Whitehorse, Yukon

Thursday, December 7, 1989 - 1:30 p.m.

Speaker: I will now call the House to order. At this time, we will proceed with prayers.



Speaker: We will proceed with the Order Paper.

Introduction of Visitors.


Ms. Hayden: I rise to extend condolences to the families of the victims of the assault on women at the University of Montreal yesterday. The grief of these families touches us all, and it is truly a tragedy for our whole country.

Speaker: Are there any Returns or Documents for tabling?


Hon. Mr. Webster: I have for tabling legislative returns dealing with questions raised by the Member for Kluane on wood bison.

Speaker: Are there any reports of Committees?

Are there any Petitions?

Introduction of Bills?

Are there any Notices of Motion for the Production of Papers?

Are there any Notices of Motion?

Are there any Statements by Ministers?


Health and Safety Standards Initiative

Hon. Ms. Joe: I rise today to inform the Assembly about a major initiative presently underway that will substantially improve health and safety standards in the Yukon workplace. This risk reduction initiative is a cooperative effort on the part of the occupational health and safety division and the Yukon Workers Compensation Board. They share similar convictions that their programs for the 1990s must have stronger focus on the prevention of workplace injury and ill health.

The objective of this initiative is to identify and design Yukon-specific programs to reduce the risk of injury and disease to Yukon workers. The achievement of this objective will result in reduced human loss from workplace disability and, at the same, will reduce the high economic costs associated with work-related injuries and disease.

This initiative has four main priorities, which include: health and safety program development and evaluation with an emphasis on programs for small businesses; increased health and safety education and training for workers and employers; programs aimed at increasing the public’s awareness of workplace health and safety issues; and a review of the Workers Compensation Board’s merit rebate and penalty assessment options.

In addition to this broad area of program development, a number of special issues were identified that require particular attention: chemical exposures; indoor air quality, including radon gas; work-induced stress ailments; female workers and reproductive hazards; health promotion programs for the workplace; and accident cost-accounting methodologies for employers.

There is strong evidence that the number of injuries within the construction and mining sectors has increased sharply up to the end of 1988. There was also a corresponding, though less dramatic, increase in the service industry sector.

It is felt, therefore, that this initiative is timely in that intervention is required to improve health and safety standards at our Yukon workplaces. I must stress, though, that not only is it important to reduce the number of injuries over the short term, which the occupational health and safety division is actively pursuing, it is equally important to reduce risk over the long term through initiatives that focus on prevention. This initiative addresses those two needs.

I am pleased to be able to emphasize the cooperative nature of this program with industry, labour, this government’s occupational health and safety division, and the Yukon Workers Compensation Board, all working toward objectives that will have a positive impact on improving conditions for workers. This project will place the Yukon at the forefront in Canada with respect to being able to address the evolving health and safety needs of employers and employees.

Mrs. Firth: We are pleased that the Minister has brought this to the attention of the House today. The work has been going on actively for some time. This is a perfect example of the valuable contribution that boards can make in working with the government. The Workers Compensation Board identified a problem. That problem was that injury experiences were going up. They said let us do something about it, recognized a need and ran with it. An expert was hired to draft up a conceptual plan and everyone buckled down to work.

There has been extensive consultation with the Chamber of Commerce, the Chamber of Mines, businesses, employers and with labour. There have been many people who have had input into the program.

This group has done its homework. I would like to recognize the individuals who have worked so hard on the program, including Tom Mickey, who is the business representative on the Workers Compensation Board, Heiko Franke, who is the labour representative on the Workers Compensation Board and Rick Rovere, the manager for occupational health and safety.

Over the last two months, they have dedicated many hours to consultation and development of the program. I think these individuals should be commended for identifying the problem and taking control of the situation. To Tom Mickey, Heiko Franke and Rick Rovere, congratulations and thank you for a job well done.

Hon. Ms. Joe: I would like to thank the Member for Riverdale South for completing a ministerial statement. As you know, there are certain things that have to be in a ministerial statement; the Member for Riverdale South has added to that information and I thank her for it.

Speaker: This then brings us to Question Period.


Question re: Yukon Pacific Forest Products

Mr. Phelps: I have some questions about the Yukon Development Corporation and its ill-fated investments in the Watson Lake sawmill. I would like to focus on the politically-expedient giveaway of the assets to Yukon Pacific Forest Products in order to attempt damage control on this issue just before the last election.

I have in my hand a legislative return filed by the Minister on March 29, 1989, and this states, in answer to a question from me, that Yukon Development Corporation received $400,000 by certified cheque from the purchaser, Yukon Pacific Forest Products Ltd. - the Shieldings Group and the Indian consortium are both shareholders of Yukon Pacific Forest Products Ltd.

My question of the Minister arising from the information subsequently received and, of course, from the books of YDC that were filed in the House, is when did the Yukon Development Corporation pay the $400,000 back to Yukon Pacific Forest Products for shares in Yukon Pacific?

Hon. Mr. Penikett: Is the Member asking me for a date, a time in the day or a month? The question was not clear. If he is asking me to be precise as to when the officers of the corporation completed a certain financial transaction, he will, of course, know that without notice I cannot possibly have that kind of information on hand.

He has referred to a legislative return, which, I guess, we presented to the House some months ago. All I can do is take that question as notice unless he is more precise and presents in a supplementary a question he can reasonably expect me to have the answer to.

Mr. Phelps: At the time this legislative return was filed in late March 1989, did the Minister know that the sum of $400,000 was going to be paid back to Yukon Pacific for shares?

Hon. Mr. Penikett: I know what was indicated in the legislative return. That was the advice provided to me by the corporation and the advice I communicated to the House. If the Member is asking what I know about the precise transactions and the documents and papers that flowed following that date, I cannot reasonably answer that question without notice.

Mr. Phelps: Does the Minister agree that this legislative return is, to say the least, misleading, because it would leave the impression with the public and with Members of this House that Yukon Development Corporation could receive and retain $400,000 from Yukon Pacific Forest Products?

Hon. Mr. Penikett: The Member is referring to a document that I do not have at hand, and notwithstanding his quotation from it, I am not prepared to accept that it is misleading in any sense at all.

Question re: Yukon Pacific Forest Products

Mr. Phelps: I have a copy of the legislative return for the Minister. He may want to respond to it in due course.

The financial statements filed in the House for the Yukon Development Corporation and the Yukon Energy Corporation are interesting, as the real loss to Yukoners occasioned by the Watson Lake sawmill purchase and sale continues to grow, and grow. I note on page 15 of the Yukon Energy Corporation year-end report that a dividend of $8.6 million was paid by the Yukon Energy Corporation to the Yukon Development Corporation. Was this dividend intended to cover some of the huge losses incurred by the Watson Lake sawmill?

Hon. Mr. Penikett: First of all, let me correct the assertions made by the Member opposite. The Member said the losses continue to grow and grow. Obviously, with the completion of the sale of the forest products company, the losses are not likely to grow. We remain determined in our view that the investment we made in the community of Watson Lake, and in that sector of the economy, will prove to have been of substantial benefit to that community and the industry in the long run.

Secondly, contrary to what the Leader of the Official Opposition says, the Yukon Development Corporation in the year recently reported showed a profit in excess of $3 million.

Finally, in response to his specific question rather than just the preamble, I would point out that the dividends paid to the Development Corporation from the Energy Corporation were monies that were surplus to the needs of the Energy Corporation, which has been run very well, and notwithstanding the reduction in power rates, is still a very profitable concern. The Development Corporation is employing that money for the purpose for which the Development Corporation was created, making strategic investments for the benefit of the people of the territory.

Mr. Phelps: Of course, the Government Leader did not answer my question, but Yukoners are becoming rather used to that, I am afraid.

The dividend was a result of profits in the Yukon Energy Corporation, which were in turn due to the high power rates paid by Yukon consumers of electrical energy. Is it true that Yukon consumers have subsidized the losses of the Watson Lake sawmill?

Hon. Mr. Penikett: That is not correct. The power rates charged in the first two years following the transfer of the Northern Canada Power Commission to local control were established by agreement with the federal government. The fact that the Energy Corporation and the Development Corporation were able to do so well and the fact that the rates were able to be lowered is the result of the financial arrangements this government made to that corporation. The Development Corporation was intended and created to play a certain role. It is playing that role and will play that role in the community. We, of course, are not happy with the losses that were sustained in Watson Lake but...

Speaker: Will the Member please conclude his answer.

Hon. Mr. Penikett: ...we remain convinced that the investment we made to put that mill back to work and to put that town back to work, was the right decision.

Mr. Phelps: The Yukon Public Utilities Board was not happy with the high rates being imposed upon the consumers of electrical energy in the Yukon and of course insisted that these rates be lowered. Where do the dividends of $8.6 million from the Yukon Energy Corporation to the Yukon Development Corporation show up in the books of the Yukon Development Corporation?

Hon. Mr. Penikett: I do not have the books in front of me, but I would be quite happy if the Leader of the Opposition would give me a short amount of time. I am sure I can provide him with that information. I would be happy to do it this afternoon, because I am sure that it is there.

Question re: MV Anna Maria

Mr. Phillips: My question today is to the Minister of Renewable Resources regarding a problem that has plagued the Yukon government for quite some time and that is the problem of the MV Anna Maria. We learned last night that extensive damage was done to the Carmacks campground when the MV Anna Maria was taken out of the water at Carmacks. The Government of the Yukon paid $22,000 to remove the MV Anna Maria and store the boat in the YTG campground. Who will be responsible for the costs of repairing the damage that was caused by the removal of the MV Anna Maria?

Hon. Mr. McDonald: As the Member knows, the assertion that the campground was damaged was made last night by the Member for Porter Creek East. I undertook to check into the matter for the Members to determine, first of all, whether or not the damage had been done, and who was to pay for it if damage had been done. The Member mistook the statements I made last night with respect to the $22,000 figure. The government did not pay for the removal of the MV Anna Maria, but in fact loaned the money for the removal to the company that had taken control of the boat. That money was paid back, so it would not be correct to say that the government paid for the removal of the boat to Carmacks.

Mr. Phillips: What, then, are the estimated costs of repairing the campground? I understand they tried to move the boat with one Cat and then had to bring in some other equipment and that they tore up the campground in the process of trying to remove the boat from the water. Who is going to pay for the damage done to that campground?

Hon. Mr. McDonald: As I indicated last night and a minute or so ago, I am having the assertion that was made last night with respect to the campground checked, and I will be in a better position to provide the information to the Members when the checking has been completed.

Mr. Phillips: Could the Minister give us assurances that, once he finds out how much the damages will be with respect to repairing that campground, that they will try to recover the costs from the sale of the MV Anna Maria so the Yukon taxpayer will not be saddled again with an extra cost for the problems this boat has encountered?

Hon. Mr. McDonald: The first thing is to determine whether or not there was damage. Secondly, we have to determine how much the damage was, if there was any. Thirdly, we have to determine whether or not the bills have already been paid, if there was damage done to the campground, and what the amount of the bills were. If the government incurred costs with respect to this boat at any stage, the policy has always been to try to recover those costs from the operators or, at this particular point, from the sale.

