Wednesday, December 6, 1989 - 1:30 p.m.
Speaker: I will now call the House to order.
We will proceed at this time with prayers.
Speaker: We will now turn to the Order Papers.
Are there any Introduction of Visitors?
Returns or Documents for Tabling.
Reports of Committees.
Are there any Petitions?
Introduction of Bills.
Notices of Motion for the Production of Papers.
Are there any Notices of Motion?
Statements by Ministers.
This then brings us to the Question Period.
Question re: Licence plates
Mr. Phelps: I have some questions about the controversial new licence plates that have upset so many Yukoners. The Klondike Visitors Association is rightfully upset about the plates as the members were not consulted. They posed some interesting questions that deserve answers.
My first question is for the Minister of Tourism. Since the gold panner logo is an already established symbol of the Yukon, why does the government see the need to change it, especially without consulting the tourism industry on the issue first?
Hon. Mr. Webster: As I indicated yesterday, indeed the gold panner is a recognized symbol of the territory; we have others, especially the Chilkoot climbers; and, as well, the fireweed. I think it is in our best interest that we emphasize more than one, to broaden our tourism appeal.
Mr. Phelps: The next question is this: if there is financial restraint right now with regard to government in this territory, why did the government waste money on the new licence plate design?
Hon. Mr. Webster: I take exception to the assumption that we are wasting money on the new design. The new design is an attractive one and will bring a lot of attention to our territory; it is introducing another theme in this territory, that being The Magic and the Mystery, which has been very well received in the last three years. It is also identifying another symbol, the fireweed, and together they will, in a very fine way, promote the wilderness character of our territory.
Mr. Phelps: Yet another question posed by members of the KVA is: why has the government spent millions of dollars to advertise the Yukon as home of the Klondike, only to throw away the Klondike and its well-known symbol?
Hon. Mr. Webster: I repeat: we are not throwing away that symbol. We are emphasizing another one at this time. I have also emphasized, at every opportunity, that we will be returning to that familiar symbol with the next set of licence plates, the period 1995 to the year 2000.
Indeed, it is recognized we have spent some money and I think we spent a lot of money, too, doing market research in major Canadian cities and American cities. We found that the slogan The Magic and the Mystery has captured the imagination of a lot of tourists, who have been contacting us to find out more about the Yukon.
Question re: Licence plates
Mr. Phelps: I have more questions on the reason for the change. One interesting question is whether the Minister of Tourism can tell us if this government takes the position that placer mining is not significant to the history of the territory? Is that why they made the change?
Hon. Mr. Webster: That is a ridiculous question and does not deserve an answer.
Mr. Phelps: These are questions being posed by people with the Klondike Visitors Association in his constituency, so I hope he would pay some attention to them, and try to treat them as serious questions.
The next question posed by members of his constituency, which used to be called the Klondike, but perhaps we will change it to fireweed country is: is the government taking the position that placer mining is out-of-date?
Hon. Mr. Webster: No. We are not taking the position that placer mining is out-of-date, and we will return to the gold panner scene again on the 1995 licence plate. I am sure it will not be out-of-date at that time either.
Mr. Phelps: Can the Minister tell us whether the change in the licence plate is related in any way to the governments position with placer claim staking on the Tatshenshini River?
Hon. Mr. Webster: I am not surprised that on the third consecutive day of Question Period where the licence design has been an issue that they are really scraping the bottom for some decent questions.
Question re: Licence plates
Mr. Phelps: It is a good question in my opinion. Is there any relation between the canceling out of the symbol of mining of the territory and the announcement at the same time, taken without the consultation of the placer mining industry, of its position regarding no more placer staking on the Tatshenshini?
Hon. Mr. Webster: No.
Question re: Licence plates
Mr. Lang: I hope I am not seen as scraping the bottom of the barrel for a question when this issue is obviously on the minds of a lot of Yukoners. They are probably not at the same intellectual level as the present Minister of Tourism.
A number of years ago, some private individuals provided the government with some proposals for changing the licence plates, which the Minister alluded to yesterday in reply to a number of questions. Those people who came forward with proposals were told by the chief of staff, who I believe was Mr. Beebe, that if the licence plate was to be changed that there would be a process of public consultation.
In view of the fact the government made this commitment, will the Minister consider reversing his decision and go for public consultation prior to any changes to the licence plates?
Hon. Mr. Webster: I am not aware of any commitment that a Mr. Beebe made on behalf of government a couple of years ago in this regard.
Mr. Lang: If the Minister finds out that commitments of this kind are made within his government, is he prepared then to reverse the decision?
Hon. Mr. Webster: No, I am not.
Mr. Lang: I understand the proposed licence plate was professionally designed. Could the Minister tell the public how many different designs of licence plates the Cabinet considered prior to picking the one that is obviously out in the public and obviously becoming so unpopular?
Hon. Mr. Webster: I do not have the information as to how many designs were presented for consideration. I think that would be a question the Minister of Community and Transportation Services could provide an answer to in this House.
Question re: Licence plates
Mr. Lang: Was the decision to go with this design not made by Cabinet? At that time, were there not various designs presented to Cabinet with which to make the decision of which one to go with?
Hon. Mr. Webster: That is true. There were a number of designs presented to Cabinet. The decision was made by Cabinet. I do not know how many different designs there were.
Mr. Lang: How many designs were considered by Cabinet?
Hon. Mr. Webster: It was a process of refinement of a number of themes and eventually we narrowed the design down to two or three. They were improved upon and, finally, the decision was made among two or three. Of the original number that came before us for consideration, I do not have a specific number.
Mr. Lang: We know how expensive design work is, so perhaps the Minister could give us this information: how much did the total design cost the taxpayer for all the work that was done? Secondly, could the Minister provide us with how much more the printing of this type of plate, with so many different colours on it, is going to cost the taxpayers over and above the present plate we now have?
Hon. Mr. Webster: I will be pleased to come back to this House with the information as to the total cost of the design work and, also, the cost for the printing of the new plate.
Question re: Licence plates
Mr. Phillips: I would like to direct my question to the Government Leader, and it is in regard to the new licence plate, as well. The Minister of Tourism has just told the House again today that he will not reconsider the decision to do away with the Yukon gold panner and the Klondike on Yukon licence plates. Many Yukoners have expressed their outrage at this decision by signing a petition, phoning their MLAs, writing letters to the editor and, as well, one individual is walking up and down the streets of Whitehorse today with a sign asking the government to save the gold panner.
In light of the upsurge of opposition to the new change, will the Government Leader exercise his authority and ask the Department of Community and Transportation Services to delay ordering the new plates so that Yukoners can have a chance to be consulted in a proper way on this significant change?
Hon. Mr. Penikett: Let me congratulate the Member as I think, for a change, most of his preamble was factually correct.
There are people who do not like the new plates. I am sure there are many people who, once they get a chance to see them in all their glory, colour, and attractiveness and see that they are consistent with the tourism promotional campaign that we have developed after much consultation with people in the industry and the public, will find them very appealing. The Member is making a representation that I intercede in the work of another department and cause the government to reconsider a decision. I see no reason to do so at this point.
Mr. Phillips: I would like to remind the Government Leader that he is the leader of the government that is imposing this new licence plate on people. Yukoners are asking to be consulted and are not on this issue.
I would like to ask the Government Leader if he will permit the petition that is circulating around the territory to be placed at the front desk with the new licence plate that he has placed there so Yukoners have the option of looking at the new plate or choosing the old one. Will he permit the petition to be placed at the front desk so Yukoners can at least send their message to the Government of Yukon?
Hon. Mr. Penikett: I am sure the Member is aware of the rules governing petitions in this House. He is perfectly at liberty to circulate any petition he wants with anybody he wants. The government is not endorsing the petition and therefore will not be circulating it.
Mr. Phillips: I would just like to make the point that tomorrow this topic that is not so hot, at least in the governments mind, is going to be the topic on a local CBC phone-in show. It will be interesting to hear the comments on that show.
I would like to ask the Government Leader again, as the leader of the Government of Yukon and the person who has the authority to make the change, or at least direct the Minister to do so, if he will delay the ordering of the new plates so that the people of the Yukon can properly be consulted with respect to any changes to the Yukon licence plate?
Hon. Mr. Penikett: I think the Member has the most peculiar idea of Cabinet government. As leader of this government, I am first among equals. I am not a king or dictator. I do not intend to function in a way which is greatly at variance with the best traditions of Cabinet government.
The Member points out that there is going to be a radio show tomorrow at noon. It is interesting that he is already assuming great political consequences as a result of that radio show. He is already assuming the nature of the calls that are going to be made. Perhaps he is planning to make some himself.
This government has a better record than any government in the history of the Yukon or Canada in consulting on major policy issues. With the greatest of respect, the choice of a licence plate, which reflects a tourism strategy we adopted after much consultation, is not in itself a major policy decision. It is a logical consequence of a policy decision we have already made after much consultation with the community. I believe that once Yukoners get a chance to see these plates, they will come to know...
Speaker: Order please. Will the hon. Minister please conclude his answer?
Question re: Licence plates
Mr. Phelps: I have a question of the same Minister. I would like to know whether or not the government has any policy with regard to YTG employees signing the petition to bring back the gold panner on the licence plate.
Hon. Mr. Penikett: I would be extremely surprised if we had a policy about government employees signing petitions about gold panners on license plates. The Member for Porter Creek West says he is surprised. It continues to astound me what surprises him. I am on record, as is this government, as to the political rights extended to public servants, which are much better than those available to employees of the Conservative government. The employees of this government, as long as they are engaged in political activity on their own time and are not involved in betraying confidences of the department they work for and are not involved in public criticism ...
Speaker: Would the Member please conclude his answer.
Hon. Mr. Penikett: I hope the time for heckling will be deducted from my answer. As long as the people are conducting themselves properly, they have all the rights of free speech of any citizen. I am sure they will continue to exercise it as they have throughout our time, unlike the time of the previous government.
Mr. Phelps: The Ministers answer is, I take it, that the employees of this government can exercise their freedom of speech and sign the petition without fear of retribution from the government.
Hon. Mr. Penikett: Absolutely, other than the people who are in the department that are directly responsible for the thing. The Leader of the Official Opposition knows full well what constraints people who are working directly with some public business ought to exercise over themselves. Public servants are citizens and they have the right to free speech, the same as any other people. We are not in a situation here of ordering people to turn up to party conventions or to vote for anybody, like some of the horror stories that happened before we came in.
Mr. Phelps: The answer to that is that what they do is make sure that they only hire party hacks. Getting back to the issue at hand, I want the employees of this government to be reassured that when they sign the petition that there will not be any sanctions taken against them. I understand that some people have been threatened within the department by their employers.
Hon. Mr. Penikett: If the Member will give me any direct evidence that anybody has been threatened with discipline or dismissal as the result of signing a petition, I give him my undertaking that I will act on that.
Question re: Mickey Mouse Day Care/busing
Mr. Lang: I want to go into another area of major concern. I was listening with great delight as the Government Leader was saying to one and all what a good government was and how it consulted with people. There is an issue that has come up within Whitehorse that is affecting quite a number of people in the area of education. It has come to our attention that instructions have gone out that the school bus service for the Mickey Mouse Day Care is to be discontinued. Could the Minister of Education tell us why he made such a decision?
Hon. Mr. McDonald: Once again, the assumptions that the Member is making are wrong about who made the decision and at what time. It is not incumbent for the Member to make mistakes in assumptions, but nevertheless, I am aware of the issue that the Member mentions. It is as a result of a decision by the school busing committee, which consists of one representative from each school committee, that other than more students going to the regular school programs should not be allowed on school buses any further, because it is causing the school buses currently in place in Whitehorse to become overcrowded. The committee made the recommendation to the department and the department has communicated that decision to the respective day cares.
Mr. Lang: Could the Minister of Education tell us if these instructions apply to all day cares?
Hon. Mr. McDonald: My understanding is that all services that have been provided to day cares would be affected by this administrative decision. The respective day cares were informed of the decision approximately one week ago.
Mr. Lang: I have very serious concerns about this being done in the middle of the school year. Parents have made plans, and decisions have been made. A lot of single mothers are affected by this and how their days are going to be affected over the course of the winter. In view of the seriousness of such a decision, why was the decision made in the middle of the year as opposed to the beginning of the year?
Hon. Mr. McDonald: Well, this is a fundamental problem that occurs now and again when people make the common-sense argument that if there is space on the school bus, why not let other people use that space on that school bus. The argument has come forward from various communities and in this particular case it came forward from the City of Whitehorse. The request was made that if there was available space on school buses, it should be made available to children going to day care. The school busing committee and Department of Education considered the request, knowing the potential difficulties they could get into if the buses became overcrowded, but nevertheless made the decision that they would permit the spaces to be used by the very young students. The decision was based on the assumption that, should the school buses become overcrowded, the people who had first right to travel on the school buses would, of course, be the children going to the public school system. Unfortunately, the situation, as the Member outlined, is that the school buses have become overcrowded and, consequently, the school busing committee, after considerable deliberation, made the recommendation that the school buses not continue to allow day care students to ride on them, in order to ensure that there is sufficient room for the students going to the public school system.
Question re: Health act
Mr. Nordling: I have a question to the Minister of Health and Human Resources, with respect to the proposed health act. In answer to my question about the consultation process regarding the proposed health act, the Minister said the principles in the ministerial statement would be elaborated on further in letters that will go to citizens and interest groups. Has that letter been drafted and sent out?
Hon. Mr. Penikett: I have approved a draft of the letter. I cannot for a certain fact say whether or not it has been mailed to anyone yet. I would have to check on that information.
Mr. Nordling: Shortly after the policy statement was made, the Minister could not say what consultants may or may not be hired. Does he now have an answer to that question?
Hon. Mr. Penikett: No, because unless someone has been hired since the Member asked the question, I am pretty certain that no consultants have been taken on, other than the people who are already available to us inside the public service.
Mr. Nordling: The Minister also said that some jurisdictions have done major studies in the health policy field. Has the government received copies of those studies and if so, could they be made available to us in this House?
Hon. Mr. Penikett: I think that most jurisdictions have done studies and I am sure that the ones that are public are as available to the Member as they are to me. The ones that we have in our files presently, as long as they are not so large that they would require us to do a lot of xeroxing, I am sure we could make available, but it may be just as easy for the Member to write directly to those jurisdictions and get the studies as it would be for us to put our copying machines work. If we have spare copies of studies that have been done, particularly by Ontario, - I think it has done more work than any other jurisdiction, and I think probably, secondly, Quebec - I am more than pleased to make them available to the Member.
Question re: Judge/land claims negotiator
Mrs. Firth: I have a question for the Minister of Justice. We understand now that the land claims negotiator, Mr. Stuart, will be staying on for another three months, until March 31, 1990. In debate in committee yesterday, the Government Leader expressed concern about the settlement of the umbrella agreement and said that we were not so optimistic at this point, referring to a completion date of March 31. My question is directed to the Minister of Justice. How long is she prepared to extend the secondment of Mr. Stuart from the Justice department to the land claims department?
Hon. Mr. Penikett: I do not know whether the Member was here at the moment yesterday when the Leader of the Official Opposition was asking questions on the progress of land claims negotiations. As I indicated to him at the time, Mr. Stuart will be devoting his time to completing the umbrella agreement and the final deadline for doing that is March 31. We had earlier hoped to do it somewhat sooner than that. It is still possible it will be done very soon, but the time available to us now is basically the first quarter of the new year. It is certainly our hope, and I believe the hope of the other parties, that Mr. Stuart will be able to be with us to see that important work completed. That is what he will be devoting his time to in the new year.
Mrs. Firth: That did not answer my question, with all due respect to the Government Leaders good intentions. I stated there was new information; the land claims negotiator is going to be staying on for three months. His contract expires in three weeks. How long is the Minister of Justice prepared to allow Mr. Stuart to be seconded from the bench to work on the land claims process?
Hon. Ms. Joe: The Yukon knows that land claims is a priority with this government. Mr. Stuart has been the chief land claims negotiator for four years or more. He has indicated that he will be staying on for an additional three months. As I said, land claims is a priority with us.
Mrs. Firth: Again, with all due respect, I cannot believe that a government would make land claims a priority over justice, particularly in light of some of the things that have been happening in the justice system.
Could I please just have an answer to the question - no rhetoric, just an answer to the question - how long is the Minister prepared to allow her department to have the secondment carry on as the land claims negotiator?
Hon. Mr. Penikett: Clearly the Member for Riverdale South and this government have fundamentally different notions of justice. For us the most important issue of justice facing this territory in our generation is the issue of land claims - the most important question of justice.
Mr. Stuart is devoting himself to completing the umbrella agreement for a Yukon land claims settlement. He will be trying to complete that in the first quarter of the new year. He will be leaving us at the completion of that to take a sabbatical, following which it is his announced intention to return to the bench.
Question re: Judge/land claims negotiator
Mrs. Firth: I am not being combative in these questions. I am asking very real, rational questions. It is not my opinion, as the Government Leader has directed the criticism at me, that one system should suffer because of another. I simply want to know because time is passing. This was to be an 18-month secondment. It is now four years later. There is a year with pay - special leave - outstanding. There is an additional six months without pay. This is another three months that is being added. That is almost six years the justice system will be without the third judge. How long is the Minister of Justice prepared to allow this to go on?
Hon. Ms. Joe: The Member again has stood up and made a long speech prior to asking a question. The fact of the matter is that the justice and court system is not suffering. We do have deputy judges who are coming in to deal with cases in the court. That is a fact, and that will continue to happen.
Mrs. Firth: Even if she cannot tell us, could she just stand up and say she does not know so at least the public knows this could go on for six and one-half or seven years? Let us face it. There is not a lot of optimism out there about the land claims. The Government Leader expressed that himself. Could she just tell us whether it is going to go on for a long time or it is not?
Hon. Mr. Penikett: If I may, once again, the Member is putting words into peoples mouths that could not be further from the truth. The Member says there is not a lot of optimism for the land claims. The settling of the land claims, the aboriginal claims of the people of the Yukon, is the most important public business before this government and, also, before the people of the territory. I am fundamentally optimistic, not only about the purpose but the desirability of doing it. The Members constant personal attacks on Mr. Stuart have nothing to do with the conduct of the justice system.
Point of Order
Mrs. Firth: Point of order.
Speaker: Order please. Point of order to the Member for Riverdale South.
Mrs. Firth: I have not been combative. I have asked a simple question, requesting the length of time this person is going to continue to be seconded from a department. I have had personal attacks on me, which is not going to stop me from asking the question. I would simply request, Mr. Speaker, your patience and tolerance in helping the Government Leader to recognize that he is abusing the privileges of the House when he makes those kinds of speeches and attacks. Could I just please have an answer to my question?
Speaker: Order please.
Hon. Mr. McDonald: On the point of order.
Speaker: Minister of Education, on the point of order.
Hon. Mr. McDonald: On the point of order, I was just looking through the rules respecting points of order, and I did not find a rule permitting rude interruptions, which is what the Member has just inflicted on the Premier in the Premiers attempt to supply accurate information to the House. So, of course, there is no point of order.
Mr. Lang: On the same point of order, I would ask you to consider Rule No. 8, which all Members of this House have supported. It states as follows, The question must adhere to the proprieties of the House and it must not contain inferences, impute motives or cast aspersions upon the persons in the House or out of it.
If you analyze the record, you will find the Member has just done that in the beginning of his speech.
Hon. Mr. Penikett: On the same point of order, the Member for Porter Creek East is absolutely right. The Member for Riverdale South has been imputing motives and doing those other things he referred to in Rule No. 8. Therefore, her question is out of order, and I agree with the Member for Porter Creek East.
Speaker: Order please. After all this debate, I find there is no point of order. There is a place in this book where it says that, A Member must not interfere when someone is speaking in the House.
So, we will carry on. Final supplementary.
Mrs. Firth: Could I have a new question please, Mr. Speaker?
Speaker: New question to the Member for Whitehorse Riverdale South.
Question re: Judge/land claims negotiator
Mrs. Firth: I would simply like an answer to my question. The Minister of Justice and the Minister responsible for land claims have not answered the question. I would like to know - and I know the people within the Department of Justice would like to know, the people in the court system would like to know, the RCMP would like to know, the lawyers would like to know, everyone would like to know - how long the third judge position is going to be kept open and how long the Minister is prepared to allow this individual to be seconded to another department, leaving us one judge short in the territory?
Hon. Mr. Penikett: The thesis of the Member is that the court system is suffering, because a judge is on leave to conduct very important negotiations on behalf of the people of the Yukon Territory.
Firstly, the court system is not a department of the government. Secondly, she knows full well what the arrangements are with Mr. Stuart. He will complete the negotiations on the umbrella agreement, we hope, between now and March 31 of this year. Following this, he will take a sabbatical. After that sabbatical, it is his stated intention to return to the bench.
