Whitehorse, Yukon
Monday, November 19, 1990 - 1:30 p.m.
Speaker: I will now call the House to order. At this time, we will proceed with Prayers.
Prayers
DAILY ROUTINE
Speaker: We will proceed with the Order Paper.
Introduction of Visitors.
INTRODUCTION OF VISITORS
Hon. Mr. Byblow: I would like to call the attention of the House to representatives in the gallery from the steering committees of the Mount Lorne and Ibex Valley hamlets. The Ibex Valley hamlet is co-chaired by Bonnie Hurlock and Guy Coquet and the Mount Lorne is chaired by Peter Carr. I would like Members to welcome them and their presence today.
Applause
Speaker: Are there any Returns or Documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. Penikett: I have some documents to table.
Hon. Ms. Joe: I have for tabling responses to questions from the Member for Riverdale South.
Hon. Mr. McDonald: I have for tabling various documents including the Yukon College’s 1989-90 annual report.
Speaker: Reports of Committees.
Petitions.
Introduction of Bills.
Notices of Motion for the Production of Papers.
Notices of Motion.
NOTICES OF MOTION
Ms. Hayden: Given that November 21 is North America day of action against racism, also known as equality day, I give notice of the following motion:
THAT it is the opinion of this House that racism is the scourge of humanity; and
THAT this House recognizes that multiculturalisim is the foundation of Canadian social fabric and awareness of the issues around racism, when combined with understanding and respect, will accomplish much to protect individual rights and freedoms for all Canadians.
Speaker: Are there any Statements by Ministers?
MINISTERIAL STATEMENTS
Mount Lorne and Ibex Valley Become Hamlets
Hon. Mr. Byblow: I am very pleased to announce the establishment of Mount Lorne and Ibex Valley as hamlets under the authority and provisions contained within the Municipal Act.
As Members are aware, a hamlet is a first step toward local government in the Yukon. A hamlet council is democratically elected and advises the Yukon government on matters normally handled by a municipal government.
Petitions requesting hamlet status were received from Mount Lorne residents in December 1989, and from Ibex Valley in February 1990. A lengthy consultation process took place involving boundaries and various mutual concerns that were conducted with area residents, the First Nations involved and other interest groups. In the end, in final public meetings that were held in both areas, the result was a unanimous endorsement of a hamlet.
The hamlet of Mount Lorne takes in the area from Mile 2 on the Carcross Road to the Bear Creek bridge and along the Annie Lake Road to the first bridge crossing the Wheaton River. The hamlet of Ibex Valley extends north along the Alaska Highway from the City of Whitehorse boundary to Stoney Creek. At the request of the First Nations, land selected by First Nations will be excluded from the hamlet boundaries and their jurisdictions.
The formation of hamlets goes hand in hand with our policy and belief of involving Yukon residents in local decision making where they are willing to assume the additional responsibility. In this regard, the order-in-council establishing the hamlets includes provisions for holding the first and subsequent elections. I am pleased to announce that nomination day for both hamlets is scheduled for November 26, 1990, and election day for the hamlet councils is December 6. The newly elected councils will hold office from the date they are sworn in until November 1991. At that time, under the provisions of the Municipal Act, municipal elections will be held throughout the territory. Councillors will then hold office for a term of three years.
I would also like to note that, in the case of Mount Lorne, the steering committee have established five wards as the basis for their elections. I commend the residents of Mount Lorne and Ibex Valley for moving toward this first phase of local government.
Mr. Phelps: I would like to join with the Minister in congratulating these people for the work they have done. As they know and as the Minister knows, I have supported this concept in my riding since 1985 in various speeches to such organizations as the Association for Yukon Communities, among others. There have been numerous organizational meetings and a lot of work done by the residents in both areas. There have been petitions signed by residents supporting the concept of hamlet status and discussions of the concept in sometimes long conversations between those on the organizing committee and residents in the area.
In both cases, an overwhelming number of the residents supported hamlet status for their area. I suspect that we are going to see other areas in the Hootalinqua Riding coming forward in the near future with similar requests. On Thursday night, we will be having a meeting in Carcross about hamlet status with government officials and with one of the chairmen of the committee for the Mount Lorne hamlet to discuss hamlet status for Carcross.
We anticipate there will be a lot of interest shown by Tagish and by Marsh Lake areas as well. I think it is a good thing that is happening; I think it is great to see people taking and achieving more controls over their lives and their neighbourhoods, and so we certainly join the Minister in congratulating the residents of both areas in finally achieving a form of local government. Thank you.
Hon. Mr. Byblow: I would like to extend my appreciation to the Leader of the Official Opposition for his support of the hamlet status creation in the two areas surrounding Whitehorse. I would like to reassure the Member that should such a similar request come from Carcross or other areas of the Yukon, this government will be as willing, as it has demonstrated with these two hamlets, to open the door for discussions and formation of hamlet status.
I thank the Member for his comments.
Lifeline Alert System Monitor
Hon. Mr. Penikett: I wish to inform the House of an undertaking by this government to assist Yukon seniors to remain in their own homes.
We have entered into a contribution agreement with the Line of Life Association to conduct a pilot project in Whitehorse. We are contributing $23,000 for the purchase of a Life Alert System monitor and 15 home units, as part of that pilot project.
A fear of being unable to call for help following a fall or a sudden illness is one of the main obstacles preventing many healthy elderly and disabled people from living in their own homes.
The Lifeline Alert System provides a communication link between the user and ambulance services.
A committee is being established that will consist of one physician, one registered nurse, one home care representative and one representative from the Line of Life Association. Together, these people will develop eligibility criteria for the program.
The government’s contribution is a one-time contribution. The association expects to become independent by utilizing federal grants and local community agencies to further develop the program.
The association will be charging a monthly rental fee of $17.50, which they anticipate will cover future administrative costs. Future purchases of equipment will be funded either by community donations or federal government funds.
The Lifeline Alert System is a simple one. Clients are provided with a disk that can be pinned to the clothing or worn around the neck. In case of a fall, or illness, pressing the disk will activate the home communicator unit, which will automatically ring at the Lifeline emergency response centre located at the ambulance station in Whitehorse.
This is just one example of our commitment to promoting independence for the territory’s disabled and elderly.
Mr. Lang: I want to say that this side of the floor shares the concern of the side opposite in respect to the very real situation that faces some of the elderly. As the Member knows, I think there is generally common support by all political parties when it comes to programs of this kind. I would just make an observation that perhaps, rather than looking to the various other government institutions like the federal government and to the community for funding, I was thinking that perhaps some thought should be given that those who wish to purchase the assistance can do so themselves. Maybe there are a lot of senior citizens, as well, who would be prepared to go on a loan program if this type of a program is made available to them. Perhaps we could reach more people quicker this way, than depending on other government agencies for financing. It would seem to me that our social network will take care of those who cannot afford it but those perhaps who can would be prepared to step forward and purchase the service on their own and others may be prepared to go with some sort of a loan program. This way, perhaps we could assist more people, as opposed to just the 15 who are going to be designated here in the near future.
Speaker: This then brings us to the Question Period.
QUESTION PERIOD
Question re: Lawsuits
Mr. Phelps: I have some questions for the Minister of Government Services regarding the management of capital projects by his department, and by government. As we all know, there has been a lot of money wasted over the years. In 1988, the Public Accounts Committee looked into the management of capital projects, and were of the unanimous view that many projects were out of control.
We are now told that this government is involved in 10 lawsuits regarding capital projects. Does the Minister feel his department is getting a handle on capital project management, so we will not be seeing cost overruns in the future?
Hon. Mr. Byblow: I should point out that a number of steps have been taken in the course of the past couple of years respecting the management of projects by the government. One of those steps is a substantial initiative, which was introduced to the Public Accounts Committee and endorsed within this House: a two-stage decision-making process, reflecting extended planning and a series of steps that involved strict compliance with regulations and, overall, to ensure that projects were administered according to funds that were allocated. That project management policy is in place, is being followed, and does reflect sound management practices by this government in construction projects.
Mr. Phelps: I am concerned about the large number of losses; 10 have recently commenced. Would the Minister agree that all this litigation is indicative of problems associated with the management of capital projects by this government?
Hon. Mr. Byblow: I would not accept the Member’s assertion that the lawsuits are indicative of any particular behaviour that makes the government fall short of standard practice. The lawsuits that the government is involved in involve quite a range of activity. In some cases, it is where there was inadequate work provided by contractors; in other cases, it is where contractors are challenging the government’s position and implementation of regulations.
The lawsuits reflect a point of view, in the case of both contractors and government, where there is no agreement and a lawsuit is proceeding. It is not an extraordinary situation ...
Speaker: Order please. Would the Member please conclude his answer.
Hon. Mr. Byblow: I am concluding. There is nothing extraordinary, unusual or, in any way, different in terms of the number of lawsuits.
Mr. Phelps: Surely, one cannot simply assert that all these lawsuits are frivolous. Is the Minister telling us we can expect to see fewer lawsuits regarding construction contracts in the future?
Hon. Mr. Byblow: The Member knows very well that I cannot predict what will happen with future contracts. There is no way to predict either government enforcement or contractors’ disputes in the delivery of construction projects. To suggest there will be more or less is an impossible prediction by me. However, I would prefer there were fewer lawsuits and that there be more agreement and harmony on the regulations that we have in place, regulations that have been developed in consultation with the industry and regulations that are endorsed by the solid management of our policies.
Question re: Lawsuits
Mr. Phelps: A couple of years ago the Public Accounts Committee found that much of the waste in government capital construction occurred because of poor front-end timing on these projects. Can the Minister tell us whether or not he feels confident the front-end planning has been improved on the various construction projects that are being undertaken now?
Hon. Mr. Byblow: I can give the Member every assurance, as I did last spring, when we introduced the policy, that front-end planning is now a large component of our two-stage decision-making process in the construction and implementation of construction contracts. It is fairly extensive. The policy calls for a planning exercise to be initiated by the respective client departments. The policy calls for Government Services to work closely with the client departments in establishing estimates. The estimates are established with the best expertise available from the industry and within the Department of Government Services. I have every confidence that we are engaged in actual implementation that we said we would bring in.
Mr. Phelps: Can the Minister tell us that this means that design changes after the construction contract has been tendered are being minimized, that design changes are not being made once the projects have been tendered?
Hon. Mr. Byblow: The Member is attempting to make me provide a statement of guarantee that certain things may or may not happen. There is no way, as Minister, that I can do that. The Member knows that each individual contract has its own special circumstances in relation to not just materials but sites, supply, labour and any number of extraordinary circumstances that can arise to require a change to take place during construction. The policy makes provision for changes that may be forced upon a particular job in the middle of work being done. In each event, the government is exercising prudent judgment and organized analysis of the changes that may have to take place.
Mr. Phelps: Does the Minister feel that contracts are now being tendered in a timely fashion?
Hon. Mr. Byblow: I would like to tell the Member that more than ever before I believe our contracts are tendered in a timely fashion. One of the problems, historically, has been that we were tendering according to a schedule that the government deemed desirable. We have spent considerable time over the past couple of years working with the contract community, with the industry, to stagger contracts throughout the course of the year and particularly to ensure that no tenders closed on the same day. This was at the request of the contracting community, the contractors association to be specific. We have, as a consequence, provided to the contracting community a schedule of our contracting activity through the year and we update it every three months, I believe.
I can say to the Member, more than ever before, that we go to great lengths to provide contracts on a cyclical basis that allows the contracting community to face the least number of obstructions in meeting the requirements for putting in a tender.
Question re: South Highway School
Mrs. Firth: My questions are also for the Minister responsible for the Government Services and I have to start out by saying that I just cannot believe my ears, listening to the Minister’s comments today about how wonderful everything is going within the Department of Government Services. If that is the case with the information that the Minister tabled last week with respect to the South Highway School, one can only conclude that the information has revealed that there is ministerial incompetence and absolute mismanagement of the taxpayers’ funds here.
Let the record note that the Minister of Education laughed; he thinks that is funny.
I would like to start my questions with the Minister of Government Services about this particular school. I would like to ask the Minister if things are going so well why, after telling Atco, the successful bidder, that they had the contract for $1.252 million did they start renegotiating upward with Atco until they reached a final cost of $1.321 million, a process that was not offered to the other contractors, and that in itself is an attack on the integrity of the tendering process; I would like to ask the Minister why that happened.
Hon. Mr. Byblow: In the first instance, I have to tell the Member that in the case of the South Highway School, there were extraordinary circumstances as a result of the desire to see the school open for September 1 of this year that required some measure of expeditious tendering. The Member is fully aware that we went to a purchase contract method because that was the fastest way to provide the school in short order. The Member is also aware that once the purchase contract was provided, a number of change orders were required to meet the conditions of the site, and it was perfectly in order to give them to the principal contractor as they related to the original contract.
I think it only remains to be said that there were no improprieties conducted with respect to South Highway sSchool. It was done quickly; it was done in spite of a lot of difficulties with the award in terms of the site conditions.
Speaker: Would the Member please conclude his answer.
Hon. Mr. Byblow: We provided the school not quite in time for September 1, but shortly after.
Mrs. Firth: In the legislative return, the Minister blames the residents for the site preparation costs going up, yet he made the decision to award the contract for $98,700. Nine change orders later, the contract bloated to a $484,510 contract.
This is not expeditious.
Speaker: Order please. Would the Member please get to the supplementary question.
Mrs. Firth: This is not expeditious. This is absolute mismanagement. Why did the Minister approve this? Why did he go ahead with this gross over expenditure?
Hon. Mr. Byblow: In her first question, the Member implied that the contract was with Atco. She is now talking about a contract with Trimate. The contract relating to the foundation preparation, which I believe the Member is referring to, was for just over $100,000 and escalated to close to $480,000. It was not a fixed price contract; the Member must realize that.
If it were a fixed price contract, it would be upheld. It was what amounts to a unit price contract in the contracting business, with which the Member appears to be not too familiar. As a result, given the conditions faced in providing for the foundation, a number of change orders were required in order to get the foundation in place for the school.
The long and the short of it all is that site conditions were unusually difficult. The change orders were the result of that, and ...
Speaker: Order please. Would the Minister please conclude his answer.
Hon. Mr. Byblow: ... the construction of the school, albeit two weeks late, came in nearly on time.
Mrs. Firth: The Minister is trying to make it sound like the site preparation was for some other school. We are talking about the South Highway School.
There was a clearing and grubbing contract for $3,886. It went up to $18,608. There was a siding contract, which was ...
Speaker: Order please. Would the Member please get to the supplementary question.
Mrs. Firth: I am getting to the supplementary. The siding contract was negotiated out of the original contract, and it went from $43,900 up to $46,000.
We are talking about a total cost ...
Speaker: Order please. Would the Member please get to the supplementary question.
Mrs. Firth: I will, Mr. Speaker. The total cost of this school was supposed to be $1.4 million. It is now well over $2 million. How can the Minister refer to this as wise management, exercising prudent judgment, how every contract is guaranteed, and how his policy is in excellent performing condition? I would like him to explain that.
Hon. Mr. Byblow: The Member is aware that the original contract to Atco was for just under $1.3 million.