Question re: Medical testing

Mrs. Firth: I have a question regarding the employment-related medical testing draft policy. We started debate in the Legislature yesterday but, because of time constraints, we were unable to complete the debate. Is the Minister of Justice prepared to proceed with the intention of the motion and amend the draft policy by deleting the particular sentence we were discussing?

Hon. Ms. Joe: It is not my intention to amend the draft policy. The policy is a draft policy of the Human Rights Commission. I would expect that if the Member for Riverdale South or any other group, such as the Yukon Medical Association, had concerns in regard to it, that would be the appropriate place to recommend that the draft policy be changed.

Mrs. Firth: The Minister, along with her Cabinet colleagues, has to give final approval to the policies of the Human Rights Commission. When that final approval is given, would she take the request that has been made into consideration?

Hon. Ms. Joe: That concern, and a number of other issues that might have been raised, or will be raised, will certainly be taken into consideration.

Mrs. Firth: We understand from the Human Rights Commission that this policy will become effective January 1, 1990. The Legislature will not be sitting at that time. Could the Minister give us some indication of when she may be able to communicate a decision to us as to whether or not the Cabinet will approve that that sentence be deleted or if it will be remaining in the policy?

Hon. Ms. Joe: We have had discussions with the Human Rights Commission in regard to the draft policy. There is a preparation time before anything goes to the Cabinet. I have not had any indication from them yet when we should expect it in our offices. Certainly, I will check that out.

Question re: Family violence, staff recruitment

Mr. Nordling: With respect to family violence, on November 22, in a ministerial statement, the Minister of Health and Human Resources advised this House on government policy. He said, and I quote, “As of November 1, the Department of Health and Human Resources has hired two new staff people who will be working exclusively on new programs in the area of family violence.”

Is it the policy of the government that these positions for the new programs be indeterminate or term positions?

Hon. Mr. Penikett: The two positions in question in this case are term positions.

Mr. Nordling: Are these two new term positions in addition to the two new term positions for family violence programs and the support programs that the Minister announced in this House on April 18, 1989?

Hon. Mr. Penikett: They are the positions that were budgeted for in this year. There is not a supplementary contemplated in addition to the ones that are indicated in the budget mains.

Mr. Nordling: My understanding is that these were the positions we budgeted for last year and people were just hired as of November 1.

Are these two new staff people who came onstream November 1 as term positions from outside the government or were they transferred from within the government?

Hon. Mr. Penikett: I am going to have to depend on my memory. I will check the facts following this Question Period.

I know for a certain fact that one of the people came from outside the public service of the Yukon Territory. I believe the other person changed jobs - was in a position in the Yukon public service and has moved to this new post from work that they were previously doing.

Question re: Kwanlin Dun Band land selection

Mr. Lang: On October 27, 1989 the Kwanlin Dun Band land selection was made public. In the announcement the Primrose Mountain area at Kusawa Lake was identified as a joint wildlife management area. This type of management regime is a new concept and, to my knowledge, has never been discussed publicly.

Can the Minister of Renewable Resources provide us with the guidelines and criteria for such a potential wildlife management regime?

Hon. Mr. Penikett: Since the Member is asking about interim protection maps under land claims, perhaps he will permit me to answer the question.

In the first place, the management areas he is asking about are provided for in the framework agreement on land claims and were discussed at many of the public meetings we had on that issue. The management areas are not negotiated yet, in the sense that they are defined or that there are specific arrangements governing them. The proposal for the Primrose Mountain area is an interim protection and we will be dealing with that matter with the First Nations affected in the negotiations.

Mr. Lang: To my knowledge, and the knowledge of other interest groups, this is the first time this type of regime has been mentioned. One with a major interest in the area is the Yukon Fish and Game Association. About six or seven years ago it recommended that a permit system be put in place to protect the harvesting of sheep in that area so they could multiply.

Was the Yukon Fish and Game Association ever consulted about such types of management zones being set up, and if so, when?

Hon. Mr. Penikett: The first thing we should understand is that, as yet, there is no agreement by us or any other party as to whether there will be a special management area for the land in question. It is certainly contemplated, as we move to the final agreements with each First Nation, that as selections or proposals are made for such things as a special management area, if that proves to be the case in the final negotiations, that fact will be made public, public input will be invited and groups would be included, such as the Fish and Game Association or other interested parties.

I think in the case of any area that is in the territory, but especially those close to Whitehorse, I am sure there will be a lot of public interest in such questions.

Mr. Lang: I find it interesting that we have agreed to a potential wildlife management area and have no criteria or guidelines. When will the guidelines be made available to the public so that we can determine whether or not that concept is a good idea, and whether or not it should be implemented?

Hon. Mr. Penikett: The concept, as yet not precisely and finally defined in final agreements, was provided for in the framework agreement. It was felt there were areas in the territory where both the aboriginal people and the non-aboriginal people might have a mutual interest in seeing some area protected for wildlife or conservation purposes, but which may or may not be included in the final settlement lands.

The Government of Yukon is currently concluding internally our negotiating position with respect to such areas. I do not think we will be making that position public because it is a negotiating position. We will be negotiating the concepts as we get into the band-by-band final negotiations.

The specific areas that are potentially affected by such an arrangement will be made public and there will be public discussion invited. There may be an appropriate point...

Speaker: Order please. Will the Member please conclude his answer.

Hon. Mr. Penikett: My apologies, Mr. Speaker. We will look for an opportunity in this session, if we can, to describe more completely our approach without betraying our negotiating position. That may fall to my colleague, the Minister of Renewable Resources, to do that for the House.

Question re: Yukon Pacific Forest Products

Mr. Phelps: I have some more questions for the Minister responsible for the Yukon Development Corporation regarding the sale of the Watson Lake sawmill to Yukon Pacific Forest Products. Fifty percent of Yukon Pacific Forest Products is to be owned by the Shieldings Group, which we subsequently found out was made up of Shieldings, Inc. and TF Properties. Is it true that Shieldings Group has the right to determine who the manager of Yukon Pacific Forest Products will be?

Hon. Mr. Penikett: That is correct. It is the operating company.

Mr. Phelps: We understand that the manager of Yukon Pacific Forest Products is TF Properties, which is a very cozy arrangement indeed. How much money is TF Properties skimming from Yukon Pacific Forest Products in the form of management fees of one sort or another?

Hon. Mr. Penikett: I am not a lawyer, but I think the word skimming sounds to me like an accusation. I cannot respond to that accusation, and I do not know what kind of a charge the Member opposite is making or on what evidence he is making a charge.

I will take the question as notice, but I am not sure that the arrangements between Shieldings and its agents or employees are necessarily our business, although it may be the business of the board of the corporation. I will check into that.

Mr. Phelps: I did not intend to offend the sensibilities of the Minister. Since TF Properties is based in Vancouver and seems to be handling all the money received from Watson Lake lumber for sale of product, is the Minister not concerned about the amount of money retained by TF Properties as management fees?

Hon. Mr. Penikett: The Leader of the Official Opposition did not offend my sensibilities at all. I am potentially concerned that a charge is made against someone outside of this House that may or may not be fair. I do not know the basis of the charge. The government’s concern is that the company is operating in a way that meets Shieldings’ obligations to us, and those obligations include the payment of bills in that community, both to the employees and to the local business people. That is one of several objectives to which Shieldings has committed itself, and we have every reason to expect it to be met.

Question re: Hospital worker strike

Ms. Hayden: Yesterday, I received a letter, as did all the Members of this House, I assume, from the hospital strike committee of the Public Service Alliance of Canada. These workers are not the elite in our health care system. They are part of the very valuable team in the hospital.

Would the Minister of Health and Human Resources inform this House what actions have been taken by the government in this hospital strike?

Hon. Mr. Penikett: It is a strike by federal employees against the federal government, but it is a work stoppage and a dispute that is of great concern to us. On November 17, 1989, I wrote to the Hon. Perrin Beatty, urging him to ensure that everything possible was done to avert a strike. We are very disturbed, as a government, that after the strike was commenced no negotiations have been held, and we are particularly distressed because, in this community, the hospital is an absolutely essential service. We believe, therefore, that it is incumbent on the Department of National Health and Welfare to come to a fair negotiated settlement with its employees.

Ms. Hayden: Could the Minister tell this House if this government is taking a position on the back-to-work legislation introduced by the Government of Canada?

Hon. Mr. Penikett: I can tell you that, as a matter of policy, this party and this government is opposed to back-to-work legislation. As a general rule, it is a bad idea when employees are out on a legal strike to legislate them back to work rather than negotiate with them. The consequence of that action is almost always a deterioration in morale in the workplace and has a negative effect on productivity and, ultimately perhaps, even the welfare of the people in an institution like a public hospital.

As a general rule, and in this specific place, we think back-to-work legislation is a very bad idea.

Ms. Hayden: The hospital workers and the Public Service Alliance of Canada have been fighting for almost a decade to reach a settlement on the pay equity issue. Given hospital transfer to the territory, what will be the position of this government on the issue of pay equity for health service workers?

Hon. Mr. Penikett: Members will know that, as a matter of fact, the majority of hospital workers are women. It has also been very clearly stated as policy of this government in the public sector that pay equity shall apply. Even though, under the hospital board legislation, which is now before this House, the hospital will be operated by an independent board, the act we have before us from this government specifically provides that the pay equity rules of this government shall apply to that hospital and that hospital board.

Therefore, we take the view that the standards of pay equity, having been established in the public sector here, ought to apply to all workers in the public service, including the federal public service in this sector.

Question re: Yukon Pacific Forest Products

Mr. Phelps: In looking at the books for Yukon Development Corporation, I noticed on page 17 a loss on sale of inventory of $639,000. We understand that much of the timber that was harvested and trucked to the sawmill was wasted and destroyed. Thousands of board feet of logs rotted or were ruined by beetles and were therefore wasted. I am wondering whether this sum of $639,000 is intended to show some of that shameful waste.

Hon. Mr. Penikett: There were, and the statements of the corporation show that there were, some extraordinary items that added to losses in excess of those originally projected. Among those was a loss in inventory, because it was infested, as the Member indicates. That happened and that is regrettable, but an accounting adjustment was made as a result of the value of that inventory as it was milled. That was indicated at the time when the value of the inventory as it was estimated in the yard was recalculated as the product went through the mill, and some of the timber was found to be infested, as the Member has indicated.

Mr. Phelps: In the Yukon it takes 100 to 150 years to grow a tree to maturity. Is the Minister not concerned about the dreadful waste of our timber resource through the mismanagement of Yukon Development Corporation when it was running Hyland Forest Products?

Hon. Mr. Penikett: I am concerned with waste anywhere we find it, but let me be perfectly clear about this once again, since the Member continues to misstate the facts on this question. Throughout the operation of Hyland Forest Products, it was under private management. The decision of the Development Corporation board was to hire a private manager. The Development Corporation hired a private manager; the company lost more money than it was supposed to. They changed private managers and the company continued to lose money. At some point, as Members all know, we sold the controlling interest in the company in order to bring in some nationally prominent people who had the experience in the industry and who could run the company in the commercial environment by commercial standards. We also retained half ownership of the company for local interests in order to maximize local input in the decisions of the board. Throughout the operations of this company...