The Member knows the answer to the question she has now asked several times. She is leaving the impression that she just wants to put the question on the record and is not interested in the answer, which she already knows.
Mrs. Firth: In this House yesterday, and I know the public had the same impression, we felt that the land claims negotiator contract would be terminated December 31, the year on sabbatical would pass and he would then return to the bench. That has changed. This is another three months. Is it going to change again? Will there be another and then another three months?
The words of the Government Leader were that we were so optimistic...
Speaker: Order please. Will the Member please get to the supplementary question.
Mrs. Firth: Yes, I will. His words were that we were not so optimistic at this point. I just want to know if this is going to go on for another and then another three months. Can the Minister of Justice tell us?
Hon. Mr. Penikett: If the Member had been attentive to the debate yesterday, she would know that there is a deadline to complete the umbrella agreement by March 31, 1990.
I do not know what her representation is. I do not know what the visceral basis of her continuing attack on Mr. Stuart is, but it is fundamentally important to the completion of the land claims negotiations that the person who has been part of the process for four years be encouraged to complete those umbrella negotiations, for the sake of the negotiations and the sake of the territory. Her representation is that somehow this person should be cut off now and sent home, - I do not know if her perception is that perhaps he should not even be returning to the bench - which would do profound damage to the land claims negotiations. It would do nothing whatsoever...
Speaker: Order please. Would the hon. Member please answer the question.
Hon. Mr. Penikett: ...to benefit the service or the conduct of the criminal justice system or the court system.
Mr. Phelps: The Government Leader himself said that deadlines change and that was one of his concerns.
Perhaps I should put the question another way. Is this just an open-ended secondment? In other words, the Minister cannot give us an answer. It will just be for as long as it takes. Can you answer that? Yes? No?
Hon. Mr. Penikett: As any sensible person knows, if you make arrangements with someone to do a job, and you also make arrangements for a time period in which you expect or hope the job will be completed, at the end of that time period, if the job is not complete, you do not suspend your relationship with that person, whether they are building your house or fixing your car or doing something as profound and important as settling land claims. Your hope is that, having a talented and able person assigned to the task, he will stay with the job in order to complete as much of it as he can.
Question re: Emerald Lake
Mr. Phelps: I have a question of the Minister of Tourism regarding the most photographed scene in the Yukon. Of course I refer to Emerald Lake near Carcross on the Klondike Highway. There are a number of old 45-gallon drums in the lake at the south end. These drums are in plain view from the road. My question for the Minister is whether his department will look into the feasibility of removing these eyesores from the lake.
Hon. Mr. Webster: Yes, we will.
Speaker: Time for Question Period has now lapsed. We will now proceed with Orders of the Day.
ORDERS OF THE DAY
Mr. Phillips: The House leaders have agreed that the Motion for Production of Papers No. 5 should be called first today. This is to be followed by Motions Other Than Government Motions, with the motions being called in the following order. Motion No. 58, Motion No. 54, Motion No. 51, Motion No. 60. I would request the unanimous consent of the House to proceed with our business in the order agreed to by the House Leaders.
Speaker: Is there unanimous consent?
All Members: Agreed.
Speaker: There is unanimous consent.
MOTIONS FOR PRODUCTION OF PAPERS
Motion for the Production of Papers No. 5
Clerk: Item No. 2, standing in the name of Mrs. Firth.
Speaker: Is the hon. Member prepared to proceed with Item No. 2?
Mrs. Firth: Yes, Mr. Speaker.
Speaker: It has been moved by the hon. Member for Whitehorse Riverdale South
THAT an order of this Assembly do issue for copies of all contracts signed between the Government of Yukon and Barry Stuart for the years 1985 to 1989 inclusive.
Mrs. Firth: I bring this motion forward in a non-controversial way. The purpose of debate is to indicate why the papers requested should be tabled. I have brought this motion forward because I have not received a response nor commitment from the Minister of Justice or the Minister responsible for land claims with respect to the request I made in Question Period for the specified contracts. Neither Minister has indicated in a positive sense so in the parliamentary context my next alternative is to request contracts through this motion.
On previous occasions the government has made contracts available to us upon request, as I understand it has and continues to be its policy to do so.
We still operate under the principle that expenditures of taxpayers dollars or public funds on all contracts is considered public information and am looking forward to the governments support of this fundamental principle in producing for me the contracts I have specifically requested.
Hon. Mr. Penikett: I welcome the opportunity to debate this matter.
I find it in passing strange that the Member opposite is so interested in Judge Stuarts contracts being made public, particularly when we know that she already has access to the information.
I also find it fascinating that she is demanding that the contract be made public, something that the government of which she was part, refused to do.
Let us put this clearly on the record at the outset of this discussion. When Members of the New Democratic Party opposition in this House asked for the information that the Member for Riverdale South is now demanding - the very same information - we were told by the Government Leader of the day, the then Member for Riverdale North, that we could not have this information, that it could not be made public
The invitation was made to the then Member for Whitehorse South Centre to observe the contract in the privacy of the Government Leaders office, but they would not agree to public access. We were allowed only to view them in the former Government Leaders office.
Once again, we have this incredible double standard from these wonderful champions of freedom of information and democracy on the other side of the House. One rule for a New Democratic government and another rule for a Conservative government; open access to information from a New Democratic government, no damn information from a Tory government - nothing.
The Member for Porter Creek East would have sneered and sniffed at the kind of demands now made regularly by him in this House. He would have sneered at even our right to ask such questions when we were in opposition. How convenient are their memories. How wonderfully convenient are their memories. How incredible are the moral and ethical double standards that they demonstrate in this House.
Let us realize that times change, things improve, reforms do happen with a new government. Consistency has never been a strong point with the other side. I know that the Leader of the Official Opposition has shared with me - I think it was Thoreaus statement - that consistency is the sign of a weak mind. I think that has been demonstrated here.
I want to take up a couple of minutes to clear up a few misconceptions that have been bootlegged into the record in the past few days of debate, particularly by the Member for Riverdale South. The facts are as I am going to indicate them in a minute. I want to correct the record and some impressions that have been made.
Throughout the lurid preambles to the Member of Riverdale Souths questions over the last few days, we have heard some incredible allegations. We have heard that friends of the government are given incredible privileges and pay and benefits beyond that available to other people.
It is a matter of fact that Mr. Barry Stuart was appointed as a deputy magistrate on the Territorial Court on March 30, 1978. This was long before the NDP got elected. Mr. Barry Stuart was appointed a permanent magistrate on August 9, 1979, when there was a Conservative government in office. The New Democrats were not within a whiff or a scent of power in this territory. He was appointed chief territorial court judge on December 23, 1983 by a Conservative government. That is not to impute that he was a friend or a crony or an alley of the Conservative government. He was a person supremely well-equipped to sit on the bench by virtue of his learning, experience and judicial character.
Clearly, the Cabinet of that day, or at least four-fifths of the Cabinet, or five-sixths of the Cabinet, had sufficiently high regard for this persons qualities and character that they were prepared to see him appointed to the bench, and even made chief territorial court judge.
It is a fact that Judge Stuart took leave from his judicial duties to do a very difficult and challenging job for the people of the Yukon in August, 1985. At the time he took the job, he had been a judge in the Territorial Court for a period of six years. We asked Judge Stuart to take the position of chief land claims negotiator because we felt he possessed a quite rare combination of abilities that suited him for the job. I remember, shortly after the election in 1985, having a discussion with the Leader of the Official Opposition. I betray no confidences to say that we all understood, at that time, how difficult it would be to find the right person to take on the job of negotiating the Yukon land claim on behalf of the people of the Yukon.
He was suggested to us, and he was appointed by us, because he was highly regarded in the legal community, both nationally and in the Yukon; his academic skills was undeniable, and we were confident that he would be able to deal intellectually with the issues of land claims and the emerging legal discipline. He was trusted by the aboriginal people of the Yukon, and we believed, and still believe, that this negotiation must be one of all parties, in which all parties have faith in the sincerity and the integrity of the negotiators. Of course, Judge Stuart was free of all partisan political connections.
We felt those were admirable and desirable qualities in a land claims negotiator, and this appointment would serve the objective of making the land claims negotiations as free as possible of partisan considerations on a daily basis.
It is a matter of fact that Judge Stuart had no allegiance, except to the land claims process itself. I would argue that the fact land claims has proceeded this far, to a point much farther than any other time, is, in itself, a telling commendation of Judge Stuarts abilities as a negotiator. I would also point out, and this should not be necessary, that Judge Stuart took the position at a lower rate of pay than was enjoyed by the previous chief negotiator. I would not point this out if the Member for Riverdale South, in the last few days, had not made a sustained and brutal attack on the income of the chief negotiator, an income which, I am certain, is less than, as the Leader of the Official Opposition would say, he would earn in private practice, and less than the negotiators of all the other parties. I am certain of that.
The attack on pay by the Member for Riverdale South is perhaps somehow also a subliminal attack on her own leader, because he was also paid handsomely by most ordinary working peoples standards when he was the chief negotiator. It is a very important job. If I want to take into consideration the question of inflation over the past five years, it is a matter of fact that there has only been one year in which this government paid Mr. Stuart an amount higher than the largest amount charged by the former chief negotiator, the now Leader of the Conservative Party in this House.
I do not want, even here, to make any implied attack on the Leader of the Opposition of this House; I do not do that. I only want to put in context the attack on the pay of the chief negotiator that we now have.
It is true that Judge Stuart plans to take a sabbatical before he returns to the bench. We know that as a judge, and as a Chief Judge, he began discussions with officials in the Department of Justice about sabbaticals for judges, a long time ago. The discussions of those terms and conditions we know for a fact have continued through a succession of Chief Judges. We know that the bench has been perfectly consistent in their view that these were desirable arrangements to be made for judges in the Yukon Territory. If we wish to retain people of ability on the territorial bench - and he is quite right that there has been a significant turnover of people on the territorial bench, but one of the reasons, I suspect, is because there have not been arrangements before now that would permit judges to take a sabbatical and renew their legal learning.
It should be stressed that a sabbatical is not free time; it is not a holiday. During a sabbatical, the recipient is charged with following a course that will improve his or her understanding, or proficiency, of his or her vocation. Most commonly, a person taking a sabbatical will attach his or her self to an institution that educates either academically or through hands-on, practical experience.
It is interesting that the dictionaries, including the dictionary on the table here in this House, define a sabbatical as interval of time for study or travel. I want to say that it is obvious that in the Yukon, the governments collective agreement with the Yukon Teachers Association provides for the taking of sabbaticals.
I want to also say that the idea of sabbaticals for judges is not new and did not originate in the Yukon Territory, nor did it originate with Mr. Stuart. Judges in Prince Edward Island have explicit provisions in their contracts for sabbaticals. The provincial court acts of Manitoba and Ontario both allow for judges to take leave, either with or without pay, at the discretion of the Attorney General. In the Northwest Territories, judges are covered under the same terms and conditions as to leave, as are government employees, so there is a discretionary right to educational leave.
Many believe in the legal fraternity believe, and we in this government share this belief, that judges should have access and recourse to academic settings so as to periodically re-acquaint themselves with innovations in the law. I am sure that Members opposite realize the difficulty in keeping appraised of legal jurisprudence that might not present itself in the case the judge is actually hearing.
It is also important to understand that judges, in a place like the Yukon Territory, operate in considerable professional isolation. There is not a large bench here. There is not an accessible law school. There is limited prospect for them to socialize and participate in the community; it is the nature of their work. It is important that a territory like ours, at this stage in our development, not only be able to attract judicial talent, but to keep it if we can. It is a matter of record that we have not been able to do that. We have had a very high turnover in judges and we believe that timely sabbaticals for judges who have served five years on the bench is a good idea.
At the time Mr. Stuart took leave from his position as chief territorial court judge he had already been a judge for six years, a much longer period of time than most territorial court judges. On that basis he would have qualified at that time for the sabbatical provisions in our regulations. Since then, as all Members know, he has spent four years as a negotiator. The terms of Judge Stuarts contract certainly do not confer on him a benefit that he would not qualify for under the regulations, as do other judges who meet the same terms.
It could also be pointed out that while Judge Stuarts contract was prepared in anticipation of the regulations for sabbatical being approved, it was considered by all to be a good idea to ensure a break between his time as a negotiator and his return to the bench.
I am left with some regret as to the reason for the attack by the Member for Riverdale South, as I am left with some questions as to the nature of the documents that the Member opposite has in her possession, and the manner in which they arrived there. I say I am curious on that point because Members on this side in Cabinet know we did in this last while have a government break-in, and I would be extremely concerned if documents in possession of a Member of this House were obtained in any illegal manner. That is a serious concern; it is a serious concern to any government.
The precise issue before us, as to the contracts relating to Judge Stuart, is one I will now turn to directly. I would like to make it clear that neither this government nor Mr. Stuart objects to the information about his working arrangements as chief land claims negotiator being made public. I would extend to any person about whom private information was going to be made public the courtesy of seeking their consent. I want to tell you as a matter of record that Mr. Stuart has no objection to making those documents, and the information contained in them, public.
It is regrettable when there is a sustained personal attack on a person of great character and great qualities in this House, especially if the nature of that persons position prevents him from replying, and certainly would prohibit him from replying in kind.
I am not sure what the basis of the Members animosity towards the chief land claims negotiator is. It does strike me as a motiveless malignancy. Perhaps the tabling of the documents to which we referred will satisfy her - perhaps not. We shall see.
Motion to adjourn debate proposed
Hon. Mr. Penikett: Since I believe that by tabling these documents the terms of the motion will be met, I would like, therefore, to table the documents and to move
THAT debate on this motion be adjourned in order for Mr. Speaker to consider whether the terms of the motion have been satisfied.
Speaker: It has been moved by the Premier that debate be now adjourned.
Motion to adjourn debate agreed to
Speaker: Motions other than Government Motions.
MOTIONS OTHER THAN GOVERNMENT MOTIONS
Clerk: Item No. 20, standing in the name of Mr. Phillips.
Speaker: Is the hon. Member prepared to proceed with Item No. 20?
Mr. Phillips: Yes, Mr. Speaker.
Motion No. 58
Speaker: It has been moved by the hon. Member for Whitehorse Riverdale North
THAT the Yukon Legislative Assembly is opposed to the Goods and Services Tax as proposed by the Government of Canada.
Mr. Phillips: I rise today to speak to what we, on this side, consider to be an extremely important issue. This motion is one that I believe all Members in this House will strongly support. It is quite simple: the GST is bad for the north. It is clear, again, that a new law for tax has risen from the south with very little understanding how it will affect northern Canada. This lack of understanding began when the Blenkarn Commission, that was to travel across the country, decided initially that it was, and I quote Mr. Blenkarn," too expensive to travel to the north." I am sure that if the members of that committee had listened to those words of Mr. Blenkarn they would have realized that this new tax on almost everything would have a much larger impact on northern residents, simply because, as Mr. Blenkarn said, things are much more expensive in the north.
I was pleased to see that because of the enormous pressure put on by northern residents and politicians the committee changed its mind. Unfortunately, it seems that this new understanding of the north evaporated when the committee only visited Whitehorse. We can all imagine what effect the GST would have on food prices in some other Yukon communities. What about Old Crow, for instance? This could be devastating to this community and, certainly, it would be unfair.
By just coming to Whitehorse and no other northern community, for example Yellowknife, this commission illustrated its ignorance of northern problems and the differences between the various areas of the north.
Too often, southern politicians refer to the Northwest Territories and Yukon as just the north. I am saying the time has come to tell the south we are tired of putting up with that lack of understanding about our region.
Many who have been proponents of this tax explain it as being a more fair and equitable tax for all Canadians. I would venture to say that not one of those Canadians understands or knows about the higher cost of living in the territory: it is some 20 to 30 percent higher than other parts of Canada.
It seems ironic that the Government of Canada spends millions of dollars solving the problem of regional disparities and then with one signature and the implementation of this tax will increase those disparities.
A tax such as this will affect our low-income earners and people who have a subsistence lifestyle. It is fine to say that they are at the lower level of taxable income and will get a rebate, but many of these people cannot afford to pay this tax in the first place. That is where they will have to pay it, when they buy such things as skidoos or other products they need to carry on their lifestyle. I ask you, is that fair?
Yukon manufacturers will suffer as a result of this tax. Transportation of goods to outside markets is already high, and another nine percent can simply make them uncompetitive. This is simply not fair.
Because of our geographic location, Yukoners are forced to travel greater distances for business and holidays, and already pay the highest air fares in the country. Another nine percent will add an extra burden on the Yukon family or business person. I do not believe that is fair, either.
I am extremely concerned about the added costs and the red tape that small businesses will go through under this new tax. Small business is the backbone of Canada and the last thing it needs is an unacceptable burden.
Every area of Yukon life will be affected, but one that comes to mind that will suffer greatly under this tax is tourism. Transportation costs to Yukon are already among the highest in Canada. Because of the seasonal nature of the tourism business, hotels are expensive in the north. Gas, food and other services also reflect the higher costs of doing business in northern Canada.
Simply put, our tourism industry can ill-afford a nine percent cost increase at this time and expect to be able to compete in the marketplace. The Canadian dollar is on the rise and spending by tourists in Yukon is decreasing. This new tax could have a devastating effect on Yukons tourism industry. I do not believe that this could be described in any persons mind as being fair.
Many groups and individuals have spoken out against this tax; some have been in support of our northern concerns. The Canadian Federation of Independent Business routinely polls its members on issues of importance to business. No single issue has united small business in opposition to this move as much as this. In the last questionnaire they sent out, they received the highest response they have ever had to a questionnaire. That questionnaire was related to the GST.
Government simply has to listen to what people in Canada are saying about this new tax. Everyone appreciates the need to get rid of our deficit, but it should be done equitably and fairly. The GST, as it is now designed, does not do that. The GST, as it is now designed, will force Yukoners and other northern Canadians to pay a much higher price than southern Canadians and, at the same time, receive fewer benefits.
Put bluntly, Yukoners cannot afford the GST. I would ask all Members to join with me in sending this clear message to Ottawa.
Hon. Mr. McDonald: I very much appreciate the remarks made by the Member for Riverdale North. I share many of his views and perhaps will enter the discussion by providing a few background notes to complement, and perhaps repeat, some of the more significant points made by the mover of the motion.
As Members know, the GST proposed by the federal government is to be levied at a rate of nine percent and will replace the existing federal sales tax. With the exception of food and a few other relatively minor items, every purchase of a product or service by consumers will include the payment of this new tax.
The general sales tax is essentially a value-added tax. All purchases, whether they be made by the consumer, the manufacturer, a provider of a service, or by an intermediary in the change of distribution, will include an additional sum for this tax. When the product is sold, the tax is added to the selling price and a credit is claimed for tax paid on the imput. Therefore, prior to the final sale, the tax is levied on the value added at each level of production.
Unfortunately for the end consumer, it is he or she who bears the brunt of the tax, because he or she is purchasing the product or service for the purpose of consumption, and not to resell.
There is no doubt that the existing federal sales tax is a poor tax and should be replaced. It is complex to administer, due in no small part to the multiplicity of rates it encompasses, it discriminates against the manufacturing sector, it is subject to avoidance and it is almost impossible to calculate the amount of tax hidden in the selling price of the product.
The small base upon which the tax is levied skews both business and consumer decisions. Perhaps its worst feature is that it taxes domestically-produced manufactured goods and is therefore biased against exports and in favor of imports. Clearly, such a tax regime is in need of serious overhaul.
The new tax, as it is presently designed, is flawed in several important respects and is not sensitive to the unique circumstances that prevail in Canadas north, and in the Yukon is particular.
The current sales tax would raise approximately $18.5 billion for the federal government in 1991 were that tax to continue in its present form. The new general sales tax will yield roughly $24 billion in 1991. The $5 billion difference is to be refunded to lower income consumers through the income tax credits, a lowering of the middle income tax rate and by increases in family allowances and other transfers to individuals. Most commentators believe the yield from the new tax will be higher than the $24 billion predicted by the federal government. Even if the estimates were accurate, it is clear that the consumers will be facing a net tax increase of considerable proportions on their purchases. It is predicted that the increase will work out to over $210 for every man, woman and child in this country. While the federal government has made a brave attempt to refund and advance a portion of the tax paid by lower income individuals and families by enhancing the tax credit system, we believe that people who do not presently file tax returns will not do so in the future and thereby will miss the benefit available to the credit. In a nutshell, we believe that the federal government will raise more money through this new tax than they are currently estimating and will not pay out as much under the credit system as they are predicting. We believe this tax will become what is colloquially referred to as a cash cow for the federal government. In the end it will be the average consumer who must bear the burden of these additional taxes. This is the same person who already carries a heavy tax burden, a burden about to be made even heavier when the new tax comes into force in 1991.
