Whitehorse, Yukon

Thursday, April 25, 1991 - 1:30 p.m.

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



Workers’ Day of Mourning

Hon. Ms. Joe: This Sunday, April 28, is the day chosen by the Canadian Labour Congress as an annual Day of Mourning. It is a day of remembrance for workers who were killed, injured or disabled on the job. It is also a day to remember the families, friends and neighbours left to mourn and to bear the deep sense of loss forever.

In 1990, five Yukon workers died. Almost 1,700 were injured. These deaths and injuries represent untold suffering and tremendous human and economic loss. At this time I ask your permission, Mr. Speaker, to allow the Members gathered here to rise and remember those workers and their families in a moment of silence.

Speaker: We will proceed with the Order Paper.

Introduction of Visitors.


Mr. Brewster: I would like to have the Legislature welcome members from the Mendenhall subdivision, who came down the “Byblow-Faro Way”, and only a few of them made it. But they are here, happy as can be.


Speaker: Are there any Returns or Documents for tabling?


Speaker: I have two documents for tabling. They are the report of the Chief Electoral Officer on Contributions to Political Parties during 1990 and the report of the Clerk of the Assembly on Deductions and Indemnities of Members of the Legislative Assembly, made pursuant to Subsection 39(6) of the Legislative Assembly Act.

Are there any further Returns or Documents for tabling?

Hon. Ms. Joe: I would like to table a copy of the program material entitled, “How to Reduce Health and Safety Risks in your Workplace”. These program materials will be introduced today at an occupational health and safety seminar, to be held at Mt. McIntyre. The seminar is a joint initiative of the occupational health and safety branch of the Department of Justice and the Workers Compensation Board.

Speaker: Are there any Reports of Committees?



Petition No. 6

Mr. Brewster: This petition states:

“Whereas the Mendenhall homestead subdivision study stated that the community would be provided with minimum standard roads.

Whereas the homestead policy defines a minimum standard road as a 12 metre cleared and grubbed right of way with a drainage ditch and a layer of gravel where existing soil is inadequate.

Whereas three of the four roads in Mendenhall had neither the clearance, the drainage ditch nor the layer of gravel as stipulated in the homestead policy and were, in fact, as admitted by the Minister of Community and Transportation Services, “essentially pushed in by a Cat.” (October 31,1990 Hansard)

Whereas we entered into our agreement for sale with the understanding that although our roads might be rough at times, as per caveat in the subdivision study, they would be at least constructed as described in the homestead policy.

Whereas the fact that our roads fail to meet the minimum standard that we understood we were paying for under development cost is no fault of our own.

Therefore, the undersigned ask the Yukon Legislative Assembly to urge the Minister of Community and Transportation Services to provide us with roads comparable in quality to the minimum standards for roads as defined in the homestead policy at no additional cost to the holders of agreements for sale." There are 34 names on this petition.

Speaker: Are there any Introduction of Bills?

Notices of Motion For The Production of Papers.

Statements by Ministers.


Stay-in-school initiatives

Hon. Mr. McDonald: Every year in Canada, 100,000 young Canadians leave high school before they graduate - an horrendous rate of 30 percent, with grave consequences. The loss of human potential, the social costs arising from unemployment, illiteracy and poverty and an under-educated workforce that hampers our economy are just some of the consequences. This government is committed to increasing the number of Yukon young people who stay in the territory’s public school system. Already, the Department of Education has developed and implemented several programs designed for youth who are vulnerable to social, financial and legal troubles.

I am pleased to announce today that this work will be enhanced immediately as a result of a federal allocation of $381,000 from the Canada Employment and Immigration Commission’s stay-in-school initiatives program, to the Department of Education. The department’s projects will be further complemented by a $29,700 allocation to Yukon College for the development of a job-future’s book specifically designed for the Yukon. This publication will assist school counsellors, advisors and the general public in understanding the prerequisites for Yukon occupations and the future demands for skilled and trained people by occupation in this territory.

The Government of Canada announced the stay-in-school initiative program in February of last year. It is designed to foster collective national and community efforts to deal with the drop-out problem while recognizing the territory’s and provinces’ fundamental responsibility for education.

The Department of Education has developed four projects to enhance existing programs. The first involves research into the current situation among Yukon youth - a $51,200 project. It is important to determine not only how many Yukon students drop out, but also the reasons for this choice. Local people have been contracted to carry out this work.

Most of the stay-in-school funding, $190,000 to be precise, will be used to develop and implement learning materials for directed studies courses. This project will begin this May and conclude next April.

The department already offers directed studies courses at F.H. Collins in subjects such as accounting, biology and social studies. These courses offer students individual instruction and self-paced learning - opportunities which encourage them to stay in school. The department intends to expand the range of course offerings as well as offer directed studies courses in rural high schools.

A math/science tutor program will be developed and implemented through a $93,000 allocation. Tutors will be contacted in several Yukon secondary schools for the 1991-92 school year in order to assist students with math and science at the junior high level. Successful completion of science and math at this level ensures a greater course selection for students in senior secondary and, ultimately, more career opportunities. The more opportunities a student has, the more incentive they have to stay in school.

Lastly, the department intends to build upon the success of the Wilderness 10 experiential program and develop a similar program for use by rural schools. A total of $16,400 is allocated for this, which will cover not just development but also a limited pilot project. The Wilderness 10, or ACES program, is now in its second year and is an overwhelming success. Students are challenged by their experiences outdoors, which combine not only physical education but also environmental studies and Yukon studies. The self-confidence and awareness gained through the program enable students to become committed learners.

These new programs complement other Department of Education programs, such as the teen parent program and the PASS, or practical alternatives for selective students program.

For example, the teen parent program is for pregnant or parenting teens who need extra support, such as day care, counselling and flexible school hours in order to finish school. The PASS program works intensively with vulnerable youth, with the goal of integrating them into the conventional classroom.

This government began these programs several years ago. We foresaw the need to develop alternatives, if we were to help develop the whole child to the extent of his or her abilities. Our goal of equal opportunity for all children will remain unfulfilled unless we are prepared to offer particular assistance to individuals - assistance that will help them overcome barriers and enable them to fully participate in society.

Mr. Devries: In light of the Minister’s response to my reply to his ministerial statement yesterday, I am hesitant to give anything but glowing praise to today’s ministerial statement. The stay-in-school initiatives outlined in the statement do deserve high praise. I am sure a lot of us in this House would have benefited if these initiatives had been in place during our school years.

I am surprised and, dare I say, disappointed that the Minister chose not to mention the award-winning program taking place in the Watson Lake Secondary School. Watson Lake high school teacher, Ken Agar, in conjunction with members of the local chamber of commerce and the Minister’s own department, initiated a program where students run a convenience store that is accountable to a board of directors, comprised of students and business people.

This project meets the criteria of stay-in-school initiatives, and has been very successful in achieving that goal. I feel strongly that good work should be recognized. In fact, at this very moment, Mr. Agar, one of the members of the business community and a student, are in Toronto receiving an award for this wonderful project.

I trust the Minister will join this side of the House in congratulating all those involved in this nationally-recognized project. I also encourage the Minister to brief the various school councils on the success of this program, so it can be made available to schools all across the territory.

Hon. Mr. McDonald: Contrary to popular belief from the opposite side, I am able to withstand some criticism from time to time when it is well directed. The point of the matter yesterday was that the criticism came out of left field and I did not quite understand what its origin was. The announcement that I am making today does not have anything specifically to do with the very laudable work that is being done in Watson Lake with respect to the business education program.

We have announced that particular success on a number of occasions publicly, in the Yukon in the past. I felt that the Member might be criticizing the Department of Education and education authorities for tooting their horn too often, by simply repeating that obvious success once again. I must stress that the success of that program and this program are but examples of the many hundreds of things that Yukon teachers are doing across this territory, and who are receiving national recognition on a number of fronts for their good work. I think the work that is being done in Watson Lake with respect to the innovative project to combine business course work with local businesses is something that is not only innovative, but is recognized nationally as being innovative.

What we are dealing with today is the need to address those students who are having difficulty staying in the school system. It is those students to whom we must give some special recognition in order that they are not lost in the system entirely. We have taken some initiatives in the past to that end. This is a continuation of those efforts. Through the extensive work by the hundreds of Yukon teachers and administrators, I am sure that many more innovations will come our way and will improve the system even further.

I would like to thank the Member for his constructive comments. Today, there are appreciated.

Speaker: This then brings us to Question Period.


Question re: Yukon Energy Corporation, diesel consumption

Mr. Phelps: I have a few more questions of my esteemed colleague, the Minister responsible for Yukon Energy Corporation and the Yukon Development Corporation.

Yesterday, I asked for information about the use of diesel for generating electricity and I did not receive any satisfactory answers. For the record will the Minister either now or next week, provide us with the figures showing the amount of diesel used by the Yukon Energy Corporation in 1990 for the generation of electricity, and also the amount of the diesel used in the Whitehorse/Aishihik/Faro system for that year?

Hon. Mr. Byblow: I see no reason why that information cannot be provided. I will give the Member that undertaking.

Mr. Phelps: Will the Minister either now or next week provide us with figures showing the amount of diesel that the corporation is forecasting it will use in 1991 overall, and of that, how much is going to be used on the Whitehorse/Aishihik/Faro system?

Hon. Mr. Byblow: I can provide the Member with an undertaking to provide more detail than is now in the strategic planning documents and the supply option documents previously tabled in this House. In general terms, those forecasts are already there.

Mr. Phelps: Of course the forecasts are wrong, but we will get to that later. When will the public be given the financial statements for Yukon Energy Corporation for the year ended December 31, 1990?

Hon. Mr. Byblow: I am sure that those statements are either nearing completion or are completed already. They should be tabled shortly, likely in this session.

Question re: Yukon Energy Corporation, energy projections

Mr. Phelps: Yesterday the Minister said that the documents tabled in this House on November 29 last year provided accurate forecasts of the plan for electrical energy in the Yukon for the next five or ten years.

I draw the Minister’s attention to one of these documents, entitled Energy Supply Options for Yukon, and I will just briefly read from it. On page 3, it states that the biggest customer on the Whitehorse/Aishihik/Faro system is the Curragh Mine, representing one-third of the system peak demand and almost one-half of the system electricity requirements. On page 2 it states that in arriving at the forecasts of demand, Curragh is expected to remain relatively constant throughout the rest of the decade. Also, on page 2 of the document, it states that growth rates by system for the period 1991-1999 for the Whitehorse/Aishihik/Faro industrial consumption is supposed to drop by one percent.

In view of the fact that Curragh is now saying that it requires an increase of 30 percent during the next few years, is he still saying that the forecast tabled in this House is accurate?

Hon. Mr. Byblow: I think the Member has to address the issue in its entirety. He has to refer to the corporation documents tabled in the House, dated November, commonly known as the Strategic Plan. In that plan, on page 39, there is reference that the requirements by Curragh could be addressed quite easily by the Surprise Lake project. In the documents, also, there is reference to the increased demand recently indicated by Curragh, and elsewhere in the document it addresses that.

I must take the opportunity to clarify for all Members that, when we talk about Curragh’s demand in terms of a 30 percent increase, we are talking about the need by Curragh to have a 30 percent increase in consumption. A consumption rate is a generation of gigawatt hours. Those gigawatt hours can be produced by megawatt plants. The Yukon Energy Corporation is entirely capable of picking up the increased demand of Curragh with existing megawatt capacity because, when you generate from a megawatt plant on a consistent basis, you can generate the 30 percent increased consumption required by Curragh.

Mr. Phelps: When we get into these details, the Minister’s answer seems to be based on the premise that, if he runs around and around this room in circles very quickly, and the public of the Yukon tries to follow him, they will get dizzy and fall down before he does. He may be right.

The concern is not over whether or not the system can generate electricity. We can bring in as many diesel generators on as short a notice as we like, and generate as much electricity as we might like. The issue is how much diesel we are becoming dependent upon, and how much is that going to cost the rate payers?