Speaker: Would the Member please conclude his answer.

Hon. Mr. Penikett: ...it has been privately managed.

Mr. Phelps: The new managers may not be nationally renowned, but they are certainly well-known - infamous, in fact - in the Howe Street area of Vancouver.

Is the Minister taking any steps to ensure that such dreadful waste of our timber resources will not occur in the future at the Watson Lake sawmill, which is still partially owned by the Yukon Development Corporation?

Hon. Mr. Penikett: Mr. Speaker, I apologize. Shieldings is, of course, a national company; the manager referred to by the Leader of the Opposition is, I understand, well-known in British Columbia, though not well-known to myself. The obvious objective of this government will be - I am sorry, the Members are tittering across the way. I cannot claim knowledge of a person whom I have not had the honour of meeting.

The object of this government is obviously to avoid waste of resources. We will want, in the kind of forestry legislation that my colleague, the Minister of Resources will bring to this House, and in the arrangements we make for the transfer of responsibility for forestry, to achieve that objective. Whether we are a minority shareholder or whether we are simply carrying out normal government responsibilities, we would want to avoid unnecessary waste of resources in this territory.

Question re: Bear-proof garbage containers

Mr. Phillips: My question is probably somewhat related to the last answer. You could probably fit the last answer into the subject that I am going to talk about. I have a question for the Minister of Renewable Resources involving the newly designed bear-proof garbage containers installed in Yukon campgrounds. It seems that the bear-proof lids on the containers are also children-proof and senior citizen-proof. Many people struggle to open the containers and then, out of frustration, set their garbage next to the container. This defeats the whole purpose of the litter containers in the campgrounds.

Would the Minister consider redesigning this people-proof lid so that tourists and residents who use Yukon campgrounds will not be encouraged to litter?

Hon. Mr. Webster: I was not aware that the containers were working so well that besides preventing bears entering them, they also prevented people from entering them. Now that the Member has brought the seriousness of this matter to my attention, I will look into it.

Mr. Phillips: Now that the Minister is aware of this problem, would he give this House an assurance that he will look into it immediately and solve this problem this winter so people in campgrounds next year will not have the same problem?

Hon. Mr. Webster: The garbage containers are there for a definite purpose. If there is something preventing people from using it for its intended purpose we will definitely look into it before the season arrives.

Question re: Government seeking legal advice

Mrs. Firth: I have a policy question for the Minister of Justice.

What is the policy with respect to government departments seeking legal opinions outside the Yukon territory?

Hon. Ms. Joe: I am not exactly sure what the Member is getting at. She has asked for information on outside solicitors being hired by this government. We do require that certain legal information be available, and sometimes we have to go out of the territory to get that type of experience. The department is preparing the information she required. Certainly, we sometimes have to seek legal advice from solicitors from outside the territory.

Mrs. Firth: Is it the policy of the Minister’s department that other departments who wish to seek legal opinions outside of the territory go through the Department of Justice?

Hon. Ms. Joe: It is normal practice for the departments to go through the Department of Justice. Sometimes that does not happen, but it is a practice that has been going on for a number of years in all governments.

Mrs. Firth: If it is the policy that they go through the Department of Justice, is the Minister aware of any departments that are seeking legal opinions outside without going through her department? Is she aware that it has been happening?

Hon. Ms. Joe: I just said that it does occur. It has been a practice that has been practised by former Tory governments as well. It occurs for specific reasons, I understand.

Question re: Government seeking legal advice

Mrs. Firth: Is the Minister specifically aware of departments seeking legal opinions outside? Are there some departments within government that can do that without checking with the Department of Justice? Are there some able to do that as a special privilege, or is it routinely practiced by all the departments?

Hon. Ms. Joe: I do not know if it is routinely practiced by all departments. I do know that it does occur. There is sometimes information that is required by a certain department in regard to certain kinds of legislation, or to provide some other kind of information, and it is done. I am aware that it is being done by other departments.

Mrs. Firth: Could the Minister provide for us a list of other departments that have sought legal opinions outside and whether or not they sought those opinions independently or whether they went through the Department of Justice, as I think is the proper route for that kind of opinion to be sought?

Hon. Ms. Joe: I will try to seek out all that information for the Member. She has asked for information before, and we are trying to gather that information together to provide it to her. She will be receiving that within the next week or so, I hope.

Speaker: The time for Question Period had now lapsed. We will proceed with Orders of the Day.

Speaker’s Ruling

Speaker: Before proceeding with Orders of the Day, it would appear to the Chair that Motion for the Production of Papers No. 5 has been satisfied by Session Paper 89-1-39, which was tabled yesterday by the Premier. Therefore, the Chair orders that the Motion be withdrawn from the Order Paper.


Special adjournment motion

Hon. Mr. McDonald: I move that the House, at its rising on Thursday, December 14, 1989, do stand adjourned until 1:30 p.m. on Monday, January 22, 1990.

Speaker: It has been moved by the hon. Government House Leader that the House, at its rising on Thursday, December 14, 1989, do stand adjourned until 1:30 p.m. on Monday, January 22, 1990.

Motion agreed to

Speaker: Government Bills.


Bill No. 66: Third Reading

Clerk: Third reading, Bill No. 66, standing in the name of the Hon. Mr. Webster.

Hon. Mr. Webster: I move that Bill No. 66, entitled Pesticides Control Act, be now read a third time and do pass.

Speaker: It has been moved by the hon. Minister of Renewable Resources that Bill No. 66, entitled Pesticides Control Act, be now read a third time and do pass.

Motion for third reading of Bill No. 66 agreed to

Speaker: I declare that Bill No. 66 has passed this House.

Bill No. 3: Third Reading

Clerk: Bill No. 3, third reading, standing in the name of the Hon. Mr. Penikett.

Hon. Mr. Penikett: I move that Bill No. 3, entitled Hospital Act, be now read a third time and do pass.

Speaker: It has been moved by the hon. Minister of Health and Human Resources that Bill No. 3, entitled Hospital Act, be now read a third time and do pass.

Mr. Nordling: As we said at second reading and in Committee, we have no problem with the bill. There was a concern over the makeup and structure of the board. I want to put on the record that we do have some concerns about the way the board will be selected and the makeup of the board. I hope we do not have any trouble putting this together after we have effected a transfer of health services.

Motion for third reading of Bill No. 3 agreed to

Speaker: I declare that Bill No. 3 has passed this House.

Bill No. 7: Third Reading

Clerk: Third reading, Bill No. 7, standing in the name of the Hon. Mr. McDonald.

Hon. Mr. McDonald: I move that Bill No. 7, entitled Fourth Appropriation Act, 1988-89 be now read a third time and do pass.

Speaker: It has been moved by the hon. Minister of Finance that Bill No. 7, entitled Fourth Appropriation Act, 1988-89 be now read a third time and do pass.

Motion for third reading of Bill No. 7 agreed to

Speaker: I declare that Bill No. 7 has passed this House.

Bill No. 45: Third Reading

Clerk: Third reading, Bill No. 45, standing in the name of the Hon. Mrs. Joe.

Hon. Mrs. Joe: I move that Bill No. 45, entitled Act to Amend the Employment Standards Act, be now read a third time and do pass.

Speaker: It has been moved by the hon. Minister of Justice that Bill No. 45, entitled Act to Amend the Employments Standards Act, be now read a third time and do pass.

Motion for third reading of Bill No. 45 agreed to.

Speaker: I declare that Bill No. 45 has passed this House.

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


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

At this time we will have a recess.


Chair: I will now call the Committee to order.

Bill No. 13 - Second Appropriation Act, 1989-90 - continued

Economic Development: Mines and Small Business

Chair: We will proceed with Economic Development, page 25, Capital Expenditures. Is there further general debate on the $25,000 in Administration?

On Administration - continued

Hon. Mr. McDonald: There are two things to report since yesterday.  I will table the evaluation of the Yukon economic development officer program. I have a copy here for Mr. Phillips, the Member for Riverdale North.

The second thing is the move of the MV Anna Maria. I indicated last night that I thought that the $22,000 was the cost of the transfer of the boat from Whitehorse to Carmacks and its mothballing. Unfortunately for me, it also includes the cost of the contract, including the campground repair, which apparently has occurred, the land use permit, and everything that was done respecting the move. The total amount was repaid.

Mr. Lang: Could he give us a breakdown of the $22,000 and what the various elements did cost?

Hon. Mr. McDonald: Unfortunately I cannot. The funding was provided all through one invoice and was, as I indicated, paid back by Panamerican Bancorp Leasing Ltd.

Mr. Lang: I take it that he may not have it today, but we will get an idea of the projected costs to repair the campground. Is that correct?

Hon. Mr. McDonald: Apparently government personnel inspected the campground after the move and cleared the repairs to the campground before the invoice was paid. My understanding is that the work has been done and paid for.

Mr. Lang: I must have missed the boat here. I do not quite understand what is being said. Is the campground repairs bill part of the $22,000 that was paid and, if it is, how much is it?

Hon. Mr. McDonald: That is the same question that the Member asked before. There was some damage to the campground; there was also the cost of the move; the repairs to the campground, which are completed, and the move, which is completed, totalled $22,000. We supplied them with a single invoice; Panamerican Bancorp Leasing Ltd. paid the full $22,000 for the cost of the move and the repair to the campground. I do not have the break-out with respect to the separation between the move itself and the mothballing, and the repairs to the campground. The total amount was $22,000 and it was paid back.

Mr. Lang: I know the Minister has not got it with him today, and I appreciate that, but I would ask to have that information when we get into the main estimates. I would like a breakdown of how he actually came to the $22,000. It is the first time in history that a Minister has stood up in this House to tell us we did not know what the various elements of the bill were. I know government too well. There has to be some documentation somewhere in the various departments of why there is a charge.

Could the Minister come back with that information when we discuss this further in the main estimates? I am not going to hold up the supplementary for it, but I would like a breakdown.

Hon. Mr. McDonald: The whole move was one contract, including the cost of the repairs. We can try to make further inquiries as to the breakdown, but we do not have that information within government at this time.

Mr. Lang: I take it that information will be provided at a later date. I have one further question in respect to the campground. Is it fully repaired now, or are there going to be some further costs incurred by the government to finish off what was started after the boat was moved?

Hon. Mr. McDonald: We will provide the information if we can and if the people who made the move will give us a breakdown. It is my understanding that the repairs to the campground have been completed and that our government personnel had cleared the repairs to ensure they were complete before the final payment was made to the government.

Mr. Phillips: If the boat is to run next spring, it has to go back over the same trail it went over this fall to get back into the water. If the same arrangements are made, will the Government of Yukon be responsible for that move? If any damages are incurred, will whoever moves the boat be responsible for putting the campground back into the condition it was in when they found it?

Hon. Mr. McDonald: Any damage that this or any other private sector contractor would do to government property will be the responsibility of the private sector contractor. The policy I mentioned in Question Period is the policy of the government, that the costs will be recovered.