Excepting the credits for lower income earners, the rate of tax paid by all will be the same. A person earning $40,000 will pay the same rate of tax on the purchase of a $15,000 vehicle as will a person earning $60,000. This is a consequence and a problem with all flat rate sales taxes. Given the magnitude of the revenues to be collected under the new tax regime, it appears the federal government is increasing the importance of the concept of graduated taxation based on income and ability to pay. This is a matter of concern to us and appears to have received little attention in the national debates surrounding the goods and services tax. Unfortunately, the two consumers I just mentioned - the $40,000 and the $60,000 earners - may not be fully aware of the amount of tax contained in the price of the products they purchase. One of the original goals of the new tax regime was to be visibility. Buyers would know how much tax they were paying when the spent their money. However, as a result of a number of technical difficulties associated with the tax, total visibility will not be achieved in all cases. This, too, is a concern, because we believe that an informed consumer is a wise consumer. The federal government admits to a one-time increase in 1991 of the Consumer Price Index of 2.25 percent as a result of the new tax. This is almost certainly too low.
On average, private sector forecasters, including the conference board, the economic council and the University of Toronto Institute of Public Administration predicted an inflationary impact of 2.7 percent in 1991, with continuing additional inflation through 1993. The reason for this difference of opinion is that the federal government, in drawing its conclusions on inflation makes three crucial but unlikely assumptions. These are first of all that all benefits flowing from the elimination of the existing federal sales tax will be fully passed on. The second is that wage earners will not attempt to demand higher wages in response to higher consumer prices. Thirdly, the monetary policy should fully accommodate the one-time increase in inflation. That is, the Bank of Canada should not raise interest rates in response to the increased price of goods and services. In my view, these assumptions are unrealistic. In a large measure, I believe the opposite will occur and prove the predictions of the private sector forecasters.
An increase in the rate of inflation, even if it were to be only one time, is unwelcome news for the hard-pressed citizens of the country who will be squeezed between paying higher taxes with inflation-induced lower incomes. Canadians have borne higher interest rates for some time now as a result of the Bank of Canadas attempt to control inflationary pressures through a restrictive monetary policy. Having borne this burden, they are now being asked to accept a higher rate of inflation, intentionally encouraged by the federal government, without seeking compensation in the form of higher incomes. I believe that all Members of the Legislature would admit that this would be an undue hardship to ask the citizens of the country to bear.
The imposition of the goods and services tax will not leave the budgets of the provinces and the territories unscathed either. There are a number of reasons for this, and I will only mention a few of the most important ones.
The reduction of the middle income tax rate from 26 to 25 percent will cost these jurisdictions many millions of dollars, because their taxes are expressed as a percentage of the basic federal tax. As that tax decreases, so does the yield of provincial/territorial income taxes. While the federal government has promised to make special provisions for municipalities, schools, colleges, universities and hospitals, all of which are institutions we fund, there is no guarantee it will be sufficient to cover the extra tax that will be levied on them.
There will also be a lag between the time the claim for tax paid is made and a refund of that tax that will have to be financed at very high interest rates.
The federal government further intends to abrogate a reciprocal taxation agreement it has in eight of the provinces. These agreements commit both parties to paying the others commodity taxes and duties. The effect of the cancellation of these agreements will be a net reduction in revenues for the affected provinces. Almost assuredly, the tax will probably increase the wage demands of employees of these governments and our government.
Some federal payments to the provinces and territories will increase once the new tax is in place, but this benefit is greatly outweighed by the cost impacts that will accrue to these governments.
The net cost of the new tax to provincial/territorial budgets for the period of 1991 to 1992-93 runs into many billions of dollars. Based on conference board data models, the cost to the Government of Yukon for the same period could run from $10 million to $15 million, depending on the assumptions made for the taxs impact on the economic activity here.
This is a high cost and equates to roughly $325 to $500 per person in this territory. You have to remember that this is only the impact on our government. To this, we must add the increased taxes and reduced real spending power of our citizens.
For the most part, the comments I have made so far have been generic to all of Canada. As the Member for Riverdale North mentioned, the tax will not impact equally on all Canadians, and we, as Yukoners, and others living in the north, are being asked to bear a disproportionate share of the burden this new tax will impose upon the citizens of the country.
One of the principal features of a good tax, if we can call any tax a good tax, is said to be fairness. Few would argue this principle, but in its very unfairness, the goods and services tax, as presently structured, fails to meet the test of a good tax.
The tax is unfair to northerners, because it is a tax upon the final selling price of a good or service. It is common knowledge both here and in the south that living costs are far higher for the two territories and some of the more isolated areas of the provinces than they are elsewhere in the country.
There are many reasons for this state of affairs. I am certain most of us here would be well aware of most of them. Obviously transportation charges and heating costs, both of which have ripple effects on the economy, are two of the most significant reasons.
The goods and services tax ignores this most basic fact of northern life and ostensibly treats those living in the north the same as all other Canadians. The problem is that in treating us in the same manner we are, in fact, treated differently to our very great detriment. The imposition of a nine percent tax on the sale of all goods and services in the Yukon, even with a total savings from the elimination of the existing federal tax to be passed on to consumers, we believe, will have a devastating result on our citizens and our economy.
If higher costs will hurt Canadians in general, they will hurt northerners to a greater extent. If the tax will result in inflation for Canada as a whole, its effect will be felt more in the north. If provincial budgets will suffer because of the tax, territorial budgets will suffer more. Yukoners already bear a heavy tax burden. Our analysis shows this burden to be at or above the national average and all taxes paid to all levels of government are taken into account.
Our tax burden is even heavier than these analyses would indicate. This occurs because our cost of living is so high, and a disposable income in the Yukon does not buy nearly the same quantity of goods as does the same income in the south.
Despite this, the income threshold for phasing out the sales tax credit will be the same here as it is in the south. Low income Yukon families face higher living costs but will pay more GST than similarly disadvantaged families elsewhere; however, the current proposal for the sales tax credit takes no account of this anomaly. Furthermore, because the relative number of individuals living subsistence lifestyles is almost certainly higher here than it is in the south, more of our citizens will receive no refundable tax credit whatsoever, because they do not file tax returns. This will occur despite the fact that they will pay tax on virtually everything they purchase. The new tax, with its higher prices and inflationary impact, will further decrease the already limited purchasing power of Yukon incomes.
These comments ignore the effect the tax will have on our economy. The Yukon is an expensive place to do business; it will become even more expensive once the general sales tax is in place. We believe this will have dire consequences for all sectors of the Yukons economy, especially our tourism industry.
One of the principal thrusts of our tourism strategy has been to increase the length of time visitors spend in the Yukon; the reasons for doing so are obvious. One of the facts of life we have to confront regarding the tourism strategy is that it costs a great deal to get to the Yukon and it can be an expensive place in which to spend any length of time. The effect of this new tax will be to make this even more true, to the detriment of an important segment of our economy. While there is provision for non-Canadian tourists to claim a refund, I think we all know that the vast majority of them will not bother to, or they will not remember to do so.
The end result of the tax may well be the raising of a significant barrier to economic development in the Yukon in particular, and the north in general. Reaction by the federal government would seem to move counter to the expectation of the federal government contained in their 1988 policy paper, entitled A Northern Political and Economic Framework, that the territories are expected to find ways to generate more direct revenues.
The final issue I would like to speak to concerns the administrative load the general sales tax will have for businesses, and most especially and most importantly, for the small business sector. The Canadian Federation of Independent Business released a brief on the general sales tax, entitled A Paper on the Goods and Services Tax: A Nightmare on Main Street, and I am afraid that this description may turn out to be all too accurate. In those parts of Canada where a retail sales tax already exists, merchants will now be collecting two separate taxes, taxes with no common base and in most instances with differing rates. That this will increase their administrative burden and costs goes without saying. The small administration fee the federal government will pay will probably not cover these costs in most instances.
For many businesses, and especially those operating in the territory, where already high costs mitigate against there being a local retail sales tax, there will probably be a requirement for new cash register equipment. The federal government has promised to provide assistance for such purposes, but once again, it is doubtful that it will cover the full cost.
It is a motherhood statement to say that small business is one of the principal engines of economic growth. Its contribution to economic well-being and job creation cannot be overstated, yet this is the sector that will bear the bulk of the administration burden and the cost of the new tax. Instead of encouraging people to begin small businesses, this general sales tax may well end up making this a less viable option for those who wish to do so.
The goods and services tax as a concept has merit in reforming the tax structure in Canada. However, as it is presently structured, it has many negative aspects for Canadian people and the economy. These negative aspects may well nullify the very real gains in national wealth that a properly structured tax could achieve and which the federal government is predicting. Most importantly, the tax is insensitive to the northern reality.
The Member for Faro had hoped that he could be present this afternoon to present a few comments about the goods and services tax and its impact on transportation, communications and community services, ministerial responsibilities that he holds in the government and for which he is responsible in this House. I know he has taken a very direct interest in the issue of the GST as it relates to such things as air travel, the cost of freight and transportation and communications.
Perhaps what I will do on his behalf - not quite so eloquently or as forcefully as he would make the arguments - is simply state a few things for the record that are noteworthy.
In the area of transportation, it goes without saying that many Yukon families spend more on air travel than families do elsewhere in the country, especially in southern Canada. It is partly because air travel is the most practical means of transportation; it is probably because it is the most practical means of transportation, even within the Yukon. According to Statistics Canada, from which I have some figures here, the average Whitehorse family spent $662 on air travel in 1986, while the average Canadian family spent only $211. Of course, residents outside of Whitehorse generally pay more and of course Old Crow residents take the prize because they need to use air travel in order to have access to any of the world outside of Old Crow.
The federal government, in response to concerns put forward about the general sales tax, has promised to reduce the cap of the air transportation tax, from $50 to $40. Even with that reduction, the average increased cost for air travel for Yukon families would be at least $40 more than the increase for the average family in southern Canada. Just to provide for Members a slight comparison, the regular adult return fare between Whitehorse and Edmonton or Vancouver will increase - or would under the general sales tax proposal -by $55 and the excursion fare would increase by $22.
In terms of the general transportation system, the general sales tax will add about 7.8 percent to the cost of freight transportation. Of course the federal sales tax will be removed when the GST is applied, but the effect of the federal sales tax on freight is now only about 1.7 percent and the general sales tax is nine percent, so the impact will be a cumulative 7.3 percent. The general sales tax on transportation is probably rightfully considered a tax on distance.
Yukon people already have to pay significantly more for goods because of the extra cost of freight. Now, we can expect the extra cost of freight will be 7.8 percent more expensive in the future. There will be similar penalties for shipments of goods out of the Yukon, except for exports, which will be exempted from the general sales tax. That will obviously have the impact of putting Yukon businesses at a worse advantage in competing in the Canadian market.
The role the general sales tax could play on the transportation sector and the cost of doing business and running a business in the territory will be significant and noteworthy.
In communications, we have made mention in the Legislature and expressed concern about the application of a new telecommunications tax, which was introduced in 1987 at a rate of 10 percent. We were concerned about that, and this has now been raised to 11 percent without much fanfare. When it was first announced, that tax was disputed by northern residents because it placed a disproportionate burden on the Yukon because of our use of long distance telecommunications, particularly the telephone. Telecommunications will be subject to the nine percent general sales tax, and we still have yet to hear any word as to whether or not the old/new telecommunications tax will be reduced or removed altogether.
The general sales tax will have a greater impact on the Yukon than it will have in southern parts of the country. Again, we have a tax that is really a tax on isolation.
With respect to the areas of municipal and community services, it is important we make mention of the level of government we respect in this Legislature, what is commonly referred to as a junior level of government, but nevertheless an important one, that of the municipalities, and the effect the sales tax will have on them.
The GST paid by municipalities will be offset, in part, by the elimination of the federal sales tax. At this point, it is impossible to determine the net effect on any individual community or Yukon communities as a whole, for the following reasons: The federal sales tax burden now varies widely from municipality to municipality, from town to town, because of differences in goods and services bought and services provided in each municipality. However, the federal government intends to offer rebates to municipalities based on national average expenditure patterns. Clearly, some municipalities, based on the way they do business, are going to face a greater or lesser impact as a result of the general sales tax than will others.
This is something municipalities should be aware of and be prepared for if the general sales tax comes forward as originally conceived.
Municipalities, as well as the Government of Yukon, will also face a more significant administrative burden to calculate the rebates and the net taxes owing. I will give you an example of the kinds of complications a typical municipality will be faced with.
Rebates would apply to user fees for tax-exempt municipal services, such as recreation centres, but there would be no tax rebate on revenues from a concession stand inside the recreation centre. So, there will be rebates for the general operations of a community hall but, if the community were to set up a small concession stand to sell hot dogs and coffee, there would not be any rebates for that, yet the municipality would be expected to draw the distinction, of course, and provide the necessary taxes owing to the federal government, should they be applied.
The Federation of Canadian Municipalities advocated what they called an exemption with certification approach, whereby there would be a separate rate of tax for goods and services supplied to municipalities on the production of a certificate at the time of purchase. This would clearly be a fairer and easier system to administer than the proposed system of rebates.
There are a couple of other areas I think I should make brief note of before I conclude, and that is the application of the GST on the sale price of lottery tickets. As far as we know, the portion of the lottery ticket proceeds allocated to prizes will not be taxed. However, the portion that is provided to sports, arts and recreation organizations, who depend on the funding, will be taxed. Consequently, the revenues they receive in order to provide their good services will be lessened by the tax.
The case has also been made by the arts community in this territory about the impact of the tax on the artists attempting to make a living here, operating in a high-cost environment. The sales tax on cultural goods will be expensive for patrons, the purchasers, and it presents a significant administrative problem, as it would for any other small business operator in the territory. Artists claim, and there is good reason to believe this, that they face special challenges here in the north because there is a limited market for their goods and the costs are high. This further hardship would only serve to inhibit the development of cultural industries.
I think I have covered many of the points, although certainly not all of them. When the Blenkarn Commission travelled to the north at the urging of the government and many people of the Yukon, they indicated that in the time they had their hearings, they had never received better researched or more eloquent submissions as they did when they were in Whitehorse.
We were all given hope, of course, that these kind words of praise to the many people who made presentations before the committee would result in some modifications being recommended by the committee to the proposed tax, which would have the effect of easing its impact, in a fair and equitable way, on northern residents. That did not happen, as Members know. It is of considerable concern to me that northerners who had made such well-researched presentations were basically ignored in the final committee report.
This is not to say that their efforts were wasted. It did cause everyone in the country to have a greater understanding of the effect of the tax on isolated regions and the submissions that the members have made consequently are on record with the Standing Committee on Finance.
The only concern I have with the motion, and I communicated this to the mover, is that the motion communicates a message that is, at least in my view, incomplete. I believe strongly that the motion we send should explain some, if not all, of the concerns that Yukoners have expressed in the past few months on the federal proposal. I believe it is essential that the federal government is aware, without having to read through long-winded speeches like the one I just gave, of the basic intent of this Legislature with respect to the motion and to better understand the concerns that this government, this Legislature and the people of Yukon have with the GST proposal as it is currently conceived.
I would like to move an amendment that I believe enhances the wording of the motion and incorporates some of the more significant points that I have put on the record in my speech. This will serve to better explain to the federal Minister, on the basis of a quick read, where the concerns are.
A few weeks ago, I had an opportunity to speak with Mr. Wilson, the federal Minister, on the subject of the general sales tax. The Minister indicated that what he wanted most of all was to understand why people were concerned and not that people simply wanted to reject the tax. He felt, given the work he had put into the tax and that the federal government had put into the tax, that the public owed him some expression of the reasons for the concern. I believe that we do owe them that. Consequently, I feel that a motion that is more descriptive of our concern is in order.
I will end by moving an amendment and indicating that I think we should, in the most positive way possible, encourage the federal Minister to understand the concerns we have expressed. I believe that we should be indicating to him that any proposed tax should be equitable and fair and that the federal Minister should take into account, even though we are not numerically significant in terms of the overall population of this country, the concerns of regions and in particular, the concerns of Yukoners who have taken the time to express themselves on this matter. With your permission, I will move an amendment:
Hon. Mr. McDonald: I move
THAT Motion No. 58 be amended by adding the following:
THAT it is the opinion of this House that:
1. The federal governments proposed goods and services tax will impose an undue tax burden upon the citizens of the Yukon;
2. The federal governments proposal to secure additional revenues by the use of a flat rate sales tax and movement away from the concept of proportional personal and corporate taxation based on income and ability to pay is unfair and inequitable;
3. The goods and services tax will cause undue hardship to those residents of the Yukon who live a subsistence lifestyle or who have low or fixed incomes;
4. The tax will result in an unacceptable increase in the level of inflation for all Canadians but particularly the people of the Yukon because of already inflated costs for goods and services in the north;
5. As a result of the imposition of this new tax, the provincial and territorial governments will lose revenues and incur increased costs;
6. The goods and services tax will result in residents of the Yukon bearing a disproportionate share of the taxs burden because of the significantly higher cost of living in the North;
7. The tax will result in an unacceptable administrative burden for Yukon businesses, most especially the small business sector; and
THAT this House urges the Government of Canada to consider and act upon the concerns raised by this Legislature, the Government of the Yukon and Yukon people as expressed in submissions and presentations to the Standing Committee on Finance concerning the goods and services tax.
Speaker: It has been moved by the hon. Minister of Finance that Motion No. 58 be amended by adding the following:
THAT it is the opinion of this House that:
1. The federal governments proposed goods and services tax will impose an undue tax burden upon the citizens of the Yukon;
2. The federal governments proposal to secure additional revenues by the use of a flat rate sales tax and movement away from the concept of proportional personal and corporate taxation based on income and ability to pay is unfair and inequitable;
3. The goods and services tax will cause undue hardship to those residents of the Yukon who live a subsistence lifestyle or who have low or fixed incomes;
4. The tax will result in an unacceptable increase in the level of inflation for all Canadians but particularly the people of the Yukon because of already inflated costs for goods and services in the north;
5. As a result of the imposition of this new tax, the provincial and territorial governments will lose revenues and incur increased costs;
6. The goods and services tax will result in residents of the Yukon bearing a disproportionate share of the taxs burden because of the significantly higher cost of living in the north;
7. The tax will result in an unacceptable administrative burden for Yukon businesses, most especially the small business sector; and
THAT this House urges the Government of Canada to consider and act upon the concerns raised by this Legislature, the Government of the Yukon, and Yukon people as expressed in submissions and presentations to the Standing Committee on Finance concerning the goods and services tax.
Mr. Phelps: On the amendment I want to take this opportunity to make a few points about the GST, as it is known.
Our party has consistently made it very clear that we can stand up and be counted to oppose measures coming from the federal government no matter what political party may be in power. Members argue that their position has a negative impact on the Yukon and its future. We have been consistent in this stance. All Members in this House will recall we firmly opposed the Meech Lake amendment to the Constitution. We prepared briefs and appeared before the Joint Committee of the House of Commons and the Senate. We lobbied throughout this great country against Meech Lake because of the adverse impact it has on Yukoners in having the potential to make us second class citizens in our own country.
We also opposed, publicly and openly, the imposition of the tax on communications, which, unfairly again, mitigated against Yukoners who depend so much in their personal, private, and business life on telecommunications.
Once again, we join with all sectors of Yukon and people of all political stripes in opposing this tax. As some of those present will know, I attended, as Leader of the Official Opposition, to make a presentation to the Standing Committee on Finance on the goods and services tax when they came to Whitehorse and heard from so many Yukoners about the tax and the negative impact it would have on us.
At that time I put forward views, in many ways consistent with the Member who just spoke in this House. At that time I echoed the view held by most people who live here that because our high cost of living is 20 to 30 percent higher than that of southern Canada, Yukon consumers will be paying more sales tax on goods and services than consumers in southern Canada. We do not believe this is fair.
It is not just the Yukon consumer that will be unfairly treated by the imposition of this tax: the business sector will suffer injustices as well. For those businesses that compete with businesses in the south, the sales tax will impose a larger burden and unfair cost on doing business.
At present our two main industries are mining and tourism. Mining and exploration costs are higher in northern Canada than in southern Canada. Northern mining companies will be paying more in sales tax than companies located in southern Canada.
The same unfair burden will be placed on our tourism industry, which competes with other regions in Canada as well as with destinations throughout the world for business.
Since goods and services to the industry cost more here than they do in southern Canada, the tourism industry will be paying more sales tax and will suffer the consequences of being forced to pass higher costs on to tourists.
What is truly frustrating and puzzling about the proposed tax is that it runs contrary to one of the longstanding and fundamental tenets of federal government policy, that of reducing regional disparities in this country. This tax exacerbates regional disparities, ensuring that consumers and businesses in remote regions, such as Yukon, will pay more for goods and services than those in central Canada. Not only that, but this tax will go a long way toward freezing Canada into the past and present economic reality, whereby Ontario and Quebec have the secondary industries, while the regions are the hewers of wood and drawers of water.
