074 Hansard
Whitehorse, Yukon
Tuesday, March 25, 2008 -- 1:00 p.m.
Speaker: I will now call the House to order. We will proceed at this time with prayers.
Prayers
DAILY ROUTINE
Speaker: We will proceed at this time with the Order Paper.
Tributes.
TRIBUTES
In recognition of World Water Day
Mr. Hardy: On behalf of the Legislative Assembly I would like to pay tribute to World Water Day. Water is life and we all need it, Mr. Speaker. Each year on March 22 is World Water Day, an initiative that grew out of the United Nations in 1992. Since its inception, communities around the world have organized to promote access to safe public water as a universal right.
Globally there is enough water to meet everyone's needs; however, 1.1 billion people live without access to clean water, resulting in over 400,000 children dying every day from diseases caused by dirty water.
Mr. Speaker, water is the blood of the planet. It feeds all living creatures; it ensures life. Without it, this would be a desert. Just over a week ago, Canada went on record at the United Nations, unfortunately, opposing the right to water and sanitation, blocking a resolution tabled by Spain and Germany. This is a shame. We urge the Canadian government to recognize the right to water. We urge the federal government to develop a national policy that protects Canadian water from the marketplace and prevents diversion, bulk exports and privatization. Even here in the Yukon, we have repeatedly had people living with boiled water advisories -- Champagne and Carmacks people come immediately to mind.
The Yukon Medical Association recognizes clean water as a determinant of health and has called on the Government of Yukon to participate in an all-government plan to adopt an integrated water stewardship approach to ensure that all Yukoners have access to adequate supplies of clean, safe and reliable drinking water.
In the meantime, a national union will be coming this spring to assist Carmacks in the repair of their infrastructure, and that is a very interesting initiative.
In winding up here, water is life; everyone in the world needs it; water is for people and it's not for profit.
Speaker: Are there any further tributes?
Introduction of visitors.
TABLING RETURNS AND DOCUMENTS
Speaker: Under tabling of returns and documents, the Chair has for tabling the final report of the Electoral District Boundaries Commission. This report was released to the Members of the Legislative Assembly, the media and the public on March 3, 2008.
The Chair also has for tabling two reports of the Auditor General of Canada, entitled Government of Yukon's Role in the 2007 Canada Winter Games and Investment in Asset-Backed Commercial Paper -- Department of Finance. These reports were released to the Members of the Legislative Assembly, the media and the public on February 7, 2008.
Are there further documents or returns for tabling?
Hearing none, are there any reports of committees?
Are there any petitions?
Are there any bills to be introduced?
INTRODUCTION OF BILLS
Bill No. 46: Introduction and First Reading
Hon. Mr. Kenyon: I move that Bill No. 46, entitled Act to Amend the Liquor Act, be now introduced and read a first time.
Speaker: It has been moved by the minister responsible for the Yukon Liquor Corporation that Bill No. 46, entitled Act to Amend the Liquor Act, be now introduced and read a first time.
Motion for introduction and first reading of Bill No. 46 agreed to
Bill No. 47: Introduction and First Reading
Hon. Ms. Horne: I move that Bill No. 47, entitled Miscellaneous Statute Law Amendment Act, 2008, be now introduced and read a first time.
Speaker: It has been moved by the Minister of Justice that Bill No. 47, entitled Miscellaneous Statute Law Amendment Act, 2008, be now introduced and read a first time.
Motion for introduction and first reading of Bill No. 47 agreed to
Bill No. 48: Introduction and First Reading
Hon. Ms. Horne: I move that Bill No. 48, entitled Act to Amend the Summary Convictions Act, be now introduced and read a first time.
Speaker: It has been moved by the Minister of Justice that Bill No. 48, entitled Act to Amend the Summary Convictions Act, be now introduced and read a first time.
Motion for introduction and first reading of Bill No. 48 agreed to
Bill No. 49: Introduction and First Reading
Hon. Mr. Fentie: I move that Bill No. 49, entitled Act to Amend the Financial Administration Act, be now introduced and read a first time.
Speaker: It has been moved by the Hon. Premier that Bill No. 49, entitled Act to Amend the Financial Administration Act, be now introduced and read a first time.
Motion for introduction and first reading of Bill No. 49 agreed to
Speaker: Are there any further bills for introduction?
Are there notices of motion?
NOTICES OF MOTION
Mr. Inverarity: Mr. Speaker, I rise to give notice of the following motion:
THAT an increasing number of Yukoners are unable to find affordable housing;
THAT the Government of Yukon has received millions of dollars from the Government of Canada to develop affordable housing; and
THAT this House urges the Government of Yukon to move expeditiously to help create more affordable housing for Yukoners.
Mr. Edzerza: Mr. Speaker, I give notice of the following motion:
THAT this House urges the Government of Yukon and the Government of Canada to convey to members of the U.S. Senate and House of Representatives that neither high oil and gas prices nor the desire to increase domestic sources for these resources should be used as an excuse to permit exploration or development activity in the Alaska National Wildlife Refuge.
Mr. Cardiff: I give notice of the following motion:
THAT this House opposes any move to outsource workers' compensation services to another jurisdiction, such as Alberta or British Columbia, in an effort to reduce administration costs.
Mr. Hardy: I give notice of the following motion:
THAT this House urges the members of the Public Accounts Committee to honour their responsibility to the Yukon people by meeting at the earliest opportunity to arrange for a public hearing in all matters related to the Yukon government's investments in asset-backed commercial paper, which have been deemed by the Auditor General of Canada to have been in breach of the Financial Administration Act.
Speaker: Are there further notices of motion? Hearing none, is there a statement by a minister?
Hearing none, that brings us to Question Period.
QUESTION PERIOD
Question re: Asset-backed commercial paper investments
Mr. Mitchell: I have some questions for the Minister of Finance. Last summer, the minister made $36.5 million in bad investments. We still don't have our money back, and we may never get it all back. The story in today's Globe and Mail says the frozen paper may have lost 40 percent of its face value, according to an RBC analyst.
The Premier got caught and it is Yukoners who are going to pay the price. The 36.5-million investment was part of an overall investment strategy that was very risky. The Premier made other investments in these types of bonds -- almost $120-million worth. Let me give you some examples: Rocket Trust; Comet Trust; Aria Trust; several more in Symphony Trust, all of which are currently frozen.
Why was the Premier gambling people's money in such a reckless way?
Hon. Mr. Fentie: To help the Member for Copperbelt correct the record, the government does not gamble with people's money, nor did the governments as far back as 1990 gamble with people's money. In fact, they made investments in this area in good faith, as this government has done. The difference between this government and past governments is that we've recognized that there are some challenges in relation to this particular investment, thanks to the banks not living up to their agreements of liquidity. We have implemented a policy, Mr. Speaker, to ensure that no further new investments in this area can take place.
But I would caution the member, also, to accept as fact reports out of the media on so-called 40-percent losses. The arrangement on restructuring has yet to be completed.
Mr. Mitchell: I'll correct the Finance minister: the reports are on the current reduction in face value, were people to try to cash these in today. As far as new policies, all the Premier had to do was follow the old policy. If he had followed the act, we didn't need a new policy. The old one was fine.
Now $36.5 million is missing and the same people who took it are now promising to give it back in five years or nine years. The fact remains that we don't have the money to spend today. This $36.5-million investment was part of a larger risky investment strategy that this Premier was pursuing. It supposedly paid higher returns and there was more risk and the Premier got caught. In the last number of years under his watch the government has made more and more of these types of investments. The amount tied up could have been higher but we luckily got out in time.
Why was the Premier pursuing this risky strategy?
Hon. Mr. Fentie: The short answer is that the member's position is complete nonsense. The facts are that a total of $1.7 billion -- if you follow the member's logic -- was put at risk by governments of the Yukon as far back as 1990. We have changed nothing other than to ensure that this can't happen again.
Mr. Mitchell: The Premier's answer is complete nonsense. He talks about $1.7 billion being put at risk. Events and the investment climate were different in 1990, 1995 and 2000 than what they were in the summer of 2007, when everyone was talking about the shaky house upon which this strategy was built.
Now, this was all part of a risky strategy. Last summer, the Government of Yukon was busy buying this junk, week after week. In Nunavut, they bought none of it. Their rules don't allow the territory to put its money into ABCP.
"We based our regulations on the amount of risk that we wanted to take. Our primary concern was safety of capital," a Finance official said. "I think we're just more conservative." Well said, Nunavut.
This Yukon Party government bought millions of dollars of this stuff when others were steering clear. Of course, we already had rules in place, but the minister didn't follow them. In the end, $36 million is frozen; we may not get it back.
Why did the Premier take all this risk with Yukoners' money?
Hon. Mr. Fentie: You know the member's questioning here is getting more and more ridiculous -- to make these assertions that this government suddenly decided to take risks with taxpayers' money. The facts are the investments were made under the same conditions, under the same Financial Administration Act, under the same agreements of liquidity, and in the same trusts as created by banks and the investment community -- no different from what past governments were making.
What this government has done, however, is implement a new policy -- I repeat for the Member for Copperbelt, a new policy -- to clear up this matter and, furthermore, Mr. Speaker, is this member suggesting Nunavut is in a good financial position to even decide to make investments? I think not. Nunavut is in serious financial difficulty, probably can't make investments and I think it's clear that this government's financial management ensures that we can: to date -- no loss, by the way, Mr. Speaker -- no loss in our investments, approximately $20 million in earnings.
