Whitehorse, Yukon

Tuesday, December 17, 1991 - 1:30 p.m.

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



Speaker: We will proceed with the Order Paper.

Introduction of Visitors.


Hon. Mr. Penikett: I would like to introduce the Grade 5S class of Jack Hulland School. They are here with their teacher, Mr. Wilf Somers. This class was kind enough to invite me to visit with them yesterday.



Speaker: Under tabling of documents, I have for tabling the Auditor General’s Report on “Other Matters” for the year ending March 31, 1991.

Are there any other Returns or Documents for Tabling?

Hon. Mr. McDonald: I have the annual report for the Department of Education for the year 1990-91.

Hon. Mr. Penikett: I have three returns for tabling.

Hon. Mr. Byblow: I have some returns for tabling.

Hon. Ms. Hayden: I have a legislative return for tabling.

Speaker: Are there any Reports of Committees?

Are there any Petitions?

Introduction of Bills.

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

Notices of Motion.


Mr. Nordling: I give notice of the following motion,

THAT it is the opinion of this House that all profits from the Yukon Liquor Corporation be used to combat alcohol and drug abuse in Yukon.

Speaker: Are there any Statements by Ministers?


Government position on federal constitutional proposals

Hon. Mr. Penikett: I rise today to advise the House of this government’s position on some of the federal constitutional proposals.

Since these proposals were released in September, the course of constitutional renewal has not run smoothly, and at this point it is still not entirely clear what process will be used to achieve a stronger Canada.

The lack of clarity about the process and the specifics of the federal constitutional vision has inhibited the development of firm responses to its proposals. It is also not possible in a ministerial statement to address all 28 proposals, but I shall speak briefly to those that concern us the most.

Ironically, our main constitutional objective is missing: a new amending formula. The Yukon Government opposes the amending formula contained in the failed Meech Lake Accord. The demand for unanimity can too easily lead to constitutional deadlock. The use of vetoes can too easily become political bargaining chips.

We also remain opposed to an amending formula requiring either unanimity or the consent of seven provinces with at least 50 percent of the Canadian population for the creation of new provinces. This decision belongs to those affected, which in our case is the Yukon and federal governments. It is equally offensive to suggest that any province can decide to extend its boundaries northward without the consent of the territory affected and the people who live in it.

We also believe constitutional change must recognize our desire for a meaningful role in Canada, prior to achieving provincial status. The proposals for the Council of the Federation and a reformed Senate are too vague on this question. We want an effective voice, including full participation in national ministerial meetings and institutions.

The Yukon Government is prepared to endorse the “Canada Clause”, recognizing Quebec’s special responsibility to preserve and promote its distinct society. We also favour adding a section to the Constitution, stating that the Charter of Rights and Freedoms shall be interpreted in a manner consistent with the recognition of Quebec as a distinct society. It would clarify the Charter’s pre-eminence within our political and legal system, while affirming Quebec’s uniqueness in Canada.

This government actively supports the federal proposal to entrench the right to aboriginal self-government in the Constitution. We also wholeheartedly support the proposal that all governments commit to negotiating self-government agreements.

We cannot, however, support the proposed delay in the enforceability of the right to aboriginal self-government for up to 10 years. In our view, the right to self-government is an inherent right, something that exists now and has always existed. It is fundamentally unjust for us to ask aboriginal people to wait when their rights have already been violated for too long.

The Government of the Yukon is also concerned about the emphasis the federal government has put on proposals to entrench a stronger economic union and on the equalization of fiscal policies. We are prepared to discuss proposals for strengthening our economic union in a way that respects regional realities and needs. But we maintain they are incomplete without provisions that also restate our commitment, as a nation, to a fair and equitable distribution of benefits arising from a strong economy. A social charter may be one way of redressing the one-sided perspective now contained in the federal proposals.

There are, of course, several other important proposals outlined in the federal document but, as I have indicated, many, such as the Council of the Federation and aboriginal representation in the Senate, are unfortunately vague and time does not permit a full exploration of them in a ministerial statement.

In closing, however, let me state our earnest hope that the constitutional process can be reorganized in a way that gives Yukon citizens and all Canadians a real opportunity to discuss the federal proposals. Let me also state our firm commitment to dealing, in a serious and substantial way, with proposals to build a stronger, more united Canada.

Mr. Lang: We want to thank the Minister for his brief overview with respect to the proposals brought forward by the Government of Canada. We also regret the fact that one of our main constitutional objectives has been a change to the amending formula. Unfortunately, under the present circumstances, this is not open to discussion. I am sure that the Government Leader will be bringing it to the First Ministers’ meeting in the near future to bring to their attention that this is an outstanding issue that should be resolved.

We are in the process, like the government, of developing a position for the various proposals put forward. I believe there are 28 different proposals for changes to the Constitution of Canada. It would be our intention to bring a clear and concise message to the Parliamentary committee that is due to be in Whitehorse January 28.

We share, with the government, the hope that when this process comes to a conclusion we will be a more united country and get on with the business at hand.

Mr. Nordling: We appreciate the Government Leader updating us on his government’s position with respect to the constitutional proposals. We recognize that it is very difficult in a ministerial statement to comment on all outstanding issues. We look forward to periodic updates and hope that, through his participation in First Minister’s conferences and maintaining contact with the Northwest Territories and our provincial counterparts, a constitutional agreement will be reached that is acceptable to all Canadians.

Hon. Mr. Penikett: Let me thank the representatives of both groups opposite for their responses. Let me say first to the Leader of the Official Opposition that I appreciate very much his comments about the amending formula. But, it should not be forgotten that one of Quebec’s main objectives in the Meech round was to obtain a veto for itself. I assume that, even though that objective is not stated in the current federal proposals, it remains. It may be that as we get down to a firm federal proposal for Quebec, it may resurface. This will put the question back on the table and thereby create an opportunity for us to make representations about our position on the issue again. I am hoping that possibility will arise.

In response to the Member for Porter Creek West, let me say that I am more than happy to give periodic updates, and I will try and do that as frequently as the House is sitting or, if the House is not sitting, then through other vehicles. As all Members know, I will be travelling to a First Ministers’ conference tomorrow, which is on the economy, but I fully expect that there will be some informal discussions around constitutional questions while we are there. If there is anything of substance to report, I will communicate it back to the Members of this House.

Implementation of the electronic monitoring system

Hon. Ms. Joe: Members of this Assembly may have noticed that I am wearing something rather unusual on my wrist. No, it is not a special medical device designed to monitor how many cups of coffee I need to drink before Question Period. I wish I could say it is a unique piece of jewellery from a famous fashion designer, but no luck. One thing is certain, though: I cannot get the darn thing off, even though I am told it can be removed whenever the key is found.

There is really no mystery in this. This bracelet is part of the new electronic monitoring program due to take effect early in the new year. Initially, the program will be restricted to the Whitehorse area for a trial period, but I am confident the system will soon prove effective for use throughout the territory.

This government is concerned about the high number of people sentenced to correctional facilities. We are also well aware of the structural limitations of the Whitehorse Correctional Centre. The safety and security issues imposed by overcrowding and the inability to separate various types of offenders demands that new measures be introduced to help ease these problems. The electronic monitoring program was chosen because I believe it provides a positive alternative to incarceration for minor offenders. By fitting someone with this small electronic bracelet, that person’s whereabouts can be continuously monitored.

To avoid any confusion, this program applies only to persons convicted of minor crimes. At present, they are generally sentenced to a period of incarceration that can be served on weekends. This way, they can keep their jobs, look for work, or go to school.

The electronic monitoring system is simple and effective. First, there is this lightweight, waterproof, virtually non-allergenic bracelet. I am wearing it on my wrist just to show you what the radio transmitter looks like, but offenders will wear it around their ankle. Information is then gathered silently and continuously by a small tamper-resistant field monitor located in the offender’s residence and tied to the offender’s telephone. If there is no phone, the transmitter can be monitored externally. The phone will be tied into a corrections computer that reports on the offender’s whereabouts. If offenders are restricted to be at home or on the job at certain times, the computer will immediately report it if they wander away from their restricted areas. In case some Members are wondering, this bracelet is extremely strong but any attempt to cut or tamper with it will be reported automatically by the host computer. Power outages or related malfunctions will also be reported.

In closing, the electronic monitoring program will be administered by the corrections branch. The policy for the system is now in place and training has been provided. I believe this new program will be a more cost-effective and humane alternative to intermittent jail time. In short, it is a program that is symbolic of this government’s commitment to provide Yukoners with an acceptable level of protection but flexible enough to assure minor offenders that they are not beyond hope.

Mr. Phillips: It is quite a coincidence that the Minister announced this program the same day she came into the House wearing the bracelet.

This morning I received a brown envelope from the Department of Justice. When I opened the envelope there was nothing in it except a key. I am sure now, that we hold the key to the Minister of Justice’s security. We will be keeping a close eye on the Minister of Justice in the future. We will be watching what this Minister is up to.

On a more serious note, we are pleased to see that this program has come into the Yukon. It is just a trial program designed for minor offenders, and it has worked very well in some other jurisdictions. We are going to reserve comment on this program until we see how well it does work. If it works as well as it has in some other jurisdictions, then it should be a success here. We will be monitoring the program, as the Minister will, over the next period of months.

Mrs. Firth: We, too, will be actively watching the development of this program. If I am not mistaken, we identified $80,000 in the 1991-92 budget. That amount of money was not spent. I noticed when we reviewed the budget last night, there was no money in the budget for the program. I would appreciate having some information from the Minister with respect to how much this program is going to cost.

The other two concerns we have are with respect to the policy itself. We would like to know if the Minister will give us a copy of the policy so that we can see exactly how individuals will be chosen for the program and who has the responsibility and authority for doing that.

Our last concern, the most important one, is that of choice. We can appreciate that some individuals may not like the idea of having a transmitter attached to their body. We would like to know if it is going to be a program where people can opt into it or they can decline and carry on with what the present system is. I think that would be fairly important to individuals.

I look forward to receiving that supplementary information from the Minister. We will follow the program along and see how it works out.

Hon. Ms. Joe: The Member for Riverdale South is correct in saying that the money was allocated in the budget for 1991-92 and we were not able to purchase the equipment until recently, and the training has been provided.

I believe that the policy is being put together, and when that is complete I will certainly have that information delivered to both Opposition Leaders. In regard to choice, the person does have the choice of whether or not they want to spend weekends in the facility, or whether they would choose to wear a bracelet - the bracelet is rather attractive.

In response to the Member from Riverdale North, I tremble at the thought that the Opposition would know my whereabouts, wherever I might be. Nothing is secret anymore.

Speaker: This then brings us to Question Period.


Question re: Yukon Development Corporation/former president’s statement

Mr. Lang: Talking about keys, I think that we received, this morning, a key to the possible success of the Minister responsible for the Yukon Development Corporation. I am referring to the statement issued by the ex-president of Yukon Development Corporation, Mr. Cable, that was issued and made available, I gather, to the Minister as of yesterday, with respect to some proposed changes to the Development Corporation.

It is no secret that the ex-president resigned due to the political interference of the government, with respect to the day-to-day operation of that particular corporation and because of what  it was eventually doing to the electrical ratepayers throughout the territory.

One of the most significant recommendations that Mr. Cable has included in his statement is that the Yukon Energy Corporation should be split from the Yukon Development Corporation. Mr. Cable further goes on to note that the two corporations require different management skills and do not blend well. I would like to ask the Minister: in his review that is supposed to be completed by February of this year, is the Minister going to be contemplating the concept of splitting the two corporations?

Hon. Mr. Byblow: Let me observe that in response to the Member’s preamble, regarding the reasons for the ex-president’s departure from the corporation as having been because of interference, that has to be, indeed, one of the best kept secrets, because that certainly is not my understanding of his departure.

The Member raises a question about the separation of Yukon Energy Corporation and Yukon Development Corporation. The Member also notes that the mandate review process is currently underway.

It is correct to say that the two corporations are currently examining, through the board, through staff and in cooperation with me, a review of their direction, role and, in essence, their mandate. It is correct that matters such as the ones raised by the ex-president, are matters that have been under discussion for some time.

In respect to the specific separation of the two corporations, I suspect that down the road, that may well be an eventual evolution of things.

The Member has to remember that when the original corporation was created, the intention was to operate a very lean, mean machine on behalf of Yukon people. It would certainly not be prudent to create duplicate structures to maintain these two corporations.

Mr. Lang: I will tell you that the electrical ratepayers of the territory sure got a lean, mean machine and they are paying for it everyday, as the kilowatt hours tick on.

The ex-president of the Yukon Development Corporation brought forward recommendations that the composition of the board should be changed, so that  public servants are not represented on the board of directors of the corporation.

Is the Minister prepared, in his review, to ensure that when the review has been completed, the mandate of the corporation will be such that only members of the public will be represented on the board and Deputy Ministers or civil servants responsible to the government will not be active members on the board?

Hon. Mr. Byblow: I beg to differ with the Member’s opinion surrounding the efficiency of the Yukon Energy Corporation, as demonstrated in the last rate application and by financial statements tabled in the House. I think we do indeed have one of the best run utilities in the country, under some excellent supervision, guidance and management.

With respect to board membership, I would pose the rhetorical question: why is it that members of the public are better qualified to sit on a public board than members of the public service? It seems to me that we should not preclude capable, competent, senior people of a government to sit on public boards to provide necessary policy interpretation, linkages, advice and expertise.

Mr. Lang: The reality of the situation is that we have witnessed, in the past year, some of the worst political interference in any corporation, compared to any other corporation or organization at arm’s length from the government. Deputy Ministers report to Ministers of this government and their first duty is to the government. I want to ask the Minister again: in view of the experience of the Yukon Development Corporation, would he ensure, following the completion of that review, that the composition of that board will be reviewed, to ensure that Deputy Ministers will not be represented on that board, or be voting members.

Hon. Mr. Byblow: Again, I beg to differ with the Minister. We look for a balance of interests, balance of gender, solid backgrounds of expertise and experience, and senior officials of the government should not be excluded from that.

To answer more specifically the Member’s question about the mandate review, board composition is a subject of discussion and debate in that review. I cannot preclude the results of that review. It is one of the issues that is being addressed. I would take issue with the Member, however, that senior officials of government should be disqualified from sitting on public boards when they have something substantial to contribute.

Question re: Yukon Development Corporation/former president’s statement

Mr. Lang: The difficulty we have is that we have appointed top civil servants to a particular board. Whether it is correct or not, it is perceived that they have directions from the government about how to conduct the business of the Yukon Development Corporation. One of the major areas is the question of the dividends paid by Yukon Energy Corporation to the Yukon Development Corporation, which we have witnessed. It is $16 million going for something other than energy development in this territory.

In the statement made by the ex-president of the Yukon Development Corporation, he makes it very clear that the board of directors should have clear instructions about whether or not the profits should be rebated to the customers or given to the government as dividends. This could be dealt with in the government’s upcoming energy policy review. Will the Minister undertake that upon the conclusion of the review to give this House a clear, definitive statement about exactly what the policy position of the government is going to be about the dividends paid by the electrical consumers of the territory.

Hon. Mr. Byblow: I wish the Member, instead of making allegations and creating false perceptions, would identify the incident and the specific interference that is taking place. It is not taking place. The corporations operate under broad policy guidelines under a strict mandate provided by this House for their operations. The suggestion of interference by alleging that Deputy Ministers are giving marching orders as to what kinds of decisions boards must take is ludicrous. It is a totally inappropriate statement to make about the quality of the people on that board.

With respect to the dividends, the board has a dividend policy. The board has every entitlement to change that policy. The board functions in that independent role. It is going to be the board that will ultimately determine the nature of dividends, if and when they choose to have them issued.

Mr. Lang: In view of the problems the Yukon Development Corporation has faced over the past number of years since its inception, and in view of the interference that has gone on, not perceived ...

Some Hon. Member: (Inaudible)

Mr. Lang: ... $16 million worth of interference to start with. I want to ask the Minister once again: is he going to review the question of the dividends and how they can be spent? Will he be coming back to this House to give a clear, concise policy in respect to the government’s position on the utilization of the excess profits made through the generation of electricity?

Hon. Mr. Byblow: Mr. Speaker, I want you to allow this Member 14 supplementaries so that I can get it through to him that the board has a dividend policy. The board has established a dividend policy. It is an accepted dividend policy. There has been no dividend issued for this past year. No dividend was issued a year ago. Three years ago, there was a dividend issued; it had no relation to Watson Lake, as Members would allege. The corporation, based on the investment it made in the Energy Corporation of some $40 million, is entitled to a rate of return.

At the time when there were surplus funds, the corporation chose to issue a dividend. Since then, it has not, because it has developed a capital development program. It has injected money into rate subsidy programs. The policy is clear - it is stated; it is being followed and it exists.

Mr. Lang: If the listeners believe what the Minister has just said to this House, then I am sure they are more than prepared to buy a bridge from the Minister, too.

In the statement issued by the ex-president, the individual working with the corporation, he states very clearly that instructions should be issued by the government regarding the profits and the use of dividends. Is the Minister saying that the ex-president does not know of what he speaks?

Hon. Mr. Byblow: I would not want to reflect upon the quality of opinion voiced by either the Member or the ex-president. Let me say this. The Member seems to be wrapped up in a pretty serious contradiction. On the one hand, he is alleging that the government interferes in the operations of a corporation, in spite of the history on the subject, which is quite clear about how that corporation runs and how the Energy Corporation is a subsidiary of the Development Corporation. On the other hand, he stands up and asks, if we are going to give direction, as a representative of the government, to the corporation?

On the one hand, he is arguing that you should give direction, you should interfere and you should tell the corporation what to do. Then on the other hand, he says, “You are interfering and you should not do that.” The Member has to decide which side of the fence he is coming down on.

Question re: Yukon Development Corporation/former president’s statement

Mr. Nordling: I have a question responsible for the Yukon Energy Corporation. He hoped that the prior questioner had 14 supplementaries so he could explain it. Well, I will give him three more tries. I would like to follow up on exactly the same issue.

One of the biggest concerns that I have, and one of the areas where there is certainly a perception of political interference in the YEC, is the payment of that $16 million dividend.

Who made the decision to pay that dividend from the Energy Corporation to the Development Corporation and why was that decision made, rather than leave that money in retained earnings to be used on the bill-relief program and to develop new sources of energy?

Hon. Mr. Byblow: I think the Member recognizes that I was not there at the time. The answer has been provided repeatedly to the Member since that time. The decision to issue the dividends was made by the board of directors. The Member knows that the board of directors of both YDC and YEC are the same.

Mr. Nordling: We will go a little bit further in order to clear up this perception we in the public have.

We have heard that the dividends from the YEC were not used to finance the Watson Lake sawmill because this government put $30 million into the formation of the YDC and YEC.

I would like to ask the present Minister if the Minister responsible for the YEC at that time told the board that the government wanted its money back from its initial investment and that dividends should be paid from the YEC to the Yukon Development Corporation?

Hon. Mr. Byblow: The Member knows that in the absence of my presence at the time, I cannot answer the question in any way. But, clearly, based on what I have already told the Member, that could not have been the case. The board of directors made the decision with respect to the dividends. The Member has to be corrected about his $30 million figure. This government provided the Yukon Development Corporation with a total of $43 million, which is documented in financial statements tabled in this House.

I suspect that what the Member is saying is that the Development Corporation could have invested $43 million and ought never to get a return on that investment, even though every utility in the country is entitled to a rate of return.

What the Member has to tell me, in the course of his next 12 supplementaries, is whether or not he believes that the Yukon Energy Corporation is not entitled to a rate of return and is not entitled to issue any dividends to its parent company. Does he believe that there should be a different set of rules for the Yukon Energy Corporation than rules that exist across the country for similar organizations?

