Whitehorse, Yukon

Thursday, February 15, 1990 - 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.

Recognition of 25th anniversary of the Canadian flag

Hon. Mr. Penikett: I rise to note that today is the 25th anniversary of the Canadian flag. Obviously, a flag is more than a coloured piece of cloth; it identifies those who stand below it as a symbol of a community, be that community geographical, cultural or political. In the case of our Maple Leaf, the flag symbolizes all the many communities that make up Canada.

I am sure that all Members of this House remember the acrimony and anger that surrounded the flag debate in the early 1960s. The question was not just about what would best symbolize Canada but whether the adoption of a new, distinctly Canadian flag would change our relationship with Great Britain. Would a different flag make us a different nation?

The decision to choose a new symbol was a difficult one and not a universally popular one, but in retrospect I believe there is no one today who could say it was not the right one. Today, the Maple Leaf, our flag, identifies Canada around the world; it has become a symbol of the strengths of our nation: tolerance, compassion and peace.

Today, an awards presentation will be made in the foyer of this building to the 1990 Yukon Canada Day poster winners. I hope all Members will be able to attend that ceremony at 4:00 p.m. for a few moments to applaud those young winners from Yukon schools.

On related matters, I am pleased to report that Yukoners can look forward to being greeted on arrival at Vancouver International Airport in a proper manner. Just this past week, Transport Canada, at the request of our Minister of Tourism, rectified a long-standing oversight, and the flags of the Yukon and the Northwest Territories now fly there, alongside those of the provinces.


Speaker: Are there any Returns or Documents for Tabling?


Hon. Mr. Byblow: I have for tabling two new policy directives of the government. One is the Yukon business incentive policy for construction; the second is the Yukon business incentive policy for goods and services.

Hon. Mr. Webster: I have for tabling a report entitled Whitehorse visitor reception centre feasibility and design study.

Hon. Mr. Penikett: I have for tabling a legislative return.

Speaker: Reports of Committees.


Introduction of Bills.

Notices of Motion for the Production of Papers.

Notices of Motion.

Statements by Ministers.


New Yukon Business Incentive Policy

Hon. Mr. Byblow: I am extremely pleased to inform the House today that this government has adopted a new business incentive policy. This will go into effect immediately. The new policy replaces the northern preference system with a rebate system.

Under the new policy, rebates will be paid to contractors for using Yukon labour and Yukon materials on government contracts. There will no longer be a bid adjustment process that determines the successful bid. It is my view the integrity of the tendering system is protected. Also, businesses will no longer be required to disclose details of their ownership to benefit from the policy.

The new policy fulfills the objectives of the Yukon Economic Strategy. It ensures Yukon workers and businesses benefit from the money the government spends on goods, construction and other services. It also encourages contractors to employ apprentices on government construction contracts.

The new policy was developed in cooperation with business and labour representatives from the Yukon Contractors Association, the Yukon Chamber of Commerce, the Whitehorse Chamber of Commerce, the Yukon Federation of Labour, the Whitehorse and Yukon Area Building Trades Council, and the International Union of Operating Engineers.

Further, a business incentives review committee, composed of representatives from each of these organizations, will be established to provide advice on the administration of the policy. The committee will ensure that concerns arising from the operation of the policy will be addressed promptly and in a manner agreeable to the business community and the labour organizations.

The new policy will apply to any tenders issued after today. The old policy will still be in force on contracts that were awarded while it was in effect.

The Department of Government Services will also begin an educational program to explain the details of the policy to local businesses to ensure they take advantage of the policy to the greatest possible extent.

I am extremely pleased with the cooperation that was shown by local businesses and the labour communities, and I am sure the policy will be a success as a result of this cooperation.

Mr. Lang: The Yukon Business Incentive Policy has had a history of constant bumbling since its conception under the leadership of the former Minister, Mr. Kimmerly. We all recall that there were numerous debates in this House over the course of that four-year reign when that policy was brought in.

It is important to highlight that the Minister, in his ministerial statement said that there will no longer be a bid adjustment that determines the successful bid so the integrity of the tendering process is protected. This substantiates our claim over the past number of years that the past policy has been seriously flawed, which really brought into question the integrity of the tendering process.

We are pleased that the Minister recognized the legitimacy of our observations as well as those of the business community on the weaknesses of the old policy and the perception of unfairness.

The new concept of rebate for labour and materials will have to be monitored closely to ensure that it meets the Yukon content objective, yet, monitored at the same time to keep the costs of our projects at reasonable, cost-effective levels.

In the Minister’s response, I would appreciate it if the Minister can inform this House of the amount of rebate that will be made available under this policy and the projected costs of the 1990-91 capital budget resulting from the implementation of this policy.

Hon. Mr. Byblow: I am pleased with the support articulated from the side opposite. The Business Incentive Policy of this government has indeed gone through some periods of adjustment and considerable debate. The policy that we brought forward addresses all concerns. I consider it a very successful exercise in cooperation between the business and labour communities.

The Member raised the issue of the rebates that would be applied. The documents that I tabled earlier, which articulate the specifics of the policy, outline those rebates. In short, there will be a rebate provided for labour composition of over 80 percent on any job. There will be additional incentive of over 90 percent. There will be rebates related to items on the goods and services side for local manufacturers.

There will be rebates related to the use of Yukon materials. The general spinoff to the economy is going to be substantial, and I look forward to providing Members with the results of the impact of those rebates and economic stimulation. This government is seriously committed to its objectives of encouraging local labour, of provision of materials that are Yukon in origin and to provide credit to contractors who support those principles.

This rebate system endorses those objectives, and I am very pleased to be announcing it today.

Speaker: This then brings us to Question Period


Question re: Henderson’s Corner power project

Mr. Phelps: I have some questions for the Minister responsible for the Yukon Development Corporation and Yukon Energy, in particular, with regard to the issue of rural electrification, and more specifically with regard to the announcement the Minister made during the election campaign last year that Henderson’s Corner would be receiving electricity. Unlike other projects the line to Henderson’s Corner was not paid for by property owners out there, but by Yukon Energy. Last week the Minister said he would be looking into this matter and telling me how much it cost to build the line to Henderson’s Corner. Can he answer that question now?

Hon. Mr. Penikett: I have not had occasion to update my information on that question yet, beyond the ability to confirm in general terms what I said to the House on the occasion of the questions from the Member.

The one additional piece of information confirmed to me by the Minister of Community and Transportation Services is that the actual hook ups to the homes were financed under the rural electrification program, as has been the case in other rural subdivisions in the territory.

Mr. Phelps: The difference is the cost of getting the electricity out to the homes.

Has the Minister had an occasion to find out when the Yukon Energy board made its decision to pay for the lines?

Hon. Mr. Penikett: I am waiting for information about the precise date of that decision. I have been able to confirm in general what I told the House before, that the decision to go ahead with it was on the basis of it being a prebuild decision of a single-phase line in anticipation of the three-phase line going along the same route. While it has not yet been approved by the Public Utilities Board, it is subject to approval by the Public Utilities Board before it can be added to the rate base.

Mr. Phelps: Why did the Minister take the unusual step of making the announcement in the middle of the election campaign last year and why did the board not make that announcement?

Hon. Mr. Penikett: It is almost unheard of in this country for Ministers to make announcements during election campaigns. I happened to be in the community at the time, and therefore, given the strong interest in this question at the meeting I had with residents of Henderson’s Corner, I was able to communicate it to them. The government made the decision that that was the appropriate time to do it.

Question re: Henderson’s Corner power project

Mr. Phelps: When this came up last week the Minister said that Yukon Energy took the unusual step of paying for the line. It was unusual because in other parts of Yukon the property owners have to pay for such extensions. It took the unusual step of paying for the line because it would be a prebuild.

Henderson’s Corner is pretty well the end of the line when it comes to developed areas moving out of Dawson. I would like to know: pre-build to where?

Hon. Mr. Penikett: I continue to be fascinated by the complete about-face of the Opposition on this question. Let me remind the Member of the context in which the decision was first faced.

Originally, the decision of the Energy Board was not to proceed with this line until they had a decision about a North Fork hydro project. The original decision was they would not put the line in until they were proceeding with that project. For various engineering and economic reasons, they decided they were not ready to proceed with that hydro project, it not being economic at moment. The board was considering a number of other alternatives, including the utilization of power for Mayo, the prospect of building a line from Dawson along that route, and the eventual possibility or viability of the North Fork project. In any event, they were anticipating there would be a line put down there and that they could justify the expense of this as a prebuild, and I reiterated that today.

Mr. Phelps: This is really interesting. We are being told now that it was the board’s decision to prebuild the line without having any place to build it to. We are being told, as I understand it, that the board decided not to go ahead with the hydro power on the North Fork of the Klondike; when did it make that decision?

Hon. Mr. Penikett: I cannot give the Member precise dates from memory, but I recall when we indicated in this House that we were not prepared to go with the decision I was being denounced by Members opposite as being evil and unholy and inconsiderate and nasty and terrible and mean and ugly because we were not proceeding with it. Following that very elevated debate, we asked the corporation to have another look at the question. They did look at the question again, and decided that, on the basis of a prebuild, they could look at it.

Mr. Phelps: Let me get it straight: did the Minister suddenly decide during the election campaign that he would purge himself of any evilness and redeem himself in the eyes of this side by suddenly having the Yukon Energy Board prebuild a line to nowhere so that Henderson’s Corner could be promised electricity during the campaign? Is that what his decision was?

Hon. Mr. Penikett: I hope none of us are beyond redemption, at any point. I am almost certain, and I am having to depend on that imperfect instrument, my memory, that the decision to ask the corporation to have another look at it was made well in advance of the election.

Question re: Henderson’s Corner power project

Mr. Phelps: I get rather concerned about the decision-making powers of the board itself. It was their decision to prebuild a line when there was no destination in sight. Is the Minister saying it was their fault and their decision to take this very unusual step, at tremendous cost?

Hon. Mr. Penikett: No. I not only communicated the decision, I defended the decision then and I will defend the decision now. We admit we changed our minds on the position and I would be glad to hear that the Leader of the Opposition admit that he, too, has changed his mind. He was for the line before the election; he is now against it. That is very clear.

Mr. Phelps: I wonder if the Minister has considered further the consequences of this very unusual step. Will Yukon Energy now pay for the extension of lines into the Tagish subdivision, which were paid for by property owners there, the extension of the line into Judas Creek, which was paid for by property owners there, the extension of the electrical line into the Robinson subdivision, which was paid for by the property owners there? Can those property owners expect some kind of payback or forgiveness of the loan against their property for which they have to pay the government money every year on their tax base? Will he consider such a forgiveness?

Hon. Mr. Penikett: What I would consider doing is to take a look at the situations the Member has described to see if they are in any way comparable to the one at Henderson’s Corner, and I would be happy to provide the conclusions of that review to the Members opposite and to the House.