Question re: Asset-backed commercial paper investments
Mr. Mitchell: Mr. Speaker, let's try a different tack. We'll ask some questions of the Deputy Premier on the statement she made here last fall about the government's $36-million investment in frozen investments. She had lots to say last fall and nothing to say last Thursday. Let's see if the Premier lets her speak today.
The Deputy Premier claimed the $36.5 million dollar investments were backed by a bank -- not the case. She claimed the Auditor General knew all about these investments and was okay with them -- again, not correct. She claimed this Yukon Party government was following the Financial Administration Act when it made these investments -- again, not so. Yukoners want an explanation for why so many things she said here last fall turned out to be not correct.
When the Auditor General was in town last month, she said there will be a loss. The question now is: how much?
Instead of covering for her boss' fiscal mismanagement, will the Deputy Premier admit what everyone has known for months: we are going to lose money on these investments. Will she do that?
Hon. Mr. Fentie: Mr. Speaker, I think the problem here is the incorrect approach by the Member for Copperbelt in trying to articulate this very issue. I think it demonstrates this member does not know what he is talking about.
First off, to suggest there is a loss here would be for somebody to firesale these assets. That is not what the restructuring plan is all about. It's restructuring it to ensure that a maturity date can be established so that not only is the principal returned but interest will be earned on the investment. That has yet to be completed. The member opposite should be a little less presumptuous in his positioning.
Furthermore, the member has suggested the Auditor General did not know about these investments. I beg to differ and the member should correct the public record. These investments were fully disclosed each and every year-end, as audited by the Auditor General. The member has to correct the public record.
Mr. Mitchell: Well, I'll correct the public record, Mr. Speaker. The Auditor General said she didn't know we had investments that weren't in compliance.
Now, the Finance minister hasn't answered any of the questions that we asked of the Deputy Premier. She still has a lot of explaining to do. Last fall, she had a decision to make: should I go into the House and read the Premier's briefing notes and pretend that nothing is wrong, or just admit that we made a really big mistake? Unfortunately for Yukoners, she chose the former.
The Deputy Premier said our money was guaranteed. It wasn't. She said the Auditor General was fully aware of the investments and had no problem with them. Not so. She said the government was following the law. It wasn't.
She also said repeatedly that we're not going to lose any money. Again, not correct. We've been losing interest for months. We have a supposed promise, if we sign on to a deal, that we may get it back some day -- from the same people that can't pay it back now.
We still have no guarantee that we'll see all of our money again. Why wasn't the Deputy Premier up front with Yukoners when I raised these questions last fall?
Hon. Mr. Fentie: The Member for Copperbelt is now alluding to wrongdoing by a member of this side of the House. Frankly, the Deputy Premier, in my stead, did her job, unlike the Member for Copperbelt who isn't doing his job.
Now, the Member for Copperbelt has already quit the Public Accounts Committee. He has quit on Yukoners. He's not doing his job. He's being irresponsible, and his line of questioning is not borne out by the facts. So maybe the member wants to move on to something more constructive.
Mr. Mitchell: Once again the Premier is trying smoke and mirrors to change the question. I didn't say that this member committed a wrong act -- referring to the Deputy Premier. The Premier is suggesting that; that's his opinion. I said that she didn't present the information we asked for last fall.
Mr. Speaker, I think a lot of Yukoners are disappointed in the Deputy Premier's role in this whole affair. She had a chance to do the right thing -- stand up, be straightforward on this issue -- but she didn't do it, and I think that's too bad.
So, I'll ask one more time. The Deputy Premier, over the period of about a month last fall, had plenty of time to look into this entire mess and decide for herself whether or not the investments were up to par. She chose not to. Instead, she just read the notes and did what she was told. Why didn't this minister admit the obvious last fall, namely that the government's bad investments were outside of the Financial Administration Act -- outside of that law -- which has tied up millions of our tax dollars for years to come?
Hon. Mr. Fentie: Now that the Member for Copperbelt wants to talk about correcting the record, let's delve into that. The Member for Copperbelt has said in this area that it is a cover-up. Wrong. The member should stand on his feet and correct the record or resign, because these items were fully disclosed.
The member has said that we've lost money. Wrong. The member should stand on his feet and correct the record or resign, because we're making money -- approximately $20 million to date, Mr. Speaker. The member says that there was no liquidity agreement in place. Wrong. The member should stand on his feet, correct the record or resign. On second thought, the Member for Copperbelt has so many corrections to make that he'd be on his feet for days; he should just resign.
Question re: Asset-backed commercial paper investments
Mr. Hardy: There is lots of advice being passed around.
Mr. Speaker, there are many, many questions that the public wants answers to about last summer's investment of $36.5 million in asset-backed commercial paper. What they want to know most is how long this money will be tied up and how much the government could stand to lose on these investments? They also want to know how this debacle happened. Unfortunately, Yukon Party members of the Public Accounts Committee chose to block that opportunity. As well, the Liberals tried to quit; neither are serving the public good. That leaves us with no other choice but to pursue the matter here in the House. My first question is this: when and how did the Minister of Finance first learn that there was a problem with these investments?
Hon. Mr. Fentie: First, Mr. Speaker, I must agree with the Leader of the Third Party that the Liberals have quit. They have quit their responsibility; they have quit on Yukoners; they have quit any sort of constructive input in this Legislative Assembly, unlike the third party, which continues to bring forward constructive debate and issues.
So to the Leader of the Third Party, we as a government became aware of this issue when the banks reneged on their liquidity agreement. Secondly, we became aware along with everyone else, with respect to the FAA issues, as reported by the Auditor General when the Auditor General tabled her report.
Mr. Hardy: Now, I am not asking for opinions or predictions about what may or may not have happened to the money involved. I am not making any accusations; I am simply asking the minister for factual information that he should have at his fingertips.
According to the public accounts for 2006 and 2007, the government learned last August that its short-term investment in two trusts would not be redeemed upon maturity. So I am asking for dates, if the minister can send over a briefing on this. When did the minister's officials break the bad news to him and what direction did the minister give as a result of that?
Hon. Mr. Fentie: As I said in the first question, when the banks failed to meet their liquidity agreement. Secondly, we did fully disclose this matter in public accounts and I think clearly that demonstrates how quickly the government acted responsibly in this area. I want to suggest also to the Leader of the Third Party that we must allow the process of restructuring to conclude, to reach its inevitable end, because there are very important matters in relation to that: this whole area is under protection now, and that is important; secondly, the restructuring is ensuring a maturity date will be there in the future; and, thirdly, we have to understand that the total value will be reinvested. So to suggest today there is a loss is incorrect. We must let the restructuring process conclude, unlike the Official Opposition and the Member for Copperbelt, who are already destructing a restructuring process that has yet to be completed.
Mr. Hardy: I feel the public deserves an answer to many of the questions surrounding this and it is not, as I said, about making accusations and trying to embarrass people or insult them. It is about getting to the bottom of this story. It is also about allowing the Public Accounts Committee to do their job because, as long as it is not up and functioning, we are not doing the public good in here. That is a fact; we have a duty to make sure that committee works. If someone owed me $36.5 million and decided to default on it, I certainly wouldn't be shrugging it off. I would want to know exactly what went wrong and what could be done to get my money back, and I would want a detailed explanation about legal opinions that were open to me.
Mr. Speaker, the Public Accounts Committee could get to the bottom of that. We shouldn't be doing so much questioning around this in the Legislative Assembly.
Now, did the minister ask his officials to get a legal opinion on this matter or did he himself seek advice about the legal implications of this default and how the Yukon government got into this situation in the first place?
Hon. Mr. Fentie: For the member's benefit, when the Finance officials had their briefing with the media, post Auditor General's report, they were very clear that there is another legal opinion that is inconsistent with the Auditor General's opinion. They stated that publicly. What we as a government have stated, however, is that we accept and respect the Auditor General's opinion.
But I think we have to focus on the facts. As the restructuring process evolves, this whole investment area has been structured into class A1 and A2 notes that will pay a quarterly interest equivalent to a banker's acceptance minus 0.5 percent. Class B notes will also accrue interest at the same rate as A1 and A2 notes, but will only pay out at maturity. Class C notes will accrue interest at a rate of 20 percent per annum.
There's a way to go yet to conclude the restructuring but, to the member's point of finding out how we can address the situation, everybody involved is working on ensuring that the restructuring plan will allow all invested -- Yukon, Alberta, Ontario, Canada Post, Air Canada; the list goes on and on and on -- to recoup their investment.
Question re: Asset-backed commercial paper investments
Mr. Hardy: Now, on October 17 last year, the Minister of Finance signed off the public accounts for 2006-07. Page 81 contains a note to the financial statements outlining what we know quite well, that two trusts, totalling $36.5 million, were not redeemed on the maturity dates of August 31 and September 4. I assume that the minister read the public accounts document, including the note on page 81, before signing it off. This was more than two months after the department learned about the ABCP problem. The minister had plenty of time to get to the bottom of what went wrong.
My question is this: in that time, did the minister seek any explanation from his officials, or from outside the department, about how these ABCP investments had gone sour when this had never happened before?
Hon. Mr. Fentie: Well, yes -- the short answer is yes. It's pretty clear. The only time this became an issue, after years and years and years of investment -- a total of $1.7 billion worth of investments -- the only time it became an issue is when the liquidity agreements were reneged on by banks. That's exactly what has transpired.
