Whitehorse, Yukon

Thursday, May 12, 1994 - 1:30 p.m.

Page Number 2549

Speaker:

I will now call the House to order. We will proceed at this time with silent Prayers.

Prayers

International Day of Families

Hon. Mr. Phillips:

I rise today to announce that Sunday, May 15, is International Day of Families. The United Nations has declared this day as a day each year when people around the world can acknowledge the importance of the family in their lives. The International Day of Families truly is a special day that speaks to each one of us. It is, I believe, most meaningful as a private celebration rather than a public one. Thus, I invite all Members to set aside some time on May 15 for their own family, for simple activities like family dinners, telephone calls to distant family and perhaps to reach out to friends whose families may be far away from them.

In Remembrance of John Smith, Leader of British Labour Party

Mr. Penikett:

With the Speaker's indulgence, I rise today to note the passing of the Hon. John Smith, Leader of the Opposition and Leader of the Labour Party at Westminster - a man who was expected to be the next Prime Minister of Britain and whose early death, from a heart attack at age 55, I want to note today as a member of the sister party of the organization Mr. Smith led.

Hon. Mr. Ostashek:

I, too, rise today to pay respects to the memory of John Smith, Leader of the Labour Party of Great Britain, who died suddenly. Mr. Smith's death, especially at the young age of 55, is a sad loss not only to his family but also to the British Parliament. Mr. Smith is a highly respected politician and had served as a Member of Parliament for over 20 years. He was held in high regard and will be missed by his colleagues of all political affiliations.

On behalf of the Government of the Yukon, I, too, would like to offer my condolences to Mr. Smith's family.

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

Mr. Penikett:

I have a document for tabling consisting of a reply to a question that was asked in the House.

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?

NOTICES OF MOTION

Ms. Commodore:

I give notice of the following motion:

THAT it is the opinion of this House that the Government of Yukon create an all-party delegation to make representation to Members of Parliament that the Yukon land claims must pass without amendment.

Speaker:

Are there any Statements by Ministers?

MINISTERIAL STATEMENTS

Gold Rush curriculum kit

Hon. Mr. Phillips:

Every time I rise in the House these days it seems that I am wearing more than one hat. A few days ago, it was a cooperative career awareness venture between the Department of Education and the tourism industry. Then it was a summer camp jointly sponsored by the Department of Education, Yukon College and the Women's Directorate. It is great to see this kind of cooperation among various government departments, and frequently including the private sector.

The initiative I wish to announce today will involve at least four of the agencies for which I am responsible, as well as the federal government and the private sector, including the Dawson First Nation, the Yukon Historical and Museum Association and the Klondike Placer Miners Association. If that sounds ambitious, it is, because the theme of the project is worthy of that kind of effort. I am speaking of the anniversary of the Klondike gold rush, and the development of an elementary school curriculum package, which may help explain the significance of that event to students across North America.

The key players in this project will be the grade 4 and 5 students at Robert Service School in Dawson City. It will be they who will be the prime creators and developers of what we are calling the "Gold Rush Adventure Kit", a multi-media curriculum package in which they will talk to their peers in other classrooms about the community past, present and future.

The kit may include such things as a video in which students offer a guided tour of Dawson and the Klondike today; a tape of songs from the Han culture, from the gold rush era and from Dawson's contemporary musicians; an activity booklet with ideas on the gold rush and Yukon-related projects for subjects as diverse as science, social studies and art; a bulletin board of photos and articles recreating the entire spectrum of Yukon history.

This only scratches the surface. When Robert Service School reconvenes in the fall, we will be getting serious about this project immediately, and I am sure the students will have dozens of great ideas that have not even occurred to our curriculum people yet. Over the following months, they will work with writers, artists, photographers and many others to fine tune their ideas. They will leave no stone unturned as they meet with people from every element of their community - Parks Canada, the First Nation, the placer mining community, the churches, the tourist industry - to ensure that the picture they present in their adventure kit is as many-sided as possible.

The four agencies I spoke of earlier - the curriculum division of public schools, the Yukon Archives, the heritage branch of Tourism and the Yukon Anniversaries Commission - are obviously only a part of making the project work, and by the time it is complete, early in 1995, I think it will be something that many schools across Canada and the United States will want to get their hands on. As the gold rush anniversary approaches, it may inspire families from every corner of North America to come to see the Klondike, and the Yukon, for themselves.

I know the Members opposite will be very interested to know how we intend to pay for this ambitious undertaking. Certainly we are prepared to put up a lot of the money ourselves, but I think this is a project which might well lend itself to corporate partnerships, particularly with publishers or companies that were involved in the gold rush, or with companies working in the Klondike region today. We will be exploring the options over the summer, and one of the reasons I am announcing the initiative now is to stimulate some interest out there.

I have heard a lot of great ideas about how to commemorate the centennial of the gold rush and of the Yukon. This is one of the

Page Number 2550

best I have heard about that involves children, and the exciting thing is that this really is their project - everyone else is just a resource. I welcome the ideas of all the Members and I look forward to keeping Members informed as the "Gold Rush Adventure Kit" comes together.

Mr. Harding:

The Official Opposition supports this initiative and encourages the building of the partnerships identified in the statement.

Speaker:

This then brings us to the Question Period.

Point of Personal Privilege

Mr. Harding:

I would like to rise on a question of personal privilege, if the Speaker would allow it.

Speaker:

I recognize the hon. Member for Faro.

Mr. Harding:

On Tuesday in the Legislature, I referred to the Minister of Education by a name that I should not have used to describe his behaviour. In the midst of sometimes long and heated debates, things are said that are not appropriate, and this is clearly one of those cases. There is no excuse. Upon reflection, I wish to publicly apologize to the House for any disrespect shown it, and also to anyone in the public who may have been offended.

QUESTION PERIOD

Question re: Social assistance, fraud investigations

Ms. Moorcroft:

Today in the Legislature we heard some fine words about families from the government, but some serious concerns have come to my attention regarding some families in the Yukon who are dependent on social assistance. Single mothers with no other source of income report that they are being cut off benefits while they are being investigated for fraud. Can the Minister for Health and Social Services tell us if there are any instances in which they cut off social assistance benefits to families, so that they have no money, are unable to buy groceries and other essentials, while fraud investigations are being conducted?

Hon. Mr. Phelps:

I will have to come back with a response to that question.

Ms. Moorcroft:

We have received phone calls from distressed people, and we have asked the Minister for information about the fraud investigator in the past. I think that there is a legitimate concern that the system must show some compassion for the plight of real people. I would like to know from the Minister how clients are selected for investigation. Does the department rely on anonymous tips, and is there any test of whether a complaint may be malicious or unfounded?

Hon. Mr. Phelps:

The practice that was in place during the previous administration is that if someone is being investigated for fraud by the RCMP, and a file is opened, there is a point in time at which they are cut off from social assistance.

I will come back with more specific information for the Member once I have made some inquiries; however, it is not a new policy.

Ms. Moorcroft:

We would like to know from the Minister what the policy of his department is. Do they discontinue social assistance when they are investigating cases of fraud? Why does the Minister not have any information?

Hon. Mr. Phelps:

If the investigation is being carried out by the police, yes, they are removed from the social assistance payments - there is no question about that. It is not a new policy. It has been in place for a long time.

I am quite prepared to come back with more detailed information, if that is what she is asking.

Question re: Social services reform

Ms. Commodore:

My question is for the Minister responsible for social services. It is with regard to his planned social services reform package.

He announced in this House about two or three weeks ago that he would be announcing the changes in this House about one month from that time. Since we have been hearing a lot of concerns and complaints from single parents, specifically mothers, we are becoming quite concerned about the manner in which the Minister is proceeding with this private investigator. I would like him to tell me what the process was for consultation with the major users of social services and, in particular, social assistance recipients?

Hon. Mr. Phelps:

There were consultations, which we discussed at length in this House. The announcements will be made next week.

Ms. Commodore:

As of January 1993, other provinces and territories in Canada offer a partial exemption on earned income for social assistance recipients as an incentive for them to remain employed. In order to bring the Yukon in line with the rest of Canada, does the soon-to-be-released reform package include this incentive?

Hon. Mr. Phelps:

Yes.

Ms. Commodore:

So, we are looking at progress.

Recently, the federal appeal court ruled that child support payments are no longer considered income. In light of this ruling, will the Minister be including in his reform package a regulation that child support payments are not considered income when calculating a single parent's social assistance?

Hon. Mr. Phelps:

I am not going to get into the details of the package, which will be announced next week, and that is what is being attempted by the Member opposite. Suffice it to say that it is a thorough revamping of the social assistance package, as we currently call it, and it will be dealing with issues such as the one she raised.

Question re: Deputy minister severance policy

Mr. Cable:

On February 23 of this year, the Government Leader issued a press release on severance policy for deputy ministers. Attached to the press release was a Cabinet policy document and an amending regulation. The Cabinet policy document talks about what is going to happen to deputy ministers who are released without cause. From reading through all the regulations, the act, the amending acts and whatnot, that seems to be the first time the phraseology "without cause" is used. What sort of situations does the Government Leader anticipate that this policy would be operative on?

Hon. Mr. Ostashek:

I would think it would be self-explanatory that the severance package would not apply if they were dismissed with cause.

Mr. Cable:

Quite so, but deputy ministers do not just disappear - a good word. Is the Government Leader saying that personality conflicts, or the wrong politics, or something like that would be the situation that would trigger this Cabinet policy document?

Hon. Mr. Ostashek:

I am not about to stand here and speculate on what may trigger the document, but the fact is that deputy ministers serve at pleasure.

Mr. Cable:

Let me ask this question. The regulations - before they were amended by the regulation attached to the press release - set out termination rights. Now we have a Cabinet policy document that is doing that. Why was the Cabinet policy information not incorporated into the regulation, where it is visible for everybody to see when it is changed, rather than being incorporated in a Cabinet policy document that could be changed overnight.

Page Number 2551

Hon. Mr. Ostashek:

I am not sure I follow what the Member opposite is getting at. My understanding is that prior to us making that policy public, severance packages were negotiated with confidentiality clauses. Now, the public knows what the severance packages are for deputy ministers.

Question re: Kluane Game Sanctuary access road

Mr. Harding:

I have a question for the Renewable Resources Minister. The Minister told us in the House, with regard to his plans for roads into Kluane Game Sanctuary, that he had consulted with First Nations in the area. Based on news reports that I read this morning, I know now that there has not been full consultation with the Kluane First Nation. The umbrella final agreement sets out some specific provisions for the process of consultation with First Nations. When will the Minister be undertaking that full and detailed process with the people in that area?

Hon. Mr. Brewster:

I think the people in that area know me well. I have been in favour of this for a long time. We have not chosen an area yet. I have made it very plain to the Chief of the Kluane First Nation that we would not be interfering in any way with land claims and that land claims would have priority over anything we do. As for the access road, we are trying to get it established at the Alsek Pass. The Champagne-Aishihik Band has been consulted on it and agrees, subject to the environmental assessment, which we hope will be done this summer.

Mr. Harding:

I fear the Minister is missing the point somewhat. The issue is not that he has not consulted with people before choosing a road. He is not supposed to choose where the road will be until he does a consultation. He has said that he has talked to lodge owners and placer miners about it. Why would he wait until the very end, until he decides where he wants to build the road before he decides to have any in-depth consultation with the First Nations?

Hon. Mr. Brewster:

I have never said that I had a road chosen. We are looking at it - L-O-O-K-I-N-G - we are looking at it. We are trying to figure out where it can go where the First Nation is not. I am sick and tired of being told that I have chosen a road. I have not done so.

Mr. Harding:

I will not touch that.

I would ask the Minister a question. He says he is looking at a road. At the same time, he is consulting with some people and not others. There is a problem here. There are other Yukoners, aside from the people he has talked to and the First Nations, who have concerns about where he is going to put the road. When are they going to get a forum for their input into this decision?

Hon. Mr. Brewster:

I have gone through this three or four times. When we decide where we can look at putting a road and when we get past the environmental thing and handle the expenses, we will then approach people to see if they are interested. There is a 150 mile area there on the game sanctuary. Surely to God we will be able to find one location where we can have a road.

Question re: Outfitting territories, foreign ownership

Mr. Harding:

I have a question for the Minister of Renewable Resources on the issue of foreign ownership of outfitting territories.

Yesterday, the Minister said that everything is according to law when it comes to Yukoners' fears that foreign owners may have bought up several Yukon outfitters' territories, or at least have a major interest in them. He said the foreign buyer was a landed immigrant. However, from our information, which we have checked, this man lives in Europe.

How can you be a landed immigrant in Canada and live in Europe?

Hon. Mr. Brewster:

My information is that he has lived in Vancouver for close to eight years. Perhaps he has gone over to Germany for a holiday; I do not know.

Mr. Harding:

We tried to do a share registry search today, and we were told they could not give us the information because they had to call the client in Austria.

It seems it keeps coming up, time and time again.

The Minister says a landed immigrant is the same as a Canadian citizen for the purpose of conducting business, in accordance with the Wildlife Act. Is this based on a legal opinion, and can he table it for us?

Hon. Mr. Brewster:

They tell me that this gentleman lives in Germany, yet they dealt with the same individual. These properties were sold to this individual by the former government, not by us.

Mr. Harding:

The Minister is incorrect. The point is not whether there was a mistake made by our government or by their government.

