the P3 — this is a hand-in-glove arrangement.
We only have to look at some of the initiatives that were started under some of the previous governments. If you want to look at the one-stop shop that was a Liberal initiative, that could have been built and operated by the Yukon government for considerably less than what it’s going to cost the government over the 10-year life of that contract.
There is a very good chance that that contract will have to be extended. Yet, the way the accounting was, you could go out and you could lease a building for 10 years, you didn’t have to book it all up front, but yet that liability was vested in the Yukon government to have to pay that rent year after year after year after year. The same holds true for that ferry. It’s not going to go away if we keep a ferry or build a new one, because that cost is going to go on year after year after year after year as long as that ferry is there.
The costs are going to continually escalate. I can recall the first time I travelled back and forth on the new George Black ferry. I believe it was in 1969 and there was a captain and a deckhand. Today we have a captain, a first mate and two deckhands.
As a government we also, according to Transport Canada regulations, have to carry $50 million worth of liability insurance on that ferry — $50 million. Now, anyone in this House who goes out and places insurance on any business or any of their personal effects, ask your agent what it’s like to get $50 million worth of liability coverage, and then top it all off by saying that it has to include environmental liability, which is just about impossible. But that is what the requirement is from Transport Canada. It is for $50-million worth of liability insurance with environmental liability included. Those kinds of policies are not readily available and the costs are going up and up and up.
It’s something that’s not readily discussed, but start asking anyone who is going out in the market looking for liability insurance. The costs have gone through the ceiling, and they’ve gone up for government as well. Government has a sinking fund and the ability to have a reserve so we have a basic amount, and we’re self-insured to a great degree today, but for the Whitehorse Airport and all the other airports, government has to have in place liability insurance, as it does for the two ferries it operates here in the Yukon, the one at Ross River and the one in Dawson City.
Mr. Speaker, there are so many points that show that th construction of this river crossing will have a very positive impact, both financially and environmentally, and it can be a building block on which our government is committed to Yukoners to rebuild the Yukon economy. Judging by the smirks on some of the faces opposite, Mr. Speaker, they’re just jealous over on the side opposite. They haven’t been able to accomplish what we have accomplished as a government.
Now, in the NDP ranks, there is kind of a resentment of a P3 initiative, and there appears to be this dirty word “profit” or “potential for profit” in the equation. Mr. Speaker, government has to recognize that industry has the ability, has the skill and also has the need to engage industry in many of these sectors.
This P3 initiative is a way of accomplishing a tremendous amount. Our government is working on a P3 policy that is underway as we speak. If there’s a public interest to pursue a policy of public/private partnership, that basically puts the P3 policy into a eunuch mode. This has to be a viable instrument of development and economic development here in the Yukon — and it is, and it will be, under this government.
This P3 project is a pilot project. It’s going to be carefully monitored, and I’m sure the official opposition and the third party are going to be carefully scrutinizing this initiative. I don’t look for much enthusiasm for a P3 undertaking from the official opposition, but I know that after it is constructed and after it is in place, they’ll be shaking their heads, and wondering why they didn’t attach their blessing to this wonderful initiative that will enhance Yukoners, that will enhance the highway system, that will improve the ability of us to move forward in many, many ways.
Speaker: Order please. The time being 6:00 p.m., the House now stands adjourned until 1:00 p.m. tomorrow.
Debate on Motion No. 275 and the proposed amendment accordingly adjourned
The House adjourned at 6:00 p.m.
The following Sessional Papers were tabled November 17, 2004:
Yukon Heritage Resources Board 2003-04 Annual Report (Taylor)
Yukon Geographical Place Names Board 2002-03 Annual Report (Taylor)
Yukon Arts Centre 2003-04 Annual Report (Taylor)
Fleet Vehicle Agency 2003-04 Annual Report (Hart)
Queen’s Printer Agency 2003-04 Annual Report (Hart)