Mr. Phelps: I look forward to that. I am wondering if, at the same time, he would have a study made of Deep Creek and Jackfish Bay, along the Mayo Road, which in my submission are identical situations to Henderson’s Corner; they, too, could be part of the prebuild of a line to somewhere, anywhere.

Hon. Mr. Penikett: Since the Member has changed his position once again, he seems to now be in favour of prebuilds in some places in his constituency, but perhaps not of prebuilds to locations in other constituencies. That clarifies the issue wonderfully.

I will consider his representation with respect to those matters, and I will refer the proposals he is making to the Energy Corporation for its consideration.

Question re: Henderson’s Corner power project

Mr. Phelps: What is at stake here is the issue of fairness and of people being treated equally by government during an election year, or not during an election year, no matter which riding they happen to reside in. That is the issue. We simply want to see whatever policy there is applied equally and fairly.

Would the Minister also examine the situation on the Hotsprings Road along the old Dawson Trail past the Hotsprings itself, where a lot of people would like to have power provided and an extension of the existing line?

Hon. Mr. Penikett: Once again, I will consider the representation. I will say with respect to the Member opposite that he cannot have it both ways. He cannot argue, as his colleagues did before the election, that the government was wrong and improper to make the decision it did and to press and urge us to go ahead, and then, after the election, tell us we were wrong when we listened to them. That seems quite schizophrenic to me.

Mr. Phelps: What is at issue here is the lack of a policy that applies equally across the board to all Yukoners. I would hope that, when he makes his considerations and brings them forward in the House with regard to the areas I have already enumerated in the House, he would do so well in advance of an election being called. Will he do that?

Hon. Mr. Penikett: I suspect the proposition put by the Member opposite is now sufficiently complex that it may take a fair amount of the time available between now and the next election. I will be asking the Energy Corporation to have a look at the representations he has made.

Mr. Phelps: Since representations made by this side always lead to government decisions in a cause-effect relationship, perhaps he would not mind if I made the announcement on his behalf during the next election and took full credit for it, since it was my idea.

Hon. Mr. Penikett: I will accede to that suggestion, especially if the announcement is in the negative.

Question re: Reindeer, disease testing

Mr. Lang: On the question of the now-quarantined reindeer on the Mayo Road, it is normal practice and policy in provincial jurisdictions that wild and domestic animals have to be tested for disease prior to going into another jurisdiction, or there must be a verification that they are disease-free.

Could the Minister of Renewable Resources tell us who gave permission on behalf of his department that these reindeer be allowed into the Yukon prior to being checked for disease?

Hon. Mr. Webster: First of all, I must address the assumption made in the preamble by the Member that it is required in all jurisdictions that domestic animals have to be inspected for disease before they are transported across provincial boundaries. From our initial research, that is not the case at all. In this particular case, it looks like every jurisdiction handles it in a different way. There is no established legislation or policy to follow.

With respect to his question as to who authorized the movement of reindeer from the Northwest Territories into the Yukon, that was done by Dr. Al Chambers, the veterinarian for Agriculture Canada, who is situated in Dawson Creek.

Mr. Lang: I was not asking about the federal government involvement. I was asking about the Department of Renewable Resources’ involvement. How much involvement did the Department of Renewable Resources have in aiding and assisting the authorization of the movement of these reindeer into the Yukon to be checked and quarantined in the Yukon?

Hon. Mr. Webster: The Department of Renewable Resources had absolutely no influence, nor did it offer any assistance, in transporting the animals into the Yukon. There is no requirement by the Government of Yukon for the inspection of domesticated animals. In this case, the reindeer are defined as domesticated animals. Agriculture Canada, which is responsible for this matter, gave the final approval.

Mr. Lang: This really concerns me. Is the Minister telling this House that there was no contact with the Department of Renewable Resources prior to these animals being shipped into the Yukon? We are dealing with over 200 animals. These animals were brought into the Yukon and were then quarantined and checked in the Yukon, and the Department of Renewable Resources had no knowledge of this shipment?

Hon. Mr. Webster: I did not say that at all. Naturally, we were contacted when this event was taking place. The Member asked me if we, in any way, authorized or assisted in the movement these reindeer.

Some Hon. Member: (Inaudible)

Hon. Mr. Webster: This is not playing games at all. The Member asked me a question and I answered it directly.

Question re: Reindeer, disease testing

Mr. Lang: I am sorry that I did not ask the specific question. Instead, it was very general. Did the Department of Renewable Resources, in its discussions with Agriculture Canada, raise any concerns about their bringing animals of this kind into the Yukon, and did they discuss what possible effects it would have on the Yukon if the animals had diseases?

Hon. Mr. Webster: I already answered the question. Yes. We did raise some concerns at the time that we were notified of the proposed move of the reindeer from the Northwest Territories into the Yukon. Those concerns centered around the health of the animals. We were assured by Agriculture Canada officials that there was not, in their minds, a great risk involved, considering that they would be quarantined in a very safe and secure farm here in the territory. There had not been, to their knowledge, a great deal of disease in this herd.

I mentioned yesterday in the ministerial statement that animals from this herd are at the Northern Splendour Reindeer Farm. There have also been previous shipments of reindeer from that herd to southern parts of Canada, and all tests were done there with negative results.

Mr. Lang: Did the Department of Renewable Resources not voice any objections to domesticated animals such as reindeer coming into the Yukon to be checked for disease instead of being checked in the Northwest Territories prior to shipment?

Hon. Mr. Webster: As soon as we were notified of the intended move, we raised our concerns. They were addressed. Agriculture Canada, which has the responsibility in this matter, gave the authorization for the move.

Mr. Lang: There are over 200 reindeer expected to be quarantined. How long do they have to be quarantined for prior to being judged free of disease?

Hon. Mr. Webster: Agriculture Canada will begin retesting all the animals next week, including the 33 that showed positive results. Once those test results are known, all those animals that are confirmed to be free of disease will be shipped on to Alaska.

Question re: Reindeer, disease testing

Mr. Lang: In view of the very unfortunate situation that has developed here, can the Minister tell us what assurances we have that the State of Alaska will allow those animals into their jurisdictions once they are out of quarantine here?

Hon. Mr. Webster: The owner of the animals, a resident of Alaska who owns a reindeer farm, assures us that if the animals have passed the test, they show negative, they will be permitted to enter Alaska.

Mr. Lang: We have raised this question a number of times over the past four years about disease and animals being brought into, or through, the territory. In view of the fact that the government has no policy, when will the Minister be bringing forward a policy on the transporting of animals into and through the Yukon for our consideration?

Hon. Mr. Webster: As I indicated yesterday, the matter is currently under investigation. I think it might even be appropriate to include such a policy in concert with the agricultural policy. To my mind, in the two-year process of public consultation in coming up with an agriculture policy, this matter has never been raised as a real concern by the agriculture community.

Mr. Lang: I find that hard to believe. I understand representations have been made this past year to department officials by a number of people. I find the statements surprising, and I will be going back to people to find out how accurate those statements are.

In view of what has happened, and there is obviously a void of policy we spoke of earlier, will the Minister assure this House that no more animals will be allowed into the Yukon unless it can be shown that they have been checked for disease prior to coming into the Yukon? Will the Minister make that policy decision now so we have some protection over the interim period?

Hon. Mr. Webster: I indicated in my ministerial statement yesterday that Agriculture Canada has already stated emphatically that no more reindeer from this herd will be permitted to enter the Yukon Territory without first being tested for these diseases.

Question re: Reindeer, disease testing

Mr. Lang: I am not just concerned about reindeer. We raised this about other animals as well, both domestic and wild. People who have brought animals in for their own use have taken great pains to ensure they are disease free prior to bringing them into the Yukon. My concern is other animals, no matter what they might be, whether domestic sheep, cattle, or whatever. They may just be going through the Yukon, but there should be a check so there is no possibility of disease being spread during the period of time they are in the Yukon.

Is the Minister prepared to issue a ministerial instruction that anybody bringing in animals during the period of time we have no policy has to have the necessary papers to ensure that they are healthy prior to bringing them into the Yukon?

Hon. Mr. Webster: I am not prepared to do that at this time. I have already indicated, we are currently in the process of looking at other jurisdictions to see what the practices are, and we will be basing a policy on their experiences.

Mr. Lang: Why can we do it for reindeer and we cannot do it for other animals?

Hon. Mr. Webster: In this particular case, we would have had it done had there been a facility in the Northwest Territories where the test could have been conducted. Now they have been ordered to provide such a facility for all testing of reindeer before they are moved.

Mr. Lang: I would like a new question, which goes back to the question of the agricultural policy.

Question re: Agricultural policy

Mr. Lang: On November 22, I asked the Minister if he was going to table the agricultural policy; he said he was going to do so two weeks later. Two weeks later, on December 14, I asked again for the agricultural policy and he said it would be early in the new year. This past week, I asked the Minister of Agriculture if he was going to table the agriculture policy; we finally, over the course of about 10 questions, found out it was the Minister of Community and Transportation’s fault that the policy was not here. We asked the then-Minister, who was partially responsible, whether or not the agricultural policy would be coming forward and he told us that it would be tabled this week.

I noticed it was not tabled in the House today. Is there going to be a press conference this afternoon or later on today or tomorrow when the agricultural policy is going to be announced? Or will it be done in a bar?

Hon. Mr. Byblow: To allay the fears of a press conference at the Gold Rush this afternoon, the policy will not be tabled this week. As I indicated in a previous communication to Members last week, the policy is in its final stages of readiness for release to the public. I can tell the Members that we anticipate releasing it early next week.

Question re: Education act

Mr. Devries: I have a question for the Minister of Education. As the final deadline for the public consultation on the draft education act has passed, there appear to be more concerns expressed about what the act will actually contain. Can the Minister advise the House if there are going to be any briefings in the next month or so to update the general public on the changes that have taken place, so that people will know which ones are being followed up on?

Hon. Mr. McDonald: As the Member knows, the primary concerns are emanating from the Home Educators Society and members of the society who feel that not enough attention has been paid to their particular concerns; they have indicated that they would like to see some changes made either to the act or to the regulations - or at least a fleshing out of the provisions of the draft act with respect to their aspirations.

If the Member is asking me whether there is going to be yet another round of public consultations, the answer is no; we will not be doing that. The round of consultations we have conducted up to now was to be the last round with a detailed draft act. There will be a drafting committee made up of stakeholders - stakeholders being, incidentally, the Council for Yukon Indians, the Yukon Teachers Association, the Principals and Vice-Principals Association and the Education Council - who will review all the submissions and make recommendations for any changes to the draft legislation. After that, the legislation will go into the Department of Education and be issued to Cabinet for approval prior to coming into the Legislature. That is the procedure I announced back in December, and it is the procedure we can still stick to in terms of the time schedule we have.