There was an additional $600,000 involved in site preparations and various work related to having the school in place. The work that was not anticipated was the quantity of rock that had to be removed in preparation for the school’s foundation. As a consequence, a number of other changes were required, such as relocating the septic and water tanks. All of those were legitimate and expected costs that could be borne for the construction of the school.
The cost of the school, at $1.9 million, is still at least more than one-half of what it would have cost to construct a permanent structure. We still got a bargain through the method in which it was done.
Question re: South Alaska Highway School
Mrs. Firth: This question is to the same Minister.
This is absolutely unacceptable. It is nothing but mismanagement and incompetence.
We have $11,000 in the supplementary budget coming forward. There is another $100,000 in next year’s budget. We have wells to dig and landscaping to do. The gyproc in the gym has to be covered with plywood now, and we still have a bunch of trailers.
We and the taxpayers want to know where the extra money is coming from. It will be well over $2 million before they are finished. Where is the money coming from to pay those additional costs?
Hon. Mr. Byblow: The Member is suggesting that the parents of the area do not know whether they want a school, where they want a school and how it should be constructed. The Member must remember that a decision was made barely one year ago to locate a facility on this particular site at the request of not only the parents of the area but also by the Department of Education, who is providing the service, in collaboration with my department, who is responsible for the construction of the facility.
The fact remains that we have a school for less than $2 million where ordinarily it would cost close to $4 million as a permanent facility construction. That is not mismanagement.
Mrs. Firth: The parents did not sign the contracts or the nine change orders to increase the cost of the school from $1.4 million to over $2 million.
The Minister still has not answered the question. Where are we going to get the money to pay for the $600,000-plus cost overruns? I would also like the Minister to tell us exactly how much the school is going to cost when all the dust settles.
Hon. Mr. Byblow: The school is expected to come in at $2 million. We have $1.9 million committed, or spent, at this point. We have some minor work to complete. We do expect that it will come in at $2 million. The money will obviously be found from a repriorization of activities of the government. It will be found from within. It will be found in terms of the priorities of this government. Education is important; an education facility is critical. We are providing it and, in spite of the very onerous, difficult and expensive ground conditions we encountered in the construction of this school, we will deliver our commitment to the people of the community.
Mrs. Firth: My figures come in at $1,939,843. Now, you add $100,000 to that, plus $11,000, and it is in excess of $2 million. Would the Minister check his final figures. I would like an accurate quote brought back to this House, so that we know how much this school is going to cost. When the Minister is setting his priorities, I would like him to tell us where he is going to get the money from. He is going to have to take it from some other project, and we would like to know where or from which other project.
Hon. Mr. Byblow: The Member can raise that question during budget debate. The Member will be facing those budget debates within the hour. They are questions that relate to specific budgetary reallocations and possibilities for expenditure, and are more appropriately answered there than on my feet now, where I do not have the information.
Question re: Cost overruns
Mr. Lang: I also have a question for the Minister of Government Services, and it has to do with the question of projects, project management and cost overruns. As the Minister knows, we have experienced numerous cost overruns over the past five years. The Public Accounts Committee, an all-party committee of this House, has made certain recommendations to the Legislature in respect to how projects are to be managed.
I want to refer the Minister to the multi-million dollar school in Dawson City, which was just constructed this past year. Can the Minister confirm that an additional approximate $100,000 was paid out to hire employees to do a 24-hour a day, 7 days a week fire watch over the building over the past year, because the sprinkler system was not working? Is that true?
Hon. Mr. Byblow: I cannot confirm that figure. The Member may recall that some questions were raised about the Robert Service School last week. I have asked my officials to provide a detailed breakdown, and I will be providing a legislative return on the subject, with specific amounts, activities and deficiencies in that building that we talked about.
Mr. Lang: The Minister has been in charge of that particular project. Can he confirm that the sprinkler system was not working for almost 10 to 11 months?
Hon. Mr. Byblow: I cannot confirm the length of time. My only recollection is that there was a manual fire watch of the building. The particular details surrounding the length of that watch, the cost to the government in providing that watch, and costs related to other deficiencies surrounding the school will be provided in detail in a legislative return to the Members.
Mr. Lang: I do not blame the Minister for not wanting to talk about it.
Maybe the Minister can tell us whether or not there are major structural problems with that particular facility, to the point where quite a number of windows have broken over the past year?
Hon. Mr. Byblow: The Member should not allege what is not accurate. When Members raised the issue a week ago, I had a discussion with officials regarding the deficiencies surrounding the school. They are not of a major structural nature. It is thought that what is occurring is that some settlement is taking place and some effect is being felt in the walls and window casings of the building. Apparently the problem is more complex and relates to the type of window that was used to meet the requirements of the community with respect to its historical theme. All of that detail is being assembled for Members and I will be happy to share it when I do have the details.
Question re: Cost overruns
Mr. Lang: While we are on the question of overruns and cost of projects, a facility that was estimated to cost $1.6 million about four years ago and finally finished up at $3.2 million, was the young offenders facility. Last year, $40,000 was voted for new fencing for that particular facility over and above the $3.2 million.
Can the Minister of Government Services verify that an additional $160,000 is going to be spent for fencing for that particular facility?
Hon. Mr. Byblow: I do have an excellent memory as a rule, but my ability to quote chapter and verse of specific contracts for some $90 million worth of expenditures while on my feet in Question Period is, indeed, limited.
I am sure the Member will remember that during the previous administration, prior to 1985 there were numerous cost overruns on numerous construction jobs throughout the territory and we have minimized those to only a few, so the track record of this government is exemplary in terms of bringing projects in on budget. With respect to the question on Na Dli, I will take the question as notice and will prepare my memory bank for tomorrow as to whether or not $160,000 was spent.
Mr. Lang: I would be the last one to tax the Member’s memory, believe me. He does it so well. When the Minister is taxing his memory today and tomorrow, could he provide us with any other capital projects that are going to be undertaken in the young offenders facility during this coming year, or that have taken place in the past year? Could he provide that to the House?
Hon. Mr. Byblow: I would like to correct the Member. I said I would be checking my memory. Only his side would consider taxing such a service.
I will take the Member’s question as notice, and provide information accordingly.
Question re: SS Tutshi
Mr. Nordling: On July 25, the SS Tutshi and the visitor reception centre in Carcross burned. On October 26, a press release reported that the fire marshall’s office and the RCMP had been unable to determine the cause, but that the investigation was continuing. Can the Minister of Community and Transportation Services update us on the status of that investigation?
Hon. Mr. Byblow: I have to beg the Member’s indulgence. I am not certain whether or not the investigation is complete. I would take the Member’s representation as notice and provide information to him directly.
Mr. Nordling: I was interested in whether the investigation was on hold, or whether the marshall’s office or the RCMP were actively seeking further information, or just waiting for leads.
My supplementary question is for the Minister of Tourism, with respect to the same subject. Has he ordered any follow-up into the fire to try and ensure a tragedy like this will not occur with any of our other heritage sites?
Hon. Mr. Webster: In response to the Member’s first question, I am just reading from the press release of October 26, which states that the RCMP investigation is continuing, and both agencies said they will continue to follow up on any new leads that come to their attention.
I just bring that to the attention of the Member, to assure him that it is under active investigation.
Mr. Nordling: I also have a copy of the press release, which is why I asked the question. It said they would continue to follow up on any new leads that come to their attention. Does that mean they are inactively waiting for new leads to come up, or are they out seeking witnesses and leads? Again, I repeat my supplementary for the Minister of Tourism. Is his department doing anything with regard to other heritage sites by investigating or preventing this sort of thing from happening?
Hon. Mr. Webster: I can only conclude that the RCMP investigation is actively pursuing and following up on leads, in addition to waiting for someone to come forward with additional information.
Following the tragic demise of the SS Tutshi, the Tourism department did put extra security on a number of sites around the territory, and made an investigation into what could be done to decrease any possibility of a risk of fire or damage.
Question re: Teacher turnover
Mr. Devries: During the past three years, there has been an unacceptably high teacher turnover in the Carmacks, Pelly, Mayo, Dawson and Old Crow areas. What is the Minister of Education and his department doing to encourage teachers to become an integral part of these communities?
Hon. Mr. McDonald: As I pointed out last week in the budget estimate debate, there were a number of things the government was doing to try to deal with some of the problems rural communities are facing, and rural schools in particular, one of them being the turnover of rural teachers. I explained some of the reasons why the teacher turnover was taking place.
We are increasing professional development for teachers in the territory, and are also trying to train indigenous teachers locally, so that they can appreciate and be aware, in advance of taking on an appointment in a community, what the community conditions are like, speaking specifically of the Yukon native teacher education program. Those are two of the things we are doing. With a little more time this afternoon, if people wanted to continue listening to explanations I have on this particular issue, I am certain I can explain in even more depth what the government and the Department of Education are doing to retain teachers.
Mr. Devries: According to sources in these communities, new teachers are not being properly briefed. During the interview process, they are promised certain grades and class structures, only to find that the situation is much different when they arrive at the school. Will the Minister assure this House that this practice will not be repeated, and that more accurate information is relayed to the prospective teachers from outside?
Hon. Mr. McDonald: The Member’s question contains the basic assumption that all teachers who are hired into rural Yukon are mischievously misled as to what the conditions are in those communities. I think that would be an unfair assumption.
The expectations of people who come from large urban centres, or even from relatively remote parts of various provinces, have a very clear but sometimes inaccurate vision of what it is like to teach in Pelly Crossing, Ross River, Mayo or Old Crow. Without a familiarization tour in advance, it is difficult to provide a full explanation of what the community conditions actually are.
This issue has come up in the past, and I have discussed this same issue with regional superintendents and, because they are responsible for hiring, I have asked them to be as careful as they can to provide as accurate a picture as they can, anticipating that the terms of reference may not be the same for those southern teachers as they would be for a Yukon community teacher, in order to give those teachers the best possible vision of what the territory is like, prior to making a decision to come to the territory.
Mr. Devries: This time I will say “some” and not “all” the teachers were informed of adequate housing but found themselves moving into houses that did not meet their expectations. In some, the grass had not been mowed for over two years and the buildings were in a state of disrepair. What is the department doing to prevent this from happening again?
Hon. Mr. McDonald: I think the expectation level is sometimes too rosy when it comes to teachers’ expectations of what to expect in a house in a particular community. Having said that, and being a critic prior to 1985 of the government’s staff housing program, the Yukon Housing Corporation has put literally millions of dollars into staff housing upgrading. I think any objective person would see that significant progress has been made to improve housing for teachers when they come to the communities.
Question re: Chipseal crew travel
Mr. Brewster: My question is to the Minister of Community and Transportation Services. Did the Government of Yukon fly a chipseal crew from Whitehorse to Faro and return daily last summer?
Hon. Mr. Byblow: I am trying to recollect the details because the Member raises an issue with which I have some familiarity.
It seems to me there was a problem with supplying adequate accommodations in the area where they were working and the department determined that it was cheaper to transport the crew back and forth as required than to try to put in a special camp.
Mr. Brewster: As long as the Minister remembers this, how much did it cost?
Hon. Mr. Byblow: I do not know the precise figure. I can tell the Member that the cost to transport the crew was cheaper than providing accommodation in the respective areas where their work took them. There was an actual cost savings.
Mr. Brewster: How many workers were involved and will the Minister table the costs of the operation?
Hon. Mr. Byblow: I have no problem giving the Member a commitment that I will table the information. The issue is one with which I have only a sketchy familiarity. The assurance that I have been given is that we saved money in the final decision, particularly so by avoiding putting in a camp for the crew.
Question re: Chipseal crew travel
Mr. Lang: I am baffled. Is the Minister telling this House we flew a crew from Whitehorse to Faro and then back to Whitehorse daily in order to do a job in Faro?
Hon. Mr. Byblow: I could not have told the Member that, because that is not what I said. The number of days that the crew may have been flown is information I am not familiar with. I have already committed to provide that information to the Member for Kluane. The Member should remember that a BST crew moves fairly quickly from community to community during the construction season. It is unlikely that the BST crew would remain in any one general area for more than a few days because of the nature of their work. They are doing sections of road. The preparatory work is usually done ahead of them. Because they have to work on a seasonal basis very quickly, it is on a very tight schedule that they work throughout the territory.
Mr. Lang: This is the first I have ever heard of the Government of the Yukon Territory flying crews from Whitehorse to some other smaller community on a daily basis. Is this the common policy of the department? Will the government be flying crews to and from Whitehorse as they work in smaller communities?
Hon. Mr. Byblow: It is not the policy of the government to fly the BST crew around the territory. The circumstance was unique in the particular location where they were working on the Campbell Highway. There was inadequate accommodation throughout the communities surrounding that area. That also includes Carmacks and Ross River, where they also could have been placed. The lack of accommodation and the cost of a camp was analyzed and a decision was made to move the crews back and forth from the site to Whitehorse in order to complete the very tight schedule for BST on roads as planned for this past summer. This was done for a few days. I do not know how many precisely, but I will check.
Mr. Lang: In compiling the figures, can the Minister also figure in the cost of the wages of the employees for the time they spent flying to and from Faro.
Hon. Mr. Byblow: I am sure the department officials have that information. The decision was made on the basis of cost efficiencies and it was laid up against the simple fact that there was no accommodation available and to put in a camp was more costly than transporting them. On the surface it sounds reasonable to me, but I will provide details for Members.
Speaker: Time for Question Period has now lapsed. We will now proceed to Orders of the Day.
ORDERS OF THE DAY
Hon. Mr. McDonald: I move that the Speaker do now leave the Chair and 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 the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair: I will now call the Committee of the Whole to order. We will now take a short recess.
Recess
Chair: I call Committee back to order.
Bill No. 15 - Second Appropriation Act, 1990-91 - continued
Department of Education - continued
Chair: We are on the Department of Education, general debate.
Mr. Devries: I was going to move on to Yukon College, but I would just like to go back for a moment to the career counsellors. It is not clear to me whether these are positions being transferred from Whitehorse or if they are being transferred along with the personnel or if they will be positions that will posted and advertised in rural communities to give a local person the opportunity to apply?
Hon. Mr. McDonald: The answer would depend on whether or not the positions being transferred are positions that are sought by the incumbent in a rural community. I realize that is a kind of convoluted way of saying it. If the incumbent in the position wants to move to the rural community, then they have first option to make that move. If they do not wish to make the move, then the attempt will be made firstly to recruit in that community. If there is nobody found who is qualified in that community, then we will move territory-wide and ultimately outside of the territory if we must.
Mr. Devries: I would also like to bring to the Minister’s attention, the tremendous amount of waste in the two pages that were duplicated in the budget book, unless one is to scribble on and one is to keep nice, I guess you could say.
I would just like to go back to the subject of teachers. This is something that was brought up by several teachers in Watson Lake. As the Minister is aware, we have a large number of teachers there who have been with the department for a considerable length of time. We have teachers there who have been there for up to 25 years and a lot of these teachers do a tremendous amount of extra curricular activities and are often the first to volunteer when there is something going on in the school in the evening or on the weekend. From the information I have gotten, I find it strange that all of a sudden the department is getting nit-picky when some of these individuals are just asking for an extra day off, whether it be an important family matter or something else. I think the Minister has to realize, especially in the rural communities, that these people are very important to the community, both in the aspect of being volunteers and in the activities field. Part of the emphasis of the Education Act was partners and a team spirit and I think the team spirit is going to come to an end awfully quickly if the Department of Education keeps nit-picking every time a teacher asks a favour in the form of a day off for having to attend something that they feel is important.