What was the cost of diesel for the Yukon Energy Corporation during the last calendar year?

Hon. Mr. Byblow: To be more specific with the Member about accuracy of forecasting, and accuracy of documents, I have to call his attention to the summary document, also tabled in this House. I quote from page 9, “Sales to Curragh were assumed to remain relatively constant during the decade, but very recent indications are that an increase will occur and will require adjustments.”

To set the record straight, the documents do speak to the increased demands of Curragh. They were very timely as they came during the preparation of the documents. Curragh indicated its new initiative to the corporation at that time.

I can bring the most accurate figures regarding diesel consumption to the House, but we are consuming in the magnitude of $3 million worth of diesel - but I would stand to be corrected; I will consider that to not necessarily be a final or accurate recollection of the consumption.

Mr. Phelps: The first part of the Minister’s answer was to what question, I have no idea. Really what he is saying is that the material that was tabled in this House was full of all kinds of interesting figures and forecasts and so on, and there is a little footnote that says, oh, by the way, we have just found out that this is based on false information so please ignore it.

I would like to go on to a new question if I may.

Question re: Yukon Energy Corporation, Mayo-Dawson transmission line

Mr. Phelps: I would like some up-to-date information with regard to the proposed transmission line from Mayo to Dawson City. I am wondering if the Minister could tell us what the estimated cost of that project now is, and when construction will start and finish?

Hon. Mr. Byblow: It is my understanding that we are in the final stages of engineering and analysis of the Mayo-Dawson transmission line. It is my understanding that we are planning to proceed with the project. We should be undertaking the required survey this year. Whether construction itself will conclude during this year, I cannot say at this time, but it is proceeding and in the final stages of analysis.

Mr. Phelps: I gather from that answer that a decision has been made to go ahead with construction. Do we have close cost estimates at this time?

Hon. Mr. Byblow: The current cost estimate of the Mayo-Dawson transmission line is $20.5 million.

Mr. Phelps: They have gone up since the material was tabled in the House. Is that considered now to be the final escalation in cost? Will that be the figure within which the project should come upon its completion?

Hon. Mr. Byblow: In all fairness it would be presumptuous of me to commit that these will be the final costs. These are the current cost estimates as developed by the corporation in conjunction with the appropriate engineering and analysis. If they should change either way, it would be reflected by progress on the project, the related costs and the accuracy of the estimates.

Question re: Foster parent per diem rate

Mr. Lang: I would like to direct a question to the Minister of Health and Social Services. It has to do with the daily per diem rate presently paid to foster parents who take in children. There has not been an increase in the per diem rate since 1986. I know that some delegations and individuals who are foster parents have approached the Minister and have requested that the schedule be reviewed and some changes be made.

I will provide some background. Some foster parents do not have large disposable incomes and basically are doing this out of the goodness of their hearts. One particular foster parent described to me the way things are presently, regarding the financial situation. Before you take a number of foster children to McDonald’s for supper, you feed them a light dinner so that you do not spend too much money at McDonald’s, as you cannot afford it. After looking at the schedule, I can believe this is true.

I want to ask the Minister if he has made any changes to the schedule and if so, when did these changes occur?

Ms. Hayden: The foster parent rate is one of the programs that is currently under review. As the Member has indicated, it is not a very plush rate that is paid to foster parents. It is my intention to bring that forward during the next budget review process.

I will be looking at the recommendations that the review people are bringing forward.

Mr. Lang: This particular issue is not a surprise to the government. This was brought to the attention of the previous Minister of Health and Human Resources. Is the Minister telling this House, and these people who have taken these children for the amount of money that is presently on the schedule, that they are going to have to wait 12 months before that schedule will be changed?

Ms. Hayden: I am saying that, along with the other Members of my caucus, I share the concern about the rates. When the review report is in, I will be bringing it forward to look at.

Mr. Lang: In deference to the situation, my understanding is that representation has been made to the Minister, clearly and concisely, and that it is basically up to her and her colleagues to make a decision with respect to the present schedule that is in effect.

She just admitted that it is very low and does not nearly meet the cost of taking care of these children.

When can we expect an answer on this schedule and will it be retroactive?

Ms. Hayden: I understand the Member’s concern. I can guess that he has had people speak to him. We have certainly read stories in the paper. Everyone is concerned about the care that our children under our caregivers receive.

I answered the question that the decisions will be made after I receive the report from the review process.

Question re: Foster parent per diem rates

Mr. Lang: I did not think that this was too difficult a question. I would like to know if the Minister can tell us when will she be in a position to notify these citizens of a decision that is going to be made about the schedule? What is her time line? Are we talking about two weeks, three weeks, two months or a year?

Hon. Ms. Hayden: The Member is attempting to pin me down to a specific date that I can not commit to at this time. I want to take a careful look at it. I understand that it is an important issue. I certainly do care about what happens with this issue. I want to have the opportunity to both see the review process and to allow my colleagues to see the results of that process, and then bring forward a recommendation that meets these needs and is not done in unnecessary haste.

Mr. Lang: I am not talking about unnecessary haste, I am talking about unnecessary delay. This is an issue that has been raised with the government for the past year. This is not something that is new and appeared out of nowhere. The Minister, about two or three responses ago, indicated to the House that we are talking about the next budget that is going to be tabled in this House. She has a responsibility to tell us, and those people in particular, or at least give us some guidance about what time line are we speaking about when a decision is going to be made. Are we talking within a month, two months or is she talking about...

Speaker: Order please. Would the Member please get to the question.

Mr. Lang: I just asked my question Mr. Speaker.

Hon. Ms. Hayden: I am not quite sure what the question was in all of that except that the Member is asking about two points. One concerns the budget process, and I beg the Speaker’s permission or indulgence in that I may not be completely familiar yet as a new Minister with the strict time lines of all of the budget processes, and the Member can criticize me for that if he likes, but I will, as soon as it is reasonably possible, bring forward something about foster parents.

Mr. Lang: I just want to ask the Minister if it will be retroactive, if she raises the per diem amount that is paid, to the beginning of this year so that these people’s costs can be covered?

Hon. Ms. Hayden: There is no way for me determine that yet. As I repeated several times, the review report has not come to me yet.

Question re: Portable trailers for schools

Mrs. Firth: I have a question for the Minister of Government Services with respect to portable trailers for schools - the Takhini portable trailers.

When we last sat, I was given some information in the House by the previous Minister of Government Services, and subsequently went through the application process of access to information to get further information. This revealed that some of the regulations with respect to tendering had been breached.

I would like to ask the new Minister if, when he assumed responsibility for that portfolio, he checked into that incident and, more specifically, if he checked into how many other times this kind of thing has happened.

Hon. Mr. McDonald: Yesterday, I listened intently as the Member set up the scenario where the government was changing policy because they perceived there to be a problem in the Yukon with respect to Yukon contractors. My only defence at that time was that there was no perception that there was a problem at that time and that there was no change in policy. I believe we have a similar scenario unfolding here where the Member is suggesting there were breaches to the tendering regulations and now is asking whether or not there is a widespread abuse of this situation.

I think the short answer must be that I have been able to detect no breach of tendering regulations. I read the memos the Member read. I do not have them committed to memory, but I do recall that part of the circumstances surrounding this particular tender process include the Deputy Minister of Education participating in a conversation with one contractor with respect to the ability of the contractor to deliver on a particular promise.

The conclusions that the Government Services personnel came to was that the regulations were not breached. Consequently, I would have to say that I did not draw from that there was a breach of regulations. Secondly, I must indicate that it is not my view that there is a widespread abuse, or any abuse for that matter, of the tendering process.

Mrs. Firth: Something obviously happened. If the Minister does not want to refer to it as a breach of regulation, that is fine. The other Minister called it an anomaly and an irregularity. The Deputy Minister referred to it as fast-tracking. When fast-tracking procedures go on, mistakes can be made.

Something happened. Is the Minister telling this House that after this incident he did not examine to see whether it had happened before or whether it was continuing to happen? Does he have no idea as to whether this was an isolated incident, or had the same thing happened before? I know that there are lots of incidents...

Speaker: Order please. Would the Member please get to the supplementary question.

Mrs. Firth: There have been lots of incidents of fast-tracking. I would like the Minister to tell us how many other times that this has happened.

Hon. Mr. McDonald: I was not the Minister responsible for Government Services at the time the matter was raised in the Legislature. I do recall, though, when the matter was first raised, that the Member suggested in the preamble that there was a breach of regulation, which is essentially the same thing as saying that someone broke the law. Secondly, the Member then followed up by asking the Minister of Justice whether there was going to be a formal inquiry. Further, there was some suggestion that we take this further before we know any of the facts; what the penalties were; are people going to be fired; are we going to hang them; are we going to draw and quarter them on the basis of flimsiest of evidence?

The most inappropriate and irresponsible response from me now would be to take the information from that exchange and conduct a witch-hunt in the Department of Government Services to seek whether there are any like situations since 1985, because she is not interested in anything before 1985. I am not prepared to do that. I have asked and given clear direction to the Department of Government Services that the tender regulations must be respected. They did not need to be told that. The situation, as I am informed, is that the personnel in Government Services feel that the tender regulations are being respected.

I have received no further information to suggest that there is any need for a witch-hunt to carry on from the rather unenlightening...

Speaker: Order, please. Would the Minister please conclude his answer.

Mrs. Firth: Thank you, Mr. Speaker.

Hon. Mr. McDonald: ... initiative by the Member for Riverdale South.

Mrs. Firth: I would like to start with a new question, please.

Question re: Contract regulations

Mrs. Firth: I understand from the presentation the Deputy Minister gave at a business dinner the other night that the government is going to be reviewing and revamping and making all the contract regulations simple so they can be used by the public.

I have a great deal of concern about the direction the new Minister is taking. The Minister knows I am not asking for a witch-hunt. I am  asking to see whether there is a regular occurrence of the regulations not being appropriately used or appropriately enforced. Perhaps it would be better to use that avenue rather than going in and rewriting the regulations. There has to be something wrong if the department is embarking on a revision and rewriting of all the regulations. I would like to know how many times they have had difficulties with fast-tracking in the tendering procedures before the Minister takes a whole new direction in the Department of Government Services.

Hon. Mr. McDonald: The performance of the Member in this Legislature suggests that what she is requesting is, in fact, a witch-hunt, because I can only draw conclusions from her own actions and her own approach. There is no question in my mind that the information the Deputy Minister of Government Services provided to the Women’s Business Network with respect to the tender regulation review was something that had been requested by the contractors association and by the Chamber of Commerce to simplify the tendering process. It was a commitment that was made by a predecessor of ours, a dear friend to Members opposite, Roger Kimmerly. It was a promise that was also made by another dear friend of ours, Mr. Byblow, but was superseded by other events and other pressing priorities.

It is now left to me to conduct the review of tender regulations. The tender regulation review is not taken in the context of the fearmongering and witch-hunting that the Member for Riverdale South is pursuing. It is done as a result of a desire to improve the process, and to make it more simple and more easily understood by a full range of contractors.

Mrs. Firth: The Minister can continue on with the same sort of style that comes from the Members opposite. He can attack me all he wants and say I am on witch-hunts, call me names, like he likes to do, and whatever. He has a responsibility to defend the government’s actions.

This is not just as a request from the Chamber, because they also requested an enquiry, and that was turned down. Why is the government taking this kind of action, if everything is running so smoothly and there are no breaches of tender regulations? The Minister is refusing to check it out and see if the regulations are even being enforced.

Hon. Mr. McDonald: I must protest that my intentions are not to attack the Member at all. We have the most cordial relations whenever we have the opportunity outside the Legislature. I am merely attacking the Member’s performance, because there are so many people who are paid to listen to it.