Administration in the amount of $25,000 agreed to

On Internal Energy Management

Mr. Phillips: I would like to hear a brief explanation from the Minister on these line items. What has happened here?

Hon. Mr. McDonald: The branch determined that the position of coordinator of energy management was no longer necessary, given the loads, and did not fill the position. It intends to resign the position to the main estimates at the end of the year, and feels the functions of that person can be picked up through other personnel in the department.

Mr. Phillips: Would this be the area where they would be looking for the possibility of future hydro and energy developments in the territory?

Hon. Mr. McDonald: No, future hydro development would be the responsibility of the Yukon Energy Corporation.

Mr. Lang: I notice there was a study done with respect to the possibility of having a small hydro up in Fraser camp. Can the Minister tell us what the results of that study were? Is anything being done as a result of it?

Hon. Mr. McDonald: New Era Engineering Corporation did a review on the proposed micro-hydro plant at Fraser and determined that the operation would be profitable over a specified period of time. Community and Transportation Services and personnel responsible for Yukon Energy Alternatives Program had discussions with the New Era principals and determined that a contract could be signed that would benefit the users of the Fraser station, including the Government of the Yukon personnel who reside there.

A contract is being considered to have the micro-hydro project constructed by New Era to supply power to the government at the Fraser site.

Mr. Lang: How much money is the government going to put into this project? Who would own it?

Hon. Mr. McDonald: There will be $200,000 from YEAP, and $100,000 will be allocated to convert and monitor the equipment at the Fraser government camp. The proposed contract is for a 20-year life. Projected savings to YTG over the 20 years, based on anticipated useage, appear to be approximately 5,000,000 liters of diesel fuel.

Mr. Lang: What is the total cost of the project if $300,000 of government money is going into it?

Hon. Mr. McDonald: If my memory serves me correctly it is in the $800,000 range. I will have that figure checked.

Mr. Lang: Who will own the project after it is finished?

Hon. Mr. McDonald: New Era will own the project. The contract is conceived to recover the equivalent value of the YEAP contribution and - over the 20-year life - save the government on utility costs.

Mr. Lang: Who are some of the principals of this company?

Hon. Mr. McDonald: The Member for Hootalinqua probably knows better than I do who they are. I will get the names of the persons. I only know them peripherally.

Mr. Lang: Is the $200,000 for the YEAP project not a grant?

Hon. Mr. McDonald: It would be a grant, but it is anticipated that even that grant will be recovered within the life of the contract.

Mr. Lang: The Member for Watson Lake has mentioned an area for which there has obviously been an application for micro-hydro: that is Rancheria. Is the Minister considering also making some financing available for that particular project since it is obviously going to assist in alleviating some dependency on diesel-generated energy?

Hon. Mr. McDonald: I believe the Member knows exactly the response I am about to give with respect to the Rancheria micro-hydro project. When the application came forward, it appeared that the costs of the project and the anticipated benefit to the operation did not justify YEAP assistance. Consequently, the YEAP application was denied. The YEAP personnel recommended that the Rancheria property consider a scaled-down version of the proposal and also consider the fact that energy transfer from local diesels could provide for cost savings more so than the expenditure of a fairly large sum of money for a micro-hydro project.

One consideration was that the cost of the micro-hydro project would be roughly equivalent to the value of the lodge itself. The debt that the lodge would incur was considered to be too large by the managers of the program and the result was that the grant was denied. I understand that Rancheria is proceeding with some other micro-hydro project development. I do not know that status of that development as they are proceeding on their own. In correspondence with them, I have wished them well on their project, but I have not reversed the decision of the department.

Mr. Lang: I just want to pursue the policy issues related to when government money is involved in such a case as a micro-hydro project. In the situation at the Fraser camp, for example, is it the policy of the government that all the work will have to be publicly tendered so that all contractors get an opportunity to bid on it?

Hon. Mr. McDonald: With respect to this particular project, my understanding is that the proposal for a micro-hydro development was tendered by Government Services some time ago.

With respect to the Rancheria project, I am not sure what their proposal entailed. We have not had that many applications for micro-hydro projects in the past. I am not sure whether or not they were going to tender it out. The same company that reviewed the micro-hydro project for Fraser is the company that reviewed the micro-hydro project for Rancheria.

Mr. Lang: I do not think the Minister understood my question. I will try to be more clear. In view of the fact that the Government of Yukon is putting $200,000 toward the project through YEAP, is one of the conditions for the building of the micro-hydro project that the construction work be publicly tendered?

Does the Minister understand my question? My point is that if the government is putting in money directly and is the major user, over a period of 20 or 30 years, guaranteeing the payback, then, for the purposes of ensuring the lowest possible price comes in, is the construction work going to be publicly tendered?

Hon. Mr. McDonald: In the case the Member refers to, if the government was going to be the user of the energy, the policy would be that there would be tendering. With respect to the Fraser camp proposal, my understanding is that  the call for proposals did take place some time ago. The Government Services department was the responsible agent. I do not know any more details than that. YEAP was requested to participate, and did, once the cost-benefit analysis was done by Government Services and Community and Transportation Services.

Mr. Lang: Could the Minister tell us what other projects have been approved through the Yukon Energy Alternatives Program?

Hon. Mr. McDonald: There was another project that I communicated to the Member for Riverdale South. I may have a list here.

Champagne-Aishihik Enterprises received $180,000 for a woodchip-fired central heating plant.

Mr. Phelps: What is the status of the proposed mini-hydro development near Carcross at Tank Creek, a submission by the Carcross-Tagish Indian Band?

Hon. Mr. McDonald: I do not know the exact status at this time. I remember referring to it last summer, but I have not kept up-to-date with respect to that particular item. I can ensure the information is brought back for the Member with respect to that particular proposal.

Mr. Phelps: I would like that information, although it is not critical at this time. My next question has to do with the Fraser project. It seems to me that, back when the camp was being built, Yukon Electrical proposed the extension of the transmission line from the Venus Mine on to Fraser to service the Fraser project. Was the cost of that transmission line considered when the government was looking at an alternative energy supply for Fraser?

Hon. Mr. McDonald: Personally, I do not know. If it was a well-known offer by Yukon Electrical, the proposal that was evaluated would quite possibly have referred to it. Personally, I am not aware of that detail, nor have I ever been aware of that detail.

I will let the Member know if that was or was not considered.

Mr. Phelps: I would appreciate it, even if it is a legislative return later. The other question I have has to do with Rancheria. It seems to me that we have a situation here where the owners of the lodge have gone ahead. I understand that most of the work has been completed, and that the hydro will be operational and online by August of this coming summer. I am a little curious about policy within the department. If it works, and money is saved, and the facilities at Rancheria prosper, what kind of investigation will be conducted to see why the officials went so wrong there in their judgment in not allowing the operators at Rancheria to borrow money or have money from the program to build the facility?

Hon. Mr. McDonald: The officials are requested to take a number of things into account when evaluating a proposal. They are to use their best professional judgment when considering whether or not the proposal should go ahead. The four reasons for rejection in the past included: uncertainty about the stability of the lodge, based on financial statements that the lodge provided; the lack of certainty about capital required for operating costs in the project proposal, the lack of information provided for electrical loads and power generation; the lack of data on alternatives to micro-hydro power, given that there were other alternatives on the market that would provide for more inexpensive power than was being suggested by the proponent.

Together, those caused the persons administrating the program to be nervous about approving the application. Consequently, they did not. I indicated to the department that I wanted to be sure the criteria upon which they were basing their application was fair, and the causes for concern were justified. Having reviewed the matter, certainly not in the same detail nor with the understanding of the technicians, there seemed to be a very good reason to be concerned about the viability of the project and the lack of information on alternatives.

It is a judgment call, there is no doubt about that. If the proponents come forward and provide a micro-hydro project for whatever it costs, perhaps less than they have applied for, and it is a success, that would be wonderful. It appeared from the information provided on the application that there was cause for concern. Prudence required that the program administrators not approve this particular loan. Obviously we do not approve all loans or applications for funding. We have to make a best-guess judgment based on the professional advice we have. I am satisfied they considered the significant factors and considered them fairly.

Mr. Phelps: I am pleased to hear that. It does denote a fair approach and a concept of Ministerial responsibility that was singularly lacking with the Ross River Arena, for example, when the bureaucrats were blamed by the Government Leader at a public meeting in Ross River and various actions were taken against officials responsible for that arena. In contrast, rather starkly, was the approach taken over the Yukon Development Corporation’s terrible losses, for which nobody takes blame. Indeed there seems to be an approach taken that the senior bureaucrat who interfered so vigorously in the operation of the sawmill is not at all responsible, nor is his Minister. I am sure pleased to see a different attitude taken over this project.

Mr. Phillips: Other than the three projects that he has named today, are there any other micro-hydro projects on the books? If so where are they?

Hon. Mr. McDonald: I am confident there are no active applications. That does not mean that other formal approaches have not been made to government departments. I will check to see whether or not there are even any informal discussions being held with respect to potential micro-hydro sites in or around the territory.

Mr. Lang: Would the Minister update us on the application for assistance for the wood chip operation proposed to heat a number of buildings downtown?

Hon. Mr. McDonald: Some technical difficulties appear to have cropped up to cause a delay in having the law centre heated by Klondike Central Heating. We are still waiting for those difficulties to be overcome.

Mr. Lang: Is it expected that those technical difficulties will be overcome? Is it expected to be providing alternative heat to the law building by the end of this winter? Is there a time frame involved, or is it just a case of the proposal slowly disappearing into the distance?

Hon. Mr. McDonald: My department is confident that the project will proceed this heating season, this winter. I do not know if that is an over abundance of optimism or not. They feel the technical difficulties can be overcome, and they refer to them as being minor.

Mr. Lang: Does this apply to the alternate energy situation at the college as well? I believe the Minister referred to the question of alternate energy sources for the heating of that particular government facility. Could the Minister update us on that and tell us what the government is doing in that particular case? Could he tell us how much the saving would be with an alternate energy source?

Hon. Mr. McDonald: The Department of Economic Development has nothing to do with the college facility itself. That is Education. I will briefly preview it for the Member. The fluidized gasifier at the college is a system that is designed to burn a variety of fuels. In order to burn those fuels, it has to have certain intake capacity for different kinds of materials. It is one thing to burn a homogeneous material like coal; it is another thing to burn garbage, which you have to feed in in the proper way.

Currently, Government Services is looking at what modifications would be required to burn other than homogeneous fuels and what the costs would be for providing a feed to the facility for fuel like garbage, for example. I understand that that technical study will be complete near the end of January 1990.

Mr. Lang: Another area of alternate energy was the question of the coal in close proximity to Whitehorse. Is anything happening in that particular area through the government? I know the government did help assist in a resource road a number of years ago. Could the Minister update us on that?

Hon. Mr. McDonald: To my knowledge, since I have been Minister, nothing significant has transpired in recent times to cause one to be optimistic about accessing coal near Whitehorse. Accessing means getting it, gaining access to coal, bring coal into Whitehorse for the purpose of fuel.