Since then, work is being done by all involved here to ensure that this issue is going to be dealt with fairly, responsibly, and so those who have invested will recoup their money. It's just not the Yukon, Mr. Speaker. There is a long, long list of governments, public corporations, corporate Canada and indeed individuals who invested in this particular area including, by the way, the regulatory body that deals with government pension superannuation. All of this is an important matter to this government and to all concerned and we are going to stick to the process to ensure that we not only don't lose money, but we continue to make money.
Mr. Hardy: Last week, the minister insisted that these investments in ABCPs were business-as-usual; that governments, as far back as the Penikett administration, had invested in them; but we know that simply is not the case. This particular form of investment didn't even exist before 2001. It's this minister and this government that not only invested in less secure forms of ABCPs, but allowed these investments to grow exponentially. A lot of this argument rests around bank issues.
When and how did the minister first learn that these trust investments did not have the same guarantee that bank-issued ABCPs have?
Hon. Mr. Fentie: That's an interesting angle, Mr. Speaker, but I want to inform the member opposite that he is way off base. The facts are that investments, as this trust is, were being made all along by past governments. No difference. And the liquidity agreements were also in place. It only became an issue when the banks did not meet that liquidity agreement.
So, Mr. Speaker, once again, the Leader of the Third Party is asking the same question only in a different approach. The answer is going to be the same, over and over and over. So we either move on or we continue to discuss something that has now had so much misinformation put toward it, I don't think the public even understands what the opposition is trying to point out -- if the Official Opposition had a point.
Mr. Hardy: Mr. Speaker, it is interesting because it is the public that is asking me to ask these questions, so I think they understand very clearly what is happening.
The Auditor General has said these investments did not meet the security requirements called for in the Financial Administration Act, but of course that's just her opinion.
The Justice department came to exactly the same conclusion, and I suppose that's just an opinion as well.
Well into November, the minister and the acting minister were insisting that these investments were guaranteed by the banks and had the highest possible rating.
Will the minister now acknowledge that the statements he and the acting minister made in the House last fall were not correct?
Hon. Mr. Fentie: Well, Mr. Speaker, no, I cannot acknowledge that because the statements were correct. What is not correct is the member's assertions. These investments not only had liquidity agreements in place by the banks, they are also rated with a triple-A rating. I don't know what part of the facts the member just does not want to listen to in the answer. There is no possible way, Mr. Speaker, to respond to questions of that nature, because, if I did so, in the manner that the member wants, I would be misinforming the public.
Question re: Climate change action plan
Mr. Elias: I have a question for the Environment minister. Climate change is the single most pressing issue facing our planet today, and nowhere will the effects be more pronounced and more immediate than in Canada's north. We as a territory have never experienced anything of this nature or magnitude before. Combating climate change will take experts, time and massive financial resources. As in any project of this magnitude, planning is of the utmost importance.
Will the minister explain to this House how the relatively small amount of $130,000 announced in the budget speech for the climate change action plan hopes to address the problem?
Hon. Mr. Fentie: Mr. Speaker, I share the member's concern about climate change, and that is why this government has actually developed a climate change strategy. That is why we have been instrumental in getting adaptation on the national agenda. We have been very successful with that and, in fact, even the federal government now recognizes that further attention must be paid to adaptation in the north.
Now, to suggest that all we're investing in climate change is $130,000 is the typical approach by the Official Opposition -- cherry-pick an issue out of context, out of the total detail of an $899-million budget, and then try to create an issue. The issue here is climate change is a critical, critical problem for the north, as indeed the global community now understands. This government has taken action; we're doing so with our national partners. We even now have entered into discussions with the State of Alaska, so I'm very encouraged by the progress being made, along with many of the Yukon representative bodies and indeed the Yukon public and First Nations who have made a great contribution to this initiative.
Mr. Elias: Mr. Speaker, if rhetoric were worth money, this would be the wealthiest government on earth. The facts are, Mr. Speaker, that there is still no climate change action plan ready to be implemented. No plan means that various levels of government and their departments are going off on their own with no identified goals, no identified outcomes and no identified criteria for measuring success. Mr. Speaker, $130,000 is less than one percent of his department's budget. Mr. Speaker, this is the same minister who has gambled and jeopardized our finances, and now the minister appears to be doing the same with our environment. When are the minister and this government going to get serious about climate change?
Hon. Mr. Fentie: Well, given the line of the member's question, I can tell you that the government is a lot more serious than is the Official Opposition when it comes to climate change.
The climate change action plan is being developed in conjunction with Yukoners, with expertise, with the International Polar Year initiative. With so many others involved here, that input is critical to designing and implementing an effective plan. We're going to do the hard work. We're not going to stand on the floor of the Legislature and point out, through a misunderstanding -- and that's being kind -- of what is really going on with climate change in the Yukon under this government's watch.
Mr. Elias: There are always consequences for bad judgement, and for this Yukon Party government to go on with no climate change action plan is simply bad judgement.
This same minister has allocated $227,000 for office furniture, equipment, systems and spaces in this year's budget. These numbers speak volumes about this minister's commitment to, and understanding of, the environment.
Mr. Speaker, this is simply not acceptable; it's not acceptable at all. I understand it's World Water Day, and judging by the minister's words, he thinks he can walk on water. Well, let me tell you that there's some water missing from my riding, and that's in the Old Crow Flats. That's real climate change.
When is the minister going to stop avoiding responsibility and show some leadership and advise Yukoners when this government will unveil the climate change action plan?
Hon. Mr. Fentie: Well, unveiling the plan will come in due course. But the Member for Vuntut Gwitchin suggesting that this government has done nothing is incorrect. Old Crow Flats -- it's this government, in conjunction with the Vuntut Gwitchin government, that has protected some 8,000 square kilometres of Old Crow Flats.
Mr. Speaker, I think that speaks volumes about the priority we place on our pristine environment and the impacts of climate change.
Question re: Asset-backed commercial paper investments
Mr. Mitchell: Thank you, Mr. Speaker. I have more questions for the Minister of Finance.
Last Thursday, the minister said some interesting things. One of the things he said was that the Auditor General's report said that, as far back as the 1990s, the government was investing in these instruments.
I have a copy of the report in front of me; I would be happy to send it across. It is nine pages long. There is no mention of the 1990s anywhere in it. The Auditor General said no such thing.
Now, the minister says we have been investing in these for years. Well, economic times change. One hundred and twenty years ago, the minister could have made great investments in buggy whips; more recently, not so much.
When you lose money or your money is tied up, it means some things don't get done. It works that way in a family and it works that way in government. One look at the budget and it is obvious that projects are now on hold or delayed because of the uncertainty caused by the reckless approach that this minister took with our money. For example --
Speaker: Order please. Ask the question.
Mr. Mitchell: -- where is the health centre? Will the premier admit that this risky strategy has delayed this project?
Hon. Mr. Fentie: Well, considering the member's position last Thursday on the budget about so-called dependency on Ottawa and failing to mention the once-again increased investment in this territory in health care, education, our environment, in diversifying our economy, and in building Yukon's infrastructure, one can only wonder where this member is coming from. To correct the record once again, the Auditor General said governments -- plural -- governments in good faith were making these investments.
Mr. Mitchell: I don't believe she said that in this report. Mr. Speaker, we know the Premier has never made a mistake. He won't admit to one; he has never made one. But $36.5 million is tied up for five to nine years; that is a fact. We may never get it all back at all. That is a fact brought forward by the proponents of the restructuring. We may get it back. The result is that projects are delayed or cancelled altogether. There is a $36.5-million hole in our future plans because of this minister's gambler-like approach to investments.
The Dawson City health centre promised since 2005 is off the books -- not even money for planning.
Let's look at another project not mentioned in the budget: the reconstruction of F.H. Collins. It is also delayed because of the financial uncertainty caused by this minister. This minister took unnecessary risks and the results will be felt for years to come.
Will the Premier admit the F.H. Collins school replacement is delayed because of this investment fiasco?
Hon. Mr. Fentie: I'll do no such thing. It's rubbish, Mr. Speaker. I've never heard such rubbish. To suggest that things are delayed in Dawson City is conveniently ignoring the fiscal disaster the former Liberal government inflicted upon the City of Dawson by allowing them to exceed their debt limit -- under the act, by the way, if the member's listening. This government bailed Dawson City out, came forward with a financial package and is working on all issues important to Dawson City, as we are on all issues important to Yukoners. That's why the Yukon today is a better place than it was under the former Liberal government.
Mr. Mitchell: What's rubbish is this minister's investment portfolio on behalf of Yukoners -- that's what's rubbish, $36.5-million worth of rubbish.
The Auditor General investigated the minister's investments and found they didn't follow the Financial Administration Act. The minister told Yukoners the investments were backed by a bank; the auditor disagreed and now he talks about liquidity agreements. Straightforward, she said they were never backed by a bank.
The Deputy Premier repeated these claims several times last fall; she is silent so far this sitting, refusing to answer the direct questions being put to her.
The results of the Premier's risky adventures are evident in the budget tabled last week. We're scaling back capital spending because of the uncertainty around the $36.5-million mess. Projects are being delayed in Dawson, Whitehorse and around the territory. The Premier can deny it all he wants but his follies have already had a negative impact on Yukoners.
Will the Premier admit that his bad investments have tied the hands of Yukon governments for years to come?
Speaker's statement
Speaker: Before the Premier answers the question, I just would like to remind the Leader of the Official Opposition that the government body is a collegial body; any member can answer for any member. Just keep that in mind as you are asking the questions.