Hon. Mr. McDonald: Firstly, the budget book shows two pages as I did express concern with Finance that I might have to debate the budget twice as a result but they assured me that the pages were identical and that there was a printing error, so they printed two of the same pages for the budget book.
I know the Member can appreciate that some of the issues he has just brought up are certainly issues that are currently being discussed in contract negotiations. Contract negotiations are proceeding apace and clearly it would not be appropriate for me to betray a position or a sentiment that could be taken to the negotiating table and used as a vehicle or a lever to extract further concessions from the government.
I will be careful and I will trust the Member will understand why I am being careful.
The policy respecting absenteeism from work has not changed. The application of the policy may vary, depending upon the supervisors involved. Certainly, the policy overall has not changed.
I have asked, in recent weeks, that the policy be reviewed because an increasing number of teachers are requesting time off for other than school-related activities. In the past, there have been various policies that supported the attendance of teachers at events like Arctic Winter Games or other sports events, but there has been no comprehensive policy to deal with leaves of absences for community events that are not supporting the activities of the school. It is desirable to have a comprehensive policy in that area.
The problem with absenteeism is that it always requires extra money to provide a fill-in for the class. Not only does it require extra money to provide the fill-in for the class, but the class itself is disturbed by having the regular classroom teacher away. Quite often the fill-in is not a qualified teacher at all, just somebody who is devoting their time and energy to keeping the class under control. Quite often it is the case that the regular program studies are not enhanced or furthered by the person who is filling in for the classroom teacher. That class is simply considered to be a study period instead. That is not always the case, but it certainly is the case in many instances. So, there are two costs to the education system: one is financial, the other one is disruption to the class.
Apart from that which is allowed in the collective agreement for personal leave, there has been a tendency to approve leaves of absences that are specifically school related. In the last few years a few other exceptions have been made to permit teachers to leave for community-related activities such as the Arctic Winter Games, and there are other notable examples as well. So, I think we have to find the balance in the policy to ensure that the program studies are being respected and the majority of the children in the class are getting due attention, at the same time allowing reasonable absenteeism by the teacher, certainly for the school day activities and for anything that is allowed them under the collective agreement, but also on the occasion when flexibility must be shown by the school. The balance will probably not be perfect and will always be subject to some subjectivity by the supervisors, but I think a comprehensive policy is something we should be aiming for and encouraging.
Mr. Devries: If there was someone who had worked for me for 20 years I think I would throw the policy out the window and try to meet some of their requests once in a while.
I can understand what the Minister is saying but, by the same token, a teacher who has been at it for 20 years is pretty dedicated to his or her students and I am sure they will not try to sneak out of or walk away from a class if they feel it could harm a student in any way.
Something came up the other night at a learning disabilities dinner. One of the questions was the maximum time it would take from the time a parent showed concern with a subject of an education evaluation plan appeal to the point it would go through the educational tribunal appeal process. First a problem must be taken to the principal and if there are unsatisfactory results at that level, it goes to the school council. Then it must go to the Department of Education and the Minister. Finally, it may go to the Education Appeal Tribunal. Each step may take a month or more. If there is something the parent feels is serious and the school is not meeting the needs of the student, that student could lose a year or more of their education process.
Another question was whether or not the parents would have to be accompanied by a lawyer or doctor if the problem were of a legal or medical nature. I assume the parents would have to pay for the services out of their own pockets.
Hon. Mr. McDonald: First, to address the issue of the leave of absence policy with respect to a need for flexibility, I agree that a nice symmetrical bureaucratic policy is not going to be good for every situation. If it is to be a useful policy at all and not just something that will sit on the shelf, there will have to be a certain amount of flexibility in the policy to allow judgments to be made where it makes sense.
The issue comes down to who will show that common sense. In one school, a principal or superintendent could be a real humanitarian and be very forgiving. The policy can ensure that that person has that flexibility. However, the sword cuts both ways. If the policy is too subjective and leaves it up to the judgment of a superintendent who happens to be more authoritarian, the policy may go against the interests of a particular teacher. Subjectivity and flexibility can therefore then be both beneficial or detrimental to the lives of the teachers.
We have to understand the nature of policy drafting and what flexibility you want to draw into it, knowing the balances you have to make in the interests of the teachers and students. I admit that the vast majority of teachers in this territory would do things only if they felt it would be in the best interests of the children. There are exceptions to that, and we are aware of the potential for exceptions.
With respect to the Education Appeal Tribunal, the Member has a very pessimistic vision of the length of time appeals will be heard at the school level and the Education Appeal Tribunal level. I believe things can move more quickly than that. It allows the parent to be able to participate in the real decision making associated with the individual education plan for their own child. The process encourages the decisions to be made at the school level, rather than firing them up to the Minister’s level. It encourages people to solve their own problems. That is something the whole Education Act was all about.
I realize some people interpret that as Ministers ducking responsibility, but that is not the case at all. A good education system, in the opinion of the vast majority of the people of this territory, is one where parents participate, in terms of providing advice and standing on the sidelines to provide comment on the system, as well as actually having a decision-making role. That role is in the name of the council. It is far from the case that a council is somehow buffering the Minister from decisions. The council is making decisions. The parents are making decisions. The one-person school board in this territory is no longer the purview of the political arm of the government, which is a most ludicrous state of affairs in modern times. This allows people to make decisions for themselves.
The Education Appeal Tribunal is there to provide a more dispassionate look on those very few, but very tough, cases that come up from time to time, with respect to the services that are being provided to a particular child. It is the desire to hear those very few cases, and I hope they will be few. I hope the local schools will be able to resolve issues themselves. It will be up to the Education Appeal Tribunal to move very quickly. They have been appointed now, and they will be able to hear cases.
It is not necessary for a parent to bring in a lot of high-priced help, consultants and that sort of thing, into that appeal process. If the tribunal feels it needs an independent assessment, or special help, then there is a budget here for them to provide that special help.
It certainly is not meant, nor designed, to be as costly for the parent as the normal court system would be. When a parent appeals a decision of a department official, the parent would come in, and there would be an explanation of events by both the parent and department official and as to what the local school decision-making body has decided. If a good case can be made by anybody, including members of the tribunal, that they need specialized assistance, then the tribunal can cause that specialized assistance to be acquired and used for that hearing. That is a reasonably sound manner of operating by a para-judicial body such as the education tribunal.
Mr. Devries: I would like to move onto Yukon College.
My understanding is that Yukon College gets a grant for $9 million and something. Do they have to reapply for that grant every year, or is it automatically indexed for inflation so they would get four percent more every year? How does that grant process work?
Also, on the teachers’ negotiations, there is additional money for them if they receive a substantial increase, or four percent.
Hon. Mr. McDonald: Basically, the situation on staff at the college is the same as it is for the general government employees: we do not budget anything particularly for those employees prior to the conclusion of labour negotiations. Otherwise it may be quite easy to anticipate what the mandate is and have the mandate exposed while you are attempting to negotiate an agreement.
The case is that the college will receive a supplementary based on the mandate that we have allowed. If they want to supplement that through their own resources, we are more than willing to attempt that.
We are anticipating a process every year - we are only just starting it now for the very first time - where the department and the college will discuss the programming for the college for the coming year. There will be an exchange of information with respect to the priorities of the college and the priorities of advanced education in terms of providing funding for various training programs in order to avoid duplication.
As the act anticipates, the overall goals of training will be communicated by the Minister to the board during those discussions as well.
For fear of painting an incomplete picture, I would say it would be more or less accepted that the grant would be considered something they would receive every year. If there were additions to the cost of living or to respond to labour contracts, additions would be provided. Also, in the future, there may be special contracts that the Department of Education, or another government department, or even another government, may want to undertake with the college. YTEP is one such contract right now with the college. The funding for that would not be considered part of the base grant. It would be a special contractual arrangement with the college to provide training for teachers.
The process is one of discussion and establishment of college and department priorities so that duplication does not take place. That happens throughout the year.
Mr. Devries: I suspect the college is free to negotiate with people like Curragh Resources for some money to do some training on their behalf, or things like that. Are they free to do that?
Hon. Mr. McDonald: Yes, they are. They are free to negotiate directly with CEIC, if they wish, for a particular project, although, in the main, the Government of Yukon and CEIC are the two organizations to take that step in a relationship.
Yukon College may negotiate with any private sector employer, and they are doing that right now, especially with this latest exciting initiative in co-op education, to undertake some programming and work experience that may be mutually beneficial to both the employer and to the college. It is anticipated that this will be something the college will do well with in the future, like other community colleges in the country. They all depend on a base grant from a government to a certain extent but, depending upon how entrepreneurial they are, for lack of a better word, they all seek contracts with other employers to act as a training institution for that employer.
Mrs. Firth: I want to ask the Minster some questions about the financial position of the College. I see from the report that it is operating at a deficit.
Now, the Minister is going to be giving a new allotment of funding to the college in the new budget. I would like to know if he can tell us approximately how much extra money they have requested in light of the deficit and in light of the extra funds they are going to need for the settlement of the union negotiations. Does he know exactly how much shortfall they are going to have? Perhaps he could tell us whether he has discussed with them how they are going to meet that shortfall.
I know there has been no money in the main budget allocated specifically for the union negotiations, but it is going to come out of the $15 million surplus. I am not asking the Minister to reveal the exact amount because of the point he made with respect to knowing what the increase would be, et cetera, but I would like to know if he can give us some idea of how much money they are going to be needing and whether the government is going to be giving it to them or is this something they are going to negotiate, or how is it going to work?
Hon. Mr. McDonald: Well, firstly, I will respond to the deficit question. The college is projecting a deficit but I have been told that they likely will not now experience the deficit because that was something that they were projecting earlier in the year, and they would like to balance their budget. I would remind the Member that in the supplementaries that we are providing for the House, we are projecting a deficit too, but one that is likely never to come to pass, if experience is ever a judge in these matters.
With respect to the labour negotiations, what has happened is that the government indicates to the college what the government is prepared to provide in terms of an increase associated with the labour negotiations. This is a common practice for all like institutions in the country. The college then negotiates a labour agreement with their employees and if it goes beyond the mandate that has been provided to them - and usually the mandate is very similar to the one the government would have inflicted on itself - then the college has to find from within its own resources the difference between what has been preferred by government and what is finally settled.
Mrs. Firth: I guess it just remains to be seen with respect to the deficit, whether there is one at the end of the year or not. I do not seem to have the confidence that the Minister does that there will not be a deficit, particularly because the college does not have the huge pot of money to draw on that the government does when the Minister makes his analogy that they predict deficits too. So, I think the total college fund that they have to draw on is somewhat less than the government has and therefore it concerns me. I hope that they do not have a deficit. I would certainly be interested in finding out where they expect to pick up extra money to cover its projected deficit because as the Minister said at the beginning of the year, a $67,000 deficit is quite a hefty deficit to start out your budget with.
Perhaps the Minister could indicate to me if he has asked them where they plan to pick up the extra funds that would give him confidence that they will not have a deficit.
Hon. Mr. McDonald: I do not work for the college. The college is an independent organization and will do what they can to ensure they have a balanced annual budget every year.
They have indicated to me that the projected deficit is a small one and they will do what they can to ensure that it does not come to pass. I have been given no signals to suggest that the deficit is so big, or that there is worrying about the college being under funded or going beyond its mandate.
They are earlier on in their fiscal year than we are in ours. Their fiscal years ends at the end of June; consequently, they have more time to respond to information provided with respect to their budget.
I, personally, think the college is well funded. I do not think it is over funded; I do not think it is under funded. I would be hard pressed to find a single person at the college who would not say that there are good ways to spend more money in training. There are lots of good ideas out there for expanding the resources of the college. We will try to meet those needs in conjunction with the overall priorities of this government. That is all I can offer at the present time.
I suggest that when the college president and board come to visit us during the main estimates debate, the Member’s question be put to them and she can judge for herself whether or not she is comfortable with the estimate.
Mrs. Firth: Can the Minister tell us if any of the endowment fund is being used for the operation and maintenance of the college?
Hon. Mr. McDonald: The only way I can answer that question is that it should not be used for operation and maintenance. The last time I got an update was probably about 30 days ago. At that time, they were setting up a mechanism at the college to determine approvals for that fund. The fund is intended to provide for research into northern studies, and this is captured in a letter between the government and the college. I think the terms of reference are public.
They are not supposed to use the funds for normal operation and maintenance expenditures. The agreement on the endowment was fairly specific.
Mrs. Firth: Maybe I will put the question to the board when they come in for the main budget debate. According to the report, the statement of revenue and expenditures, and the report on the examination of the accounts and final statements of Yukon College as of June 30, 1990, 50 percent of the annual income from the fund will be added to the principal amount. The remaining 50 percent may be used for Yukon-based academic and scholarly research projects.
In a way, they could be using some for operating and maintenance costs in that program. They do not have page numbers. I was going to give the Minister the page number. I will redirect the question to the board members, or president, whoever is coming to the Legislature to address questions.
I wonder if the Minister could answer one more question for me. What are the salary ranges of the three vice presidents?
Hon. Mr. McDonald: The vice presidents are classed in the MG-8 level.
I do not have the salary range for the MG-8 level; I just have the level.
Mr. Devries: We can move into line by line now if the Minister wishes.
On Operation and Maintenance
On Public Schools
Hon. Mr. McDonald: I think I should explain this if you do not mind.
The $812,000 is made up of the following items: the Education Appeal Tribunal secretary for $12,000. The additional 14.25 teachers I mentioned in the opening remarks cost us approximately $475,000. The additional 5.5 person years to increase the amount of administration time is slated at approximately $176,000. The $126,000 is for what are classed as Education Act reform costs, which are costs associated with the payment of school councils, the local curriculum development, et cetera. I can give a breakdown on that if the Member wants. Finally, $23,000 is to continue with the implementation of the development regulations pursuant to the act. Those regulations are primarily financial regulations and will come up partly this year and partly next year. We will likely have a person on secondment to provide support in that particular area.
I do not think they will require the financial regulations until such time as school boards are in place.
Mr. Devries: As far as the 14.25 new positions are concerned, could the Minister give us a list of all the schools with a breakdown of how many teachers they had last year, and how many they have this year, so we can determine where the new people went, rather than going through it all now?
Hon. Mr. McDonald: I thought I had sent out a pupil/teacher ratio. There was a package of information that had it broken down by school. If the Member does not have last year’s, I can dig up a copy for him, and he can see the difference from one year to the next, based on what I handed out last year.
Mr. Devries: Will each Education Council have a bit of money to hire an individual secretary-treasurer, or is this an overall person? What is the plan?
Hon. Mr. McDonald: There is an allowance provided to each council for the purposes of providing a secretary-treasurer service.