Some Hon. Member:

(Inaudible)

Mr. Harding:

The point is that if there is wrongdoing it should be corrected in the interests of Yukoners. I know that seems funny to the yuk-yuk boys over there, but that is the issue.

I will ask the Minister the question again. He has said that being a landed immigrant is the same as being a Canadian citizen, for the purpose of conducting business in accordance with the Wildlife Act. Is this based on a legal opinion, and can he table it?

Hon. Mr. Brewster:

We talked with the Justice department several times, even long before I was here. The Charter of Rights overrules the section of the Wildlife Act where it says landed immigrants are not equal to citizens..

Question re: Outfitting territories, foreign ownership

Mr. Harding:

I highly doubt, given what the Minister has said, that I can put much regard in the statement, because he is not prepared to table it.

Can the Minister get an opinion from the department regarding this matter and can he table it for us?

Hon. Mr. Brewster:

He now wants me to be a lawyer, and we have a number of them in the Legislature here. I am not a lawyer, and I simply go by advice given to me by the Department of Justice.

Mr. Harding:

I am really disturbed at the stonewalling I am getting from the Members. I am just trying to ask questions. There are a lot of Yukoners who are concerned about this, and you would think that the Members opposite would be more cooperative in the production of information so we can satisfy these concerns.

I know the Minister says he is relying on information given to him by the Justice department. What I am asking him is simply this: can he table that legal opinion for us, so we can find out?

Hon. Mr. Brewster:

Again, he is asking me for a legal opinion. What I will do is go back to the Justice department and see if I can do that. I have no clue whether I can bring a legal opinion in here or not.

Mr. Harding:

I will take the Minister up on his commitment to bring it back.

I would also like to ask the Minister this question. Every year, a corporation operating a concession gets a certificate from the government. Every year, it has to be renewed. I would like to ask the Minister how he is sure that the foreign owner of these territories was a landed immigrant at the time of being granted an outfitting certificate renewal recently?

Hon. Mr. Brewster:

I would suggest he ask the Official Opposition. They are the ones who checked it when he first got the concessions.

Page Number 2552

Question re: Outfitting territories, foreign ownership

Mr. Harding:

This is very disturbing conduct on behalf of the Minister. There is a difference between an outfitting concession and an outfitting certificate. The certificate is renewed every year. Can he tell me how he is sure that the foreign owner of these territories was a landed immigrant at the time of being granted an outfitting certificate renewal recently?

Hon. Mr. Brewster:

The certificates are renewed in the name of the person who lives in the Yukon who has 51 percent.

Mr. Harding:

If the Minister reads the act carefully, he will see that all voting shares must be owned by Canadian citizens - not 51 percent, but 100 percent. Therefore, the person who is getting the certificate and all the shareholders must be Canadian citizens. How can he be sure that the person who has voting shares - the foreign buyer - was a landed immigrant at the time he certified the renewal?

Hon. Mr. Brewster:

As a Canadian citizen, I believe very strongly that if you are a landed immigrant and you have all of the other privileges, I presume you can go into business.

I have a number of people from Germany in my riding who have invested a lot of money in that area and they are still landed immigrants.

However, I will go back and get some further information from my department for the Member.

Mr. Harding:

We are trying to gain information about the sale of outfitting territories and we are trying to find out if things are done in accordance with the spirit of the law, and how Canadian ownership of Yukon outfitting territories is protected as these businesses do utilize a public resource.

In one of the territories in question, the public record clearly shows that the Yukoner who is declared as the majority owner of the Kluane outfitting territory is not listed as a director.

Does it concern the Minister that a majority shareholder and manager would not be a director?

Hon. Mr. Brewster:

I am presuming from this debate that the Member wants us, as a government, to interfere with the shareholders of companies and to start snooping into companies that have registered shareholders. If that is what the Member is saying, I am not prepared to do that.

Question re: Outfitting territories, foreign ownership

Mr. Harding:

I am concerned that the Minister is not concerned about protecting some jurisdiction of Yukoners and Canadians over the outfitting territories that are being sold. I am really concerned about that.

The Minister says he is not prepared to look into anything. I want to ask the Minister when these areas, with foreign ownership interests, are due for concession and certificate renewal. If the Minister does not know and cannot answer on his feet, can he provide me a legislative return?

Hon. Mr. Brewster:

I can assure the Member that there is no foreign ownership in any of them. A landed immigrant is a Canadian citizen after eight years. How long does he have to stay in Canada to be a Canadian citizen? Why are we picking on one individual all of the time?

Mr. Harding:

The Minister should also be aware that a landed immigrant has to be in the country for three years prior to doing business in the territory and getting the concession licence.

There is also the issue that we raised earlier about whether his opinion on the Charter is right. There are many issues here.

We have heard complaints from a lot of Yukoners about foreigners working in areas owned by this foreign owner. We think that can take some jobs away from Yukoners if it is indeed happening.

Yesterday, the Minister said that he investigated it and there was nothing to it. Could he tell us what was the process of his investigation?

Hon. Mr. Brewster:

I did not say that I investigated; I asked Immigration to investigate and they did so. They came over to my office and explained that they had no evidence that this was happening.

Mr. Harding:

The Minister has the power under the Wildlife Act to order a full review of the ownership situation of Yukon outfitting territories. He also has the power to refuse renewal of a certificate when he feels that is in the public's best interest. Does he intend to do anything to investigate this, prior to certificate renewal, as he has the power to do?

Hon. Mr. Brewster:

After we left here yesterday, I phoned the department. They double checked on everything and assured me that everything is quite legal the way it is at the present moment.

Question re: Yukon Energy Corporation, privatization of

Mr. Penikett:

You may recall that, yesterday, I was trying to ask some questions about energy policy, but was unsuccessful, because the Minister of Justice was fulminating and blustering about socialists and sawmills - always a sign that he is in a corner. Today, I would like to ask the Government Leader this: since the Minister responsible apparently has no mandate from Cabinet to negotiate the sale of Yukon Energy Corporation assets, would the Government Leader tell us if it was in fact a Cabinet decision to initiate a proposal for selling one-third of Yukon Energy Corporation assets to Yukon First Nations?

Hon. Mr. Phelps:

The conversations back in January that we had with First Nations were of an exploratory nature. That is all that they were. I stated at the meeting that I had this idea, and I was wondering whether or not they were interested in my pursuing that idea. That was the context of the meeting of the leadership. It took them some time to get back. It was about two months before they got back to me.

Mr. Penikett:

Let me congratulate the Member on resuming the position of Government Leader.

Since the Minister has told us that the proposal to divide the assets of the Yukon Energy Corporation into thirds was originally Mr. Southern's, of Alberta Power and Canadian Utilities, and that this idea was subsequently put to the Council for Yukon Indians by the Minister, even though there was no Cabinet mandate, is it still the position of the government that, if there is no deal on the Yukon Energy Corporation with the First Nations, there is no deal at all? Is that still the position of the government?

Hon. Mr. Phelps:

The position I placed before the leadership was simply that I was exploring it with the view of taking it to Cabinet and that I was interested in finding a way in which First Nations could become partners with us in the development of energy infrastructure in the Yukon. That was the context in which that was placed. I, personally, was pursuing it with that in mind. I was not interested in pursuing it further if, for some reason, the First Nations did not want to get involved.

Since that time, there has been a strong indication that they are keenly interested. I am rather interested in the way in which the Member opposite seems so eager to misconstrue the situation to Yukoners by referring to me, for example, as the Minister of Yukon Electrical whenever he can and bringing in all kinds of red herrings.

I guess what he is really afraid of is the fact, as the recent polling shows, that Yukoners support a private utility, rather than publicly owned ones.

Speaker:

Order please. Will the Minister please conclude his answer?

Page Number 2553

Mr. Penikett:

I will be frank: what I am afraid of is that the Minister, using his former law partner, is going to negotiate with a private business formerly associated with his family, in the sale of hundreds of millions of dollars worth of public property, without any overseeing by this Legislature or with any concern for the public interest. That is my fear; I will be frank about that.

I want to ask the Minister if during either of the terms of the two contracts signed with Mr. Boylan, did he have, in addition to any discussions he might have had with Yukon First Nations, any meetings with any representatives of Yukon Electrical, Alberta Power or Canadian Utilities, during the term of the two contracts?

Hon. Mr. Phelps:

The answer to that is no. I get a little concerned when he continually stands up and refers to the fact that my family was involved as part owners of Yukon Electrical Company Ltd. That was sold in the 1950s, before some Members in the House today were even born. I personally, with regard to any kind of relationship with Yukon Electrical Company Ltd., can honestly say that I operated a law practice here for over a dozen years. At no time did I even have them as a client.

The lengths to which the side opposite will try to go in an attempt to draw innuendoes and, in a very curious way, get into attempted character assassination, really amazes me sometimes.

Question re: Yukon Energy Corporation, privatization of

Mr. Penikett:

Recalling the sequence of events, the Minister says that he met with Alberta Power to discuss dividing the assets of the Yukon Energy Corporation three ways. Subsequently, the Minister went to the Council for Yukon Indians to propose a sale. In the House, we heard that even though there was no mandate, the Minister said today this was his personal representation. I want to ask the Minister if it is still the case that there is no Cabinet mandate in respect to the privatization of the assets of the Yukon Energy Corporation.

Hon. Mr. Phelps:

Again, he is misrepresenting what in fact occurred. Having discussions with regard to the possibility of exploring the sale of shares in Yukon Energy Corporation to First Nations, or indeed to any other group, is quite a different kind of thing than making an offer of sale to anybody. The talks have been exploratory. There has been work done by a consultant and by other experts in the field, the result of which is going to Cabinet soon, in order to see whether or not there will be a mandate to continue to have talks with First Nations. Until that Cabinet minute is obtained, nothing will take place. But, we do expect to have a decision fairly soon.

Mr. Penikett:

A few minutes ago, the Minister told the House that it was his personal view that if there was no deal with First Nations, there would be no further discussions - at least that was the essence of what I understood to be his view. Could the Minister explain then why, in his April communication to the First Nations, he indicated that the second stage of discussions with Yukon First Nations would be negotiations with Mr. Southern and his companies.

Hon. Mr. Phelps:

Once again, that is a misinterpretation of what was said. What was said, and confirmed by letter, was that we are interested in discussing with First Nations, and other Yukoners, the potential for selling up to 30 percent to the First Nations and up to 20 percent to other Yukoners. That is the first stage. If that ever happens, then the second stage would involve, if the partners wanted to explore the possibility, amalgamating with the assets of the Yukon Electrical Company Ltd., for which there would be obviously some ownership remaining with Yukon Electrical Company or its parent, Alberta Power. That is something that is quite hypothetical and has nothing to do with the mandate that is being sought from Cabinet.

Mr. Penikett:

A few minutes ago, the Minister made reference to public opinion. I would be reasonably certain that public opinion in the Yukon, were it consulted now, would be strongly opposed to the sale of the assets of the Yukon Energy Corporation to outside interests. Given what the Minister and the Government Leader have said about sales to First Nations and to Yukon interests, is the Minister prepared to make a policy statement here and now that his government will not seek to sell the assets of the Yukon Energy Corporation to outside interests - any outside interests?

Hon. Mr. Phelps:

This is absolutely ridiculous. The Member opposite who asks that question is the very member who was busily engaged in selling the assets of Yukon Energy Corporation to Canadian Utilities, and it broke down at the last minute when they refused, in exchange, to sell Yukon Hydro to them. When they purchased NCPC - and this can be looked up - part of their plan was to rationalize "the assets with Canadian Utilities Alberta Power" and part of that involved selling the assets of Yukon Energy to those people in exchange for some assets. The current, very preliminary, discussions are not very different from the discussions that he already had - and almost reached a deal on. I am absolutely appalled that the very person who would sell the assets of a Yukon corporation to outside interests is now standing up -

Speaker:

Order please. Would the Member please conclude his answer.

Point of Order

Mr. Penikett:

On a point of order, Mr. Speaker. I would challenge the Member opposite to table any single document he can find showing that the Cabinet of the previous NDP government ever considered selling the hydro assets of Yukon Energy Corporation to any outsiders.

Some Hon. Member:

(Inaudible)

Mr. Penikett:

Well, what is the Minister talking about, screwdrivers or sawmills?

Some Hon. Member:

(Inaudible)

Speaker:

Order. There is no point of order. It is just a disagreement between two Members.

Question re: Judges' sabbaticals

Mrs. Firth:

I have a really short question for the Minister of Justice. Presently, there is a policy in place to give Yukon judges a paid sabbatical leave, at which time they receive 70 percent of their salary. I would like to ask the Minister if he agrees with this policy.

Hon. Mr. Phelps:

We have grave concerns about the policy. However, it is a policy that was negotiated by the former administration. The current situation, where the chief judge - or the ex-chief judge - has taken advantage of that contractual arrangement and has left the territory under the terms of that arrangement, is one we could not fairly change, but we have had some preliminary discussions with members of the bench with a view to try to change that particular term of employment.

Mrs. Firth:

This Minister has been a Minister for 18 months now. Upon their being elected, this government was crying the blues about not having money. Why did the Minister not change the policy 18 months ago, so they could save the taxpayers approximately $70,000?

