Whitehorse Yukon
Wednesday, April 27, 1994 - 1:30 p.m.
Page Number 2305
Speaker:
I will now call the House to order. We will proceed at this time with silent Prayers.
Prayers
South African Election
Hon. Mr. Ostashek:
I rise today to congratulate the people of South Africa on the historic event of their first fully democratic election.
People of all races are voting for the first time in their lives and I am sure that all Members of this House, in fact all Yukoners, are encouraged to see this very significant step forward in the lives of the South African people.
As Nelson Mandela said, "Today is a day like no other before it. Today marks the dawn of our freedom."
We congratulate them on this achievement and hope that the new multi-racial government will be able to find a way to end the violence that has plagued their country for so long.
Mr. Penikett:
This is, indeed, a remarkable time for South Africa, for the world and for all those people everywhere on this planet who have watched the pain, the heartache, the violence and the oppression in that country for most of their lives, and that Nelson Mandela, at 75 years of age, after spending 27 years in South African prisons, shall emerge from this election as president of what will be in all respects a new country, is a truly astonishing and wonderful development.
It is a tribute to the process of democratic renewal in that country that we shall see a government, when this election is over, in which we understand all parties will be consulted about legislation, women will be involved at the highest level, trade union rights will be respected and all racial minorities will be involved in the government.
Noting these wonderful developments, I am reminded of Mahatma Gandhi, who was born in South Africa and who, when visiting England, was asked what he thought of western civilization. He replied that he thought it was a good idea.
I hope that the Conservative forces in South Africa, faced with the new realities, do not resort to violence or reaction, but allow what looks to be the most beautiful possibility to develop - that South Africa could become a democratic model for the world.
DAILY ROUTINE
Speaker:
We will proceed at this time with the Order Paper.
Introduction of Visitors?
Are there any Returns or Documents for tabling?
TABLING RETURNS AND DOCUMENTS
Hon. Mr. Ostashek:
I have a document for tabling.
Hon. Mr. Brewster:
I have a legislative return for tabling.
Speaker:
Are there any Reports of Committees?
Are there any Petitions?
Are there any Bills to be introduced?
Are there any Notices of Motion for the Production of Papers?
Are there any Notices of Motion?
Are there any Statements by Ministers?
This then brings us to the Question Period.
QUESTION PERIOD
Question re: Energy Corporation, CYI participation in
Mr. Penikett:
On behalf of my party, I have had occasion to make it clear that we have no objections whatsoever to the sharing of the ownership of shares in the Yukon Energy Corporation with the First Nations and municipal governments. Nonetheless, the Minister indicated the other day that we were opposed to privatization, which is the case if we are referring to a sellout of Yukon Energy Corporation assets to southern private interests.
I want to ask the question, in the context of the preamble, about the government's position in respect to the Energy Corporation negotiations. We understand the Minister has said previously that if there were no deal with First Nations, there would be no deal at all about the sale of Yukon Energy Corporation assets to private interests. I would like to ask the Minister if that remains a statement of government policy.
Hon. Mr. Phelps:
The initiative that we are taking, the exploring of the possibility of selling up to a certain amount of the assets to the First Nations, is an initiative that is being undertaken at this stage. In order to attempt to accomplish a statement of principle made about a year ago at the ministers of mines meeting in Whitehorse, wherein the then-Minister of Mines, Tom Siddon, the federal government group from the Northwest Territories, including the Premier of the Northwest Territories, Ms. Cournoyea, and Ministers from this government, met with chambers of mines from both territories and First Nations representatives from both territories, at that time we said we would be interested in seeing the First Nations of Yukon involved as partners in the production and distribution of energy in the Yukon.
So that was one of the reasons that we are exploring the possibilities with CYI. If those talks do not go ahead, then this initiative will stop. What I have said to CYI is that as far as I am concerned this initiative will not go ahead if we do not have interest from First Nations and some method of them acquiring the necessary funding to buy into the Energy Corporation's assets.
Mr. Penikett:
Has the Minister given any indication to the First Nations that reorganizing the Energy Corporation might involve merging of Yukon Energy Corporation assets with those of Yukon Electrical, or its Alberta parent companies, a proposal that did not originate this year or last year, but several years ago from Alberta Power and Canadian Utilities, not from any local source?
Hon. Mr. Phelps:
The issue of rationalizing the assets of Yukon Energy Corporation with those of Yukon Electrical Company Ltd. was a commitment made, as I understand it, by the previous administration. I understand, as well, that talks were undertaken with Alberta Power and Yukon Electrical Company Ltd. about some rationalization of the assets, which would amount to selling and purchasing various assets of both companies. The object, as I understood it, was to have one company as the wholesaler and one company as the retailer. Those talks did fall through, but not until there had been lengthy negotiations between the previous administration and the Yukon Development Corporation on the one hand, and Alberta Power and the Yukon Electrical Company Ltd. on the other.
If that is the Member's question, I understand that those kinds of discussions have been going on ever since the transfer of assets from NCPC to Yukon Energy Corporation.
Mr. Penikett:
Rationalization is one thing; a proposal that would give absolute control of the energy assets belonging to the people of the Yukon at little or no cost to the southern investor is quite another. It is our experience from those discussions that leads some of us to have some concern about the direction in which this government is going.
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I want to ask the Minister in as neutral a way as I can if he does not see some problem, at least at the level of perception, with his former law partner being involved in negotiations with the former family business about public property worth perhaps hundreds of millions of dollars? Does he not share the view that many citizens have that there is, at minimum, a serious perception problem there?
Hon. Mr. Phelps:
I do not share that view at all. The issue regarding the individual who is on that contract was a result of our concern in having someone involved in the negotiations who had a great deal of competence in examining an extremely complex issue.
That individual was available and certainly has the competence, which no one has ever denied, at a very reasonable cost to government.
Question re: Game, pay-per-kill promotion
Mr. Harding:
I have a question for the Minister of Renewable Resources.
Yesterday, during the budget speech, the Minister said, and I quote, "I doubt that anyone, in good conscience, can place a dollar figure on the value of our wildlife."
How does the Minister reconcile this statement with the Government Leader's pay-per-kill public promotion of this practice - a practice that puts the ultimate dollar value on wildlife, because an outfitter gets more money the more wildlife that is killed?
Hon. Mr. Brewster:
That does not happen to be the opinion of the department, and I will stick with what I said.
Mr. Harding:
I am not interested in the opinion of the department. I am interested in the opinion of this government. The Minister gets indignant when I ask him about the runaway costs of the wolf kill and the inaccurate accounting of those costs. He gives me sanctimonious speeches about there being no dollar value on wildlife.
In the face of this, why would the government promote pay-per-kill hunting?
Hon. Mr. Brewster:
I am unaware that they are promoting that.
Mr. Harding:
The Minister claims to be a straight shooter. Let me ask him this then: is the Minister in support of pay-per-kill hunting - yes or no?
Hon. Mr. Brewster:
I would have to know what that actually means and what it is all about. If he asks whether or not the outfitters should make a profit, yes, they should make a profit. It is private business like any other private business.
Question re: Health and social services reform
Mr. Cable:
I have some questions for the Minister of Health and Social Services, related to the four-page document he put out last week on health care and social assistance reform - a document that indicated 280 people participated in advertised public meetings. Last weekend, the Yukon Party had a convention and the newspaper reports indicate there was some reservation about the method of public consultation. The newspaper indicated, "The meetings are attended by the same handful of involved individuals", and it went on to indicate that "the recent education survey was cited as an example of a more meaningful process," involving 2,600 responses, almost 10 percent of all Yukoners. In view of that motion, is the Minister of the view that consultation with 280 people, approximately one percent of the Yukon population, is an adequate basis for major reform in a major department of this government?
Hon. Mr. Phelps:
Of course not. That public consultation was only one aspect of the process, and I thought the hon. Member was aware of that, because it has been said over and over again in the House. The process was far more complex than that. There were all kinds of groups that the members of the department and I have met with privately - interest groups, stakeholders in the health care field, stakeholders in the social assistance field, stakeholders in the field of narrower concern of the alcohol and drug strategy. There were all kinds of groups, individuals and professions consulted as well. All of them were Yukon residents, and all of them have a keen interest in the issues about which we have been speaking about. There has been a lot of work done, in addition to the public consultations. Let me say that certainly my experience with the public consultations that have taken place over the years, by the previous administration as well as others, is that I have gone to many of these meetings in Carcross as the MLA, I have been at meetings in other areas and it is very unusual for more than a few very interested people to show up at those meetings - no matter what the issue might be.
Mr. Cable:
The reason for that might be that people do not usually come to discuss the state of the universe without option papers or white papers being presented.
In the budget speech, the Government Leader signalled two initiatives being taken by the Minister: a social assistance reform package, which will be forthcoming during this legislative sitting, and a package relating to health care insurance costs, an indication that those costs will be significantly reduced.
In that this sitting might end tomorrow or might go until Christmas, can the Minister indicate more specifically when he anticipates these two packages will be introduced?
Hon. Mr. Phelps:
It will probably be in about one month's time. It is interesting the sudden concern this Member has with a process that was described to him over a year ago in these Chambers. It seems to me that the consultation has been more lengthy and far more thorough than the consultation that is ongoing right now by the federal government with the people of Canada. The federal government, which is really driving this issue ahead, is the government that is going to be making the Draconian changes to the social assistance programs through cutting CAP funding and dismantling UI as we know it. I am rather surprised that he would expect a totally different standard from us than he would from his brethren in Ottawa.
Mr. Cable:
The budget speech indicated that there would be a significant reduction in health care insurance costs. Could the Minister give us some idea what he is talking about? What sort of rule of thumb is he using? Is it $1 million, or $5 million, or $12.5 million? What is he working toward?
Hon. Mr. Phelps:
Again, this is something that was debated in this House. We were talking in terms of slowing down the rate of growth and perhaps leveling it off, or even seeing a decrease in the actual expenditures. It has been out of control for years. Anyone who looks at the budget can tell that. We have already achieved significant gains, in terms of leveling off the rate of growth over the past 12 months.
With regard to the actual numbers, these are things we will be indicating when we make a public announcement, once the final decisions have been made by Cabinet. There are still decisions to be made at that level.
Question re: Kluane park access roads
Mr. Harding:
I would like to remind the Minister of Renewable Resources that, even though outfitting is a private business, it utilizes a public Yukon resource: wildlife.
I understand from reports at the Minister's public meeting in Haines Junction that the Minister intends to punch a few roads into Kluane Park. Mentioned were Paint Mountain, and other locations, as well as Alsek.
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How many roads is he talking about, and where are they going to be?
Hon. Mr. Brewster:
I would suggest to the Members that this reply is going to be long, because I am going to have to give the Member a geography lesson. The last time I heard, Paint Mountain was in behind my house, which is about 12 miles from Kluane National Park. I could be wrong though, because the Members opposite are always right. The Member can explain the situation to me, or if he would like a geography lesson, we can go out and I can explain to him where these places are.
Mr. Harding:
Well, I guess I will have to ask the question again. If it is not Paint Mountain, please tell me where he is going to punch these roads in, and how many roads are we talking about, and where are they going to be?
Hon. Mr. Brewster:
As we all know, until environmental studies are done, there is no way that we would punch a road into Kluane National Park. That park happens to be under federal jurisdiction, and I do not have much say over that, which is too bad, because I would get some roads in there if I had some say.
Mr. Harding:
That is interesting, because people whom I consider to be reliable Yukoners have said that the Minister made comments that he has some money to put roads into Kluane Park. The Minister has not said how many roads or where they are going to be.
Can the Minister tell us if he has had any contact with federal officials and if he has applied for permission to punch roads anywhere within Kluane Park?
Hon. Mr. Brewster:
You know the man is out to lunch. I have never once said that I was going to punch a road into Kluane National Park. I did say that we are looking at putting a road into the Kluane Game Sanctuary. He probably never heard of that, which happens to be along the highway. He has driven up and down the highway and he has seen the Kluane National Park signs everywhere, but that is not their border; the border is some nine to 12 miles back from those signs.
Yes, if we can find a suitable site for a road that will attract tourists, we will try to put a road in. The Kluane Game Sanctuary happens to fall under territorial jurisdiction.
However, I would like to give the Member a geography lesson anytime he would like to learn more about this.
Question re: Kluane Park access roads
Mr. Harding:
I think if we are going to be talking about geography lessons, the Member should start with the Government Leader.
If the Minister is going to punch some roads into the Kluane Game Sanctuary, will there be any public consultation with Yukoners, or will this be another Yukon Party rule by decree, … la Boris Yeltsin?
Hon. Mr. Brewster:
I believe that, according to section two of the guidelines, that question would be considered argumentative, but I do not mind having an argument at all.
We have consulted about everything that has been done in my department, and I challenge the Member to bring up one issue where I have not consulted with people.
Does the Member want to hear an answer or does he want to show off because the television people are here and he wants to make a good show? Let us make up our minds what we want to do here.
Mr. Harding:
The Minister refuses to get to the point and answer the question. Who is the Minister going to consult with regarding putting the roads into Kluane Park? How much is it going to cost and where is the money going to come from?
Hon. Mr. Brewster:
We are still in the consulting stage. We are talking with people on the highway and in Tourism about where they would like to see them. The Departments of Renewable Resources and Tourism are doing this. We have talked to a few lodge owners and people in the area who happen to know the area - and know that the Kluane Game Sanctuary is not Kluane National Park; there is a difference - about where to locate the road.
After that is established, we will figure out where we are going to get the money, if the people want it.
Mr. Harding:
Has the Minister talked to First Nations? Has he talked to people concerned about the environment or to other Yukoners who might not live in that particular area, but also have some concerns about what happens in the Kluane Game Sanctuary or Kluane Park? Has he had any of these kinds of consultations?
Hon. Mr. Brewster:
How could I have a consultation when I do not know where they would go?
Question re: 501 Taylor Street
Ms. Commodore:
I have a question for the Minister of Health and Social Services with regard to 501 Taylor Street.
The Minister has announced that he will be closing 501 Taylor Street as an open custody facility, and is looking at the parent model foster care style for housing young offenders sentenced to open custody. Can I ask the Minister when he intends to close 501 Taylor Street?
Hon. Mr. Phelps:
Fairly soon. Some of the steps are currently being taken toward the goal of changing the use of the facility from that of an open custody centre to a place where staff will be working on other projects, such as after care for young offenders, training young offenders and assisting them with regard to obtaining employment - that sort of thing.
Ms. Commodore:
The Minister announced yesterday that future committals to open custody will be housed in specialized care-giver homes - by that I presume he means the parent model foster care homes. I would like to ask him if he intends to consult with people in the neighbourhoods of those homes before housing the young offenders who are sentenced to open custody.
Hon. Mr. Phelps:
We are certainly always very concerned about the NIMBY syndrome. I can remember a time when the Member who asked me the question used to be quite disgusted by the NIMBY syndrome; now she seems to want to support that attitude among residents of the Yukon.
We are going to be very firm minded and reasonable in the way in which we proceed on this sensitive issue.
Ms. Commodore:
Because I am asking the question does not imply that I support it or otherwise. I am asking because it was the former Opposition that was offended by this.
How many of these homes does the Minister intend to contract out and what qualifications are required of the parents who will be caring for the young people in their care who are sentenced to open custody?
Hon. Mr. Phelps:
I will be quite happy to provide the Member with a written answer to that question.
Question re: Ibex Valley hamlet fire protection
Ms. Moorcroft:
I have a question for the Minister of Community and Transportation Services.
At a recent Ibex Valley hamlet meeting, the volunteer firefighters society reported that, although that community met the criteria for a fire protection program under departmental policy, there is no money for a building, a pump or equipment. If the Minister is still committed to administering a fire protection program for the public safety of all Yukoners, which I am sure he will say that he is, why can the hamlet not have the funding they require for fire protection, since they have met all the requirements?
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Mr. Millar:
The Member was present last night and heard my answer. The fact of the matter is that there is no money this year; there may be no money the year after; there may in fact be no money the year after that. But that does not mean that the people in Ibex cannot provide a type of fire protection, which I laid out to them last night and to which they were very receptive.
Ms. Moorcroft:
We all heard the message that they do not have any money over there. If they do not have any money, I wonder how they are able to spend $500 million a year.
The Ibex Valley volunteer firefighters, in an attempt to raise some funds on their own, requested funding in exchange for a highway clean-up of their area, in keeping with previous years. However, this year they were told there is no funding for them to clean up the highway. Can the Minister explain why there is a change in policy for the highway clean-up, and how they expect the volunteer firefighters to raise funds?
Mr. Millar:
I will answer the second part of the question first. I do not think that it is up to me to tell a community group how they should go about doing fund raising. As for the highway corridor clean-up, there is money in the budget this year, and some groups have taken advantage of it. I am not sure exactly why they were turned down. The deputy minister is actually looking to see if possibly the funding has all been allocated for the year - we are not sure.
Ms. Moorcroft:
The volunteer firefighters are trying to raise some money, and they are trying to take advantage of the program. They are wondering whether this failure to provide the funding this year that was available in previous years is vindictive toward the community. Can the Minister tell us if his department is going to extend the highway contract?
Mr. Millar:
I think that is one of the most ridiculous statements I have ever heard. As for extending the contract, no. We have an allocation for the highway clean-up. As I said before, I am not sure if the money has all been allocated. I do believe that it was said that they could clean up in another area. I think that was one of the things that was said last night. So it may mean that the funding has already been allocated for that one particular area.
Question re: Fire protection, mutual aid agreement
Ms. Moorcroft:
At the hamlet meeting I had the pleasure of attending last night, I must say I was impressed with the Minister of Community and Transportation Services, who sat for so long without a break that I thought he must have given up smoking.
There is a burning issue arising from correspondence tabled at the meeting. This March 15, Community and Transportation Services and the City of Whitehorse held a meeting on peripheral issues at which an arbitrary 25 miles or 40 kilometres from each of the fire halls was determined as a first cut for the areas for mutual aid agreement. Is the government negotiating a mutual aid option with the city for providing fire protection to outlying areas beyond city limits?
Mr. Millar:
No, we are not.
Ms. Moorcroft:
Let me put this in plain English. I have here, notes from a meeting where the government is talking to the city about mutual aid agreements for fire protection in the rural areas outside city limits.
Is the government negotiating a deal with the city to provide what it calls a mutual aid option that will put the Golden Horn volunteer firehall out of business?
Mr. Millar:
No, we are not.
Ms. Moorcroft:
My constituents in the Mount Lorne hamlet have also bent over backwards to comply with the policy to get government funding for fire protection. Can the Minister assure these residents that their funding is secure?
Mr. Millar:
We will be discussing the budget in the next few days, and the Member can certainly look in the budget and see for herself.
Question re: Contracts, funding limits without tendering
Mrs. Firth:
I have a policy question for the Government Leader. Currently, the maximum amount that can be paid for a consulting contract that does not have to go through the standard tendering process, in other words, can be sole-sourced, is $10,000. In a document tabled in this Legislature, called the Contract Regulation Review - Second Draft, there is discussion about raising this limit to $25,000 or even $50,000. I would like to make my position very clear in opposing raising the limit at all from $10,000. In fact, I would not be upset if it was reduced to $5,000. I would like to ask the Government Leader if he will reassure Yukoners that his Cabinet will not approve raising the limit for sole-source contracts.
Hon. Mr. Ostashek:
I agree with the Member opposite. I, personally, do not think that it should be raised. But, having said that, the request has come from some engineering firms and other firms, I believe, who feel $10,000 is too low. I, personally, would have great difficulty with it. I do not know that I can give the Member the assurance that Cabinet is going to say a flat "no" because we have not looked at the reasons and the rationale for wanting it raised yet. It has not come to Cabinet. This is still in contract regulations and the final package has not been brought back for approval.
Mrs. Firth:
The Auditor General levied considerable criticism at the government about the abuse of contracting procedures, including criticisms about sole-sourcing and general deficiencies in management.
Since the Minister is personally expressing this desire, why can he not just give a commitment, as the leader of this government, that his policy is going to be that it not be increased?
Hon. Mr. Ostashek:
On many occasions, Members opposite accused me of being dictatorial. That is a Cabinet decision. My personal feeling is that the $10,000 ceiling is substantial. I do not think it needs to be increased, but I cannot preclude what Cabinet will decide when faced with all the information.
Mrs. Firth:
In light of the strong feelings of the Government Leader, could he indicate to us when this issue is going to come before Cabinet for a decision, and will he let us know immediately upon that decision being made?
Hon. Mr. Nordling:
Perhaps I can answer that, in that I am directing the contract regulations review. We expect there to be input from the stakeholders and from the public, and I will take that representation as input from the Member for Riverdale South with respect to that issue.
We hope to have input until June 3, and then we hope to go over it within the department to have something for Cabinet near the end of June this year.
Question re: Rock Creek flooding
Mr. Millar:
The Rock Creek area in the Klondike Valley is experiencing flooding right now. Could the Minister of Community and Transportation Services briefly bring the House up to date on exactly what is happening there right now?
Mr. Millar:
Apparently, there are icejams both above and below Rock Creek on the Klondike. The access road into Rock Creek has been washed out, and there is apparently about four feet of water laying there. We have not heard yet, but I would expect there is water in some of the houses. Some of the people have been moved to neighbours' places.