One of the qualifications would be that there would be sufficient market for a coal operation. The college and, perhaps, the new hospital would be sufficient in size to justify the use of coal, or garbage, to make a coal operation economic.

Mr. Phelps: I understood from some of the operators of Whitehorse Coal that the college was originally designed to be able to handle coal from that coal deposit close to Whitehorse and that, subsequently, it was found that it could not handle the high energy given off by the burning coal. Is it not correct that there were negotiations with Whitehorse Coal for the purpose of supplying coal to heat Yukon College at one time, and that the design was not sufficient to handle that hot of a product?

Hon. Mr. McDonald: I am not aware of any active negotiations with Whitehorse Coal. I believe one concern has always been, as I alluded to in my previous answer, that there was not enough capacity to justify an economic operation to burn coal. It was felt that, until we had the sufficient boilers like the one at the college and perhaps the one that is anticipated for the hospital, if appropriate, and like the one that might be anticipated for Granger School and other newer government projects, until such time as the market is assured in Whitehorse, it would not be economic to produce coal or to encourage a contractor or mining company to produce coal for local consumption.

I will check with respect to that matter. I do not personally know of any discussions the department has had, or the government might have had, with Whitehorse Coal. It does not necessarily mean they did not take place.

I will have to check on that matter for the Member.

Mr. Phillips: At the economic and environment conference that was held in relation to Yukon 2000, the Government Leader, in describing his Swedish experience, told us about the super high intensity burner they used in one of the Scandinavian countries that dealt with not only the burning of all kinds of garbage but also used the excess heat from that to heat part of the community. The Government Leader indicated that he was fairly impressed by that facility. It sounds interesting and appears to be something that could solve two problems: firstly, to dispose of garbage and secondly, to heat various buildings in a city. I am wondering if the government has given that concept any further thought and if there are plans to investigate that a little more this year?

Hon. Mr. Webster: Having had the opportunity to visit the plant, I was impressed with the facility. They had a number of advantages in that northern community that unfortunately we do not have here in Whitehorse or Dawson City. One was that the city was a fairly new one and was gradually expanding. Over the years, as the town grew, they extended more than 25 kilometres of heating lines to the buildings throughout the town.

Also, the town does not sit on permafrost, which gives them an advantage right there. It would cost a great deal of money here to dig lines down to a deep level. The insulation involved immediately brings to mind the problems encountered when the water and sewage lines were installed in Dawson City. The technology used for that operation was devised in Denmark and has been used in a number of cities throughout the world. One of the real advantages of it is that you can use a variety of different materials in the burn; in fact, they were even burning all kinds of metal things that had been thrown in the dump by the people, along with wood chips and peat that is found in the area, scrap lumber and household garbage.

Another interesting point is that the garbage is burned at such a high temperature, with such a sophisticated system of burning the material, that the waste discharge or smoke could not be detected by the eye. Because of this, they promoted the fact that they had the cleanest air of any part of Sweden.

Mr. Phillips: I thank the Minister of Renewable Resources for that update on this type of facility, but the question I asked is whether or not the Government of Yukon is looking into having that kind of facility here? Are we going to explore that idea any further than just the excitement that was shown in the Government Leader’s voice as he described it at that meeting?

Hon. Mr. McDonald: I think the excitement in his voice was entertaining enough in itself, but, as it so happens, I did discuss the potential of heating facilities that could burn garbage  with the Mayor of Whitehorse. He has agreed to discuss the matter further with us in the coming year.

As buildings are built or replaced, it is our intention to build in the capacity to burn garbage through the heating system. The college is the first good example of that. Ultimately, with the construction of buildings and heating plants, there will be enough amassed capacity to warrant the burning of garbage by a contractor or a company that can collect garbage and separate refuse for burning or mine it from the existing dumps. Certainly we are anticipating that there will come a time in the not-too-distant future that the burning of garbage in Whitehorse will become an economic venture. We are planning for it with the design of heating plants.

Mr. Nordling: Perhaps the Minister can tell us how our super burner at the new college is working? Are we putting garbage in that yet?

Hon. Mr. McDonald: As I indicated to the Member for Porter Creek East and the Member for Riverdale North, the intake for the boiler is not designed for anything other than a homogeneous fuel. Right now it is burning oil. Even so, the fuel requirements are not sufficient in size to warrant a private-sector contractor, at this point, to come forward to provide for either the use of coal or garbage. What we are doing is to try to create a capacity, through our building program in the future, to build in a heating system that can accommodate garbage, or whatever fuel comes along, with minor modifications. Ultimately, there will be amassed a sufficient market for garbage that would allow for an economically-viable enterprise to get started to provide the fuel.

Mr. Phillips: Maybe we could just gather up all the documents that led up to putting in this real expensive burner that cannot burn anything, and throw them in there to offset some of the heating costs. It seems there were problems in the design that has led to where we are today. If it had been better planned we could have used that facility for what it was intended.

Hon. Mr. McDonald: I do not know where that comment came from. I do not understand the point at all. The mistake in design is not known to me. I wish the Member would make it clear to me where the mistake came from.

No one plant is sufficient in size to justify the establishment of a fuel supplier for garbage, coal, or anything else. In time there will be enough unit capacity to justify the supply.

If the Member is saying that a mistake was made in providing for a boiler that is not currently taking alternative fuels, I can justify that by saying that in time it will happen. If the Member is trying to make a technical argument that this boiler cannot burn such fuel, then he is wrong.

The decision that was made was a sound one. It is a realistic long-term strategy and ultimately garbage or coal can be used in these boilers.

Mr. Phelps: Before the Minister gets too far out on a limb with a saw blade behind him, he should check into the Whitehorse Coal situation. They were prepared to supply the coal but the boiler would simply not take it. I have seen correspondence and will share it with the Minister.

Hon. Mr. McDonald: I realize it requires all Members to listen to the whole conversation in order to understand the points I have made. The feed for coal for the boiler at Yukon College is not in place. An engineering study is being undertaken right now to provide advice on what modifications to the feed would be required. The feed to the system differs depending on the fuel being supplied.

On Internal Energy Management

Internal Energy Management in the amount of an under expenditure of $50,000 agreed to

On Prospectors Assistance

Hon. Mr. McDonald: This amount is due to more applications and greater volume.

Prospectors Assistance in the amount of $50,000 agreed to

On Economic Development Planning, Mineral Resources

Hon. Mr. McDonald: This is a portion of the current extended EDA for mineral resources. This reflects the funding for the subagreement for the EDA for the 10 months the agreement is in place.

Mr. Phillips: Other than the freeze on land claims and the land set aside under land claims, which prohibits staking, and the recent announcement on the Tatshenshini, which prohibits staking, can the Minister tell us whether there are any other areas in the Yukon the government is contemplating designating as a no-staking corridor or a no-mining corridor, or that type of thing?

Hon. Mr. McDonald: To my knowledge, there are none. The Member has put the question to the wrong Minister and the wrong ministry. The no-staking is for purposes of protecting the environment. The Minister of Renewable Resources is the responsible Minister, and those decisions are made in that ministry.

Mr. Phillips: I would hope the Minister of Renewable Resources would talk to the Minister responsible for mines. After all, we just went through a fiasco here a few weeks ago where the Minister responsible for mines met with the Chamber of Mines within 24 hours of an announcement. I find it hard to believe, as does the Chamber of Mines and many other people in the mining community, that the Minister responsible for mines would tell the Chamber of Mines at that meeting that he did not know of any potential parks or that type of thing being set up, that he did not know anything was going to happen. I find it extremely hard to believe that that Minister did not know something was going to happen. I would hope that, if it does in future, at least the two Ministers would communicate so they could consult with the mining community and give them an idea of what the Department of Mines and the Department Renewable Resources are doing.

Hon. Mr. McDonald: The Government of Yukon provides a tremendous amount of support for the mining industry. My relationship with the Chamber of Mines is first class, in my view. I would challenge the Member to provide a different point of view, or supply a different point of view from the executive of the Chamber of Mines. I believe we have a very good relationship with respect to issues related to mining that are specific to this ministry. We have had good discussions on a number of occasions when I have had an opportunity to meet with the Chamber of Mines executive. We have talked about support with the Chamber on a number of initiatives that are of impact to this ministry. The Chamber of Mines indicated the relationship is good with this ministry and the department. Any difficulty they may be having with other departments and other ministries is something I will certainly help out with, whether it is a real concern or a perceived concern.

Nevertheless, in my view, the relationship between this department and the Chamber of Mines is good.

Mr. Phillips: I am not questioning right now as to whether or not the relationship is good, but I have to say to the Minister that if many more stunts are pulled like the one that was pulled with the announcement of the Tatshenshini, without consultation, I would suggest to the Minister that the relationship is going to deteriorate rather rapidly. That is all I am talking about.

I agree that the Minister of Mines has been talking to the Chamber of Mines, and that is great. That is part of the responsibilities of that portfolio. On the other hand when, 24 hours prior to an announcement of a mining freeze in an area of the Yukon, the Minister tells the Chamber of Mines nothing is going to happen, they are going to lose trust in this Minister pretty quickly. I am saying that the Minister should not let this happen again.

I think the Tatshenshini problem could have been solved with consultation and might have ended up with the same result we have today but, unfortunately, you have destroyed a lot of confidence that the mining community has in this government to protect its interests, as well.

Mr. Lang: I am curious about the process here. I will use the decision by the Government of Yukon to request the federal government to do a freeze on any further staking of placer claims on the Tatshenshini as an example.

Can the Minister of Economic Development tell me if that would be a Cabinet decision?

Hon. Mr. McDonald: I am sorry I did not jump up after the Member for Riverdale North spoke, because I have something to say about that. The Member made the allegation that I was asked about the Tatshenshini situation and indicated to the Chamber of Mines that nothing was going to happen. That is not correct. The Member is racking up an impressive list of errors being presented in this House over the last couple of weeks. Soon we can call him Mr. Belvedere.

The Chamber of Mines, in discussion with me, talked about the future creation of territorial parks. I indicated that I was not familiar with all the workings of the Department of Renewable Resources and its plans regarding the creation of territorial parks. I did not know what their plans were.

They asked me about a land reserve. I believe it was the same land reserve the Member for Porter Creek East referred to in Question Period today. I indicated to them that I was not aware that the interim selection by an Indian band had been made. I indicated I would be looking into that matter and we would discuss it further at the next Chamber of Mines executive meeting I would be having with them. That was the extent of the conversation. I did not indicate that there was going to be nothing happening. We did not discuss the matter of bans on placer staking. We did not discuss placer mining at all during that meeting. The Chamber of Mines should bear that out.

On what the Member has referred to as “a stunt” - the Government of Yukon, through the Minister of Renewable Resources, indicated that it was the government’s position that there should be no staking on the Tatshenshini River while the Kluane land use plan was being determined. It was not designed to compromise the plan in any way; it was designed to assist in the planning process. We consequently made that decision known to the federal government. It was not a stunt at all. It was a position that complemented the Kluane land use plan. It was a government decision.

Mr. Lang: Was the particular position taken by the government a Cabinet decision? That is all I asked.