Mr. Devries: The people who have attended the public meetings - this is not only the home educators but also the Watson Lake School Committee - have been told by education officials that their concerns and suggestions would be followed up and that the Department of Education would get back to them, but a lot of them have had no word. I would like the Minister to assure the House that these concerns are being acted upon and that these people will be advised that they are being acted upon.

Hon. Mr. McDonald: Everybody who has written to me or the department has had an acknowledgement of their submission. I am sorry, Mr. Speaker, I missed that. There is usually a witty remark from the Member for Porter Creek East. Normally, I just hang in my chair waiting for it but, unfortunately, I just missed it this time. I do not know what I am going to be able to do to get the Member to repeat it.

The situation will be that if there is a requirement for further work on a particular section that will require further consultation, we will take what time we have to consult with any groups, including the Home Educators Society, if we need to better understand their position or to have their position clarified. The next time the act is formally brought to the public it will be as a tabled document in this Legislature for first reading.

We will communicate a response to each and every person who has sent us a letter as to what the act says with respect to their submission. That is a fair amount of work in itself.

I still think we can meet the time lines, but I am trusting all Members will want to see this act in this Legislature this spring. I hope we will have a finished document for the beginning of the next school year.

Mr. Devries: Can the Minister advise the House when we will see the actual act and how much time will be given for the public to react to it before it goes into debate in the House?

Hon. Mr. McDonald: I cannot give the Member any definitive answer to that question. I can only say that we have been in consultation with respect to education and the draft act for approximately four years. I am sure the Member will agree that there comes a time when there has to be a conclusion to the consultation.

The one thing that many people have indicated to me in the last couple of months is that, as far as they are concerned, the consultation process is over and they want a finished product. That has been expressed in the form of a demand. It is a demand I intend to meet. I am sure Members will agree that, with the consultation we have had with the very clear and thorough expressions of interest by many groups in the territory, all Members should be well informed of where interested individuals and groups stand on the act and its provisions and will be more than prepared and able to debate it.

Question re: Smoking policy

Mr. Phillips: As of January 1, 1990, the Yukon government designated all Yukon government offices as non-smoking. The Minister responsible for the Public Service Commission is now in receipt of a petition that contains 453 names of government employees, smokers and non-smokers. It should be noted that more non-smokers than smokers signed this petition.

Has the Minister responded to the petition?

Hon. Ms. Joe: I have not responded to the petition. There are a lot of things that have to be taken into consideration on any decision that has to be made in regard to the response.

First of all, they are asking for designated smoking areas in government buildings. I have asked for a list of all those government buildings we either own or rent, and there are many. The consideration is the availability of space, the cost of ventilation, because you cannot have a designated area unless there is ventilation.

The Member said there were more non-smokers on that list than there were smokers, and I do not agree with that. You also have to take into consideration that there are a large number of non-smokers in this government who support the kind of policy we now have in regard to smoking.

I have not responded. I need to look at all the options, if there are any, and look at the possibility of designated areas. We do have a policy. There was a whole year for the Public Service to deal with that. It was not as if, on January 1, we said this would happen. There was a year’s preparation. There were committees set up. There was a program available to them they could take advantage of to help them with their smoking, if it was their wish to quit.

No, I have not responded.

Mr. Phillips: I would have thought that the government would have examined all areas prior to bringing in the policy instead of bringing in the policy and then examining all areas.

I would like to table the petition for the information of all Members of the House so that they have an opportunity to read it. One of the concerns of the petition is that the policy that is laid out is not being carried out fairly and equally. Can the Minister assure this House that the new policy will be carried out fairly and equally?

Hon. Ms. Joe: We went through a debate regarding the smoking policy. The Member knows that I did receive a petition from the corrections personnel on their smoking policy. They were concerned that the inmates were allowed to smoke in restricted areas.

In Macaulay Lodge, some of the residents are able to smoke. There are some concerns regarding a policy that may or may not affect everyone. There are a lot of things that have happened since January 1. Some people are still smoking, and we are trying to keep on top of it.

We have ongoing discussions with the Public Service Commission. I have ongoing discussions with the departments and with individuals who either support or do not support this policy.

Mr. Phillips: The Minister indicated, in answer to my first question, that we are now examining all government buildings. When does the Minister expect to announce any changes that she may make to the policy? Does the Minister have any deadline set so that people who signed the petition and others in government buildings know where they stand?

Hon. Ms. Joe: I have had much discussion on the petition. When I respond to it, I will respond to the person responsible for presenting it to us.

Question re: Chronic disease list

Mrs. Firth: The Minister is always going to respond soon, in a very few months, in a little time.

Over three weeks ago, we requested from the Minister a list of all the diseases and equipment that were presently being supported by the chronic disease list. Is the Minister going to be providing that information to us - I see him frowning; it is not the same information that was provided to the Public Accounts Committee. That was out-of-territory travel. We are looking for a list of diseases and equipment supplied under the chronic disease list.

Hon. Mr. Penikett: The information has not reached my office yet. I will do everything I can so that the Member has it before I get to my estimates in the mains.

Mrs. Firth: I would like the Minister to also provide the guidelines for that program that are given to the medical fraternity when they are adding people to the list.

It has been over two weeks since I wrote to the minister requesting the contracts for John Walsh and for Doug Rody with respect to their work with this government on health transfer. Will I be getting copies of those contracts next week?

Hon. Mr. Penikett: I signed a letter in response to that letter from the Member yesterday.

Mrs. Firth: Does that mean I am getting the contracts or a letter? I would like the contracts.

Hon. Mr. Penikett: The Member is getting a letter and one contract.

Question re: Medical travel

Mr. Nordling: I would like to follow up with the Minister of Health and Human Resources regarding information I have requested on behalf of my constituents. Over three weeks ago, in response to my request for a copy of the policies and guidelines for medical travel within the territory, the Minister said, and I quote, “I can provide the Member with the policy. There are protocols that establish when the plane or ambulance can be ordered. Yes, I can do that.”

When can I expect to receive a copy of that policy?

Hon. Mr. Penikett: My officials have taken note of the request. I have not yet received the information from the department. I will undertake to ensure it is communicated in the House, or to the Member, as soon as I receive it.

Extended care facility

Mr. Nordling: Another area of concern is with respect to the extended care facility. On January 25, I asked for a flow chart with the time frame on it for the extended care facility. The Minister responded, “The Member is asking for a flow chart and I think we can provide him with one. Probably that is the most succinct way we can describe what we see as the program.”

When will I get a copy of that flow chart?

Hon. Mr. Penikett: Again, I will assure the Member that I will provide that information before we get to my estimates in the mains.

Na Dli Youth Centre, McLaughlin contract

Mr. Nordling: I also wrote a letter to the Minister almost three weeks ago asking for a copy of Audrey McLaughlin’s $55,000 contract for young offender program planning service. When can I expect a response to that letter?

Hon. Mr. Penikett: I can only say soon. I recall the Member did write one letter asking for some contracts that were already tabled in the House, so we were a little confused about the request. I am not sure if that is the same letter he is asking about now, or if he is asking about another letter.

Speaker: Time for Question Period has now lapsed. We will proceed to Orders of the Day.


Hon. Mr. McDonald: I move that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Speaker: It has been moved by the 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 will now call Committee of the Whole to order and declare a brief recess.


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

Bill No. 19 - First Appropriation Act, 1990-91 -continued

Economic Development: Mines and Small Business - continued

Hon. Mr. McDonald: Yesterday, the Members asked a number of questions. The first was about those proponents who had submitted applications for a contribution under the business development fund and had withdrawn before the contribution agreement was signed, or after the approval was given. There were three projects. One project was identified last night: the women’s business network. The Whitehorse Ski Club and the industrial electric business expansion were the other two. They are the only ones I am aware of at this time.

The Yukon Development Corporation projects are treated by the department like any other corporate entity. Two of them were for the feasibility of the MV Anna Maria, and the third was for the feasibility of a trust company. The feasibility study on the MV Anna Maria was to get background information on the boat and marketing for potential purchasers.

Mr. Phillips: I am not quite clear what the Minister said the Yukon Development Corporation’s involvement with the MV Anna Maria was. Was it looking at marketing for the sale of the boat, or was it looking at buying the boat?

Hon. Mr. McDonald: It was looking at gathering information for potential purchasers of the boat. To expedite the process, they got contributions from the business development fund for an analysis of the boat and the potential marketing schemes that would make the boat a viable venture for potential purchasers.

Mr. Phillips: Why would the Yukon Development Corporation do that? Why would not the Department of Tourism, or something like a department that is involved in tourism, rather than YDC?

Hon. Mr. McDonald: The business development fund is for other than Yukon government departments. The Yukon Development Corporation is not a government department. It is operating in a commercial environment and was apparently interested in providing support to potential purchasers.

Mr. Phillips: The Minister is really saying the government wanted to help in the marketing of the MV Anna Maria, and it realized it would be difficult to use some of its own funds, so it gave a grant to the Yukon Development Corporation, and the corporation acted as the supposedly independent agency, not affiliated with the government, to do the advertising and promotion of the MV Anna Maria to attract buyers. Is that correct?

Hon. Mr. McDonald: No, the Member is putting a twist on things. I can understand where the Member is coming from. It is understandable.

The government did not have any intention to do a feasibility study for potential purchasers and try to use the Yukon Development Corporation as a vehicle. Independently, and operating in a commercial environment, the Yukon Development Corporation was approached by various individuals and agreed to do a feasibility analysis on the project that could be used by anyone who wishes to consider a purchase. Consequently, it is a public document.

Mr. Phillips: Would it not be the job of the main creditor to put together all the data about the M.V.  Anna Maria and its potential for the buyers and do its very best - Pan American , the corporation that was involved in holding the first mortgage on the boat - to do all that kind of work? I would have thought that is normally what happens. If the Bank of Montreal seizes an asset from somebody, it is the Bank of Montreal’s job to go out and put together some kind of a sales job so that they can recover some of their funds from it, rather than use government funds or private funds again, which you have used. What we have really done is just sunk another few thousand dollars in the MV Anna Maria in a roundabout way.

Hon. Mr. McDonald: The Member and I disagree entirely on this point, I guess, because that is not the way things like this work. If I were a potential purchaser of a particular boat like the MV Anna Maria, and the person who is selling the boat is providing all the analysis about the boat’s potential, I would not necessarily regard that as being absolutely and entirely and 100 percent reliable information. I would look to a more independent analysis before I would consider putting up funding of my own.

Certainly, Pan American, which is responsible for the sale of the boat, will make the project look as attractive as possible and that is to be expected. There are others who would like an independent review of the boat before they would consider putting in private capital of their own. Consequently, they approached the Yukon Development Corporation and the YDC in turn approached the business development fund for those feasibility studies.