Mr. Nordling: The Minister ducked, and missed the point completely. I take it from the Minister’s answer that he is telling me that the Minister did not instruct the Yukon Energy Corporation board to pay that dividend.

I would like to ask the Minister, if at the time the executive director of the Yukon Development Corporation and the Yukon Energy Corporation was the Deputy Minister of Economic Development in this government? I would like to ask what role that executive director and Deputy Minister played in the payment of the dividends from the Yukon Energy Corporation to the Yukon Development Corporation.

Hon. Mr. Byblow: I can only make the same assumption that I suspect the Member has made. The executive director was the senior officer of the corporation. He would perhaps have been the equivalent to today’s president, the chief executive officer, and played the role accordingly. This was in a period of lean operation.

Question re: Yukon Development Corporation/former president’s statement

Mr. Phelps: I have to enter into this exchange at this point. I feel rather sorry for the Minister responsible for the Yukon Energy Corporation and the Yukon Development Corporation because, of course, once all of the dirty work was done, he suddenly found that he was the Minister of these corporations and he is the apologist for the previous Minister, his boss.

The Minister speaks about this being a lean, mean machine. I submit that it is a big, fat washing machine - that is what it really is - and it is busy laundering the profits from the Yukon Energy Corporation in a style and manner that would make the best of the Mafia bosses envious.

Will the Minister admit that most of the equity that the Yukon Development Corporation is claiming - and government is claiming - in the Yukon Energy Corporation, is really largely the write-off of the debts by the Government of Canada, which were assigned to the government, which, in turn assigned them to - placed them in - the Yukon Development Corporation?

Hon. Mr. Byblow: It seems to me that the Member for Hootalinqua was in the House at the time that the entire debate took place. I recall the Member, in a previous debate, suggested that he initiated the exercise that began the transfer of NCPC to the people of the Yukon. So it seems to me that the Member knows precisely what corporate arrangement took place in 1987 when the NCPC assets were acquired by Yukon Energy. He knows precisely the deal in terms of the cash injection, in terms of the notes and debentures issued, and in terms of the total assets that were acquired.

Mr. Phelps: You bet I know, but the public does not know, and I want the Minister to tell us right now whether he will admit that most of this so-called equity that they are claiming was really the write-off of the debts by the Government of Canada - the promissory notes.

Hon. Mr. Byblow: That is not accurate. The equity that was acquired was part of the transaction that occurred in the transfer of the assets, so to suggest that somehow these assets have a write-off quantity is inappropriate, because the assets are on the books; they are listed at value and the Member was here at the time that all of this transaction was taking place.

Mr. Phelps: The Minister just put his finger, unwittingly, on the button. The equity was a result of the transaction. It was a result of the Government of Canada writing off about half the debts that were owed by NCPC to the Government of Canada. The Minister is right on that score, but how does the Minister feel justified in bleeding the Yukon Energy Corporation of its profits when the Government of the Yukon put in very little equity?

Hon. Mr. Byblow: The Member was here at the time. I was not. He should have a better knowledge of these things than I. He knows very well that the $39 million is being repaid on an annual basis. Is he suggesting that does not constitute some debt obligation? Is he suggesting that the promissory note for an additional $15 million is somehow a forgiven asset? The Member cannot have it both ways. There was an investment made by this government, through the Yukon Development Corporation, in the acquisition of that asset. It was an investment on behalf of the people of the Yukon by the people of the Yukon. Where the Member gets off on the suggestion that somehow we should write off some $50 million worth of acquired debt is completely baffling.

Question re: Yukon Energy Corporation/former president’s statement

Mr. Phelps: The Minister is obviously wrong on that one. That can be easily proven. Let us get on to the most important part of this exchange. We have this letter from Jack Cable, dated December 16, to the Minister. There is no question that he has some suggestions with regard to making the situation arm’s length. One of those suggestions is that government have Yukon Energy Corporation report directly to a committee of the Legislative Assembly and give that committee the power to appoint the board of directors. Why would he suggest that if he were not concerned about the present relationship between the government and the Yukon Energy Corporation?

Hon. Mr. Byblow: I suppose a rhetorical question has to be asked. When the ex-president sat on the board of NCPC, I do not recall him saying that NCPC should report to a board of the House of Commons. I am sure that the Member is not suggesting that he supports that point of view. It would be quite obvious to me that the chain of accountability would be lost if a corporation had to report to a committee of the House.

The corporation is responsible and accountable to the people of the Yukon through the Yukon. This is an agency of the government and the accountability chain stops here. Reporting to a committee of the House would clearly impede the accountability process, so I think that suggestion, put simply, is very naive.

Mr. Phelps: That is just bloody amazing. Here we have a Minister, standing in his place and suggesting that the government is not accountable to the Legislative Assembly or to the people of the Yukon. That is the logical place where his argument ends. He just missed the final step, and I am submitting that obviously the reason that this suggestion is made in black and white by the last president of the corporation is because he is dreadfully concerned about ...

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

Mr. Phelps: ... the use of the corporation as a political tool. Would the Minister not agree that if this suggestion were followed we would not have the bizarre situation of the government Minister, the Leader of the Government at the time, sending out all the wonderful, positive announcements on the corporation letterhead just before the election and during the election, yet when bad news comes ...

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

Mr. Phelps: ... he does not bother to send such messages. Would the Minister not agree that having the first suggestion here followed would end that kind of terrible, terrible misuse and abuse of this corporation and the people of the territory?

Hon. Mr. Byblow: I have to again pose the rhetorical question to the Member. Where is the terrible misuse and abuse? Where is it occurring? We have a competently run energy corporation; we have an efficient energy corporation; we have a well-run development corporation; we have a corporation that is reviewing its mandate, reviewing its role and reviewing its direction. It is a corporation that reports to me through the board of directors who, in turn, through this government, reports to this House. So, I fail to see what the Member is getting at when he says that reporting to a committee of the House is somehow more accountable than reporting to this government, which has been charged and mandated to carry out the public interest of Yukon people.

Mr. Phelps: I love when the Minister, in attempting to defend what has gone on before him, tries to give us some logical arguments and answers and has to jump, after painful pauses, from non sequitur to non sequitur.

I would like to ask whether or not the second suggestion, replacing public servants on the board with members of the general public, would not be directed primarily at the problem of government interference through these public servants, which has been witnessed by virtually every Yukoner.

Hon. Mr. Byblow: I am really in a quandary as to what position the Yukon Party is coming from. I pose the rhetorical question: is it the position of the Yukon Party that Crown corporations should be accountable to committees of the Legislature and not to Ministers?

Is ministerial accountability something that Members are throwing out the window?

Some Hon. Member: (Inaudible)

Hon. Mr. Byblow: That is in response to the Member’s preamble; let me respond to the question, even though I have already responded to the issue of board membership.

The suggestion of interference through board members who may be civil servants is completely ludicrous. If the Member is suggesting that senior civil servants who happen to be appointed to certain boards are somehow incompetent or inadequate, or should not be appointed to those boards or for some reason should not be qualified, then let him stand up and say that that is his position. Let him stand up and say that senior officials of the government should not be allowed to sit on any boards in the Yukon.

Question re: Yukon Development Corporation/former president’s statement

Mr. Phelps: I think that the Minister is deliberately trying to twist the question around. The real issue is that the Minister sends his employees there as watchdogs to report back and run the board and to insist that the Minister actually, through his puppet strings, runs the board. That is what the complaint is and that is obviously what has sparked the suggestion referred to in Mr. Cable’s letter dated December 16, 1991.

The Minister, in his answer to the previous question, suggested that the YDC has been run terribly efficiently - a model corporation. If we go back and start talking about the Watson Lake sawmill, we get crocodile tears from the other side. “Oh no, do not talk to us about that again. You have already picked on us enough. We really meant well and we do not want to hear any more about it.” Mind you, the same side can stand up and try to answer questions we ask by relating what a previous government did 10 years ago, but we should not be asking them about the Watson Lake sawmill.

Will the Minister not agree that Mr. Cable is being very kind and very sensitive in not bringing out the sordid history of the Watson Lake sawmill? Would the Minister not agree that he is being very kind in his letter?

Hon. Mr. Byblow: I think the letter does indeed suggest that further debate about the Watson Lake sawmill would be unproductive, but Members insist on bringing it up time and time again, through every available soap-box that they can muster.

The Member might make mockery of the investment in Watson Lake but the Member knows that the investment in Watson Lake was made on behalf of the people of Watson Lake, on behalf of the Member for Watson Lake, and through the pleadings of Members opposite. Members supported the investment in Watson Lake.

It is easy now to turn around and say it was a bad decision and that it did not work out the way it should have. At the time, however, they supported the decision. Had Watson Lake turned out differently, they would not be bringing it up. It is because they think that a mistake was made. Well, I do not think a mistake was made. I think some things were not done right, but a mistake was not made.

Mr. Phelps: It did not go absolutely broke and the mill shut down and he is saying that the forest industry was not set back about 10 years by the ineptitude and pure negligence of the Yukon Development Corporation and this government.

One thing he forgot to mention, though, was who paid for all the losses. He forgot to mention that it was electrical consumers who paid for the losses because the Minister himself admitted that the dividends went to pay for the losses at Watson Lake.

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

Mr. Phelps: I will ask a very fast question, despite the fact that the Minister’s boss, the former Minister responsible, wants to answer. He has placed, I gather, the Minister in the awkward position of being his apologist for all of the terrible mistakes made under his stewardship of the department - but that is politics.

Will the Minister tell us whether or not he agrees with the third suggestion of Mr. Cable, that “As the board of directors is responsible for the affairs of the corporation, hiring all employees, including the president, should be done by the board or under the board’s direction, independently of the Public Service Commission.”

Does he agree with that proposition?

Hon. Mr. Byblow: The Member went on at some length in his preamble on the subject of dividends in Watson Lake. As many times as the Members want to try and say it, it will not make the statement true, that the ratepayers of the Yukon paid for the losses at Watson Lake. When the dividends were drawn from the Yukon Energy Corporation, they were not earmarked for Watson Lake. The entire intent behind the formation of the Yukon Development Corporation was to actively assist in the development of the territory and to function as a vehicle for implementing government economic policy. In that broad framework, the investment was made in Watson Lake, supported by Members opposite.

It was a community that was desperate, a community that now, four years later, has survived that particular depression and can meet today’s economic goals of the region; it can handle the Sa Dena Hes mine; it can handle the exploration.

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

Hon. Mr. Byblow: That investment, in those terms, was a useful investment.

Mr. Phelps: The Minister must be rather interested in the fourth suggestion of Mr. Cable: split off Yukon Energy Corporation from Yukon Development Corporation. That is his suggestion, and I am wondering whether or not the Minister would agree that the bill I presented in this House to amend the Yukon Development Corporation Act, and which was narrowly defeated - narrowly defeated - that this recommendation of Mr. Cable is even more drastic, quite a bit more drastic, than the rather benign suggestion I had and put forward in the bill that was narrowly defeated, perhaps primarily due to the lack of goodwill on the side opposite?

Hon. Mr. Byblow: The only suggestion I am hearing from Members opposite is that the Development Corporation ought to make a $43 million investment and never expect a return on that investment. That is what the Members opposite are saying.

The Members must really have a dearth of questions for Question Period today because they are recycling questions I have already answered. I have spoken to the issue of board membership two or three times. I have spoken already to the issue of splitting off the two corporations. If Members want to hear my answers repeated, I will be quite pleased to provide them. It may well be an eventual evolution for the two corporations to be split off but Members were in the House when their creation took place and there was an intention, a deliberate intention, to have the two corporations together to save on efficiencies and to save on expenses, because it was going to be a lean machine. But Members do not want to hear about a lean machine; they would rather spend, spend, spend. That is what we are hearing from Members opposite.

Question re: Yukon Development Corporation/former president’s statement

Mr. Nordling: I am going to help the Minister out by asking a question he has not answered yet. The Minister wants to know where the misuse and abuse is that people are so concerned about. What I would like to do for the Minister is go way back to the beginning, when Yukon Development Corporation and Yukon Energy Corporation were formed. The Executive Director of the Yukon Energy Corporation and Yukon Development Corporation at that time happened to also be the Deputy Minister of the Department of Economic Development. He reported to the Government Leader, who at the time was not only the Minister of Economic Development, but also the Minister responsible for the Yukon Development Corporation and the Yukon Energy Corporation. At that time, the president of the board had close political connections to the NDP.

The Government Leader wants the name. I believe it was David Joe.

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

Mr. Nordling: Yes. My question to the Minister is: what role did the executive director play in arranging the dividend that was paid from the Yukon Energy Corporation to the Yukon Development Corporation?

Hon. Mr. Byblow: Given that the matters surrounding the question took place several years ago when I was neither in the House or the Minister responsible, perhaps the Minister would permit me to take notice on the question.

Mr. Nordling: I will look forward to the Minister coming back with a response to that. Let me add one more thing to that cozy little arrangement. Sitting on that board when those dividends were made was none other than the recently resigned president. The recently resigned president expressed concern about how that transaction took place.

In his letter...

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

Mr. Nordling: Yes. If the Minister does not know the answer, I would like to ask if he would also investigate further the transaction involving those dividends that the recently resigned president has expressed concern about in his letter.

Hon. Mr. Byblow: What happened to the real issues that are taking place in the Yukon today? What has happened to real services to real people?

I recognize the Members’ rights to ask any questions that they chose, but to query for 40 minutes about what took place three to four years ago, at a time when I was neither in the House nor the Minister responsible, surely could be the subject of a written question or surely could be the subject of providing notice to me on those questions. I really question where Members are coming from in recognizing the real issues of the day.

Mr. Nordling: I know exactly what would have happened had I got up and asked the former Minister in charge of the Yukon Energy Corporation; the new Minister would have jumped up and said, “I am in charge of that now; ask me.” So that is what we are doing and if the Minister has to do some research, we will wait for him.

The Minister wants to know what happened to real services to real people? I would like to ask the Minister if having $16 million disappear that would have been available for the bill-relief program for electrical consumers, is not a real service that involves real people?

Hon. Mr. Byblow: I think that the Member has tried to pose that question several times in the past, and I have already tabled a legislative return that spoke to the issue of rate subsidies and the issue of capital investment and upgrading of a utility.

It is quite clear that anytime you have funds earmarked for a specific purpose, they can be used for that purpose. At a time when those purposes are not recognized or deemed as current, then a board is entitled to do with those returns what it chooses. Rates of return today are calculated on projected costs tomorrow. That is the principle of utilities across the country. The Members can dredge up all that they want from three and four years ago.

It is getting pretty boring.

Notice of Business

Hon. Mr. Webster: Pursuant to Standing Order 14.2(7), I would inform the House that the Government Private Members do not wish to identify any items standing under the heading of Government Private Members’ Business, to be called on Wednesday, December 18. The House, therefore, when Orders of the Day are called on Wednesday, will proceed directly to government-designated business.

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

Speaker: It has been moved by the Hon. Government House Leader that the Speaker do not leave the Chair and that the House resolve into Committee of the Whole.

Motion agreed to

Speaker leaves the Chair


Chair: I will now call Committee of the Whole to order and declare a brief recess.


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

Bill No. 19, First Appropriation Act, 1992-93 - continued

Public Service Commission - continued

Hon. Mr. McDonald: In the session yesterday afternoon there was some brief discussion about competition appeals. I have some new information that Mrs. Firth may be interested in. During negotiation of the 1992-93 collective agreement, language was added to ensure that recruitment delegated to departments would be done as fairly as possible.

At that time, a clause was added to the collective agreement, and it reads as follows: “Any person sitting as a member of a selection panel must be approved by the Public Service Commission. At a minimum, the chairperson of the selection panel must have taken and successfully completed the selection skills course conducted by the Public Service Commission. All selection panel members, before interviewing any candidate, must sign the Public Service Commission conflict of interest form indicating he/she foresees no conflict of interest in sitting as a member of the selection panel.”

Now, in terms of the number of appeals that have been heard, in 1989-90 there were 14 appeals, in 1990-91, there were 22 appeals, and in 1991 to now there were four appeals.

The vast majority of those appeals were withdrawn, cancelled or dismissed. It indicates that there is a small number of appeals. The fact is that appeals would count less than one percent for all of the job competitions.

I believe that is the answer to the question that the Member asked.

Mrs. Firth: I thank the Minister for that information. As I said yesterday, I will follow up by keeping track of the numbers of complaints I get. I will also keep track of the particular jobs that are applied for. Then, I think we can discuss it again when the House next sits.

I want to follow up with the list of secondments that the Minister provided us with yesterday. I also would like to ask the Minister if he could give us a list of acting long-term appointments. I can appreciate that there may be quite a few appointments in an acting capacity that would be on a short-term for people who are on holidays and so forth, but what I am looking for are the long-term ones. An example is the Deputy Minister of Community and Transportation Services, who is on leave for one year. That will be an acting appointment for a long term. I would like to have anything that is within that kind of range.

I went through the secondment list quite thoroughly, trying to determine what kind of direction the government was going here. The Minister has made some reference to job ghettos, training on the job and so on. A lot of the positions are AR and MG positions. Most of them are at the mid or higher levels. The concern I have is that there were two jobs identified that I did not see any previous existing position for. It looks to me like they are new jobs. They are the senior policy analyst in Government Services; the Yukon Housing Corporation manager of housing operations went to the senior policy analyst position. I did not see a position in Government Services for that job. In the Executive Council Office, there was a senior advisor on national issues and that person went to Economic Development to become a senior advisor on special projects.

The point we keep trying to make with this is that these jobs are being given by the Deputy Ministers without competition and that other employees perceive this as an unfair situation. It is definitely unfair in the sense of being able to compete for the jobs.

Perhaps the Minister can address those two positions and tell me if they are in fact new jobs? Why would they not have gone out to competition and why were they just given out on a secondment basis?

Hon. Mr. McDonald: I cannot answer that question. I will have to get back to the Member. I am not familiar with either of those positions, but I can find out more about what the specific positions entail and more about the reasons why the positions were offered on a secondment basis.

I think that I provided, fairly adequately, the reasons for secondments last evening. I do not want to bore the Member by repeating, once again, the general reasons for secondments.

The only statement that I would like to reiterate is that of job ghettos. When one speaks of employment equity, a goal that the government would like to address, one has to understand that job ghettos can exist at various levels of the public service. There are ceilings in terms of job promotions that are sometimes reached by some people without the ability to move beyond a particular job category. There have been concerns that not only are people at the clerical end considered to be in a job ghetto, but there are also a number of other problems that have been identified in the public service, particularly, the ability of people - women in particular - who tend to populate the administrative sections of departments, being elevated to senior levels of the departments. There should be some opportunity for them to acquire experience in other areas so that they may be considered for promotion in the future.

I will have to ask the department about those two positions before I can respond.

Mrs. Firth: The things that the Minister has raised are exactly why I am concerned about the list that he has given me. The objectives that he enunciates are not consistent with the positions that have been seconded on the list.

The Minister is talking about advancing women to higher positions, and getting them out of the job ghettos, providing training opportunities and so on. However, when I go through the list, it does not apply to that objective. It includes all categories of people. Many of the positions are filled by male employees, and I was concerned about the two new positions that were created. It is not fair if two new positions were created and someone was seconded to those positions, because if they ever become full-time positions those people get to apply for those positions and have the advantage over everyone else, and they end up getting the jobs. It becomes a hand selection process and the Deputy Minister has the ability to second people to these positions.

Also, I noted that another one of the positions, the health and social services planner for the long-term care, was in the Department of Health and Social Services, yet he was the architect and project manager for the Yukon Housing Corporation, I believe, to oversee the extended care facility project and that person has now left. I do not know if that position is vacant in both departments or what is happening, because this position was definitely listed in both departments in the phone directory and the same person was listed.

I do not know what that means, whether the Health and Social Services was paying the salary and the person was working out of the Yukon Housing Corporation or what happened, but it is those kinds of irregularities that I have found in the list, that do not support the objectives of the Minister.

