Whitehorse, Yukon

Monday, May 16, 1994 - 1:30 p.m.

Page Number 2569

Speaker:

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

Prayers

Recognition of 100th birthday

Hon. Mr. Ostashek:

It gives me great pleasure, and it is an honour, to rise today to extend birthday greetings to two Yukoners who will be celebrating their 100th birthday in the next few days.

Daisy Smith was born in 1894, but the exact date of her birth was not recorded. She was born in the Tagish-Carcross area and had many brothers and sisters. Daisy herself had 10 children, two of whom are still living, and she has approximately 26 grandchildren and numerous great-grandchildren. Daisy is in excellent health. Her memory is still keen. She has a wonderful sense of humour and likes visitors to drop in to chat. Daisy will be celebrating her birthday on Saturday, May 21, in Carcross, and we wish her good health and happiness on her 100th birthday.

Jim Watson was born on May 16, 1894. Jim came to Canada from England as a young man. He met and married his wife, Lettie, and homesteaded near Clive, Alberta. Jim was also a JP in Alberta. He served in both world wars, and in the second world war served the country as a merchant marine. Jim and Lettie moved to Watson Lake 26 years ago when he retired, because their son, Roy, lived there. Jim now resides at Macaulay Lodge. On May 4 of this year, Jim became a great-great-great-grandfather. A granddaughter was born in Red Deer, Alberta. Phyllis, his daughter-in-law, resides in Watson Lake and is in Whitehorse to help Jim celebrate his 100th birthday. We also wish to say happy birthday to Jim.

Applause

Speaker:

We will proceed at this time with the Order Paper.

ORDERS OF THE DAY

Speaker:

Are there any Introductions of Visitors?

INTRODUCTION OF VISITORS

Hon. Mr. Phillips:

I would like all Members to welcome to the House today a grade four class and their teacher, Mrs. Zacarelli, who are here to listen to our deliberations. I would ask all Members to make them welcome.

Applause

Speaker:

Are there any Returns or Documents for tabling?

TABLING RETURNS AND DOCUMENTS

Hon. Mr. Ostashek:

I have a legislative return.

Hon. Mr. Brewster:

I have information on the circumpolar agricultural proceedings.

Speaker:

Are there any Reports of Committees?

Petitions.

Are there any Introductions of Bills?

Notices of Motion for the Production of Papers.

Notices of Motion.

Are there any Statements by Ministers?

This then brings us to the Question Period.

QUESTION PERIOD

Question re: Outfitting territories, foreign ownership

Mr. Harding:

I have a question for the Minister of Renewable Resources regarding the question of ownership of Yukon outfitting territories.

Last Friday, a concerned Yukoner gave me a copy of a proposal from the lawyer for Fritz Mayr-Melnhof, the outfitting multi-national, that was made to him. Mayr-Melnhof's offer was clearly designed to give the illusion of Yukon ownership, when in fact the whole concession was to be owned and controlled by a foreign resident.

I have provided the Minister with a copy of this document. I must now ask this: will the the Minister establish a public inquiry into the issue of foreign ownership of Yukon outfitting concessions?

Hon. Mr. Brewster:

The document was put on my table just before lunch and I just saw it. I believe he is asking for a legal opinion, which I will not give.

Mr. Harding:

I am not asking for a legal opinion; I am asking for a public inquiry into the matter. These documents clearly show how side agreements can be used to circumvent the spirit of the Wildlife Act, which is designed to protect Yukon ownership of outfitting concessions because they use wildlife - a scarce public resource.

I would like to ask the Minister this: does this Austrian outfitter have ownership interests in other outfitting territories?

Hon. Mr. Brewster:

I will take that one under advisement.

Mr. Harding:

Is the Minister aware of any other secret proposals or arrangements, such as the one I gave him today, existing in his other territories, and how can he be sure of this without an inquiry?

Hon. Mr. Brewster:

I will take that under advisement.

Question re: Outfitting territories, foreign ownership

Mr. Harding:

I am very concerned that the Minister did not take the last 35 minutes to look over the short set of documents that I gave him. I believe, and the Official Opposition believes, that some people have to be put under oath to get to the bottom of this matter. How can the Minister be sure, given the evidence I have provided to him, that other foreign outfitters are not buying up areas in the Yukon?

Hon. Mr. Brewster:

To my knowledge, as of today, there are no other areas for sale. Period.

Mr. Harding:

The Minister is not speaking to the point of this matter. I have provided the Minister with copies of proposals to a Yukoner that, clearly, are designed to establish a front. Does the Minister not agree that this matter must be exposed for the benefit of Yukoners?

Hon. Mr. Brewster:

The department has done absolutely everything that they should under the Wildlife Act.

Mr. Harding:

We have produced evidence of proposals designed to create the illusion of Yukon ownership. We know that this person is not a Canadian citizen, and on the share registry in the proposals it is clearly shown that this person has an Austrian address, so he is not even a legal immigrant. Why is the Minister refusing to act on the concerns that we put forward as the Opposition, and hold a public inquiry into this important matter? Let us get to the bottom of it.

Hon. Mr. Brewster:

I will take that under advisement.

Question re: Outfitting territories, foreign ownership

Mr. Harding:

The laws in the Wildlife Act were established to protect Yukon and Canadian ownership of our outfitting territories. Why is the Minister against the principles set out in our law, or does he agree with it?

Page Number 2570

Hon. Mr. Brewster:

He has asked me a personal question. I will not answer.

Mr. Harding:

Both the up-to-date share registry for Kluane Outfitters and the secret proposal made last year by the Austrian outfitter show an Austrian address. How could this person be a Canadian citizen, or even a landed immigrant when he lives in Austria?

Speaker:

I think the Member should be aware that a question ought to seek information, and cannot be based on a hypothesis, or seek an opinion, legal or otherwise. I question whether these are legal opinions. If the Minister is prepared to answer the questions, then I have no problem. I just wanted to make the Member aware of it.

Hon. Mr. Brewster:

Mr. Speaker, he will have to repeat the question as I was listening to your ruling.

Mr. Harding:

Both the up-to-date share registry for Kluane Outfitters and the secret proposal made last year by the Austrian outfitter, which I have given the Minister, show an Austrian address. How could this person be a Canadian citizen, or even a landed immigrant, when they live in Austria?

Hon. Mr. Brewster:

My information is that he is a landed immigrant, and I presume he was back in Austria to possibly recruit big game hunters. I do not know - I have not met the gentleman, and I have not talked to him.

Mr. Harding:

That is exactly why we need an inquiry into this. The Minister hit the nail right on the head.

On May 6, 1993, over one year ago, the Minister said, in response to my question on this issue, "As long as he is a Canadian citizen we cannot stop him. I did not make those laws and I have much the same problem with it as the Member. I also have a problem with one person being able to own two or three outfits."

This person is not a Canadian citizen, the Minister is in a position to enforce, or even change, the laws, and, thirdly, this person looks like he owns three outfitting territories. Is the Minister going to stand by and watch this, or is he going to do anything about it?

Hon. Mr. Brewster:

He is a minority shareholder in all three outfits.

Question re: Outfitting territories, foreign ownership

Mr. Penikett:

I must say that the answers of the Minister today are deeply disturbing. Even a quick reading of the documents filed with the Minister show that a Yukoner was asked to sign a document that appeared to maintain local control of a Yukon outfitting area, while giving complete and absolute control of the concession to someone who is a citizen of a European country, something that appears to be contrary to the law.

Is the Minister not concerned about that? Will the Minister not investigate it? Will the Minister not tell the House whether or not he even sees it as a serious problem?

Hon. Mr. Brewster:

They are now asking me to comment on legal issues again.

Mr. Penikett:

This Minister has not been asked for a legal opinion. I would ask him, as a former outfitter, as a Minister of the Crown, as a citizen of the Yukon, if he is not concerned about what appears to be, on the basis of this document, a deliberate effort to circumvent the wildlife laws of the Yukon Territory that he is sworn to uphold. Is he not concerned about that? Will he do nothing about it? Will he not look into it? Why does he resist the idea of a public inquiry?

Hon. Mr. Brewster:

Which of those questions would he like me to answer?

Mr. Penikett:

I would have been quite happy if the Minister had answered any one of them. So far today, he has been asked nine questions and has refused to answer any, which is causing us some very, very deep concern about what is going on here.

A few months ago, the Minister said, and it is on the record, that he was very concerned about foreign ownership of Yukon outfitting areas. A few days ago, he said it was okay because the person in question was a landed immigrant, even though the law says they have to be a citizen. A day after that, he said it was okay because the Charter made the law we have in the Yukon not applicable, or made it irrelevant, or superseded it.

Let me ask the Minister this: what is the position of the Government of the Yukon on the question of foreign ownership and control of big game outfitting areas in this territory?

Hon. Mr. Brewster:

I am unaware of any foreign ownership. The gentleman they are talking about is a landed immigrant and I understand that a landed immigrant has all the rights of a Canadian citizen, except the right to vote.

Question re: Whitehorse General Hospital, reconstruction schedule

Mr. Cable:

I have some questions for the Minister of Health and Social Services on the hospital reconstruction.

In December, the Minister indicated that the hospital reconstruction would be completed on time and within budget. Subsequently, he provided a time-line chart for the hospital project. Could the Minister indicate whether this time-line chart, provided on April 12, 1994, is still the chart to which his department is working and whether he anticipates the hospital reconstruction will be completed on time?

Hon. Mr. Phelps:

Basically, yes it is. I understand that thus far the various stages are on time and will proceed as set out in the charts that were provided to him. There may have been some minor adjustments since that exact chart was produced and, if he likes, I can bring him an updated one, but any changes are very, very modest indeed.

Mr. Cable:

The Minister also indicated in December that the hospital reconstruction would be completed on budget. Is that still the Minister's position?

Hon. Mr. Phelps:

Yes.

Mr. Cable:

Could the Minister provide to the House a list of the contracts issued to date - the amounts, parties and starting dates of the work to which the contracts relate?

Hon. Mr. Phelps:

Certainly.

Question re: Outfitting territories, foreign ownership

Mr. Penikett:

I have to pursue this very serious issue raised by my colleague, the Member for Faro, and since we cannot get any answers at all from the responsible Minister, I would like to ask the Government Leader this: given that Members of the House have been shown information, which they have shared with the Minister, that seems to indicate a deliberate effort to circumvent the wildlife laws of this territory, namely, by giving a foreign citizen control of an outfitting area, in contravention of the specific provisions of the act, is the Government Leader concerned about this revelation and, as head of the government, will he want to initiate an investigation of the facts by way of a public inquiry, or some other appropriate method?

Hon. Mr. Ostashek:

I have not had the opportunity to see the information that was shared with the Minister. I will be reviewing it, in light of the questions that have come up today. If it is a situation where there is foreign ownership, I would be concerned. But, as I was a person who was involved in one of the sales - under their administration, when they were in power, and the documents were all approved by the Minister responsible at the time - I know that the wildlife branch did extensive checks to see whether the individual is a landed immigrant or not. The sale that I participated in was open and above board. We had

Page Number 2571

numerous meetings with the wildlife branch before the sale and it was approved, as it was a legal sale.

Mr. Penikett:

I thank the Government Leader for his answer.

The problem appears to be that the documents that the Minister was given today indicate that there may be some facts that might not have been made available to the Minister at the time of a sale, such as agreements between a Yukon resident and an outside resident in shareholder or other documents.

The documents provided to the Minister indicate that the lawyer who participated was conscious of the provisions of the Wildlife Act and was trying to design a document to circumvent them. I want to ask the Government Leader, if in the examination of the documents he confirms that fact, would he treat the matter seriously enough to ask his colleagues for a public inquiry?

Hon. Mr. Ostashek:

I certainly will be reviewing, with the Minister, the documents that he has received from the critic. I will assess, at that time, whether or not the allegations are serious enough for a public inquiry.

Mr. Penikett:

For a number of reasons, I doubt if the Government Leader will be in a good position to assess the facts or decide, entirely by himself, whether or not there is a basis for a public inquiry.

Could I ask the Government Leader if, in considering the question of a public inquiry, he might solicit the advice of an independent third party, knowledgeable in the law, to advise him as to whether or not the documents, given to the Minister today, might constitute evidence of a deliberate attempt to circumvent Yukon law? If he does that, will he then bring the question of an inquiry to his Cabinet colleagues?