I do protect and respond to the needs associated with the public interest. I do recognize that there has been a call by the contractors association and by the Chamber of Commerce to review the tendering guidelines or the regulations, and to simplify them. There are many different issues associated with the tender regulations. They are a complicated set of rules.

My predecessors have made the public commitment in the Legislature that there will be a tender regulations review. This was years ago, long before the Member engaged in the Takhini witch-hunt. Consequently, it is a good public policy initiative to undertake a review. It is a good public policy initiative to involve the various interests.

Consequently, we will undertake this in the public interest, because it is a reasonable thing to do.

Mrs. Firth: It is a very shoddy arrangement that the Minister who is responsible for the Department of Education is now also the Minister of Government Services.

The deputy minister set up a dinner meeting when the regulations would be ready and...

Speaker: Order, please. Will the Member please get to the supplementary question.

Mrs. Firth: Will the regulations be ready in six months, as the Minister has said?

Hon. Mr. McDonald: I can only assume from the Member’s preamble that she feels that it was a conflict of interest to have the Minister of Government Services also be the Minister of Education. That is something I am sure the Premier will take note of the next time he makes cabinet appointments.

The Deputy Minister of Government Services has enormous credibility in the territory and with me. I am certain that if it is humanly possible to revise the regulations by a certain point in time, as is indicated, I am sure that we will do our best to meet that deadline.

Question re: Mental Health Act

Mr. Nordling: I have a question for the Minister of Health and Human Resources or Health and Social Services. I am not sure of the proper title. I would like to again congratulate her on her appointment and tell her in advance that today my question will not be difficult but that next week my questions will be much more difficult. I do have some serious concerns about what is happening in her area of responsibility.

Last May, in this House we passed a new Mental Health Act. As far as I know, this act has not been proclaimed into effect despite the fact that many Yukoners think that things have changed a lot for psychiatric patients.

I would like to know if the Minister is having problems with the act or what the problem is that it has not yet been proclaimed into effect. It has almost been one year since we passed it.

Ms. Hayden: I thank the Member for his congratulations. In relation to the Mental Health Act, the requirements for proclamation of the act are that regulations be in place and that a mental health review board be appointed. I am not sure if the terminology is correct, but the Member will know what I mean. There are numerous forms. It is proceeding, contrary to what may appear. The forms are at the printers, and there are very brief regulations that I expect to be able to take to Cabinet for approval soon. At the moment, the primary delay is the appointment of the required professionals to the review board.

Mr. Nordling: If the regulations are in place, and the problem is appointing people to the board or whether the regulations have been prepared yet, my concern is that we are not getting regulations anywhere near the same time that acts are presented in the House. My impression is that the environment act will be the next victim of this. Mr. Kimmerly, bless him wherever he is, made a commitment on behalf of the government to try to introduce draft regulations at the same time that bills were introduced.

Exactly what is the problem: regulations or appointments?

Ms. Hayden: As I said previously, the forms are at the printers, and they are part of the regulations. I have not seen the remainder of the regulations, but I have been told that they have been drafted. The appointments have not been made. It is a combination of things.

Mr. Nordling: By the use of the title Minister of Health and Social Services, I assume that the new Health Act, which was passed by this House in December, has been proclaimed into effect. It is also a considerable time since that act was passed in the House. Was there a problem with that act with respect to making regulations for it, before it could be proclaimed into effect?

Ms. Hayden:  I am told that I will have the regulations for the Health Act in about August of this year. There is an apparent discrepancy in the time, and there is a considerable amount of work to be done. They are coming. I have also asked where they are, and that is the answer that I have.

Question re: Mental Health Act

Mr. Nordling: I have one further question, and I thank the Member from Riverdale North.

The Minister is saying that the Yukon does not have a new Health Act, and we should still be calling the Minister the Minister of Health and Human Resources, and the act has not been proclaimed in effect by the Cabinet. I would like confirmation that we do not have an operating Mental Health Act, and we do not have an operating Health Act. Is that the situation?

Ms. Hayden:  I do not think that is the case but, if I may, I would like to refer that question to the Premier, the former Minister of Health and Human Resources.

Question re: Employee transfer expenses

Mr. Phillips: A few months ago, a new Deputy Minister of Tourism was hired in the Yukon. It has come to our attention that one of the items that the Deputy Minister moved to the Yukon with her personal effects, was a horse. There is a strong concern that the Yukon taxpayer paid for the transportation of this horse to the Yukon. Can the Minister of Tourism’s department, who reviewed this claim, either confirm or deny that we, the taxpayer, actually paid well over $1000 to have a Deputy Minister’s horse shipped to the Yukon?

Hon. Mr. Webster: I want to thank the Member opposite for his question. There is just one point for clarification. The horse is not owned by the Deputy Minister of Tourism. It is owned by the daughter of the Deputy Minister. I do not have the answer at this time to the Member’s question as to whether or not the taxpayers of the Yukon paid for the transportation of this animal, but I will find out and get back to the Member.

Mr. Phillips: Our information is that the government did pay for the transportation of the horse. I guess we should consider ourselves fortunate that the new deputy minister was not an elephant trainer, because it would be a lot more expensive to get an elephant to the territory.

What is the government policy on the types of personal effects that we will pay for?

Hon. Mr. Webster: They are limited to personal effects, and there is a weight limit on the amount of personal goods and household effects that can be transported in a move. I would not think that a horse would be included in those categories.

Mr. Phillips: We are going to have to be careful from now on when we hire government officials outside, and make sure they do not own a farm, or we will have a big problem here when they bring up the whole barnyard.

Could the government provide us with a list of government officials who have moved to the Yukon in the past 12 months, as well as a list of items that we paid for to ship here?

Hon. Mr. Webster: I will take that question under advisement.

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



Bill No. 77: Second Reading

Clerk: Second reading, Bill No. 77, standing in the name of the Hon. Mr. Byblow.

Hon. Mr. Byblow: I move that Bill No. 77, entitled Municipal Finance and Community Grants Act, be now read a second time.

Speaker: It has been moved by the Minister of Community and Transportation Services that Bill No. 77, entitled Municipal Finance and Community Grants Act, be now read a second time.

Hon. Mr. Byblow: I am quite pleased to address a second reading of this particular piece of legislation. I consider it a significant piece of legislation that will continue the process of transferring significant decision-making authority to municipalities.

With this act, the Yukon will be in the vanguard of municipal finance and property tax reform on a number of fronts.

The act proposes to replace five existing grants with a single comprehensive municipal grant and, at the same time, eliminate school taxes on property, thereby enabling municipalities to collect those revenues directly.

The new legislation also incorporates existing provisions for grants in lieu of taxes, for extraordinary grants and infrastructure grants to unincorporated communities.

The Municipal Financing and Community Grants Act that we have before us will replace the Municipal and Community Infrastructure Grants Act and the Municipal Finance Act, both of which will be repealed in the process. Several sections of the Assessment and Taxation Act, dealing with school taxes, will also be repealed.

I believe Members are familiar with the evolution of the municipal finance regime in the Yukon over the past number of years. Our system of municipal financing has evolved toward a greater decentralization of control from the Yukon government to local governments, specifically, municipal governments.

Members will recall that in 1975 the Community Assistance Act authorized capital grants to municipalities and unorganized communities for basic infrastructure. Subsequent to that approach to a form of financing municipal infrastructure, in 1981 the Municipal Finance Act was replaced by the Municipal Aid Ordinance, thus creating block operating grants and a number of conditional grants.

In 1984, the Municipal Act expanded municipal authority and responsibilities and the number of municipalities subsequently increased from three to the eight we have today.

In 1987, capital block funding replaced project-by-project funding. Block funding enabled municipalities to set their own priorities for capital spending. This initiative was very well received by municipalities and continues to be a major success.

This government now proposes to increase that authority to municipalities. It wants to increase municipal decision making even further by removing many of the remaining conditions on how grants are spent. This legislation we are now addressing for second reading will do just that.

One of the most difficult problems in the past has been the equitable distribution of the grants. In 1987, the Association of Yukon Communities requested a review of the formula for distributing municipal operating grants and no consensus could be reached at that time.

In 1989, when I first became Minister, because of the inability to reach consensus on how the municipal operating grants should be distributed, there was a decision to suspend the formula temporarily - in other words, keep the formula that was in place and have it continue for subsequent years. Since then, the share of total grants that each municipality receives has not changed, regardless of how many changes have taken place that may impact on the formula.

Since capital block funding was introduced in 1987, the Yukon government has given over $44 million, plus an additional $6.6 million in extraordinary grants and contributions, to municipal capital projects. In other words, well in excess of $51 million has been provided to municipalities strictly through capital funding. This funding represents a 100 percent increase from the level of funding that was available to municipalities before that.

Combining the capital block fund into one comprehensive fund will further enhance the individual municipal financial capabilities to better meet the infrastructure needs that municipalities have. The Yukon government recognizes the continued requirement, however, for a substantial extraordinary infrastructure grant of a significant nature. Although we are creating a comprehensive block fund by rolling a number of grants into one major grant, we recognize that that financing may not be adequate for certain special projects. One that comes to mind immediately is the Whitehorse sewage treatment facility. The formula may not provide adequate funding for a project of that size.

There may be projects in other communities that are significantly more than the respective municipality is capable of funding. It is in part because of this need for extraordinary funding that it became necessary to revamp our system of municipal funding. When we undertook a comprehensive review of the municipal funding system, a process of thorough consultation with municipalities concerning municipal finance, was initiated.

A number of areas were addressed during that consultation period. One of those areas is in the matter of school taxes. This bill will revoke all requirements to collect school taxes on real property according to requirements under the Assessment and Taxation Act. This is a significant change that will make our property tax system more equitable and will devolve more authority to municipalities.

This government believes that property taxes should generally be used to provide local services that benefit property holders. It became apparent, that territorial-wide programs such as education, should be provided through YTG general revenues and not through school taxes that, for the most part, bore no resemblance to the cost of providing such a service.

It should be noted that a previous bill before this House, the Education Act, prohibits school boards from raising revenue through property taxation, so education will be paid out of general revenues. Up until now, municipalities have been collecting school taxes and turning the funds over to the Yukon government. This was deemed as administratively cumbersome, and no real purpose was served by doing it that way. This act will enable municipalities to keep all of the property taxes that they collect. They will be able to raise a larger share of their own revenue without increasing property taxes. There will be no tax increase to taxpayers as a result of this exchange. Municipalities will take up the tax room vacated by the territorial government on the issue of school taxes. It is not an elimination or a reduction of taxation by the Yukon government. I must make that clear; it is simply an exchange of tax room. Revenue collected will remain the same. As municipalities will be keeping these revenues, and not turning it over to the Yukon government, municipal grants will be reduced by the same amount that they collect as if school taxes had been there.

Each municipality has the right to decide what their tax rate will be, but, if municipalities adjust total municipal taxes by the amount of the existing school taxes, then neither total municipal property taxes nor municipal revenues, will change.

There are several points I would like to stress quite emphatically, because there was some concern by the municipalities that the issue may be misinterpreted or misunderstood.

The Yukon government is not reducing taxes through the approach being taken on vacating school tax room. Municipalities will still have to continue to collect the same taxes to maintain their same total revenue. We are simply trading school taxes to municipalities in return for an equivalent reduction in municipal grants. In short, because school taxes compete with municipalities for tax room, and because school tax assessed on property is not an equitable system, not to mention that it is a cumbersome administrative approach to do it that way.

School taxes will also be eliminated in rural areas. Again, taxpayers will not notice any difference. All that will be taking place is that taxes will be marked as general property taxes for the entire amount that general tax and school tax totalled previously.

During the consultation process with municipalities, the entire issue of rolling the funds into one large pot was discussed at length. Essentially, that is one of the principal features of this bill. We are creating a comprehensive municipal grant fund. All grants to municipalities, except for grants in lieu of taxes and extraordinary grants, will be paid from that comprehensive fund.