Mrs. Firth: Can the Minister tell us who approached the Development Corporation? He keeps referring to they; I would like to know who they are.

Hon. Mr. McDonald: I do not know whether it is necessarily public information but I will take a chance and indicate that it is Mike Stutter.

Mrs. Firth: Is the Minister saying, then, that someone can approach the Development Corporation - for example, the hotel in Watson Lake, which is in a similar position - and the Development Corporation can agree to do an independent objective feasibility study regarding the marketing of project X and then that information is available to whoever wants it and is interested in the purchase, and then the Yukon Development Corporation turns around and goes to the business development fund to get funding to do that kind of thing? Is that some kind of set policy of this government? Is this the first time they have done it? Is it going to become common practice? Is there some stated policy regarding this procedure?

Hon. Mr. McDonald: Firstly, before the Member entered the Chamber, I did indicate to the House that the business development fund regards the Yukon Development Corporation like any other corporate entity operating in a commercial environment. That is the policy of the business development fund. With respect to the policies of the Yukon Development Corporation, I am not the Minister responsible for that corporation, but as I recall it, it is within the mandate of the Yukon Development Corporation to consider projects in a commercial environment that would have a long-term benefit to the future of this territory. To the extent that they have done that or have conducted their affairs in that way is unknown to me, other than the brief appearances they have made before the business development fund.

Hon. Mr. Penikett: If I could just say a sentence, I could probably clarify the issue very simply. When a business person or business persons come before the Development Corporation with a proposal - to invest or joint venture or get involved in some way in a business - in that case, the proper behaviour for the Development Corporation is to do some test of the feasibility of the proposal that is before it. Just like any other company, it can look to the programs of the Economic Development Department for this purpose. That is what they did. They did their investigation according to this funding and made the decisions accordingly.

Mr. Phillips: I would like to go back. I did not write down what the funds were for what the Yukon Development Corporation received. Could the Minister go over once more what the funds were for?

Hon. Mr. McDonald: There are a few items. The MV Anna Maria was one, and the other one was a trust company proposal.

Mr. Phillips: Which one is which?

Hon. Mr. McDonald: The feasibility purchase were both the M.V.  Anna Maria. The trust company proposal is at the bottom of the list. The $6,000 survey was to determine the seaworthiness of the MVAnna Maria. The $15,000 project was the BDF contribution toward the total cost of the project for the feasibility study.

The project at the bottom of the list is for the trust company proposal for $25,000.

Mrs. Firth: Does that trust company proposal for $25,000 have anything to do with the trust construction training project under Special ARDA for the Champagne/Aishihik Band for $59,600? Are those two related at all?

Hon. Mr. McDonald: To my knowledge, they are not related. The project is to determine whether or not a trust company is feasible in the Yukon. It will determine what the costs and benefits would be to customers and investors. I am not aware of any relationship between this project and any other proposal that may be coming up.

Mrs. Firth: Can the Minister tell us why YDC is looking at that? Is it because they are getting into the construction business? Why would they be getting money to look at the feasibility of a trust company?

Hon. Mr. McDonald: The trust company proposal was attractive enough to the managers of the program as being something that was worth reviewing. I am not aware of what the YDC’s plans are. I do not know what they are going to do with it.

Mrs. Firth: Did the Development Corporation initiate this project on their own, or are they doing it for someone else who has made representation to them?

Hon. Mr. McDonald: I am aware of any partners that YDC might have for this proposal. As far as I am aware, it came forward on its own, and the total project costs were $50,000. The BDF contribution was $25,000.

Mrs. Firth: Could we get the details of that proposal? Since it is the Minister’s department that is authorizing the expenditure, he should be able to get that information. Could he provide that for us please?

Hon. Mr. McDonald: I might be able to provide more information. Some of the information would properly come from the Minister responsible for the Development Corporation, especially any future plans for trust companies, what use the Development Corporation might make of it or what their plans might be is not something that I can answer for.

However, I can provide as much information as I can and defer other questions to the Minister responsible for the Development Corporation.

Mr. Devries: The next item under core funding shows all chambers of commerce having received $5,000, but I do not see Watson Lake there. Did they not apply, or did they not need it?

Hon. Mr. McDonald: I can only assume it is because they did not make application. I do not know why they are not incorporated into the list. I know it is on the basis of application; you have to apply. I am not aware of any other extenuating circumstances.

Mr. Phillips: I have a couple of other questions on contracts. There is one contract to the Yukon Indian Development Corporation for $120,000 for a non-interest bearing repayable loan. Further down on the page is another one for Tagish Kwan Corporation for $400,000. Can the Minister tell us what both of those are for?

Hon. Mr. McDonald: The YIDC loan is bridge funding for the current year. The YIDC was projecting a shortfall in their cash flow for that amount and required the funding to carry them to the end of the year. They could not secure this from their member companies.

Mr. Phillips: Are we supporting YIDC’s deficit financing?

Hon. Mr. McDonald: I will repeat myself. This is the funding to cover a cash shortfall: a repayable contribution, a loan, for the balance of this fiscal year.

Mr. Phillips: I guess we are supporting their shortfall to the end of the year. How do they plan to pay this back?

Hon. Mr. McDonald: They are charged with the responsibility of managing a number of companies. Certainly the funding is secured against the companies they do have.

Their future funding is a matter for the Council for Yukon Indians and the YIDC board to arrange. This loan was to provide bridge financing for the balance of the year. Certainly it would be the responsibility of YIDC to secure funding for future operating years.

Mrs. Firth: Can the Minister tell us what the $75,400 for the YIDC is under “non-repayable various” on the previous page?

Hon. Mr. McDonald: This project involves funding for three projects that YDC will be joint-venturing: a data north bank for $26,000; the Ice House for $25,000; and a joint-venture with Trimac trucking company for $30,000.

Mrs. Firth: I am sorry, I did not hear that. It was a joint venture with whom?

Hon. Mr. McDonald: Trimac, the trucking company.

The funding was provided as a contribution under the community enterprise corporation section of the venture capital program, for a total of $75,400.

This project was approved in prior years under the joint venture program and was brought forward to be handled by the business development fund in this transition year.

This is funding to provide for the Tagish Kwan Corporation, which is the main contractor on the Centennial Street project for the Yukon Housing Corporation. It was unable to obtain the needed financing from the banks to complete the work and, consequently, there was a short-term loan provided to the end of the construction period to allow for the project to be completed on schedule.

The Centennial Street project is a turn-key operation for the Yukon Housing Corporation.

Mr. Lang: I asked a question of Yukon Housing Corporation about two weeks ago as to whether or not the government was putting any money into that particular project. The Minister of Housing told us no. All of a sudden, the Minister of Economic Development stands up and says, we threw in a few bucks through our department.

Is this money available for anybody? The appearance is that it is who you know that decides who gets this money. When was this money allocated?

Could the Minister also explain whether this proposition was given to all the other people who put proposals forward to the Yukon Housing Corporation for the purpose of providing these units?

Hon. Mr. McDonald: Before I answer the question, I find it absolutely objectionable that the Member, and perhaps Members, would identify only those projects on this list that are native business projects, and then go on to say that the only reason these projects have come forward and the only reason they have got approval is because of who you know in this government.

All the projects over a certain dollar amount for this program go through a business loans board and the board provides recommendations on the projects. It is not who you know in this government that provides for funding under this program or any other.

As I understand from the Minister responsible for the Housing Corporation, the project that the Member cites, and the questioning the Member made in this House for this particular project, was whether or not this project was joint ventured under the joint-venture program of the Yukon Housing Corporation; the Minister for the Housing Corporation reported no, it was not.

The Yukon Housing Corporation, as I understand it, advertised on a turn-key basis for the construction of units and the Bald Eagle and Tagish Kwan has bid on the project and won the project without any assistance from the Yukon Housing Corporation. It was a turn-key project, not a joint-venture project.

The Tagish Kwan Corporation had difficulties, in and of itself; it came to the business development fund for a loan, it was provided an interest-bearing loan to carry them for the balance of the project. On the basis of the viability of the project, after being considered by the loans board, it was approved: pure and simple.

Mrs. Firth: Sometimes I just wish the Minister would stop being so stupid and would just answer our questions. Just settle down, Piers. He sat there and he accused us of only bringing forward amounts and grants that were given to Indian corporations or people. I have raised these specific questions because they are the amounts that add up to the most, or are the largest amounts of money. That is our job: to find out where this money is going. That is why we have asked questions about those particular areas. The amounts of $400,000, $75,000 and $46,000, accumulated to one area: the Development Corporation. That is why we are asking the questions - not for any other reason or who you know or anything like that. I really object to that.

Some Hon. Member: (inaudible)

Mrs. Firth: Come on, Piers. Madam Chair, we are trying to raise these questions responsibly. Can we not have some responsible exchange here?

I want to ask the Minister about the three projects for the YIDC he talked about. I have another list of small business incentives subagreement applications that have been approved. On one of them, I have the Ice House, which was a feasibility study for $10,000; that was done jointly with YIDC and it says YIDC/Ice House/Chief Isaac. There is another one: YIDC/Ice House/Chief and it is for the expansion of a fish processing plant for $200,000. Do those two go hand in hand with this YIDC/Ice House amount of $25,000? I am trying to follow the flow of money.

Hon. Mr. McDonald: The Member is going to have to pardon me if I respond emotionally to very direct criticisms about favouritism. I mean only to provide the information that the Member requests in a responsible way. I will respond to charges of favouritism made in the House.

These projects are the same ones. There may be a question about the flow of cash - because projects approved in the previous years may not have gone forward in the previous year because of a change of heart - as to whether or not a project might not have made sense last year and was have been carried into this year. If the Member want a fuller explanation, I can probably get that in writing.

Mrs. Firth: I would appreciate that because it makes it much easier for us to understand exactly where the money is going. I would also like to follow up on another question about the concept of businesses that are having problems with cash flow coming to the government to get funds. What policy is there regarding them paying it back when it is a repayable interest or non-interest bearing loan?

The YIDC’s cash flow shortfall was covered by the $120,000. They have a non-interest bearing repayable loan. The Tagish Kwan Corporation received an interest-bearing loan in the amount of $400,000. Could the Minister provide us with some some details of the policy and how the government ensures that we get the money back?

Hon. Mr. McDonald: The first thing that is done with an application is to determine the environment around it. We determine the proponent’s business plan, the equity, the cash flow and all elements of the project to determine if the project is shakey or solid.

Ability to repay is a fundamental part of the analysis. In many cases, it is a judgment call as to whether or not the project is viable, given a certain assessment of the risk. On that basis, it is either recommended for or against. A fair number of projects have experienced cash flow problems; it may be in their first year of operation. They may not have received a business development fund, or any other government fund before. Cash flow problems are usually encountered in the first couple of years of the operation.