Not only will the proposed tax penalize businesses for setting up secondary industries in remote regions, such as Yukon, by building a higher tax base into the cost of production - it will do that because we pay to transport the raw materials to Yukon and, thus, pay a higher tax on those materials - but it will also result in more tax being paid on the product once it is transported to market. After all, for secondary industries the market is central Canada, and the consumers there will be paying the tax on the cost of transporting manufactured goods for any product manufactured in Yukon from Yukon to the market place in southern Canada.
I think that is an extremely important point and, in due course, I will be proposing an amendment to the amendment to reflect what I have just said.
I want to go on, though, before I introduce that amendment, which I have only partially written out before it came to be my turn to speak. I would like to finish off what I have to say generally about the tax.
When I appeared before the standing committee, I asked it to take a message back to the Minister of Finance that, in trying to sell this tax proposal to Canadians, this government should dispel any claim the tax is revenue neutral. Canadians are not gullible. They know this tax will raise more money than is currently taxed and that it is, in fact, intended to do so. Canadians also know that, once in place, this tax will be about as temporary as income tax, and subsequent governments will have a tremendous temptation to raise the tax just a wee bit whenever they are strapped for money or the national books do not balance.
It is my view, and the view of my party, that any imposition of a goods and services tax must be accompanied by a cutback in government spending. Yukoners, like their fellow Canadians, are prepared to pay more in tax to help reduce the deficit, but only if government cuts back on its spending. We do not want to pay more tax only to see the government continue to flagrantly waste money on programs of questionable merit. This is the message we are hearing from Yukoners, and I believe it is generally reflective of the feelings of all Canadians.
I want to stress that we agree with everything that has been said here today about the tax, but we do feel that the motion ought to be amended and therefore, we will do this in time. I will try to finish the writing I commenced to amend the amendment to the motion to reflect my concern about regional disparity and the fact that it will make it even more difficult for the regions, and particularly the Yukon, to ever see secondary industry here that would have as its marketplace the vast majority of those who live in Canada. Those people, of course, live in the south and are concentrated particularly in central Canada.
I was prepared to carry on speaking until my good friend, the Member for Riverdale North, asked me if I would let him speak in my place for a couple of minutes. I was stunned and rendered speechless, but I am recovering.
Mr. Phelps: I move
THAT the amendment to Motion No. 58 be amended by adding the following after paragraph 7:
8. The tax will penalize businesses for setting up secondary industries in regions such as Yukon by building a higher tax base into the cost of production and will also result in more tax being paid on the product once it is transported to market;
9. The tax will exacerbate regional disparities; and"
Speaker: It has been moved by Leader of the Official Opposition
THAT the amendment to Motion No. 58 be amended by adding the following after paragraph 7:
8. The tax will penalize businesses for setting up secondary industries in regions such as Yukon by building a higher tax base into the cost of production and will also result in more tax being paid on the product once it is transported to market;
9. The tax will exacerbate regional disparities; and"
Mr. Phelps: I think that these are points that are important and we made them to that committee. At a time when federal government policy has been to reduce regional disparities on the economic front, it is important to note that this is a tax that runs contrary to that general theme that guides so many federal policies.
I support the amendments made by the Member for Mayo. However, I do think these two important points ought to be added to the motion.
Hon. Mr. McDonald: On the subamendment, I thank the Member for making the suggestion to add the two points. The latter point with respect to the increase in regional disparity is a point that all Members who have spoken so far have referred to. The cost of doing business in the north will increase over the cost of doing business elsewhere. For those people, whether it be the tourism industry or a small business that is trying to compete, even in the domestic Yukon market, they will be faced with a cost that is more significant than will their counterparts elsewhere in the country.
With respect to the first point the Member made, I am not sure I recognize all the jargon the Member is using, but I understand the point the Member is trying to make and feel fairly comfortable with the Members point of view, and feel it would also be a worthwhile addition to the amendment to the motion. Consequently, I believe we can support the subamendment.
Mr. Phillips: On the subamendment, I will be supporting the amendments made by the Member across the floor and the Leader of the Official Opposition. I am batting 500 on this issue. It seems that every time I bring a motion into the Legislature, it does get accepted by all Members, and they all agree with exactly what the motion says, but they always add something to it. I was debating a moment ago whether or not I wanted to add paragraph nine and just append my speech to the motion. When I read all these amendments, I think I said all that in my speech. I suppose it has to be a little clearer than the way I put it in the speech, and I will go along with that. I would like to thank the Members for putting the motion forward. I am not going to give you my trying-to-steal-my-thunder speech, but I do thank the Members for the friendly amendments.
Subamendment agreed to
Amendment agreed to as amended
Ms. Hayden: Much of what I want to say has already been stated by my colleagues, but I believe we need to emphasize our concern over and over again in the hope the government in Ottawa will eventually hear our concern and act to abolish the GST.
I join my colleagues in the House in support of this motion as amended.
While Ottawa is spending millions of dollars in taxpayers money to promote the goods and services tax there are thousands of Canadians - Canadians on fixed incomes, Canadians with disabilities, Canadians living on old age pensions, Canadians living in remote regions of this country, working Canadians living on minimum wages, thousands of Canadian citizens - who will suffer if this tax proposal is allowed to continue.
The tax will effect the Canadian north, the Yukon and our smaller communities more than anyone else in this country. It will have a larger impact on low- and moderate-income people than it will have on wealthy people and the large corporations.
Many single-parent women and middle-aged single people, in particular, fall into the low-income category. Although the tax proposal as written calls for a rebate scheme, make no mistake about it, many people with low incomes cannot or do not file forms necessary to get rebates. Worse still, some people living on low incomes just cannot afford to wait for rebates.
If the rebate schemes are an attempt to make the tax more palatable, let us be realistic and acknowledge that any rebate scheme would fall short in its ability to benefit those who will need it the most.
This is an outrage that will not soon be forgotten by the Canadian people. We have a tax system in Canada that panders to the few and hurts the many. The notion of fair taxation seems to have escaped most federal legislators. What is fair about a system about which forecasts indicate that by 1990 individuals will pay $4 in personal income tax for every $1 paid by big business. What is fair about a system that requires many bank tellers to pay higher taxes than the banks that employ them? What is fair about a system that has many gas station attendants paying more in tax than the oil companies?
Since the Conservatives took office in 1984 personal taxes have increased by a whopping 46 percent while corporate taxes have risen by only 21 percent. Seniors in this country are faced with a claw-back. Old age security is a social program that is supposed to work for seniors, not against them. We hear that the claw-back will effect only those seniors who have an income of more than $50,000 a year. With inflation it will not be too long before the indexed pensions of many people, along with savings, will hit that mark.
Working Canadians cannot continue to carry the burden of revenue creation for the federal government. Working Canadians demand, and have a right to expect, a fair tax system based on the ability to pay. Here in the Yukon, people will be even harder hit. Canadians have been told that the GST will mean lower food prices, but here in the Yukon, where we already pay significantly more money for food, higher transportation costs as a result of the GST will result in exorbitantly higher food costs.
National statistics show that a basket of food that costs $104 in Vancouver will come to $141 in Whitehorse. In Ottawa, that same food basket costs $103. Compare it: we pay $38 more in Whitehorse for the same amount of food than it will cost a government Member in Ottawa, and that is not even counting an additional tax on transportation to Whitehorse. If we are paying more for food in Whitehorse, just think what it will cost in the communities.
Let us do some more comparisons. The statistics review produced by the Yukon Bureau of Statistics shows that food that costs just over $71 in Whitehorse is valued at close to $86 in Carmacks, around $78 in Faro and in Watson Lake, over $80 in Ross River and an overwhelming $121.14 in Old Crow. When we are told not to worry about food prices, we will know better. We have a lot to worry about.
So what can we expect? The GST will bring an overall increase in the cost of living for everyone in the Yukon. The GST will affect food costs; it will affect vehicle costs; it will affect fuel costs. When my granddaughter wants to buy a book at Macs or Books on Main, she will pay more because of the GST. When seniors in my constituency want to travel to visit their children who live in other parts of the country, they will pay more because of the GST. When tourists come to the Yukon for a holiday - or if they come - they will pay more. In fact, the tourism industry in the Yukon may well be seriously damaged because of the GST. Who wants to pay more to come to the Yukon when you can get to Europe for less money? Who wants to drive to the Yukon when fuel prices will be higher than just about anywhere else in Canada or Alaska?
How will the GST affect the hopes and dreams of first-time home buyers? I submit that it seems to me that people who have been saving to buy a home and are almost there will be put on hold once again. When the family vehicle needs repairs - and goodness knows, that is often enough - expect to pay more. When a trappers snowmobile needs repairs, he or she can expect to pay more.
In its presentation to the finance committee of the House of Commons, the Canadian Federation of Independent Business called the GST a Nightmare on Main Street; that has been referred to before this afternoon. The two-tiered structure creates the ultimate compliance nightmare for small businesses and confusion for consumers. That was the federation in its presentation. It called the GST a massive tax grab ... a triumph of greed and politics over reasoning and sound tax planning.
The Champagne Aishihik Band has also stated that the GST will increase the administrative burden of small businesses. They also note that the GST will have a major negative impact on costs in communities, resulting in increasing pressure to locate small industry in larger centers: a double blow to Yukon communities.
So, Mr. Speaker, the GST is bad for small business and it is certainly bad for non-profit societies. It is bad for seniors, single parents, tourists, low-income earners, and kids.
Who will benefit? It appears that too few will benefit, except perhaps the corporate giants, which already take advantage of tax breaks available to no other Canadians.
Housing is not a luxury commodity. Food is not a luxury. For many people, owning and maintaining a vehicle is a necessity; it is how they earn their living. Even the ability to visit with friends and relatives is necessary to a healthy lifestyle.
The GST is wrong. It is regressive and threatening to many Canadians - to Canadians who are already struggling to make a living.
The amended motion before us states very clearly the message we must convey to the Government of Canada. We must say no to the GST.
Mr. Lang: I hope we can see our way through the debate so we can pass this motion by the end of the day. I think it is important and very timely that we expedite the feelings of this House and the feelings of the people to Ottawa as soon as possible, since they are getting to the point where a decision will be made, and it will be a final decision with respect to what is going to be presented to the Parliament of Canada.
I want to express my grave concern about the inflationary pressures this is going to put on the economy generally here in Yukon. There is no question, whether it be a seven percent or nine percent tax across the country, that there is going to be an inflation felt by all of us. Subsequently, we in junior levels of government are going to feel the consequences thereof, both in our negotiations with labour and with labour in the small and large business sectors because there will be requests for more money for the working man. You cannot argue the principle they should not get paid more. It is going to have an effect on our ability to be competitive internationally. If we are not competitive internationally, the short and the long term will mean fewer jobs. That is going to have dire effects on a lot of fellow Canadians.
When the present government was voted in, it was voted in on the strength of one principle. That principle was that they were to manage our affairs well. There is no question there were some basic principles outlined at some given time with respect to what was going to be done to the tax system if the present government was elected. The public was never informed that, in order to revise the tax system in Canada, it was going to cost us an additional 5,000 civil service jobs to administer this new tax regime. That is a startling statistic, when you take into account that that is 5,000 new jobs within the civil service, and all their responsibility will be to collect more money. It will not be to provide one more service to the general public, not one more program that will assist people who need it. All it is going to do is collect for this tax regime. That, in itself, is a basis for any politician to pause and reflect on what they are doing.
The Leader of the Official Opposition made a point here, and I think it should be emphasized. The Government of Canada, the Government of Yukon, all governments at this stage in Canada have a responsibility to review their expenditures. Programs that are not working, or are not meeting the objectives of 1989 and 1990, should either be eliminated, revised, modified or added to other programs, and the program be administered more efficiently. There is no question we have some very significant problems in Canada when it comes to the deficit. No matter what political party was the Government of Canada, it a major problem. It is one we and all Canadians have to confront.
It is my opinion that, prior to a tax of this kind coming in across Canada, let us first manage what we have well and then assess what tax changes should be taking place.
The other area I am concerned about is that, once this tax is put into place - which was initially going to be nine percent and is now going to be seven percent, and we are supposed to feel better about that - I know what is going to happen. It will be brought in at seven percent for the first year. The next year, it will be eight percent and, the following year, it will be nine percent. Even in our little jurisdiction of Yukon, when liquor taxes were first brought in, they were brought in for the purpose of a recreational tax. Over the years, it got lost, and it is one of the easiest areas to tax. It is a luxury tax, and it is no big deal. Look at the sales tax in our neighbouring jurisdictions, such as British Columbia. There was a provincial election, after which they increased the sales tax. Two years prior to a provincial election, they decrease it.
It is another way of milking the public through taxation, and that causes me concern.
The other area I want to touch on is the amount of taxation Canadians are prepared to endure. It is getting to the point where all the working man does is pay, pay, pay - up to 50 percent of his income goes to the tax man. This is before he buys shoes for his kids, or before he has the luxury of buying a second-hand vehicle or before he pays his mortgage. We are fast approaching the stage where it is becoming less and less an incentive to work, or if you do work the incentive is to work on the black market. In other words, quid pro quo, you do this for me, I will do this for you and there will not be any tax receipts. Then we are all happy and the Prime Minister or whoever does not know the transaction took place. It is not a very good way to run a country. It takes the incentive away from our young people to meet their obligations to our country. It is our country. I believe that politicians, whether at the federal, territorial or municipal level, have to start assessing whether some of these things are needed. I question some of the programs that the Government of Canada is coming out with and some of the initiatives taken by this government and how useful they are. And rightfully so, they should be questioned. The usefulness of the programs should be scrutinized. That is what this forum is for.
I want to say that I am pleased to see the Member for Riverdale North bring this motion forward. I want to commend the Leader of the Official Opposition who put our position forward to the finance ccommittee when they were finally coerced into coming to Yukon. I want to express a little disappointment that no one from the Cabinet appeared before that committee. I think it was important that the various political parties appear and state their positions. It is going to be the body politic that is going to make the decision. I think it is important for it to be on the record that we all, as political parties, should have been there.
With that, I am pleased to see that the Member for Riverdale North, once again, has a motion looking as though it is going to successfully pass through these Chambers.
Hon. Mr. Webster: I want to thank the Member for Riverdale North for bringing forth this motion on the proposed federal goods and service tax. I would like to thank the Member for Mayo for proposing an amendment and the Leader of the Official Opposition for his subamendment. It is rare for us in this House to be unanimous on subamendments and amendments, let alone motions.
I think it is important for this Assembly to recognize that the goods and services tax, which has been referred to by my federal colleagues as the grief and suffering tax, is a bad idea. It will be a nightmare for small businesses and consumers to contend with. It is unfair and symptomatic of the general Conservative approach to what they call tax reform. Since the Conservatives came into office, corporate taxes have dropped. The taxes on low and middle-income earners have climbed. The rich in this country, whether it be individuals or corporations, are paying less than their fair share to run this country.
In the Yukon, corporate income taxes paid to the federal government have dropped from $13.2 million in 1984-85 to $9.3 million in 1988-89, during a period of time when Yukon prospered. In contrast to this decline in corporate taxes paid, personal income taxes increased over the same period from $37.3 million to $46 million last year. It should also be noted that over the same period of time, which coincides with the term of the Conservative government in Ottawa, the total of all taxes paid by Yukoners to the federal government has increased year-by-year-by-year from $74 million in 1984-85 to $96.5 million in 1988-89.
Discussion of a goods and services tax should not be isolated from a general discussion of the fairness of the federal taxation policies.
Although the taxation burden has shifted away from corporations more rapidly under the Tory government, the trend to load taxes on individuals is one that is well established with both the Liberal and Conservative parties.
In 1950, individuals and big business each paid about half the total tax load. Today, individuals pay almost 80 percent while big, profitable corporations pay only 20 percent.
Over that time, low- and middle-income people have had to spend an ever greater percentage of their income to pay for their government. With the addition of the goods and services tax to the tax burden already borne by low- and middle-income earners, they will be forced to spend a greater proportion of their incomes on basic necessities than rich people. This is not fair to low- and middle-income earners, wherever they live in Canada. It is especially unfair to low- and middle-income earners who live in the Yukon or elsewhere in the north or in the Maritimes or, in fact, anywhere distant from the major manufacturing and population centres of this country.
The goods and services tax will pyramid the cost of living for people in more remote parts of this country. We already pay more for our daily needs. The nine percent consumption tax on top of our inflated cost of living means that we will pay proportionately more than our friends and relatives living in the south. Similarly, my constituents in Dawson will individually pay more because of the goods and services tax than will people here in Whitehorse, simply because they are a little farther still from the larger centers that ship us household furnishings, groceries and many of the basic things we need to live our lives. Transportation services will be taxed, not to mention most of the products being shipped.
A moment ago, I mentioned our friends and relatives in the south. Many of us on occasion maintain contact by telephone. In 1987, we saw the government impose a 10 percent telecommunications tax, which was subsequently raised to 11 percent. This is a point raised by the Member for Porter Creek East. Once a new tax is put in place, gradually the rate of tax is increased and we suffer the effects. The goods and services tax would add an additional nine percent to this taxation. Essentially, Yukoners are being taxed on isolation, as was a point made by the Leader of the Official Opposition.
Having said that, I would like to spend a few moments to discuss the impacts of the goods and services tax on tourism. Tourism is a highly variable and sometimes fragile industry. Right now Canadas competitive position has already been hurt by the rising value of the Canadian dollar, courtesy of the Conservative high interest rate policy. Just today, the value of the Canadian dollar rose to 86 cents U.S.
Growing uncertainty about the future of the United States economy has also affected our biggest group of tourists: Americans. In Canada, as a whole, the number of American visitors during the first seven months of this year dropped by 5.3 percent. In the Yukon we managed to hold that drop to 4.1 percent. Although national visitor figures are down by three percent, Yukon tourism visitations actually increased by a modest 1.2 percent. When the grief and suffering tax hits Yukon and the country in 1991, despite our departments best efforts to market the Yukon and the industrys ever more sophisticated attempts to satisfy tourist demands, we may see a major downturn in this industry. It is anticipated in British Columbia, for example, that the tourist industry is expected to be hit by a loss of 130,000 to 200,000 visitors a year. This will cost the service industries in British Columbia as much as $43 million a year in lost business and lead to the likely elimination of 5,300 jobs in 1991 alone.
The consequences for the Yukon will be more drastic. Tourists wishing to visit the Yukon will have to pay a nine percent premium on the airfares to reach northern and Yukon destinations. This means higher air fares in this era of deregulated air travel, which was supposed to be a Tory boon for air travelers. A regular adult return fare between Whitehorse and Edmonton or Vancouver will increase by $55, or, from $734 to $789. Psychologically, this moves the cost of return airfare to Whitehorse from the $700 range to the $800 range.
The same nine percent will peel bills from visitors wallets as they eat in Yukon restaurants, sleep in Yukon hotels, and visit the Yukons attractions. I suspect that most of the Members in this House realize that the majority of Yukon visitors already find Yukon prices for accommodations and meals uncomfortably high when compared with the south. A nine percent increase is not going to improve their attitude.
Contrary to what the federal Minister of Finance appears to believe, our ability to pay taxes is not infinitely expandable. The average tourist just cannot print money the way the government can. Tourist dollars are not elastic, but they are portable. If an RV tourist from the western states cannot get the bang for his buck that he wants from the Yukon, he will spend it somewhere else.
The Tories celebrate a world of international competition; a product that cannot deliver at competitive rates is dead in the water. The grief and suffering tax has a potential to make Yukon tourism a dead duck.
My government and officials in Tourism Yukon fully recognize that the double blow of Tory high interest rate policies and the Tory grief and suffering tax will heavily impact our ability to compete for American and international tourists. Unlike the federal government, that put most of its eggs in one basket with the American trade deal, we have recognized that we may be able to do better by dealing with our fellow Canadians who are more likely to see the Yukon as a destination but will have to be prepared to spend more than Americans.
Our new $295,000 program, Destination Yukon, is directed at the Canadian market and designed to build on the growth that we saw this past year: a 38 percent increase in Canadian visitors to the Yukon. It is interesting to note that we also enjoyed a 22 percent increase in overseas visitors in 1989, despite the unfavorable exchange rate caused by the federal high interest policy.
It is sobering to realize that our best efforts to market the Yukon to attract visitors here may be sabotaged by the goods and services tax. I have been speaking until now of the general effects of the GST, the effect it will have on the territorial tourism economy and its potential for growth and development.
I would like to take a few minutes now to move the discussion a little closer to home and talk about the impact of the tax on our neighbours and friends. The people who operate the small businesses in the Yukon provide services to Yukoners and visitors alike. Most businesses in the Yukon are not international corporations with hordes of accountants and tax lawyers on call. They are not anything like the federal Department of Finance, ready to add thousands of people to the payroll to administer this nightmare new tax. Many Yukon businesses are family oriented, with limited resources, already struggling to meet the requirements of Revenue Canada and the Unemployment Insurance Commission. Tourism oriented small businesses recognize the bookkeeping headaches that the GST will mean and expressed their concerns to the subcommittee of the House of Commons standing committee, which reluctantly visited Whitehorse.