Hon. Mr. McDonald: I cannot remember if it was a Cabinet minute or not. If it gets down to the final analysis of whether or not I knew, certainly I did know that the government was going to propose a ban on placer staking for the period of the planning process. We did not discuss that matter at the Chamber of Mines meeting, nor did we come close to discussing the matter. The government’s position was quite clear on the proposal for no staking on the Tatshenshini. It had nothing to do with final report at all, and it had nothing to do with placer mining, and it had nothing to do with the government’s thoughts about the placer mining industry. The issue had everything to do with the Kluane land use plan; it ensured that the planning process was not compromised by development on that river.

Mr. Phelps: I am pleased to know that the decision had nothing to do with mining, the department of mining, placer mining or anything else. It is quite revealing to hear all this from the Minister.

Mr. Phillips: I would like to straighten out the record because the Member opposite seems to have developed the habit of trying to discredit or turn around what Members say in this House. I think if the Member takes the time tomorrow to read Hansard he will see that very I clearly did not refer to the Tatshenshini River. What I talked about is that they asked about any parks or land being set aside for any other reason with respect to mining. If the Minister wants to get into splitting hairs with the Chamber of Mines, he is going to be in trouble. He knows full well the common sense approach the chamber took when it asked if there were any parks or land set aside is what it meant: any land being set aside for anything. It is unfair of the Minister to split hairs and say he did not refer in particular to the Tatshenshini. I think it is an insult to the people he had met with 24 hours before. The Minister at least owes the Chamber of Mines an apology for that.

Hon. Mr. McDonald: The Member again is asserting things that are incorrect. As I pointed out just now, the array of mistakes and the allegations the Member is making that are not true is getting quite impressive and is noteworthy - and it should be noted. It is not I who twists the words of the Member with respect to the Belvedere Hotel. It is not I who am twisting the Member’s words with respect to the Esso Isserk drilling program. It is not I who am twisting the words with respect to the allegations on this government’s position on marine tanker safety. It is not I who said that the Government of Yukon, or me in particular, deliberately misinformed the Chamber of Mines executive. I did no such thing. We were talking about territorial parks. We were talking in the context of parks like Coal River Springs territorial park. We were talking in the context of the creation of other parks. I dispute absolutely, completely and utterly the Member’s latest allegation that I misinformed the Chamber of Mines. I did no such thing. The Member is once again completely and utterly wrong.

Mr. Brewster: I am a little disappointed, because I met with the Chamber of Mines and was asked if you knew. I thought I knew you well enough to know that you would say if you knew. I told them that I did not think that you knew from what I knew of you. It is now quite apparent that I have to go back and tell them...

Chair: Mr. Brewster, could you address the Minister as “the Minister” and not “you”.

Mr. Brewster: Now I have to go back and tell them that apparently the Minister did know because apparently he did. I was prepared to take him at his word. I had better not ever do that again.

Hon. Mr. McDonald: I would ask the Member to check Hansard. If I have said that I did not know about the proposed ban on placer staking on the Tatshenshini River on the record - and I will take the Member’s word for it if he has heard me say it in public outside the House - I will apologize. But I did no such thing. I did not indicate that I did not know. I have never done any such thing. I have not lied in this House. Neither have I lied to anyone in public with respect to this matter.

I did discuss with the Chamber of Mines, and I am sure this is a matter of record as there were a number of people at the chamber’s executive meeting, the issue of the creation of territorial parks. That was the subject of conversation.

Mr. Brewster: When the Minister was talking about this, their impression was that this meant any land that was set aside. They asked me distinctively if I thought you knew. I defended the Minister and said I did not think he knew that that had been done. Now he states in the House today that he did know, so apparently I misread what I saw in the House. I did not say he said it. I was watching his face and, after you have been around this world as long as I can, you can get expressions in faces very well. I thought very seriously that he did not know. Now, today the Minister admitted he did. I will have to go back to the Chamber of Mines and say that I was wrong.

Mr. Phillips: If the Minister felt that he did nothing wrong with the Tatshenshini issue, why did he have his deputy minister call the Chamber of Mines the next day after the announcement to apologize?

Hon. Mr. McDonald: I asked the deputy minister of Economic Development to indicate to the Chamber of Mines the reasons for the decision, and to indicate to them that if they had felt they had been misled in any way, there should be an apology extended. The reasons for the decision were communicated by the deputy minister, who is a very capable person. In respect to the issue of consultation, as I have indicated in the past, I had committed to the Chamber of Mines that we would try to consult with them on all matters of policy. If they felt they were hurt at all by the Tatshenshini decision, in terms of the concern about the general policy of this government, I indicated to the deputy to please explain that to the Chamber of Mines.

Mr. Phillips: I hope the government has learned a lesson from this episode. In the future, if it plans to make any closures and make some major announcement that do affect the mining community, to have the courtesy to consult ahead of time so the mining community has an opportunity to respond before the fact rather than after the fact.

Mr. Lang: I am not quite sure how this works. Is this our contribution, and the remaining 75 percent is elsewhere in the budget? I am not following this properly. Could the Minister explain it to me?

I noticed down below we have Economic Development Agreement for $2,471,000, and here for $271,000. Could the Minister clarify that?

Hon. Mr. McDonald: For the purposes of this particular element of the EDA, this is a full payment. There are no recoveries associated with this particular portion of the EDA.

Mr. Lang: Could the Minister tell us what it was actually spent on?

Hon. Mr. McDonald: There are two phases to this project: year 2 is phase 2. A total of $842,000 has been made available. The projects that have been approved, or that are underway, include the Wheaton area mapping, Skookum project rock dating, Kluane ranges analysis, mineral inventory acquisition, computerization of the mineral inventory, sample collection 1989 regional geochemistry, sample collections and analysis, the MacDonald Report - that is not me - and the placer sampling report.

There are some items available that are considered proposals at this stage. Heap leaching through the Yukon Chamber of Mines, the Klondike Placer Miners Association project with respect to gold recovery, a United Keno Hill Mines gravity proposal that I do not know the details of, Curragh wetlands, and more rock dating. Those are the proposals. If Members want a list I can provide it.

Mr. Lang: Yes, we would like a copy of the list.

We never voted any money for this project this past year. You are asking for a $271,000 supplementary; you said the project program is costing us $842,000. Why is there no money being asked for in the 1990-91 estimates?

Hon. Mr. McDonald: Firstly, the 1991 estimates are not before us, but there are funds associated with the EDA. They are all in the economic policy and planning research section of the departmental vote under one line item: EDA. If there is an EDA we like, and if and when the new EDA contains mineral activity, it can be broken out. Right now we have it all allocated to one line item, but there are funds dedicated to it.

Mr. Lang: The sum of $842,000 is what was indicated. Is that all YTG money or is it cost shared between YTG and the federal government? Are you then saying that we spent $500,000 last year?

Hon. Mr. McDonald: It is a cost-shared agreement on a 70/30 basis, and this is our expenditure.

Mr. Lang: Are the programs just listed done by various departments within the government in most part: i.e. the Kluane range study, the Wheaton River study, or are they done by federal departments? Can he tell us exactly what he meant by mineral acquisition, and what it entails?

Hon. Mr. McDonald: It is a mineral inventory acquisition. It is not a mineral acquisition in the classic sense. I will provide an explanation on each project and who the proponents are.

The government departments may have some hand in some of the actual work for these projects, but I will have to come back with the detail on a project-by-project basis.

Mr. Lang: I do not have a problem, as long as we get the information and with the understanding that, if there is something we find in that information, we can raise it at another time. That is all I ask.

Hon. Mr. McDonald: We have two months of budget session coming up before too long, so I would imagine there would be lots of time to discuss it.

Economic Development Planning, Mineral Resources in the amount of $271,000 agreed to

On Economic Development Agreement

Hon. Mr. McDonald: As I have already indicated, the practice is that the EPPR, or Economic Policy, Planning and Research, holds the money until such time as the agreements have been negotiated; then it is broken out between the responsible branches of the department. This is $1,440,000 that has been separated. In this particular case, the funds may be moved from this line item to the Economic Development Agreement, Small Business Incentives program.

Mr. Lang: The other day, we asked if we could get a breakdown of the various projects that have been financed under this particular program. I would assume that most of it is the Economic Development Agreement. The Minister said that most of that work was already done within this department. Does he have copies of that, and could we be provided with copies?

Hon. Mr. McDonald: I can get that information for the Member.

Mr. Phillips: When the Member is gathering the information about the EDAs, could he give us an idea of the number of government departments that are now using EDA funds to fund various projects? I would like to know the comparison from the beginning of EDA for each year of the percentage dollar value. For instance, when EDA first started out, was it 35 percent for government and 65 percent private, and what is it today? Is it the same ratio? I know the EDA was primarily designed for private individuals to access the fund. I have a feeling it may be turning around the other way, where more government departments are accessing it and there are fewer private applications. I may be wrong, but that is why I would like the Minister to provide that type of information, if he could.

Hon. Mr. McDonald: I understand what the Member is asking. If it is easily recoverable, I will pull it out. It has always been our position during negotiations that we did not want the funding of these projects to be line department functions of, in particular, the Department of Northern Affairs, whether government departments are associated with them or not. The Government of Yukon has no interest in funding line functions that would properly be the responsibility of that department. I am pretty confident we are not doing that, but I will pull out the projects and see who the proponents are. If it is easy to secure percentages, then I will ask them to do that, too.

Economic Development Agreement in the amount of an under expenditure of $1,440,000 agreed to

On Economic Development Planning

Hon. Mr. McDonald: This is new funding for the EDA. In this particular case, as we will see from the recoveries, this reflects 100 percent of the approved funding for both the federal and territorial contributions, and there is a 70 percent recovery from the federal government showing up in recoveries.

Mr. Phillips: I know coming into the House and having to explain your budget is a painful process, but I would appreciate the Minister giving us an idea about what is happening with the various line items. I do not think it is too much to ask. I think his sarcastic comments are out of line.

Hon. Mr. McDonald: I generally feel quite comfortable providing information to the Members. I have provided general explanations for the Members on all the projects. I have indicated, with respect to the EDA, that I will provide a breakdown of every single project and the proponent. I have indicated I will try to provide the percentages the Member has requested. I have indicated how the program is broken out on the EDA, where the recoveries are and what the plans are.

I indicated that I thought this was going to clear because the answer would hold true for this item as it would for the others. I have not been sarcastic with respect to this matter, and I do not intend to be.

Mr. Lang: Does the Minister have any idea how this money was spent? I would also like to know how much money has not been spent and, if there is money that has not been spent, how is it to be spent in the next couple of months?

Hon. Mr. McDonald: There has been $248,000 spent and $111,000 has not. The projects that have been approved are the Ross River comprehensive plan, Carcross-Tagish Indian Band community plan, Liard Indian Band economic development officer, Teslin Indian Band economic development officer and trainees, Selkirk Indian Band economic development officer, Gwich’in Band Council economic development officer, Champagne-Aishihik Indian Band treatment centre feasibility study, Ross River-Dena economic development officer and the Kwanlin Dun Band economic development officer. The other $111,000 is not yet spent, and there are no pending applications.