Mr. Devries: The Minister also mentioned curriculum development. Last year, I asked him that, as anything was developed and completed, I be provided a copy of it. I am assuming they have not done anything, as I have received no copies of anything that has been completed.
Hon. Mr. McDonald: That would be a very dangerous assumption to make. I will undertake to provide some of the materials. I have seen some of the materials recently. There is also a grade 10 Yukon history textbook, which is in the final drafting stages and should be published by next year.
Various materials have come forward, especially in the environmental education area. I am certain the Member will be pleased to see these.
Public Schools in the amount of $812,000 agreed to
On Advanced Education
Hon. Mr. McDonald: The funds here are being provided to Yukon College, and they are funds from the various departments that would, at one time or another, have had an interest in the college in providing central agency services. We have already heard from Executive Council Office, which provided $6,700 toward the college. The $240,000 available here are from the Executive Council Office at $6,700, the Department of Finance at $20,000, the Department of Justice at $5,000, and the Public Service Commission at $108,000. There is also a transfer of $100,000 from Government Services for the purposes of handling rental agreements that currently exist in the communities.
Advanced Education in the amount of $240,000 agreed to
Operation and Maintenance in the amount of $1,052,000 agreed to
On Capital
On Finance and Administration
On Yukon Arts Centre
Hon. Mr. McDonald: This is in the administration branch of the department. As Members will know now from past news releases, et cetera, the project total shows a change. Let me just run down the changes for the Members.
Actual expenditures to June, 1990, were $720,000. If you add to that a revote of 1989-90 funds to 1990-91 of $2.4 million, and a budget of $2.5 million, with the inflation factor that was ruled in by Government Services of $300,000, it shows a shortfall of $1,450,000 to meet the project total, which is slated at $8,451,874. The budget has been $7 million, and this request is for the difference between $8,450,000 and $7 million.
They are showing a recovery in this budget of $500,000 from Arts Canada North.
There is a commitment by the federal government for $250,000 in the year 1992-93, which the Arts Canada North people have indicated will be returned to the Government of the Yukon, as well.
Mr. Devries: So, purchasing a seat for $500, and things like that are all included in the Arts Canada North budget. That is where Arts Canada North gets its money; is that right?
Hon. Mr. McDonald: That is part of where they are finding the $500,000. They are also seeking funds from various groups, businesses, all the banks in the town, Northwestel, plus the Lottery Commission, which I think has made a commitment to them as well. So that is where they are getting their funds. I am not current on this, but I believe they are very close to meeting their $500,000 target.
Mrs. Firth: Do I understand the Minister correctly then, that the Yukon arts centre, that was supposed to cost $7 million, is going to cost $1,451,874 more? That $1,450 million is considered the total cost overrun?
Hon. Mr. McDonald: That is correct.
Mrs. Firth: Well, that is pretty high. I can remember some of the debate that we had here where the Minister was quite insistent that they were not going to get any more money. Maybe he could just tell us what happened. What did they do to him to get him to give them another almost $1.5 million?
Hon. Mr. McDonald: Well, it started with the Minister caving in, obviously, to the pressure to seek the additional funds. I think it started and ended there. The position that I had taken in the past was quite clear with respect to the Government of the Yukon’s commitment to this project. It was my intention to proceed with the $7 million commitment, which I thought was a substantial commitment. That, coupled with the $500,000 that the Arts Canada North people would dedicate to the project, would make a project that would meet the needs of Yukoners.
I should just clarify one little point with which I may have misled the Member: we are showing the recoveries now that we did not show before, so the $8.5 million would be minus the $500,000 committed from Arts Canada North, minus the $250,000 commitment the federal government has made but will not be providing to Arts Canada North, and then to us, until 1992-93. So I guess, in a sense, the cost overrun is less than $750,000 or so. Nevertheless, it is substantially higher than what I indicated it would be.
A couple of things caused a change of heart on the project. The first one was that after going through the process of analyzing potential costs and getting reputable companies to provide projected costs, the first bid came in higher than was projected. That caused us to do some thinking about the real costs, because the costing companies had been so accurate on other elements of the college’s construction. For example, on the archives, they were within thousands of dollars of the final figure, which was considered to be a very good projection. The decision was made, as Members know, that we would retender it, as we felt it may have just been the time of year and that with winter coming on people may have artificially jacked up their bids.
The second round of bidding produced results similar to the first, which caused us to realize our initial estimates could have been inaccurate and that if we wanted to continue with the project we had to downscale it.
A number of things were considered. Between the first and second round of bids we did shave the project back by about $200,000 worth of items that could have been sacrificed - at least for the time being. We felt that would be enough to account for the inflation costs that would exist between the two rounds of bidding. In the end, however, the bids again came in high and we had to make the decision either to substantially downscale the project, and we could only do so, according to the contract regulations, by up to 10 percent, or we could redesign the project and tender it again - or we could come up with the difference. Having discussed this with Arts Canada North, we felt that retendering the project was not an appropriate approach, and it was basically a choice of building then or not in the near future.
In going through the savings that could be made, we found a few very minor ones. Everything else would have accounted for a more major shift in the design scheme, ultimately. After a very long deliberation, during which there was a real chance the project would have been cancelled altogether, we decided it would be appropriate to proceed and seek the extra funds to allow the project to happen. We feel the opportunity exists to do it now, and that it is very complementary to the other facilities at the college. It will be good for the arts community and, because considerable funds have been dedicated toward the design costs already, we feel it would be most appropriate to continue with the project, despite the onerous fact of life that the project was going to cost more.
Mr. Devries: So, is the $4,931,000 enough to complete the project, or is there another supplementary coming up?
Hon. Mr. McDonald: This will complete the project.
Mr. Devries: Without all my colleagues here, I am reluctant to clear that item. Could we just carry on to the next item and go back to this one?
Hon. Mr. McDonald: The main estimates are coming forward. I am certain that, if the Member’s colleagues want to discuss the matter further, they can do so then.
Yukon Arts Centre in the amount of $4,931,000 agreed to
On Public Schools
On Facilities Construction and Maintenance
On St. Elias Student Residence - Whitehorse
Hon. Mr. McDonald: The St. Elias Student Residence requirements are for a revote of funds entirely.
Mr. Lang: Can the Minister tell us what he intends to do with this particular building since we have built a new student residence? I realize a portion of it is presently being used for a day care. What is the long-term position of the government on this facility?
Hon. Mr. McDonald: The student residence we are referring to here is the Gazoodsa student residence. It has undergone a name change from St. Elias to Gazoodsa. Just so there is no misinterpretation, we are not spending $1.7 million on the old St. Elias student dorm.
The old St. Elias student dorm building in downtown Whitehorse has been turned over to Government Services for general government purposes. I am not certain what the status of that facility is at the present time. I will ask the Minister of Government Services to provide an update when we get to Government Services. He will be able to let the Member know what the plan of action is.
St. Elias Student Residence - Whitehorse in the amount of $1,718,000 agreed to
On Robert Service School - Upgrade Expansion
Hon. Mr. McDonald: These funds are required for the sprinkler system repair that Members know was required. The Department of Education is required to expend the funds but the government is pursuing reimbursement from the bonding company for both these funds and for the fire watch that was necessary from the period November 2, 1989, to September 14, 1990.
Mr. Lang: Could the Minister tell us how much the cost of the fire watch was?
Hon. Mr. McDonald: Yes, I can. The fire watch costs are approximately $1,500 for a week for 2.2 people for 45 weeks. The total cost for 45 weeks was $67,500. That plus the funds associated with the repair are what we are seeking from the bonding company.
Mr. Lang: I am just wondering if the Minister can tell us exactly how much the Robert Service School cost when it was all finished.
Hon. Mr. McDonald: I definitely have the wrong information with me. I cannot really provide the information. I will get the final costs for the Member directly.
Mr. Lang: Could the Minister also tell us whether or not it came within budget? I would like to have an idea exactly what we are comparing as far as estimates versus the final cost. And can the Minister tell us how much of a structural problem there is with the school.
In Question Period, the Minister of Government Services mentioned that it was settling, it was not a structural problem but it was settling. Could he just tell us if that is true and secondly if there are some major problems with the roof in that it is not capable of carrying the snow load.
Hon. Mr. McDonald: I am not perhaps the best person to ask all these questions of. But what I will do is indicate that there were problems associated with the sprinkler repair and I have just given the Member a rough cost to fix that. I am aware of no settling of significance for the entire school. No settling has required repairs.
There was a problem that was detected with the structure of the central roof portion of the new school. I have a brief note I can just read out if the Member wants to hear it: “A problem has been detected with the structure of the central roof of the new portion of the school. The roof slopes up from four directions to a square flat section in the centre. The two-by-sixes that permanently support the roof rest on the rafter bearing wall system have rotated and come apart in several locations. The purlins were erected perpendicular to the slope of the roof and therefore stand about 30 degrees off perpendicular. It appears they were inadequately blocked. The weight of the roof has pulled them over by as much as an inch in a couple of places.”
This has caused the roof skin to pull away from the peak, though it has not led to roof leaks, so far. They are discussing the reasons for the problem with the structural sub-consultant. They are looking into ways to resolve that. They do not regard it as being particularly serious.
There was some duct work that had to be done. The Department of Education paid for that out of its general budget. That was $1,600. The rainwater leaders were not heat-traced, and the department has also provided the money to repair those.
The issue of ancillary room acoustics may take more work by Government Services to investigate how to improve the situation. However, we are not planning to make any changes at the present time.
Mr. Lang: Is the Minister quite satisfied that the school is in good condition?
Hon. Mr. McDonald: Yes, I believe that, overall, the school is in good condition. There are a number of problems I am aware of that require monitoring, and some minor items that require repair. I am of the view, supported by the department, that the school is in good condition and that any costs that have been borne, with respect to the sprinkler system freeze-up, will be recovered through the bonding company, as it is certainly not the department’s fault the problems occurred in the first place.
Mr. Lang: It came to our attention that there had been some severe cracking in the walls due to settling. In some places, over an inch or an inch and one-half of settling has occurred of the actual structure. Could the Minister check that out and report back to us as to whether that is true or not?
Hon. Mr. McDonald: I can. I heard the statement made in Question Period, and I asked the department to check out what might have led to the statement being made. I am not aware of the settling the Member has mentioned.
Mr. Phillips: I have a question about the Dawson school, as well.
The Minister of Government Services mentioned today that there was some difficulty with the structures of the windows, and that some of them were cracking. If we designed the windows wrong, who is responsible to replace them or do whatever we have to do to make it right? It would not be the main contractor’s expense, because he is probably not the one who designed the windows. If we had to meet some kind of heritage requirement in Dawson City and designed the windows ourselves, would that not be our responsibility? If so, how much could it cost us to replace those windows, if we had to?
Hon. Mr. McDonald: I am definitely not the person to ask about this particular question. There are problems with the windows. I must claim I do not know much about the issue and must ask the department for information through Government Services. I am certainly the wrong person to answer the question about who is liable. If there are problems with the school of any sort, the costs can and should be recovered from anyone other than government, and I think the government should make the effort to seek those costs.
The Minister of Government Services has indicated to me that he will be providing that information in a legislative return. Given that I will be receiving the information through Government Services anyway, I will have to allow the Minister of Government Services to respond directly to the Legislature.
Mrs. Firth: I want to ask the Minister a question about shovelling the snow off the roof of the school. Can the Minister tell us if his department is paying for that? If they are going to have to do this all year, what do they expect it will cost?
Hon. Mr. McDonald: That is another detail I will have to seek information about. I am not aware of the need to shovel the roof regularly. I remember listening to the discussion in Question Period and asking for a response, but I have not received any information that there is an ongoing problem that requires work. I did discover that there was a vent on the roof that had potential, because of its location, to be plugged up by snow. I was informed that the entrance way to the vent had been changed so it does not plug up, and that the work was of a very minor nature and has been completed.
I am not aware of a problem with respect to snow build-up on the roof, but I will request that the Minister of Government Services have that kind of detail incorporated into his return.
Mrs. Firth: Maybe the Minister of Government Services could answer because it is a question we had asked earlier. I am concerned about where the money is going to come from and what it has cost to shovel the snow already? Is it going to come out of the Education budget or is Government Services going to pay for it? Maybe the Minister could tell us if money has been spent for someone to shovel snow off the roof and how much? Did it come out of the Government Services budget?
Hon. Mr. Byblow: The Member cannot be serious about asking whether I know if snow has been shovelled off a particular building in the territory. I had committed to the Legislature to provide detail in a legislative return. That is being compiled and will be done. The information will be available.
Mrs. Firth: I do not understand why the Minister is so defensive. This is something that was raised in Question Period last week, or the week before. It is something the MLA for the area should be aware of. I am not giving the Minister some magical quiz or anything. I just wanted to know if he even knew about it. I guess he did not, so that is why he does not know what it cost and will come back with the information.
That is fine. I just thought the Minister may know.
Hon. Mr. Byblow: The Member should keep the record straight. Nobody raised the issue of shoveling snow off the roof last week, or even until five minutes ago. That question was never raised before. The Member is not correct when she said it was raised before. I have committed to provide the information. I said it would be provided in detail related to costs, and that is being assembled.
Mrs. Firth: The issue was shoveling the snow out of the attic. If the Minister wants to be defensive, as well as picky, that is fine. I will wait until we get the legislative return, because the Minister always provides us with lots of information in his legislative returns.
We will take a shot at it then.
Robert Service School - Upgrade Expansion in the amount of $36,000 agreed to
On Granger - Construct Elementary School
Hon. Mr. McDonald: We are nearing the end of the design stage for the Granger school. The school is scheduled to go to tender in February, and there are conceptual plans, if the Members want to have a look at them at some point.
Mr. Devries: The Granger school had a multi-year capital project cost of $9,539,000. Is that still expected to be within budget, or is there going to be another insulation index on it, similar to the Yukon arts centre?
Hon. Mr. McDonald: This is still expected to be the project total. We have not received the bids from the tender yet, and we will have a better understanding of what the actual cost of construction is going to be. Right now, my understanding is that it is on budget.
Granger - Construct Elementary School in the amount of $639,000 agreed to
On Watson Lake Secondary - Upgrade/Expansion
Hon. Mr. McDonald: The Member asked, I think, at some point, whether or not there was a change of heart with respect to the school or whether the estimates for the school had changed, based on the some information that was in the budget book.
The figure that we are still seeking is approximately $8,750,000. I have a hard time determining the origin of the $7 million figure but we have not changed the estimates for this particular school. We have, as the Member knows, indicated a two-phase construction schedule, but the estimated cost of construction is the same as we expected it would be before. The tenders are to be out before Christmas, as I may have mentioned in my opening remarks.
Mr. Devries: As the Minister may know, the grand opening is on Wednesday night, so if he wants to share a charter with me, we could fly down there and take care of that. We will have to pay for it out of our own pockets, I am certain.
I must say that it is a very nice facility. I have had several tours of it. I think that it is much appreciated by the Town of Watson Lake. It is something that we are very happy about.