June Hampton, representing Yukon members of the Alliance of Canadian Travel Associations, and David Philpott, executive director of the Tourism Industry Association, cited a number of specific problems that the goods and services tax will cause. Mr. Philpott pointed out, for example, that Atlas Tours, based in Whitehorse, will have to levy a tax for booking tours into the Yukon while Westmark Tours, based in Seattle, will not have to charge any tax for booking the same tour. Ms. Hampton cited other local examples, such as ferry bookings for the Alaska State Ferry System. Yukon travel operations would have to charge a tax for booking passages, while a tax would not apply if someone was booking directly with the ferry service. This distorts the market and provides an artificial incentive for people to bypass Yukon travel services.
I have seen studies that claim that the mining industry will not suffer from the imposition of the goods and services tax, that in part, tax credits will reimburse mining companies for the taxes paid on materials purchased to do business. Those findings might be true for the multinational mining industry, but for a family placer operation, it would be an entirely different story. Small businesses will need full-time bookkeepers to keep track of the taxes they have paid and make applications for the refund.
It is no wonder the Canadian Federation of Independent Businesses finds itself at odds with the goods and services tax.
There is much more I could say. I could point out the Chamber of Commerces opposition to the goods and services tax but, as we are running out of time, I will let other Members take the floor.
Hon. Ms. Joe: I am pleased today to have the opportunity to debate the very urgent concerns I have with the proposed goods and services tax. There are a number of areas within the Yukon that will be severely impacted by this proposal. It is our responsibility to ensure that we do what we can to bring the concerns of Yukoners to the attention of the federal government.
With the many concerns we have received, and with the urgency and anxiety associated with these concerns, it is increasingly evident that the hardships that will be created by this proposed tax are unacceptable by the residents of the Yukon.
I, for one, am very concerned about the hardships that will be created for single parent families. The Yukon has a much higher proportion of single parent families than all of the other provinces. Single parent families make up 50 percent of Yukon families, and 75 percent are headed by women. If you add the cost of raising children to the lower incomes generally earned by women and then consider the burden of an additional nine percent sales tax, it is easy to understand the extra impact this tax will have not only on single parent families but also on women themselves. Because Yukon women earn 58 percent of the average male income, it is reasonable to assume women will pay a significantly larger portion of their income to the goods and services tax.
Many of the tax services, such as the accounting fees, legal fees and dental fees are already too high to be easily accessible to lower income earners, the majority of which are women. The proposed tax would make already costly services inaccessible to many women in single parent families.
While there may be credit due to those who may find this tax a financial hardship, nevertheless, people will be required to pay this tax during the year, when oftentimes many people have a difficult time making ends meet with their present resources.
Will we have created an even larger gap between the haves and the have-nots? I suspect, in the long term, we will create a very serious gap between those who live either below or barely within the poverty level and those who continue to reap all the benefits money can buy.
While we looked at the hardships of those residents of the Yukon who live a subsistence lifestyle or have low or fixed incomes, we need to also look at small businesses, which are an important part of the Yukon economy. Approximately 30 percent of Yukon businesses are owned by women. Most of these businesses employ fewer than five people, and almost 60 percent of Yukon women-owned businesses have startup capital of less than $10,000; 45 percent start up with less than $5,000.
Almost half the women who own businesses are in the retail or service areas and will be tax collectors for the proposed goods and services tax. The cost of computerized cash registers, accounting costs and time spent on administering the tax will be a greater hardship for the smaller, women-owned Yukon businesses.
Most of the foreseeable problems that will be created by this tax will undoubtedly affect the lower income and small business people the most in the Yukon. The increase to transportation costs that affect all of us in the Yukon will be the final straw for many of our residents who already have a difficult time making ends meet.
It is simply not true to us in the Yukon that some things will not be taxed, because everything in the Yukon is dependent in some way on transportation costs. We need to work together to ensure that the federal government is made aware of the hardships that will result to residents of the Yukon.
The implications of the hardships of this tax will be felt in a number of different areas that we may not even realize at this point in time. We can expect that there will undoubtedly be an increase in consumer complaints as product and service costs rise. We can expect that landlords will pass on any increased costs due to the proposed goods and services tax to their tenants. Certainly we can expect that all fee costs, particularly those associated with professional services, such as consultants, lawyers and accountants, will pass on their tax increases through higher fees. These hardships will be felt most by those small businesses that utilize these services on a contract basis.
This government will be forced to collect and pass on to the federal government the proposed nine percent tax that will be incurred when the federal administrator manages the estates of deceased persons. The people most affected by this will be those Yukoners who presently live within a subsistence lifestyle or are in a lower income level, for they are the ones who would most need the services of the public administrator.
In the area of labour services, there most certainly will be additional pressure to increase the minimum wage to offset the proposed tax. Employers, especially those in marginal operations, may find the extra nine percent simply too high for their operations and may be forced to close down or abandon their operations. In case of a legal battle between taxes and wages, we know the taxes will win out over wages.
We can also expect that employers will resist increases in minimum wages and other wage rates, because they may have just increased the cost to consumers to cover the goods and services tax, and wage increases would require a further increase to the consumer. The cost of Workers Compensation Board assessments may rise because of the increase in medical costs, thus placing a further burden on employers.
Employer impact will obviously cause a further impact on employees and, in the case of the proposed goods and services tax, these impacts are all negative.
Employees will ultimately bear the brunt of the pressures that this proposed tax places on the employers. There is a segment of our population, mainly the seniors, who will be hit hard in the Yukon. We want the Yukon to be a place where not only we can enjoy the lifestyle while we are young or working, but also where we can retire and enjoy all the benefits that the Yukon offers and that we are so proud to share with the rest of the country. Can we expect our senior citizens to be able to understand this financial hardship? Can we stand before our seniors and tell them that Mr. Blenkarn, the chairperson of the House of Commons Finance Committee, feels that this tax is okay because seniors do not spend money in the same sense that others do?
We need not only be compassionate toward those who have less, but we need to be very strong in our stand to have the impact on seniors of the goods and services tax, which is unfair, inequitable and a severe burden to Yukoners, considered carefully, and also the impact on all the residents of the Yukon. I would like to support this motion as amended, and I would also like to thank the Member for Riverdale North for bringing this motion to the attention of this House.
Speaker: The hon. Member will close debate if he now speaks. Does any other Member wish to be heard?
Mr. Phillips: I plan to be brief. I would like to thank all the Members who rose in the House today in support of this motion, and the friendly amendments that were introduced by the Member for Mayo and the Leader of the Official Opposition. I think that that helps strengthen the motion overall, and I do believe that today we are sending a very clear message to Ottawa about our feelings toward the GST. The GST, as designed, will have serious effects on northern residents. I hope that when the federal government receives this motion, they will treat it in a very serious manner and that they will again look at the GST. It is hoped that they will look at another way of imposing a tax on northerners and Canadians as a whole.
Motion No. 58 agreed to as amended
Clerk: Item No. 16, standing in the name of Mrs. Firth.
Speaker: Are you prepared to proceed with Item No. 16?
Mrs. Firth: Yes, Mr. Speaker.
Motion No. 54
Speaker: It has been moved by the Member for Whitehorse Riverdale South
THAT it is the opinion of this House that the Yukon Human Rights Commission Draft Policy entitled Employment Related Medical Testing should be amended by deleting the sentence in the first paragraph of the introduction which reads as follows:
For example, testing for drugs, alcohol or suspicion of Aids and/or HIV Virus before or after a person has been hired, may be a violation under the Yukon Human Rights Act on the basis of disability.
Mrs. Firth: There is some urgency to debate this particular motion because, as I understand it, the Human Rights Commission is going to be finalizing the policy on January 1, and there are individuals and groups who have made presentations to them, bringing forward the concerns that I would like to express, who have not heard back yet.
The request to have the particular paragraph removed is as a result of a possibility of it being misleading to people and having the potential of saying that the doctors or physicians who are really responsible for determining what to include on a medical exam will no longer have that responsibility, or be able to make that determination, that it will be up to the Human Rights Commission to determine whether or not a certain exam should have been done.
I think that I make the representation fairly. In general, the policy was received in a positive way. The Medical Association welcomed the introduction of the proposal so that people with disabilities can work. Their request was simply that this paragraph be removed so that it was very clear that the discretion of the examining doctor was preserved and maintained, particularly for cases and concerns of public safety, such as the aviation and marine testing that has to be done. An example I was given was regarding people who would be driving school buses and so on. There may be some indication that the doctor would determine as to whether or not that kind of examination or test should be done in relation to alcohol or drug use. Another one was regarding people who go to the offshore rigs. If there is a chance that they may have to be blood donors, the doctors would do the test for the HIV virus.
The paragraph in the opening sentences of the policy says that even though they order that in their decision as a doctor, it may be considered to be a violation of the...
Speaker: Order please. The time now being 4:30 p.m., it is my duty pursuant to Standing Order No. 11(7) to interrupt proceedings and call Bills Other than Government Bills.
BILLS OTHER THAN GOVERNMENT BILLS
Bill No. 102: Second Reading
Clerk: Second Reading, Bill No. 102, standing in the name of Mr. Brewster.
Mr. Brewster: I move that Bill No. 102, entitled Act to Amend the Workers Compensation Act, be now read a second time.
Speaker: It has been moved by the hon. Member for Kluane that Bill No. 102 entitled Act to Amend the Workers Compensation Act be now read a second time.
Mr. Brewster: I am very pleased to present this bill for second reading. Our duty as legislators is to ensure that the laws that we pass in this House are fair and just in their application. Often we are not aware of the full consequences, problems, or in some instances, the injustice that legislation we pass creates until much later. This is the reason why this bill is before us today.
The purpose of the Workers Compensation Act is to assist injured workers. It is not to make his or her life more difficult. Sometimes in the confusion of regulations, different systems and the never-ending bureaucracy, this central purpose has been lost sight of. From time to time it is essential that we as legislators ensure that the laws continue to be for the designated purpose. The Workers Compensation Act was subject to a major overall in December of 1982. The portion of the act dealing with the determination of the amount of compensation for a workman was completely revised and section 41.2(1), now section 50, was added at that time. In introducing the amendment, the then Minister of Justice stated, During these difficult economic times in Yukon and in Canada, we all know the availability of dollars is very restrictive; therefore we must maximize the value of the money that we do have available. We can no longer afford a system of workers compensation that over compensates some workers and under compensates others. We can no longer afford to have a system that, other than through the provision of funds, does little to rehabilitate the injured workers so that they can lead more active and productive lives. The injured workers must receive their fair compensation. The difficult economic times referred to was when the Yukon economy was in severe recession with the closure of all the territorial hardrock mines. Money was scarce and everyone, including the Government of Yukon, had to cut back. That was appropriate under those circumstances, but may not be appropriate now.
When this particular section was raised in Committee of the Whole, there was no debate. I was not made aware of the difficulties with section 50 until I was approached by a constituent of the Member for Whitehorse South Centre who was injured in a mining accident in 1985. Yukon Workers Compensation Board had, pursuant to section 50, deducted the disability pension he was receiving under the pension plan from his workers compensation benefits. This situation did not appear to be fair, and I understand the MLA for Whitehorse South Centre made representation by way of a letter to the Minister responsible for workers compensation to delete section 50 so that disabled people would be able to receive the workers compensation that they were entitled to and the Canada disability pension they were also entitled to. I am not sure what happened to this representation, but obviously it did not bear results. In subsequent inquiries by this individual and by myself to clarify the reasoning behind the deductions of the Canada Pension Plan disability payments from workers compensation, the responses from the government were inconsistent. On June 20, 1989, the Government Leader explained that workers compensation is a wage-loss system, not a pension system. Its purpose is to ensure income maintenance on behalf of the injured worker at a level equal to that experienced immediately prior to the injury with protection for inflation. There was a concern that persons who were able to establish eligibility under CPP and workers compensation would receive income in excess of their earning capacity. I could not accept this explanation, because the payment for the loss of earning capacity as determined by section 43 of the act is subject to maximum wage rates that are set by the Commissioners order and is not related to a workers actual wage prior to injury. In 1985, this rate was only 75 percent of $28,500. On August 23rd of this year, I received a copy of a letter from the Minister responsible for workers compensation that gave a different explanation of why wage loss payments are reduced by payment from the Canada Pension Plan. She stated that a worker cannot be compensated twice for the same injury and pointed out that contributions to the Canada Pension Plan were made by both the worker and employer and premiums for workers compensation are paid 100 percent by the employer.
As a consequence, if the CPC payments are not deducted, an injured worker is deemed to have been compensated twice for the same injury. I have trouble accepting this reason, because there appears to be no recognition of the fact that the employee has paid a premium for his Canada Pension Plan and then effectively loses the pension benefit by the subsequent reduction in workers compensation payments.
Further, this reason for the deduction is inconsistent with the previous stated reason that workers compensation is a wage-loss system and not a pension plan. If this is indeed the case, how can the workers compensation, in good conscience, factor the benefit received from a pension system when calculating the workers compensation payments?
Finally, November 22, I received a response to my letter of September 6, which I hoped would give a more complete explanation for exempting the Canada Pension Plan from the workers compensation plan. The explanation, however, was still far from adequate. In that letter, the Minister stated that the Canada Pension Plan is not really a pension system, but is an income replacement system. I noted that a disability pension is available to eligible injured workers based on their contributions, regardless of the reasons for the disablement. The Minister then admitted that this pension was far too low to provide income security on its own. That is some income maintenance system. It appears to me that someone is robbing Peter to pay Paul.
Once again, I reiterate that some persons who are able to establish eligibility for both workers compensation and Canada pension would receive income in excess of what they received before the injury. This is a situation common and accepted under the old system of pension, but it is unacceptable under a system that is based on the object of income maintenance.
What really appears to be at stake here is not the concern for the injured worker, but rather the integrity of this so-called progressive wage-loss system that effectively nullifies the disability pension under the Canada Pension Plan.
As I stated before, there is no recognition of the fact that the injured worker makes contributions to the Canada pension as well as the employer. Where is the fairness in this?
Further, I must really question the assertion that without deducting that Canada pension disability pension, an injured worker would receive income in excess of what they received before the injury. Anyone who has had the misfortune to claim workers compensation would have a tough time believing that.
As I have already mentioned, the maximum rate for the total physical impairment and the maximum wage rate are set by the Workers Compensation Board and the latter can bear little relation to the actual earning capacity of the injured worker. In 1985, for example, the maximum award for total physical impairment was $25,000. The maximum wage rate set was 75 percent of $28,500. How many Members in this House believe that the loss of ones eyesight is worth only $25,000 and that a permanently disabled worker should be confined to a maximum wage rate of 75 percent of $28,500 minus any CPC disability payment until he or she reaches the age of 65, irrespective of what their true earning capacity was prior to injury?
I appreciate the fact that these rates have subsequently been raised. But what about the workers who had the misfortune to be injured between 1982 and 1986? I will be giving the Members an opportunity to show what they really believe when they vote on this bill.
Prior to doing this, I would like to examine how the various Workers Compensation Boards across the country treat this issue. The Minister noted in her letter of November 22 that the income maintenance system or wage loss system was in operation in four jurisdictions as well as in the Yukon, and that all jurisdictions would be implementing this system by the year 1991. I contacted the various Workers Compensation Boards in the provinces and the Northwest Territories. Saskatchewan, Newfoundland, Quebec, New Brunswick and Manitoba have adopted the wage-loss system. British Columbia has a dual system and Nova Scotia and Ontario may introduce the system. With regard to CPC deductions being made from workers compensation payments, there was the following breakdown: no deductions of Canada pension payments are made in the Northwest Territories, British Columbia and Manitoba. Fifty percent deductions of Canada pension payments are made in Saskatchewan and Nova Scotia. One hundred percent deductions of Canada pension payments are made in Alberta, New Brunswick, Newfoundland and Ontario. As you can see, the different jurisdictions are all over the map on this issue and the type of system they are on, be it wage loss or pension, does not appear to be the determining factor. What is comes down to is a matter of policy and legislation.
In the final analysis, the decision is ours to make. In the interest of fairness and justice, I commend this bill to the House.
Hon. Ms. Joe: In response to the bill introduced by the Member for Kluane, I would like to point out there are some problems I might have in regard to this. I would like to be able to find out a little bit more about the cost implications that he may have researched. I realize he is very sympathetic to what it is he is trying to do in this bill. I find it admirable that he is very concerned, and so are we. There are certain things in this proposed amendment I think a lot of us here would like to be able to get clear in our mind about how many people this is going to affect, and how much is it going to prove to cost in the end, if we were to look at the change being in effect and having to look down the road a few years.
I am wondering if he has carefully thought out the kind of impact the amendment to the WorkersCompensation Act would have on the workers, as well as the employers. They have long expressed their concern for the employers of the Yukon, but do we know if it is going to affect the employers and employees as well? I understand, and he has mentioned in the House, that on behalf of a person he has been lobbying this government and has approached the Member for Whitehorse South Centre.
I would like to know, in my mind, the kind of research he has done in regard to a number of other matters before we proceed with this. Is he prepared to answer some questions as we go into Committee of the Whole? I realize that the amendment was instigated as a result of the problem with the cost of living at that time and the restraints we were under. I am wondering if he has any idea about the total estimated cost of this change in the act.
I am prepared to go into Committee of the Whole, or whatever the process is, to have the Member respond to some of my questions and some other questions that Members on this side may have.
Mr. Phelps: I was not going to speak during second reading of the bill, until I just realized the approach being taken by the side opposite, which, in my view, is firstly most unfair and, secondly, is a weak-kneed attempt to try to justify the present deplorable situation whereby workers are not entitled to collect on the Canada Pension Plan without it being deducted against the maximum amount, as is the case with regard to the constituent to whom the last speaker referred.
Everybody in this House ought to think a little bit and not be misled by the bureaucracy, or those in charge of the Workers Compensation Board. I am afraid that if we are gullible enough we may be led into a logical trap whereby we are content to sit back and define compensation for an injury in the terms that are being imposed on us by the bureaucrats and by the people in the workers compensation business.
I was absolutely astounded that we would accept the premise that there are only two ways in which damages are awarded to people who have been negligently injured - that there are only two ways and, therefore, once you have imposed that framework, you pick one or the other.
I have read some of the correspondence that has gone to the Member for Kluane, both from the Government Leader and from the board and from others - the absolutely incredible approach to this, that there are only two possible systems: the income maintenance system and the other, whatever that might be.
I think we should all think for a bit about what workers compensation is all about. What it does is impose a system on the worker in place of what was the common law right to sue the employer, in general terms, for negligence. There are certain benefits that surround the system, such as workers compensation, and those we readily admit. We are not against the Workers Compensation Board or the workers compensation system, generally speaking.
Normally, when a person is a victim of an accident and sues for damages, he asks for the loss of income he has suffered and will suffer as a result of a permanent injury. In many cases, the defence has tried to set up the situation in common law whereby a person injured ought not to receive, in addition to normal damages, the benefit of a pension plan or a private insurance plan that person might have purchased on his own.
There are all kinds of cases that support the proposition that a private disability plan, having been purchased by a party who is injured in an accident, for example, does not enter into the issue of damages awarded to that person at all. The common law is that a person who is fortunate enough or had the foresight to buy one of the many plans that we can buy that award money for disability - a person being unable to work over the loss of an eye or the loss a life or that sort of thing - does not have it deducted from the damages awarded against the negligent party.
I think that those same principles ought to be applied in the case of workers compensation as it is implemented in this day and age in the Yukon. It seems to me that if someone has the foresight to purchase a private plan, and there are all kinds of them around - group plans for loss of life and disability - they should not be penalized for that kind of foresight or that kind of prudence in protecting their family or in protecting their own earning capacity for the future.
I totally reject the defence and the illogical approach that there are only two kinds of systems possible for workers compensation and it is one or the other. That kind of argument is not one that I accept for a second. It is very possible to have workers compensation systems that do not fall into these two, for want of a better word, phony categories.
Having said that, we should then look at the situation before us: a person making good money is injured and unable to work again. There is a maximum placed on the amount that he is going to get from the Workers Compensation Board and that has been changed since the accident in question, but the protection for the Workers Compensation Board is built into the maximum amount that is allowed for a worker from time to time under the legislation. That is the protection for the system itself.
What we are looking at here is whether or not the gross amount paid by the board is fair to the recipient. That is what we are looking at. We are looking at the other question, which is part and parcel of the same, whether it is fair for the board to be deducting from maximum monies that are rightfully paid to that person by virtue of a plan into which he has paid.
Again, I submit that the general rule of law is that in an ordinary common law case the plaintiff who has the foresight to purchase a private plan is not penalized for that foresight.
To move on to the proposal by the side opposite to ask questions about the exact amounts that deleting section 50 will bring in terms of extra costs to the compensation board, surely what we are concerned about here is justice. Surely the Minister herself would have those figures available to her from the board that is under her stewardship, indirectly.