We do have an Emergency Measures Organization in Dawson. Carol Murray is the EMO coordinator. She is working with the
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highways department and with the social assistance people to look after emergencies that may come up.
Question re: Council on the Economy and the Environment, economic summit
Mr. Cable:
I have some questions for the Government Leader about the Yukon Council on the Economy and the Environment.
The Minister wrote to the council on November 5, 1993, asking - and I gather this is a direction under the act - that an economic summit be set up. He indicated that, either in the context of the conference or as a follow-up, he and his Cabinet colleagues would like the council to address questions about allowing VLTs and casinos in the Yukon. In that we know that the gambling issue is before the council, what is happening with the economic summit - this conference - that the Minister instructed the council to set up?
Some Hon. Member:
(Inaudible)
Hon. Mr. Ostashek:
The Member says "bingo". They might be investigating that along with VLTs and casinos. I read an article in the Globe and Mail today where bingo halls are being infiltrated by gangsters and people laundering money and so on. Perhaps we should consider doing that in the Yukon as we have a substantial number of bingo halls here.
The Yukon Council on the Economy and the Environment felt that they should deal with the gambling question first. They felt that they could do a better job of giving Cabinet clear direction as to which way we should go in supporting economic diversification in the territory by examining the private sector, sector by sector. They felt they should perhaps take the mining sector and then the tourism sector, and examine them one at a time.
The feeling is that there have been quite a few public meetings, and it seems like the same thing comes out of every public meeting - 15 or 20 Yukoners get together and express the same sort of ideas. Nothing concrete comes from it. They are looking at it, and I expect they will be embarking on it shortly after the VLT and casino review.
Mr. Cable:
I was reading a news report from April 12, wherein the chair of the council was discussing what they were doing. They were talking about gambling, and then he went on to say, "Meanwhile the council is taking on other jobs. Council Chair, Tim Preston, says there are tentative plans for many conferences on different development issues. The first one will likely be a conference on the arts, tentatively set for June. There may be other events on subjects ranging from agriculture to energy." In the Minister's view, is the council following the instruction given under the act by having these separate conferences, rather than a Yukon economic conference, as set out in his instructing letter?
Hon. Mr. Ostashek:
I wonder if the Member for Riverside feels that arts have nothing to contribute to the economic diversification of the Yukon? I would be very, very disappointed if that was the position the Member was taking. I believe that the Council on the Economy and the Environment can do a better job of examining economic diversification if they examine it on a sector-by-sector basis.
Mr. Cable:
That was not the question that I was asking. I asked if the Minister thought the Council on the Economy and the Environment was following the instructions given to them.
The total capital and operation and maintenance budgets of the Department of Economic Development has been cut by $3 million. This would indicate that the Minister is placing less emphasis on his department for idea generation and job creation. Does this mean that he will be turning over more of the idea creation to the Council on the Economy and the Environment?
Hon. Mr. Ostashek:
The fact that the Department of Economic Development's budget has been cut simply is not true.
There were some one-time projects that have been completed. There has been some reorganization within the department but, overall, the department has not been cut, so there is no shift of emphasis from the Department of Economic Development to the Council on the Economy and the Environment.
Speaker:
The time for Question Period has now elapsed.
We will proceed to Orders of the Day.
ORDERS OF THE DAY
Mr. Harding:
On a point of order Mr. Speaker.
Speaker:
The Hon. Member for Faro.
Mr. Harding:
Given that the Yukon Party campaign during the last election utilized a local political cartoon book, and that the media is now reporting that a Minister is suing a local paper by defamation by cartoon, I was wondering if the Government Leader would be allowing this suit to proceed, or does this government only like cartoons when the joke is not on them?
Speaker:
Order. Order. There is no point of order.
GOVERNMENT PRIVATE MEMBERS' BUSINESS
MOTIONS OTHER THAN GOVERNMENT MOTIONS
Clerk:
Motion No. 64, standing in the name of Mr. Abel.
Motion No. 64
Speaker:
It is moved by the Member for Vuntut Gwitchin
THAT the Yukon Legislative Assembly urges the Honourable Ron Irwin, Minister of Indian Affairs and Northern Development, to present the Yukon Indian Land Claims Settlement legislation to the Parliament of Canada;
THAT the Yukon Legislative Assembly urges all Members of Parliament to give expeditious passage to the Yukon Indian Land Claim legislation which will protect the rights and interests of Yukon First Nations and allow the Yukon Territory to progress toward the 21st century; and
THAT a copy of this resolution be forwarded to the Honourable Ron Irwin and the Right Honourable Jean Chretien, Prime Minister of Canada.
Mr. Abel:
Many years ago, on February 14, 1973, the Yukon First Nations, represented by Elijah Smith, presented their comprehensive claim to Prime Minister Trudeau in Ottawa. This was the first comprehensive claim accepted by the Government of Canada for negotiations, as a consequence of the Calder case in British Columbia.
Eighteen years later, in 1991, the Council for Yukon Indians ratified the umbrella final agreement and the model self-government agreements.
In October 1992, the Champagne/Aishihik First Nations ratified their land claims and self-government agreements and they were joined in 1993 by the Teslin Tlingit Council and the Na-Cho Ny'ak Dun First Nation and the Vuntut Gwitchin First Nation.
In these Chambers, on March 17, 1993, the Yukon Legislative Assembly gave third reading and witnessed assent to two bills, being An Act Approving Yukon Land Claims Final Agreements and the First Nations Yukon Self-Government Act.
Now, one year later, we are waiting for the Government of Canada to present our land claims settlement legislation to Parliament and for all Members of Parliament to deal quickly and fairly with that legislation.
I, and all of the First Nation people in the Yukon, are still
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patiently waiting for the day when our land claims settlement legislation will become law.
I was a young man when I first started serving with the Vuntut Gwitchin Council in 1974. Since then, in the six years I have served as chief, there have been lots of words spoken and lots of speeches and lots of hours sitting at the negotiating table. I have spent most of my life working on land claims. A lot of other people, both aboriginal and non-aboriginal, have worked very hard toward achieving this goal.
Today, the Yukon First Nations people are ready to take on the responsibility of managing our own rights and our interests in the Yukon, working with the Government of Yukon and all Yukoners in partnership, to progress into the 21st century. The processes involved are working now and will only improve once the certainty of federal legislation is in place.
I would also like to take a moment to mention the Member for Mayo-Tatchun. He has been a leader in land claims and has always worked very hard in the House to see land claims passed. Although we sit on opposite sides of the floor, I respect and thank him for his years of hard work to make land claims a reality. I would also like to recognize the Member for Whitehorse Centre for her involvement, on behalf of all Yukoners, and for her contributions regarding this matter.
I would urge all Members of the Legislative Assembly to support this motion so that we may send a clear and strong signal to the Minister of Northern Affairs and to the Prime Minister of Canada, that the people of the Yukon are ready to live today for our children tomorrow. Mr. Speaker, thank you for giving me the opportunity to speak to this very important issue.
Ms. Commodore:
I would like to thank the Member for Vuntut Gwitchin for bringing this motion forward in the House this week. It is a very important motion. It was a discussion that we had at our convention over the weekend, and felt that come heck or high water, this thing has to take place.
I could stand here, as I have done in the House before, and go over the history as I remember it, because my knowledge of the land claims process goes back over a couple of decades, but I have already done that.
There are a lot of people who played a very important role in land claims. The Member for Vuntut Gwitchin mentioned the Member for Mayo-Tatchun, and certainly, he played a very important part in it, and might have been at the very first meeting - but I cannot remember that.
The Member for Vuntut Gwitchin mentioned he was a young man when it first started. I wish I could say the same thing about myself, but certainly there have been a lot of hard-working individuals who helped this go through. We know that it was a long road. It is still ongoing, but we certainly cannot do much more here in the Yukon until this legislation is passed in the House of Commons.
I listened to the 12:30 news today. It indicated that Judy Gingell, the chairperson for the Council for Yukon Indians, is in Ottawa. She announced that the land claims legislation will be going before the House of Commons next month, according to the radio. She also announced that she will be meeting with Opposition parties. It is very difficult to know how those meetings will turn out because we already know that there appears to be great opposition from the Reform Party, and that is not surprising, but it is pretty scary. We know the kinds of things that we had to go through here in the Yukon - things done by individuals who think the very same way as some of those Reform Party Members of Parliament. It is going to be interesting to find out the kinds of things that are being said. I do not really look forward to listening to this kind of debate going on because we know that it is very spiteful and hurtful, and it makes people take sides. If a person has been very quiet in their opposition to progressiveness for aboriginal people, this may incite some public hostility, which is what happened in the Yukon many years ago.
I would like to talk a bit about the problems that we are facing in the Yukon, despite the fact that legislation has passed this House, and is now Yukon law. I worry because decisions are being made on a continuing basis in regard to land claims. Decisions are made in regard to the waterfront, without involvement of First Nations people, despite the fact that no agreements have been made. I worry about that. It is all very well to stand here in the House and support federal legislation for land claims, but decisions continue to be made that should not be made without the involvement of First Nations people. That is happening and it continues to happen.
Statements are being made about the transfer of forestry to the Yukon, whether or not First Nations people are involved. That is a worry, too.
I remember questions in this House in regard to the Whitehorse sewage system, and announcements being made by the Government Leader and the Mayor of Whitehorse in regard to areas that were set aside, without the involvement of First Nations. I really worry about those kinds of decisions and those kinds of discussions taking place prior to the signing of any agreements. There are still problems.
We can stand here and talk and support this kind of legislation. We can support this motion, which is a good motion. We will, of course, be supporting it. I want to state that we do still have some concerns here in the Yukon in regard to ongoing discussions and ongoing decisions being made. I look at the motion, and it says, "that the Yukon Legislative Assembly urges all Members of Parliament to give expeditious passage to the Yukon Indian Land Claim legislation which will protect the rights and interests of Yukon First Nations and allow the Yukon Territory to progress toward the 21st century." I agree with all of that.
We certainly need a boost in the Yukon to allow the territory to progress toward the 21st century, because we have seen no evidence from the present government.
If the legislation is passed, there will be certain First Nations groups in the Yukon that will be able to proceed with a lot of good ideas, programs and projects, and we are very supportive of that. We will be supporting the motion as it has been presented by the Member for Vuntut Gwitchin. I thank him once again for introducing it.
Mr. Cable:
I will support the motion presented to the House today by the Member for Vuntut Gwitchin. The settlement of the Yukon land claim holds great promise for the Yukon, and I think all Members realize that. It is in the interest of all Yukoners that these agreements be passed expeditiously by the Parliament of Canada.
I can assure the House that Minister Irwin is aware of the importance of this legislation for First Nations and for all Yukoners. I know Mr. Irwin is committed to completing this process, and that he has taken a personal interest in it. I also know that the Minister has met with the CYI and Yukon chiefs on various occasions since he took office some six months ago.
As a matter of fact, the Minister again met with representatives of CYI yesterday afternoon to review his plans for presenting Yukon land claim legislation to the House of Commons. As indicated by the Member for Whitehorse Centre, they received a satisfactory response, I believe, and an indication that the agreements will be presented to the Parliament next month.
I had an opportunity to speak with Minister Irwin last week to discuss the matter with him. He has assured me he is doing all he
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can to expedite this process, and I am confident this historic legislation will be introduced to Parliament before Members recess for the summer.
I should point out to Members that it is important to note that, while the federal government obviously sets the agenda for Parliament, there are other parties that can also impact on the tone and pace of business in that House. The reception accorded Bill C-16, the Sahtu Dene land claim, at second reading, on Monday this week, by the Reform Party, is an example.
The Reform Party has indicated that it will oppose this legislation. Among other things, it says that this agreement is too generous.
I have a copy of the debates from the April 25 federal Hansard. I would like to read into the record a portion of that debate. These are comments made by Mr. John Duncan, the aboriginal critic for the Reform Party. I will be brief.
Some Hon. Member:
(Inaudible)
Mr. Cable:
Certainly, I would be happy to table the federal Hansard, just in case the government does not know how to get a copy of it.
Here is what Mr. Duncan has to say: "My party" - this is the Reform Party - "has some very serious reservations about the direction in which the land claims settlements in the north have gone, in general, and specific concerns relating to this agreement in particular. I intend to point out some of them. I am sure that my colleagues will add further to what I have to say. Many of our members wish to speak on this bill". Then he goes on to say, a bit later, "This is an enormous package of benefits and one cannot help but be struck with the fact that there are so few people who stand to receive them". Then he goes on to say, again, "A very disturbing aspect of this agreement is that fact that a massive area of land will be forever removed from the public lands of Canada and conveyed outright".
I think what those statement show is a massive lack of understanding of what the land claims bills are all about, the aboriginal title and the surrendering of the aboriginal title for a settlement. I think it is important that all Members of this House communicate with all the leaders of all the parties in the federal Parliament, so that they are fully versed in what is going on and so that they fully understand the basic nature of the land claims settlement, so I would like to make an amendment to Motion No. 64
Amendment proposed
I move
THAT Motion No. 64, be amended by adding after the words "Prime Minister of Canada" the following: "The Hon. Lucien Bouchard, Leader of the Official Opposition, Mr. Preston Manning, Leader of the Reform Party of Canada, Ms. Audrey McLaughlin, Leader of the New Democratic Party of Canada, and Mr. Jean Charest, Leader of the Progressive Conservative Party of Canada".
Speaking -
Speaker:
Order please.
Hon. Members, a few words were changed in the opening paragraph, but basically it has been moved by the Hon. Member for Riverside
THAT Motion 64 be amended by adding after the words "Prime Minister of Canada" the following: "the Hon. Lucien Bouchard, Leader of the Official Opposition, Mr. Preston Manning, Leader of the Reform Party of Canada, Ms. Audrey McLaughlin, Leader of the New Democratic Party of Canada, and Mr. Jean Charest, Leader of the Progressive Conservative Party of Canada".
Mr. Cable:
I think I made my point from reading the excerpts from Hansard. Last spring, the Government Leader and I and the Leader of the Official Opposition and Ms. Gingell from CYI went down to Ottawa to persuade various politicians of the importance of the land claim bill. This exercise should be repeated in letter form. It should not simply be restricted to the parties who are already persuaded of the importance.
Amendment to Motion No. 64 agreed to
Speaker:
The Member has spoken to the main motion.
Mr. Cable:
I made the amendment during the speech.
Speaker:
The Member would be able to speak now at the conclusion. The way that I understand it, the Member would be the last one who speaks. My understanding is that the Member has spoken and cannot speak again.
Some Hon. Member:
(Inaudible)
Hon. Mr. Phillips:
I am very pleased to rise today in support of the motion and the amended motion that is before us. I would like to congratulate the Member for Vuntut Gwitchin for bringing the motion forward. I know that he has been involved in the land claim process for many years. Like all First Nation people, he would like to see the process brought to finalization.
The motion that is before us today, I think, is quite timely because of the fact that the Yukon land claim agreements and the umbrella final agreement are supposed to go before the House of Commons in the next 30 days. I hope sooner than later.
Many Yukoners, both native and non-native, have grown up, as the Member for Vuntut Gwitchin did, living with this as an ongoing process, some 20 years now and costing millions of dollars and thousands and thousands of hours of effort by all concerned.
There are a few people whom I would like to mention here today that we should also thank.
The Member for Vuntut Gwitchin mentioned some of his colleagues, but I think it is important in this debate to add to the list people who have worked very hard to see this land claim to where it is today. One of those people is the former Government Leader, Mr. Penikett, who worked very hard in negotiations over the last few years. The Member for Ross River-Southern Lakes worked as a negotiator for many years, and of course our own Government Leader who, a short time after being voted into power by the Yukon people, introduced the Yukon umbrella final agreement legislation. Less than a year into this government's term we passed the legislation and we are now waiting for the federal government.
This is an extremely important agreement and the Yukon government has done everything it can to accelerate the process. Just a couple of weeks ago, we put the last $2.4 million of our commitment into the training trust fund. The previous government put $1 million in there and we put the final allotment of $2.4 million in there. I would urge the federal government to make its contribution as soon as possible as well, so that the training trust fund and the work of the training trust fund may get underway.
The passage of the settlement legislation is also going to trigger the flow from other federal payments that will enable the Training Policy Committee to perform its functions. The Training Policy Committee has developed a mandate statement, an implementation strategy and a work plan as an annex to the umbrella final agreement implementation plan and work on individual First Nations training plans is underway, in conformance with the implementation plan. All of these things will be triggered by the final signing of the agreement and it is much needed.
Another area I would like to touch on briefly is the beneficiaries of this claim. Beneficiaries are, of course, all First Nations people, but I think what we are seeing more and more of in the First Nation community, is the involvement of First Nations women. In
Page Number 2312
travelling around the territory and talking to many people, one will find, as one goes from band to band, that many First Nations women are involved in the administrative level of bands and are working very hard. They will be the leaders in administering the band agreements and providing a future for their band members. It was back in the late 1970s and early 1980s that a delegation of First Nations women first travelled to Ottawa to make a presentation to the Assembly of First Nations on section 12.1(b) of the Indian Act. That clause had created discrimination against First Nations women who were married to non-aboriginal men. Northern First Nations women were asked to make a presentation because the Council for Yukon Indians had already made statements about Yukon beneficiaries, including non-status beneficiaries. Since that time, the Yukon Indian Women's Association has had three basic priorities on its agenda. One is to ready First Nations people for self-government through self-awareness, community organization and employment. I think we will see, with the passage of this agreement and the implementation and funds flowing from this agreement, many First Nations taking a lead role in the work in their communities.
I strongly support the passage of this legislation. It is long overdue. We cannot afford any more delays by the Parliament of Canada. We had assurance from our Liberal colleague that Mr. Irwin is committed to the passage of this legislation. I am sure others are. There may be some in Parliament who will speak out against it, but if they took the time to understand the legislation and the history of First Nations people in this country, I think they would come to realize this is an important piece of legislation and is something that should get speedy passage through the House of Commons. I would urge all Members of the Parliament of Canada to support the legislation when it comes forward, and give it speedy passage.
Mr. Joe:
Mr. Speaker, it does not matter how you put this motion, I am going to support it anyway. I would like to thank my friend, the Member for Vuntut Gwitchin.
I do not like to repeat myself too often, but this is one time I feel I must. I will be brief and not waste too much time. The federal government must pass the land claim legislation.
I agree with the motion put forward by my friend, the Member for Vuntut Gwitchin. For more than 20 years, I have been working hard in helping to put this agreement together. I am getting old. I want my children and grandchildren to enjoy the rights they will have under the land claim.
I want to tell the Prime Minister that I cannot wait too much longer. He must act fast before I get too old.
That is all I have to say.
Ms. Moorcroft:
It is always an honour to follow my colleague, the Member for Tatchun. I am very happy to speak in favour of the motion and find it laudable that this government wishes to expedite a fair settlement of land claims for the Yukon First Nations. This motion has come forward from the Member for Vuntut Gwitchin, for whom I have a great deal of respect.
I think it is too easy for those of us who live in the Yukon, who are not First Nations people, to forget just whose land it is that we are living on. The Yukon still belongs to the First Nations people, and the legislation that we are urging the federal Parliament to pass recognizes this. It is the culmination of 20 years of negotiations with the Yukon's aboriginal people to meet an outstanding legal and constitutional obligation.
As part of the self-government and land claims settlement, First Nations will have a say in health care, social services, and the healing of their communities. I feel I would be remiss, however, if I did not point out that this government has already reneged on its heritage obligations as laid out in the umbrella final agreement. By instituting cuts in heritage branch staffing, and by eliminating the assistant archaeologist position, this government has stepped back from its heritage responsibilities, despite the protests of Yukon First Nations.
As we are all aware, the archaeology branch has carried out, in cooperation with First Nations, a number of successful community heritage projects, such as that carried out with Carcross Tagish First Nations at Annie Lake, the Frenchman Lake project with the Little Salmon people, and Tatl'a Man near Pelly. These have resulted in significant archaeological discoveries and analyses. There remain hundreds, if not thousands, of equally important sites to be studied and excavated in the Yukon. Rather than expand staffing to meet this exciting and important challenge, this government has put in jeopardy a program vital to Yukon First Nations heritage work.
By resolving the longstanding issue of land claims, all citizens in the Yukon will have access to land development. We recognize the right of aboriginal people to self-determination in passing this model self-government legislation. Several features of the land claims agreement will give us all better tools to deal with land use conflicts. Land use planning, put on hold by withdrawal of federal funding, will be able to get underway again, funded by this agreement.
There are, in the umbrella final agreement, provisions for regional land use planning commissions. I urge the federal government to present the Yukon Indian land claims settlement legislation to the Parliament of Canada for speedy passage. Perhaps then the Yukon Party government will proceed with its obligations under the umbrella final agreement.
It is also significant that the only economic plan for generating revenue that has received the territorial government's serious consideration and study has been forcefully opposed by Yukon First Nations: an expansion of gambling facilities, including video lottery terminals. Despite overwhelming evidence that the social and economic impact of gambling is especially devastating to the poor and disenfranchised, and that First Nations would suffer disproportionately from increased exposure to gambling, this government has nonetheless been a proponent for this fast and easy way to increase revenues.