The comprehensive municipal grant fund will replace a number of other grants, which exist in various pieces of legislation. One of those is the municipal operating grant fund; another is the municipal infrastructure grants fund, known as the block fund of 1987. There is also the water and sewer deficit grant fund, which all municipalities get, except Whitehorse; the public transit grant fund, which is only provided to Whitehorse; and the municipal recreation grant fund, which is provided to all municipalities.

In order to provide an adjustment period to municipalities, the two deficit grant funds - that is, the water, sewer and transit grants - will be phased over the next several years into the comprehensive fund. That will take a period of three years. It will start with this fiscal year, 1991-92, and will continue for two successive years after that. This will allow these particular grants to continue to grow on the basis of actual costs for this time period, following which all municipal financing will be then met through the one fund. In other words, two of the grants that we are rolling into the comprehensive fund are going to take place over a three year period, so that, according to the existing formula, they will grow during those three periods to more adequately represent the needs of that particular municipality.

In setting the total fund, the 1991-92 appropriated amount is $11,470,167. This will be used as the base, or the minimum, size of the grant fund. That is not expected to change. In fact, it is enshrined in the act that it will remain at that level and not decrease. This base will be further adjusted by the increase in the two deficit grants I mentioned earlier, as they phase in over the next three years. So, automatically, that $11 million figure will be increased by the phased-in increase of the two grants.

In addition, the act will allow the total comprehensive grant fund to potentially grow by as much as the rate of increase of the total government expenditures. It may increase. That will be an authority granted to the government at the time of budget setting. Each year, the growth will be determined, obviously by budget priorities and budget decision making, but the grant, as developed in this legislation, will not reduce.

This, of course, is to set some measure of security and confidence for municipalities.

Setting this minimum or base size of the fund in legislation will provide municipalities with considerable certainty, I believe, about the minimum amount of funding they will be assured of receiving. Of course, this in turn will help them in meeting their needs in terms of meeting their long term planning needs and being comfortable that the base amount will always be there.

The other area that took considerable debate during the consultation period was the issue of equitable distribution of the money. I mentioned earlier in my remarks that there was a period in 1989 when we suspended the formula because we could not reach consensus on how to distribute the grant that was supplied for sewer and water deficit funding.

The new formula we have developed will ensure that the comprehensive grants are distributed equitably. There are four parts to that formula. There is a base grant given to each municipality. There is an adjustment for the local cost of providing services. There is an assessment equalization component to the formula, and there is a proportional component based on the size of the municipality also built into the formula.

This will automatically adjust the distribution of funds over time in response to changing conditions within municipalities. As populations change, as assessments change, as the number of dwelling units change, as local costs change in rural communities in all municipalities, the formula is structured to address those changes and maintain an equitable and fair distribution in spite of changes that may occur.

The comprehensive block fund will devolve, in short, more decision-making authority to the municipalities. Many of the conditions that are now placed on the existing grants will be removed.

The comprehensive block funding will provide to municipalities a powerful incentive to operate efficiently. They will be able to keep any funds they save. They will receive the funds and it is up to them to priorize them.

The new legislation will provide municipalities with greater flexibility for spending these funds. Several municipalities have found that, while they had adequate total revenue, they had a shortage of operating funds and a surplus of capital funds. I recall on many occasions representatives of various municipalities saying that they had adequate capital funding; in many cases they were able to bank it, but found that their costs of operating were difficult to sustain from the available revenue bases they had.

To rectify that problem this legislation proposes another major change. Municipalities will be allowed to spend up to 50 per cent of their comprehensive grant on operations and maintenance. That is a substantial increase in operating revenue from what was available to them under the other five operating grants available to them previously. I believe that it will be easier for both the Yukon Territorial Government and the municipalities to administer this single block grant. Certainly it will be much easier to distribute than the current array of grants, which have different criteria, reporting requirements and interpretive clauses. The time and effort saved from reducing this administrative burden can certainly be put to better use.

I would like to conclude by saying that this legislation will bring about a major restructuring of our system of municipal funding. The combination of the comprehensive block fund and school tax transfer will devolve significant authority and flexibility to municipalities. These changes will introduce a greater equity and efficiency into the financing regime we have with the municipalities. From other discussions I have had with counterparts in other jurisdictions across the country, we are on the leading edge of municipal financial reform.

Mr. Brewster: I spent all morning on the phones to municipalities, mayors and councillors. They certainly have a different opinion of what this is all about than the Minister. It is too bad that they could not have gotten together and settled this instead of having it jammed down their throats like it was.

I was at the Association of Yukon Community meetings when this was announced. There was an undercurrent there that was not very pleasant. People were not very happy. I can name a number of them that are not only not happy, but they are very, very upset about this. They feel that they were trying to discuss this and they felt that they could not get anywhere with the Minister. I guess they finally said, well, we cannot get together so let us just drop it. The next thing they knew the Minister was going to make all of the decisions. That is free government for you.

They are very, very uneasy about it. In fact, some people in Whitehorse, Faro and Dawson are past being uneasy, they are very upset. Others feel that they can probably go for a year or two years. One of the reasons for this is because they have done an excellent job and have put a little money away; now everybody is saying, well, you can take it back out of your savings and then come back for more. You do not run a business that way and I think a municipality and a government should be run like a business. You run on your income, you do not run on your savings.

I talked with them for quite a while about it. I believe in cutting money back and cutting things down. One of the things that they made very plain to me is that they probably would have accepted this and tried to struggle through this. They are going to have to anyway, they do not have much choice. Big Brother has spoken. They said that if this government could have turned around and showed a little fiscal restraint and cut somewhere, instead of just cutting all of the communities - one even had the audacity to bring up to me that the environment act is going to cost around $1 million dollars and they took $1 million dollars from the Association of Yukon Communities. Now I would add those two together, I do not have that type of mind that I would think that anybody would do a thing like that, but this mayor was quite convinced that this is what happened.

Before we get through the environment act, seeing as they were paying people to run around and make up reports on it, it might be over a million dollars before this thing is through.

A lot of them are concerned that, within the next couple of years, the infrastructure is going to start going and they will not be able to handle their sewer and water. We have an example in Whitehorse in Takhini. We have some fairly nice buildings for people to live in when there is a housing shortage, yet the sewer and water is all falling down, because nobody kept up the infrastructure.

I am pleased to hear the Minister say - and it is the first time I have ever heard the government admit this - that the operation and maintenance is way more expensive to handle than the capital to build it. You can get the money to build, but you had better look at what the operation and maintenance for the next 20, 30 or 40 years is, because this is where you get hurt.

It will be very interesting, when this legislation comes in, to see whether or not it works. As I said, there are two sides to this story. It will be interesting to see just what they will do. I would like to point out that the municipalities, in most cases, are volunteers that get very little money. They have to work this and run their business. They do a very good job of sitting down and figuring out these things. It is not easy to take a budget and break it down. Most of them should be complimented on what they have done.

The government turned around and allowed everybody a 19 percent or 20 percent raise. This is another cost given to municipalities. They have to come up accordingly. Nobody gave them any money for that. So, there is another 20 percent added on to what they have to look after and, yet, they have lost a million dollars.

One councillor has already resigned in disgust. I just saw in the news release that Mayo is going to have another by-election. We have now cost Mayo some more money for that. The man resigned on a principle.

We cannot lose people like that, because our little communities do not have very many, and it is hard to get people to run for office. All you have to do is look at elections. There are four or five councillors and the mayor. The four people said that they would run in the election, but they did not say they wanted it, and the mayor said he would put his name forward. Hardly anyone else put their name forward, so these people got the jobs. That is the way our little communities have to work, because they do not have a lot of people.

They get things like this harnessed on them, and more all the time. It was pointed out to me, for example, the lieu of taxes that the territorial and federal governments pay. It is less than that tax and, sometimes, they wait a year or more for this money. For the Member for Porter Creek, or anyone else, if we do not pay ours on time, we start paying penalties, yet they pay less and do not pay until they get around to it. Sometimes, it comes the next year.

The federal government can be blamed for this, too. With the school tax being handed over, everyone is already saying, “Oh gee, they cut the school tax out. We are getting a tax break.” We did not get a tax break. The smoke screen and mirrors came out on this one. It is quite simple. All we did was juggle some paper and move it around, put it in the computer and bring it back out. We are still paying the same taxes.

Sure, they give it to the municipalities as school taxes. What I fear very much on this is that if we do not watch out, the school councils now running the schools will be wanting more money. The municipalities are going to start raising taxes, so we have another set of taxes. It goes on and on and on and it creates more government. Regardless of what they say, nobody is happy. This backs up what I heard last fall at the Association of Yukon Communities, that people are very upset about this.

Mr. Lang: I just want to make a couple of observations. I, too, share the concern that there is no agreement among the communities on this. There is no consensus, which is unfortunate. I understand what the Minister is doing, and I appreciate what he is trying to do, but, for the life of me, I do not understand why there could not be some common agreement reached with the communities, as opposed to bringing in a bill that is going to have such drastic effects on their financing and operations in the years to come. I would have thought that there possibly could even have been some delay if some time was necessary to work out an agreement. My understanding is that it all boils down to money. Some of the communities are going to get less in the long run than what they are getting now. The bottom line is that they are not going to be able to afford it. Or, it is going to drastically affect their ability to operate.

I have one philosophical point on the deletion of the education tax. As a taxpayer, when I pay my property tax, at least, in part, I recognize that our education system is directly costing me, as a taxpayer, something. It might only be a couple of hundred dollars; nowhere near the cost of education, but it is the principle that we are paying something toward the cost of running our education system. I think it is unfortunate that we are eliminating this charge under the pretense of a tax escape by YTG that will then have to be filled by the municipalities.

At the same time, it is abrogating what our direct responsibility, at least in part, is as users of the education system.

That is a philosophical point, and I think we should all assess it. We are going to get the impression that, once again, everything in the education system is free, so who cares, do whatever you want, when you want, and let us not have any responsibility in the system. We will pay for that in the long run, because irresponsibility breeds slothfulness, and what is that going to mean to us as a people?

There is another area that I would like to ask the Minister for information on when we deal with this bill in Committee of the Whole. I would like a projection. Under the present agreements that are in place for the next five years, how much would each community get under the present formula - including, for example, the Transit Commission in the City of Whitehorse, and the City of Dawson’s water and sewer cost-shared program - in comparison with what he is projecting for the transfer of dollars under the new formula? I think we should have that, so we can go through it and examine it.

I want to make a point here. The Transit Commission that was set up years ago in the City of Whitehorse began as a federal cost-shared program, primarily with the city. YTG’s contribution was minimal, and we were strictly transferring dollars from the Government of Canada to the City of Whitehorse. That changed to where those monies were rolled into the YTG budget and, then, the YTG was seen as the partner with the City of Whitehorse for the Transit Commission. Now, we are taking the next step, where we are just going to say, here is the block funding, you do what you want.

The only problem with that type of cost-sharing or financing is that, unless there is proper indexing of the ability to inflate our costs as time goes on, the City of Whitehorse is eventually going to pick up a larger portion, through their own tax resources, of the running of that system, as opposed to what it is now.

I want to conclude by going back to the remarks by my colleague, the Member for Kluane, and I say this in a sense of disappointment. I hope the Minister will reconsider what he is doing here. It is in the April 25, 1991, news, and I am going to quote the situation in Mayo, as referred to by the Member for Kluane.

“Mayo is holding a by-election next month to replace councillor Rick Cox. Cox resigned to protest the cuts in funding to municipalities from the Yukon government. When he resigned, Cox said he did not want to be part of this Maurice Byblow dictatorship. Byblow is the Minister of the department providing funding to communities.”

I am bringing the message from the communities, and I do not think that bodes well for future relationships with the communities. We talk about cooperation, partnership and all these things that are so necessary and that we would like to have within our communities.