Of course, the other concern that I have brought forward is the fact that there have been four assistant deputy minister positions filled either by acting appointments or by secondments, and I think a couple of those positions were designated for the purposes that the Minister said, but it seems that they are not going to open competition now that the Deputy Ministers are being allowed to second people to those positions. I do not think that is fair, and I think that a lot of employees within the government do not feel that is a fair method of assigning people either.

It is consistent with the issue I raised with the Minister about communications coordinators being hired by the Deputy Minister for a short term, then applying for the job when it was made a full-time job and getting that job; the Minister agreed that that may not be the fairest process and that that person would have an advantage. It would seem that that is happening at much higher levels now, in jobs that pay very high salaries and carry with them a lot of prestige and advancement within the public service.

Hon. Mr. McDonald: I think it is important to point out at this time that the Member was mentioning the need to advance employment equity objectives. I did not mean to suggest that this was an initiative that was exclusively aimed at employment equity objectives. Certainly, those employment equity  objectives should be promoted, but I would remind the Member that the employment equity policy is only a very new creation and that secondments are not new; secondments have been used by the government for a long time, for years and years, long before we came to office, long before the employment equity policy was ever considered to be something that should be promoted. There were other objectives that would be specific to each case, I am sure, that are meant to be addressed in the form of a secondment such as a short work assignment. It is appropriate for a person with special skills who is required for a short period of time and, rather than fill the job permanently with a person with specialized skills, it is sometimes appropriate to second somebody into the job for a very particular period of time so that specific work can be completed and then the job filled on a permanent basis by somebody with more generic or different skills.

I think it is important to point out, too, that the activity of the secondments is actually fairly small within the government as a whole. The Member made the point last night that she thought the list of secondments was a long one. This is less than one percent of the workforce, but it is a mechanism that is anticipated in our regulations. It is a management tool anticipated in our regulations that is permitted in order to meet a variety of objectives, and employment equity is certainly one of those. I should say that I do think male employees are entitled to training as well, and that people in certain jobs that do not have an easy career path for advancement should also be considered candidates for training. I do not want to make it sound as though, if it is not a woman in the training assignment, it is not legitimate. That is not legitimate in my view.

In any case, I understand what the Member is saying. Where there is a subterranean intention to advance one person’s job opportunities without going through the normal competition process - as I say, where there is a subterranean intention to appoint the person permanently to a particular job - then that is not a legitimate use of secondments. I cannot say that that has never been done but it is certainly not the policy of the government to encourage that to happen. However, the use of secondments or temporary transfers is, in my view, a legitimate management tool to achieve the objectives that I have stated.

Mrs. Firth: I just bring it to the Minister’s attention and he can do with it what he wants. I have some concerns about it and I have heard a lot of complaints about it within the public service. Seventeen positions might not sound like a lot in percentage terms, but I think it is a lot and it has quite a large effect in the public service here.

The Minister said he was unfamiliar with the two ADM positions in Finance and Health and Social Services that had been given without competition. The one in Health and Social Services has been given on an acting appointment basis. The ADM of budget and fiscal relations has, I guess, been awarded to an individual from Toronto and was not advertised or did not go to competition. Did he check on that particular job for us?

Hon. Mr. McDonald: Yes, I did. The person is not a secondment and is not appointed on an acting basis. It was appointed as an exemption to competition, which is permissible, I understand, under the act. This person has had extensive experience within the Yukon government as Deputy Minister of Tourism and as a senior person in Finance, in the past. There was an exemption made in this case.

Mrs. Firth: That is another example of how things can be perceived to not be fair by other people in the Yukon or within the Public Service Commission. There is nothing adverse reflecting upon the individual; rather, it is the way the government went about hiring the person. I would have preferred to have seen the job become open for competition and allow Yukoners who are either still employees with this government or still living here in the Yukon to apply for the job before exempting it to competition.

Hon. Mr. McDonald: If the Member is expecting a response, I can only say that exemptions from competitions is a fairly rare occurance. Again, it is not a brand new occurance. In fact, it is number one on the list in the act of how people can be appointed to positions. Certainly, it is anticipated that this can happen.

The general proposition the Member makes is that exemptions from competitions are denying people an opportunity to apply for jobs. That perception is a real one. Exemptions to competitions should only be made on the rarest of occasions and only for very good reasons. I would leave it up to the Department of Finance to explain why that might have been the case this particular time. I understand that they feel they have extremely good reasons. They feel the person is extremely qualified, and probably uniquely qualified, for this particular job.

Mrs. Firth: The issue is not with the qualifications, it is with the process and why it was done. I would like to ask the Minister about the individual who was doing that job in an acting capacity for some time. Was that individual offered that position? I know that individual has since moved to another job. I have not had any communication with the individual with respect to this issue, but I think it is only fair to ask that since someone had been doing it in an acting capacity for so long, were they offered the position on a permanent basis prior to it being exempted from competition?

Hon. Mr. McDonald: I am not close enough to the situation to know. I think I know, but I am not going to pretend to answer for the Department of Finance. I will have to ask them to respond to the Member themselves.

Mrs. Firth: Could I have confidence that the Minister will get a written response for me? Will he give direction to the Department of Finance to provide that rationale for me or do I have to write to them myself? Is he going to write for some written information for himself as Minister for the PSC, and then he could pass it on to me? How is this going to work?

Hon. Mr. McDonald: I will do it.

Chair: We will proceed line by line.

On Staffing

On Operation & Maintenance

On Staffing Administration

Staffing Administration in the amount of $556,000 agreed to

On Staffing Operations

Staffing Operations in the amount of $223,000 agreed to

Operation and Maintenance in the amount of $779,000 agreed to

Staffing agreed to

On Employee Records and Pensions

On Operation and Maintenance

On Administration

Administration in the amount of $498,000 agreed to

Operation and Maintenance in the amount of $498,000 agreed to

Employee Records and Pensions agreed to

On Labour Relations

On Operation and Maintenance

On Administration

Administration in the amount of $281,000 agreed to

On Yukon Government Employees Union/Public Service Alliance of Canada

Yukon Government Employees Union/Public Service Alliance of Canada in the amount of $122,000 agreed to

On Yukon Teachers Association

Yukon Teachers Association in the amount of $5,000 agreed to

On Managerial/Confidential Exclusion

Managerial/Confidential Exclusion in the amount of $5,000 agreed to

On Long Service Awards

Long Service Awards in the amount of $39,000 agreed to

On Indemnification

Indemnification in the amount of $10,000 agreed to

Operation and Maintenance in the amount of $462,000 agreed to

Labour Relations agreed to

On Workers Compensation Fund

On Operation and Maintenance

On Workers Compensation Payments

Mrs. Firth: I would like to ask the Minister some questions about the Workers Compensation Board and the review. Is it appropriate that I ask it at this time?

Hon. Mr. McDonald: As far as I am concerned, the Member can ask anything she wants.

Mrs. Firth: I would like to ask the Minister about the Workers Compensation Board and the direction in which the whole department is going. I understand from the annual report that there have been nine new person years added to the complement of the Workers Compensation Board. That number is indicated in its annual report in reference to a message from the president. “Acting on the advice from a Whitehorse consulting firm, the board recommended creating two new branches, for a total of five branches, and identified nine new staff positions.”

Can the Minister tell us if all those positions have been filled or if they are going to be filled? Have the full recommendations of this consulting firm been implemented?

Hon. Mr. McDonald: The Member is going to have to trust my memory, as I do not have anything from the Workers Compensation Board in front of me. If I am wrong, then I will get back to the Member.

My understanding is that some of the positions that were approved, were approved for occupational health and safety. The positions approved for the Workers Compensation Board have been filled. I would have to ask the Workers Compensation Board about the status of all the recommendations. I would like to point out that the characterization of the Workers Compensation Board as a department is a misnomer, of course. They are a very independent corporation. I will put the question to them.

I will come back with that particular information for the Member.

Mrs. Firth: Maybe I could make a suggestion to the Minister. There is a lot of change happening right now within the Workers Compensation Board, such as the new building, the new person years, the reviews that have been done, obviously by the consulting firm, and now the reorganization and the public consultation process that they are going through.

In order for us to be able to ask questions as Members, maybe we should have them in as witnesses. I guess that it is too late for this budget session, but I cannot remember if we have ever had the Workers Compensation Board appear before us as witnesses, other than when we were doing the change to the legislation and had the actuarial question to consider.

In light of all of the changes that are being made and the whole public consultation process, I am particularly interested in what is happening and I have a lot of questions directed to me from business, particularly since the new building is going up, everyone wants to know what has happened and why we need this new facility.

Can the Minister see any opportunity for us as Members to have the president of the board available so that we can ask some specific questions and perhaps get some idea of what the future of the Workers Compensation Board will be?

Hon. Mr. McDonald: There is going to be a very lengthy opportunity to do exactly that in the spring. It will be my intention to table new legislation, that would identify the foundation on which the Workers Compensation Board operates. Any details with respect to that legislation, of course, I will answer. I will not expect the board to answer that, as the legislation is, of course, Cabinet’s responsibility; I am the spokesperson for it.

Perhaps at that time or during the supplementary, if the Member wants to ask the Workers Compensation Board to come forward, I do not have any particular problem with that process.

Certainly, during the review of the act, there will be ample opportunity to analyze every last detail of the Workers Compensation Board operations. I will certainly be doing what I can to bone up on all of the details of everything that has been happening so that I can defend the terms of the Workers Compensation Act.

I am certain that every question that the Member can put at that time will be answered to her satisfaction. At the same time, if there are any detailed questions that the Member would like to put to the board in order to prepare for that discussion, I would encourage her to put the questions now or in the near future, so that detailed answers can be provided in advance of general debate.

Mrs. Firth: Maybe I will take this opportunity to put a few questions on the record so that I can get some information back prior to the bill being brought in, because I am anticipating that it is going to be quite a major piece of legislation and I prefer to have that information prior to having to discuss the bill itself.

I wanted to know, specifically, about the consulting firm that did the consultations and the review, what the objectives were and in what direction they recommended that the Workers Compensation Board head. I noticed, according to the annual report, that they talked about a policy and planning branch to develop policy and programs to address future needs of the system. I would be interested in seeing what policies and programs they have identified.

Two new positions were created: policy and planning coordinator and a research analyst. I would like to have copies of all of the new positions’ job descriptions so we can get some kind of idea of how they fit into the system prior to the changes.

I would also like to have a brief outline of the direction of the changes in the legislation. I am not asking the Minister to tell us what all of the changes are going to be but whether the legislative changes are reflected by the review, whether there are going to be changes in authorities and reporting authorities’ relationships and whether that has come out of the review as well.

Perhaps, if the board could provide us a copy with the review, that would help. I do not know if they would be prepared to do that, or not, but that would certainly assist us in trying to determine what direction they are going in.

I would like to know what the associated costs are with respect to all of the new person years, as well as the ongoing operating and maintenance costs for the new facility.

I think that is about it. It is just to give us some comparison of what was there before under the administration of the former president of the Workers Compensation Board, who I gather ran quite a tight ship and was quite tight with the finances and the person years, and so on, and what is in place now and what the future of the whole Workers Compensation Board holds for Yukoners.

Hon. Mr. McDonald: I will address the last point first. The previous permanent president of the Workers Compensation Board ran a fairly tight ship, but expenditures are approved by the board and we should not assume that the president’s position is exclusively responsible for financial controls. Having said that, I would not want to give the impression that the previous permanent president was not anticipating the changes that are happening now. Much of the study work and some of the changes that are taking place now were initiated by the previous board and the previous president, who were acknowledging that a change in mandate was required. I would not want to make it seem as though the previous president had nothing to do with the good changes that are taking place now or have been taking place over the last few years.

With respect to the administrative detail, I will ask the Workers Compensation Board to provide that information for the Member, including the person years, the job descriptions, the information about the building, the consulting firm, and all that sort of thing. I will point out that the policy planning section of the board right now is very much focused on the act’s development; it has been a very public process and a highly participatory one - I know there is at least one Member on the other side, on the opposition benches, who has been so good as to comment rather extensively on the act already in order to provide the board staff with some indication of what some of the current problems and concerns are with the existing act.

I am of course in no position whatsoever to start anticipating what the drafting committee and the Cabinet are going to decide with respect to the terms of the legislation. That information will have to come ultimately when the act is tabled in the House and there will be plenty of time for Members to roll their sleeves up and get into the detail.

It will be my intention, of course - and it is obvious, given the way the review process has been structured - to bring a balanced act into the Legislature that reflects the interests of both the employers and employees.

There is a great deal of common ground in the desire for some changes. There are some differences of opinion. I am hoping the drafting committee can resolve some of those differences of opinion. The drafting committee is made up of employers and employees as well as board staff.

If the Member wants to get a preview of what the drafting committee produces, a draft act will be made public for further public consultation. Everyone concerned - the public and interest groups - will have an opportunity to delve deeply into the details of the act and to pass comment on what further improvements might be made so that it becomes not just a good act, but a very good act.

I will undertake to provide a copy of the draft act to Members when it is released. If Members have comments they would like to make on the draft act, I would be more than happy to address them. If they have questions they would like to ask at that time, I would be more than happy to try to have them addressed, as well.

Mrs. Firth: I look forward to seeing the draft act. I know there was some deadline or some target of having the draft ready by November of this year. Is the draft act of the Workers Compensation Board on schedule? I know they wanted to have the draft act reviewed by the Cabinet sometime in November. The act is scheduled to be tabled in the spring of 1992. In order to get some public consultation, we would have to be able to see that draft by February or March, at the latest, depending upon when we come back into the Legislature.

Can the Minister tell us whether they are on target? Has the Minister seen a copy of the draft and when does he expect that we may get a copy of it?

Hon. Mr. McDonald: The draft act has not been drafted. We are on schedule with respect to the consultation. The public consultations, public meetings and meetings with individuals and interest groups, were scheduled to end in November, and they did end then. The information is being collated and organized now.

The drafting committee will be selected shortly. This committee will be working with the drafter, the board staff, the legal advisor and the medical advisor to the board on the drafting of the draft act. The committee will be charged with respecting a set of basic principles. These principles will be approved by Cabinet in early January. I anticipate that these principles will be very non-controversial. Within that context, the drafting committee will be asked to address approximately 40 to 50 different issues. They will be reviewing the draft legislation itself, discussing the issues and providing resolutions, as well as providing guidance to the draftsperson and the legal staff. Then, they will be reviewing the draft act prior to it becoming public. Cabinet will review the draft act prior to it going public as well. That is expected to occur in February.

There will be approximately six weeks when the draft act will be in the public, and there will be offers of meetings with persons who have already expressed an interest in the Workers Compensation legislation and have submitted some positions. The draft act will also be made public for anybody else who may express an interest and will want to comment. After the input is received, the drafting committee will once again be asked to consider the public comment on the draft and consider changes. Then the draft act will go through the internal processes of government and be approved by Cabinet prior to coming into the Legislature. It is a fairly comprehensive process and should receive lots of public scrutiny prior to hitting the floor of the House.

Workers Compensation Payments in the amount of $307,000 agreed to

Workers Compensation Fund agreed to

Chair: It appears that we have overlooked finance and administration on page 310, in the amount of $437,000.

On Finance and Administration

On Operation and Maintenance

On Administration

Administration in the amount of $437,000 agreed to

Finance and Administration agreed to

On Compensation

On Operation and Maintenance

On Administration

Administration in the amount of $586,000 agreed to

On Classification Appeals

Classification Appeals in the amount of $22,000 agreed to

Operation and Maintenance in the amount of $608,000 agreed to

Compensation agreed to

On Corporate Services and Employment Equity

On Operation and Maintenance

On Administration

Administration in the amount of $369,000 agreed to

On Native Training

Native Training in the amount of $474,000 agreed to

On Disabled Job Entry

Disabled Job Entry in the amount of nil agreed to

On Corporate Services

Hon. Mr. McDonald: The individuals who had been placed in 1991-92 were funded under this activity. They are now funded under staff development, which is now the broken-out training function of the old recruitment training branch.

Mrs. Firth: To correct the record, I referred to the new organization chart and I looked for that disabled job entry under the staff development. It is under corporate services and employment equity section. Has this been moved from staff development? Is it part of the reorganization? Staff development is a new branch in the department so it has moved over, too.

Hon. Mr. McDonald: My information was that it is in staff development, but I can check it.

Corporate Services in the amount of $40,000 agreed to

Operation and Maintenance in the amount of $883,000 agreed to

Corporate Services and Employment Equity agreed to

On Leave Accruals

On Operation and Maintenance

On Leave Liability

Leave Liability in the amount of $3,100,000 agreed to

Leave Accruals agreed to

On Staff Development

On Operation and Maintenance

On Administration

Administration in the amount of $382,000 agreed to

On Operations

Operations in the amount of $963,000 agreed to

On Evaluation and Monitoring

Evaluation and Monitoring in the amount of $30,000 agreed to

On Employee Assistance

Mrs. Firth: Perhaps I could just ask the Minister about that item again because this is staff development and it is not under here. There was $4,000 forecast last year. Did they not spend it? Are they not going to continue the program or what has happened? Why is it listed as a zero this year?

Hon. Mr. McDonald: The program is still going to be undertaken. What the Public Service Commission is doing now to enhance the program activity is actually developing a disabled-employee policy, which we currently do not have.

As I discussed with the Member for Porter Creek East, the expenditures that we currently make right now, for miscellaneous expenditures associated with making disabled employees comfortable in their work environment, is only sufficient for those who are recruited from outside of the public service. The disabled employees policy that we are also developing now to augment our initiatives in this area is designed to accommodate employees who are disabled within government and who deserve training to seek alternative employment within the government, rather than simply go on long-term disability.

Employee Assistance in the amount of $122,000 agreed to

Operation and Maintenance in the amount of $1,497,000 agreed to

Staff Development agreed to

Public Service Commission agreed to

Chair: Mr. Webster.

Hon. Mr. Webster: I move

THAT at 4:00 p.m until 5:30 p.m., Mr. Michael Sweatman, acting president of the Yukon Development Corporation, Mr. John Maissan, senior utilities engineer for the Yukon Energy Corporation, and Mr. Charles Sanderson, board member of the Yukon Development Corporation, appear as witnesses before Committee of the Whole during debate on the Yukon Development Corporation, Vote 22, Bill No. 19, First Appropriation Act, 1992-93.

Chair: Is Committee agreed?

Motion agreed to

Hon. Mr. Webster: I move

THAT the Assembly be empowered to sit from 7:30 p.m. until 9:30 p.m. tonight for the purpose of debating a motion for second reading of Bill No. 9, entitled Legislative Assembly Retirement Allowances Act, 1991, and for the purpose of considering Bill No. 19, entitled First Appropriation Act, 1992-93, in Committee of the Whole.

Motion agreed to

Chair: I will declare a break.


Chair: I will call Committee to order.

Yukon Development Corporation

Hon. Mr. Byblow: For the purposes of the budget and as requested by the Members, we have witnesses from the Yukon Development Corporation. Perhaps they could join us on the floor of the House at this time. We have the acting president, Mr. Sweatman and board member, Charles Sanderson. Currently detained and expected to join us shortly will be the senior utilities engineer, John Maissan. I believe the general subject matter is well known to us all, having just revisited it for the fortieth time a couple of hours ago.

I believe Mr. Sweatman has some opening remarks. Perhaps we could ask him to proceed.

Mr. Sweatman: Thank you, Madam Chair. We are pleased to be here to deal with any issues and financial matters relating to the Yukon Development Corporation and the Yukon Energy Corporation that may be of concern to you.

As you are aware, the Yukon Energy Corporation is a wholly owned subsidiary of the Yukon Development Corporation, which is in turn owned by the people of the Yukon through the government of the Yukon.