First Nations economic development is essential for the economic health of our territory. Although this government has pledged to work in economic partnership with Yukon First Nations, we are all aware of the shameful way in which this government has backed out of an economically viable project, which would have greatly benefited the Champagne/Aishihik First Nation.
It is important, as well, to acknowledge that the need for training and education of First Nations people can be assisted with the passage of land claims and self-government legislation. However, the actions of the Minister of Education, who felt that he had the right to unilaterally change the admissions criteria to the Yukon native teacher education program, do not meet these requirements. He tried, on his say-so, to have a non-aboriginal student admitted against the wishes of the Yukon native teacher education advisory committee.
We have to say that the government must not just speak fine words, but must act fine acts. Today is not the time to cite the numerous examples of actions taken by this government that run counter to the spirit of the umbrella final agreement, so I will stop there for today.
Their actions have demonstrated a marked lack of respect for the hopes and aspirations of Yukon First Nations. However, this is a time to speak out in unison for a swift and just conclusion to land claims negotiations, so I am pleased to support this motion
Page Number 2313
as amended.
Our Member of Parliament has worked tirelessly on behalf of Yukon aboriginal people to...
Speaker:
Order. Please allow the Member to conclude her remarks.
Ms. Moorcroft:
...support the land claims legislation and self-government agreements. Ms. McLaughlin is meeting with the Council for Yukon Indians today. She has met with past federal ministers and with Minister Ron Irwin to promote the speedy passage of the land claims legislation.
First Nations people are going to be free to chart their own destinies. They will have a say in such things as how to run their lives and how to manage our natural and historical resources. The federal government will need to provide sufficient money to the Yukon government to carry out the areas of responsibility under the land claims agreement.
I am happy to support this motion. I urge the territorial government and the federal government to do so quickly.
Mrs. Firth:
I will be very brief - just a couple of minutes. I rise in support of this motion today, and in support of the amendment that was brought forward by the Member for Riverside. I would like to thank the Member for Old Crow, who very admirably represents his people, and particularly his constituents in Old Crow, and thank him for bringing this motion forward today, so we could all have an opportunity to send it off to Ottawa.
I especially want to thank the Member who sponsored the motion for following up on issues that are of particular interest to him and his people, and for reminding the rest of us in the Legislative Assembly that we, too, should be following up and seeing that these matters are taken care of.
Mr. Harding:
I rise today in support of the motion, as amended. Without the amendment, I still would have supported the motion. It is important that the federal government be clear that the Official Opposition consider it a priority that they pass the land claim legislation. It will be a major step forward for the territory, and it will serve to further benefit and prosper the relationships between aboriginal and non-aboriginal people in the Yukon, both socially and economically - recognizing that both of those matters are certainly intertwined and related.
It is somewhat indicative of a lack of a federal priority that it has taken this long to pass. We went through similar debate last session, and there was an envoy to Ottawa to try and convince the then Progressive Conservative administration to bring it in. Apparently, there were some problems with the regulation development and the translation of it. I hope those matters have been cleared up. It is important, and I think the federal government realizes how important this is to the territory.
We have to continue to move forward, and this lack of passing of the legislation is having, from comments I have read from aboriginal leaders, a major impact on their ability to do business in terms of land claims negotiations. That is an alarming problem.
I know the Liberal Member of the Legislature went into a defence of the Liberal policies and the Hon. Minister of Indian Affairs and Northern Development, but I would have to say that I am certainly not impressed with the cuts by the federal government to aboriginal programs. We were discussing some of them last week at our convention, and I was alarmed at some of the cuts. It is a disturbing indication of where priorities of the federal government are for aboriginal people.
I also should say that, while I am supporting this motion and I appreciate and thank the Member for Vuntut Gwitchin for bringing it forward - as I think it is important - one message I would like to leave with the Yukon Party government is that actions speak louder than words. While words are also important and are sometimes representative of actions, that is not always the case.
I am very disturbed by the lack of commitment to First Nations that we have seen with this government. I think in the areas of education the Member for Mount Lorne outlined some very serious concerns. In the areas of heritage resource, and certainly in the area of wildlife management, there has been a tremendous number of improprieties carried out by the Yukon Party government in terms of dealing with First Nations, respecting wildlife resource management; they should not be allowed for proper consultative processes, whether the issue is game farming or campground privatization, or whether the issue has to do with recommendations made by the Yukon Fish and Wildlife Management Board. The list seems to grow.
In the area of land use and land selections there has really been no serious commitment by the Yukon Party government.
I realize that this motion is important. I would much rather have nothing but positive words to say to the Yukon Party government about their efforts with First Nations. Sadly, I cannot be all positive on that score today. I can be positive in support of this motion and positive in support of the federal government bringing forward land claims legislation for quick passage.
I think that it is important that the territorial government move forward, make its actions relate to its words, and that the federal government quickly pass the legislation through Parliament. This legislation will be good for all Yukoners, both aboriginal and non-aboriginal, and I think it will help the Yukon Territory continue to move forward, both socially and economically. That is something that we desperately need right now in this territory.
I will be supporting this motion as amended.
Mr. McDonald:
I will be very brief.
I have spoken to the issue of furthering legislative protection for the rights of First Nations on many occasions in this Legislature over the last 12 years. I supported essentially the same motion, which was tabled and debated last spring.
I want to make it clear, even though there is no doubt, that I support the land claims agreement and the passage of settlement legislation. I doubt very much that the federal government will not pass this bill, but we must all understand the difficulties that arise when legislation is delayed.
I believe that the Yukon's obligations should be respected both in word and action. I would like to thank the Member for Vuntut Gwitchin for once again giving a gentle nudge to the federal Parliament to pass the settlement legislation so that we can move into a new generation.
Hon. Mr. Ostashek:
I, too, will be brief, but I do have to rise today and speak in support of this motion as amended. I want to thank the Member for Vuntut Gwitchin for putting this motion forward today, especially with the timeliness of this. We need to urge the federal government to get on with the job and pass this legislation through its Legislature, so that First Nations can start to take control of their own interests, control of their own governments and control of their own economic well-being in the future of the Yukon.
I would like to make a couple of comments. It is unfortunate that some Members use a motion such as this to score political points in the Yukon. I think those debates would be better held at some other time.
This motion is very straightforward. It is a motion urging the federal government to get on with the job of passing the land claims legislation, and I believe it would be in the best interest of all Yukoners and this Legislature if we stuck to the motion, instead of straying away for other reasons.
Page Number 2314
There is no doubt that the passage of this motion is not going to be the answer to all the concerns that are going to come up, or to all the difficulties we are going to run into with the implementation of claims, with the negotiation of the final claims, with economic agreements, and whatever. There are going to be difficult issues that are going to have to be addressed. The road will not always be smooth, but I believe that, as long as we keep the same goal in mind and we work in that direction, it will be in the best interest of the aboriginal people of the Yukon, as well as the non-aboriginal peoples of the Yukon.
Last year, I was involved with the signing of the land claims legislation here, with the Hon. Tom Siddon and First Nations people, and it was a very emotional day for First Nations people in the Yukon. They had struggled for many years to reach that day and, at that point, they hoped that the previous administration in Ottawa would have been able to expedite the legislation through the House of Commons.
However, as everyone knows, we had a government that was in its last days in office, and there were other priorities at that time in their minds. I hope, now, that the Liberal priority in Ottawa is to get these land claims agreements put through their federal House of Commons, so that we can move forward in the Yukon with the implementation of the claims, and the bands that have already signed their agreements off can start reaping the benefits that they have waited many years to receive.
Mr. Penikett:
My speech will be in two parts. The first part is the part of the speech of the Liberal Leader that the rules did not permit him to give. As a courtesy and as a comrade on this issue, I am perfectly happy to join the sentiments the Liberal Leader has expressed.
"I encourage the Members opposite to contact their like-minded colleagues in Ottawa and ensure they understand the importance of this legislation for all Yukoners. While presentation of the Yukon land claim in Parliament is a critical step in the land claims process, so, too, is the process of completing First Nations final agreements with those First Nations that have not yet completed negotiations.
"Like other Members in this House, I am concerned that there appears to have been little progress in negotiations with Yukon First Nations that have not completed final agreements. Perhaps the Government Leader can explain the reason for this apparent loss of momentum.
"In conclusion, I, along with other Members of this House, realize how important it is that the federal government introduce the land claim to Parliament as soon as possible. I am also confident that the federal government appreciates the need for expeditious action in this regard.
"I note that CBC reported this afternoon that CYI is pleased with the result of its meeting with the Minister yesterday, and it appears that the federal government intends to present the Yukon land claim to Parliament early in May.
"I urge all Members, and particularly the government, to ensure that all parties in the House of Commons are aware of the importance of this legislation for all Yukoners."
I would like to say a few words now on my own behalf. I understand that the sentiment of the motion, as presented by the Member for Vuntut Gwitchin and amended by the Member for Riverside, is entirely positive and constructive. I want to be that way, in the main. However, I think it is also important to take up the challenge presented by the Minister opposite, which is to have people take responsibility for their actions. I want to articulate a couple of points on that theme during the course of my remarks.
I noted the quote attributed to the Reform Party by the Liberal Leader, particularly the one about tying up so much public land, and I suspect that were the issue a question of tying up a large amount of public land for the benefit of some oil company or perhaps a big game outfitter, then I doubt if that particular MP would have much objection. I think we need to look very hard and very clearly at the heart of some of the criticism that is coming from right-wing groups like the Reform Party, and I think that Yukoners are particularly well positioned to see clearly the true spirit and the true intent of much of that criticism, because we have lived through criticism of that kind, much of it in the course of 20 years of negotiations here.
I am reminded that, during the recent federal election, the Reform Party candidate in the Yukon likened land claims negotiation to sex between chickens in a farmyard, in my opinion a highly inappropriate image. One also remembers that there was a time when a Member of this House likened aboriginal self-government to apartheid. I remember that, because, of course, as we talk about the great events happening in South Africa today - the great liberating events for the majority in that country - it is appropriate to make parallels between the peaceful way in which the rights of aboriginal people have been addressed in this country, and the very violent clashes that have been necessary to achieve rights for the original residents of South Africa. I suspect that most of us here today would reject, absolutely, the kind of analogy made by the former Member.
I think that the Government Leader is wrong about his criticism of Members who make comments or express concerns about what is happening in the negotiations here. I think that those of us - and there are several in this House who have given years of their life to this process - are quite entitled to make comments on the progress of negotiations, as we discuss this motion urging federal legislation. I am one of many, many Yukoners who feel considerable concern that, after a year and a half in office, this government has not yet participated in a single final agreement with any First Nation.
Dare I say publicly what I have said privately to Members opposite - that I believe that part of the problem is the way in which the business of negotiating land claims is now organized under the present administration.
I had the experience of trying, for a while, to have one person playing the two difficult roles of Cabinet secretary and chief negotiator. I had the advantage of having someone as bright and hard-working as any public servant has ever been in the history of the Yukon, yet that person found the task of doing those two difficult jobs at once impossible.
I have nothing but admiration for the present Cabinet secretary. In fact, during the legislative wars with the Members opposite, he was a source of comfort and very sensible advice to me throughout those exchanges. He was a good and loyal public employee. However, I must tell the Government Leader frankly that I think he has been put in an impossible situation by having been assigned two full-time jobs. I believe that the land claims negotiations may be suffering, as a result.
I would also like to say frankly to the Government Leader that I am deeply disturbed by the fact that this government already seems to be reneging on promises made to First Nations people in the negotiations the previous administration carried out. In my view, it is quite clear that, not only the Legislature, but also the lawyers and the parties at the table understood that one of the provisions of the UFA, for example, was that there would be an annual economic conference to which one-quarter of the delegates would be First Nations people?
There is no question about the intent of the Legislature, there is no question about the intent of the legislation, or the intent of the negotiators in making that agreement. That is a promise that has been willfully broken by the other side.
Page Number 2315
Other Members have referred to commitments on heritage and education. There is a fear out there in some First Nations that this government, from its own philosophical point of view, feels justified in trying to claw back some of the achievements won by First Nations in negotiations with the former federal government and the former territorial government.
I would say frankly to the Government Leader, with no animosity or hostility, that there are already First Nations people out there who see these broken promises as adding to the long trail of broken promises. There are people who talk in my riding about seeing that trail of broken promises going straight ahead and over the horizon.
It is a great pity that that is happening so early. It is a great pity that it is happening at all, but I think that it happening so soon is a profound disappointment.
I say it is profoundly disappointing because I know that some of the Members opposite had to swallow a great many personal reservations about the particulars of the agreements that were negotiated by previous governments when they proceeded with legislation based on those agreements. I appreciate the fact that they have swallowed their concerns, dealt with their own reservations and proceeded in good faith, but I am concerned nonetheless that broken commitments in respect to the Taga Ku and the annual conferences around the economic strategy and heritage provisions and education provisions seem to be so long forgotten.
I want to make this point as well. Yes, legislation is fundamentally important. It is the next most important step in this process - as is the process of appending these agreements to section 35 of the Canadian Constitution as modern treaties and making them part of the constitutional fabric of Canada. But I think we have to understand that turning things into a statute or treaty or constitutional document is not enough.
One of the former land claims negotiators for the Yukon Territory, now Judge Barry Stuart, who suffered in silence through years of vicious abuse from Members of this House during the time he was trying to do the difficult job of negotiating, once explained that the process of negotiating land claims and developing self-government agreements was like building a car. You could, piece by piece, assemble this vehicle - this vehicle for First Nation self-sufficiency, First Nation independence, First Nation economic development, First Nation community development, First Nation healing - and you could put the wheels on, put the engine in, put a body on the car and put the First Nations leadership in the driver's seat, but if it did not have the gas to make it go we would be doing nothing but building frustration.
I believe that legislation is not enough. We also have the question about governments meeting the commitments in terms of the provisions that I have just mentioned but, most of all, about funding.
It is the funding that gives life to these agreements. If we do not put enough resources behind these agreements, if we do not live up to our commitments and respect the promises that we make, the vehicle may stall. We will not build success, but further frustration and disappointment at a cost to all of us.
I want to close by thanking the hon. Member for Vuntut Gwitchin. He and I had numerous encounters in our various roles over the difficult years of negotiating the agreements we now seek to have legislated in Ottawa.
I admire the work that the Member contributed and the work that he did on behalf of his First Nation, as I respect his good intentions in bringing forward this motion today.
In joining all Members in making an appeal to the federal government, I think it is also wholly appropriate that we also speak to each other about our collective responsibilities, not only about legislating these agreements, but also giving them life, breath, flesh and blood.
Hon. Mr. Phelps:
I, too, rise in support of the motion as amended. Knowing the Member who moved the motion and spoke to it first here today, I thought that this would be a fairly straightforward exercise in a Legislature that unanimously and very strongly supported legislation in this House regarding the land claims final agreement.
I know the Member for Vuntut Gwitchin quite well and I know his motive was to put this forward on behalf of his people, on behalf of all Yukoners, in an attempt for all of us, with one unanimous voice, to try to convince the politicians in Ottawa to proceed quickly, because their delay, and the possible reasons behind it, were cause for great concern among many Yukoners - ourselves, on this side of the House, at least, included. I believe his concern was re-enforced because the Member for Vuntut Gwitchin was heavily involved in the negotiations that led to the 1984 agreement in principle, which was ratified by nine of 12 First Nations in a democratic vote, and yet still unraveled, much to a great many people's dismay. So, delay at this time leaves us all, but particularly First Nations people, feeling rather exposed, knowing the sad history of previous attempts to finalize, at long last, a just agreement, between First Nations and Canada.
I share these concerns and I was really somewhat dismayed to hear some of the remarks that have been made here today by Members opposite. I am really concerned, and I am sure I am not alone on this, that Members from the NDP would see this as an opportunity to play politics - to innuendoes and become argumentative about some local issues, tied, of course, to land claims negotiations, but on which there is clearly room for differences of opinion.
These types of arguments - surely even they would have to admit - can only detract from the purpose of the motion, which was so clearly stated by the Hon. Member from Old Crow.
The Leader of the Official Opposition stood up and talked about possible breaches in spirit having occurred already, about the need for goodwill and that an agreement by itself was not enough, in a thinly veiled attempt to put forward some very partisan points, again, on issues that are not nearly as clear as he would have us believe.
I recall what happened during the last election. I recall the General Assembly at Lake Laberge, where members of the Council for Yukon Indians, in a discussion about land claims, about devolution, about the course that his government was taking at the time, criticized him severely - it is on tape - it has been played on television. I ran in a predominantly First Nation riding and went to places such as Ross River, where they did not even want to speak to members from the NDP party because of the way they had been neglected, unheeded; their needs and aspirations had been absolutely ignored. This sanctimonious approach, this bootlegging of partisan politics into such a serious motion is, in my view, extremely unfortunate, to put it mildly. Surely, when it comes to dealing with the federal government on an issue of such fundamental importance to Yukoners - when it comes to speaking to an issue that is so important to us all and to our future, what in effect amounts to a new social contract here - we could have put our differences aside and presented a united front on a very straightforward motion.
I supported the amendment because I felt it was in keeping with the spirit of the motion, and I certainly do not feel that the Leader of the Liberal Party in Yukon violated the intention of this motion. I do feel, and I think it is very unfortunate, that other Members opposite have.
Despite all this, I am supporting this motion, and I really, sincerely, hope it will make a difference, that it will be read and
Page Number 2316
understood by the people to whom it will be sent, and that perhaps it might give some pause to those who are presently so critical of land claims agreements in the Parliament of Canada.
I fully support this motion and I trust that all others do as well, unreservedly.
Speaker:
Order please. If the Member now speaks, he will close debate. Does any other Member wish to be heard?
Mr. Abel:
In closing this debate I would like to thank the Members of this House for supporting this motion as amended. It is hoped that we will see, as Yukoners, some positive action on this important matter from the people in Ottawa, the federal government, in the near future on behalf of all Yukoners.
(Applause)
Motion No. 64 agreed to as amended
Hon. Mr. Phillips:
I move the Speaker do now leave the Chair and the House resolve into Committee of the Whole.
Speaker:
It has been moved by the Hon. Government House Leader that the Speaker do now leave the Chair and the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair:
I will now call Committee of the Whole to order.
Is it the wish of the Members to take a brief recess at this time?
Some Hon. Members:
Agreed.
Chair:
We will take a brief recess.
Recess
Chair:
I will now call Committee of the Whole to order. We will be dealing with Bill No. 15.
Bill No. 15 - Second Appropriation Act, 1994-95 - continued
Chair:
Is there any further general debate?
Mr. McDonald:
I took the opportunity of going back to the Minister of Finance's closing remarks during second reading of the bill. Perhaps that may have been a mistake, because there was certainly a lot of rhetoric that was injected into the points the Minister wanted to make.
It is not always a wise thing to go back and get hot under the collar after reading some of this when we are trying to accept the numbers, so that we all have a common understanding as to what the government is attempting to do. The more comments I read about the socialist calculator, and given the discussions that we had yesterday, I think I will keep my calculator.
I do have a number of important and serious questions that have arisen from some of the discussions that we have had so far.
I would like to begin by asking the Minister, for our own information, whether or not he would be prepared to table the attachment to the letter that he tabled today, which is referenced in the letter and speaks to work plans and that sort of thing.
I want to thank the Minister for tabling the letter this afternoon, and tabling a returns and documents letter, because it certainly is interesting. I have a couple of questions that arise from this, both from the quote and from something else that the letter addresses.
Is the Minister willing to table the attachment?
Hon. Mr. Ostashek:
I do not believe that I would be required to table them. I have tabled the letter. I have some reservations about setting precedents by tabling all these documents. I will, however, take it under advisement and talk about it with my Finance officials. I will let the critic know tomorrow as to whether or not I would be willing to table it.
Mr. McDonald:
That is fair. I would also like some information from the Minister, if he would not mind providing it. I have a selection of budgets in my office. Unfortunately, the budgets do not go back beyond 1987. I think I threw out my budgets from the early 1980s in an effort to make room for new estimates. I wonder if the Minister could get from Finance officials - it should be fairly easy - information on all the increases associated with main estimates, both capital and main estimates and gross spending, for the period 1979-85. Also, I wonder if he could provide for us the wage settlements for that period, as well, for public servants. We need not stop at 1985, as I do not have budgets prior to 1987. If the Minister could provide that information up to 1987, I would greatly appreciate it. Would the Minister be prepared to do that?
Hon. Mr. Ostashek:
I do not see any difficulty in that. It may take my officials a couple of days, but we will get that information as quickly as possible.
While I am on my feet, I have some answers to some of yesterday's interim supply questions that I would like to table for the Members opposite.
Mr. McDonald:
I would like to ask the Minister a brief follow-up question to our closing remarks yesterday. I have not had a chance yet to have any briefings with the Finance officials with respect to the revenue projections for this coming year, but I do have an outstanding question that I would like to get some clarification on now. I will not talk about all the revenues and all the recoveries, but I am still very much interested in the transfer payment. While I do not pretend to understand all the elements of that formula and how the formula transfer is calculated, as the mathematical interpretation of that formula is a daunting one-page document, what I am interested in is a brief statement as to why the Minister and Finance officials expect that the transfer is to decline by this much.
In his remarks at second reading, the Minister made reference that some people, at least, had picked up on information from federal budget papers that the federal estimate for the transfer payment would be $311 million. The Minister made the point that that is quite often wrong, and it is certainly not accurate.