Mr. Lang: For the basis of this question, let us assume that there is no EDA. Will the Government of Yukon be prepared to fund, 100 percent, the costs of these economic development officers?

Hon. Mr. McDonald: That is not the position of the government. We have indicated to the federal government that we are prepared, given that the report on the band economic development officers showed that the program was a good one, to cost share the continuation of the officers, but only on a cost-sharing basis. That is basically our position.

Hon. Mr. McDonald: Have any proposals been put forward to the department at present for the use of the $111,000? Does the government have any intentions for that money?

Hon. Mr. McDonald: There were no pending applications for the remaining fund of $111,000 at this time, and we do not have any plans for the money other than to receive applications and consider them.

Mr. Lang: Can the municipalities apply for financing under this program for the purpose of economic development officers?

Hon. Mr. McDonald: Anyone can apply for funding under the program, if they meet the criteria and are considered by the selection group to be high priority.

Mr. Lang: Is it the policy of the government that a municipality applying for such assistance would be a priority? Whether it be Mayo or Watson Lake or, say, Haines Junction?

Hon. Mr. McDonald: If the community has presented a good argument with respect to the kinds of projects that are being contemplated, it would be given consideration. Each application would be evaluated on its merit.

Mr. Lang: When we talk about the selection committee, who makes the decision?

Hon. Mr. McDonald: The EDA has a joint committee with representation from the two governments. That is the selection committee, and the projects have to be approved by the members on the committee.

Mr. Lang: Is the Minister the one who gives final approval after the committee has made recommendations?

Hon. Mr. McDonald: Yes.

Mr. Lang: Is it the intention of the Minister that this program will continue into the 1990-91 financial year?

Hon. Mr. McDonald: The projects will have to be applied for, but for the program itself, yes. Part of the negotiation is to continue the Economic Development Agreement and what funding will be for each component is a matter yet to be negotiated.

Mr. Lang: I am very pleased to see that.

Is the Association of Yukon Communities aware that this program is available and could provide some financing for offices of this kind within their communities?

Hon. Mr. McDonald: I do not know if they know it yet or not. Most people in the territory do know of the existence of the EDA. I do not know if they have full details of this program. They have a full-time person funded by the Government of Yukon so I would imagine this person is aware of programs that are available.

Whether or not they will be approved automatically will be determined by the selection committee. The terms are that if they can make a good case, and there is a requirement for a service that anybody is allowed to apply for, each application will be determined on its own merits.

Economic Development Planning in the amount of $400,000 agreed to

On Business Development Fund

Hon. Mr. McDonald: These are revotes from the previous year.

Mr. Lang: This is like pulling teeth, but once we have asked the right question the Minister is very obliging and supplies the answers. Why are they asking for a supplementary of over $1 million? How many loans that have gone out have defaulted? If any have defaulted, how much?

There should be a basic rundown on how the fund is operated for the people of the territory.

Hon. Mr. McDonald: I have obviously provided information to the Member for Riverdale South that did not get to the other Members, so I will provide again all the information that the Member for Riverdale South did not provide to all the other Members.

These are revotes. They are funds that we voted last year for the purpose of providing loan funding. The money was spent as we had voted it to be spent. It was to be spent last year, but the commitments carried on into the current year. The funding was spent in accordance with direction provided by the Legislature and this is not new funding for new things. This is a revote of funding already voted last year.

Because the Financial Administration Act does not permit multi-year funding, we revote the funding. The program breakdown is: $574,000 for the Business Loan Assistance Plan, $220,000 to wrap up ARDA, $153,000 for the opportunities identification program, $52,000 for applied technology and research, $19,000 for renewable resources commercial development, and $8,800 for the business incentives program.

These funds are associated with projects approved prior to the year-end, for which the client claiming the funds was delayed due to progress within the fiscal year of 1988-89.

Mr. Lang: I would like to follow up on an area the Minister keeps bringing it, and that is the question of the Belvedere Hotel. Was it not under this program that $300,000 was made available to that particular establishment?

Hon. Mr. McDonald: The Belvedere Hotel was provided with $75,000 under the Business Loans Program and $300,000 under the Canada-Yukon Tourism Subagreement.

Mr. Lang: I lost what the Minister was saying there. Was it $75,000 under this particular program? And then there was further money under a federal-territorial program? Does it have to be paid back? Would you repeat the figures, because I missed them?

Hon. Mr. McDonald: The Canada-Yukon Tourism Subagreement provided $300,000, which is a repayable contribution, meaning a loan. The Business Loans Program provided $100,000, which is a loan, as well.

Mr. Lang: I asked a question, and I guess the reply was detailed, part being YTG and part federal money. I used this as an example. How many projects do we have where we are not getting repaid?

Hon. Mr. McDonald: The information is not precise, but the thinking is that there are about 30 or 40 out of approximately 100 projects for which the loans are in arrears. We are following up on recovering the loans.

Mr. Phillips: That is a pretty significant figure. What are we doing to make sure these loans come back into line and are brought up to date?

Hon. Mr. McDonald: We are making contact with the project proponents and are trying to secure the funding for the government. We have made loan collection a priority within the department. There is every intention to collect the full amounts, according to the agreements.

Mr. Lang: Roughly how much money are we talking about being in arrears? It sounds like it is quite substantial, if we are talking about almost 40 percent of the loans outstanding over the last number of years.

Hon. Mr. McDonald: The exact amount is something I do not have at my fingertips. In terms of arrears, we are talking about annual payments that are late. They may be amortized over a 10 year period of time. If one were to take a snapshot, there are late payments on about 30 or 40 out of approximately 100 or so loans. The payments may be late for a number of days or weeks or whatever, but we are following up the collection activity to make sure the government is paid.

Mr. Lang: Are these just under the loan assistance fund we are referring to, where we have arrears in 40 or 50 applications, or is this in all the various programs that are available?

Hon. Mr. McDonald: I am referring only to this loan program.

Mr. Lang: Has the government ever taken court action in any case to recover the monies outstanding? This loan assistance fund has been in existence for six years now.

Hon. Mr. McDonald: If there is an opportunity for repayment we have not taken court action. On those loans that obviously went sour, like the Belvedere Hotel and the M.V. Anna Maria, we have taken legal action.

Mr. Phillips: If the Belvedere Hotel and the M.V. Anna Maria were in arrears prior to going into receivership, and we tried to recover any of our money that was owed prior to them being in receivership when we were in line with everyone else, was there an attempt made to recover that, or at least bring them into line? If so, what were the results of that?

Hon. Mr. McDonald: My understanding is that when a loan is made there is a period of time before the first payments are made that would prevent one from being in arrears at the beginning.

Mr. Lang: I do not understand the answer. Maybe the Member for Riverdale North would like to ask his question again.

Can the Minister tell us the projects that the government is not expecting any repayments from? It sounds like a fair number. He named two right at the outset and I am wonder how many more there are. Can he provide a list?

Hon. Mr. McDonald: I can provide a list of the projects on which we do not anticipate payment. There are not that many. We do anticipate payment on a vast majority of them. Even on some of those that have gone sour, we expect to recover our funds, like the two I just mentioned.

Mr. Phillips: I did not get an adequate answer to my question. If the Minister does not have the information available can he bring it back as soon as possible? I would like to know, for myself and for the people of the Yukon, that we are making an honest effort to keep track of these loans and recover the interest that Yukoners have in these projects, and recover them according to the agreements that have been signed. It is imperative. If we have 30 to 40 loans in arrears now, I am sure the message is out not to worry about it because you do not have to pay. It seems to be an astounding number. The government has to get on top of this in a hurry to recover as much of these funds as we possibly can, especially the funds that are in arrears.

Hon. Mr. McDonald: I agree entirely with the Member, and as a matter of policy the government is securing those loans in their entirety. If anybody is under the impression they can borrow money from a government loan program and not pay it back they are mistaken. They will feel the weight of a collection activity. We have every intention of collecting every cent that the agreement calls for. We will go the full distance to ensure that money is recovered.

Mr. Lang: We obviously have a program that is not working as well as it should. I am quite startled to hear the Minister list the number of beneficiaries of the program in arrears. I am sure if it were a bank, it would certainly tighten up on the policy awfully quick or they would not be in business.

In view of the experience the Minister has had over the last couple of years, is the government contemplating some changes in the act or the regulations to further tighten it up so that they can make every effort to ensure we get our bills paid?

Hon. Mr. McDonald: The government, as I indicated before, is very interested in recovering all the funds. I do not anticipate that there needs to be a change in the act or regulations to recover those funds. We will be ensuring that full collection activity takes place. Some of the arrears, I am sure, are only a few days out and are not cause for great concern or heavy-handed government action. But those where there is a chance that the funds will not be paid or the person borrowing is playing it fast and loose with the terms of their agreement, collection activity will be taken. We will proceed with court action if required. Absolutely.

Mr. Lang: We are not interested in seeing someone who is in arrears by a month have the heavy hand of government come down on them. What I would like to see is a list of the beneficiaries of this program who are in arrears by six months or more. I think we have a right to begin questioning whether or not the public monies will be paid back if the person has not seen fit to make any payments for six months. Perhaps it would narrow down the work we are asking the department to do if we just confine this to anyone who is arrears for six months or longer. I think that would give us a better idea of how the program is working. Would the Minister not agree?

Hon. Mr. McDonald: The Member can consider it done.

Business Development Fund in the amount of $1,029,000 agreed to

On Economic Development Agreement

Hon. Mr. McDonald: Of these funds, $1,115,000 is for the small business incentive subagreement, which is partly made up of the transfer I mentioned before from the line item Economic Development Agreement under Economic Policy, Planning and Research and $1,355,000 are revote funds under the tourism and small business incentive subagreements. There is $1,273,000 for tourism and $82,000 for small business incentives.

Mr. Lang: Is the $1,355,000 for grants?

Hon. Mr. McDonald: They are all repayable loans.

Mr. Lang: Are they no-interest loans?

Hon. Mr. McDonald: I believe the Canada-Yukon Tourism Subagreement loans are interest bearing, but I will check on whether or not any of these are non-interest bearing.

Mr. Phillips: Where are we at with the repayment of these loans on this particular program? Are there any arrears in this program? If so, how many?

Hon. Mr. McDonald: When we provide the information, perhaps it would be acceptable to provide the arrears information with respect to this program and with respect to the business loans program.

Mr. Lang: I would like to move over to another policy with respect to the question of financing for hotel rooms and the policy of the government. Is it still the policy of the government to make finances available for hotel extensions or new hotels, whatever the case may be? It seems to us that a lot of money is going into this area. What is the policy of the government? Are they going to continue with that, or are they looking at the overall policy direction? Could the Minister elaborate?

Hon. Mr. McDonald: Generally speaking, for all projects, a market analysis is conducted with respect to whether or not the market itself can bear a new project, whether it be hotel rooms or anything else. If the market can bear the project, and an undue hardship is not given to competitors, then the application is considered to be eligible for loan funding.