Hon. Mr. McDonald: The concept of paying a charter ourselves is an interesting one but probably not one that is shared. Let me put this way: I do not think my wife would share the same enthusiasm for paying for a charter to go down on Wednesday night to open the school. Certainly I have been to the facility myself. It is a pretty attractive facility and it, along with the new construction to take place, will, I think, provide some very attractive facilities for Watson Lake, both for the school and also for the community learning centre.
Watson Lake Secondary - Upgrade/Expansion in the amount of $2,273,00099 agreed to
On Jack Hulland Upgrade and Renovations
Hon. Mr. McDonald: This is entirely a revote requirement. There are a number of things that we are doing with this particular school, which I mentioned last year, and which we intend to continue to do. Much of it was completed this summer. There is still some work to be done in the next year but this was scheduled to be a four-year program in its initiation and it was supposed to include, in its entire project total, work to replace windows - because the windows were, for those of you who know school, was not natural light - which was not something that the original architects considered to be an important feature to the atmosphere inside the school.
The skylight installation is for the same reason. There are air quality problems that require upgrading. That was considered to be a particular problem with this school and a few others.
Chair: I will now call Committee to order.
Jack Hulland Upgrade and Renovations in the amount of $80,000 agreed to
On F.H.Collins - Upgrade
Hon. Mr. McDonald: This again is a revote of funds. As Members know, this is part of a five-year program to upgrade the facility generally. I have indicated in the past projects that we are proceeding with, ones I would hope that we would complete in 1992-93.
F.H.Collins - Upgrade in the amount of $83,000 agreed to
On Christ the King Elementary - Renovations
Christ the King Elementary - Renovations in the amount of $3,000 agreed to
On Del Van Gorder - Upgrade
Del Van Gorder - Upgrade in the amount of $18,000 agreed to
On Jeckell Gym and Upgrade
Jeckell Gym and Upgrade in the amount of $5,000 agreed to
On South Highway School - Construction and Design
Hon. Mr. McDonald: As Members will know from discussions we have had, the project total will not be $1.4 million. The approximate total will be something more than that. Consequently, there will have to be some work done over the course of the winter to find where the additional funds are going to come from, then it will be put forward in a supplementary for next year for final completion.
Mr. Lang: Yes, I wonder if the Minister can give us a breakdown. As you recall during Question Period, the question of landscaping, a well, et cetera, all came up, and I am just wondering if the Minister is going to have a cost estimate of the finished project inclusive of all these features.
Hon. Mr. McDonald: I will just run through the elements of the projects at this time. The actual contract, including the design, is $1,322,000. The clearing contract is $18,000. The foundation contract is $109,000. Access roads, parking and bus routes are $48,000. The well is $39,000. The septic system is $62,000. The blasting is an extra $240,000. Siding will cost $47,000. Engineering will cost $30,000 and landscaping, $25,000. Yukon Electrical will cost $15,000. The total is $1,955,000.
Mr. Devries: Is the siding spruce siding, or what is it?
Hon. Mr. McDonald: I will have to take notice of the question.
South Highway School - Construction & Design in the amount of $11,000 agreed to
On Handicap Access Alterations - Various Schools
Hon. Mr. McDonald: This is a revote fund. The work this year was at the north end of Whitehorse Elementary School. The project is, I believe, completed.
Handicap Access Alterations - Various Schools in the amount of $51,000 agreed to
On Beaver Creek - Upgrade
Hon. Mr. McDonald: There were two projects, one each for the Kluane Lake and Beaver Creek schools. The funding for the two schools was awarded to the same contractor, Charlie Eikland Contracting, so the resources were a little overtaxed and caused a bit of a delay. The projects involve retrofit for both facilities, new windows and various millwork features in both schools. The last time I was in Beaver Creek and Kluane, the projects were close to completion, although there were delays. There was work done, I believe, on the Beaver Creek school with respect to the well.
Hon. Mr. McDonald: My understanding is that the project was done largely with local labour.
Mr. Devries: I understand that some of these projects also involve replacing siding, or something, and some of this was done while the children were in class. People were hammering siding on to the walls while the children were in class. Did the Minister receive any complaints about that?
Hon. Mr. McDonald: When I was at the school at Kluane Lake there was construction going on after the school year started. The staff in both schools indicated that there was some disturbance of the school operations but I did not get the impression that it was severe.
Beaver Creek - Upgrade in the amount of $105,000 agreed to
On Kluane Lake - Upgrade
Kluane Lake - Upgrade in the amount of an under expenditure of $27,000 agreed to
On Carcross - Upgrade
Mr. Phelps: I wonder if we could be told what that is for?
Hon. Mr. McDonald: The work was on the grounds of the school. There was a depression there that was filled in. The project was for clearing the school grounds, hauling of materials, and ultimately grading of materials in that depression. The contractor was Larry Dickson.
Carcross - Upgrade in the amount of $35,000 agreed to
On Grey Mountain - Upgrade
Hon. Mr. McDonald: This is just minor grounds improvements. I am not sure exactly what they are, but if someone wants to know, I can find out. It was a matter of $1,242.
Grey Mountain - Upgrade in the amount of $1,000 agreed to
On Instructional Equipment
On Drapes
Drapes in the amount of $10,000 agreed to
Mr. Devries: Just before we leave public schools, getting back to Watson Lake and the government contracts, it looks like there is about $100,000 spent on a computer lab at Watson Lake High School. Was this put out to tender? How was it handled?
Hon. Mr. McDonald: I will see if I have that information. I suspect that a project of this size would have gone out to tender, unless elements of it were done internally. I do not have that information in front of me, but I am certain a construction project of this size would be tendered. However, there may be elements of it that are done by Government Services staff. I will check on that information.
Mr. Devries: Would we find this in the capital projects of last year’s budget?
Hon. Mr. McDonald: I will have to tell the Member what fiscal year the money was spent when I get the information.
On Advanced Education
On Yukon College
On Community Campus - Construction
Hon. Mr. McDonald: These are revote funds for the Old Crow community campus.
Community Campus - Construction in the amount of $500,000 agreed to
On New Building Construction
Hon. Mr. McDonald: These funds are entirely revote funds. They are exclusively dedicated toward the landscaping of the Whitehorse campus of Yukon College.
Mrs. Firth: Do I understand correctly that it will cost $350,000 to landscape the college?
Hon. Mr. McDonald: This is for hard and soft landscaping, some of which would include paving.
New Building Construction in the amount of $350,000 agreed to
On Northern Research Lab - Construction
Hon. Mr. McDonald: These are revote funds for the lab located in the trades and technical wing of the college. It was originally conceived to be shared with the KPMA’s requirement for a lab service. At this time, it is my understanding that this project still has not been tendered, but the project is still slated to go ahead.
Mrs. Firth: How could it be a revote? There is zero voted to date. When was that project approved if this is a revote? I gathered these were new projects.
Hon. Mr. McDonald: “Voted to date” refers to voted in this fiscal year.
Northern Research Lab - Construction in the amount of $25,000 agreed to
On New Gymnasium Equipment
Hon. Mr. McDonald: This again is entirely revote funds from 1989-90 to 1990-91. It is for weights for the weight room and general gymnasium equipment.
New Gymnasium Equipment in the amount of $18,000 agreed to
On Furniture
Hon. Mr. McDonald: This again is entirely revote funds. This was equipment for the carpentry, heavy duty mechanic and electronics course.
Furniture in the amount of $34,000 agreed to
On Community Campus Equipment
Hon. Mr. McDonald: These are entirely revote funds. They included the installation of five fax machines in Teslin, Dawson, Mayo, Carmacks and Carcross, and a photocopier, table and chairs for Pelly Crossing.
Mr. Devries: Just before we leave this area, I was driving by the Teslin Indian Centre - they have a fancy name for that I could never pronounce - and I see it is almost complete. My understanding is that Yukon College will be moving in there when it is completed, which will probably be shortly before Christmas or somewhere in that timeframe. I understand the lease arrangements are $25 per square foot, and prior to moving in, they have to pay for the carpeting, painting, furniture, et cetera. Would that come under a new supplementary or would it be included in some of these, like furniture and community campus equipment, since it is still taking place in this fiscal year. I am not sure if money was budgeted for it or not.
Hon. Mr. McDonald: Money was budgeted for this fiscal year in the main estimates for the Teslin community campus. I am not seeking a supplementary, because we had the money in this budget. We anticipated takeover in October, so there may be a month’s rental savings, but it would not be significant. I think they were slated to move in in mid-November. I am not sure they have been able to live up to that schedule or not. I can check on it.
As far as I am aware, the only equipment required for the Teslin community campus that they do not currently have is shelving. That is a fairly minor expense and can be handled under a miscellaneous budget. The funding for the rental of that facility was incorporated into the main estimates.
Mr. Devries: In the future, under which figure would we find the rent for something like that?
Hon. Mr. McDonald: One would find the rent in Yukon College estimates in future years’ main estimates. The rental costs in rural facilities, of any facility that is not owned by the Government of the Yukon, would become a Yukon College responsibility. So, the leasing arrangements would become their responsibility, and Government Services would transfer their funds to the college to handle the lease, or the rental costs, associated with the various campuses.
Community Campus Equipment in the amount of $17,000 agreed to
On Libraries and Archives
On Library Facilities
On Whitehorse Library Development
Hon. Mr. McDonald: This is a revote for the Whitehorse library. It is for design work associated with renovation expansion of the Whitehorse library facilities in the adjacent building. Now that archives out, the design work is being completed, and there will be some renovations work done on the full area to expand Whitehorse library into all the old archives space. There will be meeting areas, et cetera, in what was the archives space.
Mrs. Firth: This is to look at the cost of expanding into the whole archives space and just study it, more or less. Is that correct? I see the Minister nodding his head. Then, the next question I have is, do we have any idea if we are going to have to do any major renovations there? Is it going to cost a lot of money? Could the Minister tell us how much?
Hon. Mr. McDonald: During the work at the design stage, it was determined that ventilation systems and mechanical systems did not meet code. Consequently, this may escalate the original budget that we had factored in for this project of $825,000 for the Whitehorse library. It may expand that somewhat.
Right now, there is an analysis being done on exactly what those mechanical and code requirements are, and whether or not there will be a request for additional sums beyond what was originally budgeted. Because we have budgeted $200,000 for the current fiscal year as well, we had planned to budget a total of $825,000 for this project. The final word from the consultants, with respect to the mechanical upgrade, will tell us how far we are from reality on that estimate.
Mrs. Firth: Can the Minister tell us when they are expecting that quote?
Hon. Mr. McDonald: A couple of weeks ago, I got the impression it would take a number of weeks. I expect it will take a month or so. If the information is available, I will provide it if we are sitting.
Whitehorse Library Development in the amount of $43,000 agreed to
On Community Library Development
Hon. Mr. McDonald: This is for furniture and equipment for various community libraries, including the one in Teslin. It is entirely a revote.
Community Library Development in the amount of $32,000 agreed to
On Ross River Library Development
Hon. Mr. McDonald: This is a revote for shelving units.
Ross River Library Development in the amount of $4,000 agreed to
On Library Equipment
On Audio Visual Equipment
Audio Visual Equipment in the amount of $2,000 agreed to
On Archives Facilities
On New Archives Facility
Hon. Mr. McDonald: This completes the archives. The archives are now open. It is entirely revote funding as well.
Mr. Devries: Are there any new person years to be attributed to archives or are there as many employees as when the archives were in this building?
Hon. Mr. McDonald: We are using existing staff for the time being. There may be a need for additional people, such as a conservator or others, but at the present we are using the staff we indicated in the main estimates that we would be using.
New Archives Facility in the amount of $1,961,000 agreed to
On Archives Relocation - Equipment & Furniture
Hon. Mr. McDonald: Again, this is entirely revote funding. It is for equipment for the archives facility in Whitehorse.
Archives Relocation - Equipment & Furniture in the amount of $30,000 agreed to
Capital in the amount of $12,988,000 agreed to
On Capital Recoveries
On Arts Canada North
Chair: Are there any questions on capital recoveries?
Arts Canada North in the amount of $500,000 agreed to
Capital Recoveries in the amount of $500,000 agreed to
Capital in the amount of $12,988,000 agreed to
Department of Education agreed to
Department of Finance
Chair: We will turn now to the Department of Finance. Is there any general debate?
Hon. Mr. McDonald: If you can give me two minutes, I will go to my office for my comments.
The Department of Finance is showing a reduced requirement for operation and maintenance of $20,000. This reduction is in the treasury program and represents the amount of money that is to be provided to the college, as I indicated in the Department of Education estimates, now that the Department of Finance no longer does the payroll for the college.
In other words, because the college is an independent entity and has made its own arrangements for the payroll, there is some reduction in the workload of the Department of Finance and, consequently, there is a reduced need for funds.
This a reduction in spending. There is no reduction of the department’s person year complement. There are two reasons for this. First, the dollar allocation does not equate to a whole person year. Second, in the last while, the department has been hard-pressed to handle the payroll workload with the staff it currently has.
The growth in government payroll over the years has not been accompanied by a corresponding increase of people in the payroll branch. Because there are new collective bargaining rates for auxiliary employees, this has also increased the branch’s workload considerably.
The remainder of the department’s activities are on-budget. We are not requesting any additional funds to cover them.
Mr. Phelps: I have a couple of questions relating to the way the department goes about providing information, particularly in regard to the tables in the back of the budget speech that the Minister gives from time to time. I am concerned with how and why they used the figures they did with regard to the issue of dependency, or lack thereof, of this government on the federal government.
Why would we have a chart that shows the income of this government as including the gross income from the Yukon Housing Corporation, something that does not show up in the public accounts the Auditor General provides us with? As well, the gross liquor store income, not utilized by the Auditor General, is included in income as net returns, according to the public accounts.
Hon. Mr. McDonald: The reason we show the Yukon Housing Corporation is that we vote the Housing Corporation and that is where we show it. It is a gross expenditure by this government and appropriately should show up.
Mr. Phelps: I do not understand this. Is the Minister saying that gross revenue from the Yukon Housing Corporation is income to this government and that gross sales from the liquor store are income to this government? That is not the accepted standards and certainly not the figures used in the public accounts by the Auditor General.
Hon. Mr. McDonald: We are obviously experiencing a difference of opinion. The gross income of the Yukon Housing Corporation is shown as a recovery, and the gross revenue of the Yukon Liquor Corporation is the net receipts of the Liquor Corporation, and we show that.
Mr. Phelps: The government has been using that figure to attempt to show that the territorial government is less and less dependent upon the federal government when the opposite is the case. The chart on page 48 of the budget address of the Minister first of all includes gross revenues for Yukon Housing Corporation as income to this territory, as well as the gross revenues for the Yukon Liquor Corporation. My point is that is not the accepted practice and that the income for the territorial government, as reflected in the budget itself, on page six under territorial revenue, is based on the same calculations as made by the Auditor General in the public accounts. Those do not show a net income from the Housing Corporation because, of course, the more it spends the more it loses. The income from the liquor sales are shown as the net after expenses from the Liquor Corporation back to this government.
I wonder why the department is giving us these misleading figures that can only be calculated to mislead.
Hon. Mr. McDonald: Again, there is a difference of opinion here. What we are showing in the transfer payment is a table that compares the federal transfer payment as a percent of the budgetary income. We are showing what would show in the estimates themselves. If we show Yukon Housing Corporation as a recovery, we will show it in the table.