At the same time, though, we know that 75 percent of the time we are too pessimistic. Virtually all the time we are wrong, too, but 75 percent of the time we are pessimistic in that calculation.
Then, we also talked about the population factor as part of the formula, and we talked a little bit about the population decline of last year. The Minister mentioned that it was a three-year rolling average, but the obvious point is that the census from 1991 would have shown an increase, and that would have been true for 1991-92, at least. So, those three factors, by themselves at least, do not lend themselves to feel comfortable with a decline in the transfer payment.
Now, there is obviously more to it. There must be more to it than that, and I would like to hear what that is. If the Minister could give us just a brief outline as to what he understands the reasons are, that would serve my purposes for the time being, and I will then wait for the briefing with Finance later to get the details.
Hon. Mr. Ostashek:
I will touch first on the difference in the estimates between ourselves and what was shown in the federal documents as $311,156,000. I do not believe that you can put too much weight on us being too pessimistic in that review, because, if you look at it in great detail you will see that it was underestimated the year before grossly, by the same amount, that it is overestimated this year. As I have said before, we work on a different system than the federal government does for accounting purposes. What they have done now, and as I said in my second reading speech, is that if you are going to accept that $311 million
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figure, then you have to accept the figure that the federal government had the year before. We either accept both of them, or we accept neither of them. What it does is balance out quite cleanly.
While there is no doubt that Finance officials in any government tend to be pessimistic rather than overly optimistic, and I agree with that type of calculation, I would sooner have a pleasant surprise at the end of the year than the surprise of not knowing where the money will come from to pay the bills resulting from overestimating revenues.
I think a perfect example of that is the budget that was just tabled in Prince Edward Island. That is exactly what happened. They overestimated revenues that they were going to receive from the federal government because they were using federal government figures instead of updating them with their own estimates. Now I understand that they are going to go to a system similar to ours and they are going to use their own estimates for equalization because of what happened there. They were hit to the tune of some $23 million because they used federal Finance figures. Our officials have taken the more fiscally prudent route and tried to adjust the figures based on the best information that they have.
I believe that is self explanatory, if we look at it in detail. If we are going to accept the $311 million figure for this year, we have to then accept the one that they had in their books the year before, which was underestimanted exactly the same amount.
On the issue of population, my understanding is that Stats Canada is in a dilemma as to how to update population figures, because they used to do it based on family allowances. Now, as there are no more family allowances - there is a family tax credit - they still do not have a new system in place that they feel comfortable with or that we feel comfortable with for updating population figures - changes in population. That is why our officials feel comfortable with our figures, which show the population as having increased 1.3 percent, rather than the 6 percent that the federal government has shown.
I feel quite comfortable that we are fairly accurate on our transfer estimates. I do not believe that we are going to be out very much, and I am sure that once the critic has had a chance to be briefed by our officials, he will have that same level of comfort.
Mr. McDonald:
I will tell the Minister and the departments precisely where I am coming from here so that they will know what I am thinking.
We are politicians. We are not number crunchers. Even when we have the formula shown to us, we do not understand a damn thing about it, frankly. Some of us know it better than others but none of us know it. So, we either trust what we are being told or we do not, quite often; but oftentimes we have to assess whether or not we are getting consistently good information. I am not talking about any individual or anybody individually providing us with inaccurate information or intentionally misleading information, but we have to assess, as accurately as we possibly can, the information we get.
The reason why we do that is because a few percentage point changes can make a world of difference to budgets and how budgets are presented. If, for example, this budget is out by $4.5 million or this transfer is out by $4.5 million and we put that into the context of the world we live in, that $4.5 million almost cost this government its life a few months ago. So, it is serious business for us.
That is the reason why I am often worried about the projections. In the past, in conversations I have had with Finance officials, we have talked about the assumptions they are making - the safety factors they draw into assessing what the calculation will be. Sometimes, one agrees with their degree of skepticism about a point, sometimes not, but ultimately the Minister and the Cabinet are responsible for those projections.
I do not accept either this projection or the federal projection as being entirely accurate. Based on their estimated projections and our estimated projections since 1985, there is no reason why we should believe that they should be accurate. They never have been before. There is no reason why we should assume that they are capable of giving us accurate projections.
I admit and accept that they can be, will be, and probably are, wrong. However, there is a degree of accuracy.
The problem I am having here is simply that we have a number of factors, as I have mentioned: the federal government is aiming perhaps far too high, and the fact that we have been too pessimistic 75 percent of the time. In some cases, we have been as much as $10 million, $11 million or $12 million out. We also know, at least anecdotally, that the population has indeed risen during the period of this three-year rolling average.
I cannot accept that we can simply average out the federal projections and get something that is dead on. I do not believe that bears any relationship, statistically, to an accurate formula. However, we do know that they have been wrong and that we have been wrong.
The point I would like to make - and I am more than prepared to listen to what the deputy will ultimately have to say - is that I do not understand the specific reasons why there is this degree of pessimism. I am prepared to be entertained with some ideas. However, so far, from the budget papers we have received and the Minister's comments, including his prepared comments, no Member, including myself, has received information that would give them any degree of comfort that what the Department of Finance is suggesting will be the transfer will, in fact, be close to what actually transpires.
Hon. Mr. Ostashek:
I would just like to make a few comments, because I am a bit concerned about where the Member is going with this. We are talking about a difference of $5 million in estimates. Last year, the revenues were $280 million. This year, the transfer is $275 million.
While $5 million is a lot to Yukoners and a lot to our size of budget, I do not believe that is being overly pessimistic in projections, when it is based on all the information we have.
One of the reasons my officials do not have as much faith in the federal government as they had before is that the guy who used to do our projections here, and help the federal government, now works for us. The Member opposite is fully aware of who that person is. We have hired him away from Ottawa, and he is back here.
Knowing the history - and, as you say, there is no reason why we should believe the federal government - there is no reason why ours will be accurate. However, this Cabinet accepts full responsibility for that. We are also a Cabinet that feels that we would sooner underestimate the revenues by $5 million than overestimate them by that amount. I think that is being fiscally prudent. Five million dollars is not that large a sum of money in the overall picture of the government.
If we take a hypothetical case, and assuming we were to project a sum at the same level as last year - $280 million - and then set our budget accordingly, we would have supplementaries come in, and this would just exacerbate the problem if the revenues had been overprojected.
I and Members of Cabinet have great confidence in the projections that have been given to me, and we set our budget accordingly. If we have in fact erred by $5 million, we will accept responsibility for that error, but I would sooner be criticized for underestimating by $5 million than for overestimating by $5 million.
Mr. McDonald:
I do not disagree with that assessment at all in terms of whether or not Cabinet should be taking responsibility
Page Number 2318
for these figures. They had better take responsibility, because no one else can do that. They are the ones presenting the budget. I do not have any dispute with that fact, nor do I have a dispute with the fact that it is better to underestimate than to overestimate. The question is: how far do you protect yourself in this particular estimate?
According to the public accounts, over the term of this agreement the grant has never failed to increase during the term of the agreement from one year to the next. In fact, it has not failed to increase from 1985 through to the present. We are still operating in the final year of an existing formula financing agreement.
This breaks from practice and what we have faced in the past. That is the reason why I am seeking information from the Minister to justify why he feels that we should accept that this will be the first time in nine years that we are going to expect the transfer payment to decline, particularly given that we are still operating under the final year of an existing formula financing agreement.
We have consistently underestimated, so there is no fear that we may be wrong here, obviously, but, at the same time we know that the population of the territory has increased. The population may have declined a bit last year and that is something that we will have to accept, but prior to that the census showed an increase in the population, and we know how much the federal government depends upon Statistics Canada to provide them with information. As I understand it, the federal government ignores any information that we give them about our health care statistics.
I am interested in information that would help explain specifically why the government feels that this is the way to estimate. I do not dispute that they should be underestimating as opposed to overestimating, and I do not dispute that they are taking responsibility, but the point of the matter is that while we can sit in this Legislature and debate for weeks about an expenditure of only $1 million, we seem to roll over the question about assessing the size of the transfer payment as if this is a given and that this is baseline information that we should simply accept. I can tell the Minister that I do not have the information that makes me feel comfortable.
Hon. Mr. Ostashek:
I do not expect the Opposition just to roll over and accept what we have in projections. We want to make it very, very clear to them as to what assumptions were used and how we got there. While I have offered the briefing for him and I know he has not had it yet - he has not had time, I can appreciate that - I will see if maybe I can address some of those, just by going through this briefing note I have here. It pertains to the $311,156,000 in 1994-95. Our mains show $275,757,000. Our explanation for that is our calculations are more current and our accounting system is on an accrual basis, whereas the federal government is partly, at least, on a cash basis, which ignores unpaid liabilities. While the federal government is much higher than we are for 1994-95, as I said earlier, they were much, much lower for 1993-94 than what our estimates were. The federal government showed in 1993-94 a grant of $261,766,000, whereas the Member opposite will note in the supplementaries we are showing $280,231,000 - some $18.5 million more than what the federal government is showing. The federal government has not updated the 1993-94 grant calculations, since the cut-off date for their 1993-94 estimates is some time in November/December 1992. It is apparent there were a number of events that intervened after that date. Firstly, we signed a risk-sharing agreement with the federal government, and a two-year formula review process has just been completed. Both of these impacted on the 1993-94 and the 1994-95 grant calculations, but while we have reflected them, the federal government has not yet reflected them.
Secondly, DIAND is not using the most current YTG revenue numbers in their 1993-94 or their 1994-95 calculations. This is because they must cut off data for main estimates very early to allow the finalization in the printing of the federal estimates. The federal government, for instance, is not showing the latest income tax estimates produced by their own Departments of Finance and Revenue. This difference in revenues accounts for over $17 million of the difference in the grant figures for 1994-95.
Thirdly, the federal government is using much higher figures for population growth than is in the Yukon. Statistics Canada is currently showing population growth at a rate of six percent for 1993. Now, I am sure that the Member opposite, without even looking at figures, would concur with me that that is a very optimistic growth rate. We have been condemned from the other side of the House that people are leaving the Yukon. I think six percent is overly optimistic.
As this was the official figure for grant calculation purposes for 1993-94, it is the figure we used to establish the 1993-94 grant. The federal government has used figures that are not updated by the latest Statistics Canada revisions. This is one of the principal reasons why our grant figure for 1993-94 is considerably higher than is the federal estimate.
The Statistics Canada population growth estimate of six percent for 1993, the year the mines closed, is far higher than the rate of growth they recorded when the mines started up in the mid-1980s. They do not even have that same percentage. It cannot be correct, and I believe the Members opposite will concur that it cannot be correct.
In the same year, our Bureau of Statistics recorded a growth rate of only 1.3 percent. We feel that this is the figure to which Statistics Canada will revise their 1993 figure when they do the revisions in September of this year, based on child tax benefit records. This adjustment will result in a large downturn adjustment to our grant in September of 1994. We have reflected this in our 1994-95 calculations as a downward adjustment of roughly $20 million.
There are numerous other small differences between the two grant calculations where the federal government has not used the most currently available data.
Those are some of the reasons I can give the Member opposite now for, as he calls it, the pessimistic forecast for revenues for the 1994-95 year.
Mr. McDonald:
I think that what the briefing note primarily does is suggest that the $311 million figure is not accurate, and it probably does that quite well. I would be prepared to believe that it is not accurate, either. What I have yet to understand are the reasons why we expect that it is going to go down from last year. I will wait to get a more thorough understanding later on.
Last year, the Minister indicated there was some final accounting that was to be done for the period of the negotiations. He cited a figure of up to $60 million for which they felt they had provided some good justification to the federal government. At the same time, they indicated that, while they thought that they had justification for $60 million, they could not get that much. How much did we get?
Hon. Mr. Ostashek:
The Member is quite right. We had calculated a figure that was somewhere in the neighbourhood of $60 million, based on three different things. The population review was one, the three-year review on the formula was another one, and the third one was the Kwanlin Dun lands. When we finished up with the federal government and everything was said and done, we ended up with $6 million.
Mr. McDonald:
If I had just finished reading the Minister's speech from yesterday, where he was taking issue with my negotiating ability with the federal Minister, and the Department of Finance's negotiating ability with Mr. Van Loon, I might be unkind and suggest that they have not exactly negotiated a great settlement here. Of course, we both know that, no matter how well
Page Number 2319
you negotiate, there is one side with a hammer and the other side does not have a defence. I am not going to belabour that too much.
Regarding the Kwanlin Dun lands, could he give us more specifics about that. What is he referring to?
Hon. Mr. Ostashek:
I believe we debated this last year. The Member opposite is a former Finance Minister; he knows that this has been an ongoing bone of contention between us and the federal government. In the final analysis, it was based on Statistics Canada's interpretation of it. They interpreted it as a federal transfer so they would not give us anything for it. We could not convince them. I suppose we could go to court and continue to fight it.
But, getting back to the Member's previous comments about how we only got $6 million on the $60 million, and how that was not a very good investment, I think it was. We only invested $150,000 to get that $6 million.
Mr. McDonald:
If I was trying to grab at straws to find the best interpretation possible, I might be prepared to snatch that argument out of thin air. Unfortunately, I think the bottom line is that, while we spend a lot of money on negotiations and invest all the high-priced talent from the Department of Finance, ultimately we are going to have to accept what the federal government provides. I will get to that in a few moments. I would like to talk a bit more about the negotiations that are underway. I will leave that point for the time being and move on to the negotiations per se.
Yesterday, the Minister, in his second reading response made mention that the increased revenues to the Yukon government as a result of the formula financing agreement were designed to build infrastructure. I took the opportunity to go back and look at some of the comments that were made at that time. That was not the publicly stated reason why that funding was given. If the Minister has any contrary documentation, I would invite him to give it to me.
The Minister is well aware that, at that time in 1985, the Government of Canada was responsible for much of the infrastructure in this territory. They were responsible for mines and the mining roads. They were responsible for the engineering services agreement, which provided funding for all highways, with the exception of the Klondike Highway - there was a series of highways, anyway, that we got special money for. They were also responsible for the Alaska Highway. When we were talking about the need to provide some services for Cyprus Anvil, they took some responsibility for that.
The argument for this increased funding from the mouth of no lesser than Erik Nielsen was that the purpose of the funding was to ensure that we had a level of services in the Yukon comparable with other jurisdictions. I was somewhat concerned about the Minister's interpretation of what had happened, particularly when the Minister wants to use this as justification for spending fairly large amounts of the budget and suggests, consequently, again that spending the money this way conforms to federal wishes. There may be a political wish from one person or another in the Yukon but I have never been able to detect a federally expressed wish that this money be directed to infrastructure and that, consequently, if it is not, the Yukon will be penalized. That is the logical flow of our Minister of Finance's remarks.
If the Minister can give us information from the federal government to indicate that they had wished that we direct this money toward infrastructure, or his definition of infrastructure, I would like to hear it because I have not heard it yet.
This brings me to the definition of infrastructure. This whole concept of building infrastructure has now been tied into formula negotiations through comments the Minister has made, and that is what makes it now relevant in the context of this discussion.
I have had some difficulty determining what the word "infrastructure", means because it has been used by many people to explain many different things, so I am going to ask the Minister for his definition because I think his opinion is probably the most important opinion when it comes to understanding Yukon Party government budgeting practices.
We have heard, in the last year or so, that infrastructure can include everything from roads to energy projects. That was changed with the revision of the document entitled Toward Self-Sufficiency by the 21st Century when the second version of that document dropped the concept of energy production as part of the definition of infrastructure. Are we referring to roads exclusively, when we talk about infrastructure, particularly the infrastructure that leads to economic development, or is it broader based than that?
Hon. Mr. Ostashek:
I am happy and pleased to see that the critic is reading the documents that we put out. That is a good sign.
I want to return to some of the comments on the transfers and why they were negotiated. While I do not have any documentation here, I think I could pull some newspaper articles from the early 1980s and some of the comments made by Mr. Nielsen about why we were negotiating the extraordinary funding.
It has always been my understanding from news reports that it was Mr. Nielsen's position that, if the federal government did not make this investment, we would be forever dependent upon the federal government, and that we needed some extraordinary funding in order to move away from that dependency.
I certainly do not have any documented evidence of that with me today, but that was certainly my understanding of the situation at that time in the Yukon.
As to my definition of infrastructure, it covers a broad range of topics. The infrastructure that we are interested in, on this side of the House, is infrastructure that will be wealth-creating to the Yukon - projects such as roads, the extension of energy to companies, so they can have lower operating costs, better roads so we can have lower freight costs. We are seeing some benefits from roads today. Freight costs are down dramatically from what they used to be, because of our better roads. This makes us more competitive.
Telecommunications could be another area of infrastructure that could make our businesses more competitive with the outside world.
We believe that it is our duty, as a government, to provide that infrastructure. You could certainly call buildings infrastructure, but most government buildings that have been constructed are not wealth-creating infrastructure. In the long run, schools are wealth-creation, because we teach our children. More important than the physical school is the type of education that is being taught in the schools, and that is the wealth creation.
This government is interested in infrastructure that will provide returns to the Yukon. We hope to continue on that road, and I know that much of the funding that was negotiated by the previous administration on highways was for that purpose - to rebuild our highways and upgrade infrastructure, so operating costs would be lower for the private sector in the Yukon.
Mr. McDonald:
I would point out that while what is taught in the schools is the critical factor when we are trying to determine whether or not schools are a wealth creation, what travels on the roads is also critical when we talk about whether or not roads count as infrastructure. Certainly, one might argue that the reconstruction of the North Alaska Highway to allow for quicker, easier exit from the Yukon, may not be the best expenditure of money toward our infrastructure. I want to pursue that point in the Economic Development estimates, because I think that particular point is an important one.
Page Number 2320
I am a little bit confused, though, about the Minister's position with respect to its relationship with formula financing and the federal government's investment in the Yukon, and I am a little bit concerned with the definition of infrastructure, when we heard the Minister of Community and Transportation Services say yesterday that the projects that we might be entertaining under the new federal infrastructure program might also include a community hall in Teslin.
Now, while I may be in support of a community hall in Teslin, I would not necessarily define that, using the Minister's definition, as infrastructure. So, I am still left not knowing, with any degree of certainty, what it is we are talking about here.
In any case, I want to get back to the specific point about the relationship of the Minister's belief that the federal government is insisting that this money go to infrastructure and if we do not spend it on infrastructure - this wealth creation - consequently we can expect to be penalized. Is the Minister saying that we should be directing the money that is contained in the transfer agreement to responsibilities for building infrastructure that have not yet been transferred from the federal government to the Yukon government? Is he saying that?
Hon. Mr. Ostashek:
Not at all. I believe the Member opposite misunderstood what I said. I was talking about specific funds that were negotiated, such as in the Alaska Highway agreement. We had extraordinary funding for rebuilding the Alaska Highway. That was negotiated for reconstruction of that highway and we had extraordinary funding because the federal government had not provided any for a few years prior to our taking it over.
Those are the funds I am talking about. I have never said that there should be any specific expenditures of the formula financing agreement. What I have said, even going back to 1989 when the perversity factor was brought in, is that the federal government has said that they are not going to subsidize Yukoners if they do not use the tax effort that they have available to them. We can get into a large debate as to whether we pay more taxes or lower taxes. As far as the federal government is concerned, based on their tax calculations, we pay 56 percent less than the average Canadian does. Even with our tax increases last year, that has not changed more than one percent, because every other jurisdiction in Canada has also raised its taxes.
All I am saying is that the federal government has sent a clear indication that they are not about to subsidize us because we do not want to use the tax effort that we have available to us.
Mr. McDonald:
I understand that point. I agree that that was the cause of the federal government's concern about the tax rates that we charge ourselves - that was the cause of the introduction of the perversity factor. The reason I bring up the point about infrastructure is that the Minister said yesterday that the NDP fell into a huge pot of money in 1985 - I paraphrased that - then, quote, "They were very irresponsible about how they spent that money. So irresponsible that, in 1989, the federal government brought in the perversity factor because they were tired of supporting them." That suggests very much, contrary to what the Minister just said now, that the way we were spending our money caused the federal government to penalize us by bringing in the perversity factor, when the Minister and I, apart from the rhetoric of debates, know very clearly that the reason for the perversity factor was the tax rates in the Yukon. I just want to make that point - not that I am going to be picayune about the Minister's speech here, but I want to see if I can understand clearly that we both understand that the perversity factor had nothing to do with what the federal government thought of our spending practices. Are the Minister and I on the same wavelength here?
Hon. Mr. Ostashek:
I think the critic has read an excerpt from the speech, and if he reads on he will find that I stated quite clearly why I felt we were penalized. That was stated by the assistant deputy minister at the time, Mr. Van Loon. He said he was not about to subsidize the Yukon when they were not going to use the tax effort factor that was available to them by bringing their taxes up to the national average. I still maintain that, based on the conversations I had with Mr. Nielsen when he was in there, that the extraordinary funding was to put us in a position of not being so dependent on the federal government.
Mr. McDonald:
So the Minister does agree then that the perversity factor was not the result of the federal government believing that we were spending the money in the wrong way. I have never heard the federal government pass judgment on the way we spend our money.