The board of directors of the Yukon Energy Corporation are the same as the Yukon Development Corporation, pursuant to Order-in-Council 1987/72. The corporation’s activities are governed partially by Order-in-Council 1987/72, which specifies that certain decisions made by the Yukon Energy Corporation must be approved by the Yukon Development Corporation and/or the Minister responsible for the corporation.

Several overriding considerations were kept in mind at all times. We must ensure that the operations are conducted in a business-like fashion. In the case of Yukon Energy Corporation, we must ensure that customers are well served and that the two corporations operate within the broad and specific policy directions of the government.

It is worthwhile noting major matters that have concerned the corporation since last year. The corporations have received and reviewed the report of the standing committee on public accounts on Yukon Development Corporation’s involvement in the Watson Lake sawmill. We have endeavoured to respond in a positive and constructive manner and incorporate its recommendations into Yukon Development Corporation’s operations. Major recommendations are being addressed now through the mandate review and through the hiring of staff to ensure that the activities of the corporation are adequately monitored. We expect that the revised mandate of the Yukon Development Corporation will be available for release in the spring of 1992.

The Yukon Energy Corporation has, over the past year, proceeded with a number of initiatives which will, in the long term, ensure that the corporation is able to meet the future needs of Yukon power consumers. Our major initiatives include a demand-side management program, and a report we have recently received from BC Hydro’s Power Smart Inc. indicates we could save up to eight megawatts of capacity over a five-year period. This is a substantial increase over our previously estimated savings of five megawatts. Yukon Energy Corporation’s strategic plan also includes a number of issues on the supply side in order to ensure that we are able to meet the challenges of the next several years.

Supply-side initiatives include the following: Surprise Lake, of seven to nine megawatts; the Mayo-Dawson transmission line, which will provide approximately 3.5 megawatts for diesel displacement in Dawson; a fresh look at the North Fork project; a peaking turbine for the Aishihik power plant, which would be up to five megawatts of additional capacity; the project located at Drury Creek, of 2.5 megawatts; and the Moon Lake project, which could provide as much as 16 megawatts of winter capacity.

Reports will be available in time for the capital hearing scheduled for this spring. There has been some criticism of the strategic plan for its faulty forecasts. I would like to state that the demand and energy forecasts have been revised on an annual basis. The latest forecast was included in the general rate application and a further revision will be completed in early 1992 and will be presented at the capital hearing to be held later in 1992.

We have also been called to task for not being able to supply major mining projects. I would like to clarify that, with respect to the Wellgreen project, we had been in discussion with All-North Resources and the reason that project has been shelved is the lack of available financing for their feasibility study. The Yukon Energy Corporation had received a copy of the pre-feasibility report and were fully aware of their power requirements and fully prepared to meet them.

We have also been involved in discussions with Western Copper Holdings and, contrary to statements made, are prepared to serve that load should it be required. It should be noted that the seasonal nature of their power load was not due to the lack of ability to serve but, rather, a consideration that was dictated by the process they intend to use and the weather. It is an ideal type of load for Yukon, using power in the seasons when power is more readily available. However, if they should require power year-round, we are ready, willing and able to meet this load.

Both corporations’ books of account are audited by the Auditor General of Canada on an annual basis. Accountability is important and, as a result, the corporation has requested that the Auditor General perform a special examination of the operation of the Yukon Energy Corporation.

Let me emphasize that this request was not made because it was felt that any problems exist, but in order to ensure that the corporation is accountable. Special examination will look at all aspects of the operation of the corporation in order to review the economy, efficiency and effectiveness of those operations.

Although not all details and authorities have yet be finalized, the report of the Auditor General is expected in late 1992 or early 1993. The special examination is made possible through revisions contained in the Yukon Energy Corporation management agreement with Yukon Electrical and Canadian Utilities, which has recently been extended and signed. It is interesting to note that one of the first special examinations ever conducted by the Auditor General was of NCPC, and that this proposed examination represents one of the first ever requested examinations.

Federal crown corporations are required to have special examinations conducted on a periodic basis; however, this is not required of territorial Crown corporations.

Accountability has further been advanced through the release, at the urging of Yukon Energy Corporation, earlier this year of the contract that the corporation has entered into with Curragh Resources Inc.

People will remember that at the last rate hearing, this contract was only available under limited terms, which had been insisted on by Curragh.

The past several years have seen some significant steps taken by Yukon Energy Corporation, including the publishing of the strategic plan that was tabled in the Legislature in November of 1990. The plan was developed over a number of months and included public consultation, review and approval by the Yukon Energy Corporation board of directors and the Executive Council. The plan was filed again at tab 15 of Yukon Energy Corporation’s general rate application filing.

There are also a number of issues that are identified in this plan that will have to be dealt with over the coming months, including the degree to which risk is to be borne by consumers, taxpayers and the corporation. Second, the initiation of new capital projects, which will be discussed over the next several months by the utilities board. Finally, the development of parameters for rate-making in the Yukon are also to be discussed by the Yukon Energy Corporation over the next several months.

The future capital projects that I have previously noted are to be discussed at the capital hearings, which will necessitate some of the most important decisions facing the corporation and its ratepayers. We must be cautious in our approach to these future decisions to ensure that they are prudent and wise. It is important to remember that a large capital-intensive supply project represents a large fixed cost that must be paid for over many years. In addition, large capital projects will, in the short run, contribute to higher rates, while possibly contributing to more stable rates in the long term. Large capital projects will also reduce the flexibility we have to deal with changing circumstances.

We look forward to your questions.

Mr. Phelps: Thank you, Mr. Sweatman, and welcome to you both, on behalf of my colleagues and me.

I have a number of questions I would like to ask but before I do, somebody was telling me I should congratulate you on your length of tenure already of acting president. If you are there much longer, you will be setting a record. That is something we would all like to see - even the Minister across the way.

I wanted to start by asking a few questions about Yukon Energy Corporation and the plans with regard to providing power. In the strategic plans that were tabled in this House approximately a year ago - I believe it was a year ago - mention was made of Surprise Lake and we have been told of the possibility of Moon Lake. Of course, both of these projects are in B.C. In the plans, it was mentioned that it would take at least six years, once a decision was made, to bring a hydro project onstream.

My first question has to do with those two projects in B.C. I wonder if you could tell me where we are with respect to making a determination of whether each or either project is feasible. Second, where are we with regard to going through the environmental review process - the EARP as it pertains in B.C.?

I am also rather curious - I will just add this as a footnote - I know that Moon Lake is considered to be a fairly important sports hunting area - sheep hunting in particular - which is heavily used, both by commercial and resident hunters. I am wondering whether or not there is a concern that the environmental review process might turn that one down.

Mr. Sweatman: First of all, one of the attractive features of the Surprise Lake project, when it was originally brought to our attention, was the fact that much of the feasibility work had been done in conjunction with the Adanac project, which was, I believe, a project of Placer Developments in the Atlin area. As a result of that work, that project was probably two to three years more advanced than a normal start-from-scratch type of project. We expect to have our detailed engineering and preliminary cost estimates completed in December. That would allow for commencement of construction, probably in late 1993 or early 1994, with about a year to an 18-month construction period.

With respect to the B.C. environmental review process, we have filed a prospectus with the Department of Energy in British Columbia. That is the document that is used to kick off the process in B.C.

At the same time, we have conducted fisheries studies in Atlin, to get the baseline data respecting, primarily, grayling. Some adjustments have been made to the project as a consequence of those initial fisheries studies. Finally, the socio-economic work is ongoing. We have had two public meetings in Atlin.

With respect to the Moon Lake project, one of the consequences of applying for the water licence requires that you must make any other operators or land owners in the area aware of your project. We understand that there is an outfitter on that lake. We have advised him of our intentions and our preliminary plans. That project is probably at least one year behind the Surprise Lake project, although, based on our current estimates, the project could provide winter-only energy, up to 16 megawatts. This matches very well with the load.

Mr. Phelps: I believe the outfitter is Mr. Smith, from Atlin.

The interesting thing about Surprise Lake is that there was power generated there years ago. That makes it, in one respect, similar to the power project that was examined at one point and turned down on the North Klondike by the Yukon Development Corporation.

From your opening remarks, I understand that you have been discussing power needs with some of the mining companies that look like they may be proceeding to feasibility. One of them that you mentioned, was Western Copper and the other was Brewery Creek, at Dawson. I understand that in each case it would be anticipated, at least at this point of time, that these mining companies would be requiring most of their power demand in the spring, summer and fall months. Is that correct?

Mr. Sweatman: With respect to the last discussions we had with the Williams Creek property, Western Copper Holdings, they had indicated to us that the heap-leach process may not lend itself well to mid-winter leaching. Consequently, they would only be requiring power of about 3 megawatts in the eight months, excluding the coldest months.

With respect to the Brewery Creek project, we do not know what process they intend to use. They are discussing both the conventional milling and a heap-leaching project at this time. It is difficult to know what their power requirements are specifically at this time, until they get to the next stage and decide which process they are going to use.

Mr. Phelps: I understand that, right now, although they have not made up their minds, heap-leaching on the Brewery Creek is a strong possibility if they do go ahead.

I am wondering where we are with respect to the feasibility study on the Mayo to Dawson transmission lines. Is it completed? Has there been a decision made with respect to building it?

Mr. Sweatman: The Mayo-Dawson transmission line is currently before the regional environmental review committee, which is our EARP process. We are expecting to soon receive their final report and be able to make any design adjustments that are required in order to finally determine the costs. In conjunction with that, given that the price of that transmission line has risen from approximately $16 to $18 million when we originally looked at it, to a price now estimated at slightly over $21 million, we have made the determination that it would be a good idea to again look at the North Fork project in order to ensure that the power we do supply to Dawson is the best alternative. Both alternatives would be presented to the capital hearing in the spring.

Mr. Phelps: That means North Fork remains an alternative for the Mayo-Dawson line, is it? It is not something that came about because of the Brewery Creek operation being a possible go-ahead?

Mr. Sweatman: I think both reasons are true. We were aware that our costs were increasing. The reasons for the cost increase is worthwhile going into. With a long transmission line, with a small load at each end, it creates what the engineers have told me is harmonics that can create problems if the line ever goes down. As with long, radial transmission lines, there are often problems such as trees falling and disturbances. The problem with a long line and a small generating source is that it creates power surges and spikes, which are not acceptable. We would have to add additional equipment to the substations at both ends in order to combat that problem.

With Brewery Creek coming along and the power from Mayo only having about three to four megawatts available to be sent down the line, and the Dawson load in the two megawatt range, it seems like either/or or both the projects may be required if the Brewery Creek operation goes ahead.

First of all, the prime consideration was to ensure that if we were going to supply power to Dawson, it would be done at the most economic rate possible because the old North Fork, with its high summer output and low winter output, would be ideally matched to a load like Brewery Creek.

Mr. Phelps: In the event, though, that the Brewery Creek operation does not go ahead, I take it then that it would be either the Mayo-Dawson transmission line or the North Fork hydro site, but not both. Is that clear?

Mr. Sweatman: I think that would be fair to say in that case, but right now the number one contender is the Mayo-Dawson transmission line. It is certainly well advanced in terms of planning and design.

Mr. Phelps: I understood from questions previously raised in this House that the corporation was also looking at the feasibility of a Mayo-Carmacks link with the main Whitehorse/Aishihik/Faro grid, rather than as an alternative to the Mayo-Dawson line. Has there been any sort of feasibility study done on that option?

Mr. Sweatman: There has not been nearly as much detailed work as on the Mayo-Dawson transmission line. At the same stage in the analysis, we took a look at basically three options: going to Dawson, going to Carmacks and doing both of them at the same time. We then analyzed, under varying scenarios, which project yielded the highest net present value, and then we ran alternatives from that. For example, we ran an alternative with United Keno Hill Mines coming back on; we also ran an alternative with Curragh shutting down, because that is one of the major risks we face. The Mayo-Dawson route yielded a positive value to consumers in all cases, whereas the Mayo-Carmacks line yielded a higher gross value, all things being equal, without United Keno Hill coming back and without Curragh shutting down.

In either of those cases - if Keno came back or if Curragh shut down - the line became uneconomical under those circumstances, so we chose to proceed further with the alternative that had the least risk attached to it.

Mr. Phelps: Can I take it, then, that those studies will be part of the corporation’s presentation in the capital hearings this spring?

Mr. Sweatman: I am sure that those studies will be made available if requested at the hearing. As I said, most of the work has been done on the Mayo to Dawson. I believe that a portion of that study was actually tabled in the House during the last sitting.

Mr. Phelps: I would like to move on, then, to Drury Creek. I think that I heard you say that there was 2.5 megawatt potential there. I am wondering where we are with respect to that project. Has a feasibility been completed? How long will it take from start to finish to get that onstream?

Mr. Sweatman: I do not recall exactly how far along we are. I know that we have done two years of engineering work on it. We have brought it from a reconnaissance level to an inventory level that precedes pre-feasibility. I suspect that we could bring that project onstream in three to four years, if necessary.

It does have a significant advantage in that it is located closer to Faro. The raw output of the project is not really the measure of the project. There are line losses experienced by transmitting power from Whitehorse to Faro. Locating a project closer to Faro would reduce those line losses. It is like getting a 105 percent output from that plant. You actually end up with more saleable power by about 5 percent than the output of the plant, because in the reduction of line losses that you would experience.

Mr. Phelps: Were the power line right-of-ways and the Drury project protected in the land claims negotiations? Are they being protected? I guess my question is whether the corporation is playing a role at all in protecting potential hydro sites and, as well, transmission line right-of-ways.

Mr. Sweatman: I understand that the Drury Creek site is one of the protected sites.

Mr. Phelps: Does the corporation have anyone at the land claims meetings or at the preparation for meetings to ensure that sites are being protected? I am asking this because that was the policy of NCPC in the previous rounds of negotiations, prior to 1985.

Mr. Sweatman: My understanding is that there is a list, which has not been released publicly, of 10 sites that were chosen by the corporation for exclusion from certain of the provisions of the land claim. We are aware that we have chosen sites that we believe represent a spectrum of sites that will provide for various needs over time: small sites, medium-sized sites and some large sites. We picked the sites that we believed, based on the study data that we had, were the most likely type of sites to be developed. It is a relatively long time frame that we have been looking at, in that there are some very large sites that were included on the original NCPC lists, as well as some smaller sites and some sites such as Drury Creek, which was about two and one-half megawatts.

Mr. Phelps: I wanted to turn to the issue of diesel and the increasing reliance, at least in the short term, of Yukon Energy Corporation on diesel generation of electrical energy. I am wondering if you can advise us just how many diesel generators have been installed in the past year and whether there are any forecasted to be installed for the ensuing year. I guess I am asking about calendar year 1991 and calendar 1992, that being the year-end of the Yukon Energy Corporation.

Mr. Sweatman: Last year, the only one that was installed was the new baseload diesel unit located at Whitehorse Rapids. We are currently doing engineering and expect to be installing another one at Faro next year - whether it is a baseload unit or just a peaking unit will depend upon the results of the engineering. It could be the same as the one that was installed here at Whitehorse last year.

It is interesting that the one that was installed at Whitehorse this year will be inserted into what they call the stacking order as the number one dispatched unit. It is a very modern unit. It is one of the most fuel-efficient units that Caterpillar makes. Instead of using a brand-new unit for peaking, we will take one of the older, less fuel-efficient units and use that for the short times that the peaks occur. So, although we are installing baseload diesel and we do expect them to be running more, there are just the two of them. The one of them that was installed this year, if I recall correctly, was about 2.3 megawatts.

Mr. Phelps: We did have some information provided by way of a legislative return, a written answer from the Minister of which I am sure you are aware.

In reading through some of the evidence of the rate hearings, people seemed to be using, as a rule of thumb, the cost of diesel-generated electricity as being inclusive of operating costs, as well as the capital depreciation costs or however you want to amortize it with the cost to install. The rule of thumb seemed to be 14 to 15 cents.

Does that sound reasonable? What figures would the corporation use to show the true cost, inclusive of capital cost and financing costs of generating electricity through the diesel units?

Mr. Sweatman: We are currently using an estimate, which is in the 12 to 13 cent range. It is our cheapest alternative for supplying power right now. We all know what long-term price spikes can do to the cost, but the 12 to 13 cent range gives us a fairly good picture of what the average cost over a 20-year period would be. There are no hydro sites indicated that would cost less than that. They are all indicating slightly higher costs than that. That is taking an average cost over a full life cycle 20-year period and trying to balance it across the period. In those assumptions, we have been using a four percent inflation rate for diesel. Diesel still ends up being cheaper in the long run.

Mr. Phelps: Nonetheless, I am sure that you will agree that this is rather a conservative figure for what might happen to the cost of diesel oil. This could become entirely truly conservative, should the cost of crude oil increase substantially from the roughly $20-per-barrel benchmark it is at right now.

Mr. Sweatman: We have run numbers using a starting point of 25 cents per litre, which is slightly less than what we are paying right now. The current average price across the Yukon is about 26 cents per litre. We have also used a 30 cent per litre starting point. The difference results in a cost per kilowatt hour of about one cent more, if you start at 30 cents as opposed to 25 cents. By using a 30-cent starting point, the gain is still higher than we are today. It still only marginally tips the scales in favour of some of the hydro projects. Drury and Surprise are right in around that 13 to 14 cent range on a levelized basis.

Mr. Phelps: What is your preliminary estimate of cost of a project such as Moon Lake?

Mr. Sweatman: With respect to Moon Lake, I believe the costs are in excess of $40 million but I would have to check the recent estimates. The Surprise Lake project is currently between $36 and $40 million, including the related transmission costs that are required with that project.

Mr. Phelps: I wanted the cost per toll line.

Mr. Sweatman: I am sorry; I do not have the figures for Moon Lake with me. I am looking at the next best project, and Surprise Lake is probably the most important one at this time, with Drury being very close to the same price range.

Mr. Phelps: Perhaps I could ask that the estimated cost per kilowatt for Moon Lake be provided later, at the witness’ convenience.

I want to move on to a couple of other areas. The next one, very briefly, has to do with the Old Yukon College. I was noting, from the public debate in this House, that there seems to be some suspicion that the decision to proceed with the renovation of the old Yukon College into office space was one that was directed by the political level of government rather than the initiative of the board of directors. As substantiation or support for that proposition, I would direct attention to the Yukon Development Corporation report for the year ended March 31, 1991, at page seven, under 1(c), right at the bottom, where it states, “In addition, the corporation, as directed by Cabinet, is renovating old Yukon College for lease back to the government.”

My question is: does that indicate that this was a direction from the political arm of government or from Cabinet, rather than something the board of directors approved initially?

Mr. Sweatman: Generally, I think that the board of directors of the corporation did have some concerns with the project.

First of all, there was a concern with respect to whether this type of project was within the development mandate of the corporation. They had expressed a preference that they would like to see more things being done outside of Whitehorse, at the same time.

However, the board did subsequently agree to carry out the project. There was discussion between the board and the then Minister responsible with regard to that, and the board did subsequently agree to carry out the project.

Mr. Phelps: Of course, they would do that or I guess the option is to resign. It is fairly stated, on page seven, that they were directed by Cabinet to renovate the college. Is that a fair statement in the report?

Mr. Sweatman: I believe that the Cabinet expressed a strong preference that the board do that, and I think it was a subsequent meeting of the minds - that would be a better way to frame it, rather than as a specific direction.

The act provides for direction under section 4(d) and that is done through the auspices of an Order-In-Council, and there was no Order-In-Council.

Mr. Phelps: I want to next move to the issue of the money that is being lent to Taga Ku Corporation, and again I am trying to get a handle on exactly what this means.

First of all, again, I would ask the witness the same question: was this an initiative of the board of directors or was it done at the request of or by direction of the Minister or Cabinet in Executive Council?