I think it is a red herring to try to throw questions of dollars and cents into this debate in the manner that the side opposite is attempting to do.
The Workers Compensation Board has managed very well. The board has shown that it has made very wise investments in the past. I have here a ministerial statement by Mr. Kimmerly made in 1986 when he was more than pleased to be able to announce, in the political arena, that he would be able to reduce the rates paid for workers compensation and increase some of the payments that would be going out to injured workers and their families.
The question here is one that ought not to get bogged down in semantics. It is one that ought not to get roped into a straight jacket with the imposition of only two definitions of a possible plan. We all ought to realize that many people who come under the plan have a very valid claim against their employer in negligence, and that if there was no bar imposed by the act, at common law they would often get much more than the maximum allowed to them under workers compensation.
Anybody in this House who is on the side of the worker, anybody in this House who has compassion for a person whose working life has been stopped prematurely, would support this bill. I would think that anyone in this House ought to feel silly to be asking a question that is really within their own departments capabilities - a niggling question about money - of the Member for Kluane.
I fully support this amendment to the Workers Compensation Act and I urge every person in this House to support it.
Hon. Mr. Penikett: I appreciate the opportunity to enter this debate and I want to do so to ensure that there is no misunderstanding by the Leader of the Official Opposition as to the position of our government in proceeding on this matter into Committee. The Leader of the Opposition ended his speech with an appeal to people in this House who are sympathetic to workers and, as someone who began my political life during the time I was chief steward of a mining local dealing with occupational health and safety questions, and whose time as a private Member in this House was devoted in large part to representations to the Workers Compensation Board on behalf of workers, I would argue that second perhaps only to my colleague to my left, I do not think there is anybody here who has made, in my time in politics, more strenuously consistent representations on behalf of workers.
On a technical point, the legislative provisions that we are addressing today, the act that we are seeking to amend, was an act, which I know the Leader of the Official Opposition knows, that the New Democratic Party had a lot of problems with when we were in Opposition. I believe my colleague for Mayo advises that me that we in fact opposed it.
I want to also say to the Leader of the Opposition that I do not want to be drawn by the red herring of his reference to bureaucratic logical traps. It is quite possible in some bureaucracies, somewhere in the world, that logical traps are laid by bureaucrats for politicians. It is even possible, I suspect, that somewhere, in some parts of the world, illogical traps are laid by bureaucrats for politicians, and I am absolutely certain that would never happen here. In any case, the Workers Compensation Board - the board of the board, if we can use that absurdity - are private citizens, not bureaucrats, and their decisions are made, I believe, with a sincere concern for injured workers.
I want to say to the Leader of the Opposition - appeal to him, I guess - not to misunderstand our purpose in debating this matter today. As he will understand, we have not seen this bill for a long time and it is a matter, I think, from the point of view he makes, of simple justice, but it is also a matter with some complexities, which are worth some discussion by responsible Members.
I want to make clear to the Members in this House that we support sending this bill into Committee. We think this is a serious matter. We have genuine sympathy for the individuals affected by this provision. It is also the case, as with all private Members bills, in all legislatures in the Commonwealth parliamentary system, that Committee study of a private Members bill is a highly appropriate and necessary stage in the deliberations. The sponsor, earlier today, told us that he had done extensive homework; he had contacted the other jurisdictions. I appreciate that and I respect that; it is necessary. As someone who has moved private Members bills in this House, and had to defend them in this House, that is the proper course of action.
This bill does have financial implications and I suspect it has quite significant financial implications. That is not a reason not to proceed with it but it is necessary for prudent legislators to consider the financial implications of something and I regret that the Leader of the Opposition, in this case, is arguing that we should say damn the financial consequences when in other cases he has argued most strenuously that we should be considering the financial consequences more seriously than we have in respect to other human needs.
When we are talking about legislation like this, even what may be considered minor amendments that would have considerable financial implications, it is important that we spend time, even a few minutes, talking about it. We should always submit a private Members bill, no matter how well intentioned, to the Murphys Law test. We should ask ourselves: what can go wrong? Are there any downside implications of doing this? Are there any consequences that have not been considered by the sponsor?
This is a very serious matter. We do have real sympathy on this question. We do think there are legal and financial implications that ought to be discussed. We have questions we would like to ask, and we are sure the sponsor would be prepared to answer them. It is not inappropriate that we spend a few minutes doing that. It is not inappropriate that, if necessary, the House may decide that it may want to hear from experts at a later point. I cannot presume to know that.
Notwithstanding the positions we have taken in correspondence to the Member and to others, I want to make it quite clear that we have a genuine and open mind on this question, that we do have sympathy on the question. We want the Member to have the opportunity to make his case in second reading, as well as in Committee. We want to give him a hearing, and we want to consider the points he has made, as well as whether there are amendments that ought to be considered to more precisely define what it is he is proposing. That is the proper function of legislators and the Legislature on a matter like this. I do want Members to understand that we are treating it seriously.
That is why the government majority is agreeing to it going into Committee and, following the Committee proceedings, if we are satisfied on the questions we will have for the Member, it will proceed from there.
Speaker: The hon. Member will close debate if he now speaks. Does any other Member wish to be heard?
Mr. Brewster: I will be very brief. I would suggest to the Government Leader that this bill was given to the House Leader two weeks ago. It is a one line bill. It should not take much to look at that. The other strange thing I found about it, although I was not getting any answers, was that the day we put the bill up and I came in the office in the afternoon, there were two letters, one from the Minister and one from the Workers Compensation Board that we had never received before. It seems rather strange, but governments work in strange ways.
Motion for second reading of Bill No. 102 agreed to
Hon. Mr. McDonald: I move that Mr. Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Speaker: It has been moved by the hon. Government House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair: I will now call Committee of the Whole to order. We will proceed with Bill 102.
Bill No. 102 - Act to Amend the Workers Compensation Act
Chair: Is there any general debate?
Mr. Brewster: I will start out by pointing out that what we pay into the Canada Pension Plan, as far as I am concerned, is private. If an individual and a company paid into a pension plan, you certainly would feel that you could get your hands on that. Because it is one government department to another, you seem to be rather loose with each other. It is not clear across Canada because every province is doing something different. It is apparent that maybe we should lead the way.
Maybe we made a mistake back in 1982 when we put that in. I am told there was no debate. Maybe the Government Leader is right; we should debate and find out why we are doing these things. Maybe if the Minister and the Workers Compensation Board had been a little more cooperative - we started this in June - in setting up hearings for the individual it may have been resolved. I am convinced that there are more individuals in this boat. The bureaucracy is moving along in its way.
The Government Leader made a statement that he does not think the bureaucracy moves in the direction of looking after itself. Just look at those letters from the Workers Compensation Board. It is a little boys and girls club and they are protecting each other, just like bureaucrats all over. They are very careful with what they say so that they do not hurt the next individual that they have probably met every year at different conventions.
I find it strange that we are worrying about money when the Hon. Mr. Kimmerly made that commitment that we are well off and that we have done good investing. We congratulated him for that.
I find it strange that the Workers Compensation Board wanted to build an office with employers funds and turn around and compete against them by renting office space using the funds of the private individuals that are forced by government to pay into this. Maybe that money would be better spent to help some of these handicapped people than to turn around and get into private business. Fortunately, I think this side of the House back them away from that one.
It is strange that the letters all arrived at the last moment. The Minister of Justice mentioned that she wanted to know if I had figures on how many people there are affected. How would I get those figures? Have you ever tried to get anything out of this government or the bureaucracy? I can show you letter after letter that has never been answered. I do not have that information. No one offered it to me. They wrote me a letter, but they did not offer me anything. Maybe they could have changed my mind and I would not be here now. Maybe they have a good argument. If they did, why did they not bring it up instead of wasting the time of this House? We have had to come into this House to find out these things.
I am amazed that we are starting to worry about money for people who are handicapped. We spend a lot of money in a questionable manner. These are not government funds. They are looked after by the government. They are not funds of the government. They belong to private business people. These funds are administered by a board. That board does not make these decisions. Decisions are made by what we, as legislators, say. If there is something wrong, we are here to try to change it.
Hon. Ms. Joe: The Member, in his second reading speech, identified a number of his concerns regarding the reasons why he wanted this change in the act. I think that I was being fair in wanting to know if he was aware of some of the cost implications and other things that may result if this act was amended.
I think that is a very fair question. He has also indicated the money was not ours anyhow, so we could go ahead and spend it. The fact is that we do get criticized for spending money. They have said to the public in the last couple of years that we do have a lot of money, but we are not allowed to spend it. They have complained and said we should not spend it but keep it. On the other hand, they come to the House and let us know that the money is not yours, so go ahead and spend it.
I just wonder if he has any idea about the amount of money this would cost if we were to amend this act. There are a lot of implications in regard to the cost, and I think we have to be very sure before we make any changes to any act that are going to cause some kind of an expenditure. I would certainly be prepared to find out the information, but I would have thought he would have had that information prior to bringing such an important bill to the House.
There is no question that we have the same kind of sympathy as the Member for Kluane. There are workers out there who are entitled to certain benefits, but we do not want to make decisions without some facts to go along with it. Is this going to cost $500,000 or $2 million, or is it going to cost $1 million? Does the Member know? Is he very satisfied in his mind in bringing this amendment to the House that, even if it costs $2 million, we should go ahead with it? That is the kind of information about the cost implications that everyone in this House should know. There is no question in my mind that the people involved, who would take advantage of compensation, are entitled to some benefits, and we do have a concern about that. It has been mentioned on both sides of the House. I would like to know from the Member whether or not he has considered how much it might cost. If he does not have that information, certainly other Members of this House should know if there has been an estimated cost before they are asked to vote on it.
Mr. Phelps: There are two things about this that have to be said time and time again. First of all, the protection for the Workers Compensation Board lies in the cap. There is a cap, or a maximum. It is not as though we are just talking about throwing money around without there being a cap. That is where the protection is. The second point that has to be stressed again is that it is a matter of principle. The principle is simple. If people choose to put money into plans to protect themselves, whether it be insurance plans or the Canada Pension Plan, should they not get the benefit of those plans? It is an issue of principle. My response to the Minister would be that deleting section 50 from the Workers Compensation Act does not throw things wide open.
There are all kinds of protection built in to the cap that exist right now. The issue is one of principle. If the government has tallied up what it thinks this is going to cost, we would very much like to know. We are sure, on this side, that the principle is sound, and we can only assume that the cap is one that has been set with the reduced rates in mind.
I feel we are into a bit of a red herring. If it is the tactic of the other side to make cheap political points by saying that, somehow or other, this is open-ended, it is not because of the cap that is there, and the power remains under the act to set that cap from time to time.
The issue, I repeat, is one of principle. It is particularly pertinent and ought to be supported by us all when one realizes the hardship that is being imposed on certain members of this community who lost their common law right to sue for negligence, and the case in point would have been a clear negligence suit, and that same person under common law would have had the right of his entire earnings which, when he was injured, were far more than the cap allows, with or without the pension. An underground miner makes a lot more than $21,000 a year. That person has been estopped forever by this accident, which was largely due to the negligence of the employer.
I want to make the points that we are not suggesting something open-ended. If there is a concern about the amounts, which are in the peculiar domain of the Minister and the board, by all means make those points. If it is wished, we could have some statisticians brought before the House: actuaries whose minds are only interested in the esoteric or the bottom line.
I want to reiterate that I think the position being taken by the Member for Kluane is sound. I do not think he is asking for something that is open-ended. We would be very much interested in knowing the exact amount this is going to cost, if the Minister chooses to give us those figures.
Hon. Mr. McDonald: I enter the discussion partly to put a few comments on record. Having discussed this matter some time in the past, the Members have made mention that the bill we are referring to now, the one we want to amend, was passed in this Legislature in 1982.
At that time, I do recall that I made some of the points the Leader of the Official Opposition is making now. I made those points on deaf ears. We voted against the bill. The mistake the Members for Kluane and Whitehorse South Centre and others have indicated has existed in this bill is, in my view, not the only mistake made in that legislation when it was originally conceived.
I speak with some experience with respect to compensation matters, not simply from the time I spent with this Legislature, but from the time I spent as an underground miner myself for about seven or eight years.
A lot of my friends have met up with the Workers Compensation Board, unfortunately, because they were in accidents. In some cases, attempts were made to be fair, but there was a legislative straitjacket put on the Workers Compensation Board in 1982, which I have never agreed with. The Member talks about wanting to promote fairness as a matter of principle. It is something I wish had been spoken of by the Members of the government-of-the-day. I regarded that debate as being my first major defeat in this Legislature, and it was something I cared very much about. I say this with all due respect, that the last thing I will bear here is a lecture from anybody, especially the Member on the opposite side, about the fairness of this piece of legislation and the need to change it.
With respect to the matter at hand, I personally have a great deal of sympathy for this issue. The Leader of the Official Oppositions statement that it is the onus of everyone but the mover of the bill to do the homework is not fair. It is not fair, because the Ministers on this side of the House quite often bring forward proposals that deal with very real services to the public of this territory and, in many cases, to the disadvantaged public of this territory, and we come forward with money messages to defend those proposals. We defend them on the basis of sound principle but, also, on the basis of affordability. We make it a high priority for us. We have never been able to, and I would never expect to be able to, come in with a proposal for a program to support disabled people with no idea of what it would cost. The Members opposite would have a field day with that kind of attitude on the part of any Member of this House who brings forward a message that is going to change the laws of this territory.
It is not the intent of the government, of any individual Member, to make cheap political points on the basis of legislation such as this, or any other legislation, for that matter.
The important issue here, for the Member for Porter Creek Easts information, is the issue of accountability and the support for principle. Despite the fact the principle is sound, and the Member for Riverdale South has indicated on a number of occasions that she believes the principle is sound, and that is the reason all government Members agreed to approve it in principle, it is still the obligation of the mover to give us some sense of the cost. It is not appropriate at all for the Member to turn back to the government and indicate that, because the Member has brought this forward, the onus is on the government to provide some background information.
If the Member would like to have workers compensation officials brought before the bar of this House then I, for one, would be very much in favour of that proposition. If the Member has had difficulty doing the research then the research should be completed and the cost should be determined.
With all due respect to the Leader of the Official Opposition, the issue is not simply one of principle. We have agreed to the principle already. That is what second reading is about. The issue is detail, and there is a legitimate desire of Members to understand detail. I, as one Member, as a miner myself with many of my friends on compensation, will not be guilt-tripped by anybody in this House with respect to determining the details of any particular measure to come before this House. If the Members want to pass a motion in this House that the whole Workers Compensation Act should be reviewed, then I will vote for it.
The Member for Kluane has indicated that the information he has requested is not at his fingertips. I would make a proposal that Workers Compensation officials come forward and provide the necessary information so this particular measure can be passed once we know the impact of the measure.
Mr. Phelps: I do not have difficulty with that sort of thing happening. A few things have to be said in response to the hon. Member of the side opposite.
The first point is that there is a distinction between different kinds of economic expenditures. This is not a situation such as was experienced with the chronic care pharmaceutical open-ended type of policy. This is a situation where there is a cap. There is a cap.
The second point I would like to make is that in this kind of situation I understand the approximate amount being deducted per year from the maximum is $1,500, which works out to seven percent in such cases where there is a maximum. We do not know how many people are stuck at the maximum amount, and thus having their pension deducted, but there are parameters within which this amendment does fall. It is iron clad in the sense that there is a cap. It is iron clad in the sense that in this particular case where the person was making much, much more than the maximum allowable - the difference to him is seven percent, and seven percent only.
I would respectfully submit that this is not something that would be overwhelming in terms of its significance on the board. If the Member does want to get the exact figures, which would probably work out to be much less than seven percent, we will agree. I feel that it is exaggeration to compare this lack of exact detail to the kind of arguments that we have about the open ended programs that go up by 10 times the estimated amounts over a few years.
Hon. Mr. McDonald: I accept the Members point, to a certain extent. The amount of money that the Yukon Workers Compensation Board pays out to all claimants for all purposes is based on a number of assumptions. First of all, the assumptions are limited by the restrictions of the act itself. One of the restrictions of the act, however unfair, is section 50. The question of how the rates are actuarily determined is based on the amount of pay out that they can be expected to provide in any given year, given the restrictions of the act.
If there are other people in this position, I think we should know about it. If those people are going to be paid out the full amount, as the mover of the bill suggests, what will the cost be? I think the Yukon Workers Compensation Board should know. It is a fairly simple matter.
Mr. Lang: Is the Government House Leader prepared to waive the rules so that we can proceed with the Committee hearing of this particular bill tonight. It is fairly important. There are a number of members of the board in attendance. It is affecting one individual very significantly and obviously some others. I see it as an important peoples bill. I would hate to have to wait for two weeks or until the end of January before we deal with it. Are we prepared to deal with it tonight?
Hon. Ms. Joe: It is not easy to comply with that suggestion. The information that we would like to have in order to deal with this amendment to the act requires a lot more time to gather. I would like to move that the Chair and general manager of the Yukon Workers Compensation Board appear with us in this House to deal with Bill No. 102.
Mr. Lang: May I take it that the witnesses will be made available at 7:30 p.m. so that we can deal with the bill? Is that correct?
Hon. Mr. McDonald: That is not correct. The matter will be discussed with my caucus and it will be a matter of discussion between the House leaders. There are many important matters that come before this Legislature. The suggestion from the Member is duly noted and will be discussed first in government caucus and then between House Leaders.
Mr. Lang: I want to make a point here. What has just been said is unacceptable. The Minister responsible for that department has had that private members bill for two weeks. It was given to her by the Member for Kluane. To stand here and say that we need more time is unacceptable. Maybe it was not given the highest priority, but you knew it was going to be debated and you knew when it was going to be debated. To tell us that this gentleman and other people are going to have to wait over an issue that we all agree should be addressed is unacceptable. I want to emphasize that the Member opposite has had not one day, but two weeks, for the board to assess the implications are as per the request from the Member from Mayo. I request that we have the opportunity to discuss it either this evening or during the next couple of days so that we can come to some definitive decision.
Hon. Mr. Penikett: I would like to note for the record that when I was a private Member on that side of the House moving bills, I was expected to provide the answers and have the information not the people who were doing the questioning. I find it once again strange...
Speaker: Order please. The time being 5:30, we will recess until 7:30.
Chair: I will now call the Committee of the Whole to order.
We will proceed with Bill No. 13 and continue with general debate on the Department of Economic Development and Small Business.
Bill No. 13 - Second Appropriation Act, 1989-90 -continued
Department of Economic Development: Mines and Small Business - continued
Mr. Brewster: I would like to correct the record. I give my leader a figure out $1,500 that was deducted. That was only a portion of it. It was actually $6,000. I would like that corrected on the record.
Hon. Mr. McDonald: The question that we left yesterday was with respect to the results of studies or plans that are jointly funded by government, and whether or not they are available to the public.
Apparently the practice is that the studies are treated as confidential for a period of six months but the client can receive an extension of that period, but never for more than two years. The reason for this period of confidentiality is largely to allow the client to begin implementation of the project. The feasibility study that we are talking about is only the first step and the provision in the agreement is that they can maintain a certain measure of confidentiality until such time as the client is able to start the project without fear that the information contained in the feasibility study is open to the general public to view.
Mr. Lang: I just wanted to make sure that at some given time it would be made public just in case 10 years down the road there was a similar feasibility study applied for and that information was at least on record for people to refer to.
I just want to pursue a little further the question of follow-up. If a person gets money, especially grants, for certain purposes, I think we should be doing, not a follow-up to run a persons business after they had, perhaps, built the building that was supposed to be built or whatever, but at least on a periodic basis just to see if the business is functioning as it was set up to do. We get complaints about people getting grants for the purpose of doing something, meet the obligations the government has asked of them and then within three months or down the road a year or two it turns into something else. It is a question about whether or not what we are investing in is doing what it is supposed to do.
Does the Minister understand what I am getting at?
Hon. Mr. McDonald: Mr. Phillips presented to me an example this morning that falls into the category the Member mentioned with respect to a person receiving funding for a particular project. For one reason or another, the project and some of the assets the person purchased were considered unusable after the project was underway. The concern is that perhaps the funding that had been used to meet a particular need is either used for some other purpose, or the project, for one reason or another, fell through and there is basically no follow-up. I better understand the concerns the Member was raising.
As I indicated yesterday afternoon, there is no formal follow-up, but there probably should be some post-project evaluation - without it seeming to be a policing function - to determine whether or not the intended use of the money is being used as originally intended.
I realize I am a little convoluted here, but I understand what the Member is saying. Based on that representation, it is probably reasonable to have this evaluative function undertaken so we can better understand the project.
Incidentally, for the Members information, I do have some evaluations of some EDA programs that were just delivered to me today, and I will make those available as soon as I can.