Hon. Mr. Phelps:

I guess the Member opposite is rather insensitive to the issue of the independence of the judiciary and the steps that are appropriate and not appropriate between Ministers and judges.

I can tell the Member opposite that, because of our concern and the concerns that she has expressed about the financial situation

Page Number 2554

of government, I did go and meet with the judges and ask them whether or not they would have any opposition to our reducing their salaries by two percent. They went along with that, and we took that step earlier in our mandate.

With regard to the issue of the sabbatical, that is something that we will also negotiate with the judges, but we have to be very careful about the other issue; namely, the independence of the judiciary.

Mrs. Firth:

I remember the Members, when they were in Opposition, being very opposed to this policy. I was part of the group then. The government makes this policy and regulation, and the government can change it. The Minister has been evasive about whether he supports it or not. He says that he has reservations about it, but he will not come right out and say he does not support it.

I recall, as an Opposition Member, that the Members on the side opposite did not support it.

When is the Minister going to change this, and when is he going to revoke this particular initiative?

Hon. Mr. Phelps:

I am not going to enter into negotiations with any group of employees, judges or professional people on the floor of this Legislature. That is what the Member is inviting me to do. Apparently, she is entirely insensitive to the very delicate issue of the independence of the judiciary.

All I will say is that I am not prepared to get into those kinds of negotiations with the Member. I have told her the facts, and the facts are that, in the first wage rollback package, with the concurrence of the judges, their wages were rolled back.

Question re: Deputy minister severance policy

Mr. Cable:

I have some further questions for the Government Leader on this deputy minister severance package. The Government Leader will recollect that there was some considerable talk in this House early on in the mandate of the present government about various deputy ministers being paid off when they were terminated, to the tune of several hundred thousand dollars, I believe. What is it that causes the deputy ministers to lose pleasure - as the term is used in the Public Service Act, and be dismissed or released without cause, as is used in the Cabinet policy document I referred to in the first round of questions.

Hon. Mr. Ostashek:

The only thing I can say is that they serve at pleasure, and that is why we have severance packages. I want to point out that, had this severance package been in place when other deputy ministers left the service of this government, we would have saved about 20 percent on the overall severance packages.

Mr. Cable:

I think the public is entitled to know in which circumstances a deputy minister would be let go. Is it bad breath, or theft, or what is it where they would be dismissed without cause?

Hon. Mr. Ostashek:

These are personnel issues that I am not going to debate on the floor of this Legislature. We have made full disclosure of what the severance packages are. They will save the taxpayers of the Yukon a substantial amount of money in the future, and that is as far as I am going to go with it.

Mr. Cable:

The regulation that accompanied the press release put out by the Government Leader indicated that the regulation was passed on the recommendation of the Public Service Commission. That is as it should be, because the act sets out that these personnel policies that the Government Leader was just speaking about should be generated within the Public Service Commission. Yet, it appears from the Cabinet policy document that came out at the same time that this originated within the government. Could the Government Leader indicate who it was that generated this policy? Was it the Public Service Commission, or the Government Leader?

Hon. Mr. Ostashek:

If the Member opposite is speaking to the policy of having a set severance package for deputy ministers, that policy came from Cabinet, and it directed the Public Service Commission to come up with a package for Cabinet approval.

Speaker:

The time for Question Period has now elapsed.

We will proceed with Orders of the Day.

ORDERS OF THE DAY

Hon. Mr. Phillips:

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

Speaker:

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

Motion agreed to

Speaker leaves the Chair

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?

Some Hon. Members:

Agreed.

Chair:

We will take a brief recess

Recess

Bill No. 15 - Second Appropriation Act, 1994-95 - continued

Department of Economic Development - continued

Chair:

I will now call Committee of the Whole to order. We will be discussing Bill No. 15, Second Appropriation Act, 1994-95. Is there further general debate on Economic Development.

Mr. Harding:

I have a couple of brief questions for the Government Leader and Minister of Economic Development.

The Wheaton River Minerals Ltd., along with YGC Resources, is actively working on developing the Canamax mine site as well as an open pit Grew Creek site. I guess they are looking at a four-year life there for that open pit.

Can the Government Leader tell me at what stage that development is?

Hon. Mr. Ostashek:

I had a meeting awhile back with the proponents and it is my understanding that they have applied for a water licence, and they do not believe they need a water licence for the Grew Creek pit, I understand.

They have applied for a renewal of the water licence at the Ketza River mill and the last time I talked with them it was their intention to be starting work in that area some time in August or September.

Mr. Harding:

The matter is of concern to people in Faro, because some people will be looking for employment there.

The Government Leader has said, given what he knows about the project, that he expects the proponents to start on it by August of this year. Is the Minister confident that those timetables are realistic, based on what he knows?

Hon. Mr. Ostashek:

I have no reason to doubt those timetables. I guess a lot is going to depend on the water licence for the Ketza River mill. Other than that, if they do not require a water licence for the Grew Creek open pit, I do not have any information that would make me doubt those dates. The last time I talked to them, they had their financing all in place. They had been talking to a contractor about stripping at Grew Creek, and I guess I do not have any reason to doubt their word at this point.

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Mr. Harding:

I do not know how much information the Minister has about the granting of applications for water licences, but would it not seem that even though there is an open pit there and the creek is right there, that there would be some obligation to obtain a water licence for that area?

Hon. Mr. Ostashek:

I agree with the Member opposite. That was my concern when they talked to me - whether it needed a whole environmental review, even. They seemed to be fairly confident and they were in discussions with the Department of Indian Affairs and Northern Development and the water licensing people, with respect to that issue. They seemed to be fairly confident that they would not need a water licence, or if they did, they would not have any difficulty in getting it.

Mr. Harding:

I believe the company that is looking at developing the project has entered into some arrangements with the Ross River Dene people. I am wondering if the Government Leader is aware of what they have said about the project. Are they in support of it? Do they want to research it further? Have they done an investigation or due diligence into it? Can he tell me anything about that aspect of it?

Hon. Mr. Ostashek:

As far as I know, and in the meetings that I have had with the Ross River people, they are in support of the project.

Mr. Harding:

It is my understanding from talking to a couple of people in the band that they may be interested in doing more due diligence. Has anyone from the Ross River people applied for money for a study to do a due diligence study in that area?

Hon. Mr. Ostashek:

Yes. They approached us and we have advanced them some money to draw up the terms of reference for the due diligence. Having said that, we had a meeting with them in the meantime. They said that they were supporting the project. That is all I have to go on.

Mr. Harding:

If the money has been advanced to accommodate the process of finding someone to do a due diligence, is there a further commitment to fund it? At what stage is that?

Hon. Mr. Ostashek:

No, there has been no further commitment to provide any more money. The money funded to this point is to draw up the terms of reference for the due diligence.

As I said, we had another meeting with them, at which time they indicated that they would be supporting the proposal before the regional environmental review committee. That is all I have to go on at this point.

Mr. Harding:

If they have asked for a due diligence, did they present what they believed were the terms of reference? I am confused. One would think an application for the funding would include some reference to what they felt were the terms of reference. I am confused about why the money would be given for determining the terms of reference. Did they not outline what they thought they should be?

Hon. Mr. Ostashek:

My understanding was that they asked for the money to draw up the terms of reference because they did not clearly understand mining issues. One of the concerns I have is, if they are not buying the property, why are they doing a due diligence. That usually happens if you are thinking of investing in a property. Perhaps they are, but I do not know.

Mr. Harding:

As far as the Government Leader is concerned, the process for putting out a tender for doing a due diligence has already been committed. Where does the Government Leader intend to go once that is done? Is he taking the position that it should be funded by them, or is he taking the position that the economic development agreement should help them out with it?

Hon. Mr. Ostashek:

I do not believe there is any money under the economic development agreement for that. Under the new terms of reference for the community development fund, there is no money for consultant studies, either. In the document I have here, it appears that they are supporting the mine's application for a water licence.

Mr. Harding:

If the Ross River people had already decided what they wanted to do about the terms of reference, as well as who they were interested in having do a due diligence, would the Government Leader be prepared to entertain looking at funding a due diligence?

Hon. Mr. Ostashek:

That is purely hypothetical, at this point, and I would not care to speculate on it. We have different programs in place. If they can find one that fits, they can apply, just as anyone else can.

Mr. Harding:

I would like to move on to another matter.

I recently wrote the Government Leader about a proposal put forward by the Yukon Fish and Game Association for a project. The conception was that it would be a project to find another market for a product that is already available as a result of the salmon fishery in the Yukon. The proceeds from the product would then be used to supplement a more enhanced fish enhancement program in the Yukon, and thus take some dependency from the Government of the Yukon and the federal government.

It is my understanding, from the response of the Government Leader, that the proposal for the study was rejected on the basis that he felt that, while there were some short-term benefits of the project, there was long-term jeopardy, because it could, in his view, diminish the jurisdiction over the gene pool of Yukon River salmon.

It has come to my attention that the product, which is eyed eggs, that was being proposed to be sold as a supplemental product to the fish that are being harvested, can be sterilized to avoid the development of a brood stock for anyone who bought the eyed eggs, so the fish that hatch from the eggs could not reproduce.

Could the Government Leader tell me, given that there is a solution to the problem he identified, why would the request for a feasibility study be turned down? From a broad look at it, it looks like it could have fairly good merit.

Hon. Mr. Ostashek:

I do not know if the Member opposite is aware of this, but those applications go through a committee. It is the committee that makes the decision as to whether they are funded or not funded. I was just writing to the Member on behalf of the committee, and the concerns that they raised, and the reasons for rejection.

Mr. Harding:

I realize that. There is certain arm's length and independence that must be created in that relationship and that has to be respected. I am wondering, as a matter of policy, if there are people who are putting forward legitimate concerns, or what they believe are legitimate - they look to me on the face to be legitimate - that are being rejected out of hand as a matter of policy. Would he not be concerned about that and want to investigate whether the process was fair, because that is a goal we all share.

Hon. Mr. Ostashek:

We have representatives on the committee, and the federal government also has representatives on the committee. It is a cost-shared program between us and the federal government. If the applicant feels he was unfairly dealt with, he can appeal to me or to the committee to take another look at it. I would not personally get involved, unless there was somebody who had some real concerns about it.

Mr. Harding:

The Government Leader is saying that if there is a problem, the appellant should contact them - because he has already responded once - that he would look into it further to make sure that all things have been considered, and that there has been a fair and consistent response from the committee. Is that the case?

Hon. Mr. Ostashek:

What I am saying is that, as the Minister,

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I believe that everybody should be treated in a fair and equitable manner. If the applicant feels he - or she or they - have not been treated in an equitable manner, they have the option to appeal to me, and I can ask the department to take another look at it, or see if we can get more information for them, if that is what they are lacking. Unless I get that request, I am not prepared to act on my own.

Mr. Harding:

I have also raised the concern as a Member of the Assembly. Is he prepared to take that as a concern raised on behalf of someone who is interested in a fair process?

Hon. Mr. Ostashek:

No. I will need some written documentation as to why they feel they have been unfairly dealt with.

Mr. Harding:

I have had that raised with me previously by a few people and I will do my best to let them know that the Government Leader would like some more information from them if they are indeed interested in going further.

Mr. McDonald:

I have a couple of brief follow-up questions from yesterday, and then I have a few remaining issues I would like to canvass before we get into the lines.

First of all, when we were talking about the review of the Yukon Economic Strategy as referenced in the UFA and the Economic Development Act, obviously there is a very serious disagreement as to what constitutes the Yukon Economic Strategy, even if the Yukon Economic Strategy is referenced in bold case in the legislation.

The one thing that seems to be missing is a review of any economic strategy. As I was listening to the debate last night, I cast my mind back to last year to determine whether or not I remembered any public discussion about an economic strategy, as required by law. Even in the context of the discussions about the Yukon Party's four-year plan or the Toward Self-Sufficiency by the 21st Century document, or even for the document entitled The Yukon Resource Infrastructure Initiative - and these have all been characterized by the government as their policy - I do not recall any public discussion or review of that economic strategy.

Could the Minister tell me what I missed, and when the review of their economic strategy took place?

Hon. Mr. Ostashek:

I do not want to keep repeating myself - it is on the record - about all the things we have done in consultation, while it has not been done in the perspective the Members opposite would like. I spoke about the housing conference. I spoke about the tourism summit and I talked about the community tours, but the Members opposite do not feel that that is adequate. I also said we did not do anything last year because the Council on the Economy and the Environment was not in place. I have said several times now that the council will be doing an economic review in the very near future on a sector-by-sector basis. We believe that that is adequate, and that is the direction we are going in at this time. I have said that all before on the record here, and if the Member checks back, I am sure he will see it.

I have the status of government loans, which I will table at this time.

Mr. McDonald:

I would encourage the Minister, in fact plead with the Minister, to come back and change the law, because I think there is a serious problem here.

The economic strategies that they have identified as being their strategies do not incorporate a great deal of the infrastructure document. This document that I am holding up, dated April 16, and the resource infrastructure document, do not deal with tourism or housing at all.

Consequently, it would be hard to believe - even for us non-lawyers - and to accept that the consultation that did take place in those particular sectors had anything to do with the documents that the government has claimed as a replacement for the Yukon Economic Strategy, passed by resolution in this Legislature.

I know that the Minister feels reluctant to address this issue with any precision, but I would encourage him that the best approach is not to provide for what really amounts to a very transparent attempt to skirt the provisions of the law, but to change the law.