Hon. Mr. Ostashek:

Certainly, one of the steps in the procedure that I will be taking is to seek legal advice in this matter and authenticate the documents that have been produced. If and when that all works out, I will take it to Cabinet.

Question re: Outfitting territories, foreign ownership

Mr. Harding:

I would like to follow up with the Government Leader regarding his claims that everything is in order, with or without the information I gave the Minister today.

The Wildlife Act clearly states that an outfitting certificate can only be granted to a corporation in which 51 percent or more of its issued share capital, having any voting rights under any circumstances, belongs to the holder of the concession, and all of the remaining share capital having voting rights under any circumstance belongs to persons who are Canadian citizens at the time of the issuance certificate. Where does it refer to landed immigrants? Where is the legal opinion, which we have been promised by the government, which supports that?

Hon. Mr. Ostashek:

First of all, this government does not make a habit of filing legal opinions in this Legislature. There is absolutely no precedent for it. The interpretation by the game branch in the sale that I was involved in was that a landed immigrant qualifies as a Canadian citizen. That is all that I can add to the discussion right now. That was the interpretation by the wildlife branch. The person involved was not trying to hide the fact that he was not a Canadian citizen.

Mr. Harding:

The share registry and the documents provided today clearly show that the person is not a Canadian citizen. There is a lot of question about whether he is a landed immigrant at all - even if the definition is accepted. What I want to know is this: the Minister is sworn to uphold the letter of the law, and that is the Wildlife Act, which clearly states that they must be a Canadian citizen. Why would the government take the position that a landed immigrant is the same? Why would it not be up to the outfitting certificate applicant to fight the Charter argument, and the Minister to uphold the letter of the law?

Hon. Mr. Ostashek:

I think that would be a good question for him to ask his leader, because it was their government that approved the sale on the basis of that man being a landed immigrant. It was they who approved it, long before we came into office.

Mr. Harding:

If the previous government made a mistake because they did not know all of the information that the Members opposite have today, that is absolutely no excuse whatsoever for them to plead ignorant and do nothing considering what they know now. They are continuing to make decisions - and that includes the Government Leader - that renew these certificates on a yearly basis. It is not good enough for them to say that it is the previous government's fault, like they do with everything else. Will they take some responsibility, and look into this matter of Canadian citizenship, as the letter of the law specifies, and decide that they should uphold the letter of the law, as they are sworn to do as Ministers?

Hon. Mr. Ostashek:

I have already made the commitment that we will certainly look into this, but again, I want to clarify this for the Member opposite: it was the interpretation of the wildlife branch under the previous administration - under the NDP administration - that a landed immigrant qualified as a Canadian citizen.

Question re: Advertising policy of government

Mrs. Firth:

I have a question for the Government Leader. Two weeks ago I asked the Government Leader some questions about the advertising policy. The Department of Government Services used to handle all government advertising, but that responsibility has now been moved to the political department in government, which is the Executive Council Office. Seeing that this is a major shift of responsibility and a major change in policy direction, I would like to ask the Government Leader if he could tell us exactly why they made this change.

Hon. Mr. Ostashek:

The Member is not correct when she says it is a political wing of the Executive Council Office that is dealing with advertising; it is the administrative wing of the Executive Council Office. It was moved into the Public Affairs Bureau because we felt it would be more cost efficient to do it through that department.

Mrs. Firth:

The Executive Council Office traditionally deals with more highly political issues than other government departments. That is why I referred to it as the political department of government.

Since the Minister is using the reason of saving money, can he stand up and tell us how much money the change of policy has saved?

Hon. Mr. Ostashek:

I cannot do that on my feet, but I will get back to the Member on it.

Mrs. Firth:

Two weeks ago, the Minister told me he was going to get back to me with the policy, and I still have not seen it. He promised he was going to table it in the House. I am reminding the Government Leader that he did promise to table his policy in the House two weeks ago.

Is there a policy within the department regarding advertising? Could he bring it back for us this afternoon, to be presented to the Legislature?

Hon. Mr. Ostashek:

I do not know if I can bring it back this afternoon, but I will see why the Member has not been responded to.

Question re: Social assistance, fraud investigations

Ms. Moorcroft:

I would like to go back to the Minister of Health and Social Services for some answers about the fraud investigator hired by his department, at the Minister's instigation.

Page Number 2572

I am not asking questions of the Minister of Justice regarding RCMP investigations. What are the rules governing actions taken by the fraud investigator who is working on contract for Health and Social Services?

Does the department discontinue social assistance payments to a client when fraud is being investigated?

Hon. Mr. Phelps:

The department is operating under the policy that was created by the previous administration, in this regard. As it stands, the policy is that when a matter is referred to the RCMP for the investigation of fraud, then that action is taken.

Ms. Moorcroft:

I am trying to get the Minister to answer some questions relevant to his new initiative of hiring a private fraud investigator to work for his department. Are there any policies at all governing the actions of the new fraud investigator hired on contract by the Minister's department?

Hon. Mr. Phelps:

The policy with regard to the question the Member raised is the policy put in place by the previous administration. That policy is in existence.

With regard to the department taking action to cease payment of social assistance, that action continues to take place once the matter has been referred to the RCMP for investigation, as has been the case in the past.

Ms. Moorcroft:

What I would like to know is what the department's policy is. They have hired a new fraud investigator. When the fraud investigator is investigating a case, before it has gone to the RCMP, is the policy to cut the client off social assistance while the fraud investigator is conducting the investigation?

Hon. Mr. Phelps:

For the fifth or sixth time, no.

Question re: Social assistance, fraud investigations

Ms. Moorcroft:

I have another question for the same Minister. I have in my hand a social assistance newsletter that was sent out to clients in April, which invites voluntary disclosure to avoid possible prosecution.

I would like to ask the Minister how many people reported themselves during the amnesty period?

Hon. Mr. Phelps:

I will have to bring the exact number back to the Member.

Ms. Moorcroft:

I would like to ask the Minister how decisions are made about which cases are investigated. Will the Minister tell me what the policy is on that?

Hon. Mr. Phelps:

When information arises in various ways that leads the department to suspect fraud, then actions are taken to confirm that information. If the information leads to, and supports, the discovery of fraud by the client, at a certain point in time the matter is referred to the RCMP for investigation.

Ms. Moorcroft:

Perhaps the Minister can tell me then what the department's test is about whether a complaint is warranted. Does the department rely on anonymous tips? Is there any test to determine if a complaint may have been malicious or unfounded?

Hon. Mr. Phelps:

In the normal course of events there are, and always have been, a good number of anonymous tips phoned into the department. These tips are not ignored, but they are not, of themselves, grounds to bring the file to a stage where it would be referred to the RCMP.

There is follow up conducted, and if there appears to be substance to the information, the matter is investigated to a stage where a determination is made whether or not the file would be referred to the RCMP. Quite often that is not necessary and the facts may be such that it is an abuse of the system, but not necessarily fraud.

There has been a lot of abuse of the system over the years, as I am sure the Member is aware. I am sure that the Member would agree that we ought to take steps to ensure that the system is not abused.

Speaker:

Order. Would the Member please conclude his answer.

Hon. Mr. Phelps:

It remains as an all-important safety net, the payer of last resort.

Question re: Abattoir

Mr. Cable:

I have some questions for the Minister of Renewable Resources on the abattoir.

On February 17, 1994, the Minister wrote to me confirming his government's support in principle for the abattoir as it was then structured. Does the Minister's government still support, in principle, the construction of an abattoir in the Yukon Territory?

Hon. Mr. Brewster:

Yes.

Mr. Cable:

The next question I have is for the Minister of Community and Transportation Services.

I understand that the members of the cooperative that was set up to run the abattoir approached either the Minister or the Minister's officials with a view to obtaining a subdivision of a private parcel of farmland, and the Minister or his officials told these people that they could not do this because of the new Subdivision Act. Is this the message that was given to the agricultural cooperative by the government?

Hon. Mr. Fisher:

We had a meeting last week - either Thursday or Wednesday, I cannot remember which - with the cooperative. Essentially, the message I gave them was that under the current Subdivision Act and under the existing agriculture policy, the subdivision of private agricultural land would not be allowed. However, if a request for subdivision had gone in prior to the enactment of the Subdivision Act, then we would consider it. I found out subsequently that the request had gone in the form of a letter or a note, and it is currently with the Department of Justice to determine if it could be construed or, in fact, used as an application for subdivision.

Mr. Cable:

The Yukon Party's four-year plan sets out that, under the title of promoting agriculture, the government will provide land and other necessary infrastructure to promote Yukon agriculture. In the event that the Minister finds that the private land cannot be subdivided under the Subdivision Act as it now stands, will the Minister arrange for the turnover of Crown land to this cooperative for the purpose of setting up an abattoir?

Hon. Mr. Fisher:

Yes, the lands branch is investigating three or four different parcels of land, some of which are Crown land, and we could make one of those available to the Agricultural Association.

Question re: Teacher contract negotiations

Ms. Moorcroft:

Last week, the Minister responsible for the Public Service Commission assured the House that he, as Minister, was driving the bus in negotiations between the government and the Yukon Teachers Association. Can the Minister confirm for me that, as Minister, he is, for all intents and purposes, the senior manager of the Public Service Commission?

Hon. Mr. Nordling:

Yes.

Ms. Moorcroft:

Section 274 of the Education Act, subtitled "Prohibited Practices", states, "No person who is employed in a managerial capacity, whether or not acting on behalf of an employer or a school board, shall participate in, or interfere with, the administration of, or the representation by, the bargaining agent."

Does the Minister consider himself exempt from that section of the Education Act?

Hon. Mr. Nordling:

No.

Ms. Moorcroft:

In referring to the Minister's April 19 letter - which completely bypassed the Yukon Teachers Association

Page Number 2573

and went straight to teachers - I hope I am not being uncharitable by suggesting that some people might consider that letter an attempt to interfere with representation by the bargaining agent. Since the Minister has suggested that I be prepared to put my seat on the line, may I ask him if he is willing to put his new Cabinet position on the line, if he is found to have committed a prohibited practice under the Education Act.

Hon. Mr. Nordling:

I have explained several times in response to questions from the Leader of the Official Opposition that that letter was in response to letters that the teachers wrote me - it was in no way to bypass or interfere with the collective bargaining process that started on April 20.

Question re: Teacher contract negotiations

Ms. Moorcroft:

The Minister continues to waffle and nordle around this whole question. Perhaps it is simply his inexperience in labour management issues that is showing.

On April 18, the Minister wrote a letter to a Member of the House that says, among other things, "Had the government entered into collective bargaining with the reserved intention of legislating an agreement it could not obtain at the bargaining table, the government would indeed be opening itself to a charge of bad-faith bargaining." Is the Minister now telling the House that the talks the government entered into with the Yukon Teachers Association on April 20 were not collective bargaining?

Hon. Mr. Nordling:

No, I am not.

Ms. Moorcroft:

The Minister's letter later stated that the government had agreed to meet with the YTA outside the bargaining process. Presumably, on April 18, he understood the implications of the proposed legislation with which he and his colleagues were threatening the employees. Is the Minister then admitting that the government did not engage in collective bargaining with the YTA, even though the Education Act requires it to do so when requested by the bargaining agent?

Hon. Mr. Nordling:

No, I am not.

Ms. Moorcroft:

The most telling part of the Minister's letter of April 18 - not the one he sent to all teachers the next day - is where he talks about entering collective bargaining with the reserved intention of legislating an agreement. Here is the best part. The Minister wrote, "Such an option would be as unacceptable to the government as it would be to the Yukon Teachers Association since it would be treating the bargaining process as a sham".

My question to the Minister is very simple. In view of his refusal to remove the threat of legislation, and the fact that the budget tabled April 21 factors in both wage rollbacks and a wage freeze for government employees, is he not in fact treating the whole government bargaining process as a sham?

Hon. Mr. Nordling:

No.

Question re: Advertising policy of government

Mrs. Firth:

I want to follow up with the Government Leader with respect to the government having or not having an advertising policy.

On May 2, when we were discussing this issue, the Minister indicated to me that part of the mandate of the communications branch was also to deal with advertising, which includes negotiating fees with the various media outlets and generally putting out government propaganda. I want to ask the Minister, in light of his comment as to his not knowing whether or not he can bring this policy back this afternoon, is there a policy within the department that lays out what the current procedure is with respect to placing ads, negotiating fees and what types of circulars will be issued? Is there anything in writing in the department at present?