Hon. Mr. Fentie: Thank you, Mr. Speaker. I am not going even to respond to the member opposite's questioning, because it is not based in fact at all. To suggest that this territory is cutting back when we, once again, have tabled another large, record-size budget with record capital investments compared to past governments. Under the Liberal watch, this territory was a dismal place to be.
Mr. Speaker, we have not cut back on anything. In fact, we are increasing. We are increasing our investments in health care for Yukoners. We are increasing our investments in curriculum and education initiatives, so that we can better educate young people and Yukoners to build our future. We are increasing our investments in infrastructure, highways and hydro, reducing our emissions in CO2 output, for example.
I can assure the member just one thing. If this government ever -- and I doubt it is going to happen -- has to be faced with reducing investment, the first cut we will make is the member's wages.
Speaker: Time for Question Period has now elapsed. We will proceed to Orders of the Day.
ORDERS OF THE DAY
Notice of government private members' business
Hon. Mr. Cathers: Pursuant to Standing Order 14.2, (7), I would like to inform the House that, in the interest of offering members the opportunity to debate a private member's bill, Bill No. 104, the government private member will not be identifying any items to be called on Wednesday, March 26, 2008 under government private members' business.
Speaker: We will now proceed to government bills.
GOVERNMENT BILLS
Bill No. 11: Second Reading -- adjourned debate
Clerk: Second reading, Bill No. 11, standing in the name of the Hon. Mr. Fentie; adjourned debate, Mr. Mitchell.
Mr. Mitchell: It is my pleasure to rise today to respond to the government's 2008-09 budget. Before getting to the budget, I would like to again thank the residents of Copperbelt for their continued support, for the many phone calls of support and for their oft-provided input and insight on many issues that affect our riding and Yukon.
Copperbelt remains the most populated riding in Yukon and a very diverse riding: suburban neighbourhoods in Copper Ridge, Granger and Hillcrest; rural areas along the Fish Lake Road; country residential areas like Canyon Crescent and Pine-ridge and many areas along the Alaska Highway, as well; mobile homes in Lobird; industrial activity in McCrae and along the McLean Lake Road and below Hillcrest; hotels, apartment houses, churches, an elementary school and the airport. There are beautiful wilderness areas surrounding McLean Lake, by Ice Lake and along the Fish Lake Road, beyond Copper Ridge, as well as elsewhere across the riding. In fact, you could move within this one riding and enjoy suburban living, country living or ranching, and still remain in Copperbelt.
While the redistricting that will occur in the next general election will change the nature of the riding, as it is divided into portions of four different ridings, it continues to be my pleasure to represent all of these diverse areas now and over the next few years.
I would also like to take this opportunity to thank the some 4,000 public servants who work seven days a week on behalf of Yukoners. Yukon public servants look after our health care; educate our children; provide emergency services -- medical, firefighting, ambulance; respond to auto accidents; maintain our highways; safeguard our environment; and work together with the private sector to create our economy. We appreciate your work. While we may criticize the political arm of government for the spending decisions that they make, or do not make, we know that our public servants provide their dedication and expertise to the elected politicians who govern regardless of their political stripe, and we thank you.
Mr. Speaker, it is nice to be back in the Legislature and, for the first time in several years, before the end of the fiscal year. If nothing too odd happens, we may actually be done in time to enjoy some Yukon spring on the other end of this sitting.
Before we get to the budget itself, I would like to talk about the process that the Yukon Party government has used, once again, to get us to this point -- and I speak of warrants. Let's start with the fact that, even before we came into this House to debate the budget, almost $200 million of it has already been approved outside of this House by special warrant.
It's an incredibly arrogant way to run a government, and it has become common practice under this Premier's watch. It has been done every year this Yukon Party government has been in office, except for 2003, their first full budget year.
Now, a disturbing characteristic of too many second-term governments is that they can become arrogant and dictatorial. They think they know what is best for people, and they make decisions without asking anyone's opinion, other than their own.
Sadly, this is already the case with this Yukon Party government, and we are still in the early stage of this mandate. $200 million has already been approved -- more than 20 percent of the entire year's budget -- with no public scrutiny and no comment or debate whatsoever from the people's elected representatives here in the Legislative Assembly. It demonstrates how little respect this government shows for this House and for the elected representatives in it.
A few years ago, when the Premier bypassed the Legislature in a similar fashion, he described it as an effective way to manage the public's money. It's effective, all right. It's also arrogant, undemocratic, and completely unnecessary.
His excuse for why he did it this year was that, one time during the 1990s, there was a case where opposition members filibustered an interim supply bill and prevented it from passing. "We ensured that won't happen," explained the Premier in a local paper.
I remember well the incident the Premier refers to. The Premier at the time was part of an NDP government. The opposition at the time was the Yukon Party, led by former Premier Ostashek. Now, the Member for Porter Creek talked out the clock one day, and the NDP was unable to pass an interim supply bill. The result was that, technically, the government ran out of money. It was one of the few days a former member of this House, the MLA for Faro and Minister of Economic Development, was held speechless.
Now, the only party I know of that has ever shut down an interim supply bill in Yukon is, in fact, the Yukon Party. You'd never see us do it, and I think I can say the same for the NDP. We both have too much respect for this Chamber -- something that is in short supply across the way.
I'm not surprised by the Premier's my-way-or-the-highway approach, but it is completely unnecessary and it demonstrates once again the failure of the government to work cooperatively with all the other parties in this House. The government could have and should have passed an interim spending bill, which would have enabled us to raise questions about it before it was passed. We're here in March; we could have done this. It's needless to use special warrants this way. These special warrants are supposed to be used for special circumstances, when the Legislative Assembly is unable to debate the spending. The decision shows this government's lack of respect for the democratic process and disregard for the public trust. The minister and his colleagues haven't mended their ways since the $36.5-million investment scandal, and that's truly unfortunate. I had hoped the government would have demonstrated improvements to regain the public's confidence in how their money is spent.
Once again this year, there is no reason to bypass the Legislature. Last year the Premier blamed the Canada Winter Games. Now we had only known about the winter games for the previous five or six years. That excuse really held no water. All the Premier had to do was call the opposition parties and get a commitment for interim spending authority to see it through until the full budget was passed. Did the Premier do that? No, he refused to cooperate with the opposition parties.
Now, Mr. Speaker, one of the main duties -- if not the main duty -- that we as MLAs have is to decide how to spend taxpayers' money. It is our job to weigh different options and decide how best we can serve the public. We should do that in front of the public, transparently, as we are doing today. Instead, this government makes these decisions in secret with no public debate. $200 million has already been approved without any public discussion.
Now, pre-announcements -- let's move on to another way that this government demonstrates so little respect for the Legislative Assembly. A fundamental part of the democratic process is to announce spending decisions in the budget in the Legislative Assembly first. This has long been the practice of governments across Canada; it has been this way for many, many years.
Not that long ago, ministers of finance resigned when there was an accidental leak of one small item from an upcoming budget. And, of course, there are reasons for that -- it is not just tradition. It is to ensure that there is no unequal opportunity given to companies or individuals based on information that has not been fully disclosed -- there are reasons for the precedent.
Under the Yukon Party government, that has not been the case. Over the last few weeks, we have seen millions of dollars -- millions and millions -- in announcements outside this Legislative Assembly prior to ever hearing the budget speech. It leaves the public to wonder why the Premier has such little regard for this institution that he can't be bothered to make budget announcements here first.
There is a simple way to demonstrate that the Premier and this government have any respect for the Legislature: they would not make any budget announcements outside the House until the budget has first been released here in the Legislature, in front of the people's elected representatives.
In the government's arrogance, they seem to have forgotten already whose money they are spending. It is not their money. They are elected to look after it in trust on behalf of Yukoners. When the government makes budget announcements outside the House well before they happen inside the House, there is a danger that the representative role of each and every member of this House is undermined, this House is diminished and respect for the institution is diminished, and that our Legislature is rendered ultimately irrelevant.
Now sadly we know that the Premier won't heed our advice on this matter because, as he demonstrates daily, he is convinced that he knows best.
Mr. Speaker, back in the fall of 2006, the Premier campaigned for re-election on a promise to hit the ground running. Basically he said he had spent the first term getting everything up to speed and we'd see action in the second term. People believed him and expected him to keep that promise. The second budget once again demonstrates that those promises are beginning to unravel.
The run has slowed to a crawl. There continues to be a lot of planning but very little action. The budget does not deliver on any long-term plans for economic diversification, on improving our education system, on moving forward with addressing climate change -- not at a snail's pace, because climate change is no longer occurring at a snail's pace, but in a way in which to allow Yukoners to deal with the very serious problems that we are seeing in Yukon. You know, my colleague, the Member for Vuntut Gwitchin, remarked earlier about walking on water. Well, based on what I saw on a trip last year to Old Crow out on the Flats, it is easy to walk on water now because it is like walking in the Sahara Desert -- you are walking where the water used to be but no longer is, on a cracked lake bed.
I know that the Member for Vuntut Gwitchin and the people he represents are very concerned that it is simply the beginning of more ecological disasters to come for his people. In this case, the people of Vuntut Gwitchin are like the canaries in the coal mine for Yukoners: they are seeing these effects first -- although my colleague from Kluane might beg to differ, looking at the beetle infestation that ravaged the forests of southwest Yukon. I know that there is another beetle infestation, the pine beetle, which is moving up rapidly through British Columbia, and we may see that before too long as well. These things are coming here and they are coming here a lot faster than $130,000 or $300,000 worth of planning is going to address.