Mr. Sweatman: There was no direction with respect to the project. The proponent of the project, the band, approached the board and staff of the corporation.

Mr. Phelps: Then does the board have specific policies with regard to when, and under what circumstances, it would be in competition with the Department of Economic Development? That is to say, I am a little confused as to why the board would interject itself, on behalf of the corporation, into an area that is normally occupied by the department responsible for economic development.

Is it a normal proceeding for the board to be running around looking for various types of loans to provide to corporations?

Mr. Sweatman: The board was approached by the staff and subsequently the board was approached by the Champagne-Aisihik Band. My understanding is that the amount of loan the Department of Economic Development can give is limited by regulations to somewhat less than the $2 million that we have advanced to the Taga Ku project.

Hon. Mr. Byblow: Just for clarification on that point, the limitation under the business development loans program is $500,000.

Mr. Phelps: I thank the Minister for that. I do not want to put the witnesses into a political situation. What I am really trying to ascertain is whether or not there is a firm policy with regard to the role of the Yukon Development Corporation acting as lender of last resort, or whatever it seems to be doing in this case.

Mr. Sweatman: There is no specific policy. That is certainly one of the matters that the mandate review is going to address. Sometimes the staff is left in the position where they cannot say no to a project because there is no basis on which to say no. In that case, our policy is that anybody who approaches the corporation must do a submission to the board of directors with respect to any kind of project. They are not beating down our doors, but that is the way we handle it, at this point. I am hopeful that the mandate review will provide us with some solid policy direction on which way and in what areas the board feels it is appropriate to invest.

Mrs. Firth: I would like to get into the questioning as well, similar to that of the previous Member. I would like to keep my questions along the lines of policy matters and decision making and process.

The acting president has indicated that there is no specific policy with respect to lending and that organizations, groups or businesses looking for assistance can simply approach the board.

I would like to ask exactly what kind of policies are in place with respect to decision making. I am talking specifically about policies as to how boards can make decisions, what authority boards have in those decisions, what the relationship is between the board, the president and Minister and if there is anything in writing so that if someone is appointed to the board, they can be given a policy manual and briefed very clearly and quickly as to what each individual’s responsibility and authority is.

I guess I will let the witness answer that first. Then I would like to ask some specific details about that decision-making process.

Mr. Sweatman: The decision making or the broad policy direction is contained in section 4 of the act. The relationship with respect to the board and the Minister is a formal reporting relationship, from the president to the board to the Minister. With a community-based board and with the number of questions that the Minister does get from time to time in the House, it necessitates, especially during sitting time, almost daily contact, keeping the Minister informed and forwarding information required by him to discharge his duties here.

Mrs. Firth: Let me give the witnesses an example. Say the president of the Yukon Energy Corporation wanted to be paid a bonus or some such thing, as some other corporations do. Would he approach the board for that? Would he approach the Minister for that? Would the board have the ability to make that kind of decision? Would that decision have to be made at the political level?

I am trying to get some understanding of exactly what the board is allowed to do. Section 4 of the act is so broad that it does not really define people’s authorities and responsibilities. So, perhaps using that as an example, the witness could indicate to us how those kinds of decisions could be made.

Mr. Sweatman: The general guidelines, with respect to employment in the corporation, are in the Public Service Commission Act. In other cases, contractual relationships could specify that that would be a board-level decision.

Mrs. Firth: So the board could make that kind of decision.

When the board keeps minutes of its meetings and decisions, are those minutes sent to the Minister?

Mr. Sweatman: I do not know whether or not they are sent to the Minister. I think they were at one time, but whether that continues to be done at this point I do not know.

Hon. Mr. Byblow: The short answer is no, they are not sent to the Minister but, in subsequent board meetings I do have an opportunity to review past minutes, along with the board members.

Mrs. Firth: I imagine that the Minister, in his daily conversations with the chair of the board, or his daily communication with the Development Corporation, would be apprised of decisions the board was taking, and I would like to ask the witness what process is in place if the Minister, at the Cabinet level, wants to veto a decision of the board or if they do not agree with a decision of the board. How do they come to this common agreement that something should proceed, such as the renovations at Old Yukon College? Is there some kind of policy that determines that?

Mr. Sweatman: With respect to the Member’s previous question about minutes, the Minister is sent what we call our board package, which contains all the matters for discussion. The minutes of the last month’s meeting would go out in the package in draft form because they need to be discussed and adopted. So, with respect to the minutes, I think the Minister gets them about a month late, but he gets them in draft form.

With respect to direction, there are certain matters the board is not empowered to do. Those are contained in Order-in-Council 1987/72, which specifies specific actions the board cannot take without the approval of the Executive Council Member.

The only way that I am aware that direction could be given would be through an Order-in-Council, under Section 4(1)(d) of the act. This section provides for direction to be given by Order-in-Council. I do not believe there has been an Order-in-Council issued under that section of the act.

Mrs. Firth: Once again, the direction to the board is very general. I cannot see in the bylaws of the corporation where the issues that have been discussed this afternoon would fall into any of those categories with respect to making a decision, other than the Minister having knowledge of something that is going on because of the board minutes and perhaps wanting to have some input. I think there has to be some clear policy in place with respect to the powers and the authority of the board. There has to be some clear definition so the board knows what decisions it is responsible for and what kind of decisions it can make without ministerial approval.

What kind of decisions can the president make without board approval or without ministerial approval, or are there any?

Hon. Mr. Byblow: The witness can proceed with the answer to the question momentarily, but I just wanted to provide some clarification on the Member’s comments surrounding direction and responsibilities.

As the witness pointed out, the Order-in-Council of 1987/72 provides the framework of what responsibilities the board has in terms of carrying out its duties. The act itself provides the bigger-picture framework of what its broad objectives are.

To clarify what appears to be a grey area, in terms of the extent to which direction can be given, it should be fairly clearly stated that the board is mandated to carry out the broad policy objectives of the government. The whole intention in the creation of the corporation is to speak to the economic development objectives of the government. Whether they are contained in the Economic Strategy or whether they are contained in the Conservation Strategy, those broad policy directions are there. The board is cognizant and responds to that broad direction.

If the Member is suggesting that there is a specific instruction given, it does not happen. That is not the way that it works.

Mrs. Firth: I am making a recommendation to the witnesses. There is a mandate review going on and the recommendation can apply to the government as well, but there should be some specific direction with respect to policy and decisions that can be made, so that the areas would not be so gray with respect to the powers. I think that has to be defined; it is not now and that is why it is pretty loose, but that is the recommendation that we are making.

I want to go on to another question with respect to contracting and whether or not there is a process within the Yukon Energy Corporation for tendering contracts. Is there a policy with respect to that? Perhaps I will let the witness answer that before I ask the next question.

Mr. Sweatman: With respect to your first question, the board acts as a board of any corporation would act, and it has limitations placed upon it. They can make a decision on basically anything.

The presidential signing authority is limited to $100,000; that is the commitment limit that is given to me.

With respect to contracting, we are not bound by the policy of the government; we are specifically excluded from the contracts directive, as far as I understand. I know that we followed the government’s contracting procedures with respect to Old Yukon College.

With respect to the Energy Corporation, we have a manager who uses his own contracting guidelines to award contracts. We do oversee that function to ensure that it is fair and that as much local content as possible is put into it, but again the overriding concern is that we get whatever we buy for the lowest price possible, so that it does not translate through to higher electricity rates.

Mrs. Firth: I am speaking in a general sense about all of the contracts, including the consultant contracts, legal contracts and so on. I have received correspondence from the Development Corporation with respect to contracts that were tendered from April 1, 1988, to March 31, 1991, and the value of those contracts for the Development Corporation alone was almost $800,000. I have a commitment from the corporation to be provided with the consulting contracts to date for both the Development Corporation and the Energy Corporation, so I am expecting to receive that.

I would like to ask the witnesses if they can tell me the value of all of those contracts now - I have given advance notice of that question - so that we know how much has gone out in consulting contracts. I gather that, because there is no set policy, the Development Corporation and Energy Corporation do not have prescribed guidelines or contract directives that they follow when they are tendering consulting and legal contracts.

Mr. Sweatman: I do not have that exact number with me, but I acknowledge that I did undertake to the Member to provide her with those amounts. I believe that the order of magnitude is similar to the amount at Yukon Development Corporation, but I will have to check that.

I think we try to ensure that we use the best possible consultant for the job. We do not have a specific tendering policy, if that is what she is asking, with regard to it. For example, with respect to a study we had done of the Mayo Hotel, we used Peat Marwick Stevenson and Kellogg in Vancouver as the consultant on that project, because of their wide range of experience with respect to the whole hospitality industry.

Mrs. Firth: My recommendation to the Yukon Development Corporation and Yukon Energy Corporation would be to establish some contracting directives and follow them. It is an expenditure of public funds, and I think there should be a process in place so that the contracting is perceived as being done on a fair and equitable basis for all consultants and contractors.

If the witnesses indicated that we are talking about an amount that is comparable, another $800,000, that is about $1.6 million-worth of contracts. I think that is quite a substantial amount and would warrant some rules and directives.

Where does the money come from for the consulting contracts in the Yukon Development Corporation itself?

Mr. Sweatman: The Yukon Development Corporation was originally provided with some $43 million, of which about $39 million was invested in the Yukon Energy Corporation. Those funds come from investment of those funds, well-documented returns on investment, and roughly $16.2 million in dividends that were paid. These have all been sources of funding for the Yukon Development Corporation. Interest earned on short-term investments, interest earned on an advance that the Yukon Development Corporation has made to the Yukon Energy Corporation - that is where the money comes from. So it is residuals from the original investment, as well as returns that we are currently getting.

Mrs. Firth: I just have a couple more questions.

Chair: I am trying to split the time equally among the Members. You have already had a sufficient amount of time. So has Mr. Phelps. It is Mr. Lang’s turn now.

Mr. Lang: I just wanted to follow through with a couple of areas. First of all, I would like to address some questions regarding the loan to the hotel and how that process evolved.

You stated earlier that the proponent first approached the Yukon Development Corporation and that is how it became involved in the proposed $43 million hotel. Subsequently, the final decision was made to extend a loan of, I believe, $2 million from the Yukon Development Corporation, partly because  the Department of Economic Development had a guideline of $500,000. That was one of the reasons for proceeding in that way.

I am wondering about the process and how the approval was done. Where does the Executive Council or the Executive Council Member fit in with respect to approving such a decision? Where is their involvement in the process?

Mr. Sweatman: Essentially, the Executive Council Member was not involved in making the final decision, although I do know that the Executive Council Member does, from time to time, attend board meetings to discuss matters with the board, but he does not participate directly in the decision making with regard to that.

Mr. Lang: There is no written direction to the board that outlines the position of the government on a loan of this kind, is that correct?

Mr. Sweatman: None that I am aware of.

Mr. Lang: One of the basis of support for the hotel was that it was going to provide a convention centre, as well as hotel rooms. Right now, you have the basis to go ahead with the two towers and the hotel. I am wondering what assurances the Yukon Development Corporation has that the convention centre will be built in conjunction with the two towers?

Mr. Sweatman: The plans with the convention centre were always a part of the project. My understanding is that the lease from Government Services contains a covenant requiring that a convention centre be built.

Mr. Lang: What happens if the two towers proceed - if they are built and the convention centre does not proceed? What is the fall back of the Development Corporation?

Hon. Mr. Byblow: The witness can refine or clarify if I do not make this clear enough. It is my understanding that the Development Corporation has not undertaken any obligatory requirement on the part of the proponent to ensure that the convention centre is there. That obligation rests with the terms of the lease to Government Services. The Development Corporation is not tied specifically to the convention centre; it is tied to the overall project, of which the convention centre is a part.

The witnesses can clarify whether they have, in terms of the loan, any specific requirement that a convention centre be there, but the legal specific terms, if you will, are tied to the lease with the government.

Mr. Lang: Maybe I can proceed with direct questions to the Minister with respect to that after the witnesses have concluded.

I want to ask the Minister this: the Yukon Development Corporation’s report of March 31, 1991, mentions advancing $1 million to the Taga Ku Development Corporation, wholly owned by the Champagne/Aishihik First Nation. Is it not correct that there are now other owners of that particular corporation?

Mr. Sweatman: Yes, that is correct. The property has been purchased by a company called Taga Ku Development Group Inc. Our loan is really to the band. There was a pledge of shares of Taga Ku Development Corporation to us; our legal counsel has contacted their legal counsel to ensure that the security is also switched across. The prime security for the loan is a pledge of the first funds that flow under the land claim agreement, so that is really where we were looking for our security. We have provided the funds primarily to support the band’s equity investment in the project and, therefore, our security is not a mortgage-type security by any stretch of the imagination.

Mr. Lang: Then, the security we are speaking of is not even tied to the project. Is that correct?

Mr. Sweatman: That is correct. It is tied to shares in the corporation. I know that with respect to the leases, and with respect to the funding from CAEDS, the Canadian Aboriginal Economic Development Strategy, that is tied to the project as it stands. We were given the opportunity to review the documentation with respect to the CAEDS financing as well as the lease documentation from Government Services prior to our advancing the full amount of the money. The assurance that the project will be built as billed basically comes from collateral security and not directly with us.

Mr. Lang: I would like to know how you lost the security to the land. It seems to be one of the very tangible, real assets of the project.

Mr. Sweatman: We never had security on the land. Ours was always a contribution to support the equity contribution that the band was required to come up with.

Mr. Lang: Is it not true that the band has lost its equity, or at least in part, in the total ownership of the project, now that there are new partners? Why, when you are loaning somebody $2 million, do you not at least have a first mortgage on the property?

Mr. Sweatman: The structure of the deal was always such that there would be another equity partner coming in with at least $2 million for their share of the project. We are supporting the band and their ability to match equity with their partners. The security on the land was never an issue. In fact, the security on the land, right now, is held by the Inuvialuit Development Corporation, who holds a mortgage on the land.

Mr. Lang: Now, we have a different company and, the way I understand it, we have shares, as collateral, in a different company. Is that not correct?

Mr. Sweatman: Yes, that is the case at the moment. We have contacted counsel for the band and for their corporation to correct that.

Mr. Lang: Was this done without the consent of the corporation that loaned that amount of money?

Mr. Sweatman: Yes, it was done without our consent, but we were informed by them that that is in fact what occurred. There was a letter from Chief Birckel to counsel which disclosed that to us.

Mr. Lang: I would like to pursue this further. At least as of today, our security, or what we have as far as collateral for our $2 million, is really non-existent, unless we do the necessary paper work with this new company. Is that correct?

Mr. Sweatman: Yes, as far as the shares go, but the pledge of the land claims money remains and that has always been the prime source of our security.

Mr. Lang: I want to go on to another area, if I could, and that is the question in the area of energy. I have a number of questions there.

In the 1990 strategic plan that was published, it indicated that in the neighbourhood of 10 gigawatt hours would be energy fuelled by imported diesel fuel. The balance of what was needed was going to be provided through our other energy sources. Subsequently, things have changed dramatically.

I want to ask the witness if he can verify if we are up in the neighbourhood of 30 gigawatts per hour using imported fuels.

Mr. Sweatman: That is correct. That is what was in the strategic plan. Our current forecasts indicate significantly more diesel. I do not have the exact number, but I think it is more than 30, actually. It may be 30 now that the Aishihik reservoir is filled and we will be generating with hydro at that time, but yes, that is true.

The change in circumstances, I should note, results more from a change in Curragh than it does in a change from a change in the other forecasts. Our load forecasting is very much influenced by Curragh and there is - unfortunately, I did not bring it with me - a chart of how Curragh’s forecasts varied over the past 18 months, and they have varied from a low of around 145 gigawatt hours for the year, to a high of 210 gigawatt hours for the year. It is very difficult to plan in that context. One of the advantages of the new contract that we have signed with Curragh is that those fluctuations are taken up with them paying the actual cost of producing that additional energy, so it does not impact on other rates. On the current margin, yes, we are generating with diesel, so that if Curragh goes up by 10, diesel goes up by 10.

Mr. Lang: That increase is of major concern, an increase in projected demand in just over a year from 10 gigawatt hours to over 30 gigawatt hours. It is my understanding that the reason that we are as low as we are is because of the fact that we have such a large watershed, as far as the Aishihik project is concerned, and the strike at Curragh. For a month, or a month and one-half, considerably less power was used. We would have been a lot higher.

I want to ask a question of the witness about the final decision that has to be made regarding the two significant projects that the Yukon Development Corporation is looking at, both of them being in British Columbia. Decisions are obviously going to have to be made by the B.C. government, and the project would have to conform to their regulatory process. I want to know who is going to make the decision. Will the Cabinet or the Yukon Development Corporation decide whether or not we invest directly into the capital assets of a project such as the one at Surprise Lake or enter into a long-term contractual arrangement to import electrical energy.

Mr. Sweatman: In either case, the key decision is based on who bears the risk. In either case, we would be required to sign a take-or-pay contract. We have not come to an agreement with the other project proponents with respect to Surprise Lake yet. We are concentrating on keying up the key principles in an agreement with B.C. Hydro on the proportion of that project that they are going to purchase. Once that is completed, we will be establishing our own power-purchase contract with the project, independent of whether or not we invest. If there are significant benefits that the board sees by making that investment, we would move forward to making the investment with the other project proponents or we would negotiate with them for an ownership position.

At the present time, the project is proceeding as if it would be a one-third share for Yukon Energy Corporation but, again, that is not firm, and we want to get the power purchase contracts firmly in place first, before we deal with the ownership question. That way, we can negotiate from a position of not really bothering whether we are an owner or not, and get the best deal for the consumers of the Yukon.

The fact that the project is in B.C. is of some concern. There are some advantages of having a project in the Yukon versus having a project in B.C. There are taxes that will revert to the Province of British Columbia on the property and income tax by the other proponents, as well as possible water rents and fluctuation and those types of things, which also go to the Province of B.C.

Even with those additional amounts calculated into the project, it is still one of the best projects. We consider it to be one of the major factors, I think, that the board of directors, as well as the Utilities Board, will have to consider in the long run.

The final decision about investment in major capital is that the Minister responsible can refuse to give us approval under Order-in-Council 1987/72, so, ultimately, that decision would flow to the Cabinet and certainly a significant investment at that level would require some very serious consideration about the potential that there are some benefits flowing out of the Yukon on that type of a situation. We are very cognizant of that in our analysis and preparation for that project.

Mr. Devries: In the annual report, McNaughton Creek, near Swift River, is mentioned. At what stage is that? Is it just a preliminary investigation on what the potential is or does it go beyond that?

Mr. Sweatman: I think McNaughton Creek is at the reconnaissance stage, or the advanced reconnaissance stage. It would not be what we call inventory at this point, but it is a promising looking project. One of the objectives of our hydro reconnaissance is to have projects located in very strategic locations in order to ensure that we bring those projects along in a couple of years, from start to finish. If you go looking for a hydro project today, it is true that it would take six years to bring that project on. By spending one or two years at relatively inexpensive cost, we can move that project at least two or three years closer to completion fairly early on. We are trying to build up a storehouse of those types of projects to add to the rather significant number of feasibility and pre-feasibility studies we inherited from NCPC.

Mr. Devries: In a project like that, would the Yukon Energy Corporation be at all interested in seeing a private developer develop it and then purchase the energy from them, such as for the Swift River maintenance camp and the various lodges in the area?

Mr. Sweatman: Yes, we would be interested. In fact, our board of directors has recently developed a private independent power producer’s purchase policy. We believe it provides for fairly generous benefits to the project proponent by offering them what is known as a levellized cost, whereby the overall cost to our utility is the same, and we front-end the costs a bit in order to ensure that the project proponent has a better ability to get financing. We are currently involved in discussions with the Carcross/Tagish First Nation on what is known as the Natashini project, or Tank Creek project, near Carcross.