Hon. Mr. Ostashek:

I have not checked on it personally, but I would presume there are some guidelines.

Mrs. Firth:

I would have expected the Minister to know whether there were or not. I asked him why they made this major change in policy. He indicated to me it was because it was now part of the communications branch. This government would have had to consciously make a decision to move this from the Department of Government Services to the Executive Council Office. Now, the Government Leader cannot even tell me if there is a policy in place or not. He says he presumes so.

Has this government given any specific direction with respect to negotiating advertising fees with the newspapers? Who authorizes all the ads that go out? It looks to me like the Government Leader has just abdicated his responsibility. Who does it? Does Dale Drown look after all this, and is that why the Government Leader cannot answer the questions about whether there is a policy or guidelines in place?

Hon. Mr. Ostashek:

The Member opposite knows quite well that the person she mentioned is not responsible for that, and he never has been. I thought the Member would have received an answer to this by now, and I am sorry she has not. I will get it for her.

This reorganization took place over a year ago. It is not something I can immediately recollect, but I will get the information for the Member.

Mrs. Firth:

I am not asking the Minister to recollect what happened a year ago. I know the difficulty he has with his memory, so I would not put him in that position.

However, he stood up and said to me this afternoon that he did not know whether there could be a policy tabled or not, yet two weeks ago he stood up in the House and told me there was a policy in place.

The Government Leader cannot have it both ways. Could he come back to the House this afternoon and tell us whether or not there is a policy and, if there is, provide it to the House. If there is none, could he at least be honest and tell us they do not have a policy in place and perhaps misspoke himself, and thus clear the air?

Hon. Mr. Ostashek:

It is the Member opposite who has memory problems and a very convenient memory, who sometimes twists it to remember it the way she would like to remember things.

I gave the Member a fair answer. I told her I would get the information back to her. I am sorry she has not received it yet, but that is all I can do for her at this time.

Question re: Travel outside Yukon for Immigration purposes

Mr. Penikett:

In recent years, a number of situations have arisen where Yukoners have been obliged to travel outside the territory to appeal rulings of federal Immigration officials.

As a matter of policy, could the Minister of Justice indicate if he and his department approve of such a situation, which imposes financial and emotional hardships on some Yukon citizens, from time to time?

Hon. Mr. Phelps:

The position of this government is - and I am sure it was the position of the previous government - and will continue to be, that such hearings ought to be held in the Yukon.

Mr. Penikett:

I thank the Minister for his answer. Two of the Minister's constituents are currently embroiled in a protracted legal challenge of federal immigration regulations that prohibit same-sex-partners sponsorships. The pressure that this family has endured since 1991 has been exacerbated by Immigration Canada's refusal to hear their appeal in Whitehorse. I would like to ask if the Minister has considered making representations to the federal Minister of Immigration protesting this situation, which

Page Number 2574

discriminates against this family and other northerners.

Hon. Mr. Phelps:

I have not had that representation made to me by the individuals involved. I know that I did have a meeting set up, which they did not make. Certainly if the representation is made, we will be consistent with regard to our message on the issue of the venue of the hearing.

Mr. Penikett:

Perhaps the Minister would consider the representation from the Leader of the Opposition as sufficient for this purpose.

The British high court has previously recognized the Minister's constituents in this case as a family, for the purposes of child custody. As the Minister knows, the law of this territory prohibits discrimination on the basis of sexual orientation. I would like to ask if the Minister is prepared to indicate his support of his constituent and her children in the application for landed immigrant status.

Hon. Mr. Phelps:

The issues regarding what stance has been taken by other bodies is something I am really not up to speed on. Regarding whether, as Minister of Justice, it is appropriate to take a stand with regard to the actual merits of a specific case is something I would have to inquire about. It is certainly not my practice, as Minister of Justice, to be involved with regard to the court or hearing side of Justice issues.

Speaker:

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

ORDERS OF THE DAY

GOVERNMENT BILLS

Bill No. 33: Second Reading

Clerk:

Second reading, Bill No. 33, standing in the name of the Hon. Mr. Phillips.

Hon. Mr. Phillips:

I move that Bill No. 33, entitled An Act to Amend the Yukon Advisory Council on Women's Issues Act be now read a second time.

Speaker:

It has been moved by the Minister responsible for the Women's Directorate

THAT Bill No. 33, entitled An Act to Amend the Yukon Advisory Council on Women's Issues Act, be now read a second time.

Hon. Mr. Phillips:

I rise today for the second reading of Bill No. 33, An Act to Amend the Yukon Advisory Council on Women's Issues Act. The amendments that we have proposed are primarily housekeeping measures that will make the administration of this advisory body more consistent with the administration of other advisory bodies to government.

Firstly, I would like to emphasize that the role of the Advisory Council on Women's Issues is to be an advisory body to the government. As such, it will advise me in my role as Minister responsible for the status of women, on specific issues of concern to Yukon women.

These issues may be ones that the council brings forward to me, or issues that I refer to the council for its input.

The council may also make recommendations for research to be undertaken on specific issues of concern.

The amendments to this act have been recommended as a result of a review of all government boards and committees. This government conducted this review as one of a number of cost-efficiency exercises.

Upon closer examination of the Yukon Advisory Council on Women's Issues, it became apparent that this council had been administered in a way unlike other similar advisory bodies. The council received its funding in a lump sum as a grant, which is then required to be administered. To do this, the council rented office space and contracted a consultant to conduct five to 10 hours of business per week.

Other advisory bodies to the government, such as the Council on the Economy and the Environment and the Yukon Health and Social Services Council, do not receive their funding directly. These funds are administered through the Executive Council Office on a project-by-project basis, and the costs are paid directly by the departments.

It is also cost effective and a more consistent practice for the council's funding to be administered through the Women's Directorate.

In addition, the act specifies that at least six meetings be held each year. In the amendments we have proposed this will be changed to at least four meetings. This does not prevent the council from holding more than four meetings, but it also does not impose unrealistic expectations on the council by insisting on six meetings per year.

As a final cost-cutting measure, we have specified that the council encourage, rather than support, organizations and groups that promote the equality of women. The change clarifies the role of the council as an advisory body, rather than as an intermediary for the transfer of government funds from one non-profit organization or body to another.

I look forward to having the amendments proclaimed along with the act, and to appointing a full slate of members to this council. I believe the council has an important role to play in providing me, or any other Minister responsible for the Women's Directorate in future, with advice on issues of concern to Yukon women.

Ms. Moorcroft:

What I would like to know right off the bat is when this government is planning to proclaim the Yukon Advisory Council on Women's Issues Act, with or without the present amendments. I see a need for an advisory council on women's issues, to provide the link between Yukon women, women's organizations and the Government of Yukon. It would help Yukon women to address their needs to government and help the government to equitably represent women by providing advice, research, advocacy and completing projects. The need for a council as a body to act on behalf of Yukon women is increased by the fact that we have a government with no women at the Cabinet table and, indeed, no women in its caucus. In the last year and one-half, we have not seen any evidence of a serious commitment on the part of this government to women's equality.

Most provinces and the federal government have advisory councils. The Alberta advisory council works toward full and equal participation of women. Unfortunately, here in the Yukon, we have a government that defends its decision to remove women's groups such as the Yukon Status of Women Council, which advocates for women's equality, from bodies like the Yukon Council on the Economy and the Environment.

Other advisory councils across Canada have addressed such issues as employment equity, maintenance enforcement, midwifery, new reproductive technologies, child care, economic independence, minimum wage, breast cancer, barriers to equality, education for youth and adults, labour force development, legal advocacy, economic development and eliminating violence against women and children. These are only some of the areas where advisory councils have conducted research, completed projects and developed programs. All of these issues are critical to Yukon women.

The survey of Yukon women's concerns and priorities tells us that Yukon women want to attain the goal of equality. Real change in society is needed to accomplish this goal. Part of that change

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has to be more inclusive decision making. With an active, independent advisory council that promotes equality and justice, women's voices and women's needs will have a stronger presence. It benefits all of society by working toward a more equitable society.

The spirit of the amendments before us is the exact opposite of what I believe is needed. The proposed amendments will tighten the noose around the independence of the council, giving the government more control over its direction - a direction that is counterproductive to bettering the lives of women. As well, these amendments are contrary to what other jurisdictions are doing. The amendments pose a serious threat to all groups in the territory who have a mandate to better the lives and roles of women and children.

I would urge the Minister to re-examine the amendments proposed by his government. These amendments are not just housekeeping, although they are cost cutting.

The first amendment is to repeal the function of the council, in that council shall provide assistance, as the council considers appropriate, to organizations and groups that promote the equality of women. The amendment contained in the Yukon Party substitute act is that the council shall encourage organizations and groups that promote the equality of women. They are lessening the powers of the council.

The amendment is also to repeal the council's ability to obtain project or operating funding from government, or from private foundations or agencies. The Yukon Party amendment is to delete the expression "project or operating funding".

Do they want to ensure that the council does not function? Why do they want this change? All projects incur an operating cost. Without operating costs, there will be no projects; the council will not be able to do anything.

The real cost-cutting measure is that the council shall hold at least four - not six, as in the existing, unproclaimed act - meetings. The government is turning its cost-cutting scissors to the Advisory Council on Women's Issues.

The government wants to repeal the section that reads that "the council may contract for the provision of services for the conduct of the work of the council. The Minister may make contracts with the council." The amendment is that "The Minister may, on the recommendation of the council, enter into contracts for the conduct of research projects." This amendment, like all of the others, ensures that the council has less authority and freedom to operate. It means that the council will be working on an agenda determined by the government, rather than on its own agenda. Contrary to what the Minister said in his remarks, other councils do have the ability to provide for services through contracts.

This leads to the question of when the Act to Amend the Yukon Advisory Council on Women's Issues Act, like the advisory council act itself, will come into force. Do they really expect to proclaim this statute during their mandate? Will they appoint members to council who will all promote the equality of women? Does the Minister really support equality for women?

The Minister previously expressed displeasure at the contents of the Yukon Advisory Council on Women's Issues community newsletter on family violence, leading it to cease publication. The previous advisory council was not prepared to change its policy, which was to accept community submissions to the newsletter without censure.

The Minister is opening up this act for amendments because he wants to cut costs and to limit the ability to function. In the act as it reads, it states that the chair of the council will be appointed by the Minister. As the Minister of Education, he is considering amending the College Act to permit the college board to choose its own chair, I would think that the Yukon Advisory Council on Women's Issues should have the ability to select its own chair, as well.

The role of the chair is to work for the members, not the Minister, and to work toward improving the status of Yukon women. The imposition of the key position by the Minister jeopardizes the impartiality of the council. In Alberta, there is an advisory council that is an arm's-length advisory group, which works toward the full and equal participation of women in the province.

The amendments proposed by the Minister are directed at the Advisory Council on Women's Issues, but the consequences will be felt by our entire community. Issues addressed by the council pertain to women, and members work to better the position of Yukon women. I think that a council that works on employment equity, maintenance enforcement or eliminating violence can put out pertinent information and views that will contribute to our ever-changing society. This means that the society would change for the better, not only for women, but for our community at large. I am sure that the Minister is aware that by deleting project or operating funding, he is essentially cutting all possible women's programs. Administration costs not covered by funding agencies cause the death of vital programming. I request that the Minister take another look at these amendments and come back with something that will not only please the feminists who stand and lobby for equality for women, but that will, in fact, benefit the community at large.

Speaker:

If the Member now speaks, he will close debate. Does any other Member wish to be heard?

Mr. Penikett:

I move that the Leader of the Liberal Party now be heard.

Hon. Mr. Phillips:

I will be brief in responding to the Member opposite. The Member said it is even more important to get this act in place now because of the fact that there are no women in our Cabinet. I think that, even though there are no women in our Cabinet, it is important to get this in place so we can have an advisory body. However, I am a bit confused by the Member opposite's comments urging us to get it in place as quickly as possible, then telling this House that she cannot support any amendments in the act. Obviously, she thinks it is important to get it in place, but she is not going to support the act, because she cannot support the amendments.

I do not believe we will be changing the amendments as put forward. The whole purpose of putting this forward is to make this an advisory body to the Minister, not an independent group, doing its own thing - another organization, so to speak. The function of this body is strictly to advise the Minister on women's issues, and that is the main reason for this group.