Mr. Lang: I do not see anything in here with respect to Special Agriculture and Rural Development Agreement. Is it under a different name now, or is it in a different department?
The funding under Special ARDA will be under revotes for claims that could not be paid out last year. They were revoted into this year. The Special ARDA program terminated at the beginning of this fiscal year. We are not funding it this year. We do not have any money in the budget for it. The federal government has stopped funding it. It does not exist. There were claims made last year under Special ARDA that were not paid out in the last fiscal year. Consequently, revote funding is required to fulfill the final obligations for claims made last year. There are no new claims being made under Special ARDA this year. It does not exist any more. The federal government has rolled its aboriginal programs up into Canadian Aboriginal Economic Development Strategy (CAEDS). They will be unilaterally delivering this program to Indian bands without partnership with any provincial or territorial government.
Mr. Nordling: The Minister mentioned that he had been delivered some evaluations on the EDA programs. For this budget, the business loans program, the opportunity identification and renewable resource commercial development venture capital have been rolled into the business development fund and community development fund. Before the present Minister took over, the former Minister had promised to supply analyses and reviews of all those individual programs. That is what was taking place. Suddenly, they were all rolled into the two large funds. We are still taking applications and funding things like the venture capital opportunity identification program. Does the new Minister have copies of the analyses and evaluations of those programs? If so, were they done before they were rolled into the two larger funds?
Hon. Mr. McDonald: The programs the Member mentioned that were rolled into the business development fund are now extinct for the purposes that the Member mentions. I will check to see if there were evaluations done on the old programs. I am not aware of some of them. I do know that there were evaluations done on the EDA, because I have seen them. I do know that there were evaluations done on other programs such as SEAL, YEAP, exploration incentives program, prospector assistance program, et cetera. If there were such evaluations, I will check to see if they exist. The subcomponents of the business development fund do not exist. For example, the community development fund local employment opportunities program does not exist anymore. We do not take applications under it anymore. We take applications this fiscal year under the community development fund itself.
Mr. Nordling: How will the Minister evaluate the success of the two funds? There must be categories in the business development fund that applications are taken under in order to evaluate the success of a program or if it is working or practical. Have the applications of the business development fund been divided up into categories that can be evaluated?
Hon. Mr. McDonald: Yes. There are no separate programs but there are different applications being made for different kinds of things under the business development fund. That kind of thing can be broken up. I have already undertaken to provide the information with respect to business development fund applications that have been received.
The same applies for the community development fund. The plan is that when the program has achieved one year of experience, we will review the program and do an evaluation to determine its effectiveness. Recommendations for future refinement will be made, if necessary.
Mr. Nordling: I understand what the Minister is saying. What seems to be happening is we reorganize the department so often we never get a year or two of full operation so we can evaluate these programs. Hopefully, at the end of this year, we will be able to look at the two funds and evaluate the different areas and categories.
Hon. Mr. McDonald: The concern surrounding the organization of the department is one I noted in the spring. Apart from the obvious creation of BDF and CDF and their amalgamation, no significant departmental reorganizations have taken place. There have been some refinements that will be brought up in the main estimates. The Members point on constant reorganization is a valid one. The only thing I would mention is the Yukon Economic Strategy did call for a single-window approach, not only in terms of who receives applications, but in terms of the programs themselves. They did not want a multiplicity of programs that all had their own guidelines and different application forms and different offices; they wanted it all rolled into one. The department has been quickly catching up to that particular recommendation and is probably ahead of schedule in meeting public expectation. As the program goes along, there will have to be project evaluations.
The internal auditor will be doing an evaluation of the business development fund, or a portion of it, starting in January. He will start to analyze the effectiveness of the program and determine whether or not it meets public expectation, and our expectations, with respect to the loan expenditures being made.
Mr. Nordling: I am pleased to see we are getting back to the one-window approach. When we get it all streamlined so that we have one application form and so that people can go to one place to get all the information they need on these things then we should call it the One-Stop Business Shop.
Hon. Mr. McDonald: That is a tremendously innovative idea. For some reason it sounds familiar. Certainly the theme has to be a one-window approach, not only in terms of administration but terms of the programming itself. That was made obvious during the public discussion.
I have one other thing on the SEAL program evaluation. I believe it was Mr. Phillips, so I will pass it over to him.
Chair: Is there any further general debate?
Shall we proceed with line-by-line?
On Operation and Maintenance Expenditures
Hon. Mr. McDonald: It is fairly simple. Two positions were moved from Administration to Economic Policy, Planning and Research, and one was moved from Policy, Planning and Research to Administration. That nets out to a $38,000 under expenditure.
Mr. Lang: Were there any service or consultant contracts undertaken under this line item? If so, what were they for?
Hon. Mr. McDonald: No, we do not have any service contracts under this line item at all.
Administration in the amount of an under expenditure of $38,000 agreed to
On Energy and Mines
Energy and Mines in the amount of $35,000 agreed to
On Economic Policy, Planning and Research
Mr. Lang: Perhaps this is where the question I asked earlier could be answered about consultant reports, or anything of that kind. If so, what were they for, to whom and for how much?
Hon. Mr. McDonald: I believe I have a list of contracts that are in progress or completed for the entire department, both on the operation and maintenance and capital side. I will give copies to the Members, and they can get any information they want from that. The $64,000 is the transfers that came to this department, for a net negative variance, or over expenditure, of $38,000. There were some Northern Accord support costs of $26,000, to account for the entire variance.
Mr. Phillips: Could the Minister update us on the current position of the Elsa mine? At one time, there was talk of a mining school that was going to be established there. Does the Minister have any information he can give us in the House today to give us an update on what is happening at Elsa?
Hon. Mr. McDonald: On the town site front, things are fairly quiet. There are only four employees and their families present at the mine site. With respect to the head office status, the mine had been discussing with the Government of Yukon, through the exploration office in Whitehorse, some of the issues surrounding their cost-control exercise. Those discussions are ongoing at present.
With respect to the fundamental question about the re-opening, the mine went through a change of ownership, which has changed things rather substantially, although I would not call the change in ownership the reason for the continued closure. I would call the low silver price the reason for the continued closure.
The mine was transferred from Falconbridge ownership to Noranda ownership. The situation appears to be that Noranda is surveying the Falconbridge properties it has purchased, and United Keno Hill Mines is fairly low on their list of priorities. They have a number of major properties to consider first. Nevertheless, we have approached them. The Premier was in Toronto and met with Alfred Powis, the chief executive officer of Noranda, to let him know of the existence of a property he had just purchased, namely United Keno Hill.
That was duly noted. Noranda is reviewing its properties to determine whether it wants to either operate or sell the property. The bottom line for operations is going to be, under any scenario and any owner, dependent upon the silver price. If the ore price does improve - there have been some very encouraging signs in the last couple of months, but it still has to show more improvement - in the next six to eight months, the discussions about re-opening should be a little more realistic.
Mr. Lang: Is it true that all the equipment is being, or has been, sold?
Hon. Mr. McDonald: Not all the equipment. To my knowledge, a lot of the rolling stock was, such as some of the trucks and some heavy equipment like Caterpillars and some equipment that was in storage for a long time. Many of the portable items in the warehouse were sold as well, but all the significant mining equipment is still there, such as the milling equipment, but a lot of the removable stuff was sold off in order to pay a bank debt of - I should not be quoted on this - I believe it was in the neighborhood of $800,000. They needed the cash to pay off this bank debt so that they could have a debt-free operation, I think.
Mr. Lang: Then, from what the Minister has said, we probably will not be seeing that mine going into production for at least another year. Or is it going to be longer, from the information he has?
Hon. Mr. McDonald: Mining people are probably among the worst predictors around about mining operations and whether or not they will re-open. As a mining person, I would be hesitant to make any accurate prediction, but I would say it would be unrealistic at present to discuss a re-opening because of the current silver prices, and I cannot predict where they are going except that I think they are going up, so I think it unlikely they will re-open before next summer.
Mr. Lang: There have been a number of rumours circulating around the opening of the mine. There has been some discussion of making a camp situation similar to Canamax as opposed to going back and re-opening the town site as we know it today. Is there any truth to that rumour? It has been circulating around for the last six months or so, and I recall a couple of comments now and again and some private discussions I have had with mining people and that inference was given.
Hon. Mr. McDonald: There are different statements coming from different people. The president of the mine is of the opinion it would be a very expensive proposition to have a fly-in/fly-out camp for Elsa. The fact that the infrastructure is already there makes it much more likely they will continue with a residential population. That does not make him any happier, because the residential services cost the mine money. Mining people are fond of saying they are not in the landlord business; they are in the mining business. I have heard all the rumours, or at least most of them, about a potential fly-in/fly-out camp. I did broach that subject with the mining company this last year. They did not indicate they would be moving to that type of camp. Even among the on-site management, it was felt that the infrastructure in place was too valuable to forego. The construction of housing in Mayo was not something they were looking forward to.
What happens in the interim with the number crunchers who decide what the operation is going to look like has yet to be determined. I would not want to make a prediction as to what that is going to be. I would prefer that it have a residential population where people can go home at night to their families after a long, hard days work. That is my preference. Ultimately it will be the decision of the mining company. If we have any influence, I would like to encourage a proper residential population, a proper community.
Mr. Lang: I want to offer our concern with what has happened to the community of Elsa. Have all the government facilities there - the curling rink, school, and library - all been mothballed?
Hon. Mr. McDonald: Yes, they are. Everything is mothballed.
Mr. Phillips: Has the Minister had any discussions with Geddes Resources over the proposed road from their mine site, as well as the proposed bridge across the Tatshenshini? Has the government taken a position on either of those matters?
Hon. Mr. McDonald: The government has not taken any official position at all with respect to the road and the bridge. Ultimately, I am sure we will. I indicated my own personal thoughts on that to the Member, but I would not count them as being the official government position at this point. We have not yet been approached by Geddes to take a position, and we are simply monitoring the activity at the mine site to determine how close the mine is to coming into production. We are certainly encouraged by the degree of activity at the site. I feel it will soon become an active and viable mine. I am guessing, of course, but I feel it will be. Certainly the enthusiasm shown by the company putting the money forward is a darn good sign. I feel that ultimately the mine will operate and bring benefit to the Yukon. We have not been approached by Geddes to take a position. We only know they have made preliminary contact with British Columbia to discuss the B.C. environmental review process.
Mr. Phillips: I had an opportunity to partake in the tour to Windy Craggy. I, too, was impressed, as the Minister is, with the magnitude of the operation and the expectations and hopes of the people working up in that site. From all indications, I know that if the mine does go, the Yukon will receive fairly significant economic benefits and spinoffs from supplies to possibly many of the workers at the mine living in the Yukon.
Are there any planned hearings in British Columbia that the Minister knows about? If there are, is the Yukon government going to make a presentation to those hearings?
Hon. Mr. McDonald: I am not aware of any hearings at this point. I would suspect we probably would, but I have not had discussions with respect to the actual process the company is going to have to go through in B.C. and what the needs will be to seek the necessary approval they will require in order to operate. We do realize we have an indirect interest in the operation and will likely be asked to attend, and will likely respond to, the hearings when and if they begin, wherever they may be. More than likely, they will not be in northern B.C., but likely in southern B.C.
Mr. Phillips: I am glad to see the government seems to be taking a little keener interest in this development than it did in the proposed film that Dawson City just missed. I am glad to see the Minister of Economic Development is following it up. I am sure we on this side will be asking questions from time to time to see where the government stands and what we have done to ensure that, if the development does take place, the Yukon derives some benefit from that development.
Mr. Lang: I want to follow up a little further on the hearings, a couple of years ago, the Renewable Resources put a position forward to the B.C. government on the question of the environment about the proposed Windy Craggy project. I do not know if the Minister recalls that. It was quite some time ago, prior to the last election. It was raised in the House here, because there was concern whether or not it was a government position.
Has the Minister, or the government, indicated that they are open to some development under certain environmental controls, as opposed to the position I understood was taken previously, which indicated that nothing should proceed?
Hon. Mr. McDonald: I am afraid I do not have a working knowledge of the intervention the Member mentioned, but I will undertake to find out more about it. I would like to review it before I answer any further questions, because I am on uncomfortable ground, at this point.
If there are formal hearings to the environmental process, I am sure I will be asked by either the company or the B.C. government to provide thoughts, as a neighbouring jurisdiction, with respect to the environment. Any position that is put forward will be a government position, and not a departmental position. When we do put a position forward, I am sure we can communicate it then.
As I said, to this date we have not done so.
Mr. Lang: I am pleased to hear that. The Member for Kluane raised it a couple of years ago. It was the Department of Renewable Resources. The Member for Kluane, as you will recall, raised some very valid concerns about what the department was doing and whether it was a government position or not. I want to recommend to the Minister that he get a copy of that particular intervention and follow through on it so that the next time there is an intervention by the government, it is the government and not some department going off on its own. I think it is important that we not have various arms of the government not knowing what the other is doing.
I would like to move over to another area. There are some significant consulting services for the development of a Norther Accord by somebody by the name of Russell Banta. It is for well over $100,000. Was that strictly for the Northern Accord negotations, or were there other policy proposals developed? If so, what were they?
Hon. Mr. McDonald: It was solely for the Northern Accord. Mr. Banta was Mr. McKnights special assistant with respect to northern gas matters. We were fortunate to secure his services. He is perceived to be one of the best in the country with respect to these matters. Mr. Banta is not only helping with the Northern Accord negotiations, both with the Northwest Territories and the federal government, but he is also helping the government design the oil and gas regime after the Northern Accord is in place. One element of the accord that is the concern of the federal government is that, not only do we take responsibility for oil and gas matters, but we have something in our hand that we can point to that makes them feel comfortable that we can manage it in a responsible way. It requires a substantial amount of work to create a management regime and regulations that are comprehensive enough to be effective and trusted by the people who are going to turn responsibility over to us, namely the federal government.
Members are aware that the negotiations are complicated by the fact that the Northwest Territories has a share of interest in the Beaufort Sea. They have their own ideas with respect to oil and gas management. We must keep in constant contact with the governments of both the Northwest Territories and of Canada and with the native groups in Yukon and Northwest Territories. We must also maintain contact with the oil industry and develop a working knowledge of what it is that they are pursuing. All of these things are coming together in a reasonably short time frame. The department has maintained contact through the offices of Mr. Banta and through the services of the deputy minister and senior members of the department who are going through the process of negotiations and starting to establish the basic framework of oil and gas management, which is a brand new field for this government. If we are going to position ourselves, we must be prepared. We must invest in a process that will end up with the government being prepared.
Mr. Lang: When are all these negotiations going to come to a conclusion?
Hon. Mr. McDonald: We are only one of three parties in active negotiations. I can only speak for us and what we anticipate will be the conclusion. We think that in early 1991 we should come to a final conclusion with respect to the accord and all the auxiliary work around it.
Mr. Phillips: I would like to move to another area, that being the Mount Hundere project. There has been a lot of talk lately that Mount Hundere is close to announcing that it is going to open up as an active mine in the territory. Could the Minister update us as to what he knows about the Mount Hundere project and how soon he thinks it will come on stream? What community economic benefits are going to be felt the most?
Hon. Mr. McDonald: I will answer the final question first. I think the benefit will be felt most in Watson Lake. There will obviously be some benefit to the whole territory.
If I were a betting person, which I am on occasion, I would bet that Mount Hundere will start construction on the site and the access road this coming spring. Judging by the contact I have had with one bank in particular that is backing the Curragh mine with the principles of Curragh, Mr. Frame and Mr. Pelly, I would think that it is more than just a likely prospect; I would say it is a real prospect. The company has been to Watson Lake talking to the Chamber of Commerce and the Liard Indian Band already. They are scheduled to return, I believe, on December 19 to have another round table with the Chamber of Commerce to talk about business prospects and discuss with the town council the impact of the mining activity in its area. The government is facilitating much of the discussion as well as having discussions with Curragh with respect to a whole series of issues that Curragh has broached with us that will help facilitate their mine coming into operation.
The mine itself is going through an environmental review process with the federal government. I do not know if they have actually submitted the formal application to the environmental review process, but if they have not done so already, they are going to shortly.
I can go on and on about it. I am not sure what the Member is looking for, but the government is certainly providing support. We are talking about weight limits for the road, along with the Department of Public Works, of course, which is doing the same thing. We are talking about land development with the town and the company. We are talking about the road access to the mine site, training and job opportunities for residents of Watson Lake and a whole group of other things associated with this particular project.
Mr. Phelps: I understand that the concentrate will be trucked to tidewater at Skagway - from Watson Lake it will go up the Alaska Highway to the Carcross cutoff at Jakes Corner and then on down through Carcross to tidewater. Is that correct?
Hon. Mr. McDonald: Is the Member asking if they want to truck along the Tagish road?
Mr. Phelps: No, I understand that they are not going to. They are going to instead go along the Carcross Road. Is that right?
Hon. Mr. McDonald: I would have thought that they would be travelling along the highway because of the weight limits for the heavy trucks. I will check on this specific matter for the Member. I am not privy to the technical discussions I believe they are having with the Department of Community and Transportation Services, even though the Department of Economic Development is coordinating all the discussions with the mine itself.
Mr. Phelps: Getting back to the fact that the people behind Mount Hundere are going to meet with the Chamber of Commerce of Watson Lake, I think that is good. I am wondering whether or not the Minister might use any influence he has to see that the managers of the sawmill of Watson Lake meet with the local business people and the Chamber of Commerce, as I believe they have not done so yet.
Hon. Mr. McDonald: I am sure we could supply them with flak jackets and invite them along. They might agree to come if they were members of a crowd.
We have made representation to the company the Member refers to that they should meet with the local community. I do not know why they have not. I can suspect why not though.
Mr. Phillips: I wonder if the Minister can confirm or deny that the operators of the Mount Hundere project have made a request to the Yukon government to upgrade sections of the Campbell Highway and the Alaska Highway between Watson Lake and the Carcross corner. Is that correct?
Hon. Mr. McDonald: I think Curragh would know better than to ask the Yukon government to upgrade the Alaska Highway. They are very sophisticated operators in the territory from a mining point of view and well know the issues in the territory. They know the Alaska Highway is the property of the federal government. I have had discussions with Mr. Pelly, who has been the senior trouble-shooter for Curragh and he knows well what the situation is with respect to that matter and has indicated that Curragh would like to lobby directly the federal authorities in Ottawa about the highway, not only about upgrading but also about weight limits.
They made no representation to me on the Campbell Highway. I did travel to the Hundere site with Mr. Pelly in my truck. He was indicating to me that the company felt the Campbell Highway to where the access road to the mine site would be was in good operating condition, and felt it was sufficient, but they wanted support for the access road off the Campbell Highway into the mine site itself.
Mr. Lang: Exactly what areas of financial commitment is the government looking at to get this mine going if they get the environmental go-ahead, and it is financially feasible? What financial obligations are we expected to take on? You just mentioned the access road. Do we have an estimated price for that? In what other areas are there perhaps going to be financial commitments made by the government?
Hon. Mr. McDonald: We do have the road program from which any support provided would come. If the Member is asking me for the cost of the access road, it is definitely in the millions. The government is negotiating with the company on a whole series of matters and helping with discussions in Watson Lake with respect to the impact of the mining operation in Watson Lake. The government has got a negotiator working through the situation to help determine what might be necessary to help the mine. We have existing programs available to help, and we would make it a top priority if financial help is required. We know there may be some support required with respect to land development in Watson Lake. For that reason I have had personal discussions with the mayor and with departmental people who are discussing the development issues with the company and the town. We will ultimately put together a development package that will detail what government support there will be and what the public expects from the company in return.
Mr. Phillips: I would like to ask a couple of questions about the list of contracts provided by the government. There was one to McPherson Research & Consulting for $9,000 on the Economic Profile of the Kluane Region: Input Into the Kluane Land Use Plan. Can the Minister table that document in the House?
Hon. Mr. McDonald: My understanding is that the report is not complete, but when it is it can be made public.
Mr. Phillips: Was the freeze on the placer mining on the Tatshenshini River, which I suppose would be within that Kluane Land Use Plan, put on prior to the government completing an economic plan of the area to even see if there was any economic value to that particular stretch? Or if the value was in mining or for some other use?
Hon. Mr. McDonald: As the Minister for Renewable Resources indicated in the past, the reason for the request for the freeze on placer staking on that stretch of the Tatshenshini was to allow the land use planning process to not be compromised by further development until such time as they come to a conclusion. This would be part of the governments position with respect to the economic use of the particular area, and this recommendation may form part of the governments final position. Whatever the recommendations are, they will be made public.
Mr. Phillips: That might have been an unfair question, because I just recalled that the Minister responsible for mines did not know anything about the freeze even 24 hours before it happened so that might have been an unfair question.
I would like to ask about two more contracts: One to Aklak Air for $9,567, and one to Sunrise Helicopters for $6,156.