Mr. Nordling: I am pleased that we have Mr. Sweatman here as a witness because he has been with the corporation for so long. I would like to ask about the dividend policy. Mr. Sweatman can correct me if I am wrong, but my assumption is that whether the Yukon Energy Corporation pays dividends to the Yukon Development Corporation is a decision the board makes, and I understand a new policy has been implemented by the board under the chairperson, Fred Berger, who is not here today, that dividends will not be payable from the Energy Corporation to the Development Corporation in the immediate future.

I would like to ask Mr. Sweatman about the dividends that were paid. We all knew there would be excess profits in the first two years because of the rate freeze and the write-off of $66.5 million so that that debt did not have to be serviced. At that time, the Minister responsible announced that Yukon Energy Corporation had made $20 million profit and Yukoners had benefitted to the tune of $20 million.

I would like to ask Mr. Sweatman what the basis was for the board’s decision at that time to pay the millions of dollars in dividends to the Development Corporation.

Mr. Sweatman: The primary goal of the Energy Corporation at the time was to maintain a debt/equity ratio; in utility terms, I think it is called the appropriate debt/equity ratio. If the right balance is found between debt and equity, the overall cost of capital in the future when one goes to borrow will be reduced. Those funds were paid in accordance with the policy that was published in December 1988 by the corporation when it filed its rate application in 1989-90.

I can read you that policy; I have a copy of it in front of me. I quote, “YEC will pay out dividends to YDC only to the extent that such dividends are not required to pay the costs of rate-relief subsidy programs and to fund YEC’s additional ongoing requirements.” That was the policy; it was published and clearly stated at the time.

Mr. Nordling: At that time, no one objected to the dividends being paid. What has brought it back to the attention of the public is an application for a rate increase that we have been hearing about - a 19-percent increase, which is quite substantial.

I would like to ask Mr. Sweatman what went wrong at that time? To the members of the public, something went wrong. The theory of the utility is that it is a monopoly and we knew that there would be excess profits and we knew that we would have this money and that, in the future, we would need to replace old equipment that was breaking down. We would have to develop new energy projects and we wanted to equalize rates and we brought in this bill-relief program.

The Energy Corporation had this great advantage for the first two years to build up a pot full of money, but they seemed to give it away and they are now coming back and asking the public for a 20-percent increase.

I would like to know whether it was the board’s decision, or whether the Deputy Minister, who was the executive director at the time, played any role in that? I would also like to know if the Minister in charge played any role in the dividend being payable. The reason that I ask that is because since that question has been brought up we have asked, on a number of occasions, about the money being taken out of the Energy Corporation and being used for the Watson Lake sawmill; that has been denied.

The theory is that the money was used and given back legitimately because there was this $43 million invested in the Yukon Development Corporation and Yukon Energy Corporation to begin with.

Was the basis for that dividend to pay back the $43 million or was it to have to invest in other projects, because obviously, now, electrical consumers wish that it was kept within that monopoly, within that corporation, to be used for the development of energy and bill relief.

Mr. Sweatman: That question has a lot in it. Let me try to answer. As to why you try to keep your debt/equity ratio at an appropriate level requires a very difficult explanation. I have explained this to lots of people and their eyes seem to glaze over when I go through the explanation, although the light went on with the reporter from the Whitehorse Star the other day so maybe I am making progress.

When you establish the debt/equity ratio of the corporation, the idea is to protect the debt holder. If the equity ratio is too low, then the debt goes higher. So we are striving to maintain an appropriate ratio.

Mr. Nordling: I would just like to clarify for Mr. Sweatman that my question is really that we knew that the debt/equity ratio would be way out of whack because of the excess profits due to the rate freeze and the write-off of the debt. So why was that not dealt with in some sort of special circumstance, rather than just dumping all the money out where we could not get it back again.

Mr. Sweatman: All I can say is that if the equity were $16 million higher than it is today, consumers would be paying more for their power than they are. Power rates are set based on future costs so I really cannot answer. With respect to the point I think he made earlier about bill relief, we could have given it all back to consumers and no one would have paid any power bills for six months, if that was fine, but at the end of the day, you have got to pay what it costs for the power. The conservation people will argue very strongly that rates based on average costs - which is what the average and historical costs are based on - is not an appropriate way to price power. They think power should be priced at what it would cost to build the next new supply, which would place rates in the range of 13 or 14 cents a kilowatt hour, as opposed to an overall average right now of around eight or nine cents.

It depends on what you want to use the money for. Certainly, if it was there to pay the consumers, you could give them the power for six months or four months or whatever it would work out to, but at the end of the day, somebody would have to pay for the cost of producing power. This includes operation and maintenance costs, borrowing costs and everything else.

Chair: The time being 5:30 p.m., we will excuse the witnesses. I would like to thank the witnesses.

Witnesses excused

Chair: We will clear this department.

Operation and Maintenance in the amount of one dollar agreed to

Yukon Development Corporation agreed to

Chair: We will recess until 7:30 p.m.


Chair: I will now call Committee to order.

Hon. Mr. Webster: I move that you report progress on this bill.

Chair: Is the Committee agreed?

Some Hon. Members: Agreed.

Motion agreed to

Hon. Mr. Webster: I move that Mr. Speaker do now resume the Chair.

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

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

Ms. Kassi: The Committee of the Whole passed the following two motions:

THAT at 4:00 p.m. until 5:00 p.m., Mr. Michael Sweatman, Acting President of the Yukon Development Corporation, Mr. John Maissan, Senior Utilities Engineer for the Yukon Energy Corporation and Mr. Charles Sanderson, Board Member of the Yukon Development Corporation will appear as witnesses before the Committee of the Whole during debate on the Yukon Development Corporation, Vote 22, Bill 19, First Appropriation Act, 1992-93;


THAT the assembly be empowered to sit from 7:30 p.m. tonight until 9:30 p.m. for the purpose of debating a motion for the second reading of Bill No. 9, entitled Legislative Assembly Retirement Allowance Act, 1991 and for the purpose of considering Bill No. 19, entitled First Appropriation Act, 1992-93 in Committee of the Whole.

Further, Committee has considered Bill No. 19, entitled First Appropriation Act, 1992-93, and directed me to report progress on same.

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

Some Hon. Members: Agreed.

Speaker: Government Bills.


Bill No. 9: Second Reading

Clerk: Bill No. 9, Second Reading, standing in the name of the Hon. Mr. Webster.

Hon. Mr. Webster: I move that Bill No. 9, entitled Legislative Assembly Retirement Allowances Act, 1991, be now read a second time.

Speaker: It has been moved by the Hon. Government House Leader that Bill No. 9, entitled Legislative Assembly Retirement Allowances Act, 1991, be now read a second time.

Hon. Mr. Webster: The Legislative Assembly Retirement Allowances Act, 1991 is a development of the Pension Plan for Members of this Assembly, which was established in 1984 and updated in the spring of 1987. I want to begin by saying a few words about these earlier plans in order to put the principles of this current bill into perspective.

The first Legislative Assembly Retirement Allowances Act was passed on May 7, 1984, in recognition of the fact that the Yukon Legislative Assembly was the only legislative body in the country that lacked any sort of pension plan for its Members. It also recognized the fact that devolution of additional responsibilities to the Yukon government was demanding more time of Legislative Assembly Members. What was formerly a part-time commitment had become a full-time job for most Members, particularly Ministers. Members serving more than one term in the House found it almost impossible to maintain pensions, which might have been established as a result of previous employment. The bill passed in 1984 therefore provided for a modest pension payable to Members who had served more than six years in the Assembly - a pension that could be drawn on at the age of 55.

One principal followed by that bill, and maintained since, is that the pension benefits will accrue to those who are Members of the Assembly at the time of passage of the bill - or who subsequently became Members - provided that they serve the requisite six years. Then, as is the case now, the benefits provided by the bill were just about the only benefits to which Legislative Assembly Members were entitled.

Although the public may assume otherwise, MLAs do not enjoy the extended health care insurance, dental plan or annual travel benefits that career public servants and many people who work in the private sector take for granted, nor are they permitted to contribute to the unemployment insurance plan, which provides most workers with some sort of safety net in the event they should lose their jobs.

That last point motivated one of the changes made to the act of 1987. Since Members were not, in fact, covered by unemployment insurance benefits, a severance allowance was established.

This was not the kind of golden parachute enjoyed by some executives in the private sector, but rather a modest severance payment, equal to 25 percent of the amount of pay received by the Member during the preceding year.

The other major change made in 1987 made the MLA pension subject to the cost of living adjustments. Bill No. 9 retains this feature, and the pension plan that it will establish is fully indexed, consistent with most private and public sector pension plans.

Under both the 1984 act and the 1987 amendment, the MLA pension plans were non-contributory in structure. The full cost of the pension package was paid through the Legislative Assembly budget. Given the tax structure at the time, and the modest benefits payable by the MLA pension plan, it was assumed that Members would avail themselves of registered retirement savings plans to better provide for their retirement years. An MLA pension alone, even if a person were to spend most of his or her working life as a Member of the Assembly, would not have provided a comfortable retirement income.

Within the past year, the Government of Canada has amended the tax rules governing retirement savings. The subcommittee on pensions of the Members’ Services Board has obtained legal advice that suggests that the pension arrangements for Members will be impacted significantly by tax changes that will come into force on January 1, 1992.

Under the new federal tax laws, MLAs who earn no income from outside business or employment, will be limited to a maximum RRSP contribution of $1,000 per year. With this kind of ceiling on contributions, a Member with no outside income would find it almost impossible to build a retirement fund, which, combined with pension benefits, could offer a reasonable retirement income. This would penalize MLAs who are not independently wealthy and who devote their full time and effort to their MLA or ministerial duties.

The bill that is before us today, is largely a response to the federal government’s tax revisions. Its features have been recommended by an independent tax expert who has considered the impact of the new federal rules on the current pension plan. His recommendations, and this bill that adopts them, are intended to ensure that people, who devote a significant portion of their working lives to serving the public as Members of the Legislative Assembly, will receive a liveable retirement income, effective at age 55.

The pension plan established by this bill will also be, unlike the previous plans, registerable under federal law.

The major change in principle between this bill and the current act is that the pension plan established by Bill No. 9 is a contributory plan. Members will begin contributing nine percent of their gross salary to the plan effective January 1, 1992. This means that MLAs will see their pay effectively cut by nine percent at the start of the new year. The Yukon Legislative Assembly Members will remain among the lowest paid in the country.

It is very important to note that this plan, unlike the current plan, includes a provision that would allow a Member to opt out of the provisions and continue to collect a full salary.

For those who see no need for retirement income based on their years of pensionable service as MLA’s there is no obligation to be part of the plan. I should also point out that a decision to opt out of the plan is irrevocable.

Other than those that I have noted, the major principles of this act, as I have already mentioned, are essentially consistent with previous MLA pension legislation.

In the future, with such a low ceiling on contributions to registered retirement savings plans, and Members instead contributing to the Legislative Assembly Pension Plan, benefits paid out of the plan at age 55 will be significantly increased to five percent of average pensionable earnings multiplied by the years of service. This compares to two and one-half times the years of service of the current plan.

This will not be achieved without some cost to the budget. It will cost $1.3 million to pay past service contributions for all MLA’s now sitting in the Legislature. Apart from this, there will be an annual Legislative Assembly cost of $45,000 to maintain the plan.

The pension plan that this bill will establish is not a particularly rich package. Compared with other Legislatures in the country, this plan fits into the middle of the pack. It is more modest than many plans offered by the private and public sectors, and quite similar to the plan provided to Members of the Northwest Territories Legislative Assembly.

However, as we all know, Yukon legislators are next to the lowest paid in the country; Northwest Territories MLAs are the highest paid.

I believe that this bill is a reasonable measure to ensure that those who devote a significant portion of their lives to serving the public are not unduly penalized by changes in the federal tax laws.

Those are my comments on the principles of this bill. There are of course, a number of features of the bill that warrant comment. But, I will not go into those in detail at this time, preferring that we deal with them in Committee of the Whole.

Mr. Phelps: I want to say a few words on the principle of the bill, as well, and to discuss, very briefly, my involvement in the Members’ Services Board subcommittee. We looked at the various options available to Members here, and made recommendations that you ultimately find before you, embodied in the bill we are speaking to.

I recall quite vividly, when I was first elected to the Legislature in 1974 - I was not there for an awfully long time, as things worked out. I remember back then taking the position that we ought to, at that time, institute a pension plan for Members. Those of us who advocated such a venture enjoyed a lot of support from business people and others in the community. People realized that long-sitting Members had certainly made personal sacrifices and had a very deep commitment to the Government of the Yukon to serve the people in the job, as it was then.

For example, Don Taylor was one person mentioned at that time as being the longest serving Member, if I recall correctly. People recognized that, in serving the House and the people of the Yukon, he had passed by many job opportunities, prospecting opportunities, and the like. There was a common feeling that persons, such as Don, were entitled to something in the form of a benefit for their old age.

However, regretfully, the majority at that time chose not to get into the controversial area of Members’ pay and pensions. I always regretted that Members at that time did not face up to the problem. As a result, we have, now, long-serving Members still living who receive no pension for their service. That is largely because they did not face the issues back then.

We were advised - I believe it was about eight or nine months ago, in the Members’ Services Board - that we had a problem arising with the pension plan in existence at this time. We were advised that a tax expert had told the Clerk that the fundamental basis for the existing plan, namely, that Members could provide RRSPs for themselves, but that the fundamental principle upon which this plan was built was, for all intents and purpose, being removed from the structure. We were told that most Members would not be able to contribute any more than about $1,000 to their private pension plan. So, the Members’ Services Board decided to form a subcommittee to look at the options available.

I was one of the people who went on that subcommittee, certainly not because I was looking for glory, or anything like that, but because I feel that this is an area that is a legitimate one; it is an area, in my view, that Members have to approach in a very - I suppose, small “c” conservative - way, and it is an area that has to be addressed. If it is not addressed, or if people want to play politics with an issue such as this, then in the long run a lot of Members are bound to suffer as a result. I have seen that, going back to 1974.

So what we did was to engage an expert on taxation and on pension plans, Mr. Johnston, who had been involved in the establishment of several plans, including the one in the Northwest Territories, and who was - I am not sure if he is still - working with the Members in Prince Edward Island, in an effort to amend their pension plan so that it, too, would comply with the rules of taxation, as enunciated by Revenue Canada. It, too, will be a plan that fits in the mid-range of plans throughout Canada.

We asked him, initially, to do some research and bring us back a comparative study of the existing plans in Canada for the various legislatures. He did that and we looked at the mid-range plans. Right in the middle were two that I can recall at this point. One was the Northwest Territories plan and the other was, I believe, the B.C. plan, which was, for all intents and purposes, very close in most respects.

We then decided that the best option was to look at something in the mid-range. The Northwest Territories plan, because it was one that was recently introduced in our sister territory, and because it was introduced into a Legislature with a relatively small number of legislators and because our expert had personal knowledge and was personally involved in the planning, seemed to us to be the most reasonable one in the circumstances. We asked him to devise a plan that would contain most of the features of that plan and, in addition, provide for certain benefits for family members including the spouse and children up to a certain age, in the event of death.

We asked a lot of questions in our series of meetings with him, about a number of issues and looked at the various options and decided on this plan contained in Bill No. 9.

I would like to say a few words about the plan and who it applies to, because it seems to me that what we are doing, is certainly based on established precedent.

First of all, the plan applies to the people in this Legislature and applies forward, not backward. We are assured that is a common feature of all pension plans that have been introduced in all of the various legislatures across the country. Of course, it is a very common feature of virtually every pension plan in the private sector; it is the normal way in which a plan affects those it serves.

With respect to the other provisions that provide for an inflationary increase equal to the increased cost of living in Canada, more or less, these are, again, features that are common to most modern pension plans.

The Minister that introduced the bill mentioned that we took into consideration a variety of things such as the increased workload for Members in this House, because of the increase in the money being spent and the programs being offered. We also looked at what we thought would be a relatively reasonable amount for most Members once they did reach retirement. It is our view that the pension is reasonable on all counts, particularly, when one looks at the other benefits such as salary, et cetera, received by Members in this Legislature. One can recognize the simple fact that we are at the low end of the scale when compared to other legislatures across the country.

I feel comfortable standing here and recommending this bill to all Members. I hope it will be supported. I look forward to hearing what others have to say in this debate.

Mr. Nordling: We, unlike the Member for Hootalinqua, are not comfortable with this bill. We do not object to the principle of the bill and we do not object to pensions being increased for Members of the Yukon Legislative Assembly. There are two concerns with respect to this bill that prevent us from supporting it, though.

The first concern is that the bill is retroactive. My understanding of this - and my understanding may be wrong, because yesterday was the first time that I saw this bill - is that it requires a $1.3 million payment to bring the pension plan into line so that it applies retroactively to every Member who is sitting in the Legislature today.

To me, that feels like we are giving ourselves a $1.3 million retroactive raise. It does not apply to other Members who have sat in this Legislature with us in the past years, and that makes me uncomfortable.

I tried to establish the reason for that, and my impression is that the reason it is not applying to others who served more than six years in the Legislature is because we are here to take the heat and they are not. And, it will cost more money, but I am not sure how much more it would cost to bring the plan up to speed for Members who sat with us in prior years who will not be getting the benefit of this. I do not know whether it is $2 million in total instead of $1.3 million, or whether it is $2 million more than the $1.3 million. The Member for Hootalinqua mentioned Don Taylor and his years of service and dedication, but this does not apply to him.

I would be a lot more comfortable and I think I could support this bill if it did not apply retroactively; if what we were doing is passing an improved pension plan for the Members of the Legislature, starting January 1, 1992, and proceeding into the future.

The second concern I have about this bill, and it is something that makes me very uncomfortable, is the timing of the bill. The fall session is a budget session. This spring we are going to have a legislative session. This is a piece of legislation that could quite comfortably be dealt with in March or April, in the 1992 spring session, and, if need be, it could be retroactive to January 1, 1992.

As a Member of the House, I have not had a chance to go through this bill carefully; I have not had a chance to discuss it with anyone; I have not had a chance to get any reaction to it and I have not had the opportunity that perhaps the Member for Mayo and the Member for Hootalinqua, who are proponents of the bill, have had by being members of the subcommittee that has investigated it.

Here we are, in this Legislature, on a Tuesday night, just before Christmas. It is an unscheduled sitting night. We are discussing a bill that simply deals with Members of this Legislative Assembly - no one else - which, I think, more than doubles our pension plan and requires a payment of $1.3 million and $45,000 more a year. It applies retroactively to when each of us began sitting in the Legislature.

Several Members have pointed out that one can opt out, but the choices are not even clear. The opting out is irrevocable. If we opt out, as of January 1, 1992, then we are not eligible for any pension from that point on. My understanding is that we are entitled to the previous pension plan that was brought in under the Legislative Assembly Retirement Allowances Act, which is going to be repealed. That is the non-contributory plan at 2.5 percent, and there is nothing after that. I do not think that it is fair. It is not right for the Members of the Legislative Assembly to be jamming through what appears to me to be a retroactive raise on a Tuesday night just before Christmas.

The Member for Hootalinqua says that the reason we are going to get it is because we are here to take the heat. If we are willing to take the heat, let us do it in the spring. Let us do it in the legislative session. Let us spend some time, as Members, looking at the bill and its effects and costs before we pass it.

Hon. Mr. McDonald: I am rising to speak to the bill. I think it is no secret, given the media reports, that I am a supporter of the bill before us. I am a supporter for a number of reasons and I will explain those reasons. I will also have to comment on some of the comments made by the Member for Porter Creek West because I think he is sincerely mistaken on a number of points and, in fact, inconsistent on a number of points. I do not think that his comments can go unchallenged.

I, as the Member for Hootalinqua pointed out, joined the Member on a subcommittee of the Members’ Services Board, entitled the Pension Subcommittee, to review the requirement for pension changes resulting from the changes to the tax rules governing retirement savings.