When we get into Committee of the Whole, would the Minister provide us with those financial projections, so we can see exactly what is going to happen to these communities, in view of what he has brought forward for our consideration?

Speaker: The hon. Member will close debate if he now speaks. Does any other Member wish to be heard?

Hon. Mr. Byblow: First, I want to say that I am pleased with the tone of Members’ responses. For the most part, they are constructive, and I expect that we will have very useful clause-by-clause debate on the bill in Committee. A number of fears that have been raised by both Members are unfounded.

The first one I would like to speak to is the issue of municipalities not being happy with this bill. I do not believe that is correctly the case. Municipalities, like any jurisdiction, are not happy when you have to address reducing funds. This bill protects levels of funding. The point I want to emphasize is that, in the entire two-year exercise leading up to this, one of the main problems we had between the territorial government and municipalities was finding consensus on an equitable distribution of the funds.

In every one of the grants that are distributed to municipalities, the fundamental problem was that eight municipalities could not agree on how to cut the pie. Inequities were building to a greater and greater disproportionate sense of fairness: the grants on the water and sewer, the municipal infrastructure grant, the block fund itself, the recreation funds, the water and sewer and deficit. All of the grants are built on formulas - formulae that address things like dwelling units, assessments, cost of living of rural communities compared to Whitehorse.

There was never an agreement on the best way to distribute those funds. Over time, there has been a growing disparity in the fair distribution of those funds. This is due to the application of the formulae over changing conditions. The municipalities were not happy with the funding arrangement or with the reality of having to address the fact of reduced funds from a shrinking pot. The Member for Kluane referred to a cut. I do not want to reactivate an old debate, but in the financing provided to municipalities there was not a cut in the overall amount of money allotted. There was a reduction in the amount of funds that would be available to them under the Infrastructure Grants Act or the block fund for the next fiscal year. But, due to the growth of the operating grants, there was an actual overall increase. If we took the entire comprehensive funding, there was actually a substantial increase for this year, so there was no overall cut. It goes back to my first set of remarks. This was reaffirmed by the Member for Kluane. Municipalities have indicated repeatedly that they have more than adequate capital funds, but they are struggling from the operating side of revenue generation.

We have created a resolution of that problem. We have provided to them a greater amount of flexibility on the operational side.

Hon. Mr. Byblow: That greater flexibility on the operational side translates from the formula into a greater efficiency. Rather than municipalities submitting applications of what they actually spent on their water and sewer system, which may or may not be totally accurate, they now get the block of money and can apply it wherever they choose. They do not have to apply funds specifically earmarked to water and sewer, as it was under the old system. It really opens up the opportunity for the municipalities to run their water and sewer systems more efficiently, and generally manage their overall funds better, because they are getting the one pot of money. I think that is great. I think that is an opportunity for municipalities to demonstrate the kind of leadership that they want, the kind of independence that they would like, and fiscal management, at the same time.

Members commented on the school tax. I want to emphasize that they are correct in the recognition that the school tax does not mean any change in taxation to property owners. The taxation is still going to be the same. I have to disagree with the philosophical viewpoint of the Member for Porter Creek East with respect to school tax.

Fundamentally, I believe that school, or education, is a responsibility of the entire society. Education is a benefit to all of us and the responsibility of all of us. I do not believe that property owners should be singled out to pay for a general service such as education provides, or for the responsibility that education is. More properly, property taxes ought to pay for services to that property. That is the philosophical diversion we have. On top of that, this is a much more efficient system.

Further to that, the portion of school taxes they now collect on property is only barely 10 percent of what it costs to provide the total service of education in the territory. There is no relevance between property school tax and the cost of education overall.

I believe the Member for Porter Creek East raised some concern about the transit system. We can go into detail in clause-by-clause, but I would note that the transit system is one of the three-year phase-in programs to ensure that any costs related to its growth over the next three years are built into Whitehorse’s financial health.

There were several other points that Members made with respect to the five-year projections. Those are no problem to provide, and I am sure I could provide them to the Member well before this reaches debate in Committee. I believe those have already been done and circulated at the last municipal meeting of the Association of Yukon Communities. I will try to ensure Members get them quickly.

With those comments, I will wait for Committee clause-by-clause debate to cover off some specifics. I thank Members for their positive approach at this stage to the initiative that is being shown in this legislation.


Speaker: Division has been called.

Would Madam Clerk Assistant please poll the House.

Hon. Mr. Penikett: Agree.

Hon. Ms. Joe: Agree.

Hon. Mr. Webster: Agree.

Hon. Mr. McDonald: Agree.

Hon. Ms. Hayden: Agree.

Hon. Mr. Byblow: Agree.

Ms. Kassi: Agree.

Mr. Joe: Agree.

Mr. Phelps: Disagree.

Mr. Lang: Disagree.

Mr. Phillips: Disagree.

Mrs. Firth: Disagree.

Mr. Devries: Disagree.

Mr. Brewster: Disagree

Mr. Nordling: Disagree

Chair Assistant: Mr. Speaker, the results are eight yea, seven nay.

Speaker: I declare the motion carried.

Motion for the Second Reading of Bill No. 77 agreed to

Bill No. 82: Second Reading

Clerk Assistant: Second Reading, Bill No. 82, standing in the name of the Hon. Mr. Penikett.

Hon. Mr. Penikett: I move that Bill No. 82, entitled Yukon Development Corporation Loan Guarantee Act, be  now read a second time.

Speaker: It has been moved by the Hon. Premier that Bill No. 82, entitled Yukon Development Corporation Loan Guarantee Act, be now read a second time.

Hon. Mr. Penikett: I am sure the Leader of the Opposition welcomes this opportunity to debate this legislation as much as I.

The purpose of the bill is quite simple. Members of the House will be well aware of the fact that the Yukon Development Corporation and, by extension, the Yukon Energy Corporation, are agents of the Government of Yukon. In that capacity, the debt contracted for by the corporations is ultimately the debt of the Government of Yukon. In other words, there is an implicit guarantee by the government for any debt of the Yukon Development Corporation or the Yukon Energy Corporation.

However, in the money markets, an implicit guarantee, no matter how legally binding, may not satisfy some lenders. At the very least, even the most liberal lenders will be happier with an explicit guarantee issued under the authority of legislation; therefore, the giving of an explicit guarantee may permit the corporation to obtain funds more easily and on more favourable terms.

The bill permits the government to make explicit and implicit guarantees, as exist in law. That is, I might point out, not an unusual practice. If one were to examine the hydro bonds of any of the provincially owned utilities, for example Quebec Hydro, it would be noted that such a bond contains a statement to the effect that the bond is guaranteed by the Province of Quebec.

Members know the Energy Corporation is currently examining the possibility of undertaking one or more major projects that, were decisions to proceed to be made, would require the expenditures of significant sums of money. These monies would have to be borrowed on the financial markets. The two projects nearest to a decision point, as Members know from discussion in today’s Question Period, are the Mayo-Dawson transmission line and the Surprise Lake hydro project.

The first project would permit the transmission of surplus hydro electricity from Mayo to Dawson to displace the expensive and polluting diesel fuel that currently supplies Dawson’s needs - a major community with a growing economy.

The second project, Surprise Lake, would involve the corporation’s participation in a proposed hydroelectric project in Atlin in British Columbia. This participation could take the form of being a partner in the hydroelectric project itself and/or as the purchaser of surplus power from the project. In either case, a transmission line would be required from Atlin to the Yukon grid. Both of these projects show great promise as a means of displacing diesel-generated electricity and neither of them is without risk.

As Members know from Question Period today, no absolutely final decision on either has yet been made and the economics of both will have to be assessed again by the board of the corporation and found to be favourable before a final green light is given. This bill does permit the borrowings to carry the explicit guarantee in the hope that the terms would therefore be more favourable for such projects.

It is important to note that the cost of borrowing must ultimately be covered through the electrical rates charged to consumers. It is important that these terms be the best it is possible to obtain to reduce the impact on rates.

I would note that both corporations are mentioned in this bill, even though the money is meant for energy-related projects. This is because we are not absolutely certain which corporation would actually borrow the money and, ultimately, this decision would depend upon which can be granted the best terms by lenders.

That concludes my brief introduction to the measure.

Mr. Phelps: I thank the Minister for his brief introduction.

We, on this side, will not be supporting the act in principle. There are two main reasons for this.

The first is that it deprives the Legislative Assembly the chance to properly scrutinize the government expenditures - in this case a pledge, in law, by this government about certain monies that are going to be borrowed by and spent by a crown corporation. It affects Yukoners. They are on the hook for up to $45 million. It is a blank cheque we are giving the corporation and this government if we pass the bill in this form.

In our opinion, it is far more appropriate that government should come before this House and justify each sum that it wishes to guarantee, on the merits of the project for which the money is about to me borrowed.

I do not think that this would prove to be much of a hardship for the corporation, as we are surely only talking about occasional borrowings in very large amounts.

It seems to me that it is critical that we not be seen by the public as providing this form of blank cheque for the simple reason of administrative ease.

The second reason that we will not be supporting this bill, has to do of course, with, -and reinforces the first- the dismal track record of the Yukon Development Corporation and Yukon Energy Corporation. Without going into that in any great detail, consider what the corporations have done with money already entrusted to them by the public.

We have the Watson Lake sawmill fiasco. By their present admission, more than $11 million dollars of government money has been lost and there are debts incurred by third parties throughout the Yukon.

We have the Old Yukon College. We know that the Yukon Development Corporation borrowed almost $6 million dollars to provide 32,000 square feet of office space. That is double the cost of a brand new, first class office building. I can say that I have checked those figures with a number of business people in the construction game in the Yukon.

We have the Yukon Energy Corporation itself that is, in our view, in rather desperate shape, because of a lack of strategic planning. That corporation is using more and more expensive and environmentally unsound diesel generation to try and keep up with current demand for electrical power. It has been drawing down the water levels of Aishihik Lake and destroying the ecology of that important ecological system. It is important to all of us as Yukoners, and especially significant to the culture of the Champagne-Aishihik First Nation.

We have a situation where Yukon Energy Corporation has used government funds as a political tool to assist the government in their last election.

Are we being asked to guarantee loans, to give a blank cheque to the side opposite in order to pay for the election rider that was in effect for almost two years and announced just before the last election?

The Yukon Energy Corporation has been bled by Yukon Development Corporation to help cover the losses of the Watson Lake sawmill fiasco. Are we being asked to sign a blank cheque to cover the $8.6 million that in 1988 was transferred by Yukon Energy Corporation to the parent corporation in dividends? Or the $7.6 million that was transferred in 1989 as dividends? Some of this money, it appears obvious from the financial records of the companies, was used to cover the Watson Lake sawmill deal.

In this House, each of us as MLAs on both sides, has a special duty to our constituents: a duty to examine the proposed expenditures of government in order to provide critical checks and balances and to assist, where possible, to help curb government waste. Each of us will be seen as remiss if we allow the government, carte blanche, to pledge up to $45 million on future projects involving Yukon Development Corporation and Yukon Energy Corporation without us having any firm idea about the projects and what those projects might be, let alone having had the chance to examine, however cursorily, the merits to the public, if any, and the justification of expenditures involved.

Mr. Lang: I just want to make a couple of observations, as a long-standing MLA of the House, since 1974. I am very surprised that the side opposite would come forward with a one-page bill, and ask each and every one of us, as MLAs, to support the principle that we would guarantee up to $45 million, without even knowing what the money is going to be spent for.

The record of the Yukon Development Corporation is not good, as we have seen in the past. In fact, the side opposite has tacitly admitted, on more than one occasion, that major and significant mistakes were made.

As a Member of this House, I stand in my place, and I am unable to go back to my constituents and tell them how much was spent on the Watson Lake fiasco, because the government has seen fit to withhold that information and use the electrical rates of the territory as a means of taxation to pay for that national debacle.

It seems to me that we should learn from what has happened in the past. We should not be presented with a bill that is basically a blank cheque, as the Leader of the Opposition has said.