Consequently, we are trying to match the estimates book with the table. I do not believe there is anything misleading in doing that.
Mr. Phelps: That is not what is shown on the territorial revenue side of income for the territory. The audited public accounts show the net profit and payment from the Yukon Liquor Corporation to the Yukon government as territorial revenue, and they do not show anything from Yukon Housing Corporation, because we lose money with that corporation. The more housing we have, the more we lose.
Hon. Mr. McDonald: In the main estimates book, we show income. We list out the income. That is how we budget, and how we vote the money. We match what is in the main estimates book with what is in the table.
Our public accounts show the net deficit of the Yukon Housing Corporation. When we look at page 6 of the estimates book, one sees the figure shown in the federal transfer payment on the budgetary income chart. We are matching what is in the estimates book and how we vote these funds in the past. We show the same figures in the charts, where we are showing comparative figures from previous years.
The whole point of the chart is to show comparative figures. As long as you use the same calculations from previous years, you can show trends. The whole point of the chart is to show trends. As far as I am aware, we are calculating the previous year’s figures in exactly the same way as we are calculating these.
Mr. Phelps: The public accounts do not show gross revenue of the Yukon Housing Corporation as income to the territory, because we lose money on the Yukon Housing Corporation. It does not show gross revenues from the Yukon Liquor Corporation, because that would be absurd. It takes into account net: the transfer of money from that corporation to the Government of Yukon.
I am submitting that this chart is drawn in a way to lead us to a conclusion that is quite fallacious in fact.
Hon. Mr. McDonald: Again, the point of drawing up the chart is to show trends. If you stuck to it the same way in previous years, you could still show trends. The intent of this chart was to match it with the main estimates book, which is what we vote. The public accounts show the accounts of the Yukon Housing Corporation the way it does as a result of the Yukon Housing Act.
The way we vote money and show budgetary income is the way we show it in the main estimates, and that is what we are trying to match with this chart. We match our charts with our main estimates book, which is what we are asking Members to vote on in this Legislature. It is not the public accounts. We are matching the chart and the information with our main estimates.
Once again, the point to be made here is that, as long as the calculation is made the same way every year, you can still demonstrate the trends. If you calculate out the Yukon Housing Corporation, and calculate it out in previous years as well, you still show the trends.
Mr. Phelps: Would the Minister review this and, based on his own ethics, have a hard think about whether or not he feels comfortable in bringing this kind of misinformation forward?
Would the Minister not agree that, according to definition, the federal transfer payments include recoveries, that is, the transfer payment from Ottawa, as is established programs financing. Established program financing is defined as such in the public accounts.
Hon. Mr. McDonald: Firstly, I draw the Member’s attention to the fact that this is the way the information has been presented in the past. I have always found it to be useful information, as long as it can be usefully comparative information.
There is a reason why the federal transfer payment is shown and is entitled “federal transfer payments”. There is no intent to mask this as entirely federal receipts, or to include EPF or anything else. It is to show that one transfer payment that is discretionary to the territorial government.
Other provinces receive established program financing. We receive established program financing on the basis of contractual arrangement with the federal government to perform certain duties on a per capita basis.
Based on the Members’ representations, I asked them to calculate in the EPF in order to see where the trend line goes.
It was shown to be even steeper on a downward decline than it is. The EPF and the transfer payment together are in an even steeper decline in terms of the dependency on the federal government. The point, nevertheless, is that we have always been comparing the transfer payments and that is why we did not calculate it in. The reason for that is that the transfer payments were the discretionary funds provided to this territorial government to do the business of the territory.
Mr. Phelps: The transfer payments, by definitions used by virtually everyone when we talk about monies from Ottawa, would include recoveries as transfer payments from Ottawa. EPF is a transfer payment from Ottawa as well as the formula financing payment. The concern I have is that to say the revenue side of a corporation such as Yukon Housing Corporation is a gross income to this government is so fallacious as to be laughable, because we lose money every year on the O&M - we subsidize Yukon Housing Corporation every year. We make money from the liquor store but not the gross receipts.
Hon. Mr. McDonald: When it comes to the Yukon Liquor Corporation, the amount that we are showing is the gross receipts to the Government of Yukon, not the gross receipts to the Yukon Liquor Corporation. So it is the net income of the Yukon Liquor Corporation that is coming to the Government of Yukon.
The purpose of the chart is to show comparative information. The reason why there is not one bar, but many bars, is to show trends. That is the point of the exercise. The information that is provided should be calculated the same way in previous years as it is this year in order to give you an accurate comparison.
If the Member was making a convincing argument that we are calculating the information differently this year, as opposed to previous years, and therefore the last trend line was not accurate, then I think it would be fair to say that I would have very strong concerns, ethically, about putting this information into the budget book, and I would acknowledge that the Member had a case. The Member is making a case that if one was to remove Yukon Housing Corporation from the figures this year - despite the fact that that is not the way we show it in the main estimates and that is not the way we vote it - we have to do something special in order to skew the figures because it is not the way it is shown in the budget book. If we were to do that for this year, presumably the Member would accept that we would do it for previous years in order that we may get the trend line. The point of the exercise is to discover the trend line, I would assume.
My view is that the information is being shown the way we showed it in previous years. Part of the information is to show comparisons. The information does not try to demonstrate that there is anything more than a comparison of the federal transfer payments as a percentage of the budget-sharing income. It pulls all the budgetary income from the main estimates book, which is the working document of this Legislature, and it attempts to provide a good comparative analysis. Now I do not think there is anything devious in that. We have always shown it. There is no attempt to change things for any particular purpose this year. It is the same procedure as before, and once again it is to show comparative information.
Mr. Phelps: Well I will provide the House with the charts using the same figures every year, which shows the federal transfer payments - the total of EPF transfer payments from Canada and recoveries - and shows the total budgetary income, i.e. the territorial revenues as calculated by the Auditor General in his books. The point that I will make is that the trend is the opposite way, that more and more of our budget is from Ottawa, not less, as a percentage. I am going by memory but I will give the figures to the Minister tonight. We are going really from 77 percent of the money that we receive coming from Ottawa in 1980-85, up to 81 percent of the money coming from Ottawa. It is just the converse of what this chart shows.
Hon. Mr. McDonald: I am trusting that when the Minister puts the information forward he will be prepared to have his figures tested with some rigor because if the Member does not do things like adjust for program transfers or provide comparative information from previous years, then the Member is going to have to accept some criticism. For example, if you do not adjust for program transfers, then clearly if all the funding that applies to Range Road is deemed to be new revenue, it will make it look as if the Yukon government is becoming more dependent on the federal government, if it is based on only a pure dollar comparison.
Consequently, the responsibilities of the government increase, whether or not there are new contractual obligations being taken on by the government. You have to compare the same responsibilities of the past to the responsibilities of the day and the money we are spending on those responsibilities in order to provide a proper comparison.
Chair: The Committee will now break until 7:30 p.m.
Recess
Chair: I will call Committee back to order.
INTRODUCTION OF VISITORS
Mr. Nordling: Before we get back into the debate on the Department of Finance, I would just like to point out that there is a group of people in the audience tonight. I thought I would stand up and introduce them because it is not very often on Wednesday or Monday nights we have anyone here to watch the proceedings. This is a group of people that has been affected by the trapping policies of the Department of Renewable Resources and they were hoping we would be on Renewable Resources tonight. We will not be so they are happy to stay and listen to us debate dependency on the federal government. I should just ask the Minister of Renewable Resources to take note that we will be asking about the trapping policies when we get to that department.
Chair: We will continue with general debate on finance.
Mr. Phelps: Before we broke I promised that I would table the chart that shows the opposite of the graph we were debating just before we broke at 5:30 p.m. shows. I will table those. I was waiting for the photocopier to warm up and it did not warm up in time so I thought I had better run in here before we allowed this item to pass. I will table another set.
The point is very simply that there is little question that federal transfer payments make up by far the lion’s share of our budget. If one takes the territorial income as defined in the public accounts and adds to it the established program financing transfer payment from Canada and recoveries, the total transfer payments from Canada, then one can see that really the monies from Canada are in the 80 percent range rather than the 60 percent range of the revenues to this territory.
Hon. Mr. McDonald: I do not know what to say at this point. We will certainly take our time looking at the Member’s figures to determine their validity, if any. I will be more than happy to respond sometime this sitting to the Member’s calculations and if he has not taken into account the items that I have mentioned, then I certainly will be making that case very vocally. I thank the Member for putting forward the effort.
Mr. Phelps: As I understand it, the few changes between the two line items, from transfer payment to recoveries, is still part of the transfer payments from the federal government.
Hon. Mr. McDonald: The transfer payment that we have always referred to in the budget speech book is “the” transfer payment, not all expenditures from the federal government to the Yukon government. We have always referred to the formula financing agreement as “transfer payment”. There has been no confusion in my mind as to what we have been referring over the last four or five years. Again, I will simply state that I will certainly be poring over the figures that the Member presents and if they have any validity then I will recognize it. If he does not then the territory will recognize that.
Chair: We will begin line-by-line debate.
On Operation and Maintenance
On Treasury
Treasury in the amount of an under expenditure of $20,000 agreed to
Department of Finance agreed to
Government Services
Chair: We will begin Government Services with general debate.
Hon. Mr. Byblow: The Government Services supplementary represents the best revised estimate of expenditure and recoveries for the department as of the fourth month into the fiscal year. That essentially means the end of July. As we go through line-by-line items, I can explain specific amounts and the specific reasons. I guess the single most significant expenditure that is reflected in this supplementary is in the area of property management, which amounts to a number of lease costs. Additionally, another significant amount reflects the business incentive policy implementation. As Members know, in the course of this calendar year, we have been able to put in place a business incentive policy that has been quite well received by the industry.
It reflected a desire by the industry, and Members opposite, to have a level playing field in the initial tendering of contracts, but also provide for some incentive following the completion of those contracts. As this is the government’s belief, we want to encourage local hire and the use of local materials. Those are the things we have built in to the business incentive policy and, because they create a small cost as a result of those jobs being done in accordance with that policy, this supplementary reflects some $100,000 to establish the fund for it.
Aside from mentioning those two significant items, the rest of the supplementaries reflect various reallocations within the department, mostly of a minor nature. Some, in the case of personnel, reflect more substantial amounts but mostly refer to inter-branch reallocations where the priorities of the department required more personnel.
Given that, I would invite line-by-line queries or I would take any other questions.
Mrs. Firth: We raised a concern about the lateness of tenders. He was going to bring back information for this debate on that. To refresh his memory, we talked about some of the landscaping contracts, construction work being done on the schools - particularly that work that was not started until after school had begun. Some of the teachers had arranged their rooms specifically so that renovations could be done, but when they returned in the fall, the work had not been done. Perhaps the Minister could address the concern we had on this about one week ago.
Hon. Mr. Byblow: It was my intention to provide a written detail of those particular estimates relating to expenditures affecting the schools this summer, because that is where the criticism was essentially fair. That information is not complete yet but I will be providing it to Members. In my preliminary dealings with the department on it, I am given to believe that we had a substantial increase in the amount of work that was done in schools this summer and a combination of various reasons resulted in some of the contracts being let late and some of the contracts not being able to be completed, simply because contractors had too much to handle.
I am advised by the department in my preliminary discussions that there was about a 50 percent increase in the actual amount of work that was expected for the summer break that was related to the schools. It did require an unreasonable amount of preparation for the department, in terms of preparing the specs and putting out those tenders.
The late contracts, as the Member raises the issue, really amounts, in my cursory observation, to those contracts related to the summer period and mostly with the schools. I can now provide greater detail to the Member, in the next few days and definitely before the mains.
Mrs. Firth: I will wait to get that information and then will follow up in the debate on the mains budget.
I would like to ask the Minister some questions about the GST and the impact of the GST on this government’s tendering procedure. A lot of contractors have had a question with respect to the federal sales tax being included in the bids now, and the GST. I think there is quite a misunderstanding as to how they are supposed to tender on projects because of the uncertainty. I would like to know what analysis the department has done with respect to the impact of the GST on the whole tendering process, if the contractors are going to be advised of that and what the government’s expectations will be of them when it comes to bidding on various projects.
Hon. Mr. Byblow: The practice we observed in the past relating to federal sales tax was to put out the contracts with the express direction that the federal sales tax be included in the bid price and that we would seek the rebate of federal sales tax from the federal government. As the Member is aware, there has been a 13 percent manufacturers tax on most items.
That was a change we undertook in the past year through discussions with the contracting community. Previously the contracting community had to make application directly to the federal government on the basis of the costs they incurred while paying the tax in the course of doing their particular job. In the course of the last year, we requested contractors to include FST in their bid prices and we would get the rebate from the feds and transmit it back to the contractors. It was a much more expeditious system and was really a service to the contracting community. Realistically, it is a lot easier for us to make application for refund of federal sales tax.
It is not simple with the GST, nor are we able to provide the same kind of support. To my knowledge, at this time we do not have in place a clear method or direction from Revenue Canada as to how the GST will be applied in the area of construction jobs, supplies acquisition, or the various services that are involved with buying. At the moment, the onus will be on the contractors to make application for rebate of applicable sales tax. Until we can find more out about the application of the GST on various goods and services, we have not got any mechanism by which we can provide direct support to the contractors and do it the way we used to do it, or have done it until now, on the FST.
Mrs. Firth: I am not looking for what the government has been doing to support. I am looking for an answer to give to the contractors for when they bid on a contract now. The GST is supposed to come into effect in January. Do they continue to include the federal sales tax, or do they eliminate that completely in their tenders and put on how they interpret the GST to be affecting that particular service, contract or construction project they are providing? What direction are the contractors to be given as to how they are to adjust to this change?
Hon. Mr. Byblow: With respect to the GST, which is supposed to come into place on January 1, contractors will have to bid on the basis of including the GST and seek their own rebates, where applicable. At the moment, we are finalizing wording to put into the contract tender documents that would call on the contractors to bid with an inclusion of the GST and FST as fallen away. In other words, as of January 1, the FST will fall away. That is the 13 percent federal sales tax on manufactured goods. The seven percent goods and services tax will be applicable.
We will be putting the appropriate wording into the tender documents, which will call on the contractors to include that in their bid price. I am advised we are now in the process of getting wording approved by Revenue Canada for inclusion into contracts that will be put to tender after January 1.
Mrs. Firth: Could the Minister provide me with a copy of the wording, once it has been approved by the federal government, so we are all familiar with it?
Hon. Mr. Byblow: That should be no problem. I am sure if the Member even wanted the draft wording that we are currently negotiating, she can have that. The Member also recognizes that once that wording is approved by Revenue Canada, it will be in the tender documents; it will be very public information. The only regret that I have is that at the moment we do not have any ability to tender jobs, GST exempt. That is not permissible. Revenue Canada has said that will not be the case. Secondly, we at this time, have not developed any mechanism where we can help the contractors apply for the rebates, largely again because Revenue Canada has made it clear to us that any rebates must be applied for by the contractor. Now, to the extent that we can help them assemble that paperwork, we will, because our working relationship with the contracting community is pretty good. We are quite prepared to share our expertise in helping them, largely because we sympathize with the problems faced by many of the contractors in doing massive amounts of paperwork. Many of them have small operations, barely eking out an existence in a shrinking market, and I can certainly appreciate the problems they face with increased paperwork. So we are quite prepared to help where we can, but at the moment our hands are tied.