This rhetoric is not exactly accurate. In fact, it is not accurate at all. As an interesting aside, I am reminded - and the Minister may remember - that, in 1989, the federal Minister of Finance sent us a letter - actually, sent me a letter - congratulating me and our government on the sound financial practices that we had exhibited through our budget estimates. I cannot believe that they would do that and then, in the next breath, inflict the perversity factor on us. I just want to get these points clear, because they are important.
I now want to get to the question of the perversity factor and tax rates. I am hearing conflicting things from the Minister with respect to whether or not he believes our tax rates are too low. My understanding was, and has always been, that during the period that the perversity factor was inflicted on the Yukon our tax rates were one indicator of what Yukoners paid in taxes, but not the only ones. There was also the tax burden, which involves the cost of living.
If one takes all the tax rates together - and I cannot remember what the indices of taxes are, but I think there are about 26, 27 or 28, or something like that - one can get a weighted average, which is the average tax rate for Canada. Then one is prepared for each jurisdiction, as I understand it. Anyway, the tax burden is a different concept. Does the Minister believe that the tax burden Yukoners pay is too high, too low or just right?
Hon. Mr. Ostashek:
The Member opposite surely cannot think for one minute that the taxes we pay are high compared to the average across Canada. We are one of the lowest taxation areas in Canada, and the figures prove it. The other part of that is that it really does not matter what we think when it comes to the perversity factor. It is what the federal government thinks that counts, and they think our taxes are too low. That is what they are telling us when they impose a perversity factor.
Mr. McDonald:
I cannot do anything about what the federal Minister thinks. I can lend my voice to whatever common voice there is in the Yukon and try to convince them that our case is valid, and I am certain that makes a big difference in the federal Minister's life. Even when I was Finance Minister, I did not get the impression that it made a big difference in his life, either.
However, what I do have some influence over, as meagre as it is, is to try to convince this Minister of the justice of a particular position and to determine whether or not this Minister feels that the tax rates are too high or too low. The reason why it is important to know and to try to influence this Minister is that it makes a big difference in terms of the negotiating position we take when we do negotiate to the limited extent that we do.
It is not 100 percent fiction that there is negotiation. A lot of it is fiction, obviously, and as we have both agreed, the federal government will decide in the end. However, some of it does involve negotiation, and I would dearly love to be able to say to Yukoners on the street that our Finance Minister is fighting for Yukoners' interests. He may not win, but he is fighting for Yukoners' interests.
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The messages I am getting do not give me a lot of comfort yet, and I am trying to get a clear signal from the Minister as to what the Yukon government's position is. I would like the Minister, for example, to say our tax rates are high enough, that the tax burden we pay is as much as we should bear, and we would take that position to federal negotiations.
Does the Minister share that view? Are the tax rates high enough?
Hon. Mr. Ostashek:
I do. That is why we said that Yukoners have told us that they do not want to pay any more taxes. We are taking that position to Ottawa, that the perversity factor is a disincentive for economic development in the territory. We are making that case, and we have a little bit of relief to the tune of one percent, one way or another, trying to whittle that down.
We have not been very successful, and the fact that the federal government has very limited funds these days makes the chore that much more difficult, but that is the position that we are taking. Yukoners do not feel that they need to pay any more taxes. They feel that they are paying enough taxes and that the perversity factor is a disincentive for us to be able to pull more of our own weight, that it is discouraging economic development. We want to get some relief from it, and I hope that we can accomplish that in the next set of negotiations. I do not hold much optimism for it, but that is a position that we are taking to the table.
Mr. McDonald:
I agree with what the Minister is saying. I must say that I agree wholeheartedly with that Minister's statement today, but when, at the same time, the Minister says that the government feels that our tax rates are low compared to other jurisdictions, I am nervous about the final position the government will be taking to the table.
When the taxes were raised last year, we knew all there was to know about the tax burden. Government officials said that they were raising taxes because tax rates were higher elsewhere. Now, the Minister is again saying that tax rates are higher elsewhere, but our tax rates are high enough. I am cautious about challenging the Minister on that. The more accurate a picture that I get, the more fuzzy it might seem, and I do not want that to happen. However, I do want to know how the government feels about this.
Is the tax burden too high, just right or too low?
Hon. Mr. Ostashek:
We have the critic over there trying to split hairs now. I have said quite clearly that Yukoners have told us that they do not want to pay any more taxes. They have told us to cut government spending, and that is the direction this administration is taking.
Mr. McDonald:
We just established yesterday that, in all likelihood, the planned expenditures are going up.
Some Hon. Member:
(Inaudible)
Mr. McDonald:
We will have to go back to it, then. I thought we cleared that yesterday. We will have to go back to it, because it is very important that we come to some conclusions here, so we all know what we are talking about.
I am not being vociferous, but I will just make a note of my last question on the subject, so I do not forget it, and we will go back to the question we put yesterday.
Yesterday, we talked about the total expenditures being projected at $468 million. That is a projected reduction of one percent over the forecast expenditures for 1993-94. Now, the Minister indicated that they intended to spend $4.5 million on infrastructure, including the new federal infrastructure program, jointly with municipalities, as well as on other things. He mentioned the ditch road for Loki Gold and other projects. He also cited $2 million for supplementaries that he knew he would be facing.
That shows an increase of $6.5 million planned spending over the $468 million of spending. That increases it by $6.5 million, and pushes it into the $475 million range, which is an increase over the forecast.
Some of that money will lapse, I will admit, but so will some money in 1993-94, which is not factored in, either. There will be lapsing money in both years. What we know is that, by their expenditure proposals here, there will be an increase.
Is $468 million, plus $4.5 million, plus $2 million not greater than $471 million?
Hon. Mr. Ostashek:
The Member opposite is comparing apples and oranges. He knows that very well.
There are huge capital recoveries in this budget. Along with that, we have increased services. We have the extended care facility, which is now staffed and operating. We also have the first phase of the hospital transfer completed. No matter how we go about this and no matter what cuts we make to government, as we devolve more responsibility to ourselves from the federal government our budgets will go up.
However, we do have 13 out of 16 departments and corporations coming in with lower operations and maintenance budgets than in the previous year.
Mr. McDonald:
I am not talking about whether or not the government wants to spend money on the extended care unit or something else. I am talking about the gross expenditures of government. The government has made a point of saying that the expenditures of government are going down.
The expenditures that are listed here show an increase, according to the government's figures. I am talking about total expenditures. Whether they use a dollar of federal money on the Alaska Highway or a net dollar of spending from the Yukon to run this Legislature, the point is that the government is responsible for public spending. They have made a big deal of wanting to bring the expenditures of government down, and yet they project expenditures that go up.
The Minister tries to bring in the argument that some are recoverable and some are not, and that they want to spend some money on the extended care facility that they did not have to spend before, and so on. I am not interested in that. I am interested in the total government spending, because that is the political argument that the Minister is making.
The Minister of Education is shaking his head. I do not know why. This is a fundamental political argument. Is the spending going up or not?
Hon. Mr. Ostashek:
The Member for Faro says it does not make any difference. It does not make any difference that we take over more responsibilities from the federal government? We get more in grants from the federal government for the programs we deliver; it is all included in our budget. It does not matter that we get $20 million a year from the American government that is included in here for the Shakwak project; that does not matter at all?
The O&M spending of 13 out of 16 departments and Crown corporations of the territorial government has gone down. That is the first time in years.
Mr. McDonald:
First of all, when we talk about some of the departmental spending, we have to recognize that last year, in some of the departments, in the name of realistic budgeting, the expenditures rose dramatically, and now they are being shaved back to demonstrate good fiscal management. I am not talking about those. The Minister has made a political argument. That political argument is about public spending - whether it comes from a taxpayer here, a taxpayer there, it does not matter. Whether it comes via the federal government, via the municipal government, it does not matter. This Minister is responsible for public spending, and lots of it. So, what I am trying to point out is that the Minister who has made a claim about public spending going
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down - public spending that he is sponsoring - is taking joy in that. Now he is saying we want to spend less on operations and spend more on capital. That is a political argument he can make, but that is irrelevant. The issue is, is public spending going up or down - because they have made the political argument that public spending is evil? So, I am just suggesting that when you add up these figures, however evil, or however this government wants to spend this money, or whatever they think their priorities are, the point of the matter is that this spending is going up. They even identify it in their public documents and in their political statements, saying that their spending is going down, and they identify it as going down from $471 million to $468 million. They do not try to dissect it by saying some of it is recoverable, some of it is not or anything like that. They are making a political statement about public spending, and I am responding to that political statement because I am a politician. The $468 million plus the $4.5 million plus the $2 million is $475,084,000. Is that number higher than $471,705,000? Is it higher or lower?
Hon. Mr. Ostashek:
Quite clearly, the overall expenditure by government is going to continue to rise as we devolve things from Ottawa. When we take over the forestry there will be another $13 million in our budget, but that will be $13 million out of DIAND's budget that they are spending here. What we are saying is that we are going to get the cost of operating government down, and we have said that time and time again. We have said that we are going to put more money into capital projects in the Yukon, that we are going to put more private sector people to work, and we are going to control the costs and size of government.
Mr. McDonald:
The Minister makes a political statement about his priorities of spending within the $475 million, and he is entitled to make those. Probably a true conservative might come along and say, "You may be reducing the operating costs of government, that is one thing, but you are breeding expectations out in the private sector among people who are depending on that capital budget for a living that may not be sustainable." I do not want to pursue that argument too long, because I am not comfortable in that position. However, I think that a true conservative would say precisely that, would they not? I think that what the government is trying to do is appeal to the true conservative constituency, and at the same time do something differently. It is not right. You either spend more or you do not. If you can justify it, and you can justify your priorities, then that is fine. I have no complaints.
I would like to go back to the tax burden. The Minister did not answer the question about the tax burden. He talked about the Yukon public not wanting taxes to go up. He could have told us that in October of 1992 - I think he did tell us that in October of 1992. We could have told him that last year, and I think we did. The question is all about the tax burden.
I asked him a specific question. Is it the government's position that the tax burden is too high, just right, or too low?
Hon. Mr. Ostashek:
I know that back in 1989 the Members opposite had some studies done. I have not had any studies done, so I do not know how the total tax burden compares with the rest of Canada. I do know that regardless of how much of a political debate we get into back and forth across this floor about the tax level or the tax burden, the federal government feels that our taxes are low compared to other Canadians, and that is what is impeding our transfer payments from Ottawa. That is what will continue to have a negative impact on our transfer payments. If we are prepared to live with that, then it is quite all right. That is our decision to make and that is what the federal government says.
Mr. McDonald:
Perhaps the Minister can correct me, but my understanding was that one of the arguments we made while we were in negotiations with the federal government was that our tax burden was already high compared to the national average. If we do not have a position now when we are entering negotiations on the new formula transfer, we are going to be in trouble - unless the Minister has other good arguments that would help deflect this federal push to attach the formula to the national average tax rate.
Has the Department of Finance calculated the tax effort?
Hon. Mr. Ostashek:
My understanding is that we are updating the study that was done several years back for the negotiations this time. We have hired someone to do that and Finance officials feel that will substantiate the argument that the tax burden is high in Yukon, but the fact remains that the federal government is not buying it.
Mr. McDonald:
I know they are not buying it because the letter the Minister tabled today, dated April 12, from Paul Martin to the Minister says very clearly, on page 2, and I will read from the letter - I do not have to table it; the Minister has already tabled it. The letter the Minister quoted from and tabled today goes on to say: "With respect to the tax effort adjustment factor, my letter of February 25, 1994, indicated my willingness to have my officials review alternative ways of assessing territorial revenues and formula financing, provided the link to national average tax effort is maintained."
Clearly, what they are saying here is that, no matter what kind of perversity factor we are going to have, we are going to have some kind of perversity factor in the agreement. This makes me wonder about the breakthrough that I thought we had achieved that was going to do something about the perversity factor.
Can the Minister tell us how this perversity factor might be softened, even with this fairly clear language here from the federal Minister? What is he looking to achieve with respect to softening the perversity factor?
Hon. Mr. Ostashek:
I agree with the critic. As much as the Yukon and Northwest Territories hate this perversity factor, the reality is we are going to have to live with it. We would like to have it softened and, with the updating of the tax burden, we hope that will help us in that argument. As the critic knows full well, in the perversity factor that we now have, there is a 15-percent break for living in the north. We hope to have that percentage increased substantially into the 20 percent to 25 percent range, so we could lower the perversity factor and make some gains. I believe that is an argument that we may be able to make to soften the perversity factor.
Mr. McDonald:
I am trying to reconcile some of those comments with comments made yesterday with respect to the perversity factor and who is responsible for that factor.
I am getting the feeling that we are going to be set up for a new perversity factor, and the Minister has indicated that we have to accept that, because the federal government people consist of tough bargainers, and they will ultimately tell us what we can accept.
Yesterday, the Minister indicated that we should thank the federal government for the new perversity factor, if it is implemented, and that we would have to blame the previous Minister of Finance for the previous perversity factor. The reason for this is because the Minister of Finance, at that time, was not only the negotiator on the behalf of the Legislature, but also of the formula financing agreement.
This may not be a fair question, because I am asking the Minister to explain some political rhetoric in what is ostensibly a formal debate. If there is a perversity factor introduced in this formula financing agreement, is the Minister going to take responsibility for that?
Hon. Mr. Ostashek:
If we were going to wipe the slate clean and start from nothing, and then ended up with the perversity factor, I would. However, we already know there is one there. The
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critic has read the letter from the Minister of Finance. It does not appear that there is any indication that we are going to be relieved of it. What we will try and do is soften it.
Mr. McDonald:
The Minister is skating. He is dancing.
The problem is, first of all, that we now know that the statement the Minister made yesterday is not true. There is another statement that the Minister made. He said that, early in the government's mandate, the federal government conceded that they, the Yukon government, was not spending the money in a manner that was negotiated to put infrastructure in place, so that Yukoners could be more self-sufficient and less reliant on Ottawa. Ostensibly, this was the reason the Minister gave, yesterday at least, for the perversity factor. We agree today that this is not the reason for the perversity factor.
We also know now that the perversity factor has perverse consequences. Those perverse consequences are a disincentive to economic development. Clearly, while the federal government was trying to do something to increase our tax rates, they did not understand all the consequences, because there was no experience with the formula they were imposing. Now we know the consequences. Clearly, it should be much easier to make the case to the federal government to remove the perversity factor, if they listen to reason.
They may not. In fact, clearly they will not. However, I would hate to think that the Minister would continue making statements about who is responsible for the old perversity factor, and then continue to say that now, while he is ostensibly responsible for negotiating a formula financing agreement, whatever happens is going to be the federal government's responsibility.
One might suggest that I am rubbing the Minister's nose in it, but there is an important point to make here. I just want to make that point, so that the Minister knows where my rebuttal comes from when he next repeats the nonsense that he delivered yesterday.
The quote from the federal Minister, that our Finance Minister read out yesterday, said, "I have instructed my officials to ensure that the renewal discussions proceed from the premise that the new formula will either cost less or, at most, cost the same as the current formula." He has provided a range of negotiating options for his officials, which he has communicated to our Finance Minister.
We have heard that a lot of what the government is doing, in terms of reductions in expenditures, is due to an anticipated reduction in the transfer. We have heard through the grapevine that no less a personage than the Minister of Finance himself, here, has said, in Ross River, that the federal Minister told him that they were looking for a two-percent reduction in revenues, and a freeze beyond that. The purpose was to tie it, in some way, to what was happening to the government's plans to reduce public service wages.
Are some of the planned expenditure reductions in the budget a direct result of anticipated reductions in the federal transfer?
Hon. Mr. Ostashek:
The Member opposite has heard me say, time and time again in this House, and even in my second reading speech yesterday, in which I stated the projections that Finance has given to expect in revenues over the next three years, that the reason we are making the cuts in government spending is based on those projections.
It is also a direction that has clearly been given to us by the people of the Yukon: to reduce the cost of government spending for the operation and maintenance of government. I have had some very positive calls about reducing administration costs and moving the money elsewhere in the budget. I believe the Liberal Leader even made some comments to that effect in his second reading speech. We are going to continue to do those things.
The reality is that when we have projections about what we expect our revenues to be over the next three years, we have to take those into consideration or we will be in the same situation some of the provinces are in this country today.
Mr. McDonald:
Revenues appear to be climbing over the next year, so I am not entirely certain to what the Minister is referring. If the Minister is simply saying that, as a matter of political priority, he wants to put more money into capital, or he wants to reduce the operating costs of government, I will accept that at face value as a legitimate political statement. We may disagree from time to time on the terms of that: whether or not they are cutting a service, or whether they are truly finding efficiencies, or that sort of thing. However, what I am more interested in right now is whether or not the Minister and the government are doing anything in terms of expenditure reduction as a result of what they understand are going to be reductions in federal transfers to the Yukon.
Hon. Mr. Ostashek:
There is nothing directly tied to the anticipated federal reductions. What we do have an idea about is what our total revenues are going to be over the next three years. That is the premise that we are operating on - the projection of our total revenues, not just the formula financing section of it.
Mr. McDonald:
Does this not include federal revenues? Obviously we are highly dependent on federal expenditures. To my knowledge, no one in this Legislature would dispute that. Is there not some understanding of what we might expect from federal revenues in the future, and is that not part of what the Minister is talking about, with respect to anticipating reductions?
Hon. Mr. Ostashek:
I stated how we arrived at our projections, and one fact was that our revenues from the federal government, our transfer payments, were at the same level as they are now. There was no increase. With the cost of inflation, the volume increase of delivering services to government is going to eat up any savings we have made so far, if we do not make further savings on the operation and maintenance side of the ledger. We have to keep reducing the costs of government. We are re-priorizing programs, we are trying to deliver them more efficiently, and we are going to have to continue on that route.
The fact is, this budget is not the be-all and end-all of our financial problems in the Yukon, or our financial challenges in the Yukon. We are going to have to continue on that path, if we are going to control our costs to come in line with our revenues. Other than that, we have the alternative of raising more revenues and, as I have already said in this Legislature, Yukoners have told us they do not want to pay any more taxes. So, we are not about to be raising revenues in that respect. We are going to continue to try to control the costs of government.
Mr. McDonald:
The position with respect to the federal transfer, then, is that, in their long-term projection, they are anticipating virtually a flat line trajectory for the transfers. Right now, is that the position and budgeting plan?
Hon. Mr. Ostashek:
I believe I gave two examples yesterday on projections. One of them was based upon a flat line, with some inflation increases. The other one was with a small increase, about a one-percent increase, in revenues - or something to that effect.
I am sorry, the second one included an inflation calculator in the revenues, as well. On the one where we did not include an inflation projection, which just stayed a flat line without the federal government giving us the inflation factor - we do not know whether they will give us that or not - we ended up at the end of March 31, 1997, with about a $10 million accumulated deficit. If we have the inflation factor built into our revenues, we would end up with about an evenly balanced budget with no accumulated deficit, but also no accumulated surplus.
Mr. McDonald:
The Minister is essentially saying that, as far as their budget planning is concerned, they are not anticipating
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any reduction under the formula financing agreement. They are anticipating it will stay the same.
Hon. Mr. Ostashek:
The calculations we have done to this point are based on that assumption. We do not have anything carved in stone that that is going to be the case.
Mr. McDonald:
Of course not. A lot will depend on how good a negotiator the Minister is, to determine whether or not we get the option the federal Minister identifies as the option that will cost the same to the federal government as the current formula. We will be waiting to see how well the Minister does, given that, according to the federal Minister, this is a viable option.
Up until now, the concern I have had about this is that there has been a suggestion that the government is pre-implementing anticipated reductions and sending out confusing signals to the federal government. We heard the Minister responsible for the Public Service Commission announce, when the two-percent cut for public service was announced, that we must fight the federal debt. If I were a federal Finance official, I might thank the Public Service Commission Minister very much for that but, if the Minister of Finance is saying that the reduction in employee wages had nothing to do with anticipated cuts in the formula financing arrangements, then I will take the Minister of Finance's word. He is the Government Leader.
I will make reference to a small point. Yesterday, the Minister indicated that on January 22, 1990, referring to the formula financing agreement that had just been signed, the Minister of Finance, who happened to be me at that time, said, "Mr. Speaker, in addition to this we must, as all Canadians must, reduce our expectations for continuing increases in government spending." He said, "can you imagine that; that an NDP Minister of Finance might actually say that?" I can certainly imagine that, but the operative words here were that I had said that after the agreement had been signed, not before the agreement had been signed.
This is all about sending signals to the federal government. You do not want the federal government to think that the Government of Yukon is rolling over. That was my impression of what the government had been doing and I am only modestly more comfortable with what the Minister is now saying.
There was a clause in the formula financing agreement that allows for offsets in reductions in the established program funding and the capital assistance program. That clause may be changed in the coming years. What is the Minister's position on that particular feature of the agreement?
Hon. Mr. Ostashek:
We are certainly going to fight that very, very hard. I want to go back to some of the critic's rhetoric prior to him asking the question. I have some real difficulty with his suggestion that we are sending the wrong messages.
Is the Member trying to say that we should disregard the signals that are being sent from Ottawa, that we should continue to run deficits, that we should not be concerned about the signals and that we should not be taking any actions in the event that we have a reduction or that our revenues do not increase, knowing full well that we could be cut back?