I would encourage the Government Leader, because they are the government, to do the right thing and bring the law into the Legislature seeking a change.

I do have a couple of follow-up questions about the Industrial Support Policy and this document entitled A Yukon Resource Infrastructure Initiative - Becoming Self-Sufficient through Infrastructure-Driven Investment in the Yukon, dated April 16.

As I was comparing the two documents, the Industrial Support Policy and the Yukon Resource Infrastructure Initiative document, they seem to be saying different things.

I would like to begin by asking the Minister first of all who wrote both documents.

Hon. Mr. Ostashek:

In answer to the critic's first comment about encouraging me to go back and review, and possibly change the law, I will take that representation under advisement. I will again consult with my department and if I feel that there needs to be a change in the law, I will have no difficulty in bringing that forward. This side of the House has a different interpretation of the law than that side of the House, and I agree with the Member that we should clarify the law to the satisfaction of everyone.

I do not believe the Yukon infrastructure document was released as a public document. I remember the Member received a copy, but I do not believe we ever tabled that document in the House.

I am sorry, but I forgot the other part of the Member's question.

Mr. McDonald:

The question was, who wrote both documents? I just point out that yesterday the Minister said that it was still an active policy, meaning that it was still operative and being used as government policy.

Hon. Mr. Ostashek:

Both documents were written by Economic Development and are working documents. The policy document is the Industrial Support Policy document.

Mr. McDonald:

It is a very general policy document, but the document, A Yukon Resource Infrastructure Initiative, is loaded with policy, too. What I am a little puzzled about, after having re-read both documents, is how the two documents blend one with the other. Can I ask the Minister whether or not both documents were sent to resource companies, or was it just the Industrial Support Policy?

Hon. Mr. Ostashek:

As I just said earlier, the first one is a working document. The only one that went out is the Yukon Industrial Support Policy.

Mr. McDonald:

Can the Minister tell us what he means by "working document"?

Hon. Mr. Ostashek:

I believe I have said it in the House before, but I will just refresh the Member's memory. The document was drawn up at the time we were trying to get the $10 million from the federal government, on the strategic highway infrastructure program, in which we were successful. So, that document served its purpose in that regard alone. What we did was put some ideas and directions of this government on paper, so we could take it, at the time, and have discussions with the Hon. Tom Siddon. Through him, we were able to get to Finance people and get a commitment for the $10 million.

Mr. McDonald:

I was under the impression that the document that was used to extract some money from the federal government was the document entitled Toward Self-Sufficiency by the 21st Century: Becoming Self-Sufficient through Infrastructure-Driven Investment. That was the infamous document that

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talked about railways to Carmacks. I am not referring to that one. I am referring to its successor, entitled A Yukon Resource Infrastructure Initiative, which came out later. I think it came out after - if I am not mistaken - the federal government made the announcement it was going to provide funding to the Yukon through that program. It came out in the middle of April. I will just check my Blues from yesterday. The Minister did say that both documents were operational, meaning that they were active and were the policy of government. So, I am just trying to determine what the arrangement is. My interest is in trying to find a policy from the government, so when people ask me what is the policy of the government, I can tell them, "This is an active policy of the government."

Hon. Mr. Ostashek:

The Member is half right. The first document, the Toward Self-Sufficiency by the 21st Century one, got the interest of the federal government. They asked for more information, and that is why the second document was produced. It was made for that specific purpose and is the forerunner of the Yukon Industrial Support Policy, which is being distributed to Yukon companies at this time.

I think it will be a long time before we get a signature on that $10 million. We had some commitments that they were interested in it for a substantial length of time before we finally got a signed document. I believe it was in the fall, almost a year after the first time I met with Mr. Siddon, just prior to the election, when we finally received final approval. It was quite a while, anyway, until we finally got final approval.

Mr. McDonald:

I will not dispute that point with the Member. I do not think it is an important enough point. I will go in a slightly different direction now.

In answers to questions from me yesterday, the Minister referred to a document entitled A Yukon Resource Infrastructure Initiative, and said that it was operative. Today, he says it is a working document. What does he mean by saying it is both operative and a working document?

Hon. Mr. Ostashek:

The Member opposite is trying to split hairs. The fact is that in every one of the documents we have produced, it is our belief that the road to self-sufficiency is through infrastructure development.

He can assume whatever he likes in that document, but I believe that it is consistent with the other documents and the Yukon Industrial Support Policy that is out now.

Mr. McDonald:

I have not said anything about the documents yet. The Minister should be careful about getting too defensive too early. It signals that there perhaps may be problems, and I have not identified any. However, if the Minister will give me time, I will make clear what I am talking about.

The Yukon Resource Infrastructure Initiative document, then, is a working policy of the government and is the predecessor of the Industrial Support Policy - consistent with it - but still part of government policy - is that correct?

Hon. Mr. Ostashek:

As I said, it was a document that was put together for one specific purpose: to give more information to the federal government. The public document we are now talking about is the Industrial Support Policy. That is the one that is going out.

Mr. McDonald:

I am talking about this document. I am talking about a document entitled A Yukon Resource Infrastructure Initiative, and I am asking the Minister whether or not it is a working policy.

Hon. Mr. Ostashek:

I guess the Member can identify it however he wants. It is a working document that developed the policy. There are certainly some policy statements in it.

Mr. McDonald:

I am going to have to tie it down. I apologize to the Minister. I know he might find this frustrating, but I think it is an important point, and I need to know.

Is this document government policy?

Hon. Mr. Ostashek:

As I said, the one I am holding is the policy; it is the one that went out - the draft policy that will be finalized. That other document is a working document from which this document eventually evolved.

This is the policy. I want to make that very clear for the Member opposite.

Mr. McDonald:

So, he says the Industrial Support Policy is the policy of the government. Is the policy contained in A Yukon Resource Infrastructure Initiative, which is also the policy of the government?

Hon. Mr. Ostashek:

No.

Mr. McDonald:

The Minister said no?

The Minister will understand my frustration. He thinks he is frustrated. Well, I am very frustrated, because I got answers to some questions yesterday that made it very clear that this was the working policy of the government, so I am very frustrated by this.

If it is not working policy, what is it? Was it abandoned? There is a lot more policy in the document entitled A Yukon Resource Infrastructure Initiative than there is the Industrial Support Policy. Were elements that are contained in the Yukon Resource Infrastructure Initiative abandoned in favour of the Industrial Support Policy, and are the policies not mentioned in the Industrial Support Policy, but are mentioned in the infrastructure initiative document, still operative?

Hon. Mr. Ostashek:

There are things in that document that we certainly do not have any money to implement at this time. As a result, we have implemented this. This is the one that went out. This is the one that we consulted with the industry about. This is the one that is being implemented now. Some of those other issues may be revived as we move along. I do not know what more the Member wants.

Mr. McDonald:

Just to relieve the Member from any concern that I am going to try to suggest that he should somehow be providing roads to Mount Skukum, road improvements and money for Grew Creek, or anything else, that is not what I am asking. I am talking about the policy contained in the documents, which is a different issue all together.

I will just make it clear what I am talking about here. The document entitled A Yukon Resource Infrastructure Initiative says to industrial proponents in the territory that, not only are they going to develop - if they expect any public funding from the government whatsoever - development agreements to ensure that there is local employment, that there are local business opportunities, but they are also going to have to post performance bonds, in the event that the industrial development does not take place.

Now, those features, for example, are not referenced in the Industrial Support Policy. However, if you are going to inflict them on industrial proponents, they are extremely important signals to send to the resource companies that may be interested in investing in the Yukon.

In the Industrial Support Policy there are a number of policy statements: that the amount of public investment will correspond to the amount of economic return; that the price of power will correspond to the commodity price, and it will apply to companies that use one megawatt of power or more. Now, in that particular case, it is not stated, because the Industrial Support Policy is unclear on this point, because that one-megawatt restriction is found in the narrative and not in the policy points that are listed.

But, the Yukon Resource Infrastructure Initiative document also speaks to these other items. We heard yesterday, after the Member for Riverside asked a question, that companies that require new generating facilities will have to post some security to account for the additional risk to the system. That is something

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that was not clearly identified in the Industrial Support Policy, even though the Minister said that there was some sort of vague or passing reference to some sort of sharing-of-risk kind of arrangement.

Certainly, any suggestion of development agreements, and suggestions of up-front performance bonds, or the detailed requirements in here to ensure that the level of public funding corresponds to the project size, in terms of the dollar commitment made by industrial proponents, is vague. I would refer the Minister to the policy element starting on page 5 of this operative document. It talks about project eligibility criteria in some detail: the level of funding and performance requirements for each of three major components. The first component is the transportation and energy infrastructure component. The second one is the resource infrastructure access component. The third is the mineral property evaluation component. There is a great deal of detail here. There are some things here that are referenced both in the Industrial Support Policy and in this document.

There are things contained in this document that are not referenced to at all, even obliquely, in the Industrial Support Policy. What I want to know is whether or not the document that was considered to be operative up until the Industrial Support Policy was considered to be the working document of the moment was the government's policy and whether or not they still stand behind the elements of this policy.

Hon. Mr. Ostashek:

I have said it, and I will say it one more time for the record - it was not policy, and it never went to Cabinet for approval as policy. It was a document that was put together with some ideas for the federal government, because they wanted more information on what we were looking for. That is why it was put together. It has been used as a working document and one of the policies that have come out of it - that has been adopted by Cabinet and is in a draft stage right now - is the Yukon Industrial Support Policy. If the Member opposite says there are policy statements in that document, certainly there are policy statements in it. It all falls in line with our infrastructure development, Toward Self-Sufficiency by the 21st Century.

Mr. McDonald:

I am afraid I cannot give the Minister any slack on this, as much as I would like to and as much as I would like to be nice and just leave the subject altogether. The problem is that I just do not think we are getting the straight goods as to what is policy and what is not, what the signals are to the industrial community and what are not. Yesterday the Minister said it is working policy; now it is working policy only of a department - that the department never operated under the approval of Cabinet. In fact, the department, in some senses, was acting in a rogue manner without the approval of politicians.

I am frustrated now. Yesterday it was an active document and there was no sense at all that the department had gone off half-cocked not knowing what it was doing and without the approval of politicians.

Could I ask him whether or not he believes that, if industrial proponents are expecting public funds to support their projects, they should be signing development agreements that deal with things like local employment and business opportunities, or whether or not they should be signing an agreement to put up an upfront performance bond if they, in the end, encouraged the public government to put up money. Does he believe in those things?

Hon. Mr. Ostashek:

Those issues can all be addressed through the Industrial Support Policy. As we said, these are some very broad principles that were put out, whereby we can negotiate development agreements with companies and we would put everything in them. Certainly I believe in those principles. We have to be interested in local hire. We talked to all the companies about that. We talked about how much money is going to be spent in the Yukon.

I want to make it very clear to the Member opposite that that industrial paper - whatever he calls it - was never released to industrial proponents who were coming to Yukon. It was never released to the public.

This is the document that is public, entitled Yukon Industrial Support Policy, and the contents of that document can be incorporated into the development agreements under that policy.

Mr. McDonald:

Yesterday, the Minister said it was an active policy. Whether it is released or not, it was my impression yesterday that it was what the department was thinking and how the department would have reacted to industrial proponents, should they approach the government.

Consequently, it is my view, based on the assurances I received yesterday, that this was government policy. It is only now that we find out it is not government policy at all.

I was very precise in my questions yesterday, asking whether or not this document and the Toward Self-Sufficiency by the 21st Century document were in fact active. I am sure the Minister remembers me asking those questions, and they were not asked frivolously. We do not have that much time to do these things frivolously.

The Yukon Industrial Support Policy, in the narrative, discusses wanting to provide a one-megawatt restriction to industrial proponents who come forward seeking public funding.

The Minister described that later, even though it is listed in the narrative, as a fundamental underpinning of the Yukon Industrial Support Policy.

In the other policy, which was just a departmental policy, there are a myriad of other restrictions, and no reference to whether or not the industrial user is going to be using one megawatt, or whatever. This refers to projects under $200,000, projects under $500,000, and larger projects.

The maximum project size for the resource infrastructure access component is $3 million. That figure is not stated in any element of the Yukon Industrial Support Policy.

There is a stipulation here that, for projects costing over $200,000, developers will be required to enter into a development agreement with the Yukon, which will cover scope and timing of the development, local employment and local business opportunities. Furthermore, they may be required to post a $200,000 performance bond.

If I was an industrial proponent in Vancouver, and I was reading the Industrial Support Policy, which makes only oblique reference to development agreements and what might be involved, and makes no direct reference whatsoever to this need to put up security for new generating facilities, or performance bonds, or the need to resolve local employment requirements, I might feel this policy was not only vague, but perhaps a little misleading. It does not tell me what my obligations are as an industrial proponent.

The Resource Infrastructure Initiative document makes it pretty clear what those obligations are. It even suggests there may be some costs to the program and it even quantifies those costs.

Presumably, the Industrial Support Policy would also entail costs, but it does not quantify them.

We have gone from a document that exposes the same policies as contained in the Industrial Support Policy, and contains financial information that is fairly specific as to what is expected of companies, and shows what costs might be associated with seeking public funds in the territory for industrial proponents. We have moved to an industrial support policy that does not identify any costs to the industrial proponent. It is just a fancy way of saying we are open for business.