Mrs. Firth: Has the department, in its efforts to help the contractors, done any work on assisting the contractors by providing them with information in the form of brochures or pamphlets or so on explaining to them how the GST could affect various areas of the construction industry and the service contracts. Has YTG given the Yukon Contractors Association any of that kind of assistance?
Hon. Mr. Byblow: The answer is not good. The short answer is that we are limited in our ability to provide information to the contractors largely because we have not got the information from Revenue Canada yet. To put it bluntly, they have not got their act together yet as well in terms of detailed literature respecting exemptions, application of the tax, how to apply for rebates and so on. However, the positive side of that is that Revenue Canada is sponsoring a number of seminars throughout the country. I believe it includes Whitehorse, and I believe the Chamber of Commerce is involved in the sponsorship of those seminars. I understand that there are going to be seminars throughout the country, sponsored and encouraged by the contracting industry on a national level.
With the seminars and the hope that more literature and information will be available from Revenue Canada, we would be more than pleased to help disseminate it.
Mrs. Firth: I would just like to recommend to the Minister that it is one way we could provide support services to the business community rather than each contractor having to go out and hire someone to interpret what the GST means and the effect it will have on goods and services and on construction contracts.
I think the Minister has at his disposal in the department the expertise to provide that kind of assistance. I would like to recommend they do something like that and provide some information for contractors on the effects of the GST. I think that would be further reinforced.
My colleague has a question to ask about the GST. The information the contractors need to deal with concerns they have - which is the same concern my colleague from Riverdale North has - is a service the government can provide. I strongly recommend they provide support services to the contracting industry.
Hon. Mr. Byblow: I share the sentiments of the Member in terms of providing adequate and timely information to the contracting community on the GST. I have just been advised that the Alberta construction association is currently sponsoring a several day workshop in Calgary. We are sending one of our property management personnel to that seminar, largely for the very purpose the Member recommends. That person will bring back information from that seminar and we will be disseminating and sharing that information with the local community.
I would have to explore the extent to which we could sponsor that, but I share the Member’s sentiments on supporting the industry and the burden of paperwork generated by the GST. It will be onerous and complicated. Any help we can provide will be provided.
Mr. Phillips: I share the concerns the Member for Riverdale South has about the GST and its implications. There is another area we should also look at. The Minister mentioned the GST and the FST in 1991, but I would like the Minister to also look at the area of overlapping contracts. There are government contracts that were started in 1990 and are going through 1991. The Old Yukon College is a good example, where contractors are working on the project now, but some of the goods and services they purchase, as well as some of the work they will do, will not happen until 1991; therefore, they will pay GST on some of it, and FST on others. It becomes very confusing to the contractor.
That is the kind of information the Member for Riverdale South is talking about. It is an opportunity for the government to use some of its staff and abilities to help clear the matter up for many of the contractors. Like the Member for Riverdale South said, a lot of these people do not have the resources to investigate all the possibilities.
We are six weeks away from the imposition of the GST. It is high time that someone started to tell us exactly what we have to do to play in the business field, or play in the contracting business with the Government of the Yukon.
It is going to make quite a difference in how contractors bid various contracts. It is important to get that message out as soon as possible. The government is tendering contracts every day that are going to be for 1991.
Hon. Mr. Byblow: The Member has identified a very real concern, and it is one we recognize and one we have flagged with Revenue Canada for clarification. The problem is not so much new contracts that will be let in 1991 as with overlapping contracts, as the Member describes.
We are working with Revenue Canada to get a clarification of how those overlaps will be cut. To what given point will a rebate be allowed on a job that is begun this year, but carrying well over into next year? That is the grey, unclear area that contractors have not calculated goods and services tax for in his bid. To say the obvious, it is conceivable that a contractor could take a bath on a multi-year project that he has bid on this year.
It is one we are cognizant of and have flagged with Revenue Canada. It is one we are seeking clarification on, and it is one on which we will work toward getting a clarification and we will advise contractors when we have more information on it. It is possible we will have such a clarification from the workshop in Calgary, which our staff is attending.
It comes to mind that in an earlier reference, I may have talked about the year 1990 as the GST application year. That ought to have been 1991.
Mr. Phillips: When is the workshop in Calgary taking place and does the Minister have any idea from the federal officials exactly when they plan to resolve this? Like he said, we are six weeks away and if you take out Christmas and a few other days in between, we are ending up with four and a half to five weeks before this all has to be settled. People are going to have to pay one or the other.
Hon. Mr. Byblow: The workshop in Calgary is taking place, I believe, in the last week of this month. In about another week’s time, our staff will be attending. It comes to mind in this discussion that it is possible somebody from the contracting association may wish to attend with us. I believe I will explore that. Tonight’s discussion has prompted that thought and it may be very useful, in addition to having somebody from our department attend, to have somebody attend from the contracting community, specifically the executive.
I guess I should also note that direct contact with Revenue Canada is not with our department directly; it is through Finance. That is the direct relationship. We are working closely with Finance to procure the information relating to the GST. I can only say to the Member that, like Members opposite, I agree that we should have this information available as quickly as possible. We should have it disseminated equally as quickly and we should, as a government, be providing the best support that we can to the contracting community to interpret, to understand and to apply for the greatest measure of support they can get through rebates.
Mrs. Firth: I would like to ask the Minister one more question in general debate and it is with respect to the project management manual. I know that the building management directives came out in the summer - the new Management Board directives. I have reviewed those. I wonder if the Minister could tell us when the project manual is going to be out - the new one - and have they resolved the issue about whether it should be just Government Services following this or are the other departments going to follow it too? Perhaps he could update us on that.
Hon. Mr. Byblow: The project management manual is currently being written. It is probably at about a fifth draft stage. At the same time, we are engaged in training our personnel involved in project supervision and development. As well, we are preparing the required submission for approval. I am advised we should have our manual ready for adoption sometime during the next few months. In fact, it may even be sooner than a few months - it is imminent. I understand I should be seeing the project management manual shortly, and I should be taking it to Management Board and the Cabinet very soon.
Mrs. Firth: Perhaps the Minister will be able to further update us on the manual in the general budget debates a week or two from now.
I do not have any more general questions and am prepared to move into line-by-line debate. I will have some further questions once we do that. So if none of my colleagues have any questions with respect to general debate we can move to line-by-line.
On Operation and Maintenance
On Administration
Hon. Mr. Byblow: There was one outstanding question I did not respond to. On project management, the Member raised the issue of government-wide application. That, too, will be part of the endorsement coming out of the current project manual policy guidelines, specifically relating to steps of a project. We have taken a general position that the project management guidelines ought to apply government wide, and I expect to have those endorsed as part of the imminent decision.
With respect to the operations and maintenance under the administration portion, the $126,000 reflects, for the most part, personnel costs. There are four positions within administration that are created out of surplus dollars and vacancies throughout the department. They were not identified in the main estimates largely because we knew that we could pay for those positions out of the department-wide vacancies. The four positions will cost $113,000. They consist of a personnel officer, a financial assistant, a contract administration clerk and a contract registry clerk. The additional funds to make up the $126,000 consist of an increase of $13,000 from the transfer of funds from the B and C airports devolution program, specifically for insurance premiums relating to airport assets.
There is a $10,000 increase in our cost for various increases in auto and property insurance, an additional $5,000 through a strategic planning seminar cost that we did not budget for but felt it was necessary to have. Additionally, there was a reduction of $15,000 in our estimate for what it would take to assemble the business incentive policy. We overestimated the costs related to the development of that policy and that is part of the overall $126,000.
Mrs. Firth: Are the four person years the Minister refers to - the personnel officer, contract administrator, the clerk positions - term positions and if they are, for how long?
Hon. Mr. Byblow: They are term positions. They were set up as two-year terms. I am not precisely clear as to what point in that two-year term they are in this year. I can confirm later with the Member as to whether it is the second of the two-year term or the first year.
Mrs. Firth: The Minister made the comment that they did not identify money in the new budget for these person years because they expected to have lapsed salary dollars and so on. Is that correct? Perhaps he could tell us in the main budget debate how long the terms are and at what stage they are in their term position.
Hon. Mr. Byblow: I can clarify where those four positions exist in the main estimates. We did not identify them in the main estimates because we calculated, or knew, that should we require these positions, they could be paid for out of vacancies. I believe any department can guesstimate the percentage of vacancies they have in their budgets and establish staff establishment directives against that for required priority positions. That is the situation here.
Essentially, we have transferred dollars from elsewhere in the department to make up that change of $113,000. It is not new money; it is money of an anticipated vacancy department-wide.
Administration in the amount of $126,000 agreed to
On Systems and Computing Services
Systems and Computing Services in the amount of $8,000 agreed to
On Supply Services
Supply Services in the amount of $7,000 agreed to
On Property Management
Hon. Mr. Byblow: I indicated in my opening remarks that this was the item that reflected the single most variance in the supplementary.
To begin with, on the personnel side, there is a reduction of $76,000 reflected in what would be transferred to that first vote under administration. Vacancy dollars transferred over to administration for those four positions I described came from here, in part.
There was an additional increased cost of $27,000, which reflected increased auxiliary hours for custodial work, as well as some painting. There is $100,000 that was transferred to the Yukon College, which reflects the cost of the leases of the community campuses. In the devolution, the responsibility for maintaining those community campuses historically rested with Government Services. In the devolution of responsibility, we were required to transfer the cost of those leases throughout the communities to Yukon College’s base budget. So, $100,000 is reflected in a reduction in this overall vote.
It was a cost related to decentralization of municipal advisors in the amount of $5,000 that is predictable for the community of Teslin where we anticipate having to lease some space for that position. The amount of $33,000 is reflected by a transfer of funds in the Arctic B and C airports for devolution for maintenance costs related to the buildings at the airports. The amount of $7,000 is new money given to us, again by devolution, of a program; specifically, mine safety. Again, this is relating to maintenance. There was an increase in materials and supplies for the maintenance and repairs on a number of government buildings, Yukon wide, in the amount of $276,000.
A good portion of the balance relates to office lease costs. I will try to break them out for Members. We had $16,000 transferred to us from Economic Development for the lease at Shopper’s Plaza. We had $56,000 transferred to us from Community and Transportation Services for a lease at Faro for the highways camp and for the lease at the Performance Centre here in town.
What we have taken as a matter of policy is to show all leases in Government Services as a centralized function. So, a couple of leases that were previously with Community and Transportation Services were transferred to Government Services for administration and the dollars for those leases will transfer over to our base.
Then there is $299,000 related to various lease/rentals territory-wide. This also reflects the operating cost adjustments in terms of utilities and things like janitorial services.
I can provide to the Member - unfortunately it is photocopied and sitting on my desk so I could provide it to the Member anytime after the break - a breakdown of the $299,000 adjustment we are making. It reflects quite a number of leases that have been negotiated since the time we assembled the budget and period 4, the end of July. Those costs were not predictable at the time of budget preparation.
They were unpredictable at the time of the budget preparation one year ago. The leases that were negotiated went up in most cases. Only a couple went down. That does happen, you know. These are all renewals. There are no new leases in the list. They are entirely reflective of the office space plan that was tabled for the Members earlier.
If it is acceptable to the Member, I can provide the adjustment after break. If the Member insists, she can have my working copy.
Mrs. Firth: I will take a copy of it after the break. I do not have any further questions about that particular line item.
Property Management in the amount of $516,000 agreed to
Operation and Maintenance in the amount of $657,000 agreed to
On Operation and Maintenance Recoveries
Operation and Maintenance Recoveries in the amount of $49,000 agreed to
On Capital
On Administration
On Business Incentive Policy
Hon. Mr. Byblow: I flagged this item in my opening remarks. It reflects the anticipated cost of the business incentive policy for this fiscal year. The business incentive policy, as Members know, will rebate contractors certain amounts based on the extent to which they utilize local labour. Members will recall that the policy requires contractors to get a certain percentage of local labour. Eighty percent local labour will be bottom line before the rebate applies.
During the course of this year, we also introduced a rebate schedule for materials. This was done through the committee established for that purpose. At the time of budget preparation one year ago, we had not even adopted the policy. This reflects what we expect to have to pay out in rebates for local hire achievement and use of local materials.
Mrs. Firth: This policy has been written and rewritten two or three times. Perhaps the Minister could tell us who developed the business incentive policy and what it cost.
Hon. Mr. Byblow: I am not sure of the precise amount we spent on developing this policy, but I should point out that for the most part it was developed in-house. Working from memory, I believe we used some consulting advice to assemble some information surrounding the policy. By and large, the policy was developed as a commitment by this government to find a workable policy for the encouragement of the use of local materials and labour.
When I took office some 20 months ago it was a priority we assigned to the project. We spent time assessing internally what options there were available to us to try to achieve a workable policy that still maintained a level playing field in the tendering process. We looked at other jurisdictions, and communicated with other jurisdictions about what they were doing to encourage the same principles. We spent considerable time with the contracting community. I personally spent time with them. The staff of Government Services spent considerable time discussing various options of how to achieve a policy that would be workable, would be fair and would not be unnecessarily expensive. Essentially, after about 12 or 15 months we managed to hammer out a policy in conjunction with the contracting and supply community. For the most part it was generated in-house in full collaboration with the contracting community.
Mrs. Firth: After all that I still do not know what it cost and who did it. Would the Minister commit to bring back what consulting firm was used, who developed the policy and exactly how much it cost for us to develop this new policy?
Hon. Mr. Byblow: I am advised by my staff that the only outside cost to the development of the policy was the expenditure related to some work that Alan Hunt and Associates did. I do not know the figure, but we just have to look at the contracts listing that was tabled last year to find it. I would not even predict the amount.
Aside from that cost, there would have been some minor costs related to hosting meetings with the contracting community, and so on. The balance of any cost was absorbed in-house by staff. I had many meetings with the representatives of the contracting community, but there was minimal cost to them.
Overall, the cost was probably within $1,000 of Alan Hunt’s contract.
Mrs. Firth: What are the administrative and person year requirements as a result of this policy? He said this $100,000 is the cost for this year for the policy. Is that going to be an ongoing cost every year, and how many person years are associated with the administrative cost?
Hon. Mr. Byblow: There is no new cost within the department to administer the current policy, when compared to the costs related to implementing the previous policy.
During the main estimates, I will confirm the specific person years involved. I am working only from memory now. I believe there were two people involved with administering the previous value-added policy. In part, I believe those same people are doing the work of administering the current policy.
The $100,000 is specifically earmarked for rebate. It does not reflect a cost of administration of that policy. If we are using a person and the half-time of another, that would be absorbed in the administration costs of the department, and not in that $100,000. Essentially, that reflects an anticipated three percent component of materials and labour on the construction jobs, and services that apply in this fiscal year. That is the pool of money from which we will pay contractors their applicable percentage, when they apply.