This sort of an attitude, if that is what the Member is suggesting, seems to me to be likened to a spoiled kid who is away at university saying "if I spend all of my rent money for the next six months, dad will send me some more money." Is that what the Member opposite is trying to relate to this side of the House?
Mr. McDonald:
No. What I am saying is that you do not, in the context of expenditure reductions in the Yukon, make reference to fighting the federal debt. You do not, in the context of negotiations with the federal government, make reference to wanting to establish the need for a $30 million rainy day fund. Those kinds of signals set you up very poorly in formula negotiations. What federal Minister in his right mind will want to help finance a $30 million rainy day fund for a government that has virtually no debt, when they have to go to foreign markets to borrow that money to give to us?
That is what I am saying. I am not saying that we should not be concerned about deficits. I am not saying that we should not be concerned about growth and spending. I am not saying that we should not balance budgets. I said it in 1990, and I say it today. What I am saying is that the signals we send to the federal government must be clear, and I do not think that they have been clear. They may have been clear coming from the Minister of Finance's mouth with respect to fighting the federal debt, but he also has other Ministers over on the government side who are saying other things.
When it comes to talking about the rainy day funds and things like that, that may have been something somebody might have said back in 1985 or 1986 or 1982, about wanting to keep a special reserve of an extra $30 million or one month's operating capital on reserve just in case you need it. That completely ignores the financial position that our funding agencies are in. They are not going to give us money to put in the bank. Why would they?
Hon. Mr. Ostashek:
The Member opposite and I are going to agree to disagree, because I believe that the way we can stand a better chance of getting a better deal from Ottawa is acting in a very responsible manner. Maybe we can convince them that we can act in a responsible manner, that we can spend the money responsibly, and that maybe we can get more relief on other sections of the formula financing agreement, such as the perversity factor, if in fact we are going to be making efforts to be more self-sufficient. Maybe we can get some relief so that there is not so much economic disincentive. The Member opposite and I will agree to disagree on what position we should take going into these negotiations.
Mr. McDonald:
I think the Minister, quite frankly, is being highly irresponsible. The problem here is that there is a difference between balancing your budget and having large cash reserves for rainy day funds. There is a big difference between the two.
The problem is, as I have pointed out in jest before, that there is a difference between the federal government thinking they are operating responsibly and rewarding them for operating responsibly. I am the only Finance Minister from the territory I know of who has a signed letter from the federal Finance Minister, saying I tabled a responsible budget. That does not mean that they do not have certain financial imperatives that they have to work with and are going to stick it to us anyway.
The issue is the signals one sends publicly about whether or not funding is required in this territory. I am not passing judgment now on the government's priorities for spending. I am saying that, when it comes to negotiating with the federal government, you do not announce that the initiatives you are taking are to aid or advance the objectives of the federal government's debt-fighting initiatives. You do not say to the public that, not only are you looking to balance the books, but you are also looking for one month's operating reserves, particularly in a negotiating year, when you are trying to convince the federal government that every dime they give you is needed.
They have to go and borrow this money to give it to us. That is how bad things are in Canada. We, as Canadians, should be concerned about that, but we also have our own imperatives here. If they have to go to another country and borrow the money to send to the Yukon, knowing that it is only going to sit in a bank account so that we can have yet another reserve that is being demanded by the bean counters, they are going to seriously wonder if they should be as generous as they have been. That is the obvious point that has to be made here.
The question is, what signals do you send? Balancing the books
Page Number 2325
- good signal. Responsible management - good signal to your own taxpayers. Setting up another slush fund for people - let us not call it a slush fund, let us call it an operating reserve - that does not send a great signal. I have other concerns about some of the operating reserves, even operating reserves that I helped set up in the first place. One of those operating reserves is the leave accrual account. Do I think it is reasonable to have a 100-percent-funded leave accrual account in this government? No. It is reaching $25 million. Is that a responsible use of tight resources? When the leave accrual account was initially established, there was the suggestion that we have some money in reserve, so we would not have to vote the money every year. We would have some money in reserve that accounted for lost time, sick leave, vacation time, et cetera, so that if people left the government, then we could pay them out. I thought, at the time, that this would be a good way of evening out any shocks in the system In the event that we had a higher-than-average year of departures from the government, the account would take care of that. Now we have a situation where we have, I think, better than $20 million in this account. We have taken it to almost a religion that we have to support this account, and we have $3.8 million going into that account again this year. I do not know the out-take, but it always seems to be growing, because I guess the public sector worker is getting older here and they are not leaving as often as they used to. The point is, do we need to have $20 million socked into that account? Is that even realistic? The next thing the bean-counters are going to do - and I do not mean to be mean about it - is come along and say, "Listen, if all those people leave, who is going to shut down the government? Who is going to turn off the lights, who is going to drain the pipes?" We will need a special account for that, too. Even though we are entering the twilight zone in terms of realistic possibilities, we are going to be setting aside all these accounts so that somebody can say, "We have the money on reserve." But the question is, is that a realistic choice for politicians to make? I would argue, we have to think about that.
Not to get too far off on a tangent, the whole issue here is signals. I am not talking about whether or not the government should balance the books; I say they should. In all the years that I was Minister of Finance we did balance the books. We did more than that; we began to build a big surplus.
The point of the matter is that when you are in a negotiating year you do not send the federal government signals that you not only agree with its position and that you are going to accept its position before the negotiations are concluded, and on top of that you are looking at receiving big operating reserves in case something happens. I think somebody mentioned that the Alaska Highway was going to be swallowed up into some giant western rocky rift and suddenly we would have to repair the highway at some gigantic expense.
We have to understand who it is we are talking to when we are trying to make these arguments. I think it costs us when people are loose with their tongues.
Hon. Mr. Ostashek:
The Member opposite cannot have it both ways. If we talk about a negotiating stance, I think it would have been folly to cap the leave accrual account in a year going into negotiations with the federal government and taking it out for the operation and maintenance of government. We can argue whether we should have a little bit of an operating reserve or whether we should not. I would like to ask the Member opposite, if he feels so strongly about this leave accrual account - and I know I have looked at it myself, as a Finance Minister - I wonder why the previous administration did not set a cap on what they were going to set aside and not just leave it wide open.
Now, all of a sudden, because there is another administration here, they are trying to make a case that we should be spending more on operation and maintenance of government and not be worried about expenses, and we should start tapping into the reserve account. I may need it a lot more critically in the next budget than I need it in this budget.
Chair:
Order. The time being 5:30 p.m., we will recess until 7:30 p.m.
Recess
Chair:
I will now call the Committee of the Whole to order. Is there further general debate on Bill No. 15, entitled Second Appropriation Act, 1994-95?
Mr. Harding:
I have a couple of questions while the critic prepares for his questioning for this evening.
A statement by the Government Leader this afternoon totally shocked and amazed me. The Government Leader admitted that expenditures in the budget, listed at $468,584,000, were going to be overspent by $4.5 million and $2 million. This added to the $468,584,000 far exceeds the $471 million in last year's budget, which to me or any other reasonable or sane person would equate to an expenditure greater than last year. Even though he freely admitted that yesterday in debate, he made the claim that government spending was not going to be up - even though he admitted he was going to spend the surpluses.
Could he please explain to me, once again, how, even though he is going to spend more this fiscal year, government spending is not up?
Hon. Mr. Ostashek:
I think the Member opposite should read Hansard tomorrow; I went through this for an hour this afternoon with the critic. Nothing is going to change because of the number of questions asked by the other side of the House. They have stated their position quite clearly on the record and I disagree with the position and the view of the budget that they have taken. We have agreed to disagree. They can go on for hours if they want to waste the time of the Legislature. It is not going to change the answers any. The fact that the overall budget is up does not mean that the cost of government is up. We have said that time and time again, and we will continue to say that. We are going to continue to reduce the cost of government. We take over more services from the federal government and we have huge one-time capital grants; the overall amount of money in the budget is not the issue. The issue here is whether the cost of delivering government services is going up or down.
Mr. Harding:
The Government Leader just said, "... the fact the overall budget is up does not mean that the cost of government is up." Who pays for the cost of government?
Hon. Mr. Ostashek:
The Member can read Hansard tomorrow. I have had enough of that.
Chair:
Order please.
Mr. Cable:
I have some questions for the Government Leader on just where his government is going. As the Government Leader is probably aware, there has been a little curiosity surrounding the direction in which the government is leading us.
I would like first to deal with the financial objectives that have been referred to in communications put out by the Minister and by the Minister responsible for the Public Service Commission. Is it the government's intention to, at some juncture in the future, rebuild the surplus? If so, what are the government's goals with respect to that surplus?
Hon. Mr. Ostashek:
I believe that we have said quite clearly that our goal and ambition is not to build up a huge surplus. Our goal is to continue to have a balanced budget. Our goal is to continue to reduce the cost of delivering government services to the people. Our goal is to have more money freed up for capital expenditures in the budget, and less on the operation and maintenance side.
Page Number 2326
Mr. Cable:
As I recollect, in the talk show the Government Leader was on, he talked about building up - I do not know whether or not the words were "working capital" - greater cash or liquidity in the government in order to handle monthly charges. This is what I mean, in part, about rebuilding the surplus. Is that on the Government Leader's agenda - to build up the working capital of the government?
Hon. Mr. Ostashek:
Certainly, we have to build up the working capital to some extent. Let us face reality. We paid, I believe, about $400,000 in bank charges last year because of low cash flow. As of today, we are almost $1 million overdrawn. So, yes, we have to rebuild the cash flow; there is no doubt about that.
Mr. Cable:
The statements made by the government Ministers were a little more definitive than that. They talked about financial objectives. Is there a target, in dollars, for the working capital that the Government Leader would like to see?
Hon. Mr. Ostashek:
No.
Mr. Cable:
Is there a target in time the Government Leader has in mind at which he would like to arrive at this indefinite point?
Hon. Mr. Ostashek:
I wish it had been last year. That would have suited me just fine. The fact is that if you look at the budget we put forward in the House of prudent management of the finances of government, and if you also look at the forecasts we have made, as I related in the House yesterday and again today, it appears that based on the revenue projections - the best revenue projections we have today - by March 31, 1997, we could conceivably have a balanced budget with no accumulated surplus and no accumulated deficit. In the worst case scenario, based on the projections we have now, we could conceivably have a $10 million deficit.
Mr. Cable:
I take it the Government Leader is saying that there is no definite target for a surplus - no particular financial objective, either in dollars or in time. Is there any particular target as to how this surplus, if we build it, is going to be formulated? Is it going to be a specific contingency fund, or is it going to be just general working capital?
Hon. Mr. Ostashek:
We have no intentions of building a special surplus. I have said several times over the course of the last year that Finance would like to have a one-month reserve. I do not agree with a one-month reserve, but that is what they would like to have in their conservative estimates.
What we want is to be able to have balanced budgets. That is what we want. And we want to be able to have money for capital projects in the Yukon. If we do not control the operation and maintenance costs of government and if we do not move money out of administration into program delivery to people or the capital side of the budget, then we will not be able to do that.
We have to continue to be more efficient in government. There is a certain level of services that we are required to provide and we are going to continue to provide them. We are going to continue to provide a good level of services to people in the Yukon, but at the same time we are going to restructure government so we can do it in a more efficient manner.
Mr. Cable:
That is fair enough. However, over the last few weeks, we have used terminology that suggested some definiteness.
The Minister, on the phone-in show, was talking about downsizing the public service and I would like to get some information about employee levels. I gather that the present government payroll is around $161 million.
Could the Government Leader confirm that it is his intention to downsize the public service, both in dollars and employees?
Hon. Mr. Ostashek:
Yes, over a period of time; the Member is correct. We will continue to try and downsize government. As I have said many, many times, we will continue to do so through attrition.
Mr. Cable:
That was the next question: does the Government Leader intend to use any means other than attrition?
Hon. Mr. Ostashek:
No. If the Member is talking about layoffs, that certainly is not our intention.
Mr. Cable:
I will talk about targets then in relation to employees.
Is there a target for the payroll in relation to the overall budget, or is there a target for number of employees? Where are we going, what is the direction that we will be taking so that when we get there we will know that we have arrived?
Hon. Mr. Ostashek:
I believe that if you are doing your job as government, you will never get there. You will always be trying to improve on what you have. As the Member opposite is quite aware, every private sector corporation has gone through this over the last five to six years where they have downsized.
What is the magic number? I do not know. We are going to go through the government on a program-by-program basis. The programs that we feel we can deliver in a more efficient manner by restructuring, we will do so. We will continue to provide more efficiency in the delivery of government services in the Yukon. I do not know what the magic number is.
Mr. Cable:
I will take it then that there will be constant pressure on the payroll costs and the number of employees, judging from the Government Leader's answer.
What ratios do other jurisdictions have in relation to their payroll costs as a proportion of overall operation and maintenance costs?
I believe that the Minister recently indicated that here in the Yukon it is 43 percent.
Hon. Mr. Ostashek:
That is a very difficult comparison to make, because of the different ways they are counted in the different jurisdictions. On our payroll, we have health care workers and teachers. In some other jurisdictions, the school boards hire the teachers; they are not direct government employees, so it is very hard to compare.
Mr. Cable:
What are we going to use as some indicator of success? Is there some kind of rule of thumb we are going to pull out of the sky? If it is not comparison with other jurisdictions, and we are not sure where we are going locally, how will we, on the Opposition side, know whether the government has been successful in reducing payroll costs?
Hon. Mr. Ostashek:
The Member opposite is asking me if I am a Messiah and can give him all that stuff. I am afraid I cannot. This is a process and anyone who has dealt in business in any manner at all knows you have to assess these things. You have to assess what level of staffing you need to deliver a certain service, and you are always examining whether you can deliver that service better and more efficiently, and in a more cost-effective manner. That is what we are going to continue to do.
We are going to go through the programs, on a program-by-program basis. That is what the departments are doing now. We have done a lot of realigning. We have eliminated a lot of managerial positions in government, and we are going to continue to do that. There is a certain level you cannot reduce below, or you will not be able to provide the service.
We are examining these as we go along, on a program-by-program basis.
Mr. Cable:
I was following the government's pronouncements with interest on the wage rollback and freeze. On various occasions, the financial objectives were mentioned as potential trade-offs for the concessions that were to be made. Am I right in understanding that the financial objectives are indeterminate, and that the trade-offs for jobs are indeterminate?
Page Number 2327
Hon. Mr. Ostashek:
I believe, when the Member is referring to the proposed rollbacks now, those numbers are very clear. They are incorporated in this budget for about $3 million worth of savings in wages. Those are very clear and are not indeterminate at all.
Mr. Cable:
I just happened to read this, and I listened to the Government Leader when he was giving the budget address. He was saying that they were endeavouring to achieve savings in personnel costs of between $13 million and $18 million over the next three years. That is not indeterminate, but it is certainly widespread.
Where did these numbers come from? Were they pulled out, or is there some basis for them?
Hon. Mr. Ostashek:
There is certainly a basis for it. We have been given information by the Public Service Commission about what we are looking for. The reason I would give for the gap is that we do not know exactly how many employees we will have over that period of time. We do know that the savings are somewhere in that range, based on what we have proposed at this time.
Mr. Cable:
I guess I am having difficulty connecting. The government had to start somewhere with a number that was necessary. What was that number, or was it simply the indeterminate goal that we have been talking about for the last few minutes?
Hon. Mr. Ostashek:
No, it was not an indeterminate goal. I gave it to the Member: it was $3.1 million a year. However, we have inflation and other variables that will affect that in future years. Also, we have merits and experience increments coming back into force. They may come back in the second or third year, or they may not. Those are all variables in the proposals that are on the table.
Mr. Cable:
I will just change tack for a moment. The Government Leader reinforced just before the break that he wanted to reduce the cost of government so that he could reallocate more money from O&M to capital. Is there any particular ratio the Government Leader is moving toward, or is this also indeterminate? Does he just want to continue to beat money out of O&M and put it into capital? Is that his goal?
Hon. Mr. Ostashek:
The only answer I have for that is the same as the one I have given other Members. We have to face the reality that, at present, we have been blessed with some very costly, one-time capital projects: the $47 million hospital, the Shakwak project and the extraordinary funding that was negotiated for the rebuilding of the Alaska Highway. They will end. Three years from now the Shakwak project will be finished, unless we are fortunate enough to negotiate another agreement with the United States government, which is not certain at this point. We will also have completed the $47 million Whitehorse General Hospital. One does not have to be a rocket scientist to figure out that with those one-time projects out of the way our capital budget will shrink dramatically.
There are many people in the Yukon who are dependent on our capital expenditures for their jobs every year. I believe we have to begin looking at where that money is going to come from for that capital. It must be remembered that our discretionary capital spending is far below the level of funding the previous administration had available to them.
In our previous capital budget, we had $40 million in discretionary capital. In the last capital budget we brought in, before the $5 million was even taken out - which was partly discretionary and partly not, whichever way we look at it - we only had $51 million in discretionary capital in the budget.
I believe that in the last budget that the former administration had, the discretionary capital was somewhere between $70 million and $80 million. There has been a dramatic change because we do not have the surpluses to draw on for that discretionary capital spending. That money will have to come from somewhere.
Mr. Cable:
I will summarize what the Government Leader is saying. He is saying that there will be constant pressure on the O&M budget and a constant diversion of savings from the O&M budget into the capital. Am I encapsulating what he said accurately?
Hon. Mr. Ostashek:
I believe that is a fair assumption, and I think that is a responsible way to operate - like any company would. They try to reduce their operating costs at all times, and I think that governments should operate that way as well.
Mr. Cable:
There are some other factors like the efficiency of government expenditures. Does the Government Leader have any information on the multiplier effect of capital expenditures versus O&M expenditures? Are we sure we are doing the right thing?
Hon. Mr. Ostashek:
I guess the people of the Yukon will tell us that two years from now.
Mr. Cable:
I was hoping for a little more definition. I cannot wait two years; I want the answer fairly soon. Where does the government get the idea that capital expenditures are the only way of creating wealth in the territory? Are we saying that the government payroll does not create any wealth?
Hon. Mr. Ostashek:
We can get into a big, philosophical debate about what creates wealth in the territory and what does not. This party believes that developing infrastructure and allowing the private sector to create the jobs in the economy creates far more wealth that what government jobs do. Now, government spending is important in a community the size of the Yukon; we understand that. Those private sector jobs also require government capital spending in order that those construction workers can go to work every year in order that those people can keep working and raising their families in the Yukon and not have to leave because there is no work for them.
Mr. Cable:
The Government Leader may very well be right. My sense of it is that perhaps he is right, but is there any basis for this? Is this a sort of hunch, that capital expenditures are more productive than O&M expenditures?
Hon. Mr. Ostashek:
I do not think that it is a hunch. I believe it is a philosophical belief of the Yukon Party.
Mr. Cable:
I was hoping that some economic boffin away somewhere in some university might have written a paper on it, which they were using, rather than just a hunch.
Let me ask this question: how do the ratios of O&M expenditures in this jurisdiction to capital expenditures compare with the ratio in other jurisdictions? Are we more favourable to capital?
Hon. Mr. Ostashek:
We are very, very fortunate here because of our small population. On a per capita basis, we spend far more on capital expenditures in the Yukon than any other jurisdiction in Canada.
Mr. Cable:
I will not ask whether that was a recent phenomenon or not.
The Government Leader has made a point on various occasions about weaning us off the federal government largesse. In his budget speech he talked about the Yukon government raising only 13 cents in taxation revenue and that the bulk of the money - 80 cents of every dollar - comes from the federal government by way of other means. Just by way of verification, where does the other seven cents come from?
Hon. Mr. Ostashek:
I believe some of that is made up by land sales, but there would be no revenue from land sales if there were no expenditures for land sales.
Mr. Cable:
That certainly explains that.
The Government Leader has indicated that he is moving in the direction of having the economy or the government's expenses
Page Number 2328
funded primarily, or more, by the territorial revenues than they are at present. Is there any particular target, or is this just one of these general goals that we are talking about?
Hon. Mr. Ostashek:
I find that a very surprising question, coming from the Leader of the Liberal Party.
I think we can use the analogy of a teenager growing up. At some point, he wants to be on his own. I think, as Yukoners, we would like to be on our own. That has been a goal of Yukoners. People dream of provincehood down the road and that is a goal we should all be striving for. To get there is going to be difficult. We have to invest in infrastructure. We do not have infrastructure development in the Yukon. At some point, we are going to devolve the land and resources from the federal government to Yukon and then we can truly have some control over the economic development of the territory.
Our means are very limited right now, when the federal government controls the resources such as forestry, controls the land, controls the minerals, controls the mining, but we have to work in that effort. For us to be able to benefit from that, we have to be able to have infrastructure in place so that, if and when that time comes, we do not just offset the tax revenues we are being penalized for now, but we will also have the resource revenues from those other areas so we can really have some economic levers in our hands.
Mr. Cable:
I tried to extract from my colleague at the bar, the Minister of Health and Social Services, his idea of what significantly reduced health care insurance costs are. This might relate partly to the general tone of debate here. Could the Government Leader tell us what he anticipates coming out at the end of the equation when the Minister of Health and Social Services is finished with his reform? Is it going to be significant money, as referred to in the budget speech? If so, what does the Government Leader mean by significant?