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The detailed policy, which was probably something industrial proponents could use, has moved to a very general policy statement and a pamphlet on how we are open for business.

When I asked the questions before about whether or not all these policies are still active, there was a point to it, and this is the point. I do not know what the Minister can tell me to satisfy my curiosity about this. Perhaps he does not want to tell me anything. He may stand up and say he has said it all before. Well, he has said nothing before that addresses any of this. The Minister should not, at any time, get testy with me for asking precise questions, when it is clear that the answers to precise questions can vary from day to day.

Hon. Mr. Ostashek:

There is probably nothing I can say to satisfy the critic over there, but I think he should concentrate on what has gone out in public, and that is this document here. In the previous document, there was nothing that said it needed the approval of the Legislature. I have made a commitment that any agreements made under this will have the approval of the Legislature. This is the one that is going out to companies: this is the one that will be in use once it is in the final stages and, once this is approved, we may be able to get down to drawing up some finer terms of reference, as to how an industrial support policy could look. First of all, we have to get this approved and make sure this is going to fly before we take it any further.

Mr. McDonald:

I was under the impression they were both approved. The department has been adopting policies and Ministers have been calling them active working policies.

Last year, I think the previous Minister was promoting these policies. I will check the record on that point. The fact that they were using this policy without Cabinet approval and the fact that the Minister wants to distance himself from the policy is, I think, a pretty worrying situation, in my opinion. The fact that the Industrial Support Policy, as limited as it is and as unspecific as it is, contains the requirement that any risk to the public associated with a project will require the approval of the Legislature is, of course, good news and is, in fact, an improvement of the policies. But, what the Minister has not said is there is a whole lot of policy in the Resource Infrastructure Initiative document which is not contained in the Industrial Support Policy. One would be tempted to go through the Resource Infrastructure Initiative document and ask whether or not the policies contained in there are also active in the Industrial Support Policy. While the Minister has made some virtue of the fact that this is very general in nature and allows for maximum negotiating flexibility, it does not help at all if other strictures that the government and the department are going to apply to industrial proponents are never known to anybody until after the first number of agreements are signed. I think the Minister has a serious problem to deal with and he should deal with it.

Mr. Cable:

I have a couple of sets of general questions.

In the forestry transfer - and here I am perhaps belabouring the obvious - what is the Minister's view about why this government wants the forestry resource turned over?

Hon. Mr. Ostashek:

I believe that not only this government, but any government or party in power should want to be able to have more control over their destiny. We cannot have control over our destiny if we do not have control over our resources. The more control over our resources we have, the more economic levers we have at our disposal to make us more self-sufficient in the Yukon. I believe that, because we are here, we can do a better job of managing the resources. We can derive more economic benefit from it than we can while it is in the hands of the federal government.

I would also like to make another point at this time. The party to which the Member opposite belongs said in its red book that it wanted to see responsibilities devolved to the Northwest Territories and the Yukon. We are just following up on those initiatives. In fact, the Prime Minister said - and this was reinforced by the DIAND Minister - that they wanted it done during this mandate. We will pursue the devolution of responsibilities from Ottawa.

Mr. Cable:

The Minister mentioned some economic advantage as being the driving force behind acquiring the forestry resource. Has there been any work done to determine exactly what economic advantage there would be? Does the Minister anticipate that there will be increased employment? If so, in what particular sectors will this be seen?

Hon. Mr. Ostashek:

I have no doubt that there would be increased employment. First of all, we have to look at the ridiculously low stumpage fees that we presently have in the Yukon. That is the reason it is attractive to truck our logs even to British Columbia, 1,000 miles down the highway, to, I believe, Chetwynd, where some of them are milled. I think that is criminal. We would be getting stumpage-fee revenue for the government. I believe we can develop a forestry policy, so that there would be more active sawmills in the territory. We would have a reforestation policy, which we do not have now. That would not only create a program, but would also help us to have sustainable forests for many years to come.

I see a lot of opportunities. I do not think we will ever be in a position to compete with British Columbia's forestry industry, but I think there is ample opportunity for small operations, such as a specific operation that would be fine tuned. For example, I know there has been some interest by some people in having a forestry operation that would only produce molding and trim. Apparently, some of the wood in the southeast Yukon is very good for that. The grade is very good for moldings and door trims and such.

I believe there are some real opportunities, but the first step in that process is to get control of forestry.

Mr. Cable:

Has the Minister, with his Economic Development Minister hat on, instructed his staff to prepare a forestry act that would reflect the takeover of the resource and set out policy under which the forestry resource would be governed?

Hon. Mr. Ostashek:

First of all, the forestry comes under Renewable Resources, not under Economic Development. The other issue is that, with the devolution, there are monies for drawing up the act and the policy - monies that we do not have now to entertain and do those things. With the transfer, we will be getting monies to develop policy and legislation. That is what is holding up the process right now.

Mr. Cable:

From an economic development standpoint, then, to maximize the return on the resource, there would have to be some policy or some act in place. Is the Minister saying there is going to be some hiatus between the time when the forestry resource is turned over and the local forestry act and policy is in place?

Hon. Mr. Ostashek:

Most certainly. It would be the same as the oil and gas. Right now we have signed the agreements but it will be this fall before the federal government enters their legislation. Our legislation will be coming forward in the spring, to where we have complete control of it. There will be a hiatus.

Mr. Chair, we have to take a break at this time. I have a phone call from the Minister of DIAND.

Chair:

Is that agreed?

Some Hon. Members:

Agreed.

Chair:

We will take a brief recess.

Recess

Chair:

I will now call the Committee of the Whole to order. Is there further general debate on Economic Development?

Page Number 2560

Mr. Cable:

I have a few further questions on the forestry transfer.

The Minister indicated that one of the things he thought should be done, once forestry was turned over to the territory, was to increase stumpage fees. I know that is one of the things the local federal bureaucrats have looked at and talked about and on which they have issued some kind of discussion paper.

Has the Minister, or any of his Ministers, made any approaches to the federal government to increase stumpage fees so that, in the interim period when presumably there will be some resource revenue sharing, the stumpage fees will in fact be raised?

Hon. Mr. Ostashek:

That is a question that would be better put to the Minister of Renewable Resources. I am not aware of whether we have or not.

Mr. Cable:

All right. I will leave the forestry questions until we get to Renewable Resources.

The Minister's department, Economic Development, I gather is responsible for science and science policy - is that correct?

Hon. Mr. Ostashek:

Yes, we are.

Mr. Cable:

Is there anything going on in that area that the Minister would care to tell us about?

Hon. Mr. Ostashek:

There is not much going on right now, but one of the areas we are looking at with the western provinces is how we deal with scientific issues and research.

Mr. Cable:

I know the Yukon Science Institute, for several years, has been promoting science in the schools by holding science fairs and other functions.

Does the Minister anticipate that there would be any assistance given to the Yukon Science Institute over and above the funding that I think is on the books for the 1995 National Science Fair?

Hon. Mr. Ostashek:

My understanding is that their funding comes under the college and they do, from time to time, apply to programs in our department for project-specific funding.

Mr. Cable:

Does the Minister see an opportunity for job creation through the promotion of science and, if so, what would he see his department doing in the future to promote science?

Hon. Mr. Ostashek:

I do not believe the department has explored much in that area. There possibly could be and, if the department gets time, they may start exploring that.

Chair:

Is there any further general debate?

Mr. McDonald:

I have a few questions to ask the Minister.

The first is a follow-up question from the last sitting. During that sitting, the previous Minister and I talked about the consultation the department was doing. It was my contention at the time, as the Minister will be aware, that the government was doing very little consultation and, as the new Minister is aware, it is my contention that the department continues to do very little.

The one area where we seemed to have some agreement was on a couple of issues. The first was access to capital, and the second one was a regulatory review.

With respect to the access to venture capital, has the consultation promised by the previous Minister taken place?

Hon. Mr. Ostashek:

I just got a briefing note. I am not exactly sure what the previous Minister promised. I know I have had some talks with some of the bankers; we have talked with Dana Naye Ventures, and that is about as far as I have gone with it right now.

The mining facilitator will be doing work in that area to try to help pull some of the regulatory reviews under one tent and deal with them. We hope that, under the development assessment process, with the finalization of land claims, we will be able to pull the regulatory review into one forum, so we do not have all these different committees to go through. Right now, some of the procedures that have to be followed for even putting an airstrip into some areas are tremendous hurdles to companies that want to do work in the Yukon.

We are working on the regulatory side. I have done some preliminary work in talking to banks about capital. We are reviewing the business development fund program right now, and we are going to do a complete analysis and review of it to see if it can be streamlined to be of more assistance to the business community.

These are issues I have embarked upon, but I am not exactly sure what the previous Minister promised; however, I will check into it.

Mr. McDonald:

The Minister may remember that, during the last sitting, we had some discussions about what precise consultative mechanisms might do to improve the business environment. At the time, it was suggested that one area that might be explored was the availability of venture capital for businesses in the territory. It was explained that there was some confusion in the minds of many business people as to what the rules and regulations were for the various private and public lenders in the territory - everybody from the Federal Business Development Bank, the business development fund, Dana Naye Ventures, the banks, the investment consortiums, et cetera. Not only was there some confusion about what the rules were, but there was also a lack of understanding of what money was available, what was realistic to expect from those lenders and, from the lender's perspective, they would find out what opportunities exist.

It was felt by some people that to draw in small business with the private and public lenders, in a working session, they would be able to exchange information, so that any confusion about the rules may be identified or cleared up, opportunities for investment might be identified and, consequently, it might actually lead to some improvement in the investment climate here, and might also ultimately lead to investments being made and businesses expanding or starting up.

That was the idea behind the proposal. The last Minister indicated that, having discussed the matter with his deputy, they would be proceeding. So, I was under the impression that they would, in fact, be proceeding.

Apart from what the Minister indicated was the extent of his consultation with the banks and Dana Naye Ventures, did the department do any work to try to bring together the full range of institutional lenders, both private and public, and small business people for a working conference, or is that essentially on hold?

Hon. Mr. Ostashek:

The note I have here, going back to the debate last winter, indicates to me that the critic opposite proposed a conference for small business. But, my notes say there was no commitment made by the Minister to hold the conference. He said he wanted to talk to the people during the community tours to discuss the issue and see if there was any merit to holding the conference.

Mr. Harding:

I remember distinctly the commitments made by the Minister. It took us a long time; we made a lot of arguments. We talked about the need for some leadership in the economy and we talked about the fact that people all around the territory were clearly interested in the opportunity, given the experience we had holding a small mini-conference, an economic leadership conference. We went over and over the ground with the Minister of Economic Development and I can remember we ended up meeting with quite a bit of opposition from the Minister. Nonetheless, at the end of the day, the Minister agreed that he would hold an economic conference and there would be a number of issues discussed; among them, but not limited to these subjects, were discussions surrounding the development of opportunities for venture capital for small business as well as opportunities to remove some regulatory red tape that businesses often find they have to go through - unnecessary duplication and hoops and barrels. The Minister agreed to the premise we were putting to him

Page Number 2561

and he was presented with it, time and time again, by the Member for McIntyre-Takhini. The Minister continued to support it, but he was not prepared to make the commitment. There were days when he said what the Government Leader just read out, but, by the end of the session, he had seen the wisdom in the suggestions of the Member for McIntyre-Takhini and he decided that he would, without a doubt, take on, right after session, the initiatives suggested by the Member for McIntyre-Takhini. It was the subject of some fairly intense debate in this Legislature and, without question, we felt very strongly that those initiatives should have taken place, as the commitment was made by the Minister.

It is shocking to me, after listening very intently to the debate, to hear the government now stand up and say that they never made that commitment. Without question, they clearly made that commitment on behalf of the Government of the Yukon. We feel strongly that, if the commitment is made by the Minister, it has to be met.

As we watched the end of the last session, we felt somewhat concerned that the government had not lived up to their previous commitments. All we had seen from the government was a community tour, which was not the focus that was committed to by the government, in terms of this arrangement.

I do not understand what the Government Leader is saying today. He may have read one quote from Hansard, from earlier on in the debate. However, I can assure him that, if he had read further, he would have seen a very clear commitment on behalf of the Minister to heed the representations from the Member for McIntyre-Takhini, and move into the area of debate we had suggested.

Is he confident in his position that there was no commitment for a conference in that area?

Hon. Mr. Ostashek:

I am as sure as I can be, without reviewing every page in Hansard right now, that the quotes I have here in regard to the small business conference on January 24 clearly do not indicate to me that the Minister made a firm commitment to hold a small business conference. He said he was going to address the issue with people during the community tour, and that he may have to have some follow-up meetings after that, but in the quotes I have here in front of me right now I do not see any clear commitment to hold a small business conference.

Mr. McDonald:

I would invite the Minister to move from January 24 to January 25. On January 25, in Question Period, as a follow up to the debates in the Legislature, I made the following comments: "The territory's business and labour interests are crying out for the government to show some economic leadership in the face of fairly bleak prospects for the coming year. Many business people who have come to me have expressed the view that limited access to venture capital and confused communications with the investment community are helping to stifle economic growth. Last evening, the Minister appeared very reluctant to organize any specific working discussions between investors and small business. Can the Minister tell us whether or not he sees this opportunity to lead discussions as a worthy expenditure of his time?"