Sometimes there is a downturn in the operation that requires support. If the project has long-term potential, is a good risk in the minds of the people who approve the projects, the proposal for funding is approved.

Some projects have requested funds and have been rejected because, on analysis, they were not perceived to be viable.

Mrs. Firth: If we are accepting risks that the bank is refusing, then we are not as strident as the bank in our demands. To get a loan from the bank is tough business these days. How long do they have to repay? Is that a condition and term of the low-interest or no-interest loan? Are there any outstanding or delinquent on repayment?

Hon. Mr. McDonald: The normal payback period is amortized over 10 years. During that period, they are expected to make loan payments based on the agreement they sign with the business development fund. I am trying to find the information on overdue funds. I believe I did hand out some information on overdue loans the other night.

The summary information I provided was for all the loan programs because the business development fund has not been in effect very long, and consequently, if anybody is in arrears they cannot be in arrears by much.

In the progress summary statistics, it does show which projects are underway. Repayable projects approved - 20, 14 of which are interest bearing and six of which are non-interest bearing. Of the interest-bearing projects, two have repayments that are not yet due. Twelve of the projects are not yet complete and not yet due to be paid.

My understanding is that there has not been enough experience with the business development fund to have any history of payments not due.

Mrs. Firth: That information is quite general for us to know exactly what the progress of the projects is. Where the information says “projects incomplete”, it means the amount of money being applied for has not been spent to finish the project. Repayments not yet due - that is even more vague. If they have 10 years to pay it back, are there times set when they have to start paying it back, or can they not pay anything until the 10 year term is over, or do they pay on a monthly basis? How is the department tracking that to see that someone is not falling way behind? Perhaps they should be stepping in to check on the project.

Hon. Mr. McDonald: The Member has defined that the program is relatively new. Some of the programs marked “partially complete” means that all the progress payments have not been made, and we have not yet come to the first payment requirement. If anybody was overdue, they would have missed their first payment. At the earliest, it would have been in the summer of this year. Consequently, we have not yet come to a point with the business development fund where the projects can be overdue.

The business development fund, as I mentioned before, did take over responsibility for loans from the old loan program and they are at the bottom of the page - with respect to loans overdue. Last year, the department has substantially picked up collection procedures to encourage those people who have not paid to pay, and has established a procedure to handle those persons who are more delinquent than others.

Mrs. Firth: I am sure the Minister is aware of the concern I have. He probably has the same concern. When the government is giving assistance to high risk projects, as some of these would be, it is very important to keep on top of the payments, the project, and so on, so that the government does not end up with a bagful of whatever - failed projects, semi-finished projects and so on. I would like to ask the Minister about how regular a basis does the department keep track of this? Is it done monthly or bi-monthly or quarterly?

Hon. Mr. McDonald: The concern the Member has is, in fact, very much an issue for me as well. The loans are tracked on a monthly basis. Phone calls are made and, if the loan payment is more than three months overdue, then letters are written and after that the project officer is sent to the proponent to discuss with that proponent the nature of the payment schedule and to indicate to the proponent the necessity of providing payment.

Mrs. Firth: I just have one more question. In the event that projects do fail mid-project, what happens? Does the company declare bankruptcy? Is the government’s funding lost? Could the Minister perhaps provide as an example the Centennial Street project that is being built? Say the money ran out, the project came to a halt.

Hon. Mr. McDonald: Let me put it this way: if there is an unlikelihood that the project will proceed or if we get a sense that the project will not proceed or if people declare bankruptcy, we will refer the matter to Justice for collection. Perhaps a better example - I would not want to use the Centennial Street project perhaps, because the proponents may well do well and I do not want to cast any aspersions - would be the Belvedere Hotel in Watson Lake, where some proponents of the project walked away from it and clearly there is no hope whatsoever of recovering the loan under those conditions. We referred the matter to the justice department and the justice department at that point took legal action not only to try to secure repayment on the basis of the loan agreement itself but also on the basis of the personal guarantees that were provided by some of the remaining proponents who to support the original application. What would happen would be that, in general terms, the justice department would be asked to take whatever measures are necessary to secure the government’s loan portion of the application and take whatever legal steps it can to get maximum recovery.

Mr. Phillips: Yesterday, we asked the Minister to return to the House with a breakdown of what many of these projects are and to list exactly what is taking place. There is one here, for instance, to a John Jenkins for $10,000. It is very difficult for us on this side to understand what that would be all about. Could the Minister undertake to bring back a brief description of what these contracts are all about? It might answer some of our questions here earlier today.

I would like to move off the contracts for a bit, if there is no one else who wants to stay on contracts.

When we left last night, we were discussing mining and future potential mines in the territory. I would like to turn to a mine that is expected to come onstream very shortly, and that is Mount Hundere.

When do we expect it to come onstream? At the same time, the Minister could enlighten us as to some of the housing problems in Watson Lake they have looked at, and the road route of the trucks as well.

Hon. Mr. McDonald: Just to set the record straight, last night I indicated I would have an explanation of all the projects in the business development fund and the community development fund listings available, and I did provide that information. I have that information with me. I have asked the department to get the information together, and they worked all morning doing that. I give them full credit for doing all the hard work they did in acceding to that request.

With respect to the Mount Hundere project, at this stage we expect the project to come into production in 1991. I am sure Members are aware that development for the project will take place this coming year. Financing is being sought by the proponent, Curragh Hillsborough. With that financing in place, they expect that access road construction can start in the spring. Following that, construction of the mill and the mine development can take place - that is, shaft-sinking and driving the drifts this summer, so production can begin and ore can be hauled in the spring of 1991.

With respect to the government’s role, as the Minister of Community and Transportation Services indicated in the last few days, the Department of Economic Development is responsible for coordinating the government’s actions to deal with the various elements of the project. The department is not only encouraging and facilitating discussions between Curragh, the Town of Watson Lake and the Liard band, but they are also encouraging the meetings with respect to the transportation issues with the relevant departments, the housing issues with Yukon Housing Corporation and Canada Mortgage Housing Corporation, and ensuring all pieces are tied together so the project can proceed expeditiously.

There are a number of things to be considered. One that concerns the Member besides housing, and which I think the Minister of Community and Transportation Services recently spoke of, is the concern at CMHC that providing mortgage support in Watson Lake for what might otherwise be considered a single industry town, would cause them problems.

The Department of Economic Development, the local CMHC and the Yukon Housing Corporation have been advocating that the town of Watson Lake not be considered a high risk community for the purpose of providing mortgage funding. They have been making that case on an ongoing basis.

A proposal has been put before the resource transportation access program for support for the access road into the Mount Hundere site has been given approval, conditional upon its successful work application that Curragh Resources has put before the Regional and Environmental Review Committee.

There are other issues to be dealt with. The band is looking for maximum economic benefit from this proposal. Discussions have taken place with the Kaska Dena Tri Corp, with Curragh and with the government to try to determine what economic benefits can be achieved.

The work is ongoing. The Department of Economic Development has nominated one person to chair the committee: Mr. Lemphers. This person and others in the department are charged with the responsibility of ensuring that the work of the Yukon government proceeds apace.

Mr. Phillips: The potential of that mine is optimistic information from the Minister. I am sure it will be a good stabilizing factor in the community of Watson Lake. I know that many of the residents and businesses in Watson Lake are looking forward to the opening of the new mine.

Another mine that we have discussed in this House before is the United Keno Hill Mine. It is in the Minister’s own riding. Could the Minister update us on any changes or future plans for that mine? Does he know of any plans to reopen the mine or has it virtually been mothballed with no current indication of when it might be open again?

Hon. Mr. McDonald: This is one mining operation that I do not need any crib notes to refer to at all. After the sale of Falconbridge assets to Noranda and Trelleborg, Noranda and Trelleborg proceeded to undertake a survey of all the operations in the Falconbridge inventory to determine whether or not they wanted to sell or operate.

It was no secret that Noranda was looking for the Kidd Creek Mines and had that as their primary objective. The ancillary assets, such as United Keno Hill Mine, did not weigh heavily in their decisions around what kind of bid they wanted to make in purchasing the Falconbridge assets.

United Keno Hill was the smallest of the Falconbridge group and consequently would be the last to be reviewed by the Noranda and Trelleborg working group. When they review each mine, they review the future of the mine from a technical-engineering perspective. They do an analysis of the mineral markets to determine whether or not a mine can operate in the current mineral market environment.

Falconbridge, by the way, still exists as an entity and the board still meets and still makes decisions with respect to the old Falconbridge group, but it must now report to the Noranda and Trelleborg report. With respect to the future of United Keno Hill, I have been told that, until the price of silver rises, it is unlikely that they will consider a reopening in the coming year. I should say “in the coming months” because that is what they said, but I am anticipating it will be at least a year. With respect to the future prospects of the mine, the ore reserves are the highest they have ever been in the mine’s history. The grade is as good as it has ever been in the mine’s history. Unfortunately, the silver price and collection costs are not what they used to be, so they have said that they have downsized the silver price that they think will be necessary for a reopening. It was up in the $8 to $9 range; it is now around $7 before they will review it. Basically, that is where the mine stands at this point in terms of the United Keno Hill board’s perspective.

Mr. Phillips: I get from that that there has been no indication from the board at all whether or not, if they reopen, it will be a fly-in operation or whether they will operate the town site again. They are not even at that stage, I believe, from the indication I got from the Minister. They are not even looking at that this year.

Hon. Mr. McDonald: They are still working on reopening scenarios in anticipation of a higher silver price, so they are interested, at least in a preliminary way, in looking at how they might reduce their operating costs in the future.

As I have indicated to the House before, they certainly believe that the infrastructure they have in Elsa right now is substantial and they feel that, if they were to make the community into a fly-in/fly-out camp out of the Mayo district, it would require significant capital improvement, given the standards for fly-in/fly-out camps these days. By capital improvement, I mean bunkhouses and bachelor suites, et cetera.

They do anticipate using the town site housing. They have given consideration to encouraging more development in Mayo in the future, and having a commute between Mayo and Elsa for town site expansion. They are far from any conclusion to suggest that it would be a fly-in/fly-out camp, but they are interested in whatever options they might have in the future to consider cost savings. They have more or less accepted the fact that they would like to use much of the infrastructure they currently have in Elsa, again.

Mr. Phelps: I do not know if I missed something, but I understand that United Keno Hill Mine is for sale by Falconbridge. The assets or the shares  - I am not sure which - are on the block. Certainly that is the public information that one can glean from The Journal. Perhaps the Minister might know whether or not they intend to sell the assets or the shares of the company to whomever might come along? I understand that, before it is valid, because of the high price that was paid for by Noranda and Trelleborg and because of the fact that zinc prices have gone from $6 to $3 in the last month or so, that is why this decision has come up. It is not the only subsidiary of Falconbridge that is on the blocks, but it certainly is public knowledge.