The Member mentioned the various issues this body could address. I can tell the Member that, over the past one and one-half years, we have addressed many of those issues in a very comprehensive way. I am hearing many positive comments from women's groups out there, which are talking about the outstanding work and cooperation they are getting from the Women's Directorate in coordinating their events and projects.

The Member also mentioned she had a concern that they would not receive operation and maintenance costs for their organization. They will receive some operating monies for projects, and I stated that in my opening address. It will be based on a project-by-project basis. If there is some operating money involved in the operation and maintenance of the project, they will receive it, but it has to be based on a project, and is not just to run an office from day to day. There are other groups doing that at the present time.

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With respect to the appointment of a chair, that is an amendment that is not in the act, but it is an interesting concept the previous government did not want to put forward in their proposal for the advisory body. It is a reversal of opinion from the NDP's previous proposal. I will certainly have a look at it. It is an interesting concept, although to compare this advisory body to the Minister to the college board, which is an independent and autonomous body, is perhaps a bit unfair. There is quite a bit of difference between the role the college board plays and that of an advisory body to the Minister.

As far as women who will sit on this advisory board, we will be soliciting names from women all across the territory, native and non-native, from groups and organizations, as well as individuals.

The Member was also concerned about when we would proclaim this act. If the Member wants to give it speedy passage in the House, I am prepared to send letters out and advertise for people who wish to put their names forward to sit on this advisory body as soon as possible and, within a month or two, we may have the advisory body up and running, the act proclaimed, and have an advisory council on women's issues established.

That is the time line I am looking at. Summer always interferes with these things but, by early September, we could have the nominations out, received, appointments made and the body up and running.

Motion for second reading of Bill No. 33 agreed to

Bill No. 50: Second Reading

Clerk:

Second reading, Bill No. 50, standing in the name of the Hon. Mr. Fisher.

Hon. Mr. Fisher:

I move that Bill No. 50, entitled An Act to Amend the Municipal Act (No. 2), be now read a second time.

Speaker:

It has been moved by the Minister of Community and Transportation Services that Bill No. 50, entitled An Act to Amend the Municipal Act (No. 2), be now read a second time.

Hon. Mr. Fisher:

Changes to the Municipal Act are being proposed to provide more discretionary power to local governments, and to clarify and simplify the administration of municipal elections.

Amendments to part 3 of the Municipal Act, the section dealing with elections, have been introduced in response to requests from the Association of Yukon Communities.

As early as 1987, it was recognized by the Association of Yukon Communities and department staff that changes were needed to reduce confusion and to clarify some provisions, particularly references to time.

In 1990, the elections office completed a detailed report, the Waugh Report, that also recommended several revisions to the act. Fortunately, the way the days fell in the 1991 calendar year, an extra week was created in the legislative municipal election process that made the 1991 election schedule workable under the current provisions of the Municipal Act. Typically, that is not the case, and revisions to the act are now required to improve the municipal election process that is scheduled for the fall of 1994.

A legislation review committee comprised of Association of Yukon Community representatives, municipal representatives and Yukon government staff members was formed to review existing legislation and recommend changes. This process included consultation with the elections office and the Department of Justice, as well as a review of all related Association of Yukon Community resolutions.

All municipalities were provided opportunities to review and comment on proposed changes. The proposed package of provisions was presented to the Association of Yukon Communities at their general meeting in September of 1993, and again at their annual general meeting in March of 1994. The provisions were approved by them with few additional changes.

An invitation was also extended to the public to review and submit questions and comments; however, none were received.

This process resulted in the report on municipal election provisions, which proposes over 20 changes to the Municipal Act. As I mentioned earlier, some of the revisions clarify references to time. Current references to time are difficult to interpret and create a very constricted schedule. Dates will now be specified for required actions leading up to polling day rather than having to count days as the current legislation requires. Some amendments bring the Municipal Act into conformity with other legislation for instance, offences and penalties will be consistent with the Summary Convictions Act and the revised age of electors to age 18 will be consistent with federal and territorial election requirements.

Many of the changes were proposed to improve existing provisions of the act or to specify procedures in areas where the Municipal Act has been silent. Improvements to existing procedure include options for posting of notice, criteria for rejection of ballots, and clarification respecting access to and retention of election documents.

New sections will be introduced concerning political leave, nomination dates following death of a candidate, and the requirements for council to make reasonable efforts to have the polling station accessible to electors who are physically incapacitated.

Throughout the changed sections, attention has been paid to simplifying the language of the act using gender-neutral language and correcting mistakes such as typographical errors.

Most importantly, a number of the proposed changes were designed to provide municipalities with greater discretionary power over election procedures at the local level. Several sections introduce options that allow municipalities to decide, for instance, how many people may constitute a board of revision, what hours the board of revision will sit, whether to establish a mobile poll, whether to use a sworn statement or a declaration at the polls, and options regarding advance polls.

Another amendment deals with the voter list. This revision gives municipalities the option of retaining or eliminating the list of electors. In lieu of the voter list, voters could be registered at the polls. Both Alberta and British Columbia have introduced this option and have since completed successful elections. Smaller municipalities in particular will benefit from this savings in terms of both time and money.

I would point out that, over the next few years, the entire Municipal Act is scheduled for review. However, in order to address municipalities' needs in time for the 1994 municipal election, I felt it was necessary to bring forward amendments to the elections section of the act at this time. I will be bringing other Municipal Act matters before the House in future sessions.

In general, these revisions to the Municipal Act simplify and clarify the election process for municipalities, and devolve some decision-making authority to the level of government directly affected by the legislation. This means that our goal of good, commonsense government is supported at both the territorial and municipal levels.

Ms. Moorcroft:

Our caucus fully supports moving the date of elections forward to October, which ensures that elections will not conflict with the November 11 statutory holiday. That also provides for early elections when the weather is more likely to be pleasant, which makes it possible to have increased voter turn-out.

In general, there are a number of amendments here that we support. We support lowering the voting age to 18, which is consistent with federal and territorial legislation. In addition, I support political leave for municipal officers and employees.

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Section 34.1 allows municipal employees to run for council without having to first resign from their position. The amendment reads that the political leave ends at the official declaration of election. However, during the briefing I was provided with, I suggested that municipal employees be allowed 48 hours from official declaration of the election to resign or return to work. I think the logic in this is obvious. After an election campaign, we can surely agree to allow a two-day breathing space for candidates, whether they were successful or not.

In the amendment on the mobile poll, section 42.2 says that the council shall make all reasonable efforts to select places accessible to electors who are physically incapacitated. The Yukon Human Rights Act says there is a duty to provide that, and citizens with physical disabilities want to vote, just like everyone else. The department assured me that this section complies with the Human Rights Act, but I do not like to see language that implies that giving it the old college try is good enough.

I have strong opposition to new section 50.1, which allows a municipality to dispense with the requirement of a list of electors for an election. Why is this government blindly accepting the preference for municipal discretion on this issue? I have observed that the Minister is willing to accede to municipalities' requests. For example, in Dawson City, the boundary expansion took place irrespective of the Dawson First Nations' stated request to finish land selections first, and despite an almost certain effect on self-government rights. Dawson City rezoning in the Callison area, prior to amending the official community plan, also took place, and that was before completing a zoning exercise in the area encompassed by the boundary expansion.

I think that it is important that the Minister and the territorial government provide some direction. When it comes to elections, a voter list is the most important document, whether the elections are municipal, federal, or territorial. A good current enumeration makes polling day easier. If lists are current, we are more likely to have a higher voter turn-out. Enumerators are good public relations people for elections.

This act also reduces the number of public locations to post elector lists, reduces the required hours of sitting for a board of revision and eliminates the need to publish revision hearing dates in the newspaper. Is it a general trend for municipal elections to be less in the public eye?

Enumerators reach people who may not read newspapers or read voter lists posted in public locations. Enumeration is a fundamental tenet of democracy. It increases voter registration. Accurate, current voter lists increase voter turn-out. Higher voter turn-out ensures better elections. Elimination of enumeration is a serious concern to us. We want to raise voter participation, not lower it.

In this case, eliminating the requirement for the voter list is also opposed by the Department of Justice and the Chief Electoral Officer's office. Justice feels that the voter list is an accepted method of notifying voters of their right to vote. The elections office expresses the strong belief that voter lists are critical to the efficient conduct of elections. Voter lists also make it more likely that tenants of rental properties and relatively new electors know about elections, and are thus more likely to vote. Voter lists make it possible for candidates to effectively campaign door to door.

I do not believe that real Yukoners are only those who have lived here for more than 10 years. All residents should be encouraged to vote and enumeration means that all, or most residents, will be aware of upcoming elections.

Most jurisdictions are looking for ways to increase voter registration, not eliminate it. For example, in B.C., they have undertaken a continuous computerized voter list. However, people may try to avoid computerized voter lists if they are trying to avoid prosecutions or maintenance enforcement orders. The department has estimated that smaller municipalities spend $4,000 to $5,000 per election. The City of Whitehorse's last enumeration cost $17,000. I think that when one compares that to the high annual city budget, one has to ask "what price, democracy?"

I do not agree with the Minister that swearing in at the polls is good enough. Since we are opening up the Municipal Act, I agree that we need to look at the roles of mayors and councils and a ward system. Unfortunately, the Minister's changes are going in the wrong direction here. The amendment that a ward system be changed to require candidates to reside in the ward is a sure way of preventing a ward system from ever coming into being. Rather than limit representatives to residents, anyone who is willing to take on the responsibility of representing a ward should be eligible to do so. A former Wolf Creek resident might be living in Hillcrest during the time of an election call, but be well versed in Wolf Creek issues and respected by former Wolf Creek neighbours. Limiting the pool of candidates to those who have been a resident of the ward for one year prior to the election may leave a pretty small pool to draw good candidates from.

Wolf Creek, Pineridge and Mary Lake residents in Mount Lorne and McPherson residents in Laberge have eloquently expressed concerns related to paying the same level of municipal taxes while receiving fewer municipal services, the incompatibility of industrial zoning in country residential neighbourhoods and the lack of effective representation on city council. These residents may want to go to a ward system. We are not looking at improving ward representation, though. We are looking at worsening it.

There are a number of amendments here that we do support. We support the system of making penalties consistent with the Summary Convictions Act, but I have also outlined some concerns that we will be addressing in Committee.

Speaker:

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

Hon. Mr. Fisher:

I would just like to point out a couple of inconsistencies in the Member opposite's observations: there is no need for an enumeration under the existing Municipal Act - the one that is currently in force. A lot of the smaller municipalities do not provide for an enumeration.

Also, municipalities have a choice as to whether or not they have an enumeration and a list of electors. In British Columbia, there is no voter list, contrary to the observation of the Member opposite.

Motion for second reading of Bill No. 50 agreed to

Bill No. 26: Second Reading

Clerk:

Second reading, Bill No. 26, standing in the name of the Hon. Mr. Nordling.

Hon. Mr. Nordling:

I move that Bill No. 26, entitled An Act to Amend the Public Printing Act, be now read a second time.

Speaker:

It has been moved by the Minister of Government Services that Bill No. 26, entitled An Act to Amend the Public Printing Act, be now read a second time.

Hon. Mr. Nordling:

The Public Printing Act does not currently contain a specific section that permits the making of regulations for carrying out the purposes and provisions of the act. This amendment does that. The intention is that we would make regulations that would set prices for the documents that are printed by the Queen's Printer. We presently charge a fee for publications that are printed by the Queen's Printer, but the authority for that is currently based on a number of different orders-in-council.

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It would be more appropriate for the fees to be prescribed by regulation, pursuant to the act.

Motion for second reading of Bill No. 50 agreed to

Bill No. 60: Second Reading

Clerk:

Second reading, Bill No. 60, standing in the name of the Hon. Mr. Phelps.

Hon. Mr. Phelps:

I move that Bill No. 60, entitled Miscellaneous Statute Law Amendment Act, 1994, be now read a second time.

Speaker:

It has been moved by the Minister of Justice that Bill No. 60, entitled Miscellaneous Statute Law Amendment Act, 1994, be now read a second time.

Hon. Mr. Phelps:

This bill amends two pieces of legislation: the Education Act and the Vital Statistics Act. The amendments to the Education Act were requested by the registrar of teacher certification in the Department of Education and, as stated in the explanatory note, is required to ensure that teaching certificates are not confused with certificates of qualifications for salary purposes. This amendment will clarify that it is the Teacher Certification Board that issues teaching certificates and the Teacher Qualification Board that deals with qualifying teachers for salary purposes. The Teacher Certification Board, which includes two representatives from the Yukon Teachers Association, has been consulted regarding the changes and has raised no objections.