The Minister of the moment said, "I discussed some of those issues with my deputy minister this morning and we are looking at ways in which we can accommodate something along that line."

I go on to ask him precisely what he is going to do and when he is actually going to hold the meetings - and I quote: "When will he bring the investment community together with the small business community and actually facilitate discussions with them so that they might improve communications and perhaps even get businesses going?"

The Minister said, "Right now, our goal is to begin the process in February and hold the meetings in March".

That appeared to me to be a commitment. Is that not a commitment?

Hon. Mr. Ostashek:

I do not have a copy of that page of Hansard here right now, but it indicates to me that the Minister was talking about the community tour he was going to embark upon.

Mr. McDonald:

I asked the Minister about bringing small business together with the investment community. This is not a community tour - unless the Minister sends special invitations to the investment community and the small business community to attend his meetings. So, clearly, the Minister made a commitment.

It is no wonder that we have to get extremely precise here because the attempts to wriggle out of commitments are just unreal. In my opinion, that is a very clear commitment. Now the Minister suggests that there was never any commitment. We have a real problem. We have another real problem this afternoon.

Let me see if I can ask the Minister whether or not he will make a commitment to bring small business together with the investment community. Does he think it is a worthwhile expenditure of his time?

Hon. Mr. Ostashek:

I certainly would not make that commitment here today. I will be talking to the business community and the bankers, and if I believe there is merit, I would certainly follow through, but I cannot make that commitment here today.

Mr. Penikett:

I want to record my concern. I have expressed my concern about the laws, which I think the government is not following, but I know for a fact that the previous Minister of Economic Development, who is a Member of the same government as the present Minister, gave not only clear commitment on the floor of this House, but in fact carried on private conversations about the commitment with my colleagues, and we discussed those commitments in caucus.

It is a matter of record that following our economic conference there were two proposals that we were going to pursue. One was on a question of regulations and one was a question about access to capital.

My colleague made the proposal on the floor of the House to the Minister of Economic Development, in the hope that the government might, for once, recognize that there are ideas from other quarters than their own Cabinet room that are worth considering. The Minister, in a rare moment of open-mindedness, did indicate that he was very receptive to the proposal of my colleague, the Member for McIntyre-Takhini, giving us, not only on the floor of this House, but in other communications, every indication that he was going to proceed to accept the idea that we had proposed and carry it on as a government project.

I am astonished that this has not happened and that the Government Leader does not seem to know anything about the idea.

Mr. McDonald:

I do not know where to go. There is no point in my asking the Ministers for commitment or to pass laws. Basically, the whole environment in which we operate seems to change day by day and discussion by discussion. There almost seems to be no point in going through the rest of my issues in Economic Development.

Maybe everything that we learned before does not hold any water now, I do not know. At least, I will briefly go through the motions.

I have one final follow-up question on the issue of the access-to-venture-capital conference. Did the previous Minister have any discussions with his department about this conference? He indicated that he had met with the deputy and that they had decided to proceed. Did he have any of those discussions, after all?

Hon. Mr. Ostashek:

I understand that there were some discussions about the conference and the possibility of holding one. I think that is as far as it went. I understood that - and I am just

Page Number 2562

speculating; the Minister was with me on part of the community tour - he would see what the feedback from the communities is and whether or not this conference is really required - if the business community is really crying out for it. I want to say to the Members opposite, for what it is worth, that I did not get that kind of representation during the community tours.

We talked about economic issues. We did not specifically ask if they wanted a conference on this or that issue. We were there to discuss with the people what they wanted. I did not get that indication. That is not to say that I will not be pursuing this with the bankers and business community of Whitehorse. If I think the idea has merit, I will certainly hold one.

Mr. Penikett:

When a Member of this House asks the Minister a question, and the Minister makes a commitment, are we to understand that the commitment does not mean anything? Are we to understand that when we ask a question of a Minister and the Minister says yes, it just means maybe? Or, if the Minister says maybe, it means no? Or, if the Minister says no, it means he does not know? What are we to conclude from verbal commitments from Ministers in this House?

Hon. Mr. Ostashek:

I do not have that copy of Hansard in front of me. I will review it to see exactly what my interpretation is of what the Minister said.

Mr. McDonald:

We know how widely the interpretation of what is written on paper can vary between the government and the Opposition sides. Even when something is pretty clearly stated in law, we can see that Ministers take quite unique and exotic interpretations of those provisions to suit whatever mood they are in at the time.

I just hope that of all that we have accomplished in the last couple of days - and there is precious little - the Minister will not accuse me again of wanting to split hairs when it comes to getting some precise information. Clearly, under the circumstances, I have every right to spend the next three frigging months here, going over this material.

I would ask the Minister about core funding. I acknowledge that, in the budget here, the amount of grants through the business development fund has been reduced from $156,000 last year to $50,000 for the coming year. We had some discussion about core funding for organizations, or what is termed in the handout as operational assistance. Can the Minister tell us what the policy of the department is - at least the policy for May 12, 1994 - with respect to operational assistance, or core funding, for various organizations?

Hon. Mr. Ostashek:

I do not believe there has been any change to it since the previous government was in office. It comes under the Business Development Assistance Act. Section 5.1 states, "No application for financial assistance shall be approved for a purpose in relation to a project that is not of an industrial or commercial nature." The business assistance and loan guarantee regulations, on core funding, says that chambers of commerce are industry associations that promote and develop trade and commercial activity and are, therefore, eligible for core funding. The Yukon Federation is not an association with the primary purpose of an industrial or commercial nature, and is, therefore, not eligible for core funding.

Both organizations, or any other organizations, are eligible for project-specific funding that is of an industrial or a commercial nature. The guideline and criteria for the Business Development Advisory Board states that assistance provided to community-based enterprises for operational costs shall normally not exceed $5,000 per year and be subject to the following considerations: a degree to which the organization contributes to the development of the Yukon economy, an industry or community; and the capacity of the organization to generate revenue for operational purposes.

In fee for services, the Minister of the day in 1991 - whomever that may have been - approved a fee for service approach to core funding of chambers of commerce and other industry associations. The intent was to provide funding on a contract basis for specific services, such as to provide advice on important issues, or to provide supplementary support to the department. However, since contracts over $10,000 are tendered and are available to all interested consultants, the contract approach could not be implemented. Core funding remains as a contribution, but the conditions of the contribution require specific support services to the department.

Mr. McDonald:

Well, the Minister said a mouthful there. He has indicated that the authority for this comes under the Business Development Assistance Act, an act that was repealed in 1992. So, I guess it is good to know that there are some acts that the government is following, even if the acts have been repealed. In any case, I would like to ask him, given that he indicated that the policy from the past had not changed and is simply continuing, how is the government going to meet its commitments with a lesser dollar amount, first of all? They are proposing to release $50,000 in the future, down from $156,000. How are they going to meet existing commitments, or do they intend to?

Hon. Mr. Ostashek:

First of all, the act has not been repealed. Subsection 1 will not come into force until the date to be fixed by the Commissioner in Executive Council. It has not been repealed. We believe the $50,000 is enough to meet the commitments that are out there today.

Mr. McDonald:

The $50,000 that the department is proposing to spend - are they talking about meeting all the existing commitments? What precisely is going to happen? Thirty-six thousand dollars was dedicated to the Yukon Chamber of Commerce alone last year. Is that going to be maintained?

Hon. Mr. Ostashek:

Yes, it is.

Mr. McDonald:

Okay, so the $36,000 will be maintained. How about the funding for the Haines Junction Chamber of Commerce and the Watson Lake Chamber of Commerce? Will that be maintained as well?

Hon. Mr. Ostashek:

If they apply for it, if they have a need for it, yes, it will be funded. They have not applied to this time.

Mr. McDonald:

So, they have not applied, but others may apply. What is the policy with respect to others applying - other organizations that may have something to offer to government? Are they going to be given equal and fair treatment for this funding? Is it first come, first served? What is the criteria?

Hon. Mr. Ostashek:

Yes, the Member opposite is correct; it is on a first-come, first-served basis. The total contribution for last year was $48,838.

Mr. McDonald:

At least the contributions from last year could be met. Is the Minister going to be entertaining proposals from labour and conservation organizations, together with other organizations that have an interest in the economy?

Hon. Mr. Ostashek:

I will have to refer to my other document, but I do not believe that they would qualify for core funding.

Mr. McDonald:

Why not?

Hon. Mr. Ostashek:

According to my notes, it is because those organizations are not an association whose primary purpose is of an industrial or commercial nature, and are, therefore, not eligible for core funding.

Mr. McDonald:

The Minister is saying that labour organizations, whose sole interests are jobs for their members and who promote healthy economies so that their members may have jobs, are not organizations that the Minister would consider to be eligible? Is that correct?

Hon. Mr. Ostashek:

That is what the guidelines are now, but

Page Number 2563

they can apply for funding on a project basis.

Mr. Penikett:

I was the Minister who first set up the core funding for economic organizations, and it was deliberately designed to make sure that a wide range of organizations, with a variety of political viewpoints, would be eligible - labour organizations, conservation organizations, women's organizations and First Nation organizations.

When did the government change the rules so that only their friends in the business community could qualify for funding?

Hon. Mr. Ostashek:

I do not believe anything has been changed. There was a 10-year review done on everything from April 1, 1985, to March 31, 1994, and a review of all contracts and contributions over the last 10 years from Economic Development were conducted. The list of funding to organizations reveals that there was no comprehensive or regular funding to other organizations for economic consultation. There is a whole list, but no labour organizations appear on that list.

Mr. Penikett:

The Government Leader is talking complete and absolute claptrap. The deputy responsible for the minute could find out that I provided funding for conservation groups, First Nations, labour groups and business groups. We tried to be fair-minded and make sure it was distributed widely. When did the Government of the Yukon change the policy so that only business groups could get the funding?

Hon. Mr. Ostashek:

They may have provided funding on a project basis, but they did not provide core funding.

Mr. Penikett:

We did not originally provide core funding for anyone. We provided funding equitably to all the groups. It would not take me long - if you want me to do a Piers McDonald on the Minister, I will go out and check the record to show what the facts are. We should not have to do this in this House, but I can do it.

We provided funding on the same basis to labour groups, conservation groups, First Nations groups and women's groups as we did to the business community.

When did this government change the rules so that only their friends could qualify?

Hon. Mr. Ostashek:

We did not change the rules. I have a list of the projects that were funded, and the Member is right. There are a lot of them there, but the funding was given on a project-specific basis.

Mr. Penikett:

I do not know how long the Government Leader wants to spend on this. We had the previous Minister telling us that he did not believe in core funding, and the only basis on which the business organizations got money was on a project basis. He did not believe in core funding. It was against the philosophy of his government. The only groups that got funding were business groups, which got it on a project basis.

Could the Government Leader tell us why he changed the rules so that labour, environmental, First Nations, women's and other groups cannot get funding on a project basis? When did he change the rules?

Hon. Mr. Ostashek:

The Member opposite is contradicting himself. We did not change the rules. We said that they can get funding on a project basis, which the Member opposite just said, but they have not applied for it. We are not in the habit of going around and knocking on people's doors, asking them if they want some money. We do not have that much money.

Mr. Penikett:

Just a few moments ago, the Government Leader made it quite clear, when he read out his policy, that the labour groups would not qualify. That was not a rule that existed when we were in office. When was that rule adopted?

Hon. Mr. Ostashek:

What I was reading out were the terms of reference for business development funding. This list includes Community Futures, the Child Care Association, special needs association, the Labour Congress, the International Brotherhood and Yukon Association of Community Living, which come under a variety of programs. Some are under the economic development agreement, some under the business development fund or the community development fund. They come under a wide range of programs.

Mr. Penikett:

As the Member for Riverdale South has just reminded us, this was the government that hired a consultant to go around and urge businesses to apply for money.

In the days when the government used to consult with someone other than a closed circle of people - when they consulted widely - funding was provided for not only business groups, but also labour groups and other groups in the community in order that they would be able to give the government high quality advice about the economy. It was not done under the business development fund, but during the consultations.

The Government Leader has just indicated to my colleague that labour groups would not qualify under one of his rules. The previous Minister could not defend giving money only to business groups. I want to know how the Government Leader defends only doing it that way. He says that they do not have the money, but as the Member for Riverdale South just pointed out, they actually hired someone to go out and encourage businesses to apply for programs.

Hon. Mr. Ostashek:

I was talking about the business development fund. Quite clearly, we are encouraging even chambers of commerce to raise their own money. We do not intend to continue core funding forever.

Mr. Penikett:

Let me go on the record as saying that I think it would be a much more fair situation if nobody had this kind of funding, rather than just one group of people, on the assumption that only that group had anything to say about the economy because, conveniently, their views happen to coincide with the government opposite in some cases.

A much more fair and democratic practice would be to open one's ears, hearts and minds to other people in the community. Clearly, the government is not interested in doing that.

Hon. Mr. Ostashek:

For the record, I want to make it very clear; we have not changed the terms of reference. We are following the same terms of reference that were in place when the Member opposite was the leader of the government.

Mr. Penikett:

If that is the case, let the Government Leader tell me, since he is talking about a first-come-first-served basis, which is an interesting basis, that if a conservation group or a labour group applied to him for funding at the beginning of the year, if that application would be seriously considered.