Hon. Mr. McDonald: That is right. The United Keno Hill operation has been up for sale by Falconbridge, in certain circles, even before the Noranda and Trelleborg purchase took place. Bill James was always fond of saying that he would always sell any mine for a good price. He has obviously proven that with respect to Falconbridge itself.

As far as I am aware, the mine is up for sale, and there is some speculation that the debt that Noranda and Trelleborg incurred as a result of the purchase of the Falconbridge shares is something they would like to get out from under. It has not been helped by a slackening of base metal prices. Nevertheless, they did indicate to me that if their main plan goes as scheduled, they will continue to review all the operations in the Falconbridge group, one by one, and will make a considered decision based on technical information on what to do with each project.

One might speculate, if one were in that business, that they are more interested in a fire sale in order to get some quick cash. If they have the time they will proceed as they told me they would; that would be to review each operation, one by one, and consider a plan of action for each mine site.

Mr. Phelps: The concern has to be that even if it comes close to break even, will the senior owners have the money to start it up, given they have such a large debt-financing commitment. It is kind of reminiscent about what happened to Cyprus Anvil when Dome Petroleum started expanding and they suddenly realized they had bought a mine, among other things.

Hon. Mr. McDonald: That is one element they will have to consider. It will help them determine what silver price was necessary to either use their own finances or to initiate an opening. There is talk about the desirability of a new mill. That talk is not new; it has probably been around for 30 years, but a restarting of the operation would cause those questions to be asked again.

I have heard so many figures about the reopening costs I would not want to venture a guess as to what they would be. That is a cause for concern: whether or not Noranda has the cash in the bank.

The other concern is whether or not Noranda wants to operate a small mine in the Yukon. The fact they do not have operating experience in the Yukon has been noted by the United Keno Hill board, and even though they have good exploration experience here they might not want to operate a mine this small in this region. That has caused everyone to speculate, including the Falconbridge officials.

Mr. Phillips: I would like to move into a little different area that is quite closely related to the opening of several mines in the territory in the future - that is the area of energy. The Department of Economic Development must be concerned about several of these mines coming onstream. What is the government doing with the Yukon Development Corporation and the power corporation looking into the possibility of more hydro power in the future. I understand we are almost at our maximum potential for producing hydro-generated power in the Yukon. Anything new that comes onstream will have to be either diesel generated or we will have to look at some other means of producing power. Where are we with that, and what kinds of discussions have gone on with the various parties?

Hon. Mr. McDonald: I will end up having to give the stock answer that I provided last year to the same question put forward by the Member for Porter Creek East. The Yukon Energy Corporation is the responsible agent for determining power needs and assessing those needs. However, the Department of Economic Development has communicated its view to the Energy Corporation of potential hydro demands on the system, especially as it regards larger mines, and expects that those will be taken into consideration in any discussion with respect to any future development of hydro-electric power.

As the Member mentioned, we are reaching a point in the Whitehorse-Aishihik grid where we are reaching the limit of hydro-produced electricity. That is not the case in the Mayo grid. They have a surplus of about five megawatts. That leaves some flexibility within the Energy Corporation to determine whether or not they want to tap into that or develop a new source.

In any case, that is a decision for the Energy Corporation to make. We have communicated what we consider to be the best prospects, those primarily being the mines that have made production decisions, or announced they are making production decisions or seeking financing to go into production, or announced whether or not they intend to go from prefeasibility to feasibility. That allows us the time to review the various options for the provision of power.

It is interesting to note that not all the mines are requesting hydroelectric power. I happen to know that Mount Hundere is prepared to generate power on-site and are not looking for hookup to any grid. Again, the issue is one for the Energy Corporation to decide.

Mr. Phillips: I raised the issue because, like the Minister says, it has been brought forward by other Members of this House in the past, and we are getting closer to the crunch. I have this vision of reading a headline in the paper a year or six months from now that we are having a real problem with power, or have power outages as a result of too much demand. We also know it usually takes many years to do the proper environmental impact studies and to look at various areas for developing hydro-generated power, if that is the route we are going to go.

We have to get moving on this, one way or the other, to look at hydro power or other types of power. We are getting close to being “maxed” out. If we wait until the very last minute, I am afraid we are going to be in a crisis situation where we are going to have several mines that are all ready to go, and their holdback will be the ability to access any power for production, unless they go to diesel power on their own. That can sometimes make the mining costs prohibitive.

It is something we should be seriously looking at now. I am not advocating we build a dam anywhere. I am just saying it is something we should be closely examining. It is a fact of life. We are in the 1990s, and people need hydro power to produce their products. As we get more people arriving in the Yukon and more mines wanting to start up, the more power we are going to need. We are going to have to find some way fairly quickly to bring some more power on stream.

Hon. Mr. McDonald: That is a very responsible approach. There will be increased demands. If the Members have any ideas or suggestions to make on whether or not they would like to see a hydro dam, I would be happy to hear them. I will pass that information on to the Energy Corporation. If they want to name the wilderness river or provide some sense about whose favourite recreational spot could be used for a holding lake for a hydro development project, I would like to hear about it.

The Energy Corporation is surveying potential sites for hydro development. I do not know if we are talking about the Old Crow River or what. The Yukon Energy Corporation is acting responsibly in surveying its needs and the potential methods by which they can generate power to meet the demand in the future.

Mr. Phillips: I would be the last one to suggest any river, such as one near Rampart House. I would be the last one to ever suggest anything like that. I would probably rise in my place and defend it with all the power I had to stop any kind of a hydro development in that area.

We have recently seen some indication that the government is looking ahead to the future. Lines have been prebuilt. If we do enough of this prebuilding like the one to Henderson’s Corner and to some of these other places, we will just have to plug in the sockets, so to speak because there is all this prebuild going on.

It is interesting that we are approaching it in that way. I would have thought that more time would be taken to figure out exactly where a hydro generator might be placed before the lines were built.

Hon. Mr. McDonald: There is no doubt that enough prebuild will settle the issue. It might be worthwhile to watch the flag ceremony at 4:00 p.m. As a Canadian citizen, I think it would be very worthwhile to watch the flag ceremony. I suggest that we take a break for a few minutes and get right back to this.


Mr. Phillips: I would like to go back to contracts for a moment. Earlier, I asked the Minister about a description of what the grants and loans were. He said he had the description, but he did not indicate whether he would give it to us or not.

I would like the Minister to give us an indication now whether he can provide us with a description of what each of these items are and what the grant or loan was given for.

Hon. Mr. McDonald: I can get the information tabulated and provide a brief description for every project.

Mr. Phillips: I would like to move on to another area of concern. In the Minister’s introductory remarks, he talked about the Northern Accord and the discussions we were having with Ottawa and the Northwest Territories with respect to that accord. Could he bring us up to the current status of the negotiations regarding the accord?

Hon. Mr. McDonald: The Northern Accord was an agreement in principle signed in 1988. In the last year, since I first came to the department, there has been a great deal of activity put into setting down the principles for the negotiation and considering what our position would be on the various issues surrounding the Northern Accord.

We have been discussing with the federal government the various elements of the Northern Accord and trying to get a better feeling for the position of the Government of the Northwest Territories with respect to this matter. As the Government Leader alluded to in the Executive Council Office debates, the position of the Government of the Northwest Territories does require some clarification. We are diligently working to ascertain what it is on a number of points.

The issue of the accord necessitates a more thorough relationship with a number of other parties beyond the other two governments. The department has been working with industry in Calgary to ascertain what their aspirations are in this mix, and also to meet with Inuvialuit in Inuvik and Tuktoyaktuk, as well as native groups in the Yukon and Northwest Territories.

It appears that in order for there to be an accord that is satisfactory to everyone’s interests, thorough consultation with all those groups is required and is mandatory.

In any case, as I have indicated in the House before, we do anticipate the accord will be signed, and I believe things are well in hand to be signed at the latest in 1991, in the spring, we hope. We have designated someone in the Department of Economic Development to act as the senior negotiator. As well, the deputy minister has spent a great deal of his time in discussions with federal COGLA officials in the Department of Indian and Northern Development, and with the Government of the Northwest Territories’ energy department.

The formal negotiations, inasmuch as we could anticipate it, should start shortly.

Mr. Phillips: Does the Minister feel that the lack of an accord right now is hampering in any way the exploration that might take place in northern Yukon or the Northwest Territories and the Beaufort Sea?

Hon. Mr. McDonald: No. The first project we undertook was to design a protocol on the issuance of rights for exploration in the Beaufort; since then, there have been two issue calls, one of which happened last fall, and the second one was discussed by officials two weeks ago. The protocol essentially determines the Yukon and GNWT’s role in discussing the rights issuance, because it clearly is a COGLA, Canadian Oil and Gas Lands Administration, responsibility; but they have, in the spirit of the accord, brought the Yukon and GNWT into the discussions. Consequently, with the help of Russell Banta, who I mentioned in the past - Russell Banta being a consultant on oil and gas matters previously assigned to Mr. McKnight’s office on the same matter - we have been commenting on exploration rights in the Beaufort, both on the NWT side and on the Yukon side of the border.

Mr. Phillips: Do we have any known capped wells in what we would describe as the Yukon’s Beaufort - the area we feel is under our jurisdiction? As well, do we have any current exploration activity going on there, or do we have any planned exploration that is going to take place there in the near future? I know they use Yukon waters, I think, off Herschel Island sometimes to harbour some of their ships in the winter months rather than bring them out, but I am just wondering if there is any actual drilling going on or exploration, or is there any exploration planned in the near future?

Hon. Mr. McDonald: The exploration in the western Beaufort has been not as active historically as in the eastern Beaufort. There are three capped wells that were called significant discoveries on what we would call the Yukon side of the border. In total, they are not sufficient to justify production, obviously, but they are considered significant finds. The most recent rights issuance dealing with the western Beaufort in particular are those areas that are not currently under licence. The Yukon government has indicated that there should be a significant buffer - a minimum of 12 miles - between land and any exploration activity, and that there should be no drilling activity around Herschel Island. Nevertheless, there is still fair room for further exploration in that area.

The one area under dispute I believe the Leader of the Official Opposition, Mr. Phelps, was interested in before, is an area apparently the federal government is interested in considering for issuing rights as well. They have not yet made a decision as to whether they will or not. As the Member may know, the U.S. government also issued, or at least threatened to issue licences in that area, but put things on hold after objections were raised by Canada. I believe they are discussing at this point, but have not made a decision as to whether or not they would like to issue rights in the disputed zone. Exactly how much property is there, I do not know.