Now, I'd like to move on to talk about reannouncements. There are quite a number of reannouncements in this budget. These include projects that began years ago and are still not done, like the Watson Lake multi-level care facility, and new projects like the upgrades to the Campbell Highway, which were first announced many months ago, last fall.
There is half a million dollars for the development of a two-year licensed practical nurse program at Yukon College -- a program we support, by the way -- and one we have been calling for now for a number of years, but it has already been announced several times. The Premier has reannounced dollars for the territorial health access fund to improve community health services. This is of course money in the Minister of Health and Social Services department. We have not heard much lately from the Health and Social Services minister. Perhaps his leadership rival two seats over has been hogging the spotlight.
This government has also reannounced $6.3 million for childcare to increase subsidies, to increase the number of parents eligible for subsidies and to increase wages for childcare staff. Last year, in fact, the government essentially adopted our childcare platform and put it in place as its own. During the 2006 election, they said it was irresponsible to put numbers on a plan during a campaign. Then they adopted it. We're glad they did. It will mean a better system for everyone and we support it. I'm still really curious why a Finance minister would think attaching numbers to proposals would be irresponsible; it seems to me it's the only way to make proposals that people can take seriously, but there you have it.
There is $960,000 this year to begin developing a 30-unit, affordable, single-parent family housing complex. It is particularly for single women with children -- according to the budget highlights -- and for single parents, according to the budget speech. I know the government could not make up its mind exactly what this initiative was for, and apparently it still hasn't decided who will be allowed to live in it, based on the differences between the documents, but I know that when the Deputy Premier announced it earlier this year, she indicated that she had no idea yet what it would look like, where it would be, or when it would be ready, but we are encouraged that something is going to be done.
This is money from the Government of Canada that arrived in 2006. For such a priority, it has only taken this government two years to think about how to begin to spend it. During those two years, of course, we've seen more and more people struggle to find affordable housing. I don't have the stats in front of me, but I know I was just reading, as recently as this weekend, the latest housing prices from the past quarter in Yukon. I think the average was somewhere around $293,500 for a house in Whitehorse, and that ranged from $260,000 in Riverdale to well over $300,000 in Granger and Copper Ridge and country residential.
While Yukoners who have equity in existing homes are obviously pleased to see the equity increase, more and more people are being priced out of the housing market. More and more of our children can't afford to buy a house based on these prices, so there is a real need for affordable housing and we would like to see more done.
It is funny, by the way, that his announcement was made by the Deputy Premier, because the money isn't even coming from her department; it's in the Yukon Housing Corporation budget. Of course again the explanation is quite simple: the Deputy Premier is running to be the next leader of the Yukon Party and the minister responsible for the Yukon Housing Corporation clearly is not.
There is also $10 million in the budget for construction of the hydro power line from Carmacks to Pelly. This was announced last year, but not funded. Similarly, there is $1.5 million for the third turbine at Aishihik. That was announced with great fanfare last year, and no money was in the budget to actually do anything. This is a $5-million project, and perhaps when the Energy, Mines and Resources minister is on his feet in his budget response, or the Finance minister, they could outline when the remainder would be allocated, because I am sure Yukoners will be interested in knowing.
Taking credit. As I mentioned in my initial comments to the media last week, some of the best part of the 2008-09 budget is the beautiful photo of Tombstone Territorial Park on the cover. There is a great picture on the cover, but unfortunately it tends to go downhill from there. It will obviously be a disappointment to a great many Yukoners. I think the minister's speechwriter knew that when he was writing and writing and writing. He covered everything, because he could not afford to leave anything out. He even resorted to highlighting a few things that have nothing to do with this particular budget to try to make up for the lack of news in this budget. I believe that's called "padding your stats". A symposium was held in February with over 80 delegates to map out next steps on establishing a Yukon research centre of excellence. That's great, but nothing to do with this budget.
There was the $140-million investment in mining in 2007 -- great again, but not this budget. When I attended the mineral roundup with three of my colleagues earlier this year, every mining company we spoke to attributed the Yukon's improved mining scene to dramatic increases in metal prices.
And finally, there is the issuance of oil and gas exploration rights in Eagle Plains and the Peel Plateau, valued at $22 million -- again, nothing to do with this particular budget.
Reliance on Ottawa: we have heard the minister say again and again in public, earlier today in Question Period and last week, about how entitled we are to our fair share. While the Yukon Party is trying to highlight these items, there are others that they are not talking about, hoping that the public fails to notice them. One of these is this government's continued reliance on Ottawa for the lion's share of our spending.
The Premier, as I have said, responds, "Don't we deserve our share?" And the answer is yes, of course we do. Yukoners do. We deserve to have the same opportunities as all Canadians. And, yes, we recognize that that's going to cost more money per capita in Yukon. Many governments have recognized this. Many public officials have worked hard to ensure that we have sufficient monies to provide the services.
It is recognized that everything from the Whitehorse General Hospital to rural emergency care services to maintaining the highways in Yukon is going to cost more per capita than it is going to cost in Ontario or Quebec or British Columbia, where you have higher population densities.
So, that's not the issue.
This Premier, in fact, is the only one who has made all the noise about standing on our own two feet and how, under his government, we would become more self-reliant. That, of course, has not happened. In fact, the opposite has occurred. This government promised to move away from relying on Ottawa to fund our operations.
Eight or nine years ago, we generated 15 percent or 16 percent of our own revenues. Under the Yukon Party government, that number is down to only barely 11 percent -- I think 11.2 percent in the current budget documents.
We are more reliant than ever on the Government of Canada to fund our much-needed services. The pie is bigger but, under this government, our slice -- the slice that we are self-funding -- is actually smaller than it was under previous governments, not larger. We're moving in the wrong direction.
This year, the transfer from Canada is up more than $10 million, and that is on top of a $12-million increase the year before. But the amount that is coming from within Yukon has stayed largely the same over the last two or three years. So much for building self-reliance.
Now, Mr. Speaker, I want to spend some time talking about some things we like. It would be nearly impossible to spend $900 million without doing many good things on behalf of Yukoners, and I want to recognize some of those items here this afternoon.
We support the new licensed practical nurse program at Yukon College. It's something we've been asking for over a number of years. We've advocated for it and we've promised it in election platforms. We think it's a good idea, and we appreciate the fact that the government is doing it.
It's also good to see the Government of Canada and the Government of Yukon finally moving ahead big time on Hamilton Boulevard. I know that the people who live in my riding and in the Member for Whitehorse West's riding rely very heavily, obviously, on Hamilton Boulevard as the way to get to work and home again. We know there is increasing traffic congestion every year, as the density of people living in this area increases. We know that there is no viable second way out -- just an emergency way out that needs to literally be plowed to use it, if it were to occur in winter.
So, this is a project that we support, and indeed is one I've advocated for since the first month or two I was in this Assembly in 2005. I'm appreciative that the Minister of Community Services has secured the money through MRIF to move ahead.
We also support the new infrastructure agreement announced last week that, through combining the building Canada fund and $25 million per year in based funding, will provide to each province and territory an allocation of $182.9 million, which will be available through to 2014 to help to address more infrastructure priorities. An additional $60 million will flow to Yukon communities through the extension of the gas tax fund agreement from 2010 to 2014, bringing the total infrastructure funding close to $243 million under the agreement.
The gas tax arrangement was of course started by the government of Paul Martin, the former federal Liberal government, and at the time was opposed by the Conservative government of the day. But now they have grabbed on to it and followed up on the Liberals' suggestion to make it permanent, and we support that decision. Under these agreements, governments will work together to address infrastructure priorities such as water, waste water, green energy, regional and community airports and safe roads. I do hope that the Premier bothers to ask municipalities and First Nation governments what they want before he starts spending. We do not want a repeat of last year's eco-fund where the Premier apparently sat in office one day and decided to spend all $5 million on the third wheel at Aishihik.
This is an agreement that every jurisdiction in Canada is a part of. The Premier likes to boast about how he brings back money from Ottawa. He does, as does every other Premier under this agreement. This is the same deal that every jurisdiction is receiving. Unfortunately, as I've said, Yukon has become ever more reliant on money from Ottawa under this Premier's watch. I should have more to say about that later.
"Mr. Speaker, $6 million is being provided in this budget to construct an addition to the Whitehorse terminal building in order to accommodate federal Customs security requirements and to provide an in-transit lounge for international flights." Public waiting in commercial areas will also be increased. Mr. Speaker, and for the benefit of Hansard, I was quoting from last year's 2007 budget speech. The money is back this year, and it is being spent. This is also a good initiative and one we can support.
There is $418,000 for family support services to children with disabilities. This is a good investment and we are pleased to see this funding, Mr. Speaker.
There is $1.25 million for upgrading municipal infrastructure as a result of the community tour. No doubt this will help communities.
There is $175,000 to develop Forty Mile as a major cultural heritage attraction in conjunction with Vuntut Gwitchin.
There is $329,000 to implement the new placer regime.
Development of a new forest resources act. Perhaps people will remember "forestry will thrive in '05". We all remember that promise from the minister. This legislation has been in the works since 2003. We are glad we are finally getting to it. What is three years among friends?
There is $180,000 to upgrade the Carcross Visitor Information Centre. I am sure that will be appreciated.
There is $3 million in Shakwak projects for construction of the Slims River bridge and $11 million for reconstruction of the Duke River bridge.