Hon. Mr. Ostashek:

For core funding, no, but on a project-specific basis, yes.

Mr. Penikett:

As evidence of the government's good faith in the year and one-half they have been in office, has the Department of Economic Development provided any funds on that basis to a conservation group, a labour group, a women's group or any other rural association?

Hon. Mr. Ostashek:

Just off the cuff, yes. The Yukon Conservation Society has received money. There have been women's groups that have received money from this department.

Mr. Penikett:

Was the money received by the Yukon Conservation Society simply under the Whitehorse mining initiative, in which there was an obligation inherited from the previous government?

Hon. Mr. Ostashek:

No, it was not. It was project money under a program. If the Member opposite wants, we can look it up and get back to him on it.

Mr. Penikett:

For the record, I would like to see a legislative return, which enlisted all the funding provided for all non-government organizations. I do not mean commercial loans, but I mean

Page Number 2564

for these other purposes, listing the business and the other groups that receive the money. I would like to see that.

Mr. McDonald:

I would like to ask the Minister if he can give me a clear statement of policy with respect to core funding. Does the government believe - for the coming year at least - in providing core funding to any organization of any sort?

Hon. Mr. Ostashek:

I think the Member opposite is the one who looked it up. I have not looked it up. But there is $50,000 for core funding and we are prepared to give that money out under the rules that are in place.

Mr. McDonald:

Can the Minister tell us why the previous Minister went to great lengths to tell us that he did not believe in core funding, and that they were only going to provide money on a fee-for-service basis?

Hon. Mr. Ostashek:

As I said, that is the direction we are going, and we want to discourage these people from relying on government for core funding, and to encourage them to try to raise their money from other sources. That is the direction in which we are clearly moving. I believe, as he said, it has been reduced from $150,000 to $50,000.

Mr. McDonald:

I guess the claim last year that the operating expenses, or core funding, was simply a fee for service was just some gymnastics at the time to try and get around the questions, I presume. Now we are getting the straight goods, and it appears that the Yukon Chamber - or at least others - will get some funding.

I would like to tie it down a bit. On the question of core funding or operating expenses, the Minister indicated that he is trying to wean organizations off. Does that mean that he is not prepared to cut them off this year, that the Yukon Chamber of Commerce will continue to get $36,000, or some large amount like that?

Hon. Mr. Ostashek:

I believe, for the record, that I have already stated that the chamber did get $36,000.

Mr. McDonald:

I am talking this coming year. I recognize that in the handout the Minister gave me for funds last year - I am talking about the coming year. I would just like the Minister to say that.

Hon. Mr. Ostashek:

Yes, I thought that is what I was referring to last time. Yes, they will get $36,000 this year.

Mr. McDonald:

If the Haines Junction Chamber and the Watson Lake Chamber apply they will get their total of $8,500 between the two of them, but they will be weaned off slowly, too?

Hon. Mr. Ostashek:

Yes, that is correct - if they apply. My deputy is just drawing on another paper here. The Yukon Conservation Society was funded under the Tourism economic development agreement in this last fiscal year, 1993-94.

Mr. McDonald:

I have the list of projects in front of me here, both for the EDA, the community development fund, the business development fund, et cetera. I am most interested in the core funding, because that is the funding that is purely discretionary, that is the funding that allows them to set up and run an office, and ultimately to provide thorough and consistent advice on their views to government. The point that I have made before in the past is that there are other organizations out there who have a significant interest in the economy, who want to have an office, and provide thorough and consistent views to government. The question all boils down to fairness. If all the funds are going to be swallowed up by a few organizations, that means the opportunities for other organizations are limited. When the Minister read out his definition of who qualified for core funding, he mentioned that they had to be industrial or commercial in nature. He did not quite answer the question as to whether or not labour organizations had any interest in the health of industry or commerce, but I take it from his comments on the available funding for this coming year, that they should not bother applying anyway, because the Yukon Chamber, the Haines Junction Chamber, and the Watson Lake Chamber are going to basically eat up all but $5,000 of available funding.

I am trying to get a sense of what the policy is for accepting applications. In the event that another Chamber of Commerce came along and asked for core funding - or even an organization like the Klondike Visitors Association or the Dawson City Chamber of Commerce, which I know have been interested in getting support in the past - would those applications be given consideration?

Hon. Mr. Ostashek:

My understanding is that the Dawson City Chamber of Commerce is totally opposed to core funding from government.

As I said, the budget this year was based on what was used last year, which was $48,000. There was $50,000 put in the budget this year. We are trying to discourage core funding, but anybody who applies and can meet the guidelines that are in place - these are not guidelines that I put in, but guidelines that were established by the previous administration - will be eligible for core funding as long as the money lasts.

Mr. McDonald:

When I was the Minister responsible for Economic Development, any suggestion or hint that funding would have been limited only to Chambers of Commerce would have been roundly rejected by me. I think that is the point that Members on this side of the House, who have spoken so far, have made. If the department is pretending that was the policy then, the department will have to rethink its position.

I am asking about the policy with respect to other applications. For the record, when I was the Minister of Economic Development, I had a meeting with the Dawson City Chamber of Commerce, where they asked for precisely core funding. They wanted to set up an office and have the government pay for it, so I do know that they expressed some interest in funding in the past.

I am asking my question only as a hypothetical situation, because I want to know what the policy is for others who come along and ask for core funding. Do they get any consideration, or is it simply going to be limited to the ones the government is currently funding, and that is all?

Hon. Mr. Ostashek:

Once more, for the record, there is $50,000 there for organizations that fall within the guidelines for core funding.

Mr. McDonald:

Let me put it another way. There is $50,000 to fund the Yukon Chamber of Commerce, the Haines Junction Chamber of Commerce and the Watson Lake Chamber of Commerce. There is $5,000 left over for anyone else who might come along. I think that is probably a more appropriate way to put it, as long as those others that might happen to come along are a chamber of commerce. I think I understand the policy now. I would just say for the record that I disagree with it.

This brings us to the issue of loans, loan funding and the competition policy. Can the Minister tell us how he avoids funding that might be considered adverse competition? What is the policy of the department?

Hon. Mr. Ostashek:

I will have my deputy look it up. It is in the other book, but we will get it in a moment.

On the issue of unfair competition, all projects are evaluated to ensure that they will not be disruptive to existing businesses. Projects that are unable to show that there is sufficient market share available so their goods and services will not displace other Yukon businesses will not be funded. The majority of business development fund projects are interest-bearing loans, not grants.

I will leave it at that, and see what else the Member needs.

Mr. McDonald:

The Minister said that the majority of funding for businesses is not grants, but loans. What is the proportion of grants?

Page Number 2565

Hon. Mr. Ostashek:

My understanding is that we did not give out any grants under the business development fund last year.

Mr. McDonald:

Is the policy, then, for business funding, that there are no grants? It is not simply a majority that is loan funding, but there are no grants at all.

Hon. Mr. Ostashek:

My understanding is that, under the small business support policy, there are some small grants that can still be given, but not under the business development fund.

Mr. McDonald:

Can the Minister give us a return? If he is able to right now, can he tell us what the policy is, and under what circumstances they will permit grants?

Hon. Mr. Ostashek:

It is under small business support, and I will provide the Member with a copy of the agreement.

Mr. McDonald:

Is that under the economic development agreement? Is that what he is referring to?

Hon. Mr. Ostashek:

Yes, that is correct.

Mr. McDonald:

What is the policy of the government with respect to grants under the economic development agreement, generally speaking? Is it only under the small business support that they permit grants? Can the Minister tell us why they object to grants under the economic development agreement?

Hon. Mr. Ostashek:

Generally, we are trying to get away from giving grants, even under the economic development agreement, but sometimes they do make a case that they need some grant money for training, or some issue like that. So, there are still some small grants given out under it.

Mr. McDonald:

Not that I disagree, because I do not, but can the Minister tell us what the reasons are that the government objects to grants under the economic development agreement except for those he just mentioned, such as small business training and that sort of thing.

Hon. Mr. Ostashek:

I can tell the Member that this government's philosophy and my own philosophy is to object to grants, period. I do not think there should be grants given to small businesses, or any businesses. I do not, to be perfectly frank, think the government should be in the loan business. I am going to be talking to the banks to see how we can address that issue. The government has to be prepared to help businesses, but there may be other ways to do it without being directly in the loan business.

Mr. McDonald:

We have lucked onto a policy statement here. So, the Minister is saying, both personally and politically, he does not believe in grants under the economic development agreement, or even by any public sector organization.

He says he is pursuing the options, presumably in the next year, of moving away from loan programs. This is obviously a change in direction, given that the last Minister was trying to encourage business to make more loans by way of public advertising campaigns and through the work of a consultant.

The Minister said that on a couple of occasions he has met with banks. Can the Minister tell us what he has in mind? What would he expect banks or some private lending agency to do that government currently does?

Hon. Mr. Ostashek:

It would be premature for me to enter into that debate yet. I am making the Member aware, as I said earlier, that the economic development fund loan program is under review and, when I have something more concrete, I will be making a statement in this House. I will be seeing what we can do to give businesses the support that they need, without having to make direct loans to them.

Mr. McDonald:

Obviously, this is a major shift for the Department of Economic Development and it has some impact on the business development fund and the business development office. Would there still be a role for the business development office?

Hon. Mr. Ostashek:

As I said, I do not want to get into that debate now, because we have just undertaken a review. The deputy minister and I have talked about it. We have not completed the terms of reference for the review. It is something that I am embarking on, but I am signalling to the Members opposite what I am looking at and what I want to review, and my feelings on it. I think there might be a better way to help businesses, rather than the way we are doing it now. When there is a change in policy, I will be making a statement to that effect.

Mr. McDonald:

How does the Minister feel about loan guarantees?

Hon. Mr. Ostashek:

I think that is an avenue that we will be exploring in this. Loan guarantees seem to work well under the federal government's small business loan program. We will be exploring the options that are available to us.

Mr. McDonald:

In terms of exposure of public interest, what is the difference between a loan and a loan guarantee?

Hon. Mr. Ostashek:

The banks have the expertise and the people to review the applications, to take the security and to chase delinquent loans. If the Member opposite is aware of how the federal business loan guarantee works, after all those resources are exhausted, they go to the government for the balance owing on any delinquent loans, but they make every effort to collect it from the lender before coming to the loan guarantor.

Mr. McDonald:

Is the primary concern here not the fact that the government is participating and directly intervening in the private sector, but that the government does not know how to effectively collect the outstanding loans it has?

Hon. Mr. Ostashek:

There are many issues here. The one issue is that I do not believe we should be in the private sector area. We have banks to do that. The other issue is that I personally believe there is a tendency of people who borrow money from the government not to think it is really necessary to repay it, in a lot of instances, and the government is the last one to be paid. I believe the banks could do a better job of it. We are going to explore it.

As I said, there is nothing definite at this time. We are reviewing the programs and when there is a change in policy I will be making a statement in this Legislature and, if the Legislature is not in session, I will be making a public statement about it.

Mr. McDonald:

I am trying to get at the fundamental reasons why the government believes it should be in or out of the loan or loan-guarantee business. I was wondering whether there was an ideological or philosophical statement that government should not be involved directly in specific business ventures. If that is the case, I would like to know why the government would participate in loan guarantees, if it is opposed to the government participation specifically in the marketplace.

Is there an objection on ideological terms - that the government should not be playing a role that should be left to private sector exclusively - or is it simply a mechanical problem where, in the Minister's view, at least, the government has been unable to be an efficient loans officer?

Hon. Mr. Ostashek:

It is a combination of things. Some of it is philosophical; I do not believe we should be in the loan business. However, I do believe there is a role for government to play to help, especially, small businesses. I believe, as I said, that there are other ways we can do that. Possibly, we can help even more businesses with a lot less money. We are going to be exploring that type of arrangement. As I say, if we come up with something, we will announce it.

Mr. McDonald:

It seems to me that the Minister is trying to have it both ways. He wants to make the grand, philosophical statement that he wants government out of the lives of business, yet he believes that the government has a role in business. I can distinguish between the two positions, but they are contradictory.

If the Minister said that the government would like to stay out

Page Number 2566

of business as much as possible, because there are other lending institutions involved, but at the same time they feel there is a small role that they can play, I can understand that position. It is quite consistent with the government's position for the last 15 years in this territory. However, for the Minister to say that he does not think that government has a role in business, period, and then go on to say how government can have a role in business through loan guarantees and other ways is contradictory. The statements are not compatible.

The Minister has indicated that they can help more businesses with less money. Is the Minister intending, in the case of loan guarantees, that even though we do not have to vote money for that, somehow there will be some approval by the Legislature involved for the loan guarantees?

Hon. Mr. Ostashek:

It is a money item. There will certainly have to be approval at some point. I have not explored it fully. We are just entering the review.

I do not know if there has to be money voted as a line item in the budget or if we would just have to come back to the House for the delinquent loans. I do not know, because I have not explored it that far. As I said, this is very preliminary.

Mr. McDonald:

I wonder if I could get the Minister's commitment that if, in the policy development, the department or government exposes the public or the taxpayer to risk, he will get clearance in the Legislature beforehand, rather than just coming back after the fact and asking the government to pick up the difference. Due to the fact that we do not vote loan guarantees and because we do vote loan amounts, there has, in the past at least, been some acknowledgement that the Legislature has to approve the basic loan amounts and the terms and conditions of the loan programs before the government conducts its business.