To cut a long story short, there has been some activity in the western Beaufort. It has not been as active as the eastern Beaufort.

There have been three significant finds in the western Beaufort, and there may well be further exploration work in the western Beaufort, but that would be determined by the oil companies.

Mr. Phillips: Does the Government of the Yukon have a position on the exploration of oil and gas on the very western edge of the Yukon? That is the area in dispute and borders the Arctic National Wildlife Refuge lands, I believe. I am just wondering if we have taken a position on that. I know we have objected to the ANWR proposal to develop that oil and gas there, but this is fairly close and I am just wondering if the same position the government is taking, of no development on the ANWR lands, is the same position that we would take in the northern Yukon?

Hon. Mr. McDonald: The buffer zone for offshore exploration we have requested, which has been accepted by the Canadian Oil and Gas Lands Administration, applies throughout the entire Yukon coast, including the disputed waters. We have asked that there be no exploration activity in that area at all and they have agreed - including lands adjacent to ANWR.

Mr. Phillips: The other area that I would like to explore is concerning, as the Minister has said, the three major discoveries in the western Arctic. At the same time, we have also discussed the possibility of getting the oil and gas to market and one of the things that we have said in this House, that the government has taken a position on, is that of not allowing tanker traffic in that part of the Beaufort Sea. What other alternatives is the government looking at if the time comes when we can get that oil and gas to market? Is there a corridor down the Mackenzie Valley or are there any more current plans on the Dempster lateral that the government may be looking at?

Hon. Mr. McDonald: The Member is quite right. We have taken the position that there should be no tanker traffic to and from the Beaufort Sea. Should the National Energy Board not reconsider its position to export gas, there are a number of options to consider. I did that particular twist, in terms of the Energy Board’s approval, because there is a chance that the Energy Board may reconsider its decision to approve the export of natural gas out of the Mackenzie Delta. The reason for that is largely a result of actions taken in the U.S.A. to permit the export of natural gas from Prudhoe Bay to Asia. A decision was made recently by the U.S. Energy Department to approve the export of 17 trillion cubic feet of natural gas from Prudhoe Bay to Asia. The concerns we have about that particular proposal are that, first of all, it means a tremendous amount of tanker traffic, exporting liquid natural gas from Alaska and not using the Alaska Highway gas pipeline. Secondly, it reduces the total sum reserve in the Prudhoe Bay area, making an Alaska Highway natural gas pipeline less feasible. Thirdly, it makes it much more likely that there will be pressure to place a pipeline for a smaller Prudhoe Bay field from Prudhoe Bay, across to the North Slope and down the Mackenzie Valley.

Because it makes the North Slope pipeline even more of a possibility, we have objected strenuously to it.

As Canadians, we have also objected to the fact that the U.S.A. has indicated they would be willing to sell natural gas at world natural gas prices to Asia, and we would be obligated to sell our natural gas to the United States at domestic prices under the free trade agreement. From an economic prospective, that is unfair. There is some concern about that.

Energy, Mines and Resources seem to think that the proposal to sell natural gas to Asia is unrealistic and uneconomical. Nevertheless, there are active proponents in the U.S. who are promoting this option. The Alaska state government seems to be in favour of it, and the U.S. Department of Energy is also in favour of it. That has caused us to be quite concerned about the whole question of export of petroleum resources from Prudhoe and the Beaufort.

We have indicated our position on the Beaufort natural gas is that if the Mackenzie Valley pipeline does not increase the potential for a North Slope pipeline, it is something we would not necessarily object to. We still want Prudhoe Bay gas to travel down the Alaska Highway corridor and not across the North Slope. We have kept that in mind in our discussions.

A great deal now depends upon natural gas markets. We have a potential of getting into many artificial debates with other governments about all kinds of issues surrounding the export of natural gas. The maturity of markets in Asia and the maturity of the markets in the U.S.A is what will determine what happens. It appears they are maturing a lot faster than expected a year or two ago because of the concern for carbon dioxide emissions and a desire to move to a much cleaner fuel. There are endless scenarios that one can consider.

In the coming year we will be analyzing transportation issues and all available work that has been done to better assess where the markets are coming from so we can best determine where to put our energies. We will also be working to ensure that the Northern Accord is negotiated so we can have some say in development decisions.

At this time it is impossible to state which gas field is going first and what routes might be the most economic and environmentally sensitive, and consequently, which routes might come into effect.

Mr. Phillips: I have to express some concern. We seem to be really late getting out of the starting blocks. The Minister has told us about what is happening in Alaska. I have talked to several people in Alaska, and the proponents of the natural gas pipeline from Prudhoe Bay to Valdez and the liquification plant there, and the sale to Asia is well on its way. It has a lot of supporters. The American system is one of lobbying and working hard to convince these people that they have the best idea. The advent of this pipeline would create several problems for the Yukon. Number one, the Alaska Highway gas pipeline would not be built, and number two, there would be more of a chance of a line across the northern Arctic, and I do not think any of us want to see that.

We are all concerned about that. On the other hand, the Minister tells us that the Government of the Yukon is not that upset about the Mackenzie Valley pipeline. That again will have a detrimental effect upon the Yukon in a roundabout way. It will just put off the Dempster Highway lateral and the Alaska Highway gas pipeline. Overall, the Yukon will lose out.

A natural gas pipeline coming through the Yukon would create hundreds of jobs and be a great boom to the economy to start with. Secondly, it would provide cheap and clean fuel for Yukoners to use in their homes. We should become a little more active. I would have thought we would have been working in Ottawa or lobbying in Washington, doing what we have to do, to make our point clear.

We should be taking a distinct position that we would like to see the Alaska natural gas pipeline built, with a possible Dempster lateral later down the road. The right of way is there for the Alaska Highway gas pipeline. It was cleared a long time ago; that hurdle has been gone through. Many environmental studies have been done. I am sure we would have to do another environmental impact study before we looked at that route.

I thought we would have taken a more pro-active approach and tried to convince some of the proponents that this was the best way to go, rather than sit back. We are putting our case together rather slowly while others are already planning to build their pipelines. We will find out that when we are all ready to go, the decision will have already been made. The horse will be over the finish line, and we will just be getting out of the starting blocks.

Hon. Mr. McDonald: I am dumbstruck by the comments that the Member has made after I provided what I thought was a very thorough picture of the many complications of the issue. I also made many ministerial statements in the House on our position, and I have indicated publicly where we stand on this issue many times before.

I do not know where the Member comes across in providing that kind of criticism. It has no basis. We have been working very quickly. If the Member wants to talk to federal officials, they will say that we are not behind at all. We are probably one of the most aggressive players in seeking the Northern Accord, so I do not know where that criticism is coming from.

We get as much background and work done as we can. We lobby hard on these issues. We have dedicated capable personnel in the department who make this basically a full time job. Anybody who is aware, at least in Canada, about the issue and who is involved in the discussions, will know that the Yukon is no bit player on this question at all. We have been very aggressive in stating our case and in stating our concerns. We have also suggested alternatives and are preparing for a management regime after the Northern Accord takes affect.

We are not falling behind. We are not late out of the starting blocks. We know where the race is. We are there on time. We are first off the mark when it comes to negotiations on the accord. We have been very good about expressing our views on the entire range of issues. That is not bad for the smallest government in the equation. We are definitely players. We do have considerable interest. We have not changed our overall position. I have stated that position many times for the record in this House.

I was trying to explain to the Member that there are many complications. If the Members are interested, I can explain what some of those complications are. It is not a black-and-white world out there. It does require thought and understanding. I am trying to impart that the department has put that thought to it and has that understanding and, consequently, is credible with the governments, as well as the industry and people who live in the Beaufort area.

As I have indicated before, we have made contact with Alaskan officials. We have talked with them about their proposals. We are not neophytes on that front, either. I am fully aware of support by the state for the export of natural gas to the east. I know they are starved for cash, and this is a good potential for them. We have indicated to them to sell their gas for a premium price and to expect Canada to sell its gas at a domestic price is not fair. That should be considered. It is considered by the federal Canadian side, as well. The Energy Board is going to be taking that kind of thing into account as well.

We communicate with the Energy Board, with various departments of the federal government, with the Government of the Northwest Territories and the Government of Alaska, with the Inuvialuit, CYI, the Dene-Metis, industry groups, anyone and everyone. We have even established a local benefits committee with representation of local business, including an ex-MLA of this House on the committee to discuss the issue of socio-economic issues related to oil and gas development.

That committee has been meeting, and they have been talking about the issue as well. We are not behind on this question. I would submit we are ahead of the game. There are big players in this equation - no question about that - but inasmuch as we can play a role and define our future, we are doing so.

Mr. Phillips: The Minister stated some of the facts here today. I am pleased to see they are moving ahead in some areas. We hear a great many media announcements about the Mackenzie Valley pipeline and things that are going on there. I hear the same things coming out of Alaska, through the Anchorage newspapers, of the possible Valdez natural gas pipeline and the sale of natural gas to Asia. That proponent has the State of Alaska and the federal government onside.

As good a job as the Minister thinks his department is doing, somebody else is obviously doing a better job. Whether the Minister thinks he is up front or not, the fact of the matter is that the general public’s perception is there is very little being done with regard to the Alaska Highway gas pipeline. We constantly hear about the Mackenzie Valley pipeline and the future of it, and the proponents are moving quickly to get that online, and we hear lots of news announcements about the gas pipeline to Valdez.

All I am saying to the Minister is that the information he gave us here today is fine but the general public out there does not think that the Alaska Highway gas pipeline proposal is out of the starting gate and away ahead of everybody else. They almost feel it is dead because they have not heard anything from anyone other than a few statements, right after the Exxon Valdez ran onto the rocks, about reviving the Alaska Highway gas pipeline, and that is the last the general public has heard about the issue since then. That is all I am saying to the Minister. They may be working very hard on it and I will give him all the credit in the world for working hard on it, but maybe they are not working hard enough.

Hon. Mr. McDonald: I think we have to put this question into perspective. I am not going to plead small government all the time. Even as a small government, we have done some tremendous things. However, we have to understand that the reality is not northern people debating transportation options; the reality is determined by markets. Those markets are going to decide the question for us, and we can try to manipulate some things and try to get into a good position so that we can manipulate some things, but the markets are going to decide.

It is the interpretation of those markets by the Department of Energy and by the National Energy Board, which will make decisions with respect to the export of gas and transportation options ultimately. Those are the factors that are going to tell us what is going to happen. If we understand that markets are going to be determining demand in this particular case, then I think we will be able to put our own efforts into perspective. We can interpret the efforts of the Alaska government or of particular native organizations or whatever, but in the bigger picture, which decides this question, it will be the markets that decide.