We used a calculated and educated guesstimate that it may cost us up to three percent of the cost of labour and materials on every job where we may have to provide a rebate. In cases where a contractor maximizes to 100 percent local labour, maximizes local materials and local manufacture to the greatest extent possible, they could exceed the three percent level, but we do not expect that will be the case. We calculated our best estimate of the amount we may have to pay for the construction and provision of services under the policy of this fiscal year, which was an unknown figure a year ago.
Mrs. Firth: For what period of time is this $100,000 then?
Hon. Mr. Byblow: The $100,000 is the estimated rebate we expect we may have to pay for this full fiscal year - that is, the current year that we are in. Yes, it is based, essentially, on three percent of the total value of the labour costs of a contract and the applicable local materials portion of contracts, as well as other services that may apply.
Mrs. Firth: When does it come into effect?
Hon. Mr. Byblow: The labour component of the policy came into effect, I believe, around March, at the beginning of the fiscal year. The rebate on materials, I believe, came into effect about August, so we do not expect to pay for any of the contracts that may have been tendered before those specific dates. I believe we have calculated an expectation of having to pay on some 21 different contracts some percentage of local materials and labour rebate.
Mrs. Firth: I will follow up more with this particular question in the mains because I will have some further questions to ask once we see the new budget.
I would like to ask the Minister some questions about exemptions with the rebate business incentive program. Are there any exemptions, say, for example, for Crown corporations? I would like to know about the college and the Development Corporation: are they all going to be participants of this policy or not?
Hon. Mr. Byblow: The exemptions that I recall in the policy - and I am sure I tabled those in the Legislature and I am sure we can find them again - we had an exemption for land development, and the rationale behind that was that you did not want to assign additional costs to land development because the consumer had to pay, in the end, direct dollars for that land. We sell land on the basis of market value or development cost. Any development costs associated with land are applicable for recovery so if you apply a rebate, that increases the land price. So we wiped out the business incentive policy on land and I believe we exempted the Crown corporations and I believe we also exempted any cost-shared programs with the federal government.
Hon. Mr. Byblow: The rationale there again is obvious. The federal government is not prepared to pay any additional costs related to a rebate, so it created the impossible situation of what would you pay a rebate on in a cost-shared program with another government, so we exempted cost-shared programs as well. It seems to me that those were the three exemptions.
Chair: Committee will take a break.
Recess
Chair: I will call Committee back to order.
Hon. Mr. Byblow: I want to clarify a couple of points from earlier debate. During the discussion on GST, I may or may not have indicated that the government is technically exempt from the application of GST but that does not change any of the focus of the discussion we have had because contractors who are bidding on jobs still have to bid on the basis that they will have to pay GST on their goods from their suppliers and they will have to apply for the rebate on those goods because the government job is exempt. In general terms, it means that the contractors are still going to be faced with the same amount of paperwork, whether we are exempt or not. The only point I wanted to make is I may not have made it clear that the government, though exempt, will still force contractors to go through the rituals of paperwork.
The other point I want to clarify is in respect to the umbrella policy application, government wide, on project management. I have since our discussion been advised that we do not intend to include the umbrella policy with the endorsement of the project management manual. The Member knows that previously we introduced the project management directive that outlined the planning process and decision-making steps relating to project management. Our next step is the one we talked about during Question Period today as well as earlier this evening. It relates to the development of specific criteria for managing a project and the third phase will be the introduction of a government-wide policy for all departments.
That is just a clarification of those two points.
Mrs. Firth: I would like to get back to some discussion about the new business incentive policy. I really do not understand why the Crown corporations - Yukon Development Corporation, development of Old Yukon College, the federal cost-shared agreements, land development - are exempted. I still cannot get a rational answer from the Minister as to why. There are a lot of contracts that go out under those various agencies of government. I understand the Minister is trying to make an explanation about turning the cost of the land development somehow over to the consumer, but we, as taxpayers, are paying for the rebate program as well. So, I am not just sure what the rationale is, because in the end the taxpayer pays. Why are not all government contracts, if they have to abide by regulations, why are they not part of this business incentive program?
Hon. Mr. Byblow: I cannot provide more of a rationale than I have already. Land does not have the application of the business incentive policy, in part because that is a directly attributable cost that would have to be absorbed by consumers and could affect the cost of land. Our preference is to maintain low as possible cost for land. I guess the other point that can be made on the land side is that it was exempt under the old value-added policy and it was a recommendation of the advisory committee that reviewed the policy.
The Member will recall the advisory committee that I struck early last year to work toward the development of the new policy. That committee was fairly broad based in its representation. The issue is similar with the cost-shared projects. It becomes a rather complicated exercise to try to apply a rebate scheme to a portion of a project but not another portion, which would effectively be the result of what would happen in a cost-shared program with the federal government.
The federal government is not prepared to provide a rebate scheme to any costs they are sharing. To put it simply, it would create an additional burden on this government to have to pay the federal government’s share of the cost-share program.
On the corporation’s side, again, the issue in its simplest form, is that the corporation operate under their own bylaws and regulations. They are, for the most part, operating on a commercial basis. It is their business whether they do or do not apply government policy. It would be preferable that they did and, certainly from the Yukon Housing Corporation view that I am familiar with, they are addressing it and considering the application of the business incentive policy.
I do not know if those reasons suffice, but, in short, those were exemptions under the previous policy of value added. It is now the same practice under our business incentive policy and is endorsed by the committee that helped put it together.
Mrs. Firth: I will just express a concern. Perhaps it is just a philosophical concern, but I did not agree with the value-added policy. I did not think it was practical. I have some concerns about this one, too, regardless of who supported it and whether the contractors and everyone else in the Yukon thought it was a good policy. I have a lot of reservations about it. I do not think we need it here, and I think this is going to create a lot of extra paperwork for the contractors.
What are the benefits of this policy? If we have a basic policy about local preference in the Yukon, which we do, I think that is sufficient. I am expressing my own philosophical concern in that I do not believe it is necessary for us to have these kinds of policies in place. That is my personal opinion.
That being said, I would like to ask the Minister about rebate schedules. Can he tell me how many there are and if it has been specified what materials are on the construction incentive rebate and what is on the goods and services? Has this information been made clear to the contracting industry? Perhaps the Minister could provide us with that information as we do not have it in the general policy directives.
Hon. Mr. Byblow: Shortly after we introduced the policy, we also introduced the schedule pertaining to rebates for labour. That is articulated in the policy itself. The requirement for a rebate to be applied is that a contractor must have at least 80 percent of his payroll local. That is the labour side of it. Within the policy, there are another couple of categories. As a contractor achieves a higher percentage of labour, he receives a higher percentage of rebate for the payroll portion of his costs.
Since that time, the committee that has been reviewing local materials and manufactured goods has developed a schedule. I do not have it with me tonight, but I am quite prepared to table it for the Member. This is a schedule of what specific materials are applicable for rebate. That schedule came into effect about August.
We have not yet developed the services side of the policy. The committee is working on that. My staff is working with them. We have not developed the schedule of rebate that would apply to consultant services, or to other contract-type services that are not specifically goods and material, or labour.
Two schedules are in place. One came with the policy; the second was developed on materials. I will provide it in detail through a tabling. The one on services is not developed yet.
Mrs. Firth: I understand that all the schedule for labour consists of is the 80 percent that is included in the policy. I look forward to receiving the materials schedule, and the one that is to be developed on the services side of the policy, including the one for the consulting contracts.
Why would consulting contracts even be included in this?
Hon. Mr. Byblow: Before I answer the question, in relation to the portion of the rebate schedules that are being developed now on services, they also include goods that are provided by a supplier. The rebate now applies to contractors who use local materials. At the same time we are working on services, we are also working to provide a schedule for rebates related to the purchase and acquisition of goods. Technically speaking, it is not just services, but goods and services, as per supply.
With respect to the question on consulting services, the short answer is that, under the terms of reference of the business incentive policy, we undertook to look at providing a rebate for local hire; that is, the use of local labour, or locally manufactured materials, and local materials, and goods and services.
Consulting services happen to fall under the category of services. We are looking at consulting services, if it is local, to qualify for a rebate of some sort. It is not a final decision yet, but we have asked the committee to examine it. That is what is being examined. It is a service.
Mr. Devries: The Minister talks about products. I am getting back to the spruce siding. If the product is grown and sawn in B.C. and planed in the Yukon, is it classified as a Yukon product for rebate purposes?
Hon. Mr. Byblow: A rebate schedule would apply for locally manufactured product. The final manufacture was done in the Yukon. Let me explain for the Member, because he gives me a hard time on this one all the time. Members have to recognize that we committed ourselves - I said so a year ago in this House - to encouraging the use of locally manufactured materials. We were going to spec them into our jobs. We did. We specified local spruce siding materials in three jobs in total, because that was how we saw one way of encouraging that local manufacturing.
The other way to put it is: how do you encourage the local manufacture of a product without creating a market for it? While there were some growing pains, and certainly some legitimate criticism respecting quality and standard, it does provide us with a basis for a decision on whether we should pursue the avenue we have chosen. It was specified on the Watson Lake job; it was specified on the student residence, and it was also specified on the college. That gives us a basis for some decision making, because in each case we applied different criteria. In each case, we applied different aspects of application. In some cases we covered it with paint. In other cases we used stain. In other cases we used different centres for nailing. In other cases we used different levels of lapping. All of that now provides us with a basis for some data on how to encourage this further. We have some very good signs. We have some small mills saying they like this idea and can manufacture this. These are the volumes that they can handle and can it be included in one of our future jobs?
And that is the debate that is going on to encourage this. The Member could raise the very legitimate point that it was more expensive. It probably was. In fact, I know it was more expensive to put that siding on the Watson Lake School than standard cedar siding, but the cedar siding would have been purchased from southern B.C., the dollars would have flowed to southern B.C. We would not have had those dollars spent locally in a local manufacturing firm that now is beginning to tool up and gear up for the simple reason that the government is serious about its resolve to generate local economy and we now have some data for creating even better specifications for it.
Mr. Devries: Well I guess to me the dispute is not whether I think it is a good idea or not. It is just the fact that, to me, comparing spruce that is coming from Prince George and spruce that is coming from Watson Lake is like comparing apples to oranges. There is a different quality there. I really do not feel that slapping some paint on Prince George spruce is going to give the Minister a true picture of the quality of the product because I know that the quality of Watson Lake spruce would be a better quality product although it would tend to try to twist a little more. But the end result would be a much finer, better-looking, fine grain texture wood. It is still a fact that two-thirds of the money still went to B.C., although I am saying I still agree. Yes it is a good idea.
Mr. Lang: I just want to make a point here. What I find kind of foolish in the whole debate is whether or not this type of siding should be used on our buildings, when one has a look at what private builders are building with. If one travels throughout the provinces, you can have a look at what people are using for siding and in most cases, it is neither cedar nor spruce. It is a vinyl siding in most cases. The reason is that the maintenance costs are so much lower and the longevity of the siding is much longer. I think that what is being forgotten in the tenure of debate is that the ultimate end is the maintenance costs. You put that on your school down in Watson Lake, it is guaranteed within three to five years you are going to have to repaint it, at a substantial thousands and thousands of dollars cost to the taxpayer. At the same time we know that there are products available on the market that are going to give you maybe a guaranteed life of 20 years with very little maintenance.
So there is that side of the question that I just want to point out on the record. In my knowledge of the people involved in the business, it is a joke to bring in the timber from B.C. and then manufacture it here. I have talked to people who have actually worked on it and they just laugh. They just cannot believe that the government is that foolish. They will take your money. They do not have any problem taking your money. And in this case, I would say it is his money, because I do not want to admit that it is my money going into this. But I would say to the Minister that to the actual people working on it, the government is a laughing stock and we are talking about the working stiff out there who is having to do this.
If I can use the representation made by a number of Members here, we are not trying to ridicule the government. Surely, there is some other way where we can more logically help the economy that will generate dollars, as opposed to this concept. The idea of creating an industry is not for the government to use it. The idea is for other people to take a part in it, and make it economical. The government can engineer the process to start it out until there is a volume business. If the whole idea is solely for government to use it, then that is clearly foolish.
Hon. Mr. Byblow: The Member raises some reasonable and legitimate points. I would not dispute that vinyl siding lasts longer than spruce siding. There is no question about that, but the fact remains that the vinyl is purchased from a southern jurisdiction and is probably manufactured in a foreign country.
One cannot create a market without creating a demand for a product. That is exactly what this government attempted to do. One year ago, we stated our commitment that we were going to specify this type of material. Our express purpose was to generate a market and to create a demand for a product. We did it on three facilities on a trial basis, and are examining the results of those demonstration projects. This is not to say that, ultimately, the cost is not greater. I will concede to the Member instantly that it costs more to maintain spruce siding than vinyl siding.
In the analysis that we will be able to do from our review of how this material will stand up, we will be able to determine whether or not there is some value to be gained by encouraging this local market, and by encouraging local mills to tool up and regenerate that little bit of economy we can precipitate through our tendering.
We have done it on three jobs. We are going to examine how those jobs fall out on the balance sheet, and I will keep Members informed.
Mr. Phillips: Have they done any tests or studies on their $11,000 demonstration shed they had out here? How has that stood up? That was all local material.
I found it interesting, being a painting contractor, that they just took a building here that was basic wood and did not put a thing on the outside of it, then hauled it down into the Marwell area and set it up down there, and we were going to see how it stood up to the test of the Yukon elements. It is the dumbest thing I have ever seen in my life, and that is putting it mildly, not to cover the building, but just set it down there: not paint it or do anything to it.
Have they gone down and done an evaluation of this wonderful and great local products wood demonstration project? What are the results of that great effort that cost us $11,000 for a 12 foot by 20 foot building?
Hon. Mr. Byblow: I have an impeccable memory, but I am having difficulty remembering the shed he is talking about.
Mr. Phillips: This happens to accident victims, too, when they have had a really bad experience. They sometimes cannot remember anything about it. That is probably what has happened to the Minister in this case.
Hon. Mr. McDonald: We need relief. I move that you report progress on Bill No. 15.
Motion agreed to
Hon. Mr. McDonald: I move that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order.
May the House have the report from the Chair of the Committee of the Whole?
Ms. Kassi: The Committee of the Whole has considered Bill No. 15, entitled Second Appropriation Act, 1990-91, and directed me to report progress on same.
Speaker: You have heard the report from the Chair of Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. McDonald: I move that the House do now adjourn.
Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker: This House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:29 p.m.
The following Sessional Papers were tabled November 19, 1990:
90-2-16
“Energy Wise” information sheets for consumers, published by Yukon Energy Corporation (Penikett)
90-2-17
Yukon College 1989-1990 Annual Report (covers the period January 1 to June 30, 1990) (McDonald)
90-2-18
Yukon Teachers’ Staff Relations Board Sixteenth Annual Report, 1989-90 (McDonald)
The following Legislative Returns were tabled November 19, 1990:
90-2-8
Occupational Health and Safety site inspection of Curragh mine (M. Joe)
Oral, Hansard, p. 182
90-2-9
Economic Development Agreement (EDA) - Project Administration (McDonald)
Oral, Hansard, p. 239