As someone who helped to negotiate pension improvements for fellow miners at United Keno Hill Mines, in the private sector, over the course of about six years, and someone who was involved in the establishment of the original pension plan that we have before us today, I have been a consistent and strong believer in the establishment of plans for working people.

Consequently, I do believe that pension arrangements for older people, after a lifetime of service ought to be sufficient to support older people in their retirement.

I must also say, having started this task fairly early in life, that I have always respected the need to plan ahead and I have never been swayed by those people who feel that pensions are something that you worry about when you are on the verge of retirement. I think that is short-sighted and I think that it is incumbent upon younger people, perhaps all of us, to plan for the future in a responsible manner.

There are a number of changes to the pension plan that have been outlined by my colleagues who have spoken to the bill. I believe that those changes are necessary not only to meet tax-rule changes, but also to ensure that the plan that we have as Members is roughly equivalent to the medium-range plans that are accorded to other persons who are in our occupation in this country. I am very confident that the plan that is before us is neither too rich nor insufficient to meet the needs, not only of MLAs today, but MLAs in the future.

It is a difficult matter for Members to come before the Legislature themselves and discuss their own pay and pension benefits. It is a reflection of the prudence that this Legislature has shown in the past that the pay that Members currently receive is among the lowest in the country. It certainly is a reflection of prudence, if one might put it that way, that the pension benefits are as they currently stand.

It is not wise or prudent for the future sake of, not only us, but our successors, to shy away from this important matter, in order to ensure that people who run for public office and serve the public receive reasonable compensation and retirement benefits.

The Member for Porter Creek West has indicated substantial disagreement with the bill. He has indicated that he is not opposed to the principle, but in fact, expressed disagreement with some elements of the principle of the bill that I must take issue with.

The Member initially had expressed concern about the fact that the bill was, in his words, retroactive, in the sense that it called for payment to fully fund past service of current MLAs.

He has expressed some cynicism that the Members who favour the measure now are making the argument that because they have the fortitude to do the responsible thing - I will use different words than the Member has used - that this is somehow selfish. I have to point out to the Member that he has accepted this principle himself, perhaps inadvertently, along with all Members of this Legislature, in approving changes to the pension plan in 1987 and the original plan in 1984. The principle that the pension plan would apply to current Members only was accepted then and it is consistent that we accept it now.

As the Member for Hootalinqua pointed out, in the private sector and in the public sector, and when it comes to Members’ pensions, the principle for pension improvements will apply to all sitting Members. Past service will be considered and that has always been a feature of improvements in this area.

Had we accepted the principle the Member is now criticizing, then the people whom he is expressing some concern about now - namely, Mr. Taylor, once your predecessor, Mr. Speaker, Mr. Pearson, and Mr. Falle - would not be receiving a pension today. When the pension was approved back in 1983, we accepted the concept that those Members would have their past service counted. I was a brand new Member and did not have much service myself, but I accepted that principle because I believed in that principle.

The Members that the Member expressed so much concern for, are now receiving a pension. I think that is for the good.

The criticism of the timing of the bill is something that I find interesting. We are here on a Tuesday night, and shortly after we pass this bill, if Members wish to support it, we will be about to deal with a $300 million-plus budget. That budget has infinitely more impact on the public than does this measure.

I have not heard the Member opposite take a critical view that we are working prior to Christmas when it comes to the budget, but the Member is taking a very critical view that we are working on this particular measure. I regard his comments as being an argument of convenience, because the Member has decided that he, for his own motives, will oppose the measure. The point the Member for Dawson made - that the tax rules governing retirement savings will come into full force as of January 1, 1992 - is not an inconsequential statement. If we were to deal with this bill in the spring of 1992 and deal with it retroactively, I am sure we would be breaking one of the fundamental principles the Member for Porter Creek West wants us to support - and that is to not deal with matters retroactively. Again, I would suggest that the Member has made another argument of convenience.

I think it is important to point out in closing - I do not want to drag this on at great length; we will have the opportunity perhaps tomorrow to discuss this matter in Committee and I will have more to say then - that the pay assigned to Members and to Ministers who work for the Yukon public is not rich in its quantity. It is average and on the lower end of the scale. That is something we accepted as Members because we feel it is sufficient for our needs; consequently, consistently in the past, when we have considered that it is insufficient, we have taken tough decisions and put ourselves in a position to review our pay and benefit structures. We can make changes where we feel they are appropriate, and we can speak to the public where there is a requirement to do so.

I believe the fact that the pension we are proposing is in the mid-range of  comparative pension plans in the country and the fact that Members will now start to invest a very substantial contribution to achieve that modest goal, is, I think, a very responsible thing to do.

I do not think, contrary to the Member for Porter Creek West, that this is something that is inappropriate. I must say that I do support the bill in principle and will be taking the opportunity to speak to it in particular in Committee.

Speaker: The hon. Member will close debate if he now speaks.

Hon. Mr. Webster: I will just take a few minutes here to address a few of the concerns made by the Member for Porter Creek West in his speech. I was very pleased to hear him start off by saying that he did not object to the principles of this bill, but he did have two concerns about the things he raised and I want to make a few comments on those.

The first was, of course, dealing with the matter of retroactivity, saying that it does apply. He is correct, it does apply retroactively to all Members of this House. It does not apply to Members who served previously. He suggested that the reason for this is because the previous Members are not in the House to take the heat. I want to remind the Member that they are also not here to make contributions to this plan, and this is a standard feature of all pension plans, be they in the private sector or the public sector. They are there for the benefit of present or existing Members, and, of course, all Members who come thereafter.

The second concern he raised was one of timing. He suggested it was uncomfortable that we are doing it at this time. He suggested we wait until spring. I am pleased to hear that the Member for Mayo reminded the Member for Porter Creek West that the new tax laws come into effect January 1, 1992, and it would be difficult, if not impossible, to make it retroactive if this was brought forward in the spring. I believe that we do have the time now, even though the Member protests somewhat that we are doing this on a Tuesday night just before Christmas. He seems to suggest that perhaps no one is aware of this. I would remind the Member that we did introduce this bill on Monday. We met with all members of the media and it was carried by the press quite thoroughly over the last two days. We are dealing with it again today and Wednesday and again Thursday in Committee of the Whole. I am quite sure that, as a result, everyone will be aware of this bill and its provisions.

Speaking on the provisions of the bill, the Member is quite right. He is probably not aware of all of the provisions. He stated quite inaccurately, I should point out, that this bill would more than double our pension plan. That is not correct. He also mentioned that if he chose to opt out of this bill, he was uncertain as to what situation he would be in. I want to inform him that the current pension plan would apply; he would just not be making the contributions starting January 1, 1992, of a deduction of nine percent of his salary.

I believe that most Members of this House are aware of the principles of this bill, support this bill and want to get on to clause-by-clause debate.

Thank you.

Motion for second reading of Bill No. 9 agreed to

Speaker: May I have your further pleasure?

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

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

Motion agreed to

Speaker leaves the Chair


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

We will have a brief recess.


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

Bill No. 19 - First Appropriation Act, 1992-93 - continued

Department of Renewable Resources

Hon. Mr. Webster:   I am pleased to outline today the operation and maintenance estimates for the Department of Renewable Resources, for the 1992-93 fiscal year. These estimates call for the department to spend $12.5 million in the coming year. This is a four percent increase over the spending forecasted for the current year.

Funding priorities for the department continue to reflect this government’s commitment to the completion of the Yukon land claims agreement and our role in the wise management of the Yukon’s natural environment.

To support this government’s land claims commitments, we are planning to spend $1.3 million for negotiations and implementation of land claim agreements in Yukon. This includes $640,000 for the Yukon First Nations Comprehensive Claim and related implementation costs. Approximately $690,000 has been allocated for implementation of the Inuvialuit Final Agreement. Both of these expenditures are recoverable from the federal government.

To help meet the Yukon’s decentralization goals, the department has allocated $75,000 for operating and maintenance costs involved in decentralizing park superintendents to Haines Junction, Carcross and Dawson City. We have decreased the clerical support from a half-time position to a quarter-time position in Haines Junction and we will be establishing a new quarter-time position for Carcross.

We will also establish a new half-time clerical position in Faro. These changes will allow for improved service to the public in the communities.

In the new fiscal year we will be undertaking three important initiatives that reflect our responsibility to protect the Yukon environment. The Department of Renewable Resources will be spending $40,000 in 1992-93 for activities of non-government organizations to increase public awareness of, and to encourage, environmental response and behaviour. We will also be contributing $500,000 to establish an environment enhancement trust fund, designed to finance sustainable development projects. This is the first of four contributions to this fund, which will allow for donations and bequests. In addition, we will be spending $165,000 to establish a youth conservation corps. This innovative project, designed to strengthen community-based and conservation-related projects, will involve up to 25 new summer jobs for youth.

With this year’s Alaska Highway anniversary, we have identified $42,000 for increased service and maintenance, in anticipation of increased use of our parks and outdoor recreation facilities.

In our budgets, we have identified $299,000 for environmental protection. This will be used for the development of the Environment Act regulations and for ongoing public involvement in education.

In the fish and wildlife branch, our fisheries unit will be spending over $600,000 for freshwater fisheries programs. These include harvest surveys, habitat resource and environment studies, and enhancement and stocking programs.

Our parks, resources and regional planning branch has allocated $92,000 to the geographic information system remote sensing section, for the coordination, promotion and training in this advanced information system.

The Fur Institute of Canada will receive a total of $20,000 as our contribution to the national public education programs, in support of Canada’s fur industry. We will be continuing to assist the Yukon Trappers Association this year to deliver trapper education workshops, by providing funding of $48,000.

I am also pleased at this time to outline the capital initiatives proposed for the department for the upcoming year.

In the area of parks and campgrounds, we will be funding some initiatives as well as various site improvements.

There are plans to prepare management options for the new park at Conrad. The management plans also continue the proposed parks at the Carcross dunes, Kusawa Lake, Coal River and for the Lazulite deposits. A total of $127,000 has been earmarked for the preparation of these plans, including the necessary public reviews and consultations.

We will be continuing with the implementation of the department’s outdoor recreation sites and corridor assistance plan, which we anticipate will have lasting benefits for our residents, our visitors and our tourism industry. The estimates also contain $250,000 for planning new campgrounds at Prevost and Hoole Canyon, for campground relocation at Twin Lakes and for construction at Swan Lake.

Major rehabilitation work is also planned for Simpson Lake, Aisihik Lake, Snag Junction and Fort Selkirk campgrounds. This will include construction of new roads and loops, installation of bear-proof garbage containers and wells, painting and other improvements. We also plan to spend $30,000 on a program aimed at identifying and improving natural hazards in or near campgrounds or recreation-site facilities.

In the ongoing facility replacement program, the department has allocated $110,000 to replace or repair damaged or obsolete equipment, such as picnic tables, outhouses, garbage containers, wood boxes and signs. Funding of $117,000 will allow the government to continue to manage and protect Herschel Island Territorial Park. This is fully recoverable under the Inuvialuit Final Agreement.

We are planning to invest $200,000 for construction of a new campground facility in Faro, for support services and for administration of our field service operations in that community.

We have also identified $75,000 for an addition to our facility in Haines Junction, required for our expanding programs in that community.

In the area of wildlife management, we will be continuing to support the widest use of conservation of our wildlife populations. Development of our wildlife viewing program reflects the increasing non-consumptive value of the Yukon’s wildlife. A total of $125,000 has been allocated in 1992-93 for this program, to identify and promote viewing opportunities.

An additional $225,000 has been earmarked for regional wildlife management plans.

In total, the capital estimates for the department call for an expenditure of almost $2 million. These expenditures will help us to ensure that the environment and the renewable resources of the Yukon are managed and used on a sustainable basis. They are an investment in our communities, our environment and our economy. I trust the hon. Members will support them.

Some Hon. Member: (Inaudible)

Mr. Brewster: I will respond to the remark about Buffalo Bill shortly. If the Members opposite want to be smart, we will probably stay here...

Some Hon. Member: (Inaudible)

Mr. Brewster: Nobody takes anything back.

I would first like to ask the Minister a question. I was up on the Dempster Highway during the last week of August. There are signs posted disallowing snowmobiling. I agree with this completely and think it is a good idea. There are also notices in the paper to this effect. However, when I was up on the Dempster, I noticed two black marks going up through the tundra. This caught my curiosity. It was quite apparent that the Fort MacPherson people were dragging caribou out of there. I do not have a problem with the caribou. That is a different subject.

How come a snowmobile damages the tundra when it is driven by somebody of a non-aboriginal culture and when they are driven by aboriginal people, it does not damage the tundra?

These marks will be there for the next 20 or 30 or 40 years. I stayed on the highway for an hour and watched what went on. I do not want anybody telling me that these things do not happen because I saw it.

I would just like an explanation. Do you agree that the environment should be protected or should it just be protected from certain people?

Hon. Mr. Webster: The environment deserves protection and all people should respect the environment. I do not know the point the Member is trying to make directly, but the reason the snowmobiles have been banned from use until November 1 is to protect the environment, until there is sufficient snowpack to protect the land there. Also, it is to prevent people from getting easy access to big game hunting prior to that date; there are sheep and moose in that area, as well. I would appreciate hearing from the Member or any member of the public who witnesses such attacks on the environment, so that we could respond immediately to it. It is unfortunate that this incident has come to light at this time, when it is nearly impossible to do anything about it.

Mr. Brewster: As long as I have been in this Legislature, every year complaints from truckers and others have been brought in here. I can remember Mr. Falle bringing complaints in every fall. Every fall the Department of Renewable Resources said they investigated it and nothing happened.

I would invite the Minister next summer to go up there; it will be there. I know enough about tundra. I am not an expert, but those marks will be there for the next 20 years and I can show him the two trails, one going in and one coming out. We watched it for an hour and one-half to two hours. That tundra will not come back. If we are going to turn around and protect the tundra, which I agree with - I have no problem with that philosophy - but as long as we are going to allow that, we have not gained a thing.

I extend my invitation to take him up there; I will pay the gas and oil and his meals up and back and show him the mess. It will be there, no problem.

Hon. Mr. Webster: I have no reason to doubt the Member’s remarks and the extent of the damage he suggests has been caused in that area. All I can say is that we certainly would like to enforce the rules as we have them in place with the Dempster plan, which very clearly sets out the off-the-road access routes that are acceptable for use. If anyone is in violation of that, we would like to know about it and proceed accordingly.

Mr. Brewster: I will make one more comment before I go on. I find it rather strange that the conservation officers do not report these things and someone always has to do it - especially when the conservation officers are at check points.

I would like to speak further on traplines. Can the Minister tell me how many registered traplines are not currently being used?

Hon. Mr. Webster: I cannot provide that information right now.

I think that the Member has to appreciate that the use of traplines is monitored over a five-year period, recognizing that people will choose not to trap an area for two or three years for some very valid reasons.

I know that the Member is aware that if there is no record of harvest on a trapline for a five-year period, it would be in conflict with our policy of “use it or lose it” when it comes up for renewal.

Mr. Brewster: I asked for the figures, which he could not give because they were confidential, so I pretty well got my answer there.

How many trappers have been warned that their line has not been used for the five-year period?

Hon. Mr. Webster: Just before I respond to the Member’s question, I think his introductory remark deserves some comment.

In the matter that he raised in this House earlier his year, the information requested was dealing with one specific harvest year, which of course is confidential. As the Member knows, if there is no harvest over a five-year period, that information becomes known, at which time the trapper is notified and the line is reassigned to somebody else.

I cannot give the Member the number of trappers right now, but there are at least a few cases every year where the trapper is notified by a member of our department that they have not used their line over a five-year period and that it is in jeopardy.

Mr. Brewster: Has there ever been any traplines taken away because they did not use them for the five years?

Hon. Mr. Webster: Yes, I can assure the Member that a number of traplines have been reassigned. In fact, there was a celebrated case or two last season, involving an elderly aboriginal woman whose line was taken away because there was no harvest on that line for a five-year period.

Mr. Brewster: I just have one more question. They gave me a blueprint of a beaver-proof culvert. I am more confused now than I ever have been in my life. I have had people look at this, who know more about trapping and beavers than I will ever know, and they shake their heads; they cannot figure out what we are trying to do.

If this trapline went through the road where the culvert is - if that is the culvert that is causing the problem - then these will not work unless there is four feet of water, and that would wash the road out, so we cannot plug that culvert; that is an impossibility.

If we are going to put the culvert down, I do not know where you are going to do it. The closest beaver dam to the highway is 250 feet. That means the water can back up 250 feet. I do not know why it would be put there. If the culvert is put through the dam, as it indicates in the diagram, there would have to be four feet of water there. If there is that much water, it still means the man’s hayfield gets flooded, because there is not that much height there. Also, there are three other dams down below. It is a really nice picture. Anybody who tells me that they can do it for $100 had better get out there and push, because they could sure make a business of it in this world, but it is an impossibility. The wire and staples alone would cost $100, without labour, preparation or anything else. It is a very interesting diagram and it is obvious it came from a government department. That is just the way they are.

Would the Minister like to comment on that.

Hon. Mr. Webster: I do not profess to be an expert on beaver-proof culverts. I will venture to say, however, that this picture that was provided to the Member has been provided to us by the Government of Alberta. The materials alone for the culvert would cost $100. The Member is quite right, the time it takes to install it would probably take more than $100. I am sorry, I cannot help the Member out about the installation nor its effectiveness.

Mr. Brewster: I am not joking. I am very curious. I have had a lot of people look at this. Would the Minister, sometime in the next three months, send somebody down from the department who could sit down and explain it to me. Maybe I am just dumb. I cannot figure out what it is you are trying to do. It just does not add up. If there is four feet of water and the place is already flooded, another four feet will flood it completely, because there is not even four feet of water in the dams the beavers built. If the Minister will promise me that someone will show up, sit down with me and show a numbskull like me how it works, I will never mention beavers again in this Legislature.

I did not say buffalo; I said beaver.

Hon. Mr. Webster: I want to make a commitment to the Member that we will let him know when Members of the Department of Renewable Resources install that beaver-proof culvert in the location the Member is aware of, so that he can get a first-hand viewing as to how the culvert should be installed and how it is supposed to work.

Mr. Brewster: I am trying to defend a poor farmer; I do not know why we cannot get this through our heads. It says right there that if they are going to work they have to have four feet of water. With the amount of drainage from there down to the lake, if they put four feet of water in, more land would be flooded than is flooded by the beaver.

The government says that this is going to work, but before they tear the poor farmer’s land all to pieces and flood him - he has already lost $6000 - let us see if we cannot come up with a sensible plan. For instance, why not live-trap the eight to 10 beaver there and move them somewhere else.

Hon. Mr. Webster: In addition to that commitment, I will also commit to the Member, as the Minister of Renewable Resources, to sit down with the Member before that culvert is possibly installed in the spring, to explain it to his satisfaction.

Mr. Brewster: That is all I asked for in the first place. This is the reason that the debates go on for so long. They keep giving us other answers, rather than a simple answer of yes.

I will send someone to their office, or I will go there myself; I am not ashamed to go into their offices. There is something to learn for a man as old as I. I will not ask any further questions at this time with respect to the beaver.

I would like to ask the Minister if there has ever been an elk count completed in the Hutshi and Stony Creek areas. I would also like to know how many calves were born this spring in that elk herd and how many of the calves were alive this fall?

Hon. Mr. Webster: There has been a count completed on the elk herd in the Hutshi area, but there has not been a count completed on calf survival over the last two years.

Mr. Brewster: I am very curious about this. I have seen the elk along the highway over the past few years, but when I was driving home the other day, I saw the largest bunch I have seen in a long time. There was approximately 30 cow elk with one bull, and I do not recall seeing one calf in that herd of 30. Also, I think that the Minister knows, because of my screaming about the wolves, that the wolves are killing the calves at Hutshi Lake. I am very curious to find out what is happening to these calves.