Inasmuch as we have latitude and flexibility to make decisions, we have exercised every available option open to us. There is, clearly, a flurry of activity.

Let me put it this way: there was a flurry of activity on the Mackenzie Valley Pipeline six months ago; it has been pretty quiet recently. There has been a flurry of activity by Yukon Pacific to start up the proposal to export gas to the east. Whether or not that is technically viable is debatable, as I indicated, and it may not go ahead at all.

The danger here of what we are doing is that we are debating all these various scenarios and getting caught up in the dynamism of negotiations in the north but are not keeping enough of an eye on the consumer markets. It is the maturity of the consuming market that is going to decide what happens. Presumably, one would understand that the Department of Energy and the National Energy Board in Canada would be interpreting the markets and determining, along with federal cabinet approval of course, who goes first and that sort of thing. All I am saying, and I am not trying to overstate our efforts - I do not have the pom-poms out to say that Yukon is the number one player, because that is just unrealistic and not true.

We are a significant player. We are playing our hand to the greatest extent possible, and we are developing expertise in the government that did not exist before to be able to understand these issues better and inflict our political will on the question, as much as we can.

Mr. Phelps: I am pleased to hear about this belated recognition of the impact of the market forces on the issue of transportation for that resource. Speaking of market forces, I am wondering how the market forces are reacting with regard to the very large furniture manufacturing industry we have in the Yukon. Perhaps we could hear about the market forces in that regard.

Hon. Mr. McDonald: I am not sure what to make of that question in the context of oil and gas. To refer to oil and gas for a second here, if one is going to invest $6 billion in a pipeline, one is talking about large markets. One can invest $50,000 in furniture, and one is talking about responding to smaller markets. We do not have the ability to manage or manipulate the natural gas market in the eastern United States, even if we wanted to; that is obvious. There are forces there that are causing things to change.

Acid rain concerns in the heavily-populated part of North America are causing people to think about carbon dioxide emissions. Consequently, there is a move to cleaner fuels and the generation of electricity. In turn, that is causing a desire for what they call a transition fuel, and liquid natural gas is considered to be a transition fuel, from petroleum to something else.

With respect to furniture, in the past the Minister of Government Services has encouraged an indigenous furniture-making capacity in the Yukon, based on the very limited market the Government of Yukon has, or can command within the government. Consequently, the production is small because the market is small.

Mr. Phelps: In fact, the only market is the Government of Yukon. Is that not correct?

Hon. Mr. McDonald: I do not know enough about the industry to be able to tell you whether or not the only market is YTG. There may be locally-produced furniture being sold commercially, for all I know. That is a good question to put to the Minister of Government Services.

Mr. Phelps: Is there a policy that the government would pay all of this extra money for furniture in order to put this industry on its feet? I suspect that, if one had analyzed market forces back then, one would have realized there is no realistic market for the furniture except government.

Hon. Mr. McDonald: No matter what one thinks about the legitimacy or illegitimacy of government requests for furniture, it still is a market in itself. Until such time as the government requires no more furniture, there will be a market. Consequently, government does play a role in the local economy. Whether it is against the Member’s political principles or not, it is a reality.

I believe the Minister of Government Services was taking into account the fact that the government does form a bit of a market, in terms of its purchase of supply capability, and he wished to encourage some indigenous, value-added manufacturing in the Yukon that could service that market.

Mr. Phillips: That brings me to another area I would like to talk about and that is about dealing with markets and the free trade agreement. We have heard all kinds of horror stories about free trade when it passed over a year ago, and we are still hearing horror stories.

Has the Department of Economic Development done an evaluation of free trade and its effect on the Yukon since it has been in force for a year now? What effect has it had, positive or negative, on the Yukon?

Hon. Mr. McDonald: To my knowledge, we have not done an analysis above and beyond what we did originally on the free trade agreement. What we have done is analyzed what the free trade agreement will do in some sectors, and I mentioned just one with respect to gas exports. As well, we have tried to encourage people to get as much benefit from the free trade agreement as we could, and we have been encouraging private sector participation in trades shows in Alaska and outside of Canada. There has been some take-up and enthusiasm for the trade show recently held in Anchorage. It is to encourage those people who potentially may have the opportunity to export materials to take advantage of the agreement. That is where we put most of our energy.

We do not have any assessment of the downside of free trade. Given that free trade is a reality, we have tried to put our energy into working within the framework.

Mr. Phillips: Has this government made any efforts to examine the types of products and supplies that places like Alaska need that could be obtained from the Yukon that would be duty free under the free trade agreement? I know the capital city of Alaska is Juneau, and there are many government offices there. We are not that far away: 100 miles by road to Skagway and the ferry goes to Juneau several times a week. If we had taken the opportunity to look at the types of things that the government offices, or people in Juneau, might use that we produce here, even the furniture produced for government, it might be an opportunity for someone if they investigated that market. I am sure the government offices in Juneau buy as much furniture as the Government of the Yukon. I am concerned they might not pay the same price, but they always have an ongoing turnover of furniture. I would think if the Government of Yukon is the biggest purchaser of that in the Yukon, then surely the Government of Alaska would be the biggest purchaser in Juneau, because it is the biggest employer. It is not that far away. We are closer than any Alaskan city. We should be investigating that natural market; we could send a trade mission to do some investigating of what is available.

This weekend, some members from the Alaska Chamber of Commerce are coming to Whitehorse, and they will be looking at what Yukoners have to offer. I believe  somebody from the Government of Alaska is going to be talking about procurement of various commodities.

We should possibly be making more efforts in that regard. I believe the chamber was involved in this one. Is the Government of the Yukon assisting? What are they doing with respect to trying to establish new markets with Juneau and some of the Alaskan cities that are quite close to us?

Hon. Mr. McDonald: As I have indicated, the department has encouraged good prospects, or proponents, who have come forward with a proposal to demonstrate their wares in Alaska to do so, and we have provided some financial support to them to participate in such things as the Alaska State Trade Show.

As well, we have jointly conducted, with the Yukon Chamber of Commerce, a trade and investment strategy development. We had a meeting in Watson Lake in January where the department was in attendance to discuss trade and investment issues, investment in the Yukon and export outside of the Yukon, to investigate the potential for the Yukon to take advantage of its strengths and to get appropriate capital investment into the territory.

I am aware of the Alaska Chamber of Commerce’s visit, and I will be there myself to welcome them. We have taken the issue of trade and investment policy development seriously, as I said I would do last year, and we are doing it cooperatively with the Yukon Chamber of Commerce.

The private sector is coming forward with many new good ideas for which we are providing financial support to demonstrate outside the territory, but not only in Alaska, as that is only one market. Globe 90 is another trade fair that is coming up shortly in March in Vancouver, which has international participation. We will be providing support for attendance to the private sector.

We are increasing our efforts in this particular area, both on the policy side and the financial support side to encourage the exposition of Yukon products.

Mr. Phillips: In looking at the possibility of trade with Alaska, has anybody from the Department of Economic Development met with Alaskan officials on the road proposal from Juneau, Alaska, through Atlin and into Whitehorse? It is just a proposal. There were some people in town a few months ago, and they gave a bit of a demonstration of what they were planning to do and what the status of it was. Have we taken any initiative whatsoever to look at that?

Juneau has 25,000 or 30,000 people. There is no access to it other than by water. If there was the possibility of a road that happened to come into the Yukon as a direct link, the economic spinoff would be enormous for both areas.

Right now, we already experienced quite a few people from Skagway who come to Whitehorse on a regular basis. Quite a few people from Whitehorse go to Skagway on a regular basis.

If the road becomes a possibility in the future, it might open up a lot of economic opportunities. It may be a pie in the sky dream. There are some people in Juneau who treat the proposal very seriously and who are looking for some support. Have we spent any energy at all in examining that proposal to see if it has any merit?

Hon. Mr. McDonald: When I was Minister for Community and Transportation Services, I met with the proponents behind the original motion in the State Legislature to study the concept of putting a road either from Juneau to Atlin or from Juneau up the coast, and a combination of road all the way to Skagway.

In those days, there was a good deal of snickering in the state capital about that proposal. There was a great deal of skepticism in DOT about the proposal as well. Things have progressed from that stage though. It is ultimately in the Yukon’s interest to have a road access between Juneau and Skagway. It would certainly make the Skagway Road negotiations a lot easier the next time around if Juneau and Skagway wanted access to the Yukon.

I understand from the Minister of Community and Transportation Services that the ADM responsible for transportation has been in contact with state officials about the road proposal. The Minister has communicated general support for a road proposal. There would be obvious economic benefits. I do not know what the environmental impact would be at all or what the downside concerns would be.

On the economic side, we would be able to get to Juneau in two or three hours by road. That would be a tremendous boom to both the economies of the cities of Whitehorse and Juneau, both from a tourism and economic development perspective, and in terms of the trade that might take place between those two larger centres.

The Minister for Community and Transportation Services would be in a better position to comment on the specific proposal. When I was Minister of Community and Transportation Services, we were dealing with it as a transportation issue. At that time, even when there was some skepticism, we were generally supportive of the concept, and I am informed we are still.

Mr. Phillips: I raise the issue because I know, in the cooperative spirit of free trade of the government, it would be more than happy to develop an arrangement with Juneau where people could get to and from Juneau and Whitehorse in three hours or less. We might even want to have this debate a couple of weeks from now when our Alaskan friends are in the gallery. It might be handy to discuss it then and do some of our lobbying on the floor to see if we get anywhere.

I think it is something the Department of Economic Development and the Department of Community and Transportation Services should treat seriously and investigate now. That would have tremendous potential for the cities of Juneau and Whitehorse. It would certainly be an economic boon to both areas, both recreationally and financially. There would be many spinoffs. We should seriously look at it.

Considering the time, I move that you report progress on Bill No. 19.

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 a report from the Chair of Committee of the Whole?

Ms. Kassi: The Committee of the Whole has considered Bill No. 19, First Appropriation Act, 1990-91, and directed me to report progress on same.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

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

Speaker: It has been moved by the Government House Leader 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 5:29 p.m.

The following Sessional Papers were tabled February 15, 1990:


Yukon Business Incentive Policy for Construction (Byblow)


Yukon Business Incentive Policy for Goods and Services (Byblow)


Whitehorse VCR (Visitor Reception Centre) Feasibility and Design Study, Final Report, March, 1989, by UMA Engineering Ltd. for Tourism Yukon (Webster)

The following Legislative Return was tabled February 15, 1990:


Contract by Dept. of Health and Human Resources to complete initial recruitment steps for Chief Executive Officer for Whitehorse General Hospital in preparation for transfer (Penikett)

Oral, Hansard, p. 995

The following Filed Document was tabled February 15, 1990:


Petition re non-smoking policy in Yukon Government buildings and leased space, and recommendation that smoking areas be designated (Phillips)