The amendment to the Vital Statistics Act allows for the appointment of more than one deputy registrar. This amendment was requested by the Department of Health and Social Services to permit them to appoint two deputy registrars, one of whom is the French language services health service agent, and it will facilitate the offering of French language services for vital statistics duties.

I am sure Members opposite will agree that the administrative amendments to these acts are both necessary and non-substantive.

Motion for second reading of Bill No. 60 agreed to

Bill No. 75: Second Reading

Clerk:

Second reading, Bill No. 75, standing in the name of the Hon. Mr. Phelps.

Hon. Mr. Phelps:

I move that Bill No. 75, entitled An Act to Amend the Coroners Act, be now read a second time.

Speaker:

It has been moved by the Minister of Justice that Bill No. 75, entitled An Act to Amend the Coroners Act, be now read a second time.

Hon. Mr. Phelps:

This bill amends section 6(1) at 9.1 of the Coroners Act and provides for more practical and appropriate wording.

The Yukon coroner service recently completed a comprehensive review of the program. This review looked at all existing policies and procedures, as well as the current legislative framework. One result of the review has been the development of policies that recognize the unique needs of Yukoners and the legislative requirements of the coroner service. The policy development was done in consultation with individuals and groups directly involved in death investigations and included physicians, nurses, health care administrators and the RCMP.

The revisions eliminate unnecessary and unreasonable involvement by the coroner service in situations that are more appropriately handled by attending medical professionals.

In keeping with accepted practice in all jurisdictions in Canada, the activities of the coroner service have now been limited to the investigation of unexplained, unexpected and unnatural deaths.

This has eliminated the need to report deaths that have occurred at home or in health care settings, where the death is natural and expected, and where the deceased was in the care of a physician. This has resulted in a decrease in the number of cases handled by the coroner service and a reduction in trauma and upset for family members.

These changes leave the coroner service free to focus on the investigation of unexplained, unexpected and unnatural deaths, and on the implementation of recommendations to prevent future loss of life.

The review included an examination of the legislative framework and revealed an obvious need to amend the Coroners Act to reflect the changes that have evolved over the years and become accepted, normal practice. These changes evolved for practical reasons to meet the unique requirements of the Yukon.

The amendments that we are proposing bring the legislation into harmony with current practice in the Yukon.

The first change is to section 6(1) of the Coroners Act. This section states that, if it is justified by the nature of the death, the coroner shall take possession of the body and shall view the body. The change being proposed will allow the coroner to designate someone to take possession of the body and to view the body. In practice, this is most often an RCMP officer.

The second change is to section 9(1). This section states that, where a coroner determines that a person's death was due to misadventure, violence or other cause, then an inquest shall be held.

When the current legislation was enacted, the practice in Yukon and most jurisdictions in Canada was to convene an inquest at the death scene by some four to six community members to act as jurors. These people would view the body and the circumstances surrounding the death. The inquest would then be adjourned until an autopsy and investigation was completed, then re-convened with the same coroner and jury to finalize the process. This process proved to be impractical, unnecessary, time-consuming and costly, and it resulted in jury and family members being subjected to further unnecessary and prolonged trauma.

The procedure has been changed, both in the Yukon as well as in other Canadian jurisdictions, so that an inquest is called only after completion of the investigation, and only in special circumstances. Those circumstances are the following: where there may be a need to address unanswered questions surrounding a death; where there may be a need to bring the facts to the public's attention; where there is a statutory requirement to do so, for example, a death that occurs while in custody of a police officer or while in jail; and where there is a need to examine the circumstances of the death and make recommendations concerning the prevention of similar deaths.

The second amendment proposed changes the phrase "shall hold an inquest" to "may hold an inquest". This will allow the coroner to determine. on a case-by-case basis, if an inquest should be held. In cases where an inquest is not held, the coroner service will issue a judgment of inquiry. A judgment of inquiry provides a public record of the circumstances surrounding the death, the cause of death and, in most cases, recommendations for prevention.

We feel that this will provide a more immediate and effective way of reporting to the Yukon public.

The proposed amendments will not affect the mandate of the coroner service to investigate deaths. The changes will bring the legislation into harmony with current practice, and will enable the services to provide a more effective and rational service to Yukon citizens.

Mr. Penikett:

On behalf of the Official Opposition critic in

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this area, I would note that, at this stage, we are generally supportive of the amendments. We do, however, have a couple of questions about the identification of designates and the training of same that we may want to put to the Minister in Committee.

In general, we would concur with the observations of the Minister that these may be timely and appropriate amendments.

Motion for second reading of Bill No. 75 agreed to

Bill No. 80: Second Reading

Clerk:

Second reading, Bill No. 80, standing in the name of the Hon. Mr. Phelps.

Hon. Mr. Phelps:

I move that Bill No. 80, entitled An Act to Amend the Pharmacists Act, be now read a second time.

Speaker:

It has been moved by the Minister of Justice that Bill No. 80, entitled An Act to Amend the Pharmacists Act, be now read a second time.

Hon. Mr. Phelps:

The proposed amendment will repeal section 6 of the Pharmacists Act. Section 6 of the act allows the Executive Council Member to issue special permits to practice the profession of pharmacists in Yukon and to establish fees and conditions for that purpose.

The purpose of section 6 is to allow a permit to be issued to a person who meets the qualifications set out, but who does not have the right to practise the profession of a pharmacist in any province in Canada, and who is not a member of the Canadian Pharmaceutical Association. This meant that a permit could be issued to pharmacists who were trained outside of Canada, but who were not licensed or do not qualify to be licensed in other Canadian jurisdictions.

The wording of section 6 is somewhat ambiguous, and resulted in a request from pharmacists that they be licensed by special permit, even though they are currently license, or are eligible to be licensed, in another province. This amendment repeals the section allowing special permits to be issued.

The Pharmacy Society of Yukon, which is the professional association that pharmacists belong to, has been advised of the amendment repealing the ability to issue special permits and agrees with the change. My department is working with the pharmacists association on a review of the entire Pharmacists Act. This project is ongoing and is likely to result in further amendments being requested to this body at a future legislative session.

Mr. Penikett:

I understand that, next to the budget, this is the most substantive and most important piece of legislation that the government has brought forth in this session. It is an extremely complex and important issue. Nonetheless, I would compliment the Minister on the plain English contained in this legislation. The fact that these difficult and important principles have been expressed in no more than 13 words is thoroughly commendable.

Motion for second reading of Bill No. 80 agreed to

Hon. Mr. Phillips:

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

Speaker:

It has been moved by the 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. Are we prepared to take a brief recess at this time?

Some Hon. Members:

Agreed.

Chair:

We will take a brief recess.

Recess

Chair:

I will now call Committee of the Whole to order. We are dealing with Bill No. 15, entitled Second Appropriation Act, 1994-95.

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

Department of Economic Development - continued

Mr. McDonald:

I started each of the afternoons with the statement that I have a few questions, not realizing that the few questions turn into an afternoon, and sometimes an evening. Today I have a few questions. Some of them are actually just a wrap-up from previous days. I will try to keep the questions fairly short at this point.

The first one I have relates to the economic development officers funded under the Canada/Yukon economic development agreement. What I would like to ask the Minister - to finish this subject that we left on last Thursday - is whether or not bands and municipalities, who have not yet developed an economic plan, can seek funding under the planning section to apply for an economic development officer position, or economic development officers to develop those plans and to proceed with economic development in their districts.

Hon. Mr. Ostashek:

Yes, they can apply. From the checking I have done, I believe all the bands have developed an economic plan. The next step in the process is projects to implement that plan. If there is someone out there - a municipality or band - that does not have an economic development plan, they are certainly free to apply and be considered for funding for an EDO.

Mr. McDonald:

That is fine.

I would like to ask the Minister another question that was raised on Thursday about loan funding and the government's plans to proceed with loan funding. In anticipation of any discussions we may have in the future about the efficacy of loan funding, loan guarantees or any government intervention at all in the marketplace, I would like to ask the Minister if he could come back with a record of loan write-offs that have taken place over the time that we have had the small business incentive loan, the business development fund and all the other loans programs that the government has been associated with - including the Canada/Yukon loans programs - from the late 1970s to the present. This would be useful to determine the success rate of those loans with respect to repayment and the percentage of those loan programs that were considered, ultimately, a write-off. Can he come back with that information?

Hon. Mr. Ostashek:

We certainly can do it, and we will do it for the Member opposite, but it is not something I can get him in a couple of days. It will take some research, which will probably be a useful exercise for ourselves as well. There have been many, many programs, some of which are no longer in effect, on which there were a lot of write-offs. We will try to get that together. At some point, I will get a copy to the Member opposite.

Mr. McDonald:

I do not necessarily have to have the information until we start seeing a change in government policy, because the Minister has already signalled that there will be a change, or may be a change, and when the change starts taking place we will obviously want to discuss it, and we will want the information when that time comes.

I would like to ask the Minister briefly about a proposal that

Page Number 2580

had been promoted by the Whitehorse Chamber of Commerce some years ago, called a business incubator. This was a service they wanted government and commercial enterprises to support to help fledgling small businesses with their operations, in terms of providing advice and providing whatever other supports a small business in its first or second year of operation may require in order Ito survive. There was a recognition at the time that the failure rate of small businesses was fairly high in their first years, particularly when people are attempting to be entrepreneurial but simply do not have the skill levels or the experience to make a success of it.

Accordingly, the Whitehorse Chamber of Commerce was promoting a concept of a business incubator, and I would like to know the government's position on that.

Hon. Mr. Ostashek:

It may be an idea that merits further exploration. I think that I would first want to look at everything that is available to small businesses before putting another process in place. If there is a gap somewhere that is not filled, I believe something like that would probably warrant further investigation.

Neither of the chambers of commerce have approached me with that concept yet, but I would certainly be open to reviewing it.

Mr. McDonald:

That is fine. When I was the Minister, there was no end to the ideas coming from the Whitehorse Chamber of Commerce as to how the government could spend money to help small business, and those ideas came forward under a budget that was even smaller than this one. Perhaps I was an accommodating kind of guy at the time that made them dream up all of these brilliant schemes.

I would ask the Minister about the role of the business development office. Briefly, does the Minister believe that the business development office and the officers are to be pro-active in their support for small business? Do they help guide small business proponents through the process? Do they help them with their business plan? Or does the government simply accept applications for loan funding and then process the applications? What is the role of the business development officer?

Hon. Mr. Ostashek:

That is one of the reasons why I have undertaken a review of the whole department, to get a better understanding of whether we are getting value for dollar for the services being provided, what services are required by the business community and if we can do a better job in re-aligning services.

It is my understanding that the role of the officers now is to help people in business come up with business plans, work on them, and assist them with the difficult parts where there may not be a clear understanding by the applicant. I think the officers have done that in quite a few instances, and I believe that is one of their roles.

Mr. McDonald:

Is the Minister saying that, irrespective of any responsibility the business development office undertakes with respect to providing loan funding, loan guarantees, or any financial support for small business in the economy, philosophically he believes the business development officer should be available to support small business proponents by providing advice on how to step through the regulatory hoop, as well as on how to better put together a business plan so that it actually has a chance of success?

Hon. Mr. Ostashek:

If we are talking philosophically, I believe that should be the role of the business development office. From my years in business in the private sector, and in being associated with other businesses and talking with other business people, that seems to be the area that causes the greatest difficulty for fledgling businesses that want to expand, in some cases, a lot quicker than they should - not having a well-developed business plan or financial plan and not having certain and positive cashflow projections.

The fault I have seen with small businesses - and some I have embarked on myself - is one tends to be overly optimistic about cashflow and the ability to handle a debt load. Sometimes, one has to be brought back down to earth to face reality. This is where business development officers can be of great assistance to businesses - looking at a business plan unemotionally, in a very deliberate way, to make sure they feel comfortable with what the applicant is putting together. If they are uncomfortable, they could make suggestions on how to improve it.

One of the weaknesses, and something we may want to look at expanding through some other program at the college, is how to develop business plans, for the small entrepreneur. They do not have the resources available to them that larger corporations do for developing plans. If you do not have a good plan, you are going to be hard-pressed to be successful in your business, unless you are very lucky.