Both of these were transportation for North Slope visits. Could the Minister tell us if both those costs were incurred at the same time? Who went along on that visit to the North Slope, and for what reason?
Hon. Mr. McDonald: They did not occur at exactly the same time. They were on different days, but they were the same trip. The three Ministers were, including me, Ms. Joe and Mr. Webster, deputy ministers Mr. Odin and Mr. Klassen, and Mr. Stubbs from the Department of Economic Development, Norma Kassi, and my executive assistant, Ms. Boyde.
Mr. Phillips: The Minister did not answer one of my other questions. What was the purpose of the trip? What did they do up there, other than tour the area on a very lavish-looking tour?
Hon. Mr. McDonald: The Members who were in the Cabinet of the previous government will remember what is available up there, as they took the trip themselves. What is available to see is the oil and gas development that currently exists. It was primarily to see oil and gas development. The Minister for Renewable Resources and I had a charming visit with Mr. Gruben of the Inuvialuit Regional Corporation. We also met with people in Tuktoyaktuk and visited two offshore drilling platforms in the Beaufort Sea, the Kuluk and another one. We also visited the DEWline stations in the Beaufort and, then, went to see the operation on Herschel Island, and we followed that up with a brief stopover in Prudhoe Bay to see the actual oil development in production by the American oil companies in Alaska.
Mr. Phillips: It sounds like you were rather busy people up there. I am wondering if you got all the proper environmental clearances before you did all the flying and buzzing around in the Yukons North Slope.
The other question I have is about another trip the government has taken, and that is the one to Finland. Who paid for that trip? Was that the Department of Economic Development?
Hon. Mr. McDonald: It was not an item under contract. I can find the costs for the Member with respect to costs borne by Economic Development, but I believe three departments picked up the cost of that trip. The Executive Council Office was one, as was the Economic Development department. Maybe it was two departments.
The total for the Department of Economic Development was in the neighbourhood of $20,000, and I will check the exact figure.
Mr. Phillips: Could we have a fairly detailed breakdown of that trip, what departments paid for and how much they paid? I would like to have a breakdown of hotel room costs. I understand they stayed in some pretty fancy hotels. I would like to know what their hotel rooms cost them, and that kind of thing.
Hon. Mr. McDonald: If the Member would like that information, it will be available to him.
Mr. Lang: There was also socio-economic advice given by one Mr. Lindsay Staples for $10,000. I assume he is the chairman of the Yukon Council on the Economy and the Environment. Is that correct?
Hon. Mr. McDonald: I am not sure what the Member is asking for. If the Member is asking whether or not this Lindsay Staples is the same Lindsay Staples on the Yukon Council on the Economy and the Environment, the answer is yes.
You have to understand that we are in mid-year, so many of these contracts are underway and are not complete. I do not know the particular status or the specific time with respect to this matter, so I will have to check that.
Mr. Lang: Could the Minister tell us how much the contract is for, if this is just a portion of it?
Hon. Mr. McDonald: As I understand it, no claims have been made on this contract, as yet, but this would be the maximum allowable under the contract.
Mr. Lang: I find it a little difficult to understand how this individual could be contracting in this area for the government and still be the chairman of the Yukon Council on the Economy and the Environment, which is going to be dealing with various issues as they affect the Yukon and major projects of this kind. Has the Minister considered what might appear as conflicts of interest if, on the one hand, he is working for the government and, on the other hand, he is supposed to be nonpartisan, objective and giving advice with respect to the overall plan of what the Yukon is supposed to be doing? The way I see it, you cannot have it both ways.
Hon. Mr. McDonald: I can provide the actual terms of the contract tomorrow. With respect to the issue of whether the person is going to be compromised because he provides independent advice with respect to the socio-economic elements of the Mount Hundere project, I do not see that as a conflict of interest. Perhaps the Member could enlighten me as to why he regards it as being a conflict. I do not see it that way.
Mr. Lang: From the guidelines the Minister announced for the council, I would expect the items and issues indirectly affecting such a project are going to be dealt with at some stage by the council. Is that not correct, or is the council not dealing at all with issues such as the Mount Hundere opening and the consequences thereof?
Hon. Mr. McDonald: The council is not a para-judicial council. It is not meant to be one. I am on the council, too, and I am paid by the government. I am very partisan when it comes to supporting government activities. With respect to anything that could be regarded as a direct conflict of interest, I would be sure any member on the council would absent themselves from discussion. I do not see this as a conflict of interest, and I would not see why the member would feel obligated to do that if we were discussing Mount Hundere.
Mr. Lang: The change in the council and the terms of reference have been expanded. Is the chairman being paid on a per diem basis? If so, how much, or is it on an annual basis?
Hon. Mr. McDonald: The chair would get honoraria like any other member of the council, with the exception of government employees, who would not get anything.
Chair: Is it the wish of the Committee to take a break at this point?
Chair: I call the Committee to order. We will continue debate on Economic Policy, Planning & Research.
Mr. Phillips: I would like to go back to the trip to the Scandinavian country. There is a rumour that plans were made to go, and near the last moment an order was given to change hotel rooms. Evidently they were in some lower-cost hotel rooms away from the water or the view, and someone in the government asked for better rooms, and they moved into a much fancier hotel. Can the Minister confirm that reservations were made in a much cheaper hotel and plans were changed in the final stages to move into much more expensive hotel rooms in the high-society part of town?
Hon. Mr. Penikett: I do not believe this. I do not know who the Member is using as a consultant, but I do not think there is a shred of truth to the rumour he is speaking of. I do not think any of us even knew what hotels we were staying in until we got there. I can recall only one situation where there was one close to water, but I cannot think the view was so impressive that it would have made any difference at all, given that we seemed to be getting up at five oclock every morning and going to bed after dark every night. Anybody who has any notion that we were paying a premium, or willing to pay a premium, for a view is sadly mistaken.
Economic Policy, Planning and Research in the amount of $64,000 agreed to
On Small Business
Mr. Phillips: Earth to Piers. Earth to Piers. Can the Minister make a comment on this one?
Hon. Mr. McDonald: I appreciate the intergalactic communication. The under expenditure here is made up of two things. There has been a transfer of a position to the energy mines branch, and there were some programs slow to come on speed in the business activity program that accounts for $10,000, for a total of $61,000. It is fairly straightforward.
Mr. Phillips: One of the contracts given here was for $22,000 for the removal cost of the M.V. Anna Maria. Is that the removal out of our lives permanently or just the removal off the Yukon River this winter?
Hon. Mr. McDonald: One would wish.
The M.V. Anna Maria was moored on the riverbank in Whitehorse just before Panamerican Bancorp Leasing Ltd. came in to control the situation. Just before that, the operators had made the case that the best spot for mooring the boat would be Carmacks because there was a lighted government yard there. Secondly, if one were to start an operation on the river, one could start three weeks earlier if they were already moored in Carmacks because of river levels. So to get one up on the next season, they indicated they would like to moor in Carmacks and borrowed money, which Panamerican Bancorp has paid back, to move the boat into the government yard in Carmacks.
Mr. Phillips: They could have done better. If they wanted to make sure it made it to Dawson next spring, they could have moored it at Dawson to start with and then it would have probably been where they wanted it to end up somewhere through the summer.
I wonder if the Minister could give us an update on the M.V. Anna Maria. I know that Panamerican Bancorp Leasing Ltd. has a lien against the boat. Where does the government stand in recovering the funds that were invested in that unfortunate business venture?
Hon. Mr. McDonald: We are eager to secure the funds the government loaned to the group supporting the M.V. Anna Maria through the sale of the boat by Panamerican Bancorp who have indicated the desire to sell it as the first in line on the loan. They are first in line and also third in line. The Yukon government is the second in line on this loan. We feel fairly confident that we will get the full amount of the loan returned to us from the business development loan program. The government is taking every step it can to ensure that when the sale occurs, our costs are recovered. We are also trying to encourage a situation where the boat is sold locally and is allowed to operate locally, but the government basically hopes to get its money back.
Mr. Phillips: I wonder if the Minister could tell us how much the three liens are for so we have some idea of how much is owing?
Hon. Mr. McDonald: I do not have the information here now, although I had it during Question Period. I will have to check that for the Member. I can get the information fairly quickly.
Mr. Phillips: Are we involved at all in the advertised sale of the M.V. Anna Maria, or is that all handled by the bank? Do we have any involvement whatsoever in it?
Hon. Mr. McDonald: Panamerican Bancorp Leasing Ltd. is the one handling the sale.
Mr. Lang: Regarding the $22,000 here, is there money also allocated to fix up the campground? I understand the M.V. Anna Maria tore up the campground as it was being hauled ashore. If so, how much is it going to cost to repair it?
Hon. Mr. McDonald: This funding, as far as I am aware, is only for the move itself to the government yard in Carmacks. I do not know how much, if any, damage was done to the campground and who would pay for that, but I will check on it.
Mr. Lang: Could the Minister report back to us how much estimated damage was done and if we are going to recover those costs?
Could the Minister give us a full accounting of exactly how much public money, both in federal and territorial loans and grants, we have invested in the M.V. Anna Maria?
Hon. Mr. McDonald: When I bring back the information with respect to the first three questions, I will also provide the history of the financing of the Anna Maria, to the extent that we know it.
Mr. Lang: There were some costs incurred by various departments and various crown corporations for the spectacular move of the M.V. Anna Maria from Skagway to Whitehorse. Could the Minister give us a full accounting of those costs? My information is that there are still some outstanding bills to private people. Is the Minister aware of this?
Hon. Mr. McDonald: I do not know if the loans to support the move have been recovered. I will check on that matter. They were considered loans. There was nothing that was done out of the ordinary that was not charged to the owners of the company.
There are a series of loans to local suppliers that remain outstanding. I think they total in the neighbourhood of $75,000. I will check on the totals and report back.
Mr. Lang: I understand that some of the truck drivers felt that the Skagway-Carcross road had never been in such good condition, in certain areas, as it was during the move. A lot of sand and materials had been put on the highway to help the move at that time of year. Those extras were obviously done to facilitate the move. Is that what the Minister is referring to as loans? Were they all costed out? Things of this nature could slide by if not kept track of.
Hon. Mr. McDonald: Everything with respect to this move was kept track of. The owners would take serious issue with the claim that the government had taken super care of the Carcross road or had given them special consideration. That is not their view. The move did take place near the end of the construction season. Part of the problem was that construction was going on and we had contracts to fulfill. We did not want to incur any extra costs and we did not. We told the owners and the movers, Gunrunner Services, of the exact time that we were going to grade the road. They planned their move for that time. We did not grade the road especially for the move of the M.V. Anna Maria.
Mr. Lang: I am concerned about the small businesses that have outstanding accounts. Where do they stand as creditors? Are they third in line? In what order will their payment come from the proceeds of the sale of the boat?
Hon. Mr. McDonald: I understand they are pretty low down the list. I do not know where exactly they are exactly on the list, but they are not third in line. I cannot remember exactly how many creditors there are. I think there are a few and the Government of the Yukon is one. The Government of the Yukon is in the second position but, with respect to where the others are, I believe they are fairly far down the list. In fact, they may even be at the bottom with respect to their legal position in line.
Mr. Phillips: When the government is providing us with a list of that, could he provide a detailed list of all of the liens that have been put against the M.V. Anna Maria? I am sure they are aware of that, because they are one of the group that has put a lien against the boat. I have had some constituents come in who are shareholders, are very concerned and cannot get very many answers from anyone on the issue. They would like to know whether they have any hope at all of recovering their investment.
Hon. Mr. McDonald: I am not sure about the confidentiality of all the suppliers to the vessel, and whether or not it would be appropriate for me to release the information. If it is appropriate and it conforms to common practice, then I will provide the information.
Mr. Phillips: I am not a lawyer but I am sure that, if the lien was registered in a court, it might be public information. Since the government has registered a lien, it knows it is second in line, so it must have some information as to who is fourth, fifth, sixth, seventh and eighth. That information would be pretty valuable.
Another question that I have about the M.V. Anna Maria regards the status of the investment of the people who invested in the boat. The Government of the Yukon certainly encouraged the project from the beginning, and I am just wondering if they are doing anything to assist in any way the investors to recover the money they put in the boat as well, thinking that is was a good project. The government was backing it, and it had a good possibility of success, so they freely put their money into this investment. Unfortunately, it has turned rather sour. Can the government tell us if it does have any plans to assist these individuals who have put a lot of their own personal money into the boat?
Hon. Mr. McDonald: I think it is a fairly eccentric turn on this whole equation to indicate the government has somehow encouraged people to invest in the boat and, therefore, the government is responsible to those investors because the government invested.
The government provided a loan to a company to provide a particular service. That is the extent of the governments involvement. It was a loan project. The loan was secured through the proper channels, and it was considered to be a reasonable risk from a business perspective. It is not an investment in the boat, as such. The business loans program provides loans to many businesses, and it cannot be equated as the governments faith in the project and, therefore, if something goes wrong with the project, the government has to step in and provide all investors with some out. That is not the case, and that will not be the case here.
With respect to the sale itself, to my knowledge the business development office is making the purchase known to anyone who may be interested in buying it. In terms of the equity investors, who all came in first and made application for the loan from a number of sources, I am fully aware of the predicament that the M.V. Anna Maria is in and know full well what their situation is, now that this particular business has, unfortunately, failed.
Mr. Phillips: I am not suggesting the Government of the Yukon should pay out these investors in any way, shape or form. There are some people here who made an investment, took a chance on the boat, as the Government of the Yukon was and still is involved, since some of the things are before the court. I am suggesting they may be helpful to some of these people who are trying to obtain information on where they stand with the liens or the proper routes they go. I have had couple of people into the office who are extremely frustrated in not being able to get any information. All I am saying is the government should do what it can do to assist these people in helping them to get this information so they have a better understanding of where they stand with the M.V. Anna Maria.
Hon. Mr. McDonald: I would like to know who is frustrated at not being able to get information. I am sure that if they went to the Business Development Office they would get all the information that office could possibly provide. If somebody in the Business Development Office is shutting them down, I would like to hear about it, because that is not their role.
I have had discussions with a number of the investors about the boats operation. They are aware of what the predicament is in detail. They are aware of the risk they took, they are aware of the problems the operators had with the operation and the business, and they know the situation everyone faces with respect to this matter.
As a government, we are trying to ensure the boat is sold for the highest possible price we can get. It would be nice, and we try to encourage that in order that as many creditors as possible can be paid out. We are interested in getting the publics money returned to us in the sale, but we are also interested in seeing this boat continue. I think the idea is still a first-class one. With the right debt equity ratio, the right business plan and the right operators, I think it has a heck of a good future as a real tourism attraction here.
We are interested in seeing that happen, too. We have many different and complementary objectives to meet. I will also undertake to ensure the department is providing any information people may request with respect to this matter in order that everyone knows what the status of the situation is.
Mr. Phillips: I do not think that the M.V. Anna Maria is sunk, even though it is at the bottom. There is hope of reviving it. I agree with the Minister. I think it is an excellent idea and I hope one day we will see half a dozen - I should not say boats like it, I do not know if we could afford that - similar boats on the Yukon River. I am sure it is something we shall be monitoring closely as the sale comes about and I hope the Government of Yukon will continue to do what it can to recover its investment and hopefully get as much money as it can so some of the other investors can recover some of their debts as well.
Mr. Lang: I notice there was an evaluation of the Band Community Economic Development Officer Program. Could the Minister report to us the result of the evaluation? If there is a copy of it, I would like to see it.
Hon. Mr. McDonald: The report is available. It is a fairly thick report. I believe they measure this report in pounds. We can make the executive summary available, but if the Member wants to read the heavy volume, he is welcome to come to Economic Development and have a look.
It has a summary section and also a band-by-band section with respect to this program. Does the Member want the summary document?
Mr. Lang: Yes.
Small Business in the amount of an under expenditure of $61,000 agreed to
Operation and Maintenance Expenditures in the amount of nil agreed to
On Capital Expenditures
On Community Development Fund
Hon. Mr. McDonald: In supporting the EDA, which we negotiated after the mains were set, we needed to find funds to support our contribution. The contribution in total was $626,000. A total of $326,000 came out of the community development fund line vote to support the EDA contribution.
Mr. Lang: Could the Minister tell us if these funds go to government departments as well, as opposed to organizations and that kind of thing?
Hon. Mr. McDonald: No, they are not supposed to go to government departments. The funds are applied for by agencies, societies, Indian bands and municipal governments, but not the Government of Yukon. They have to make application in order to get the funding, but they are not for direct support of a government department.
Community Development Fund in the amount of an under expenditure of $326,000 agreed to
Hon. Mr. McDonald: That is a secretarial position to support the capital programs. This position used to be the NOGAP coordinator, which we do not have any reason for right now.
Mr. Lang: Is this now a permanent position?
Hon. Mr. McDonald: It is a term position, like the old NOGAP position. It supports the work of the capital program.
Mr. Lang: Is the Minister telling us we do not get the recovery for the position anymore? We are paying it out of general revenues, then?
Hon. Mr. McDonald: It is not through NOGAP anymore because there is no NOGAP funding. It used to be federal money. It was a wonderful thing to get, if you could secure it, but they have not renewed the NOGAP program and, consequently, we cannot make any recoveries on that. Instead, we have taken the term person year that was reserved for NOGAP and funded it here to support the capital programs we have, namely the programs under the Administration section.
Mr. Lang: I want to follow up on this a little bit further. It seems to me the more we go through the budget, the more we are finding that cost-sharing has either changed or has been discontinued. This is almost continuous throughout the budget. In his capacity as Minister of Finance, could the Minister make a list up for us of what federal dollars we were receiving overall in the government as opposed to what we are getting now, comparing the last two or three years? It would be a very interesting exercise to go through to find out what has happened to all the various agreements and where we are financially, as far as the federal finances are concerned. For example, the Minister indicated there was no more Special ARDA. It is now being delivered unilaterally through the federal government, but how does that relate to the previous dollars that were being spent on that program? The list goes on.
I am sure the Department of Finance must have that as a basis for negotiations with the feds. Could that be provided to us as well? It is very difficult for us to follow as we change names of programs and various guidelines and things like that to try and figure out how the cost-sharing is working, has changed or is discontinued.
Could the Minister do that kind of a comparison for us? I am speaking to him in his capacity as the Minister of Finance.
Hon. Mr. McDonald: The budget estimate book has it. If one were to go through the recovery section of every department and draw comparisons from last years recovery to this years recovery, they would see the changes that are happening.
The general theme with respect to federal departmental expenditures in the Yukon are declining, and declining awfully fast. This is not only true of the Yukon and the Northwest Territories, but it is true across the country, with the exception of a couple of agreements. The French language agreement, which is climbing, is well funded. Across the board, the Canadian Employment and Immigration Commission has been cut back substantially in terms of the expenditures and purchases they can make in our college. That has had a significant impact on the college program. We all know the story of the EDA. I do not know if Special ARDA will be funded to the same extent through CAEDS. I am not aware of any funding flowing through the CAEDS program at this point. Even though we are eight months into the year, they are still defining policy. It is no secret that the federal government is cutting back departmental expenditures, whether it is regional economic development programs, or aboriginal economic development programs, or training programs. You name it. With the exception of the language programs, the theme is consistent across the board. With one look at the recoveries section, in every department where we have a direct relationship with the government, one can make the generalization they are on the decline, as we have been saying for some time.
The same is true for departmental expenditures by federal departments in the Yukon. There is a decline in expenditures there. They are cutting spending.
Mr. Lang: Can the Minister provide us with the list that has obviously been provided to him? It is one thing to look at the recoveries, but which programs are down? Some may be the same, depending on which department we are dealing with. For example, in education, you have a French language program, the CEIC, and various other cost-shared programs. In dollar terms, how are they relating? This department is obviously going to suffer, and suffer quite a bit.
Hon. Mr. McDonald: The programs are listed in the recoveries sections of the departments. One can see where the reductions occur.
I am proved wrong in the CEIC; there is a slight increase in the forecast.
The actual agreements we do have with the federal government are listed in the main estimates book. That is the reason for listing the recoveries in a recoveries section of the book: it shows exactly where the increase in expenditure is.
I would move that the Chair report progress on Bill No. 13.
Motion agreed to
Hon. Mr. McDonald: I move that the Speaker do now resume the Chair.
Chair: It has been moved by Mr. McDonald that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order.
May the House have a report from the Chair of Committee of the Whole?
Ms. Kassi: The Committee of the Whole has considered Bill No. 102, Act to Amend the Workers Compensation Act, and Bill No. 13, Second Appropriation Act, 1989-90, and directed me to report progress on same.
Speaker: You have heard the report of the Chair of Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. McDonald: I move that the House do now adjourn.
Speaker: It has been moved the hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker: This House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:29 p.m.
The following Sessional Paper was tabled December 6, 1989:
Contracts signed between the Government of Yukon and Barry Stuart for the years 1985 to 1989 inclusive (Penikett)