There is another reason why we should not be voting for this bill, or even considering it. By the admission of the government itself, there is presently no energy policy.

In the last report from the Committee on the Economy and the Environment, they note that the Department of Economic Development is in the process of developing an energy policy that no Member of this House, or the press, has had an opportunity to read, examine or scrutinize. Yet, we are being asked to vote $45 million for an organization, and we do not even know how they are going to spend it.

The Leader of the Official Opposition is correct. In asking us to vote for this bill, by not opposing it, we are guilty of allowing an arm of this government to do whatever they want, whenever they want, and for whatever price they want, and we should not have any right to question it, because we did not ask for the information to be provided to this House on major projects.

The people of the territory have a right to know what this corporation intends to do, how they intend to do it and how they are going to spend the money. It has been exposed in Question Period over the course of this past week, through questions by the Leader of the Official Opposition, that the information provided to us in this House on November 29, 1990, was erroneous. It was admitted in this House, by the Minister of Economic Development and the Minister responsible for the Yukon Development Corporation, that they knew back in August that the demands that were going to be made by Curragh were substantially more than what was incorporated in the report to this House.

That in itself leads one to believe, and one to know, that they can not vote, in good conscience, for a bill like this where this is a blank cheque, where we do not know what the organization is going to do.

All Members in this House support the principles of the Yukon Development Corporation and Yukon Energy Corporation. We cannot as individual Members support an organization when we do not know how and where it is going to spend its money.

Therefore, I would ask the side opposite that they reconsider the bill before us and they do not try to ramrod this through under the pretext of good management, and to reconsider their policy of presenting bills to this House. If a bill is to be presented in the area of the Yukon Development Corporation, if they want a loan guarantee for something, they come forward on an individual project basis.

I ask as the senior Member of this House that the Members reassess their responsibilities as Members to the public, not as Members to a government or a partisan party. What the Leader of the Opposition has asked, and the point has been well made, that if the majority Members of this House are to pass this bill, we are, to all intents and purposes, obstructing the right of the public to know how their money is being spent.

Mr. Nordling: I am going to be very brief, just so that my position is on the record. I do not know whether it will come to a vote. The Yukon Development Corporation is us, and whoever deals with that branch of government should have the assurance that loans will be covered.

I am going to vote for this bill on principle, not based on the current management of Yukon Development Corporation, which I agree, along with Members on this side is pretty bad. I hope that in the next two years Yukon Development Corporation will come under new management and this will not be a concern, and the bill will be proper and will be used as envisioned by the government on bringing it forward.

Speaker: The hon. Member will close debate if he now speaks. Does any other Member wish to be heard?

Hon. Mr. Penikett: I thank the Members for their comments. Let me thank first the last Member who spoke, the Member for Porter Creek West. I am not that sure I understood exactly the point he was making about the management. I assume he is in favour of a change of government but I cannot promise him that. Let me say that the management of the corporation has recently changed. Although I am no longer the Minister responsible for the corporation I believe that the new president of the corporation, Mr. Jack Cable, is an excellent and extremely capable individual. He is a senior member of the local bar, an engineer and, it so happens, is a master of business administration, a former president of the Chamber of Commerce and also a gentleman with a fundamentally liberal disposition, which also means that he is capable, I think, of understanding the social policy objectives of this government, or indeed any government that may come to office, and I believe he will serve the corporation well.

In response to the other Members who spoke, let me say that I think the Leader of the Official Opposition was much more clear than his colleague and I understood very well the point made by the Leader of the Opposition - although I think he was incorrect in one respect and I want to deal with that in my response to him.

The Member for Porter Creek East was wrong in several things he said, and perhaps I will have a chance to deal with those points as well.

The Leader of the Opposition talked about having two reasons: the pledge in law and the concern that we not give a blank cheque to the corporation. The only guarantee for other than municipal purposes that I can recall as having been issued in this House was in respect of the loan guarantee associated with the opening of the mine at Faro and that was a very specific undertaking, coming at the end of negotiations for that project and it was, I think, a valid precedent and it should be noted for the record that it happened at the same time the Yukon Development Corporation was created, even though the Member for Porter Creek East would have the public believe that nothing this government has done or the Yukon Development Corporation has done, or anything done in our economic program, has made sense or had any effect whatsoever. I know the average citizen in this community believes differently.

The second point that the Leader of the Opposition made was to claim that the Development Corporation had a dismal record, and he went through a selective list. I say that advisedly because the facts that he chose to enumerate were those carefully selected to make his case. That is not unusual in political argument, but let me suggest my own list in contrast to his because I do have a different perspective on these things than does he.

He said they have a dismal record, but he did not include in the record the one energy project that the corporation had started, planned and seen through to fruition - the Mayo dam project, which the Leader of the Official Opposition neglected to note was brought in on budget, on time, and now, as a result of the vagaries in the mining industry, particularly the situation with silver prices, has superfluous capacity that is being unused. This is the power that we hope to deliver to Dawson City, but I gather from his arguments in this House, that he thinks it would be more ideally sent to Carmacks to help provide for the Faro project.

The Energy Corporation and the Development Corporation have private managers, people well known to the Leader of the Official Opposition. Yukon Electrical has done a very careful risk assessment of those two alternatives and come to the very definite conclusion that it would be a fundamental and tragic mistake to put all our eggs in one basket, as it were, to increase the dependency of the hydro system on one customer. Yukon Electrical thinks in terms of both energy strategy and environmental strategy, it makes more sense to take what is the second largest community in the territory off diesel, the growing and vibrant community of Dawson City. That is a strategic decision made by the corporation, and one that, I take it, with which the Leader of the Official Opposition disagrees. I hope he would have integrity enough to admit there is a legitimate difference of opinion and that it is not governed entirely, as he would have us believe, by squalid - I understand that that is an implied adjective -  political considerations.

He continues, on his list, to talk about the Watson Lake sawmill project, which I may be destined to debate until the end of time. I would be lying if I said I would be happy to do that, but I am ready to do that. In Watson Lake, we responded to desperate pleas from the mayor, the chamber and other people in Watson Lake to do something about the sorry state of their economy. We looked at all the options, made an investment, and it was not the energy consumers or energy company that made the investment. It was the Government of Yukon who made the investment and advanced the money to the Yukon Development Corporation, in order to carry it out.

The Government of Yukon did not have great confidence in the ability of its public service to manage the project so it hired private managers. The first one lost money. Private managers were changed, and the second private manager lost a lot more money and then the government sold it to a company that was partially owned by the Bank of Nova Scotia.

In spite of the structure of its shareholding, that company turned out not to have much money. Perhaps it was expecting too much from a certain ship building venture in Vancouver, for a contract they were expecting from the federal government that never happened. An interesting but unhappy chain of events.

I may be alone in this but, notwithstanding the nay sayers and the stone throwers on the other side, I will never apologize, not even to the former employee of the mill opposite, for trying to help the people of Watson Lake. Perhaps the mistake we made was not having it managed by the public service. Based on the way the public service manages, on balance, they would have done a better job than the managers who were there.

Given that the property and business had gone bankrupt at least a couple of times before, it should have been no surprise that it was going to be a difficult operation. I remain hopeful that, perhaps with the support from this government, the potential for the forest industry in that community, and potentially even for a mill in that community, is good.

I will not be ashamed, notwithstanding all the negativism from the side opposite, and we will try and help the community of Watson Lake again, should it need it, or any other community in this territory that finds itself in economic difficulties.

The charge has been made again and again by Members opposite, and it was repeated yet again by the Member for Porter Creek East, that electrical consumers paid to cover the losses of the Watson Lake sawmill. That is not correct. It never was, and it will not matter how many times the Members opposite say it, it is still not true. I suspect that, as Plato predicted many hundreds of years ago, the truth in such debates is something that is too much to be asked for.

The Leader of the Official Opposition, in his list of the terrible things that the Yukon Development Corporation and the Yukon Energy Corporation had done or not done, includes diesel costs. It was interesting that, in one of his media comments on diesel costs, he had calculated them as being many times what they actually were. The fact of the matter is that the corporation has a very clearly-stated strategy, as does the government, to get the territory off diesel as much as we practically can.

Most people who have thought about this at all recognize that, although diesel is very expensive - and it has been more expensive recently - and even though the waste is a pollutant, it does have certain advantages, particularly in some small communities and in the case of some resource ventures. The advantages are that it is fairly low in capital costs and can be moved or sold if it later turns out to be redundant.

No such option exists with a hydro project, once it is built. It is there forever, in terms of the lifetimes of the Members here, and it must be paid for whether it is used or not. I know my colleague, the Leader of the Official Opposition, has argued that we should be building a 40 or 45 megawatt project. I do not know quite who he assumes is going to buy that power, but he has been reported to have said that we propose a project of that scale. It is a matter of record that the costs of such projects would be in the neighbourhood of up to $10 million dollars per megawatt of installed capacity. The cost of such a project would be in the neighbourhood of $450 million. I can say to him that were any successor of his in the Conservative Party to come forward in the Legislature with a proposal that we issue a loan guarantee for $450 million, given the size of the current territorial budget, it certainly would be a subject of great debate, both inside this House and outside. I doubt very much if the electrical consumers in this territory, in this day and age, under any circumstances, would be prepared to contemplate a project of that scale, not only for the obvious reasons, the potential environmental and social impacts, but also because I am absolutely certain that they would be regarded as economic folly.

The Member opposite also talked about the Old Yukon College. He talked about what a terrible project and great mistake that was, a further example of the incompetence of the Yukon Development Corporation. I have, just for the record, every expectation that the renovations to that property, which are being undertaken now by the Yukon Development Corporation, come in on time and on budget. The Member opposite claims - he did not cite his source, but he may have intimates in the development industry whom I do no know about - that the cost of the project is double the cost of a brand new office building. That is interesting, because when we did take a look at the options in respect to the property, we actually did discuss with some people who were floating the idea of private-sector proposals and whether they could meet the building standards and requirements of our needs with the kind of investment we are making.

It turns out that even the most enthusiastic private developer with whom we were in contact could not do it. I am advised by Government Services, for example, that the rule of thumb cost for new construction for public buildings of the standards laid down is between $125 and $150 per square foot and the cost of this project works out to $116 per square foot, according to Government Services. The other important point to be made is that we are recycling a highly usable building that sits on a valuable piece of waterfront property. It is my personal hope that at some time in the future some government may see fit to develop that property further in a way that maximizes the advantages of it being on the waterfront and contributes to the appearance of the waterfront, and perhaps even to the public development and enjoyment of the waterfront in this area.

It is quite clear to everybody in the territory that our experience in Watson Lake was not one we would have wanted but I would argue that the track record of the Yukon Development Corporation has to include, for any fair observer, the experience on the Mayo dam, what I think is a good experience in terms of the old college project so far, the commitment to conservation in the energy strategy and the sound and professional way it is proceeding to develop supply options for the territory, understanding that such issues are the source of great public debate and much controversy elsewhere in the country.

I hope, over time, to persuade the Members opposite that the Development Corporation is behaving as it should. While it has to be admitted that no business has a track record of 100 percent successes - in fact, as I am sure you know, Mr. Speaker, I think most new businesses, something like 50 percent of them, fail in the first five years - the Development Corporation was created to play a constructive role in the Yukon economy in a place where assembling capital is very difficult. I think it was assumed, certainly by the people on this side, that it would take some risks on behalf of the people in the Yukon Territory.

The Yukon Development Corporation has played a constructive role and will play a constructive role in the future. It is very easy, when things go wrong, to say, “I told you so. You should not have done that.” It is very easy to do so in the case of Watson Lake. I think it is particularly easy when the people who are throwing the stones had not a single constructive idea or a single positive alternate suggestion to deal with the problem.