Mr. McDonald:

I guess on that point in particular, we agree - in terms of the role of the business development officer. I might also make the obvious observation that without a comprehensive economic planning process for the Department of Economic Development, the chance of success for the government is somewhat limited. But, I think we agree on this point, so I will leave that for the moment.

I have a few other small points to bring up and I will raise them now. The Minister might remember that in December and January of this year, there was some disagreement in this Legislature about whether or not a particular economic forecast ought to be made public. There was some discussion at the time as to whether or not the department would continue drafting economic forecasts and making those public in the future. Is the Minister of the view that the department has a role to play in doing economic forecasting and ultimately making that generally available to the public so that everyone can see? If he does believe that, is he also of the belief that this forecasting should be done without the overlay of a political agenda attached?

Hon. Mr. Ostashek:

If we go back to the debate last fall, it was not a political overlay that was my concern. I have no problems with numbers. I do not want to go back through that whole debate again, but I made it very clear at that time that when I found out that banks were asking for these forecasts and possibly basing their decisions on whether or not to approve a loan, I was very, very concerned with the type of information that was going out. I believe if the Member opposite has had time to review the economic forecast that went out last December, he would see that some of our fears were not exaggerated, and, in fact, our concerns have proven to be very substantial. Right now, the department is working on a review of that. I made a statement at that time that there would be no more economic forecasts released until there were some proper checks and balances put in and we had time for an independent person - and I am not talking about in the political office, but someone somewhere in the system - to analyze the figures that were put out, and we are working on that. When we feel comfortable that we have a process in place that will cover those concerns, I will be quite happy to make economic forecasts available to the public again, but I just wanted to reiterate that I certainly have some great concerns, and those arose from the fact that I found out that the banks were asking for these economic forecasts. I believe when financial institutions are putting some faith in the forecasts that are being put out by Economic Development, we have to do everything within our power to ensure that these forecasts are based on the best information possible at the time.

Mr. McDonald:

I do not think there is any dispute that the reports should be done professionally and should be based on the

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best information that is available at the time. The issue is, on whose opinion is the assessment made that the report is done professionally and properly. The concern that I have is that when there is an obvious political agenda to pursue - and in some cases it may involve producing reports that are more optimistic than is justified - clearly the reliability of the reports comes into question, and the usefulness of the whole process is called into question.

The Minister will know that at the federal level there are a number of organizations that are arm's length from government departments that have in the past performed economic forecasting. For example, the Economic Council of Canada - I do not know if that organization still exists - and the Conference Board both undertake some forecasting activity. There is a sense of independence of government operations from the political arm associated with their conclusions.

What I would like to ask the Minister is what reassurances he can give us that, in the absence of independent, third-party analysis, quietly and behind the scenes, and perhaps never to be detected, there is not a quiet manipulation of the report to keep the conclusions consistent with a political agenda. What can the Minister tell us that would reassure us that numbers, and not politics, are driving the forecasting?

Hon. Mr. Ostashek:

I can tell the Member opposite that is not my agenda. Whether he accepts that or not is another thing. I do strongly believe that I have to have confidence in the numbers put out - whether they are good or bad is not the issue here. I have to have confidence in the numbers and feel comfortable when debating them, whether defending them or making comments on them. I have to feel comfortable when I know that the financial institutions are basing loan decisions on the numbers. I do not believe we can go on with having economic forecasts issued that are the opinions of one or two people. There has to be more input than that. That is the review that is taking place right now. When that is completed, and a new process is put in place, I would be happy to inform the Member opposite about the process.

Mr. McDonald:

I think the obvious point to make is that not only does the Government Leader need to have confidence in the numbers that are being produced and how they are interpreted, but so do we. Also, so do the banks and everyone else who uses that information for some economic purpose.

I do not normally express a concern about politicians being political, because that is their job, but I do have a concern when the politicians have control over certain kinds of information and choose to decide how that information is to be interpreted. Clearly, that suggests that the exercise is less reliable and perhaps more political than one would want, under the circumstances.

In our small jurisdiction, we do not have all the tools at our fingertips and organizations that we can run information past in order to get an independent analysis done for us, either in the private or public sectors. At the same time, we have to be reasonably certain that the information we do get is reliable.

That is the reason for the questions in December or January to the Government Leader about the reliability of the statistics coming from the Bureau of Statistics. The Minister assured us, at that time, that he would not touch that information or edit it, and, consequently, should not feel justified in having to defend it. It was information produced by professionals we hired and it was their unvarnished opinion about what was happening. We took it precisely as that - their unvarnished opinion - based on their own analysis of the information they were receiving. It does not mean that their assessment is flawless or faultless, but it does suggest that we can have some confidence that it at least lacks the biases that we, as politicians, have when we enter this Legislature.

I was very reassured by the Minister's comments at the time about the statistical information. I would like to know more about the sort of checks and balances that the Minister would want to put in place to ensure the same amount of reliability about the economic forecasting that he will be promoting. I do not think that the Minister should feel that the economists in his department are involved in a review of the economy, that he somehow has to defend their interpretation of events or what is to happen. That would defeat the whole purpose of having this unbiased forecasting process.

If the Minister feels that the process should be as professional and sound as one could get in the Yukon, I would support that objective.

Ultimately, there will be a need for some reassurance for all of us that the information that comes out is not politically biased, one way or another, by the Minister or anybody else. Otherwise, there is no point in this process and the suspicion would be that the economic forecast is simply the assessment of the political arm of government about what is going to happen. That creates a need for independent forecasting.

Can the Minister tell us when he is going to be coming to some conclusions about the new process he is promoting for undertaking forecasting? Can he also tell us more about what he would do to reassure people who may be suspicious and cynical about how the Minister is going to ensure that the political agenda is not going to get in the way?

Hon. Mr. Ostashek:

The Member opposite and I have the same line of thought on this. I believe that if we are going to issue statistics, they have to be numbers that are being arrived at without political interference, if banks or financial institutions are to base loan decisions on the numbers. I also believe that we cannot have numbers that are issued by one or two people with their editorial comment included; we have to have a system that is beyond reproach, or there is simply no reason to issue a forecast.

That is the process we have embarked on now; the whole process is under review. I cannot add much to it at this time, but I will when the review is finished. If we have a process in place that we feel can issue statistics that are beyond being questioned as political interference and will be of some use to the business community in the Yukon, we will proceed with it.

Having said that, we have the Bureau of Statistics now putting out statistics on a regular basis. It has a pretty good track record of no political interference.

I am looking for some way of utilizing a lot of that information and seeing some checks and balances in place so that people - not only myself but all Yukoners - can feel comfortable that the numbers are totally unbiased and that the forecast is based on the best information available to the people who are putting the forecast together.

When we have that in place, I will be making it available to the public.

Mr. McDonald:

We will wait for the conclusions and I am sure that we will have an opportunity to discuss those conclusions when the Minister makes his intentions clearer.

I would like to move to the issue of job statistics. The Minister will remember that I asked him questions in the Executive Council Office about the employment statistics that that department had been producing. My concern was that the statistics did not appear to conform with the claim of there being 1,000 more jobs. Can the Minister provide us with an update of that information, because I think this will probably be our last opportunity to discuss it?

I am really quite interested in how the Minister is reading the statistical analysis that is being produced by the government, so that we all know whether or not we are dealing with the same information and interpreting that information properly.

Hon. Mr. Ostashek:

Based on the employment statistics for

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the month of April, there are now 1,300 more jobs in the Yukon than there were in April of 1992.

Now, the Member can question the validity of these statistics, but I suggest to the Member opposite that we have been following these statistics since 1991 or 1992. There may be inconsistencies in the statistics, but they are being calculated in the same manner from month to month and year to year.

While we may not have the statistics down to the exact 10 jobs, or the exact one job, it does give a clear indication of what is happening out there with jobs. I think that is the real message that we are looking for in these statistics. It is not whether there are 1,900 people unemployed or 2,000 unemployed; it is the direction that things are moving and what is happening. That trend is probably more useful to all of us than debating whether or not the figure of 1,900 unemployed is accurate, or is 2,000 accurate.

The numbers are consistent from month to month. The same process is used to gather and analyze the information and reports are put out in the same manner, so I feel quite comfortable using those figures in that manner.

Mr. McDonald:

I am using the same information that the Minister is using, because we both receive the same report. I am sure that this report is given to anybody who asks for the report.

The report that I am holding in my hand right now is entitled Yukon Employment April 1994. I guess that these are the most recent figures.

Clearly, the problem - and this is made obvious in this report and in the other information that the Bureau of Statistics has produced - is that when one makes an analysis on a month-by-month basis, then the room for statistical error is increased and the chances of monthly anomalies taking place are more pronounced, so the branch provides annual figures as well, which provide an analysis from one year to the next.

If one turns over the sheet that we have before us to page 2 and reads the first section entitled, "Monthly and Annual Employment Figures for Canada and the Yukon" and looks down to the category of Yukon's labour force category, the employed category and the unemployed category, and the unemployment rate, one sees that, from 1992 to 1993, the average annual increase has gone from 12,292 employed in 1992 to 12,392 employed in 1993. That is an increase of 100 jobs.

The unemployed have increased from an average of 1,400 to 1,900. That is an increase of about 500 unemployed.

When the Minister is making reference to the increase in employment and, particularly, to the statistical validity of his claim, he will see that the average for the year seems to increase by 100 jobs and, when one looks at the average so far for January, February, March and April 1994, we are not very far off the 1993 levels.

Given those numbers, how can the Minister justify the better-than-1,000-job increase he says exists?

Hon. Mr. Ostashek:

We can sit here and pick apples and oranges. We went through this debate 100 times since we have been here. The Member opposite wants to put the dimmest picture he can on the employment figures. If you look at the Yukon labour force surveys, on a month-to-month basis, which are not seasonally adjusted, and compare April 1992 to April 1994, you will see that it says the workforce has grown dramatically from 13,000 people in April 1992, to 14,600 in April 1994, and that the number of people employed has grown dramatically, from 11,500 in April 1992, to 12,800 in April 1994.

I guess numbers tell you whatever you put into them. The Members opposite want to make the dimmest picture they possibly can, so they pick at these numbers. We go over them on a month-to-month basis. We have seasonal employment in the Yukon, and seasonal unemployment. If you are going to compare apples to apples, then let us do it on a month-to-month basis, from year to year.

Mr. McDonald:

First of all, I want to point out to the Minister that we have never actually discussed this before. We have only made claims across the floor about the unemployment picture. There were attempts made a few weeks ago to determine whether or not we can work with the same information. The Minister took notice of the question and here we are in Economic Development. I am asking the Minister for the same information. We have never once discussed the methodology by which we were making our claims about the employment picture, so now it is my opinion that it is time to do that - right now.

The Minister is saying that the Opposition has tried to paint the dimmest picture possible of the economy. In the past, I have taken great pains - as the Minister knows very well - to suggest that all these claims about crisis, particularly fiscal crisis, were well overstated by the government. That claim had a very direct and obvious impact on the economy and on people's confidence in the economy.

So, I have tried to do what I can to blunt the Minister's attempts to depress the economy. But, when it comes to information such as the unemployment rate and other things, I think there has been an attempt, at the same time, to make truthful observations - not to try to paint pictures that are not supportable.

In this particular case, the Minister has said on many, many occasions that there are now 1,300 or 1,400 more jobs than there were before, so he draws the conclusion from that that the economy is, in fact, better than it was two years ago.

By the government's own publications, that conclusion cannot realistically be drawn. When one takes a look at the average annual figures for the years involved, it is obvious, and crystal clear, that there are not 1,000 jobs there.

This is information that the Bureau of Statistics published - I am not using my own information; I am only using the department's information.

I am just asking the Minister if he can explain the difference between his number, the number he chooses to use in this employment survey, with the number he does not choose to use, which is listed on the reverse page. When one looks at the employed category, one sees a modest increase from 1992 to 1993 - not 1,000, not 500, but 100, between 1992 and 1993.

When one looks down at the section on the Yukon's monthly employment by gender, work status and type of work, adjusted estimates, one sees, in the private and public sectors, what looks like a larger increase in the public sector than in the private sector in terms of job creation. Due to the fact that they have no annual averages, it is very difficult to draw conclusions about that, so I will not. However, if the Minister does not want to explain this to me, that is his prerogative. Under the circumstances, one has to use, statistically, the most valid figures one can. All I am doing is asking the Minister for some confirmation of his claim and an explanation for some other figures that his department also publishes, which suggest a much more modest increase in the employed and a fairly large increase, in terms of numbers, in the unemployed. I think we all know what the unemployed are doing, or why they are there, but I am focusing on the employed column right now. We would just like some information. If the Minister can explain that to me, that is fine. If not, I will try again some other time.