Some Hon. Member: (Inaudible)
Mr. Mitchell: Thanks to Uncle Sam. We like to criticize Uncle Sam when it is politically expedient and thank him when he passes the money.
There is $685,000 to support capacity development through the governance liaison and capacity development branch. That's good. We were suggesting in the last campaign that something like that needs to happen. I look forward to hearing more details as to how that is going to be done, which First Nations will be assisted and how the program is operating.
We will be matching up to $50,000 of Yukon-raised donations for the Cycle to Walk Society. This funding is in addition to $15,000 previously provided by the Department of Health and Social Services as a direct contribution. I know that Ramesh Ferris and Cycle to Walk is very appreciative of these investments by the Yukon government. As a Rotarian, I would like to add my voice in thanking the government in finding these monies. It is a very worthwhile cause, and it happens to be one that is dear to my heart.
So, we've talked about the fact that, in $900 million, there will be some good programs and good spending, and I just wanted to point out some of it.
What is not in the budget? As I've said, we can support many things in this budget. Unfortunately, there are some glaring omissions. Despite the large amount of money coming from Ottawa, this budget fails to address several priority areas on behalf of Yukoners. There is, according to Finance officials, no new funding to implement the Minister of Health and Social Services' commitment to increase social assistance as promised last fall.
Let me remind this House: on November 28, 2007, Health and Social Services minister, Brad Cathers, announced proposed changes to social assistance rates and program structures resulting from the most comprehensive review of social assistance conducted since the program's inception. It would appear the funding may have gone to the minister's leadership rival two seats down, because it's not in the Health and Social Services department's budget. We asked the officials; they said it's not there. Again, we're told by the government it's coming soon.
Well, soon doesn't pay the bills for struggling families. It should have been in this budget. The Premier has stated the consultations with First Nations have been concluded. He said that publicly just a few days ago -- so, where is the money? Show us the money. There is no funding to replace the downtown children's receiving home. We know of the mould and the deterioration, the health risks that concerned employees and concerned all Yukoners on behalf of the children; we don't see money to replace it. The minister committed, during the last campaign, to reopening the Thomson Centre. Where is it? It won't happen this year, because the budget has no money to make it happen. We asked officials, "Is there no money for this?" They said, "No, there is not." Perhaps the minister can explain what the long-term plan is now. Apparently it's not to reopen it this year.
Now, a similar problem exists at Copper Ridge Place, where the minister finally opened 12 new beds in November of last year, only to turn around and move patients back out in February because there were no nurses to look after the patients. When will those beds be open permanently, and is there money to make that happen? What are the plans beyond that?
Mr. Speaker, we have an aging population. Just looking on my own block, I know that many, many Yukoners are bringing their parents to Yukon -- either bringing back parents who used to live in Yukon or bringing their aging parents here from Ontario, Alberta, British Columbia or Manitoba. They're bringing them here to live with them and those people become Yukoners. As much as it's a good thing that they're going to live with family, they are eventually going to need extended care, and 12 beds that it took two years to open are not going to be sufficient.
Now, I said this a year ago and I said it two years ago that, for the Health and Social Services minister, this is like an iceberg -- 90 percent of it is under the surface. We don't see it in current applicants, but we will see it. We'll see it three, five and 10 years from now. We've already seen how much planning and how long it takes for capital programs to be built and completed under this government's watch. So I urge this government to plan beyond the 12 beds at Copper Ridge Place.
Another issue that's becoming more and more problematic -- I know I hear about it frequently from constituents, and I suspect that every member of this Assembly hears of these problems from time to time -- is long patient wait times for specialist referrals and for orthopaedic surgeries done Outside. What's being done to reduce those patient wait times? If you read the minister's speech, the answer is, "Nothing." But, surely, we need to do something.
People are waiting too long here. When they get health care in this territory, it's excellent health care. The providers are first-rate. They're dedicated. They go above and beyond. But too many Yukoners are on long waiting lists for what are deemed to be non-critical procedures and surgeries. I think the wait time can be up to a year for referrals to hearing specialists to have hearing tests done.
It's not critical, unless you happen to be crossing the street and you don't hear traffic coming, when it could become critical. But having these long wait times certainly impedes people's ability to work and to enjoy life.
I have several constituents who have come to me and said to me, "What can be done? I have been on a wait-list for many months to have a knee replacement or a hip replacement." Again, I can write to the Health and Social Services minister, and I do write to the Health and Social Services minister on behalf of patients, pointing out their problems, as these are the things that we do as colleagues in this Assembly; we do them privately, in terms of letters. The Health and Social Services minister writes back, saying that the government is endeavouring to do everything possible. But for the individuals who are waiting when it is deemed non-critical, when they are limping along and struggling to bring their groceries home, to clear their driveways and to enjoy their life, it is critical to them, even though it is not critical in the medical sense. I would like to see more emphasis on this because, as the statistics prove, it is becoming an aging population and we're going to run into this thing more and more frequently.
This year's contribution to the Yukon Hospital Corporation is virtually stagnant. I find it hard to believe that the provision of health care to an aging population will not increase this year over last year. I think that the minister is fooling himself if he thinks that this allotment will be enough. It just doesn't make any sense, based on the demographics our Bureau of Statistics continues to provide us.
There is no funding to specifically implement the education reform report. There is no mention of how the government intends to proceed with the governance aspect of that report either. Instead, what we have seen is a commitment to the development of a multi-year implementation strategy entitled, "New Horizons: Honouring our Commitment to the Future". We're not going to implement the report; we're going to develop a plan to implement the report and, just for good measure, we're not putting any new money toward it.
It remains to be seen how this report is being implemented. Will it be cherry-picked? Will the minister responsible implement portions of it? Will it be implemented in whole after consultation with the chiefs education advisory committee? We're not certain what is happening but we don't see the funding to specifically implement the report. There were a lot of good things in the report and we hope it is not going to die on a bookshelf.
This is right in line with the rest of the department. Funding in the public schools branch is flat O&M funding. I see the minister is taking notes and that is good, but it is basically flat, and capital spending in the Education department is down 29 percent over last year and down more than 50 percent in the last two years.
Before the minister makes too many notes, I do realize that some of that is due to the fact that the Carmacks school project is winding up, so I understand that, but it hasn't been picked up anywhere else, whether it be in Copper Ridge, or in Porter Creek, anticipating the future construction in the lower bench or the future development of Takhini North and other areas -- the new mobile home park that is being envisioned for that area. We don't know about the future replacement for F.H. Collins. We've heard the Hold Fast study, which indicated that it is an aging facility that either needs to be upgraded and heavily renovated, or replaced -- but we don't see any budgetary provision toward doing this and we are worried that these projects will just be studied and studied and never built by this government.
Speaking of projects like that, there is $5.6 million for the replacement of the Whitehorse Correctional Centre. There is finally some real money, because we've been hearing about it for five years. This is the new facility that is basically the same size and is being built on the same spot, on the same pad, as the building that was started six years ago under the previous Liberal government -- but we know it's different, really different: delayed six years and probably twice as expensive, but likely not all that different at all, Mr. Speaker. We'll have to see when the plans are finally revealed whether this is overwhelmingly different and did it need to take six years' delay?
The Premier frequently says that he doesn't just want to build a warehouse. He says the Liberals wanted to build a warehouse, which is far from the truth. In fact, at the time, the opposition parties criticized the government of the day for building a Cadillac facility -- they said it was too luxurious. But I have to ask, how many people, how many Yukoners, have been warehoused over the last six years because of a political decision that was made to stall this project?
As I've mentioned, there is no funding to build a new health facility in Dawson City. This year, there isn't even any money for planning such a facility. I guess this project has now officially been abandoned. The MLA for Klondike will have some explaining to do to his constituents on why he has let this project slip away, but I guess he doesn't have as much influence as the Deputy Premier, because there is funding going to Watson Lake; there is funding going to the Premier's riding, but there is no funding to Dawson City for that facility.
As my colleague from Kluane points out, perhaps the funding has all been chewed up in the overruns we've seen in almost every capital project that this government has undertaken over the last several years.
There is $500,000 for the Dawson sewage treatment facility. Now, where it will be built remains a mystery, but I do hope the government listens carefully to the wishes and the will of the people of Dawson and ensures that what is finally built serves their purposes and leaves them with a feeling of comfort rather than concern that it's not creating future health problems.
For the second year in a row, as the Member for Vuntut Gwitchin pointed out during Question Period today, the government continues to spend more money on furniture in the Department of Environment than on a climate change action plan. This year we're spending only $130,000 on a new plan. The minister is once again spending more on office furniture -- $227,000 -- than on the climate change action plan. It demonstrates how low on the priority list this topic continues to be, because dollars talk; they speak louder than words; it's where you put the funding in a budget that says what your priorities are. Apparently it's a pretty low priority for this government. The rhetoric we're hearing is on par with what other jurisdictions in Canada are doing; however, it's not being matched by action; it's not being matched by dollars that lead to activity. We remain the last jurisdiction in Canada to adopt a climate change action plan, and we will for some time, apparently, under this government.
It's clear that we've been following the lead of the federal Conservatives on this. For years, both locally and at the federal level, Conservatives refuse to accept the Kyoto Accord. We all remember the former Leader of the Yukon Party standing in this House and denying that climate change was caused by humankind.
Now, the current leader has grudgingly accepted that climate change is a priority for Yukoners and all of Canada; however, he has been painfully slow to react.