The mandate of the corporation is laid down in law - a law that I think was approved by all Members of the House, and supported unanimously. As I tried to point out in my opening speech on this legislation, the law that was passed by all Members of this House technically gives the corporation a mandate that does not require it to come to the House for this approval.

The Development Corporation, because of the implicit guarantee, could have gone to the market and borrowed money for these projects. It is not an example of arrogance or indifference or contempt for the House that we come forward with this legislation, but rather, with respect for the House that says, “These are two major projects we are now contemplating. Out of consideration for the consumers, we want to ask for explicit guarantees.” The explicit guarantees requested are as I have laid out in my opening remarks. The point is, we do not need to come here with this measure.

In fairness to the Leader of the Opposition, I am going to concede that the main question he puts about timing is relevant. There is an argument that could be made where, were we to come in at a different moment on this project, we could come with more specific requests. Earlier today, he asked a question about whether we were going to proceed this year with the Mayo-Dawson enterprise. There may be an opportunity to proceed this year with the Surprise Lake project. Rhetorically, is it his view that, should the precise capital requirements of either of those projects become clear on June 1 or July 1 or August 1, he would then wish us to call the Legislature for the purpose of coming forward with a request for an explicit guarantee? Even though the act passed by all Members in this House does not require this, is it his view that that is what we should do?

The Leader of the Official Opposition is now on record that, even if he is thoroughly enjoying himself fishing at a certain point on August 1, and we think it advisable to come to the House to ask for a guarantee for a specific project, even though it is not required by law, he believes the Legislature should be called for that purpose. I appreciate the advice of the hon. Member on that score. I take note of it, and I will take his advice under careful consideration.

I want to briefly deal with the comments of the Member for Porter Creek East. I take it that the view of the Member is that nothing I or anybody else on this side of the House has done is worth a tinker’s damn, and a plague on all our works. There is a generic speech to cover that.

The Member says that he cannot tell his constituents what the cost was of the Watson Lake sawmill. He may not be able to tell, but the public record - the annual statements, annual reports, auditors reports and all sorts of other documents - provide very precise information on this score. If any of his constituents want to know, and he finds himself unable to communicate it, I invite him to call the office of the Minister or the president of the Yukon Development Corporation. I am sure his constituent will then be able to get the information that he requires.

Again, he repeats the total falsehood that electrical rates have been used to finance the operation of the Watson Lake sawmill. That was not correct the first time he said it; it was not correct the second time. It does not matter how many times he says it, it will not become correct.

He asked how and where we are going to spend the money. The two purposes for which this loan guarantee was requested were described by me in the speech. The ability of the corporation to borrow for the purposes outlined is already provided for in the act passed in this House, and supported by all Members.

The guarantee that we are specifically asking for was an act of consideration of the House, and not the opposite.

The Member says we have had no energy policy. I would argue quite differently. I would argue that everything this government has done in the energy field, whether it is our initiatives in terms of retrofitting public buildings or providing support for small businesses to do the same, whether it is the initiatives we have made in terms of conservation or local public ownership of the utility, equalization of power rates for ordinary consumers, the support and funding of energy alternatives, the development of the Yukon Energy Corporation’s strategy: all of these are elements of an energy policy.

I think the only comment that the Member made about the lack of energy policy was to say that the comprehensive energy policy is still in the works and forthcoming. I happen to know that the government of which he was a part and the department for which he was Minister for a while sat on the development of an energy policy for the whole time they were in government. I am not terribly charmed or persuaded by the Member’s criticism on that score.

The Member also claimed in his speech that the Minister of Economic Development admitted this week that the information provided to this House in the energy strategy documents was erroneous. He did no such thing. I have been here for every Question Period, and the Minister of Economic Development made no such statement. Perhaps the Member thought that what the Minister of Economic Development was saying was a non sequitur and did not understand it.

What the Minister did try to explain was the difference between capacity and consumption. It makes a very important point. I guess someone might make the analogy between the capacity of a car to be able to go 100 miles per hour and the miles consumed by the car in one year, which may be 10,000 or perhaps many more. They are different concepts. There has been a lot of confusion in the descriptions of the Members opposite about his point.

I am going to conclude my remarks by saying that I think the parts of this debate that reflect on Watson Lake are, I am sure, just an echo of previous discussions. The echo may continue over time, but I do want to say to the Leader of the Official Opposition that he has given us some advice about the nature and the precision which he would like to see, in requests for loan guarantees in the House. He has invited us to call a midsummer session, if necessary, to seek such guarantees. I appreciate that advice. I will, assuming passage of this bill at second reading, discuss the proposals with the Leader of the Official Opposition, along with my colleagues, before proceeding further with the legislation.

Motion for second reading of Bill No. 82 agreed to

Bill No. 90: Second Reading

Clerk: Second reading, Bill No. 90, standing in the name of the Hon. Ms. Joe.

Hon. Ms. Joe: I move that Bill No. 90, entitled An Act to Amend the Chartered Accountants Act, be now read a second time.

Speaker: It has been moved by the Minister of Justice that Bill No. 90, entitled An Act to Amend the Chartered Accountants Act, be now read a second time.

Hon. Ms. Joe: This bill contains a number of amendments that will affect the administration and enforcement of the Chartered Accountants Act. This act was proclaimed on May 2, 1977. There have been no changes to the act to this date. We believe the amendments will allow the Yukon Institute of Chartered Accountants to mature to the same level of self-regulation as the profession has in other jurisdictions.

Self-regulation contributes to the development of professionalism and will allow Yukon chartered accountants to attain the same professional status as their provincial counterparts. Self-regulation in other jurisdictions has not been contrary to the public interest, especially since government maintains a supervisory role.

The changes proposed in this bill will allow for the Yukon Institute of Chartered Accountants to investigate complaints against its members, former members and students, and to conduct practice reviews. It also allows them, if there is the possibility of bias, to appoint a committee of inquiry from outside the territory to investigate the complaints of impropriety.

Some of the changes are housekeeping changes. We have changed the wording in some sections to eliminate inconsistencies and to broaden the intent of the act. The amendments allow the Council for the Yukon Institute of Chartered Accountants to pass bylaws respecting inquiries into current and former members’ and students’ conduct. There is provision for the council to discipline such members by reprimand, suspension, expulsion or fine.

The changes also allow for the Commissioner in Executive Council to impose the cost of the hearing. This allows for a member under investigation to be charged with all or part of the costs of the hearing, rather than having all the costs borne by the membership in general. If the member under investigation is found not liable, then the costs will be borne by the institute.

The amendments will also make it mandatory that all members maintain insurance against professional liability.

The designation of chartered accountants, or any such designation in noting the profession, also allows for a firm to continue to use the designations for a specified time without penalty after the death or resignation of a resident partner. This will allow enough time for the firm to regroup and to continue to make a viable contribution to our community. The amendments allow for confidentiality, yet compel persons to give evidence respecting any facts, information or records obtained in the course of their duties under the act if they are required to do so with regard to an investigation. The amendments will also give the institute the same power for the purpose of an enquiry or hearing as the supreme court has for trial or civil action. A member who has been subject to a decision of the enquiry board may appeal the decision to the supreme court. All members acting in a capacity conferred by the act are protected from libel.

The Yukon Institute of Chartered Accountants has 120 registered members with 15 members resident in the Yukon. The institute will now be in a position to administer regulatory services, conduct professional and practice reviews and disciplinary actions without relying on the Institute of Chartered Accountants of British Columbia, as it has in the past.

Mrs. Firth: The only thing that was not mentioned in the Minister’s presentation was whether or not the Chartered Accountants Association had been consulted with respect to the legislation; I checked and I gather they have been. I would like to look for some kind of confirmation from the Minister as to whether or not that happened.

I have gone through the amendments and discussed them with some of my constituents who are chartered accountants; we will be supporting the initiatives and the principle of this bill.

Speaker: The hon. Member will close debate if she now speaks. Does any other Member wish to be heard?

Hon. Ms. Joe: In response to a question the Member had, it is my understanding that the chartered accountants have been consulted with regard to the changes in this bill.

Motion for second reading of Bill No. 90 agreed to

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

Speaker:  It has been moved by the Hon. Government House Leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Motion agreed to


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

We will now have a brief recess.


Chair: I will now call Committee of the Whole to order. We will be discussing Bill No. 66, Act to Amend the Home Owners Grant Act.

Bill No. 66 - Act to Amend the Home Owners Grant Act

Mr. Byblow: Perhaps as I begin addressing the committee stage of this bill, my deputy Roger Graham could join me and put into circulation some documents related to the bill for expediting discussion. I will be providing Members with copies of the Home Owners Grant Application, which has attached to it, the eligibility criteria and the specific guidelines that govern applicants when they fill it out. Also attached in the documents that are being circulated is a copy of the new application that will apply under this bill. That new application, found as page 2 of the package, is being provided to municipalities where the Home Owners Grant will be applied at source.

In the case where the Yukon government collects the property tax, this form will be included with the tax notice that will be sent out on or about May 15.

The form on page 2 is a new form to be included with the tax notice and it will be sent shortly, within a couple of weeks time, to advise people of the change that we are proposing. The Yukon government will also be providing with the tax notice a copy of the application form, which is also included in your package. Property owners will be receiving this as part of their tax notice package in a couple of weeks’ time. For Members information, I have just provided to two members the grants that have been paid under home owner’s legislation over the past two budget years. Last year’s total was $1.461 million.

The bill, as I indicated at Second Reading, is strictly intended to provide for the ability to credit at the time of paying taxes the amount of the home owner grant that one would be eligible for.

We have debated the issue in the past in the House. The subject was a matter of a motion of the House, and has been the subject of lobbying by individual residents of the Yukon. The bill before you represents the change, which is strictly to be able to apply your home owner grant at the time you pay taxes.

We have not changed any of the eligibility criteria. We have not changed the method by which we currently deliver this grant. In other words, we are keeping the same criteria for eligibility as is in the existing act, which as Members will recall has been in place for some 14 years, since 1976.

Perhaps I could speak to something that the Leader of the Opposition gave notice of during second reading debate. He was proposing to table an amendment that would change the number of days required for eligibility by people who would be ordinarily paying taxes by early July.

I certainly do not want to preempt the Leader of the Opposition’s desire or choice to put forward such an amendment but I would like to tell him that I do not believe it is necessary. I believe the concerns he may have had are adequately covered in this bill and in the policy guidelines of the act as circulated to Members. In other words, a person who has continuous residency - which simply means that they are an owner of a property and that they treat that property as the normal place of residence ...

[Power failure interrupted proceedings]


Chair: We will now call the committee to order.

Hon. Mr. Byblow: Prior to the energy interruption moments ago, I was responding to notice being given to the Leader of the Opposition with respect to a concern he had about the definition and interpretation of eligibility. At the appropriate clause in the bill I will be introducing a minor amendment that I am sure will meet the concerns of the Leader of the Opposition.

I have summarized the intent of the bill. I have given a brief history of the bill. I have provided information to the Members regarding how the impact of the bill has historically been felt from a financial point of view, this with respect to the budget dollars indicated over the past couple of years. I have also indicated the forms that will be used.

[Power failure interrupted proceedings]


Chair: I will now call the House to order.

Hon. Mr. Byblow: For fear of being affected by supplies of energy again, I will conclude my remarks. If there are any questions, I will be pleased to entertain them.

On Clause 1

Clause 1 agreed to

On Clause 2

Hon. Mr. Byblow: Clause 2 and several other clauses that will be coming up shortly speak to the issue of establishing gender equality in the bill.

Clause 2(4) was flagged by the Leader of the Official Opposition as perhaps having a substantive change that could be interpreted to disentitle people from eligibility. The Member was concerned about the word “continuous”, that appears in subsection (a) and (b) of clause 2(4). I am proposing an amendment for purposes of clarification.

Amendment proposed

Hon. Mr. Byblow: I move

THAT Bill No. 66, entitled An Act to Amend the Home Owners Grant Act, be amended in clause 2(4), (a) and (b) at pages 1 and 2 by deleting the word “continuous” and substituting for it the word “normal”.