Hon. Mr. Ostashek:

I just want to tell the Member opposite that we have used the same numbers, consistently, since we have been in office. We have used the month-by-month figures and the same month this year to compare to the same month in the previous year. We continue to do that. We are using Statistics Canada figures, as well. They are the same. We have consistently reported

Page Number 2583

them the same way.

I also want to draw the Statistics Canada GDP report to the attention of the Member opposite, which clearly stated that the fact that the amount of total wages and salaries rose slightly confirms that, although jobs were lost in the mining sector, other segments of the economy have achieved employment gains. We are using Statistics Canada figures. If the Member opposite wants to interpret them differently from us, that is his prerogative.

Mr. McDonald:

The Statistics Canada figures show income increasing. That is justified later in the same report, and is explained by an increase in transfers by unemployment insurance and social assistance. We are talking about the same Statistics Canada report, are we not? That is what I understood to be the explanation.

Perhaps the Minister can just tell me about this interesting conclusion. Does he put any stock in the annual figures on page 2? Does he think they are bogus or inappropriate? Are they wrong? Did they make a mistake?

Hon. Mr. Ostashek:

The Member may interpret numbers any way he wishes. I am saying that we have been consistent since the day we came to office. We have used the month-by-month figures and will continue to do so. If the Member opposite does not want to agree with them, that is his prerogative.

The fact is that the total wages and salaries rose slightly. Is the Member opposite going to tell me that we pay so well for social assistance and unemployment insurance that we can have a lot of people out of work and make more money in wages and salaries than when the mining sector was going? It clearly indicates that there were jobs created in other sectors of the economy.

Mr. McDonald:

First of all, I am not going to pretend to be the statistician here. I am just using the interpretation made by Statistics Canada. Obviously, the Minister has had differences with Statistics Canada in the past, and maybe has that difference with them again now. I am not going to debate that point because I do not feel qualified to.

He says that he has been consistent about using month-to-month figures. Are the annual figures in here inaccurate? I know he is saying that he is using month-to-month figures, and that he is being consistent. I would be inclined to want to say that perhaps that is not appropriate, but all that I am going to ask him now is if these annual figures are inappropriate.

Hon. Mr. Ostashek:

Certainly they are not inaccurate, but the fact remains that they compare the 12-month period from January to December. We are comparing a 12-month period from April one year to April the next. We have seasonal employment in the Yukon. We do not have consistent employment - both in summer and winter. The Member opposite is fully aware of that. The fact remains that this still must be a pretty good place, because we have people coming into the Yukon, and our labour force continues to increase.

Mr. McDonald:

I am not saying that we do not have a good place here. I am not saying that the Yukon is not a wonderful place to live. I am not drawing any conclusions about that. I am just asking about these figures.

The Minister suggests that it may not be appropriate to use the annual averages. Surely he would acknowledge that 1992, 1991, 1993 and 1994 all demonstrated some seasonal upswings and down swings, based on the ebb and flow of the economy. When one wants to compare one year to the next, one would take an average, would they not, as long as the methodology used was the same from one year to the next? Would that not be a fair process to use - a statistically valid process? Is the Minister saying that it is statistically invalid to consider the average from 1991 to 1992, to 1993, and to 1994? Is he saying that the average for those years is somehow innapropriate, and that the only way to look at this is to look at the snapshots from month to month? What is the point of publishing the annual figures if the Minister feels they are not statistically valid?

Hon. Mr. Ostashek:

I could ask the Member opposite the same question - what is the point of publishing the April 1993 statistics along with April 1994 if it is not valid?

Mr. McDonald:

I am not publishing anything. I am just asking the Minister for information about the documents the Bureau of Statistics is producing. In terms of producing the monthly statistics, one has to recognize that given the very small snapshot, the statistical validity of it is somewhat reduced, because of the nature of the snapshot being taken. What one is trying to do is compare perhaps the month of April 1994 with the month of April 1993, and maybe that is the point; but when one wants to determine whether or not, over a period of a year or two years, there are thousands of new jobs being created, would one not take the annual figures? Does that not make any sense at all to the Minister?

Hon. Mr. Ostashek:

Not much. I notice the Member opposite did not have any difficulty at all in using the April 1993 figures when unemployment was 16.4 percent. In fact, if I go back through Hansard, I could probably find quite a few quotes from the critic at that time. He did not have a bit of difficulty with that figure, but all of a sudden, when things have turned around and the numbers do not suit his political agenda, he has great difficulties with them.

Mr. McDonald:

First of all, when it comes to a sense of general direction, one can perhaps use this figure, or one could use the number of unemployed and the number of employed. I see the unemployed are 1,900 and that may be a perfectly accurate snapshot for the moment, but it does not say anything about year-to-year averages. I do not think anybody suggested, when they were complaining about a 16-percent unemployment rate, that this somehow equated with the annual average for the year and was even the permanent trend. One only suggested that we were reaching anomalous highs, suggesting that maybe a problem was occurring that the government was not acknowledging because, even then, they did not suggest there was even a problem.

When one has the annual averages, one has less chance of claiming statistical anomaly, because there are more numbers and a better chance of determining more accurately what the actual situation is when the numbers are all in for the entire year. All I was suggesting was that when one wants to determine statistical reliability, given that it is an imprecise science, one would automatically move to look at the annual figures rather than the monthly figures, would they not? That would make sense to me. Presumably that is why the Bureau of Statistics publishes those figures - because they do have statistical validity and perhaps greater statistical validity than the month-to-month figure. They suggest that even though there was a 16-percent unemployment rate, in reality, the average unemployment rate for the year was 13.3. So, given what we know now, it would only be fair to say that the unemployment rate rose by three percent and, by this calculation, the increased number of people on unemployment rose by 508 claimants. The number of unemployed has risen about 40 percent.

That is what can be drawn from the annual figures, I would think. The number in the labour force increased by approximately 600, it appears. The labour force increased over the year by 600; the number of employed increased 100, the number of unemployed increased 500 and the unemployment rate went up three percent.

That is what it appears to be when all the numbers are in. That is what I read in this document.

Mr. Penikett:

Far be it from me to miss an opportunity to say something on one of my favourite subjects. I will not cover the

Page Number 2584

ground my colleague covered, but I will point out that when the Government Leader says you have to look at a trend line, rather than one snapshot, he is quite right. That is why one should look at annualized rates, rather than a single month.

If you do not, you are in danger of being in the situation, as John George Diefenbaker used to put of being the drunk and the lamp post - instead of using it for illumination, you are using it for support.

The point is that when you are looking at economic data you have to look at all the numbers, and you have to take a look at the big picture when you are doing economic planning or any kind of subjective analysis of what is happening in the economy.

If you look at the same numbers from the sheet the Government Leader is propping himself up with, and you look at the other numbers on that sheet, it is quite clear that the average employment in 1992 was 12,292 jobs and the average employment in 1993 was 12,392 jobs, which is an increase of only 100 jobs, not 1,000. That 100 jobs suggests there might have been an eight-percent increase in the economy, but there is little evidence of that in the Statistics Canada numbers for retail trade, for example. In fact, the number of unemployed over the same period rose from 1,400 to 2,000. I believe the annual average was 1,400 to 1,908, actually, which is an increase from 10.8 percent to 13.8 percent in the unemployment rate. The annual average unemployment rate moved from 10.3 to 13.3 during a period when Canada's average unemployment rate remained the same.

Expressed in terms of a ratio of employment to population, our situation actually deteriorated somewhat.

The Government Leader is talking about 1,000 jobs, but if he looks at the same sheet he was quoting from for the change from 1993 to 1994, for example, using the March numbers, according to the statistics put out by his government, the private sector employment had increased, according to his numbers, from 6,200 to 6,400, an increase of 200 jobs. Over the same period, the public sector employment had increased from 4,300 jobs to 4,600 jobs.

The total number of jobs, according to that number, is only 500, but it is interesting that 300 of the 500 happened in the public sector, not the private sector.

If you look at the other numbers in the statistics, there in no supporting data to suggest that there are 1,000 more jobs in the economy at all. In fact, it may be what they call a statistical artifact, or monthly anomaly.

For example, if you look at the December 1992 number, and compare it to the December 1993 number, you will see that, in December 1992, there were 12,500 people working but, in December 1993, there were only 12,300, suggesting a drop of 200 jobs.

The Government Leader is quite right when he says it is a fluctuating and seasonal economy, and that is the reason you have to use annualized numbers. Otherwise, you cannot do comparisons. To state the obvious, as my constituents have constantly reminded me, you cannot show where the new jobs are coming from in this economy. I do not know how accurate the numbers are, when we are counting in-migration and population, but I suggest that there is probably some margin of error.

Even if you forget that for a minute, I wonder if the Government Leader has ever looked at the small print that comes from his own statistics branch in the Executive Council Office.

I am looking at a document that comes from the statistics branch, entitled Yukon Labour Force Statistics, Three-Month Moving Averages. It points out that the enclosed labour force statistics were designed to represent approximately 85 percent of the population in the territory, and it says, "Due to the relatively small sample size from which these data are derived, large month-to-month fluctuations may be due to sampling error or seasonal labour activity." Further on in the document, it provides an alphabetical code for the degree of accuracy of the numbers. For the unemployment number and the unemployment rate, the letter code for the degree of accuracy is F.

That code means that the percentage of standard deviation - in other words, the margin of error - on any one of those numbers is between 10.1 percent and 16.5 percent, which is a huge margin of error.

If one is depending on any one month, and any one number in any one month, one is depending on Mr. Diefenbaker's lamp post.

The problem is, as my colleague has pointed out, that some of the numbers on the one sheet the Government Leader has quoted from suggest different things. I suspect that if one wants to present an accurate figure to the banks, investors or anyone else - not a fanciful one - one must take a close look at the picture.

I know from my own experience that it is no use taking a number one likes, putting it in a budget speech and trumpeting about it, because the one thing about banks and large investors is that they all have people that are much more sophisticated than anyone in this Legislature to read this kind of data. They are perfectly able to spot the holes in an analysis that depends on one number or a single monthly statistic compared to a single number from the same period the following year. I am not asking a question; I am just making a comment.

Hon. Mr. Ostashek:

The problem is that the numbers are not as grim as the Members opposite would like them to be, so that they can keep criticizing us for not doing enough for the economy of the Yukon. The fact remains that every indicator is a positive one. Capital investment in the Yukon is projected to be $36 million higher this year than last year, and that was even before the announcement of the new mall expansion.

I can assure the Members opposite that I am very confident that the unemployment figures we are talking about from one month this year compared to the same month the previous year will continue to drop throughout the summer. I believe that there are a substantial number of jobs. A report on the radio the other morning was talking about the construction industry in Whitehorse. Apparently, housing starts are way up. I think there are a lot of good, positive indicators out there. I have no idea why the Members opposite consistently try to pour cold water on them.

Mr. Penikett:

The Government Leader should not misunderstand us. There is nothing we want more than to see a thriving economy here. The fact of the matter is that since we left office, in terms of any economic indicator people would look at to get a quick glance at the economy, contrary to what the Government Leader just said, every indicator is down. The unemployment rate is up, gross domestic product is down, mineral production is down - our number one industry - and vacancy rates are up.

Those are not signs of economic health. I guess our major brief to the Government Leader - and I do not want to belabour this again - is that the government does not seem to be doing much, either in terms of planning or anything else in terms of the economy. They certainly are not consulting Yukoners widely. They certainly are not trying to build any consensus. The Government Leader has said that we should not be doing grants and we should not be doing loans. That leaves an interesting question about what we have an Economic Development department for, because it is not even doing economic research, which I am not sure the government feels kindly about. In fact, most of the research on which we are leaning seems to be coming from Statistics Canada and the statistics branch of the Executive Council Office. The irony of what the Government Leader has just done, in terms of talking to us about pouring doom and gloom on it, is that the most positive economic indicator this territory has is that it is debt free. And yet, Members opposite are continually going

Page Number 2585

around like Chicken Little saying, "The sky is falling" and that we have a huge debt and if we do not punish civil servants and hurt teachers and cut back on social services and so forth, the economy is going to be in trouble. I suspect that we could have a long debate about that, but the experience in countries more developed than ours, is, in fact, not as we would indicate. Even the experience in this territory is such that the government talking about doom and gloom - not the Opposition, the government talking doom and gloom - had an absolutely devastating effect on local retail trade and consumer confidence in the first few months that they were in office.