Hon. Mr. Ostashek:
I believe that the Member opposite had better wait until we get into discussion about Health and Social Services, so that he can discuss that with the Minister responsible.
Certainly we hope to achieve some savings by a better delivery of the service. We are not talking about downgrading the service; we are talking about better delivery on both the health side and the social services side.
We have the SARs agreement that will help people to get off social assistance. Those are the kinds of areas that we are going to be spending extra monies in. I believe that there was an extra $100,000 in this budget directed toward that program. That is a program that is delivered in conjunction with the federal government.
The goal is to provide the service efficiently. Better utilization of the services also falls in line with some of the reasoning and rationale behind our decision to stop the hospital project and redesign it so that we would have the flexibility to provide services in a more efficient manner in future for all Yukoners.
Mr. Cable:
Before we get to the Health and Social Services debate, could the Government Leader provide us with a hint - just pull back the veil of secrecy a bit - and tell us if we are looking at large sums of money that might go into a surplus, or are we looking at nickels and dimes?
Hon. Mr. Ostashek:
The same philosophy applies to Health and Social Services as applies to other departments. We are going to deliver the services in the most efficient manner that we can without compromising the level of service that we are providing. That is the goal and objective.
Mr. Cable:
I guess I am not making my point. The Government Leader -
Some Hon. Member:
(Inaudible)
Mr. Cable:
I heard that I am making the point.
I will read the Government Leader's words back to him, "the reforms that will be announced are anticipated to significantly reduce health care insurance costs." That is in the budget somewhere; I know it is.
What does the Government Leader mean by "significantly reduced?" Is that $50, or $5 million, or what? What is the dollar amount?
Hon. Mr. Ostashek:
When we get into Health and Social Services, the Minister will answer those questions for the Member opposite. Maybe we should ask the Member, whose party is in power in Ottawa, what the federal government hopes to see when it is talking about $6 billion in cuts to Health and Social Services.
Mr. Cable:
That is precisely the point; they used a number. The Government Leader has "significantly reduced health care insurance costs". In view of the fact that it appears to be a bit of a secret, I will wait until the Health and Social Services debate.
Mrs. Firth:
I am quite interested in pursuing a line of questioning from kind of a different approach. I am very interested in how decisions are made by this government. I have heard a lot of chatter since we have been in general debate about the budget and a lot of talk similar to what the Member for Riverside has been raising, where statements are made but they do not really mean anything unless there is some fact attached to them. This evening, the Government Leader talked about restructuring government and how they have downsized management - he said there have been a list of managerial positions eliminated - but he has never really indicated how he is going to restructure government or indicated to us what the plan is. Once I find out whether there is a plan and how they are going to do this, then I would like to know how the decisions are made to move in that direction.
In order to start, to give me a clear understanding of just how this government operates, how they set priorities and how they make decisions, perhaps the Government Leader could stand up and tell us just what his government's plan for restructuring is and how it is going to do it. He has made references to businesses saving costs. I know personally of some businesses that have and how they have done it and what initiatives they used, and so on, but I am kind of interested in hearing what this government's plans are and how they plan on restructuring and making sure that they reduce the costs of the delivery of services to people.
Hon. Mr. Ostashek:
That is a topic that we have been on since we took over government and we have accomplished a lot of it already. I can use my own department, the Executive Council Office, where we have eliminated eight managerial positions and four non-managerial positions, and I believe we are still delivering a high-quality level of service.
Each of these are going to be completed on a department-by-department and on a program-by-program basis. In this budget we are talking right now about transferring three positions. There have been some positions in land - the Minister for Community and Transportation Services is not here right now - that are being transferred from Community and Transportation Services to Yukon Housing because there is a duplication of services between the departments.
Those are the kind of areas we are looking at. With Mr. Trochim's department and his committee working on delivering better government and reorganization, we will continue to do that, on a program-by-program basis.
The recommendations are made to Cabinet and then policy flows from there. That is the policy: to restructure government completely.
We are looking at other avenues. We are looking at special operating authorities as another way of maybe saving some money in government. It is under exploratory discussions now. We are just having an assessment done of our computer systems in
Page Number 2329
government and our information systems to see if there are ways to obtain savings there.
So, these are all the ongoing efforts that are being made to restructure government. It is to deliver services far more efficiently and at a savings to the taxpayers of the territory.
Mrs. Firth:
I am trying to get organized, and I am trying to see how this government thinks. Number one, it is a policy to eliminate managerial positions. That is one way the government is reducing the size of government. Is that correct? That is one way of downsizing, or reducing the cost of government.
Hon. Mr. Ostashek:
We are not eliminating managerial positions for the sake of eliminating managerial positions. We are assessing each one of the programs and the departments. In some places, we are combining them and eliminating some positions, and that is one of the areas where we have had some considerable success. Quite a substantial number of managerial positions have been written off the books.
This is only one of many ways, but I want to make it quite clear that we are not just saying we are going to eliminate X number of managers to save money. We do not believe, if you just go in and slash and do not have the ability to provide services in an efficient manner, that you are going to save money.
Mrs. Firth:
I understand what the Government Leader is saying. In that case, can I ask him to provide for us the policy with respect to eliminating managerial positions? I want to know how the decisions are made, how the government knows which positions to eliminate. I want to see something in writing.
Could he also provide me with a list of all the managerial positions that have been eliminated within government since they have been doing this?
Hon. Mr. Ostashek:
I can provide the list of how many managerial positions have been eliminated. On the other issue, I do not really know what the Member is after. This is a policy of government. We do not have a big, thick textbook that states that this "i" has to be dotted and this "t" has to be crossed. That is the direction given to the departments in their restructuring. They are to restructure in a way in which they will be able to operate in a cost-effective manner.
Mrs. Firth:
I understand that. However, I have asked the Government Leader for a policy with respect to attrition. He keeps standing up -
Some Hon. Member:
(Inaudible)
Mrs. Firth:
No, the policy was not given to me. There was a list given to me stating that so many positions had been removed by attrition, but there was never any direction or statement given to me as to how the government decides which positions should be removed by attrition and which should not.
There has to be some specific guidelines. Do they discuss every position that comes forward that may be removed by attrition? How is the decision made? If we do not know what the guidelines are, we do not know how this government makes decisions. We cannot then assess whether or not a fair decision has been made. I am interested in fairness and making sure that all people are given equal opportunity. I would like to see some guidelines. I want to know there is a set of rules, so that they are not saying one thing for one job and something else for another. The Minister has never given me that kind of information. That is why I am asking for the policy or guidelines or whatever they use with respect to eliminating managerial positions through attrition.
I would like a list of not only all the managerial positions that have been eliminated, but also all the positions that have been eliminated through attrition, so that I can see where we have fewer jobs within government. Would the Minister be prepared to provide that for us?
Hon. Mr. Ostashek:
I have no difficulty in providing a list of the positions that have been eliminated. I do not know how difficult that will be for the department to obtain, but I will get it as quickly as possible.
Regarding the policy, I have given the Member the policy while on my feet. If she is looking for something carved in stone, I do not know if I can get that. I will look. However, the departments work with Don Trochim's branch on management improvement - I believe that is the title of his branch - and this committee works with each department and makes recommendations to Cabinet as to the way in which we should go in restructuring this program or that department.
Community and Transportation Services has done a tremendous amount of that. I believe we have identified that in the budget. There has been a substantial drop in the administration of the Department of Community and Transportation Services.
I will see what I can get for the Member opposite.
Mrs. Firth:
I have reviewed the information that was given to us by the government with respect to that committee, and I understand from hearing how the committee is working that it has not been that active, until just recently. That is the committee that Mr. Livingston, who is an advisor to Cabinet, sits on; is that correct?
Hon. Mr. Ostashek:
Yes, I believe he represents Cabinet on that committee.
Mrs. Firth:
Could the Minister explain to us what his role is. Does Mr. Livingston advise that committee with respect to the policy or philosophy of Cabinet, or does he just sit there and listen to what the committee says and then report back to Cabinet? What is his role, and what authority does he have with respect to that committee?
Hon. Mr. Ostashek:
He is more of a liaison between the political people and that committee, which is a committee of government people. I will bring her some terms of reference for the part he plays on the committee.
Mrs. Firth:
The Minister has provided me with some information with respect to Mr. Livingston's job description and his terms of reference as a Cabinet advisor. Again, I am trying to determine how decisions are made. I am trying to figure out who makes the decisions and how they are made. Who has the ideas? I do not understand the government's philosophy, because it has never been clearly enunciated to us as Members of the House or to the public. So I am trying to understand where the government is coming from. All I have is this four-year plan document and that does not really give me any clear indication of this government's philosophy. I would be pleased if the Government Leader could bring back information to me regarding the decision-making process. I ask for specifics so that I can better understand how the government is working.
Tonight I have been able to determine that, one, they are going to eliminate managerial positions; two, they have moved some positions to the Housing Corporation from Community and Transportation Services. This intergovernmental committee plays a role in determining direction. They are going to look at changing the standing offer agreements - the SOAs that the Minister referred to. They are looking at doing something with computers. Then the Government Leader said they were looking at restructuring government completely.
Does the Minister have some kind of a two-year plan written down somewhere with some goals and objectives in it as to how this restructuring is going to go, which departments are going to be looked at first, or are all of them going to be looked at at once? Can he provide that information for us so that we have some kind of idea as to what the government's goals are and whether we can keep tabs on them to see if they are fulfilling those goals?
Hon. Mr. Ostashek:
The Member does not know what our
Page Number 2330
policies are and what our philosophy is. I have stated here time and time again, as have my Cabinet Ministers, that we are looking for smaller government. I would like to correct the Member. The SOAs are not standing offers. They are special operating authorities - a whole new way of delivering government that has worked very successfully in some other jurisdictions, and we are examining it.
As for having a big master plan showing that A is going to happen now, B is going to happen later and C is going to happen at another time, no, we do not have that. Our goal is to downsize government and to deliver services in a far more efficient manner. We are working on that on a program-by-program basis.
Some departments are ahead of other departments. Some, like the Executive Council Office, have been completed for many months now. We are not doing anything more there; it has been restructured. We have downsized it tremendously. We have taken over $1 million out of the budget of the Executive Council Office. As we see areas where we can eliminate another position without compromising the quality of service that we are delivering, we will continue to do that.
Mrs. Firth:
Could the Minister tell us a bit about these special operating authorities and what other provinces or other places are doing it? I am not familiar with this term. Perhaps other Members of the House are but I am not familiar with this term. Perhaps he could tell us what he is talking about.
Hon. Mr. Ostashek:
The federal government is using it in several areas. The passport office is one of them and Consulting Audit Canada is another one.
We get laughs from the other side of the House but they thought they were quite all right. They used them quite a bit when they were in government.
I believe the Manitoba government now has their cars pooled and put into a special operating authority and they are having great success with it in reducing the costs of delivering the service. We are examining this. We have not made any moves in that direction yet but we have had some briefings on it. We have had, I believe, two people in from outside who gave us a briefing on how it works in other jurisdictions. It is an area we are examining.
Mrs. Firth:
I am not much further ahead after the Government Leader's explanation. Perhaps he could table something for us in writing - some of the briefing notes or whatever that he had, so that we can have a better understanding of what they are looking at doing.
I would like to ask the Government Leader how they are going to know when they have achieved the level of government expenditures that they want to achieve. I know the Minister is going to stand up and say the Member for Riverside asked the same question. It is fine to stand up and say they are going to downsize, restructure and to make the cost of government lower. I have looked through the budget fairly thoroughly and I have examined the statistics and I have done a fairly close examination of costs. As I read it, all the statistics are increasing. In health care, there are more people on the chronic disease list. There are more people on social service, there are more kids in custody. In Justice, it is the same thing. There are even more babies being born, and I think the Government Leader, during the debate on the Grey Mountain Primary School, was told that there were fewer births in the Yukon. The statistics here show that there were more.
Obviously, there seems to be, from the government's statistical information, an increase for services. The government is saying that they are going to reduce the cost of government, downsize and deliver the service more efficiently and yet there is not going to be any withdrawal of any services. There is going to be the same quality of service.
I am having some difficulty understanding just how the government expects to achieve all of this, and at what level they want to get to, in light of the fact that we have made the observation that the demand for services is obviously going to be increasing.
Hon. Mr. Ostashek:
I believe there is one real factor to be considered. There are large upfront costs for any program put into place, even if the program is only being delivered to a few people. A program could probably be delivered to more people and the cost per capita will decrease.
I do not know what the magic cut-off number is. This government does not have a target of removing so many employees from the government payrolls. We do not have a target that we are going to spend X number of dollars delivering services. As I stated before, I believe this is a moving target. You are always going to be striving to deliver services in a more efficient and cost-effective manner. We do not have a target number of employees to be eliminated from our payroll, but we do believe that there are savings to be realized by re-examining these programs.
I believe that government has to carry out an ongoing review of programs. I believe that governments all over Canada are realizing this now, because of the fiscal realities that are facing all governments. We have to address these issues. In the past, it was not so critical to address these issues, but now all governments are addressing these issues and trying to find the most efficient way possible to deliver the services in the most cost-effective manner.
Mr. McDonald:
I have been wanting to jump in for quite a while. I am about three arguments behind the others - I will catch up.
The Minister and I spent most of the afternoon discussing the fiscal realities facing the government. I think the obvious point that was made this afternoon is that the government's income is going to increase.
We are not talking about less government spending. The government has indicated that they want a smaller government, but not less spending. We are not downsizing spending; we are downsizing government.
I am not certain that I understand precisely where the government wants to go either. Would it be a fair assessment to say that the government wants to maintain the same level and quality of service to the public? Is that the government's objective? Is there an objective like that in the thought processes?
Hon. Mr. Ostashek:
We want to deliver a high quality of service to Yukoners. Whether that is the quality of service we are delivering right now, or whether it is higher or lower than that, I cannot tell you at this point. What we are looking at is delivering the services we deliver now in a more cost-effective manner. There may be a repriorization of the services we are delivering, but that is the goal.
Mr. McDonald:
My knees are starting to knock a little bit. Now, I am starting to understand that we may not be talking about the same level of service, but perhaps different services, and without any sense of the baseline services we want to provide, but just the perspective that we want to make the government operation smaller, and that there is no inherent value in the service we are providing, other than that we can make it smaller, so that we can load more bucks into the capital budget.
Suddenly, I think the government is going to very quickly be out of tune with the taxpayer. If he is waiting for some judgment in two years, he is certainly going to get it. Perhaps we can divert the government into thinking about these questions a little more carefully.
When the Government Leader indicated that the $3.1 million they are seeking from payroll savings as a result of the initiative that had been announced to cut public servants' pay and freeze it - with forced vacations and that kind of thing - was the $3.1 million per year the target they had sought? Was that the necessary
Page Number 2331
level of funding they thought they needed from the public servants?
Hon. Mr. Ostashek:
That was the target we needed for this budget and it is incorporated into this budget.
Mr. McDonald:
I think there was perhaps some misunderstanding that this $3.1 million was going to be the sum total. What would be the total amount the government is looking for in, say, the second year? How much money, in total, is the government seeking to achieve as the full year implementation costs of the payroll changes?
Hon. Mr. Ostashek:
As I said, I think the overall budget states that it looks at the life of that initiative as being between $13 million and $18 million. That is the best assumption that we can make now. The driving force will be whether or not we will be able to remove the freeze on the merit increases and the experience increments in the second year, and if our revenue projections will be in line with what we think they are at this time.
Mr. McDonald:
I am not sure how all this fits together. Perhaps the Minister could enlighten us. There does not seem, from the questions that the Liberal Leader asked, to be any end in sight for the reductions that the Minister wants to make.
We understand that the government has this vision that they want a bigger capital budget - perhaps an ever-growing capital budget. What is the optimum size of the capital budget that the Minister is looking for, so that we know when the government will stop seeking money from savings through payroll or whatever? What do they think is the optimum, appropriate size of the budget?
Hon. Mr. Ostashek:
I do not know. Our goal is to deliver government - and continue to deliver government - in the most efficient manner possible. We want to provide services to Yukoners in the most efficient and cost-effective manner that we can.
Mr. McDonald:
I understand that objective. However, I do not understand a couple of the other objectives that the Minister has stated this afternoon and this evening. He stated he wants to make the capital budget bigger and to downsize government. Making government more efficient is an important objective. We will applaud this, as long as the government is saying that they will maintain the same standard of service to the public, or increase it.
We applaud any useful measures they may take to make the operations more efficient, as long as they treat their employees with some civility and respect their rights.
There appears to be two objectives: to make the operations of the government smaller and smaller and capital budget bigger and bigger. That is the rhetoric that has been used. I just want to know what sense of limitation there is. Is there any size of capital budget that the government thinks is appropriate?
Hon. Mr. Ostashek:
The Member opposite, having been on this side of the House, and knowing how many millions of dollars they had every year for discretionary capital, compared to what we have now, should be able to make that assumption on his own. The amount of money we have for discretionary capital projects is substantially lower than the Member opposite had when he was Finance Minister. As I said earlier, I believe that in the last capital budget they had the discretionary spending was somewhere between $70 million and $80 million. Ours, even this year, is only $51 million in discretionary capital. I do not know if that is the right figure, but I know it was substantially more than what we are spending now. We will check the figure for the Member opposite. It was substantially more than what we are spending now.
Making government more efficient does not necessarily mean fewer employees, so we are not setting a target of X fewer employees; we are looking at the efficient way of delivering those services to save money for government. There is more in savings in the efficient delivery of services than just employee costs; that is only one of the drivers.
Mr. McDonald:
I would appreciate getting the amount of discretionary capital, just for my own purposes, and perhaps capital as a percentage of total budgetary expenditures, from 1985 through to the present. That would be helpful, then we could see the history of it.
That is not the point I am trying to make. I am not trying to draw comparisons between capital budgets. What I am trying to do is to determine what the government's thinking is regarding the appropriate level of expenditures on the capital side. The capital budgets, here, whether they are discretionary capital or whether they are recovered capital, are extraordinarily large, by anybody's standards. In 1993-94, the estimate was $129 million.
What the Minister has tried to tell us is that the impact on the private sector economy is of utmost importance - of a high level of importance - and I am trying to determine how much the government considers that to be important, because we are proposing to spend $120 million in capital expenditures, largely to the benefit of the private sector economy, and I want to know whether or not the Government Leader thinks that that is an appropriate level for our economy, because he stated that he wants to sock as much money into capital as possible. Is there no limit, as far as he is concerned?
Hon. Mr. Ostashek:
I believe that is also a moving target because the Member opposite knows very well that with our hard rock mines shut down, and with very little employment opportunities in the Yukon today, if it was not for our healthy capital budget, we would probably have fewer people in the Yukon. When we have a downturn in the economy now, these large capital budgets do help.
I believe that we have to take it year by year. If there is an upsurge in the economy, there are lots of jobs in the Yukon, people are working and the mines are going. A lot of those people who are dependent now on capital projects will not be so dependent, and we can adjust accordingly at that time.
Chair:
Is it the wish of the Members to take a brief recess at this time?
Some Hon. Members:
Agreed.
Chair:
We will now take a brief recess.
Recess
Chair:
I will now call Committee of the Whole to order. Is there any further general debate?
Mr. McDonald:
I have a few questions to ask the Minister about his general targets for both operation expenditure reductions and capital expenditure increases.
This follows on the question that I asked about service target levels that the government might have in mind, or maybe does or does not have in mind when it comes to shaving the capital budget. I think the obvious point is that one can always find more efficiencies. One can also shave and trim government services forever until they disappear, and we could have one gigantic capital budget.
However, there are some people and some constituents in my riding who feel that there is some inherent value to the services being provided under the operating budget. The services range from highway maintenance, blading the roads, to teaching our children. Consequently, it is important to know where the exercise will end.
First of all, I would like to ask the Minister a question that had been asked by the Liberal Member. The question was not followed up, at least to my satisfaction, and that is the question about the multiplier effect of operations spending versus capital spending.
Page Number 2332
The Minister's response was that if we wanted to find out what the effect is, we should canvass the electorate two years from now and seek their opinion.
I am not interested in doing that at this moment. Like the Liberal Leader, I would like to know now what the government thinks is the impact of a dollar spent - for example, in payroll - on the economy, as opposed to a dollar spent in construction. As a preamble to that, I would simply point out that in 1985 or 1986, there was econometric testing being done in the Department of Economic Development, which suggested that the effect on our service-based economy is much greater through public spending through payroll than it is through the capital budget. In fact, it is substantially greater.
I am a little puzzled by this change in tack that this government is taking. They say that their primary goal is to maximize the impact on the private sector economy of public sector spending. That is their primary goal. Can the Minister tell us what information they have that would justify their claim that the dollars spent through the capital budget have much more value than the dollars spent through the operating budget?
Hon. Mr. Ostashek:
I have some difficulty with the Member opposite's approach. He seems to be saying that we should not be trying to expand the private sector or put infrastructure in place for economic development in the territory. Instead, because ours is a service-based economy, we should be concentrating on spending all our money on payroll. That is not the attitude of this government.
I do not know if Economic Development has any models on that. I will certainly check on that for the Member opposite. However, I believe that we have to have capital expenditures in the Yukon if we are going to develop that private sector economy.