If, on the other hand, we are moving exclusively to loan guarantees, I wonder if the Minister could give us a commitment that, in whatever regime he establishes, when he exposes the public to some form of risk, he will get clearance from the Legislature before undertaking it. Will he do that?

Hon. Mr. Ostashek:

I guess the way I will put it is that I do not have any difficulty with that. If that is what is required by the laws of the Financial Administration Act, I certainly will abide by them. I do not have any problem bringing the program, whether it is a loan guarantee or anything, to get approval from the House, none whatsoever.

Mr. McDonald:

I wonder if the Minister would go a little bit further than that, because - as we discussed in the context of the industrial support policy - even if an agreement did not involve an appropriation in the year that the risk was undertaken, there was still some acknowledgment that there would have to be clearance by the Legislature, to somehow approve that risk beforehand. So, the principle, even though we are probably dealing with smaller amounts here, would be the same. We may not know with certainty that there will be a bad debt, but we would know that there is some risk. As a matter of general principle, would the Minister not agree that it would be desirable to develop a system - if the government does move to loan guarantees as a regular operating principle - which allows the Legislature to approve the risk prior to the risk being undertaken?

Hon. Mr. Ostashek:

It would have to come to this Legislature because we would have to bring in the act. At the time we were making the changes, we would have to repeal sections of the Business Development Act as it is now and change it so there would be ample opportunity for the Legislature to be able to debate it. At that point, we may put in a clause that it has to come in front of the Legislature. I have no difficulty with that.

Mr. McDonald:

I think that is good. I think I have a commitment. Okay. Well, I will remember it. I was going to move a little bit away from competition policy, but if other Members have questions about the competition policy, I would like to invite them in.

Mr. Cable:

I was pleased to hear, about an hour ago, that the Minister is going to set up an evaluation of these economic development programs. It particularly troubles me when I see that, of the business development fund's total loan expenditures of $1.6 million, almost a third - $500,000 - went to a hotel expansion in the City of Whitehorse, in one of the most competitive businesses. If there was ever unfair competition or unfair advantage, that has to be it. A revisiting of the terms of reference is long overdue.

Yesterday, the Auditor General was quoted in the news as criticizing the way that economic development money is being handled in the Yukon. They were talking about the joint federal/territorial programs. The news report went on to say that the study also found that evaluation committees have not been set up as required, so there is no way to tell if the projects that received money were effective, I assume in the sense of job creation.

The previous Minister provided me with a fairly detailed assessment of job creation over the years. If I remember the numbers correctly, it was something like 216 jobs for many millions of dollars, which would indicate that, as an investment in job creation, the programs were singularly ineffective.

About an hour ago, the Minister hinted that he was going to review the effectiveness of the economic development programs. Was that review going to be in the sense of job creation, or were there some other terms of reference he was thinking about?

Hon. Mr. Ostashek:

I was talking about the ones that we are directly responsible for, such as business development.

As to the comments that the Auditor General made the other day, I want to clear up any misunderstanding.

The audit that he was referring to was based on the 1991-92 year, I believe - several years back. The findings were that the number of people involved in each project was excessive, the time span for applications to payment of funds is approximately six weeks, the evaluation committee had not prepared a framework for the establishment of a criteria and data collection program evaluation, and that, at present, there was no process in place to ensure that duplicate funding program services from federal and territorial governments did not take place.

In response to those criticisms of the Auditor General, an evaluation is going to take place. It is a very expensive evaluation, from what I understand. The total cost is going to be $380,000.

The evaluation, according to the agreements, has to be completed before the end of March 1995.

An evaluation is currently being done, which will be one of the most effective in-depth evaluations on the economic programs ever done in the Yukon. The process is open and publicly accountable. The Council for Yukon Indians and the Yukon Chamber of Commerce are on the evaluation committee. The evaluation will yield significant research on the Yukon economy and the effectiveness and efficiency of government programs. As I said, that is going to cost $380,000 for a program of $38 million. It is considerably less than the consultants' estimates, which were up to $575,000. There is a tender document being prepared that will be going out shortly. It is supposed to be completed by March 31, 1995.

Mr. Cable:

In response to the questions from the Member for Mcintyre-Takhini, the Minister indicated that he is reviewing the whole concept of government involvement by way of loans and grants. Would it be the Minister's intention to complete that review after this evaluation?

Hon. Mr. Ostashek:

No, our review will be taking place at the same time.

Page Number 2567

Mr. Cable:

I would assume that the main purpose, at least to the business development fund and parts of the economic development agreement monies, is the creation of jobs. What has the Minister's department done in the way of formally checking up on job creation at some juncture after the money has been released? I know the previous Minister was not satisfied with the evaluation, and it was my understanding that he had intended to do something about it.

Hon. Mr. Ostashek:

This Minister is not satisfied either. That is why this evaluation will look at case studies and in-depth studies of a sample of the projects. It will look at how many jobs have been created and look at the success rate.

I can tell you that there have been very few success stories. I have great difficulty and great concerns with that. As the Member opposite is aware, the economic development agreements are funded 70 percent by the federal government and 30 percent by us. The business development fund is funded entirely by us. We will be evaluating the business development fund program while this evaluation is going on, as well.

Mr. Cable:

I know the entrepreneurial skills required for filling out the application forms are not always the same as for creating jobs.

Does the Minister have some sort of sense of what would be a success? How long does he think jobs should be maintained for the taxpayers' investment to be rewarded?

Hon. Mr. Ostashek:

I think that question begs the question about the philosophical belief behind these programs. I believe that much of the money that has been committed to economic development agreement programs over the years is ineffective. The previous DIAND Minister and I had discussions about changing the terms of reference of the economic development agreement, so that the funds are not used for consultants' studies, or these types of things. There has been a lot of that over the years.

I believe that the basis of those funds is to develop some infrastructure and some longlasting jobs. I think we would be hard pressed to point to success stories for the millions of dollars that have gone into these programs. There are some. Some created some short term jobs. I have some difficulty with the view that that is what this money is for.

Mr. Cable:

Does the Minister think that the Yukon Council on the Economy and the Environment, in its sector-by-sector review of the economy, will have some useful input about government involvement in business?

Hon. Mr. Ostashek:

They may have. They may be looking at that, as well. They could probably provide some insight.

Mr. McDonald:

In respect to the economic development agreement itself, one of the things we discussed in previous sittings was the access to funds that departments seem to have to undertake public sector activities. The concern I have expressed in the past is that it appears that a lot of programs that were once the responsibility of the federal government prior to devolution, particularly in the mineral development agreement, are now being funded by YTG, at least to 30 percent. This has not just occurred in the last year or two; it has been a problem that has existed from the beginning of the economic development agreement.

Certainly the previous government, and this government, both suffer from this vision that government departments can simply wash their program expenditures through something that was supposed to, I understood, help the private sector expand its base.

Can I ask the Minister for a general philosophical statement as to what he feels about the public sector having access to these funds?

Hon. Mr. Ostashek:

I believe we started on this issue, and I share the concerns of the Member opposite. I share those concerns of getting into programs where we are funding federal responsibilities. I also have concerns and have tried to slow down - we have not been able to stop it, but we have tried to slow it down - the departments topping up their budgets with economic development agreement funding. I do not think that is right. I think that money should be out in the private sector, creating infrastructure, so we have some longlasting facilities in the Yukon.

Under the tourism economic development agreement, though, they can access it for marketing, but there is a qualification limiting it to a world-wide basis, or something; they cannot do it for local marketing. So, if we are able to utilize that, we can do some marketing with 30-cent dollars. That is probably one exception to it.

I do have difficulty with that. I share the concerns of the Members opposite, and I would like to see different guidelines, if we are fortunate enough to negotiate another economic development agreement program.

Mr. McDonald:

Certainly, I would agree with the Minister that it would make things a lot clearer if what had once been government responsibilities would be funded through normal departmental budgets, and this program, which was sensibly structured to help the private sector, would focus on the private sector. I think the trouble we have experienced is that programs that were once federal - and not very long ago, particularly in the mineral development agreement - are now clearly being funded 30 cents on the dollar by the Yukon government.

As the Minister points out, we are not immune from accessing access to these funds ourselves, particularly in the area of renewable resource, and that we are extremely accomplished at making application and receiving funding for public sector priorities.

I note for the Minister's information that, in his update of the Yukon Party's four-year plan, he might want to review his commitment to improve public sector access to the economic development agreement. Obviously, neither he nor I agree that is what should happen. Clearly, all of us on this side agree that we should not be improving public sector access, but limiting public sector access, to the fund.

I would like to ask another question, and it is a question that has arisen in the past in this Legislature, not only during this Minister's time in government, but prior to that time. It is with respect to the role of the economic development officers in the community planning section of the economic development agreement. There are a whole series of economic development officers being funded, and I would like to know if the Minister could tell me what the criteria is for funding these economic development officers, and how they interrelate their activities with the business development officers in the communities.

Hon. Mr. Ostashek:

Regarding the concerns of the Member opposite on the use of the economic development agreement funding for such things as the MDA office, I agree with him to a certain extent. My concern now is that, when we go to devolve minerals from the federal government, we are not going to get as much money, because we have been funding 30 percent of it.

Having said that, I can understand why the Members opposite entered into the agreement. It is a direct benefit to the industry. That is one of the criteria that we use now for accessing economic development agreement funding, that it is a direct benefit to the industry. For example, the international marketing of tourism is a direct benefit to the industry, so we can justify it to some extent on that.

The economic development officers funded under that work directly with the First Nations community. They work in conjunction with our officers - whichever one is in the area is responsible for them. As the Member opposite is aware, there is quite a list of them in the communities who are funded under that agreement. They work directly with First Nations - most of them - and then

Page Number 2568

they coordinate with the officers, or regional managers, that we have.

Mr. McDonald:

Is it the government's position, or the Economic Development Agreement Management Committee's position that the economic development officers are really to be provided for First Nations? Are there other organizations, especially municipalities, who have asked for economic development officers in the past that can apply and receive funding?

Hon. Mr. Ostashek:

It is not only First Nations; there have also been some municipalities. I think that some of the rationale behind that was to help these different organizations or First Nations develop economic plans and projects. I think that was some of the rationale for funding them under the economic development agreement.

Mr. McDonald:

One of the reasons that the previous Minister gave us for these economic development officers receiving funding and not others, was because they had to demonstrate that they were going to undertake specific business projects. For an economic development officer to develop general plans and to respond to whatever might come along, was not sufficient justification for the position.

Could the Minister be a little bit more precise as to what the criteria is for approving these economic development officers? Is it necessary to have specific business projects in mind in order to have the economic development officer provide the basic, background service to get these projects started, or is it for planning after all?

Hon. Mr. Ostashek:

The Member is correct in the first part. The funding is project specific, whether it is an economic development plan, restructuring and strategic planning, housing commission, review of the Nisutlin development plan, strategic planning, board training evaluation, arts and culture impact study, Keno Hill Mine closure study and the list goes on.

In order to justify having an officer, it has to be project specific.

Mr. McDonald:

Would any First Nation, for example, that is not currently being funded for an EDO and wishes to establish an economic development plan, be considered eligible for funding?

Hon. Mr. Ostashek:

They can certainly apply. I believe, however, that they would have to have something specific in mind before they were approved.

Mr. McDonald:

What we are talking about is a specific task, such as an economic plan for the area. Is that specific enough? How specific do they have to be?

Hon. Mr. Ostashek:

My understanding is that most of them have plans now and, no, that would not qualify. It would have to be project specific.

Mr. McDonald:

Does that not prevent bands that have not had the benefit of the development of a plan from getting the same assistance as the bands that got the EDO positions to do planning work? If a First Nations has the EDO provision, and was able to do specific projects, such as a specific plan, they would now be ready at the next level to deliver on those plans. However, if the criteria is changed and no planning is permissible, then those First Nations that never received EDO funding for planning would never be able to catch up. Only those that originally received funding would have an advantage. Does that not seem to be a problem?

Hon. Mr. Ostashek:

The criteria has not changed. They can apply and if they have not had a plan completed, it would probably qualify. Or, if they come along with two business projects that they want to do, that will qualify for an EDO. I do not have the entire terms of reference here with me, but I can get it for the Minister. The criteria certainly has not changed. It is just that most of the First Nations now, if not all of them, do have a basic economic plan, and they are now moving on to other projects. I do not know if there is a First Nation out there that does not have an economic plan, but if there is and they apply, they certainly would be given consideration.

Mr. Chair, given the time, I move you report progress.

Motion agreed to

Hon. Mr. Phillips:

I move 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?

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 from the Chair of Committee of the Whole. Are you agreed?

Some Hon. Members:

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. Monday next.

The House adjourned at 5:26 p.m.

The following Sessional Paper was tabled May 12, 1994:

94-1-124

Privatization of highway maintenance: letter to Mr. Penikett, Leader of the Official Opposition, from the Hon. Mr. Fisher, Minister of Community and Transportation Services, dated May 9, 1994, re 1993/94 collective agreement articles respecting job security and contracting out (Penikett)

94-1-125

Status of Government loans as at April 1994: SEAL, YEAP, Small Business Incentives, BDF, CYTSA/Tourism, EDA Renewable Resources, EDA Small Business Support (Ostashek)