The rate stabilization fund -- there's no money in the budget to continue the RSF, which the government cancelled last year. This will leave people on fixed incomes, like pensioners and people on lower incomes, in a real economic bind when their power bills shoot up another 15 percent later this year. It was last May when the government announced that it was increasing Yukoners' power bills.
On July 1, 2007, Yukoners' power bills went up 15 percent. They can thank the Minister of Energy, Mines and Resources and this Yukon Party government for axing the rate stabilization fund. As if this news isn't bad enough, it gets worse.
We've established that Yukoners' power bills went up 15 percent last July 1 at the hands of this minister and this entire Cabinet. In addition, power bills -- as I've said -- will increase another 15 percent this July 1, when the government axes the entire remaining rate stabilization fund. That's a 30-percent increase in 12 months.
While we hear, "No new taxes," again and again, it sure looks like a tax to Yukoners when the average bill goes up $350 to $400 for Yukon families.
Some Hon. Member: (Inaudible)
Mr. Mitchell: Hands in the pocket -- exactly.
In announcing this big rate increase, the minister said, "Don't worry. Be happy. We'll apply for a rate reduction in February 2008. We'll move forward with a rate reduction for all Yukoners, when it comes to their power bill." Well, February has come and gone with no relief in sight for Yukoners, and March is almost over. So I guess the Minister of Energy, Mines and Resources was wrong.
It will be some time before the government even makes an application to the Yukon Utilities Board for a rate reduction, and the board may not even approve it.
The Yukon Party government has unilaterally made a political decision to dismantle the rate stabilization fund. It will increase Yukoners' power bills by 30 percent. It is a classic case of government hands in your pockets. That is $350 to $400 on Yukoners' power bills each and every year, but it does not have to be this way.
There is a practical solution to avoid punishing Yukon ratepayers. During the interim period, the government could continue the rate stabilization program in full until we see what the board decides.
A quick look at the budget reveals that the Yukon Party government has decided not to do that. Ratepayers are on their own with a 30 percent power bill increase, thanks to this government. And I don't know what other members are hearing, but I know I have been hearing from constituents, "What's going on? My bills are going up."
Despite the Premier's bad investments, the Yukon Party is still sitting on a surplus projected to be $108 million at year-end, but not one penny of it is going toward continuing the rate stabilization fund, past the remaining portion after this July 1.
It is disappointing that the government made a conscious decision to abandon ratepayers. It is an uncaring approach.
Yukoners on fixed incomes can thank the minister for increasing their power bills by 30 percent. Imagine tomorrow. Seniors can go find $350 to pay for higher power bills. Imagine tomorrow. Young families and people who least can afford it can go find $350 to pay the minister's new 30-percent higher power bills.
There is all this new money from Ottawa, and nothing for these priority areas.
The list of items not in the budget is long. I have gone through several examples. It provides ample reason to not be supporting this budget.
Now, the 2008-09 budget, Mr. Speaker, also sees a 14-percent reduction in capital spending.
Over the last three budgets, capital spending has basically stagnated, while O&M has skyrocketed. O&M has gone from $600 million to $650 million to today's $700-million level.
At the same time, capital has gone from $191 million to $212 million and then back down again to $202 million this year.
So much for the old Yukon Party mantra, "O&M bad, capital good".
The Yukon Party was traditionally a big supporter of using capital budgets to create jobs. This time around, net capital spending has been cut by more than $18.5 million.
Mr. Speaker there is one more thing not even mentioned in this budget, and that is the Premier's misguided investing adventure. This is the topic that is perhaps most on the minds of Yukoners and the Premier decides not to even mention it. Does he think if he doesn't talk about it -- like the doting old relative up in the attic -- that people might forget about it? Well, I don't think so, because this old relative is making a lot of noise.
When the asset-backed commercial paper meltdown happened last August, companies across Canada issued news releases to update investors about how much exposure they had to this problem. What did our government do to update Yukoner shareholders, the taxpayer, last August when they knew these investments were frozen? Initially, nothing. There was no mention of it at all. Not a word -- not a peep. $36.5 million was frozen and the Premier said nothing. Surely his Finance officials were telling him, "Mr. Premier, we have a problem -- we have a little "oops" - we have a problem". What the minister did was a sort of "don't ask, don't tell" approach -- he didn't speak of it. It wasn't until the public accounts were released last fall in October that the public was even informed, and even then it was buried on page 81 -- so much for open and accountable government. Public companies issue news releases in August and in September, and the Premier buries it on page 81 of a report made public in the middle of October.
In November of 2007, I wrote to the Auditor General asking her to investigate the Premier's decision on behalf of Yukoners to invest $36.5 million of Yukoners' tax dollars in the asset-backed commercial paper market. She responded that she would and we have the results in front of us.
The question I asked was very simple: did the investments made by the Premier follow the Financial Administration Act? It is the law that governs how taxpayers' money is looked after. The Auditor General, Mr. Speaker, has concluded that the investments, in fact, did violate the Financial Administration Act. I believe that the Minister of Finance is responsible for that; he has to be. Someone has to be responsible. It wasn't deus ex machina, an act of God -- someone signed off and someone is responsible.
The Premier is fond of saying that the buck stops at his desk. Well, the buck landed on his desk -- or $36.5 million of them did -- and it is time for him to demonstrate some accountability. The Minister of Finance holds a position of great power and with it comes great responsibility. He has let Yukoners down and he has a duty to do the honourable thing. He should have resigned as Minister of Finance. Instead, he clouds the issue. He says that I should resign. For what? For asking the question? I think not. The fact that he will not even acknowledge the mistakes that he has made just makes it worse, according to the many Yukoners who have raised this issue with me and have raised it with all MLAs.
Let's go back to some of the things that government said about these investments last fall, Mr. Speaker. "Something that we on this side of the House will never do is politicize the good work of the Auditor General of Canada. In fact, Mr. Speaker, the government very much welcomes the assistance that the Auditor General can provide in further reviewing these particular investments." That was the Hon. Deputy Premier, Hansard, November 21, 2007. "I don't think that this side of the House is taking issue with the Auditor General of Canada and her good work. In fact, we fully support her work as we have in the past." Again, that was the Hon. Deputy Premier, Hansard, December 3, 2007. "We certainly look forward to the outcome from the Auditor General of Canada. I have said on the record in this Legislature that we look forward to the outcome, and we accept any findings and recommendations that are brought forward." Hon. Deputy Premier, Hansard, November 26, 2007.
"Similarly, we look forward to hearing the outcome of the Auditor General's review as well. We don't take any issue with respect to the reviews or the outcome." -- Hon. Deputy Premier, Hansard, December 3, 2007. When the Auditor General investigated the minister's $36.5-million adventure, she found the government didn't follow the law when it made the investment. Suddenly, the auditor was no longer the government's good, dear friend.
The Premier's first response was to publicly criticize the Auditor General and dismiss her findings as "just her opinion." I think he was taking issue with the work of the Auditor General. He's also at odds with his new Deputy Premier, according to her statements last fall. It's obvious that the Premier and the new Deputy Premier have a difference of opinion on this issue that needs to be resolved.
Last fall, the Deputy Premier insisted that the Auditor General was fully aware of the investments and approved of them. Well, that's not quite the case, as the Auditor General explained it when she was here -- made aware of the investments after the fact by this government, yes -- it was disclosed in the public accounts. Approved of them? Not so. We heard many a statement, reading the letter of transmittal on the front of various public accounts, indicating and implying that that was approval -- not the case. The Auditor General told us when she was here that these investments were not in compliance. She indicated that there would have to be notes in the future to address the fact that they were not in compliance.
Now, let's look at some of the words of the Hon. Premier on this matter. "The government has not lost one penny." -- Hon. Premier, Hansard, November 6, 2007. "Secondly, we're not talking about a loss here at all." -- Hon. Premier, November 7, 2007, in Hansard. "The facts are: on December 14 we will know the information on the maturity date going forward. The facts are: the Yukon government has not lost one nickel." -- Hon. Premier, November 7, 2007.
The facts are, Mr. Speaker, that all we learned on December 14 was about the next delay, the next deferral, the next missed deadline.
"There is no loss on the investment." The Hon. Deputy Premier gave that answer on November 13, 2007. In fact, there has been a loss. We have not received a penny in interest since these investments went into default at the end of their supposed maturity in early September. We've heard promises that we will eventually receive the interest, but I don't think any interest cheques have been mailed to the Government of Yukon. I don't think any interest has been received by the Government of Yukon to show on the books. In fact, I'm certain of it, because Finance officials have told us they haven't received any interest on these investments since they were frozen. That's a loss of some $100,000 or $120,000 a month. It doesn't take very long for those $100,000-plus losses to add up to a million dollars just in interest.
What do we have? We have promises from the same people who can't pay our money back, or wouldn't pay our money back, or couldn't pay our money back after 30 days, that somehow, magically, the junk bonds, as they're repackaged and renamed, with the same underlying assets, with the wave of a magic wand, will be turned into something better.
Well, I'm sorry, but the assets are the same. Those are the assets that many investment houses are saying are worth as much as 40 percent less today than they were when those investments were made. The Premier incorrectly said that we had claimed that the money was lost; that it was gone. What we said is that the losses are on the face value of those investments now versus when they were made. If we were to try to sell them -- if we could find a buyer -- apparently, the investment market thinks there would be some 40-percent loss in selling them, because the value of the underlying assets has fallen that far.