Chair: You have heard the amendment. Is there any discussion on the amendment?

Hon. Mr. Byblow: Changing the  word “continuous” to “normal”  maintains consistency between the changes in the act and the policy guidelines governing application of the act. If Members refer to the documents I circulated, they will note on the second-last page of the set of sheets that cover the grant application guidelines, at the very bottom of the page under “guide item no. 3" where it speaks to eligible residences, that section 2 talks about an eligible residence having to be owned and occupied as a normal place of residence by the applicant for 184 days. We are putting the word ”normal" into the act; this maintains the consistency between the legislation and the policy, and it addresses the way the applications for home owners grants have been handled over the last 14 years. I think the concern of the Leader of the Opposition was whether,somebody who left for a holiday through the month of January and returned on February 1 would be eligible because he broke his continuous residency. In principle, which is enshrined in the bill, that would not happen. For greater certainty and greater clarity, I am proposing we delete the word “continuous” and put in “normal”, so that this bill maintains the rules in the same way they have been applied for the last 14 years.

Amendment agreed to

Clause 2 agreed to as amended

On Clause 3

Clause 3 agreed to

On Clause 4

Clause 4 agreed to

On Clause 5

Clause 5 agreed to

On Clause 6

Clause 6 agreed to

On Clause 7

Clause 7 agreed to

On Clause 8

Clause 8 agreed to

On Title

Title agreed to

Hon. Mr. Byblow: I move that you report progress on Bill No. 66, with amendment.

Motion agreed to

Bill No. 90 - An Act to Amend the Chartered Accountants Act

Chair:  Is there any general debate?

Hon. Ms. Joe: We only introduced this act this afternoon, just minutes ago. I have some explanations for the changes here. If there are any highly technical questions that the Member for Riverdale South may want to ask, I may not be able to answer them. I do not have my official here. I can wait to find out whether or not she has any specific questions that she may want answered.

Mrs. Firth: Has the department done any cost projections as to what the implications these changes and self-disciplining body might have on the government?

Hon. Ms. Joe: It is my understanding, right now, that there were some done, but I am not sure to what extent. There is a body that has been included in here that we may have to use in some cases. Whether or not it would be something that is done on a rare basis, I do not know. I suspect that it would be a rare case when it would have to be used, but I do not have that information.

Mrs. Firth: Is the official coming? We can wait for the official to come and then we can proceed.

Hon. Ms. Joe: The official is over at the Justice building. I was not expecting that we were going to have to deal with this amendment this quickly.

Chair: Shall we move on to another bill? Is that the wish of the Committee?

Chair: Is the Committee agreed that we should move on to another bill?

Some Hon. Members: Agreed.

Bill No. 31 - An Act to Amend the Municipal Act

Chair:  Is there any general debate?

Hon. Mr. Byblow: Bill No. 31 is the amendment we are proposing to the Municipal Act. Essentially, as was explained at second reading, it eliminates the ability of a person elected to a municipal council to also hold office at the territorial level.

I have previously spoken to Members indicating that the AYC came forward with such a resolution approximately one year ago. I indicated to the AYC that I would be quite prepared to introduce such an amendment to the Municipal Act prior to the next territorial election for municipalities. Those elections will happen this fall, in November. This was a timely opportunity to introduce the amendment.

The amendment is a minor one with respect to a specific change to the bill. It simply adds to the Municipal Act a section that includes holding office as a Member of the Legislative Assembly would disqualify you from holding office at the municipal level. It is simply an additional short clause added to a clause in the bill that creates that prohibition.

I believe this is the will of the municipalities. Their rationale and justification is, principally, one of conflict of interest and, as I have indicated to Members before, I support that position. I have noted for Members that I was previously in that kind of a position, as other Members of this House have been, and it is a defensible position to take: that you should not hold office at both levels of government, especially if you are with the majority side of the territorial Legislature. It would be most inappropriate for a Cabinet Minister to sit on a municipal council. It would be an unworkable and untenable relationship.

Mr. Brewster: I will go along and support this. However, the Minister knows there are other things I am not too happy with, and we will wait and see what happens with them.

Mr. Lang: I would like to make a few comments as an MLA here. First of all, I will accept the argument that if you were a Cabinet Minister you should not sit as a mayor or counsellor in a community. I do have some reservations I want to express.

First of all, if a Member of this House - as in the case of the Member for Faro and the Member for Whitehorse West - at one time sat on the council-of-the-day in their communities and, for a period of time, sat in this House, I never viewed that as a conflict of interest. I do not buy that argument because, quite frankly, I happen to come from a community within the City of Whitehorse and, in some cases, I bring forward urban points of view, which is perhaps contrary to what the MLA for Klondike is thinking. If I recall correctly, I believe the Member for Klondike was still a member of council when he became elected to this House. He indicates he was for five months. I do not take that as a conflict of interest.

I will express my concern. I can see the rationale for the bill before us, where one has just been newly elected as, say, the mayor of Faro and, two months later, runs and is going to be the MLA for Faro.

I question how long you could carry out both functions and still work in the mine, or run a business, and do those things well. The point where I can agree, if it is for a long extended period of time, is whether or not the individual has the ability to do all the jobs he or she is being relied upon to do. That is the question I would have.

I want to express my reservations for the record. We are, in part, eliminating a pool of possible candidates for territorial elections. For example, 10 months prior to the territorial election, an individual in Carmacks sees that as a reason not to put his or her name forward, because they have not completed their term. In part, as the MLA for Kluane has indicated, the electorate will make the decision as to whether or not they accept the principle that one can do both jobs.

There is a period of time, a five or six month lull, where I do not see anything wrong with the Member for Klondike serving in both capacities. One can argue whether or not he should have been elected, but the fact is that he did put his name forward, he was duly elected and carried out his responsibilities.

I express that reservation. I do not intend to obstruct the bill. My own personal reservations are in respect to what we are doing to the pool of people we have to draw from.

I do not think that it is any secret; any political party operating in the territory knows how difficult it is to try to recruit people to run for public office. It is not the easiest thing in the world. Not everybody wants to do it. Some of us, I am sure, wonder why we do it. That is the concern I have as far as eliminating a field of possible candidates who could be successful and sit in the House. The bill before us could eliminate a number of them.

Hon. Mr. Byblow: Just in brief and general response, I can understand the sentiments of the Member with respect to talent pools and specific desires of individuals to serve in massive capacities. I will make a couple of observations largely because I was involved in the issue directly.

I think 10 years ago, territorial politics was at a stage where you could be an MLA and do other things quite successfully. I think times have changed to a great extent over the last 10 and 15 years in terms of the demands and expectations and responsibilities that are expected of Members of the Legislature. I do not think that one could honestly do a thoroughly responsible job of being a representative at both levels of government. I think that the demands are getting too onerous, the expectations are too high, and the time occupation is too great. Ten years ago it may have been marginally possible. I think of my own situation out of Faro. I had to miss council meetings because session was on. I could not adequately review some of the council matters in the community in preparation for a council meeting because I was preoccupied with some territorial matters and constituency matters.

I have found the eight months that I served at both levels quite onerous, and that was 10 years ago. The responsibilities and expectations of MLAs today has risen quite dramatically. I do not think that one is capable of doing a totally adequate job, but that is a matter of public judgment.

This does not prohibit anyone from running for office. All this does is eliminate holding both offices. There is a slight difference. If you are on municipal council and you choose to run territorially, you can do it without resigning. Only if you are elected to the territorial Legislature would you have to resign or you would automatically cease to be a municipal counsellor.

Technically, the reverse is true. If you were a member of the Legislature and you wanted to run for municipal office you could. But, the instant you got elected as a mayor you reach the critical point where you would cease to be mayor without resigning from the territorial Legislature. This would happen at the critical time when you officially become sworn in. In that period you would have to resign from the Legislature or you would not be eligible to assume the post of the municipal office.

You are not being prevented or eliminated from running for office; you are just being prevented from running for both. Members know my views on the ability to physically handle both jobs.

I really do believe it would be most difficult to hold both a position in the Legislature and on a municipal council at the same time - by virtue of the information sharing, the knowledge and the oaths of offices, you could clearly run into situations of conflict where you would be duty bound to breach one oath or another.

Mrs. Firth: I just want to express some of my opinions with respect to this legislation.

I support this initiative one hundred percent. I will tell other Members of the House the reasons for that. I do not think it at all restricts the talent pool because, as the Member for Faro has just said, anyone can run, and they can run for either office. It does not prevent people from running for both offices even. It just prevents people from holding two offices.

I well remember the complaints I had, knocking on doors in the last election campaign, where people were concerned that even though there were people who were city councillors running for positions as MLA’s, none of them would give a commitment to resign their seat as a councillor. I think that offended the public. This amendment to our Municipal Act is a response to that call from the public expressing dissatisfaction with the process the way it was.

I heard a lot of times that there was potential for conflict, and I agreed. As other Members have said, the public is becoming more demanding of their elected representatives. In particular, they are wanting their elected representatives to represent their points of view and their interests. They do not want any other conflicts arising, which already do. The potential for additional conflicts to arise is there with someone being an MLA, as well as a councillor, no matter where, whether in the City of Whitehorse or one of the municipalities.

This amendment is in response to an expression that was made by the people in the last election campaign, and it was obviously followed up by the Association for Yukon Communities. That is why we are all here: to implement some of the wishes of the people some of the time. Therefore, I am supporting this initiative 100 percent.

Mr. Lang: I want to get this clearly on the record. I am supporting the measure. I just wanted to express some reservations in respect of the timeline. I do buy the argument about the workload that would be required, if you were a councillor or mayor of a community, as well as a sitting MLA. I do not disagree with that. All I was pointing out was that there could be a three or four month period between two elections - territorially and that of the municipality - and this would force one to resign and could, to some degree, force a person not to commit themselves to territorial politics, because they still have a six month commitment elsewhere. That is the only reason I am raising that, as far as reservations are concerned. I think those are things one would have to consider.

Clause 1 agreed to

On Clause 2

Hon. Mr. Byblow: This is where we are adding the section creating the ineligibility to hold both offices. In section 34 of the existing Municipal Act, from (a) through (g), it outlines all the different ineligibility criteria: you cannot be a judge, you cannot be indebted to the municipality, you cannot be incarcerated. This is just simply adding on to that list that you cannot be a Member of the Legislative Assembly.

Clause 2 agreed to

On Clause 3

Clause 3 agreed to

On Title

Title agreed to

Hon. Mr. Byblow: I move that you report Bill No. 31 out of committee, without amendment.

Motion agreed to

Hon. Mr. McDonald: Given the fact that we only have about five useful minutes left in the day, there does not seem to be a great deal of point in debating the new act, so I would move that Mr. Speaker now resume the chair.

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

May the House have a report from the Chair of the Committee of the Whole?

Ms. Kassi: The Committee of the Whole has considered Bill No. 66, An Act to Amend the Home Owners Grant Act, and directed me to report same with amendment.

Further, Committee of the Whole has considered Bill No. 90, An Act to Amend the Chartered Accountants Act, and directed me to report progress on same.

Further, Committee of the Whole has considered Bill No. 31, An Act to Amend the Municipal Act and directed me to report the same without amendment.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

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

Speaker: It has been moved by the Hon. Government House Leader that the House do now adjourn.

Motion agreed to

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

The House adjourned at 5:23 p.m.

The following Sessional Papers were tabled April 25, 1991:


Report of the Chief Electoral Officer on Contributions to Political Parties, 1990 (Speaker - Johnston)


Report of the Clerk of Assembly on deductions from indemnities of Members pursuant to subsection 39(6) of the Legislative Assembly Act (April 25, 1991) (Speaker - Johnston)


Workers Compensation Board report: “How to Reduce Health and Safety Risks in Your Workplace” (M. Joe)