While I am on my feet, there seems to have been some confusion at the House Leaders' meeting this morning. There were some apparent allegations about our double-booking things. There seems to be some misunderstanding about the $897,000. I would just like to clarify things to the Members opposite. I thought I did just that yesterday, but I will give Members a handout now on that subject, and that should clear matters up.
During the preparation of the 1994-95 O&M main estimates, two departments expressed a desire to transfer monies already voted to them in the 1994-95 capital main estimates to operation and maintenance. In the case of the Yukon Housing Corporation, the transfer consists of three positions and their associated dollars, $160,000, which they feel would be more properly considered operation and maintenance positions.
The Department of Government Services felt that the operation and maintenance expenditures, in the amount of $737,000, which they wished to proceed with, had a higher priority than did an equal sum of capital expenditures voted to them in the capital estimates of 1994-95.
In both cases, Management Board approved the transfers.
The summary shown on page 3 of the operation and maintenance main estimates, especially the expenditures, is a summary of what has been voted by the Legislature, or what is being requested of the Legislature. The $468,584,000 in expenditures is comprised of the following items.
The amount of $346,210,000 is the total of the current operation and maintenance expenditures being requested by the government. I refer you to page 4 of the operation and maintenance main estimates. This includes the two transfers that total $897,000, mentioned above.
The total of $121,724,000 is the capital estimates passed by the Legislature during the last sitting. I refer you to page 6 of the operation and maintenance main estimates. This also includes the two previously mentioned transfers of $897,000.
Loan interest expenditures in the amount of $650,000 are being requested by the government. Please see page 2 of the operation and maintenance main estimates.
When we total the expenditures on page 3 of the operation and maintenance main estimates, it comes to $468,584,000.
It is therefore apparent that the expenditure figure includes the subject $897,000 twice. A supplementary estimate will be brought forward this year, which will show the reduction of the $897,000 in capital spending.
Were the $897,000 not added to the surplus for the year under the adjustment sections, the following would have resulted: the total income of $479,798,000, less expenditures of $468,584,000, produces an apparent surplus of $11,214,000. Take from that a reduction in Alaska Highway funding of $4.5 million and the contingency for supplementary requirements of $2 million, and the surplus at the bottom of that column would have shown $4,714,000, rather than the $5,611,000 that shows in the operation and maintenance budget. This would have understated the surplus being projected for the year, because the $897,000 is being counted twice in the expenditures figure. It is in both O&M and capital, and it is therefore necessary to add $897,000 to the surplus for the year to have an accurate budget.
The same results would accrue if one were to reduce the expenditure figures by $897,000 to $467,687,000 - that is, taking the $897,000 away from the $468,584,000. These machinations were necessary because the O&M and capital budgets were tabled in separate sittings of the Legislature. In the past, when the two budgets were tabled together, such transfers were made prior to the tabling, and would, therefore, already be reflected in the combined figures seen by the Legislature.
I will table copies of that explanation for the benefit of the Members opposite.
Mr. McDonald:
I will read that and will be able to focus on this tomorrow. I will try to understand the Minister's explanation. The Minister said that he did not have, in the Department of Economic Development, any sense of what the multiplier effect was. Is he, then, taking it on faith that the impact of public spending in the capital is inherently more valuable to the private sector economy than that spent through the operations budget, or is he trying to say now that it is not the existing private sector economy that he wants to promote, he wants to promote a new private sector economy, one that currently does not exist, and he is not worried about the impact of the spending on the local economy? What is his thinking there?
Hon. Mr. Ostashek:
I believe I heard the critic this afternoon saying that government should try to operate in a more efficient manner. I am certain I heard him say that in the debate this afternoon. Now he is questioning the validity of that. I do not understand that rationale. The Member opposite is fully aware that if it were not for the large capital budgets that we have now, there would be many, many more unemployed people in the Yukon. One certainly does not have to be a rocket scientist to figure that out.
Mr. McDonald:
Well, there are obviously not many rocket scientists here, so we will have to use our best judgment. The claim about there needing to be more efficient government is something that I think we all support. The objective, of course, is to deliver services to the public, the services the public wants, as efficiently as we can. Now, if one saves money as a result of that, by being more efficient than before, and one wants to put that into more services to the public or into capital expenditures, or into whatever, that is a choice one makes. I agree with the Minister that we should be making government more efficient. I said so back in 1990 and I say so today. We should be making government more efficient and if there are savings as a result of that, so much the
Page Number 2333
better for all of us - government and taxpayers. But, what I am trying to determine is how the government has come to the conclusion that the operations budget is something that is inherently not good for the economy and that capital spending is somehow inherently better for the economy. I am trying to determine which economy the Minister is talking about. Is it a private sector economy that exists today, or is it a private sector economy that he hopes will exist some time in the future?
So much of the private sector economy takes advantage of operation funding, so what is he talking about? This is an important question.
Hon. Mr. Ostashek:
The Member opposite must be well aware that capital spending on infrastructure development creates more private sector jobs, creates more jobs in the territory - not just the job that is employed in creating that infrastructure but there is a multiplier effect to it. What we are looking for is to be able to have more people working in the Yukon, more people employed and more jobs so that our economy and our population can continue to grow and there are jobs for those people. Not everybody can work for government.
Mr. McDonald:
I am not saying that everybody should work for government. I am trying to determine what the Government Leader has just said - that there is a multiplier effect as a result of capital spending. What is it? We understand there is a multiplier effect for spending associated with the operations budget.
From our political perspective here - and maybe this is an ideology that the government pooh-poohs; I know that - we think that many of the things the government does in the operations budget are inherently valuable to the taxpayers who are footing the bill. In fact, they probably want us to do it more than they want us to do anything else.
Let us pursue the operations side of the budget. What I am trying to focus on, though, is the impact on the economy, because some grand statements have been made about the economic impact of capital spending by various Ministers, including this Minister. He is saying that there is an inherent value to capital spending and, consequently, we should be loading more and more money into the capital budget and we should always be making the operations of government more efficient and also, in addition to that, we should be downsizing, making government smaller - presumably because he wants to load more money into the capital budget.
What I wanted to know is the rationale for that, and I want the Minister to be specific about it.
Hon. Mr. Ostashek:
I have no argument with the Member opposite that there are valuable services provided to the people of the Yukon by the operation and maintenance side of the budget. I have no argument with him on that. But also, the people of the Yukon are telling us to provide those services in a far more efficient manner.
The downsizing of government is one of the benefits derived from providing those services in a more efficient manner. It is not the goal. It is something that is the outcome of providing services in a more efficient manner. If, in accomplishing that, government is downsized, so much the better.
As to the multiplier effect, I will see what information I can bring for the Member from Economic Development. I do not know if they have anything.
Mr. McDonald:
The reason I am asking the question is not for academic purposes, rather it is because we are making major budgetary decisions based on presumptions that Cabinet Members have established. I am trying to understand those presumptions, so that I know where the limits are. I am not sure of the limits, because I get 12 different contradictory reasons for everything that the government does. I am trying to sort this out.
The government has said that they think it is absolutely essential, as an example, to remove $18 million from the payroll over the life of this proposal of theirs to eliminate and reduce public servants' wages.
Now the Minister may call that an example of more efficient government. He may call it downsizing. I do not know what he calls it, but I am trying to understand the specific reasons why this government wants to direct the money out of the payroll and into capital.
We have established the fact that revenues are increasing over the next year, for crying out loud. We know that the government is going to be spending more money; that is a given. I want to try and understand why there is an inherent belief that the money that is spent in the operations side has to be squeezed. The Minister did not provide me with any reassurances on the baseline for the level and quality of service. It could go down. The Minister is quite right that it is a moving target. I want to try and slow the moving target down a little bit, so that I can get some kind of appreciation of where this government is going.
When the decisions were made to reduce the operations budget through the payroll cuts, was there a sense that the money would then be directed into capital and that the capital was more valuable and important?
The Minister looks pained, but there are people in the public who really care about this, for crying out loud, and I do, too.
Some Hon. Member:
(Inaudible)
Mr. McDonald:
I am trying to figure out what the government is doing.
Some Hon. Member:
(Inaudible)
Mr. McDonald:
Was there a feeling that the capital budget was more important - that there was some capital spending that was more important, inherently more valuable and would help the economy? If there was, tell me what the rationale was for that, other than just the basic belief that this was just the way it would be?
Hon. Mr. Ostashek:
There is no doubt that there is a philosophical difference between this side and that side of the House.
The savings in this budget certainly could not go to capital. We are still dealing with the financial mess left by the previous administration. We needed the savings in this budget in order to have some rational continuation of the reduction of the deficit.
Mr. McDonald:
We established yesterday that it was not because of the fiscal situation that the government is making these moves. The Minister said precisely that himself. We went over the budget summary page very clearly. We determined that not only was the government going to spend more, but that if they did not spend quite as much in the capital areas, they would not have a deficit at all. As well, if they accounted for the money that is going to lapse from last year - money that was not spent - they would have an accumulated surplus.
Some Hon. Member:
(Inaudible)
Mr. McDonald:
Yes, we did. If the Minister's understanding is different, we can go over the bloody page again. Clearly, if we add these numbers up and have a look at these factors, such as the $6.5 million in the reserves that they want to spend on something or other, and add that to the projected surplus for the year of $5.6 million, the Minister himself said that if that money was not spent, there would be an accumulated deficit at March 31, 1995, of just over $1 million. He said that yesterday. Then, if we add in the money that has not been factored in yet, the Minister again said yesterday that the accumulated surplus would be $4 million to $5 million. He said that in the House yesterday.
I said that if the forecasted annual surplus has reached the $6 million range, by that calculation, we would have the accumulated
Page Number 2334
deficit reduced to about $1.5 million. Would that be a ball park guess? The Hon. Mr. Ostashek said that yes, the Member was correct in that assumption.
What are we doing here, if we cannot come to some conclusions here about what the information means? It is very frustrating trying to understand where the government is coming from. On the one hand, they are fighting the federal debt. Then the Minister says that they are not fighting the federal debt. Then they say we have to fight the deficit. Then he says it has nothing to do with the deficit, and that they are trying to do other things and load the money into the capital budget. Then when we explore the capital budget issue, it is back to the federal debt, then, just now, we are back to fighting the deficit. I cannot pin this guy down. He does not want to be pinned down, but that does not mean that he should not be pinned down.
Some Hon. Member:
(Inaudible)
Mr. McDonald:
Is the Minister telling me another story? I am prepared to listen to another story.
Hon. Mr. Ostashek:
It is a purely academic question. We told you quite clearly that we intend to spend that money.
Mr. McDonald:
So, the Minister's priority is not deficit-fighting, but it is spending the money on these things here. Is that correct?
Hon. Mr. Ostashek:
Our priority is to reduce the deficit over a period of years, not immediately in one year.
Mr. McDonald:
In the hierarchy of priorities, the Minister could eliminate this deficit right away just by expending the money that they propose to expend through the already voted capital budget and the operations budget they have tabled today. If we just voted that amount of money alone, we would eliminate that deficit, would we not?
Hon. Mr. Ostashek:
We would probably have two-percent higher unemployment in the Yukon.
Mr. McDonald:
I do not understand that claim at all. I am certain we may have higher unemployment, but I am certain it is not going to be reduced by this government's bogus numbers on jobs - and we will get to those in the supplementaries, by the way.
The Minister said the infrastructure they want to promote in the capital budget has a multiplier effect - more jobs are created. What is the multiplier effect?
Hon. Mr. Ostashek:
I guess the Member was listening more to himself than to me. I said I did not have it, but that I would check with Economic Development to see if they have a multiplier number for that.
Mr. McDonald:
Did they give the multiplier effect in the budget planning? The record said that they did not. On what basis then, does he justify the claim that the capital budget has a greater multiplier effect than does operations funding? Is that just his own belief?
Hon. Mr. Ostashek:
This debate is really degenerating. I said one does not have to be a rocket scientist to figure it out. Common sense will tell one that if one spends substantial capital dollars, one is going to create jobs.
Mr. McDonald:
Common sense would tell me that if I was to spend, say, for example, $5 million on a road contract that a company from Prince George got and they brought up most of their own crew -
Some Hon. Member:
(Inaudible)
Chair:
Order.
Mr. McDonald:
What we are doing here, obviously, because we have no numbers and the government has not used numbers, is trading impressions of common sense, are we not? All I am suggesting to the Minister is that there is another commonsense view, and that commonsense view is that if one spends $5 million on a public payroll, say, in Whitehorse, and those people rent houses here and they buy their groceries down the street and they buy their clothes down the street and they buy their car at the local lots down the street, or they buy a used car from somebody in Porter Creek, or they go to garage sales and they spend their money here, then common sense would say there is a tremendous impact from that payroll. On the other hand, common sense would also say that if one gave that same $5 million to a Prince George construction company and they came into the territory and they upgraded a section of road, and they used heavy equipment at $200 or $300 a day, or $45 an hour, depending on the equipment - it goes up to $125 an hour for some - and the diesel is trucked in from Haines, Alaska or Skagway -
Some Hon. Member:
(Inaudible)
Mr. McDonald:
I plead with the simple ones among us not to become distracted too easily. If the wages then go down south, because most of the people do not even live in the Yukon, then I would say that the relative impact of those two expenditures show that common sense suggests that you should be putting the money into payroll if the government's sole objective is to support the private sector economy in this territory. Those are two scenarios that use common sense in my estimation. They are also scenarios that have been suggested to me by many people on the street, that are in fact quite realistic.
What the Minister is saying is that Cabinet Members all sat around and said "Geez, let us put some money into upgrading some of them roads there. We better get us some big, heavy equipment and we will really feel that we are improving the economy of the territory." Meanwhile, what we are doing is telling mining companies down south that we are building roads and infrastructure so that they can come to the Yukon and do new things, and what are we doing? We are upgrading existing roads.
The economics for any mine is not dependent upon whether the road is wide, paved and beautiful.
Some Hon. Member:
(Inaudible)
Mr. McDonald:
That is the point.
Some Hon. Member:
(Inaudible)
Chair:
Order please.
Mr. McDonald:
That is the point. The Minister of Education, who is also the Minister for Tourism asks, "What is the point of this?"
Well, the point is not to support the mining industry; they say it is to support the tourism industry.
Some Hon. Member:
(Inaudible)
Chair:
Order please.
Mr. McDonald:
The Minister of Education has every opportunity to be rude to his department and to dictate to his department, but he cannot do that in this Legislature, because that is inappropriate behaviour.
The issue is that, if the Skagway Road is upgraded, it would be upgraded for not only mining purposes - I agree it is directly a mining-related job - but it would also be upgraded for tourism purposes. If one were to upgrade the North Alaska Highway on the fast-track as the Minister suggests we should - and I agree we should be doing it - then all we are going to be doing is encouraging those tourists to go through the territory just as quickly as they possibly can. It does not have any specific impact on the mining industry, does it?
There may be some good reasons to upgrade the Top of the World Highway, but how is that going to improve the infrastructure of the territory for mining? There may be some good reasons to upgrade the Campbell Highway but, unless we are talking about the Sa Dena Hes mine, what is the purpose in terms of making the economics of mining companies more real?
All this rhetoric about building new infrastructure and expanding
Page Number 2335
the infrastructure is quite bogus, because the infrastructure they are developing, and the millions and tens of millions of dollars they are putting into infrastructure right now, will have absolutely no impact on the economic viability of any mine in this territory. The Minister knows that. The only mining road he has suggested at all that might have any impact on it whatsoever is the money he wants to take out of the slush fund for the Loki ditch road.
That is the only single piece of infrastructure, and he put a caveat on his comments yesterday, saying it may not even happen. The economics may not be there to cause the mine to get a go-ahead at all.
So, when the Minister talks about infrastructure, saying that it is somehow inherently more valuable, all that I see are high prices paid for heavy equipment. There may be good social reasons for upgrading the road to Beaver Creek, and there may be some good reasons for tourism, although that is questionable, because there are pros and cons, and there are some good reasons in terms of safety. Certainly, safety is a factor. When it comes to the argument that they have leveled at us, that it is going to improve the economic viability of mines, he has not proven it. What I see the government doing is improving these roads and spending tens of millions dollars for contracts, some of which we know are going to outside companies.
Some Hon. Member:
(Inaudible)
Mr. McDonald:
Okay, $5 million or $6 million dollars is going to an outside company.
Chair:
Order please.
Mr. McDonald:
What we see is the money going to the outside company to build a section of road. We see high costs in equipment. We see money going outside. We see money being spent on fuel that is not even purchased at local gas stations. One could argue that, while the economic impact is significant, it is not as significant as even the $5 million one might spend on payroll and on the services that the public expects should be provided in any case.
While I agree with the Minister that we should always be looking to provide the services more efficiently, because that frees money up for something, I cannot necessarily agree with his proposition that this money should then be directed to capital because it is inherently more valuable. The Minister has provided us with no justification for that, other than his commonsense scenario as opposed to mine. He has not even decided to justify his commonsense scenario yet.
I think it is very important that he provide some information regarding the multiplier effect, so that we can have some justification for what the government is doing. They are making major-league decisions based on this commonsense assumption that the capital budget expenditures are inviolate, that somehow capital expenditures are inherently good and that governments should be smaller. He has said, on a number of occasions, he wants to see government become smaller. He then follows that by saying that there is nothing sacred when it comes to the services that are provided. When asked about whether or not he is prepared to provide some assurances that the services that are currently provided are going to be the same or better, he would not do it. He says they could be the same, better or worse. That is no assurance at all.
All we know is that the government is going to trim, for example, the Department of Education's budget, in the name of efficiency. Next year, they will trim a bit more and a bit more. As long as there is no outcry, they will trim even more the next year.
Then, if we have moved on public sector payrolls this time around, it will have caused a bit of a stir so maybe next time we will try to move on people/teacher ratios and see how far we can take that particular service level. There is nothing inviolate. There is nothing that the government counts as being sacred, because they are absolutely hell-bent on pursuing a bigger capital budget and building infrastructure that really has absolutely no relationship to any mining operation in this territory - no specific relationship that they have been able to identify.
The Minister shakes his head but, gol'darnit, I have been in this Legislature now for over a year and one-half watching this government operate, and I have seen this government come at this equation from a dozen different directions. We were told at the beginning that they wanted to build railways to Carmacks, and they defended that in the Legislature until it was so ludicrous that they decided they were going to do something else.
Then they said they were going to build energy project infrastructure - energy generation facilities. Then we were told that that is not infrastructure, according to the latest version of the infrastructure document. Then the Minister says today that some of the infrastructure he thinks is worth supporting, which he would classify as infrastructure, are energy generation projects.
When he talks about a moving target, he is not kidding. We have a real problem here because we only get this one small window through which to tackle these guys, pin them down and ask them what they are doing.
The one, small window affords us an opportunity to see this budget philosophy being played out in a dozen different directions. In some ways, I have had enough. In some ways, this is good sport but, in other ways, I realize that a lot of people count on us to bring their concerns forward.
I have a lot of people in my riding who do not know anything about the economy the Minister wants to develop, because they are not part of that economy. They used to be part of the economy, but they are not part of the economy now. One guy asked me what economy they wanted, because he used to work in construction, and was laid off from the job. So, what economy are they promoting? They are putting money into the economy, but what economy are they promoting?
That is why I asked the same question, virtually in the same terms. The only way we can really pin this down is to get some good, hard numbers, not commonsense scenarios, because there are a lot of commonsense scenarios on how money can be spent and they all differ, depending on one's perspective. What we want is something that is reliable, and I would encourage the Minister to have that information for the next budget round, because that would be very important.
Hon. Mr. Ostashek:
I have a couple of closing comments.
We are talking about philosophical differences between how the Member opposite believes money should be spent and how we believe money should be spent. We could continue this philosophical debate forever, if that is what the Member chooses.
We have laid out how we are spending the money and it is the job of the Members opposite to analyze the situation to ensure that we are spending the money properly. As far as their philosophical beliefs go, they are not going to impose them on this side of the House.
Mr. Chair, I move that you report progress on Bill No. 15.
Motion agreed to
Hon. Mr. Phillips:
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 a report from the Chair of Committee of the Whole?
Page Number 2336
Mr. Abel:
The Committee of the Whole has considered Bill No. 15, entitled Second Appropriation Act, 1994-95, and directed me to report progress on it.
Speaker:
You have heard the report of the Chair of Committee of the Whole. Are you agreed?
Some Hon. Member:
Agreed.
Speaker:
I declare the report carried.
Hon. Mr. Phillips:
I move that the House do now adjourn.
Speaker:
It has been moved by the Hon. Government House Leader that the House do now adjourn.
Motion agreed to
Speaker:
This House now stands adjourned until 1:30 p.m. tomorrow.
The House adjourned at 9:31 p.m.
The following Sessional Paper was tabled April 27, 1994:
94-1-120
Letter dated April 12, 1994, from the Canadian Minister of Finance, the Hon. Paul Martin, PC, MP, to the Yukon Minister of Finance re the renewal of territorial formula financing on April 1, 1995 (Ostashek)
The following Legislative Return was tabled April 27, 1994:
94-1-344
Yukon Wolf Conservation and Management Plan: implementation status update; all section 7 recommendations to be implemented (Brewster)
Oral, Hansard, p. 2137 and 2138