There were three bulls there, and I know that the government brought in 24 more bulls, so we cannot say that cow elk are not becoming pregnant. I do not care how many studies are carried out, if there are 24 bulls, the cows are going to become pregnant; there is no question about that. However, as far as I can tell, for some reason the calves are not surviving until fall. As I mentioned previously, a herd of 30 elk have been near the highway for about a month and I have not seen one little calf in that bunch.

Hon. Mr. Webster: I have no reason to doubt the findings of the Member. That same information has been raised as recently as last month at a meeting held in Haines Junction on, I believe, November 5. This would suggest that predators in the area are claiming calves from that herd.

Mr. Brewster: I am glad that I am not the only person putting a bug in the Minister’s ear. This is a very serious situation. We all laugh and joke about these things, but some of the legislative returns show that the number of moose is below 100. I am not an expert on this, but I have been told by biologists that once the numbers get below 20 percent of what should be in an area, they will not come back and they will all be lost. According to the legislative returns we have received, that is the situation in game zones 5, 7 and 9. Yet, the studies continue.

According to another study completed in 1984, 82 percent of the female caribou in the Burwash area were pregnant. When the caribou were counted in the fall, they had lost over 60 percent. Once again, calves do not just all die; it is the same argument as with the seven colts that I mentioned.

It is too bad that I have to keep talking to people who do not work with livestock and do not understand. Seven colts do not just disappear. One might lose two or three, but seven from one bunch do not just disappear. The conservation officers are not looking very close when they say that they do not see any signs. It was not just one wolf doing it; there was a bunch.

Not long ago, I was phoned about an occurrence in the Hutshi area. I believe the Minister received a letter about this as well. When these individuals went into Hutshi, they found a dead elk that was still warm. The wolves had just killed it, left it, and went away. This is characteristic of wolves, not grizzly bears. Grizzly bears are not out this time of year, so wolves are the only predators left. It was not a human predator. These people had just gone out to check their horses.

This is a very serious matter. I do not know how I can impress upon the Minister that something has to be done. We cannot keep conducting studies on the same thing and keep coming up with the same answers. We have to start taking some action.

I do not know whether the Minister wants to say anything on that, or shall we go on to something else?

Hon. Mr. Webster: I do not think there is much more to say on this matter as it has been raised three or four times already. The Member knows that a great deal of evidence has come forward recently from a variety of sources; predator control was discussed quite thoroughly at the meeting in Haines Junction. Evidence was provided to collaborate that provided by the Member for Kluane. It is indeed a serious matter, particularly at this time in game management zone 5, where we had to introduce a closure on the harvest by the outfitter in that area.

The Outfitters Association obviously realized that it is a serious matter and they are participating with us in this final study, which is in progress at this time and will be completed this week, dealing with the health of the Aishihik caribou herd and looking at the fertility rate of the cows in that herd. Of course, the Member knows that the Wildlife Management Board is meeting this week; they met today and will meet again tomorrow. The main item on the agenda, I would suggest, is to look at the situation in order for them to come forward with some recommendations for me on this matter.

Mr. Lang: I would like to know when we are going to get the copies of the report of the Wildlife Management Board, and the recommendations therein. Can we be in receipt of it by the end of the week, since there is going to be a report given to the Minister, as far as I know, tomorrow?

Hon. Mr. Webster: I would doubt very much that the Wildlife Management Board, whose meetings will be completed tomorrow, will have a report in to me by the end of this week.

Mr. Lang: When I was critic for Renewable Resources, I asked for the minutes and I got them, albeit sporadically. It seems that the Minister prides himself on being in an very open government; yet, at the same time, when one has to be an MLA and wants some information, all of a sudden it seems to be classified unless it happens to be a brochure telling people where the community of Dawson City is - which one has to pay for in a gas station.

When will the Minister make that report available to the critic, as well as to other Members of the House, because I think it is very important, especially to the Member for Kluane. It is going to affect his people directly and a lot of people in Whitehorse and the surrounding areas, such as the Member for Hootalinqua’s area. When will we get a copy of that report? We know it is coming.

Hon. Mr. Webster: As in the past, once I receive the report and have time to review it, I will make the report available to the Member.

Mr. Lang: That gives the Minister a latitude of about 12 months, depending upon how much time he needs. I would like to be more concise. Could we have a copy of that report, say, by the end of the year? That is two weeks hence and would give him some time to read it, which is fair. I agree that he should have some time to look at it. He may well want to release it before any decisions are made. I think that, in fairness to Members of the House, it is an important issue. It is one that we have been raising on a continuous basis - not just in this session. If you go through the votes and proceedings, it has been going since 1985, session after session.

Can the Minister give us a commitment as to when we can see that report. He knows he is going to get the report this week.

Hon. Mr. Webster: I do not know if I am going to get the report this week. In fact, I doubt very much that I am going to get the report this week. I will make a commitment to the Member, though, that I will make available that report to him a week after I receive it, which may not be before the end of this year.

Mr. Lang: That is fair. If it happens to be January 3, we will accept January 3.

Mr. Brewster: I am not going to carry this on any further. I would make one remark. Eight, nine or 10 years ago, wolves came in and killed two or three dogs in town here. The next day there were helicopters out and people shooting. In fact, I believe they even shot one lead dog right out of a sleigh. Yet, nobody gets too excited about the plight of the rural people and dogs are their livelihood out there. There was no livelihood at risk here; they were killing some dogs. It took no time, no studies, nothing, and they were out there the next day with helicopters getting the wolves.

The Minister looks at me but it did happen. You bet your life it happened.

Hon. Mr. Webster: Eight or nine years ago, the government shot someone’s dogs? Fortunately, I was not the Minister responsible at that time. Also, that has not happened since.

I am getting into a discussion on the policy of it, but the Member knows that when wolves are harassing animals on someone’s property, measures are taken at that time.

Mr. Brewster: In the study by the Department of Renewable Resources in 1981, 1982 and 1983, wolf predation accounted for 56 to 64 percent of the annual count of caribou. On page 36, the observation of pregnancy rate for 1980, 1981 and 1982 was 81, 78 and 81 percent. These caribou and the Aisihik caribou meet on Brook’s Arm, so they are much the same herd; they are split by a mountain, but they travel in much the same area. That is a study that cost us lots of money. Now we get a new study of the other bunch on the other side of Brook’s Arm. It goes on and on.

I will now go on to this report. I hope that two Ministers listen. This is a very good report. There is only one thing I object to. I put it on a motion, trying to get it in here, but with the House being so disrupted this year, I never got it in. I am going to try it this way. I will explain what I want and maybe the good faith of the Ministers, seeing that it is around Christmas, will help them take a serious look at this and maybe put this through and help the farmers. It is not a great deal.

In the first place, I think the policy is good, but I can tell you about a few problems. The lands branch does everything to obstruct farmers, which the agricultural branch does not do. All the problems farmers talk to me about originate in the lands branch. What I am asking is that, instead of five years here, we make it seven. Let me explain this before you all get excited.

Actually there is May, June, July, August, September and October when you can farm. You are lucky if you can farm during the entire month of May and the entire month of October. There are 60 months in five years. I will allow you another two months to clear the brush in the winter and that is giving you a lot, because with 65 hectares you can clear it much faster than that. Out of five years or 60 months you are farming for 32 months.

And you could have a year like we had this past year, when you could not get out on the land for week after week because of the rain. Crops were left unharvested. Some crops were harvested up until a short time ago and being sold frozen, because they could not be harvested earlier, because of the rain; the crops were too wet.

It is absolutely ridiculous to turn around and say that you will give a farmer five years when he really only has two and one-half years; that is all that he really has. That is with respect to farming.

I have heard the argument that it can be done faster. If you have lots of money you surely can complete it faster, but the average farmer out there has to have a second job in order to farm. A farmer cannot make it another way, since he will not realize a profit for approximately 10 to 15 years. That is the history of farming throughout western Canada.

As I recall, none of the original homesteaders ever made anything; they suffered. Their grandchildren are the ones who were able to start to make a living from farming. This was because the farm was in full operation, the land was cleared and broken and everything was looked after. The original farmers do not make a decent living at it.

The original farmers here in the Yukon are trying to hold a job and work the farm. All that I am asking is that you allow these people seven years to prove the land as opposed to five years. You give them five years and then grant 60 days, but everyone who comes to see me says that there is a hassle with the lands branch. These people should not have to argue with the lands branch.

Another thing that happens is that someone will purchase some land on December 1 - that is when his agreement is signed - and then he is told that he must produce a green crop by August because it cannot be checked in December, so effectively this person is losing four months. I would like to know why the agreement cannot allow him until May of the following year and give him the benefit of that, in view of the frozen ground? You have to take into consideration the ground and the climate.

I am asking for two more years for these people and it is not going to cost anyone a cent, except for the transfer. If I had my way, I would like to see the land for farming and agriculture transferred over to the agricultural branch in Renewable Resources and be administered through that branch. This process should be simplified when transferring the land - I see the Minister writing and I am going to get in a row here - but this is a simple thing that can be transferred. I am only referring to agricultural land, not anything else.

Once a person applies for a piece of agricultural land, that parcel of land should be transferred to Department of Renewable Resources, agriculture branch, so that the dealing is done with the people who come out and inspect the land every day, not someone who sits in the lands branch and never sees the land. Either I or the Minister will have to go out and inspect the land and come back with recommendations.

I just brought  that up. It is Christmas and I thought perhaps they would look at it; it is for the goodwill of the government. The government is going to come out shining on this when they show some cooperation. Otherwise, I think the policy is very good, but I would certainly like them to think about this. I do not know whether either Minister wants to comment or not; it is just a suggestion.

Hon. Mr. Webster: Perhaps the Minister responsible for lands is more aware of this issue than I am, but to the best of my knowledge, in all the consultations we have had with the Yukon Agricultural Association, they never requested an extension of five to seven years. They were quite content with the five years to make improvements according to the farm management plan.

As to the Member’s comment regarding the handling of the land by the agricultural branch, whose staff actually go out and makes inspections of the land to see if it meets the improvements, I will have to raise that matter with my colleague, the Minister responsible for lands.

Mr. Brewster: I realize the agriculture branch asked for five; however, they never ran into a year like this with so many problems - some of which they should have thought of; nobody has ever sat down like I did and figured out by the month, where, really, instead of getting five years, they are getting two and one-half. People do not farm in the winter, but they are being charged for it. They can farm for two and one-half years out of the five, and I am giving them the benefit of doubt of probably a month, because it is very hard to farm in the first two weeks of May; maybe it can be done in some areas, but not too many. And there may be snow during the last two weeks of October and the ground frozen, so I am giving the benefit of that. If one did not get the 60 hectares cleared in a week, they would go broke. I am giving them the benefit of the doubt. I have also talked to the new president of the Agricultural Association and he thinks it is a fine idea.

Hon. Mr. Webster: In our consultations with the Yukon Agricultural Association, most members are pleased with the five-year period, because they realize it would enable them to secure tenure to the land sooner and it also enables them to make the necessary improvements, grow the crops, take advantage of the tax relief that is provided in the policy. There is also some flexibility, as it exists at this time, with some extensions to a development agreement - an extension for only two years.

So, if farmers do experience a bad season, as they have this year, they have the ability to sit down with the department and make one amendment, one extension to their development agreement.

Mr. Brewster: One cattleman whom I know got his land on December 25, so he gets three months. He is sure not going to farm in those three months.

Hon. Mr. Webster: That is under the old policy.

Mr. Brewster: That is what they get here: 90 days.

I see I have got the two Ministers going. We will leave that because I know they will have a little party at Christmas where they will talk this over and come back in the spring and say, “Here it is.” Then I will have gotten a real Christmas present out of this and I will be real happy.

Now we can get down to serious stuff.

One Minister over there made a remark about Buffalo Bill. I do not have a problem being called Buffalo Bill. I have been called an old goat, too. I do not have that problem because I think that an old goat and a buffalo are very smart animals and I am proud to be put with them. In fact, I am a lot prouder to be in their company than with some human beings.

Let me explain a couple of things to you. A man and his daughter were knocked off the highway by a buffalo and kicked into the ditch. I do not think he was very happy with the situation.

Let me explain about a farmer who lost $6,000 or $7,000 worth of potatoes. He sweats it out and the buffalo, who are within a mile and one-half of his place, when they make their annual migration up the road, come into his place and destroy his whole crop overnight. I do not think he is quite happy. I think he is like me. He is an old goat and will defend his rights.

The two or three farmers up there who grow green feed have been continually visited by the buffalo. The buffalo do not stay there but if they ever break the fences and get in there, then they are going to stay, and there is nothing stopping them from breaking the fence. We have already proved that no fence is going to hold them, unless an eight-foot wire fence is put up along the highway to keep them fenced in.

This goes back to 1990 when the Champagne/Aishihik Band wrote and complained about losing all of their crops.

At the meetings, they said were going to do something, and they never did. One man out there has had his horses hauled out to Haines Junction twice. They will not take him to court, because the court says he cannot be convicted. But the man is guilty already, because he has to pay for the truck hauling the horses and the feed there and back. It can be done by the regulation, but, morally, it is wrong.

The same thing happened to a man at this end, at the Champagne end. His horse arrived in Whitehorse. When he went to court, no one showed up. He could not have won anyway, like I explained to him. The court can throw it out, but he will still have to pay all these penalties. Morally, that is wrong. I would like someone to stand up and tell me how they can do these things. The judge has said that any time a wild animal tears a fence down, the owner is not guilty. But he still has to pay.

It is time the department took some responsibility and did something about this thing. I made one suggestion, but it was shot down. They have lost six animals on the highway and they are six more people not happy about buffalo. If those animals had been given to agricultural people and they had given off calves, we would be ahead of the game. There would be no handouts, because everyone would be supplied with some calves. You would have solved it.

The other answer is to be like Banff. If you want to get this settled, fence the whole bloody highway and keep the elk and the rest there so the tourists can stop to see them. There is a different answer to the whole problem.

The department said they cannot move them or give them to the farmers. I have the agreement with the Government of Canada and it does not say that. It does not say that anywhere and I would defy anyone to show me where that is in there. In one of the legislative returns, it was said that there was never any specific commitment by the Department of Renewable Resources to move calves of the animals that were in the proximity of the Alaska Highway. That is untrue. I was told that right to my face. It also says it right here. It says that they will be maintaining the herd at a size of not more than 10 to 12 by the annual removal of newborn calves at weaning time. I would like to ask the Minister how many have been removed in the last two and one-half years.

Hon. Mr. Webster: In the last year, only one pregnant cow has been removed.

Mr. Brewster: It seems the Minister is keeping his promises.

I appreciate the breakdown of all the costs associated with the buffalo since the beginning of the project. The total amounts to $676,200. Does this include the $58,000 for planting brome grass at Aishihik?

Hon. Mr. Webster: No, this total does not include the $58,000, which, incidently, came from the economic development agreement fund for the purpose of keeping bison and horses off the highway.

Mr. Brewster: Should that not be a charge against the buffalo? I would hope that it was not put there for the horses belonging to the Champagne/Aishihik Band or the Canyon Creek Horsemen’s Association, I hope.

Hon. Mr. Webster: The Member makes a good point. This amount could be legitimately charged as an expense to the bison project.

Mr. Brewster:     We are finding out more costs associated with the project all the time. There is also another hidden cost where the department flew the wire into the area. I think that expense came to around $1,000. This alone totals $59,000, making the grand total well over $700,000 and expenses are still increasing. There are probably some more hidden facts that I have not got yet.

I have a letter that the Minister sent me. The Minister apologized because it was late and I accept that. I appreciate the fact that the Minister was that honest.

One way in which they were going to get the buffalo off the highway was to burn the grass in the ditches. I do not know about this. Most farmers I know burn their grass every year to make it grow better. I do not know what benefit there is to burning grass. All you are doing is burning the stale stuff and new grass just comes up. Is that not a fact?

Hon. Mr. Webster: That suggestion was originally made in order to keep the grass low so that it possibly would not be available to bison in the wintertime, but upon reviewing that proposal, we decided that it would not be effective and therefore we abandoned it.

Mr. Brewster: I have a paper, which is a proposed action plan for the bison herd near Aishihik Road. It says, “Based on the information gathered and the advice obtained, the situation about this herd can be summarized as follows: we cannot be sure at this time that this small herd of wood bison will remain in the area but any kind of scaring tactics, be it hazing by helicopter, vehicle, horses or by means of rubber bullets, sirens or baiting with hay, will only be successful for a very temporary time.”

They did every one of those things and yet their very own statement says not to do it. They did every one of them. They had a man out there this year shooting them with rubber bullets. What happened? Well, he said that after  about the second week, every time he showed up they disappeared, but they would come to every other car. They are not dumb. They are like any animal, like a horse or anything else; they know that car and they know that something goes wrong when that car comes.

Not one practical thing has been done in regard to those buffalo, and it is about time they got at it. I am sick and tired of women phoning me, scared to death that they are going to hit one of those animals on the road in the early morning. Not only that, but the bison are now at Kusawa and, once they figure out how to cross the bridge, they will be down on the Takhini and they will be on to Bill Drury’s farm.

Then when they get closer to Whitehorse you will be able to watch the action. That will get this all straightened around in a hurry. There will be no problem then. It does not matter about the rural people who have to drive in every day.

The department scattered the bison so badly while shooting at them that one now finds three and four here and another one there, so a driver is tense from the minute he leaves Canyon until he gets almost to Takhini Bridge, not including the 30 or 40 elk, which I do not have a problem with, because the 30 or 40 elk are much more hyper.

The Minister wants time. I think he has had enough.

Anyway, I will finish this off, then we can go on to line by line, unless someone else wants to get into general debate. I have made it plain that I was going to bring this up. I was going to put my last arguments in. It is up to them from here on because I have told them that someone is going to get hurt and they are going to know about it.

Thank you.

Chair: We will proceed with line by line.

Hon. Mr. Webster: How late are we going?

Perhaps we can return to this subject tomorrow. Right now, I would move that Madam Chair report progress on Bill No. 19.

Chair: Is Committee agreed?

Motion agreed to.

Hon. Mr. Webster: I move that the Speaker do now resume the Chair.

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

May the House have the report from the chair of Committee of the Whole?

Chair: Committee of the Whole has considered Bill No. 19, First Appropriation Act, 1992-93, and directed me to report progress on same.

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

Some Hon. Member: Agreed.

Speaker: I declare the report carried.

Hon. Mr. Webster: 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. Are you agreed?

Motion agreed to

Speaker: The time now being 9:30 p.m., this House stands adjourned until 1:30 p.m. tomorrow.

The House adjourned at 9:30 p.m.

The following Sessional Papers were tabled December 17, 1991:


Office of Auditor General of Canada Report on Other Matters to the Yukon Legislative Assembly for the year ended March 31, 1991 (Speaker)


Department of Education Annual Report 1990-91 (McDonald)

The following Legislative Returns were tabled December 17, 1991:


Land Claims Chief Negotiator annual leave while in office (Penikett)

Oral, Hansard, p. 1525


Executive Council Office contracts entered into for the funding provided through the supplementary estimates (1991-92) (Penikett)

Oral, Hansard, p. 1356


National Wildlife Refuges and the hunting regulations in effect in the refuges (Penikett)

Oral, Hansard, p. 1542


Monitoring snow avalanche potential on the Skagway Road (Byblow)

Oral, Hansard, p. 1558


Yukon Development Corporation: status of lawsuit regarding Carroll-Hatch (International) Ltd. on the subject of the Watson Lake Sawmill (Byblow)

Oral, Hansard, p. 1602


RRSP Investments for home ownership proposed by the Canadian Real Estate Association (Hayden)

Oral, Hansard, p. 1584