Mr. Lang: Is the policy going to continue on for the purposes of financing hotels? One comes to mind: the Minister mentioned the Belvedere. Obviously, a market evaluation was done, and it was not done very well, because it is in receivership. You also hear complaints in Whitehorse where some hotels are getting government financing and some are not, and you hear the same in Dawson and in other communities. Is the government going to continue financing these types of ventures, whether it be by grant, non-repayable loan, or otherwise?

Hon. Mr. McDonald: I am not sure whether the market evaluation for the Belvedere Hotel project was at fault or not. Generally, there is an evaluation done and if, upon study, the market can bear the addition of a new entry into the market, in the case of hotel rooms, then it will be considered again. We have not made any policy decisions to restrict hotel rooms or any other single project. We have only indicated that, in general terms, if market analysis determines there is room for this particular project without harming the existing competition, then it will be considered eligible for loan funding.

Chair: Is it the wish of the Committee to take a break?


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

We will continue with general debate on Economic Development Agreement.

Hon. Mr. McDonald: For the record, we will still be coming back with the details. In the Canada/Yukon Tourism Subagreement, these are non-interest bearing loans. Of the 29 repayable loans, six are in arrears. In the small business incentive program, none are in arrears. In business loans program, all are interest bearing, and there are 72 altogether, of which 10 are in arrears. The 30 or 40 was obviously out of line.

Economic Development Agreement in the amount of $2,471,000 agreed to

On Economic Development Program, Renewable Resources

Hon. Mr. McDonald: This is $1,075,000 for the Renewable Resources subagreement extension. This is 100 percent of the approved funding for both the federal and territorial governments. The recoveries are shown in the Recoveries section and are 90 percent of phase 1 and 70 percent of phase 2. Phase 2 is the current year.

Mr. Phillips: I believe there was another $600,000 on the EDP from August of this year. What was the uptake on that? I believe there are meetings going on right now and the applications are being filed for that.

Hon. Mr. McDonald: I do not have the precise figures. Because of the late start, it appears at this time that all the fund may not be utilized. As of November 14, there is a free balance of about $390,000.

Mr. Phillips: Is that out of this line item? Is that where this money would come from?

Hon. Mr. McDonald: Yes, that would be out of the phase 2 portion of the $641,000 total.

Mr. Lang: Is the Minister going to provide us with a list of the various projects that have already been allocated funds from this area? Secondly, he indicated there was $300,000 in October still available. Has any further money been committed? What other proposals are being considered prior to year-end?

Hon. Mr. McDonald: I do not know what proposals are being considered. The figure I provided the Member was the figure that is the free balance at the present time. That funding is yet available. We are not seeking any more for this particular project, any more than we are doing here. This is the final supplementary for the year.

The answer is true for all the questions. It provides for all the comparable programs and the loans programs. It is a complete breakdown of all successful applicants and who project proponents are.

Mr. Lang: Can you break out the money that was actually used for the approved programs? I know some successful individuals did not spend the allocated amount. You must have that information by now so could you clarify that further?

Hon. Mr. McDonald: I think that information is readily obtained. Basically, if they have not picked their funding up we would take note of that. That does not mean that they will not. We will try to get that information to the Members.

Mr. Phillips: Where are we with regard to the future EDA negotiations? What is the current status?

Hon. Mr. McDonald: As I stated in Question Period the negotiations have been continuing at deputy minister level. The contact person in the federal government is in DIAND. There have been some discussions between the Deputy Minister of Tourism and the federal department counterpart. Negotiations have been continuing. At this point we have had discussion on what the program might look like but have not had any approvals from the federal side. More importantly, we have not had any approvals or indications from the federal treasury board on funding or how much it is.

Economic Development Program, Renewable Resources in the amount of $1,075,000 agreed to

Economic Development: Mines and Small Business in the amount of $3,505,000 agreed to

Department of Finance

On Operation and Maintenance Expenditures

Hon. Mr. McDonald: The Department of Finance is requesting an additional $65,000 in this supplementary. These funds are required for the allowance for bad debts. This is a calculated figure and is normally determined at the fiscal year-end. It is dependent upon the balance of the accounts receivable that the government is holding at that time. Because the allowance is a function of unknown year-end balances, it has been our practice not to budget for the item in the main estimates. We pick up the requirement later in the year in supplementaries when we have a better idea of what the receivables balance will be on March 31.

Members will note that beginning in the main estimates for next year we will in fact budget for the item. Although the figure will be rough, we think its inclusion in the main estimates will make the documents more realistic and will give readers a more complete picture of the estimated expenditures for the year-end.

When the 1989-90 main estimates were prepared, this line item was not incorporated. We felt there was a need for the line item for year-end in a supplementary, because we do feel there will be some expenditure in this area, as we have had every year. That is why we are requesting the additional $65,000.

There are internal adjustments beyond this, of course, which involve the allocation of money, such as personnel vacancies being allocated to monitoring federal tax reform, GST activity, the formula financing negotiations and preparing positions on the financial aspects of the Northern Accord negotiations. There are, in general, the main reasons for the re-allocations within the department.

Mr. Phelps: With regard to monitoring bad debts and the allowance that is included each year, is the Department of Finance spending more resources in monitoring the collection of the various debts owed to the government?

Hon. Mr. McDonald: We do in the Department of Finance have a person who does monitor debt collection action, bad debts and almost-to-be-bad debts, although not full time. The department has taken greater action to ensure that there is collection if possible.

Mr. Phelps: I know that this is a subject of great discussion from time to time in the Public Accounts Committees and I am wondering if the department is now taking what could be considered a lead role in looking after the accounts receivables for the various other departments.

Hon. Mr. McDonald: I think it would be best to characterize the role as being much more active. They are not always first in to collect or monitor the debts. Obviously, if it is the responsibility of the Department of Economic Development, there is a responsibility in that department to see to it that debts are collected, but the Department of Finance is taking a much more active role in pursuing debts or reviewing debt collection procedures in all departments.

Mr. Phelps: Do the departments, including the Department of Finance, have a comprehensive procedure that is undertaken with regard to following up on bad debts when payments are late under various government agreements?

Hon. Mr. McDonald: Yes. The Department of Finance does.

Mr. Phelps: When the debtors fail to make good on their payments or keep their payments up, does the collection proceed to litigation and, if so, is it done by inside or by outside lawyers?

Hon. Mr. McDonald: Debt collection procedures do take place. We will go to small claims court to try to secure the monies owing to the government. In many cases, whether we write the funding off or not, we do pursue the money outstanding if we feel there is a realistic chance of getting it back.

Mr. Phelps: I was not clear if that went to outside firms or was done in-house.

Hon. Mr. McDonald: That is done in-house.

Mr. Phelps: With respect to the bad debts the allowance is being made for, which departments are these bad debts owed to? Just Finance? If so, what are the nature of the bad debts?

Hon. Mr. McDonald: The allowance is for receivables that are a debt, that is, 60 days outstanding after a year-end. There is a calculation that has to be made to provide for those debts outstanding. The debts themselves are across government. They are not specific to the Department of Finance.

Mr. Phelps: Just so I am clear it does not include, for example, the outstanding loans under the last department that were falling behind, does that include the monies owing under the small business loans line?

Hon. Mr. McDonald: It does not include those. If those monies are written off, they are written off against the loan fund itself.

Mr. Phelps: Is it possible to give us a general list, by categories, of what debts we are talking about here under this item?

Hon. Mr. McDonald: The accounts are basically broken out into two categories. One we refer to as miscellaneous receivables, and the other one would be property taxes. The Member might refer himself to the 1988-89 public accounts, page 40, which refers to the allowance for the bad debts for the year in question.

The miscellaneous write-offs are items that are under $1,000, and they could be anything from a course fee from Yukon College, snow removal, lost library books, ambulance charges, dorm fees, water delivery, or sheriff fees. They are generally very small in nature, between $10 and $50.

Mr. Phelps: I do not wish to prolong this discussion. I just wanted to point out that it is an area that has been of concern from time to time of various Public Accounts Committees over the years. It is an area that needs to be examined from time to time by the Public Accounts Committee to ensure we are not getting lax with regard to debts owed to government under all the various contracts that are outstanding.

Those are the comments I have in general debate.

Mrs. Firth: When Yukon College gets its grant from the government of $8.7 million and becomes responsible for the administration of its own finances, will it become responsible for the debt load for things like dorm fees, books, et cetera?

Hon. Mr. McDonald: After the transfer takes place, they will be responsible for collecting all those debts that have been incurred.

Mrs. Firth: After the transfer, will the Department of Finance still be issuing the pay cheques as it does with all other corporations?

Hon. Mr. McDonald: The Department of Finance will not be issuing the pay cheques, they will be issuing their own.

Mrs. Firth: They are going to have to implement their own infrastructure at the college. Is that how the other corporations work?

Hon. Mr. McDonald: This will be different from corporations. The college will likely retain a bank to provide for the service of issuing cheques and will have to have the infrastructure in place to provide all necessary administrative functions to act as an independent organization. There may be some elements in the transfer agreement that allow the government to continue to provide a service. Those details have not been approved by Cabinet, because the transfer has not taken place yet. The college will have its own financial administrative function.

Mrs. Firth: I will follow up when we come to either the Department of Education debate or the main estimates.

I would like the Minister to be prepared to tell us how it is going to work. The transfer is supposed to take place by January 1. There is not much time to get everything in place, so I would like some detail on how things are going to work on an interim basis.

I am quite interested in exactly how all of the corporations and Yukon College are going to be responsible for paying their employees. Finance should have the information as to what the payrolls are for all the corporations and Yukon College, and when it comes time, the hospital. I think they should have a handle on the payrolls. I do not know if it is common practice in government or not. We are not such a big government that that kind of information should not be readily accessible to the Department of Finance. I am not saying they have to do the administrative work, but they should have the information.

Hon. Mr. McDonald: Certainly the information is available. The Department of Finance does the payroll for the corporations. That is anticipated to be different for the college. When we get to Education, I will try to anticipate the questions on the arrangements for the college transfer. If they have not been made at that time we can certainly take it up in the mains.

On Allowance for Bad Debts

Allowance for Bad Debts in the amount of $65,000 agreed to

Hon. Mr. McDonald: I move you report progress on Bill No. 13.

Motion agreed to

Hon. Mr. McDonald: I move that Mr. 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 the report from the Chair of Committee of the Whole?

Ms. Kassi: The Committee of the Whole has considered Bill No. 13 and directed me to report progress on same.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

We are now prepared to receive the Commissioner in his capacity as Lieutenant-Governor to grant assent to bills that have passed this House.

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

Assent to Bills

Commissioner: Please be seated.

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

Clerk: Pesticides Control Act; Hospital Act; Fourth Appropriation Act, 1988-89; Act to Amend the Employment Standards Act.

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

Commissioner leaves the Chamber

Speaker: I will now call the House to order.

Hon. Mr. Penikett: I move that the House do now adjourn.

Speaker: It has been moved by the hon. Premier that the House do now adjourn.

Motion agreed to

Speaker: This House now stands adjourned until 1:30 p.m. Monday next.

The House adjourned at 5:17 p.m.

The following Legislative Return was tabled December 7, 1989:


Use of M-99, particularly for Wood Bison (Webster)

Oral, Hansard

pp. 642 and 673