What else did the Premier and the Deputy Premier say? Well, first of all, I want to point out that the best case scenario, according to Mr. Purdy Crawford who is putting this together, is that we will get our money back in some five to eight years. Well, if we do, it will be at significantly less interest than what it was originally invested for. Not even the committee restructuring the money is that confident. "A plan provides the opportunity for noteholders to possibly recover the full face value of their asset-backed commercial paper". That's in the Ernst & Young report on the plan, March 17, 2008 -- possibly recover the full value some eight or nine years out. It is possible, of course, that the new deal will not even be approved -- it needs to be voted on, on April 25.
Last fall, the Yukon Party government insisted that the investment was guaranteed by the bank. They didn't just start talking then about liquidity agreements not being honoured. They said "First, the investment had the highest rating available. Second, it is backed by the banks …" That was the Hon. Premier, Hansard, November 7, 2007. I don't see any mention in that statement of bad banks not honouring liquidity agreements, of weasel words -- no, "backed by the banks".
"The litmus test was met. This investment was backed by the banks …" Hon. Premier, November 7, 2007.
"… the asset-backed commercial paper is backed by the banks." -- Hon. Deputy Premier, Hansard, November 19, 2007.
What did the Auditor General say in her report? This is what she said, "When we reviewed the information memorandum for each of the two trusts, we noted that, while there was no reference to liquidity agreements, each included the following clause that stipulated there is no guarantee of payments from the parties. It noted neither the administrative agent, the trustee, the note" -- meaning the commercial paper -- "trustee, any beneficiary of the trust, any originator nor any of the respective affiliates or related parties will guarantee or otherwise assure payment of notes issued by the trust, nor will any such persons compensate the trust or holders of notes if the trust realizes any losses on its portfolios of asset interests."
That is from the Auditor General's report of February 7. It sounds pretty clear.
It doesn't sound like you need a second opinion, a second legal opinion. No guarantee, contrary to what the Premier and the Deputy Premier told Yukoners repeatedly last fall. The Premier and the deputy insisted last fall that they were following the Financial Administration Act. "The decision was made, not by Cabinet -- not by Cabinet at all -- but by policy and the act itself. The decision to invest was made. The government and I, as Minister of Finance, fully support that decision." Hon. Premier, Hansard, November 8, 2007.
It was made not by Cabinet; it was made not by officials, because the Premier has told us that he has every confidence in officials. Apparently the Financial Administration Act itself woke up one sunny morning and said, "I'm in a mood to invest in junk bonds and I think that's what I'll do" -- because somebody somewhere needed to sign off on this.
I see that there are members opposite who think that's funny, but apparently it just happened all by its lonesome. "Mr. Speaker, what we have done and what we will continue to do as the Government of Yukon is to abide by the letter of the law and that is the Financial Administration Act that has been in place for many, many years…" Hon. Deputy Premier, Hansard, November 13, 2007. "Our government has been adhering to the Financial Administration Act." Deputy Premier, Hansard, December 6, 2007.
The letter of the law? Not even the spirit of it. What did the Auditor General say about that? "Yukon's Financial Administration Act proscribes the investments that the Government of Yukon can make. We found that the government's investment in summer of 2007, in two asset-backed commercial paper trusts that were set up by non-banks -- total value $36.5 million -- did not meet the requirements of the act. It is important that the Department of Finance manage the investment of public money prudently and in accordance with legislation." That's the Auditor General's report from February 7, 2008. It's pretty clear. She cites the Government of Yukon in the summer of 2007, not in 1990 or 1993 or 1996 or 1999 or 2001 -- she cites investments in the summer of 2007.
Now, I guess it wasn't that important to the Premier or Deputy Premier to manage in accordance with this legislation, or they might have paid more attention to it.
One more thing that the minister said last year was that the bonds have the highest rating -- "The fact is that this investment was of the highest rating possible. The differential in rating between a Canada treasury bill and this investment was zero. Second, it was re-confirmed as recently as November 6 that this investment was still of the highest rating."
The Hon. Premier, November 8, 2007, Hansard: "The asset-backed commercial paper held by the Yukon government has been given the highest rating possible by the Dominion Bond Rating Service. The ratings are R-1 (high). Furthermore, unlike other commercial paper -- and I know the member mentioned "asset-backed" earlier -- asset-backed commercial paper is secured by assets, all of which have been rated AAA -- also the highest possible rating.
Furthermore, Mr. Speaker, this AAA rating was re-confirmed on Tuesday, November 6, 2007. As well, the banks have provided guarantees to the investors." This was stated by the Hon. Premier, Hansard, November 8, 2007.
Well, Mr. Speaker, since we're quoting Dominion Bond Rating Service, what are those same bonds rated at today by DBRS? They're rated "D" -- junk bond status. It's the lowest possible rating you can get. "D" -- bankrupt, insolvent.
I don't know if any of the members opposite remember coming home with a report card with a D on it, but I know that if I had come home with a D on it, there would be some form of heck to pay. But that's the rating of these bonds today, these AAA-rated bonds -- D.
Now, the Premier is desperate to shift the blame for this to someone else. In February, he told the Whitehorse Star that the banks were to blame, that they were untrustworthy. He repeated it today -- everything was fine until the banks bailed on their liquidity agreements.
Mr. Speaker, if the Premier feels so strongly about that, he could sue them for breach of contract. Has the minister done that? No, he has not.
Instead, Mr. Speaker, he has signed on to the Montreal Accord. One of the conditions of signing on is giving up your right to sue the banks involved -- these very untrustworthy banks that he refers to. Now the minister is trying to have it both ways. On the one hand he's talking tough about how untrustworthy the banks are and on the other hand he has already signed a deal saying that he won't sue them.
It is obvious, Mr. Speaker, that the attacks on the bank are just another attempt to deflect from the minister's failure to adequately protect Yukoners' money. The minister was minding the store and now money is missing and, of course, this must be somebody else's fault.
Now, last week, the Premier was trying to deny that we were even signed on to the Montreal Accord. Well, we are. The Deputy Premier told us that quite clearly last fall in this House. "Mr. Speaker, I just want to be very, very clear for the member opposite, and that is, in fact, the Government of Yukon is a signatory to the Montreal Accord. In fact, Mr. Speaker, 82 percent of all investments in this asset-backed commercial paper are signatories to the Montreal Accord." That was the Hon. Deputy Premier, in Hansard, December 6, 2007.
But the minister is trying to confuse people, Mr. Speaker. He is trying to confuse people by saying, "Oh, we haven't signed the restructuring deal yet." Well, of course we haven't. It is not there to be signed. But that is not what took away our right to sue, Mr. Speaker. It was signing on to the Montreal Accord last fall that had a no-sue clause built into it. We gave up our right to sue. Once again, the Premier and his new deputy can't seem to keep their differing stories straight. If the minister really thinks that the banks are breaking a deal then he should sue them, Mr. Deputy Speaker. Instead, he signed away our right to sue. The minister has also tried to blame previous governments for his woes.
The Auditor General in her investigation cited one government -- this Yukon Party government, Mr. Speaker -- for not following the law. She didn't talk about former governments; she cited this government. Although, in fairness, she did cite this government going back three years.
The minister put out a news release earlier this year saying he would stop buying ABCPs. They are going to stop buying them. They're not going to do that any more. There will be no more bad junk bonds.
Under the restructuring of these investments that he is talking about occurring, that he may yet agree to, he will have agreed to take on more ABCP investments, because that is what they still are -- that is the underlying items in these new MAV1s and MAV2s and all these other little acronyms that everybody likes to quote. But you know what? It is the same old stuff. No wonder no one believes anything this minister is saying about this issue when it comes to the investments. Everything he has said has been contradicted by the Auditor General, the highest financial authority in the country. Yukoners will take the Auditor General's word any day, seven days out of seven, over this minister's.
Mr. Deputy Speaker, the new bonds that the premier has agreed to take on as a part of this restructuring are problematic for a couple of reasons. They contradict the promise the premier made not to buy any more ABCPs, as I just mentioned, because that's the underlying assets, and more importantly, they probably don't conform to the Financial Administration Act -- "securities that are obligations of or guaranteed by Canada or a province." Well, we know they won't be that. "…fixed deposits, notes, certificates and other short term paper of or guaranteed by a bank including swapped deposit transactions in currency of the United States of America."
Well, Finance officials have told us -- and these were the words of the deputy minister during the briefing -- they are definitely not guaranteed by the banks -- commercial paper issued by a company incorporated under the laws of Canada or a province, the securities of which are rated at the highest rate in category by at least two recognized security rating institutions. So far only DBRS has indicated they will rate these, and the Deputy Minister of Finance, being very candid in the briefing, told us they had no idea whether anybody else would rate them. So far, they won't be compliant, so I look forward to reading the new amendments to the Financial Administration Act to see what kind of verbal dance is being done to dance around the fact that the new bonds won't comply any more than the old bonds. There must be a big asterisk that says "except for the non-repaid, in default, long-ago expired $36.5 million that we couldn't get before." That will be the new exception in the new, tough rules that we are going to see.
I would like to hear unequivocally from the Premier in his response later this week whether these new investments comply with the act. I guess we are going to rewrite legislation to somehow make them comply. I don't believe that they would comply with the current act, and I would like to hear how we intend to deal with it. Are we going to ignore the law or change the law? What are the options?
You know, Mr. Speaker, it's a mess going forward when a third of our surplus is net financial resources, not the surplus that consists of all the buildings that were purchased and built long before this Premier sat in this House. I don't think we are going to be selling this building or Elijah Smith Elementary or Porter Creek Secondary, so we are not going to