Hon. Mr. Ostashek:

I wonder where the government would have been financially if the government had not changed. I do not think we could have continued down that path. Even articles that are written by some of their leading people are saying the same thing - one cannot accept having debt and unbalanced budgets. The debate could go on forever on this subject.

The Leader of the Official Opposition makes great noises about the GDP being down seven-point-some percent. He has a very short memory. Just the fact of a strike in Faro in 1991 brought the GDP down over eight percent, so there is a direct correlation there. We know that when the Faro mine is down, our GDP is going to be down. I disagree with the Members opposite and I will continue to disagree with them. There are a lot of positive indicators out there and there are a lot of jobs being created in the Yukon. That will continue to happen in the mining sector as well as in the construction and road-building sectors - something that the Members opposite do not seem to have much faith in, but there are a tremendous number of people working on highway construction this year, creating a lot of jobs for Yukoners. I am very confident about the direction the economy of the Yukon is taking.

Chair:

Order please. We will take a brief recess at this time.

Recess

Chair:

I will now call Committee of the Whole to order.

Mr. Penikett:

I would like to say one last thing on the topic that we were discussing before the break. The Government Leader was quite right when he said that when there was a work stoppage in Faro, it showed up in the gross domestic product - of course it would. I do not know what the Government Leader was suggesting when he said that - that somehow the government should have done something to interfere in the work stoppage, which is governed by the Canada Labour Code. It is a matter of record that, not only did it show up in the GDP, but it also showed up in the economic forecast, and both of those documents were things that the government released.

What I do know, if you want to talk about real numbers, is that when we came into office, I think mineral production in the Yukon Territory was something like $50 million. I think that in the best year of the NDP government, the mineral production was $500 million, at least in terms of final value. I do know that it has not even been a good percentage of the $50 million, in terms of mineral production, in the last couple of years, and is not likely to be for some time.

Even on the subject of road building, I seem to recall that there was a national report put out by the highway - something - association, which pointed out that, for at least the last seven, eight, or nine years, the Yukon Territory has spent the largest percentage of its budget on road building of any jurisdiction in Canada. The Members opposite did not invent road building. It was going on before they came into office. It is probably quite likely, given the arrangements that have been made with the federal government, that we are going to continue to spend a large percentage of our budget on roads in the next few years, but it is quite appropriate for us to debate in this House whether we are spending enough, or too much, or not enough. It certainly is not a new innovation for us to be spending proportionately more than other jurisdictions in the country, because we have been doing that for years.

Mr. McDonald:

Depending upon the rhetoric that the government uses, we will have to decide at some point in the future as to whether or not we zero in on their claims the next time we have a chance, and do an assessment at that time.

Clearly, the problem we have is if there is no recognition that there are problems to be solved, then clearly the government would feel justified in not doing very much and that is the concern that I had six months ago and the concern that I have today. Not much has changed.

Nevertheless, I would like to move on to another issue. It is the issue of establishing some sort of targets for diversifying regional economies.

During the last sitting, I asked the previous Minister to let us know what sort of performance indicator he would suggest to be appropriate to determine the department's success in diversifying regional economies.

The Minister at the time suggested that it was a very difficult thing to do, because the small, rural regional economies embrace such small gains in various economic areas that it would be difficult, if not impossible, to establish precise targets for employment and business activity.

The Minister sent me back a letter and followed that with a legislative return that I agree with, in essence. I agree that economic development in rural areas is hard to measure and any successes are the result of a slow, gradual, development process. There are many different factors to be addressed.

There is some reference here to the Yukon Party's four-year plan, but I think that was put in there just to make reference to it; I do not think there is any specific strategy that is new, which I could detect, designed to provide for the long-term health of the rural economies.

The problem remains that I was pilloried when I was the Minister of Economic Development for some years, by Yukon Party members who wanted precise targets. These Members wanted performance indicators, insisting that to demonstrate that we were diversifying the economy, there ought to be some hint or suggestion as to how far one wanted to go in terms of shooting for employment figures and business starts.

Perhaps this Minister can tell us what would have possessed Yukon Party Members to insist on performance indicators and specific targets to diversify the rural economies, who now feel that these targets are not necessary or useful. I think the Minister used the words "not prudent".

Did you plan that, or is it just one of those things that happen from time to time?

Hon. Mr. Ostashek:

I guess it is just one of those things that happen from time to time.

Mr. McDonald:

I suppose so. Some of those things that happen from time to time have a tendency to happen a whole lot. If one wanted to look for consistency, in terms of positioning, one does not feel inclined to want to go back to anything prior to 1992 to get an assessment of what the Yukon Party's position might be while they are in government.

I guess that is probably one of the best and most cogent answers I can expect. I do not have a lot of other questions in general debate. If other Members have a few questions, they can ask them now.

Chair:

Is there further general debate on Economic Development?

On Administration

Mr. McDonald:

Could the Minister provide us with a detailed organization chart? I realize we have something on page

Page Number 2586

73, but it is not detailed in terms of the job-by-job activity. I know there are not that many people in the department, so, if he could give us a job-by-job organization chart, I would appreciate that. I know they must have one somewhere.

Hon. Mr. Ostashek:

We do not have one here, but I will make one available to the Member.

On Activity

On Administration

Mr. McDonald:

There are not many lines in this department. Could the Minister just give us an explanation of each change? It would help us to move through quickly.

Hon. Mr. Ostashek:

The changes from the 1993-94 forecast are the following: the mining facilitator position, budgeted for a full year at $63,000; receptionist - the previous portion of the salary was funded by the capital energy administration program, and this has been transferred to operation and maintenance for 1994-95, and is $16,000; the records index was transferred from Government Services, $26,000; miscellaneous are acting pay, vacation pay outs, summer students not included in the main estimates, but reflected in the 1993-94 forecast, $13,000; collective agreement settlement, minus seven percent, and legislative reductions, minus eight percent, is a reduction of $15,000; Other, which is program materials transferred from Government Services to records, index, increase in travel, communications, for mining facilitator, $2,000. The total change is an increase of $80,000, or 11 percent.

Mr. McDonald:

Did the Minister say the reduction as a result of the collective agreement reduced the estimate by seven percent?

Hon. Mr. Ostashek:

I am sorry. That should have been $7,000. Legislative reductions were $8,000.

Administration in the amount of $784,000 agreed to

On Energy and Mines

Hon. Mr. Ostashek:

I will go over the changes from the 1993-94 forecast. Personnel costs, collective agreement settlement, no merit or Yukon bonus change, minus $7,000; legislative reductions, salary reductions at Christmas break, minus $2,000; 1993-94 incurred one-time additional personnel costs for coal study, minus $6,000; Other includes reduction in contracts of $163,000. That breaks out to the Burns Fry contract expenditure of $146,000 and IRC representation contract expenditures of $30,000, which were one-time expenditures in 1993-94. There was $13,000 available in contract funds in 1994-95 for mining energy policy issues. Miscellaneous reductions are $1,000, for a total decrease of minus 27 percent.

Mr. McDonald:

I am a little puzzled by the reduction. As the Minister knows, no variance was called in January/February before this budget, and consequently we have been using the numbers forecast for 1993-94 consistently throughout the budget. We have been using the numbers that have been found in the main estimates, with the exception of this number. This is the first time I have seen it - I am referring to the $657,000. Can the Minister explain why we have come to anticipate this forecasted number, and why, in all the budget, there is a change in this particular area, where there clearly has been no voted amount so far in any supplementary that anticipates this.

Hon. Mr. Ostashek:

My understanding is that this was voted in January. My deputy is almost certain that it was. That is why it has been changed.

Mr. McDonald:

Let me just check it. I want to be certain about that before we go on. The number that we voted in January was $552,000, up from $393,000 in the estimate. The supplementary was $159,000 at that time. The latest supplementary, No. 2, does not make reference to economic development. Given that consistently here, throughout the department and through other departments as well, the forecasted numbers throughout the department are those that are listed in the revised vote - $704,000 in administration; 1,263,000 in economic policy, planning and research; $533,000 in programs; and $552,000 in energy and mines - we appear to have an increase of about $105,000 here.

Hon. Mr. Ostashek:

My understanding is that the $163,000 shown here, which is not in the Member's book, is a reduction in contracts. My understanding is that $159,000 is what was shown in the variance. The other $4,000 was found within the department.

Mr. McDonald:

I have the variance right here in supplementary No. 1. Supplementary No. 2 makes no reference to Economic Development operations at all. Supplementary No. 1 states that, at the time this was voted, we had voted $393,000 in the main estimates, and we had voted a supplementary requirement of $159,000, to bring it to $552,000. That is the only number in the revised vote column that does not conform to what is shown here in the main estimates. This revised vote says that we are anticipating spending $552,000 for 1993-94. Did the department submit the number $552,000 to the Department of Finance for inclusion in the estimates?

Hon. Mr. Ostashek:

My understanding is that the balance of money is transferred from capital to operation and maintenance as of April 1. On page 72, it is noted that restated 1993-94 forecasts and 1992-93 actuals reflect the transfer of capital energy administration to the operation and maintenance of energy and mines.

Mr. McDonald:

What budget do we do that in?

Hon. Mr. Ostashek:

My understanding is that this is the budget we are doing it in.

Mr. McDonald:

No, we are voting $478,000 in this budget. I am talking about the forecast for 1993-94. We are voting $478,000 - I am certain of that.

Hon. Mr. Ostashek:

It would have been in the capital of 1993-94, and it is restated in this one just to show the difference, so that the figures can be compared from year to year. It was voted in the capital in 1993-94, not in the operation and maintenance.

Mr. McDonald:

That is a change in methodology, is it not, to have an operations budget figure listed? We have separate budgets now. If one wanted to compare apples with apples and oranges with oranges, would it not have been more appropriate to compare an operations vote with an operations vote?

Hon. Mr. Ostashek:

My understanding is that it used to be in the capital and is now in the operation and maintenance, and that is why it is being shown there now. If there is some further information the Member requires, we will be happy to try to get it for him, but I think this is consistent with the procedures that were in place before.

Mr. McDonald:

This is surely unique in this budget. I have not actually seen this before. It is not a big point, because we are not voting $657,000; we are voting $478,000. The Minister says it is as of April 1 - it cannot be a change that took place as of April 1, otherwise it would be voted for this current year. I am looking at the forecast for 1993-94, which ends March 31, 1994 - a day before April 1.

Perhaps the Minister could just come back with an explanation as to why this is happening. It is not a big deal, because we are not voting the money. I am just trying to make sense of what the government's budgeting is all about.

Hon. Mr. Ostashek:

I will bring a paper back for the Member to help explain it. I think that page 72 says that it was previously administration money for capital projects. The note on page 72 states that it was restated in the 1993-94 forecast and in the 1992-93 actuals to reflect a transfer of capital energy administration to O&M of Energy and Mines. I will get a paper for the Member that may explain it better for him.

Page Number 2587

Mr. Cable:

I have a few questions on the Whitehorse mining initiative. The mining industry in Canada met here a couple of years ago and worked out something called the Whitehorse mining initiative, which anticipated action by the industry and also action by the government. There is a five-point plan for government action.

It sets forth: establish processes for land use planning, streamline federal/provincial environmental regulations, respect mineral property rights, change tax laws and launch a national initiative to build the necessary infrastructure. Most of those things fall under federal jurisdiction, but has there been any formal response from the Minister's department to the local mining body - the Chamber of Mines - with respect to the five points set out in the Whitehorse mining initiative?

Hon. Mr. Ostashek:

We participated in those meetings, and it would be very useful if we could get the Minister of DIAND to come to the Yukon to discuss some of the outstanding issues with the mining community. It is very disappointing that he is not able to make it to the Gold Show. I think the Minister should have placed a higher priority on it, because it is very important that the Minister be knowledgeable about what is happening in the Yukon and the mining community.

I know that there was some relief given in the last federal budget on tax breaks for the reclamation fund. Mr. Martin did make a commitment that he would be holding a meeting some time between the time the budget came down and, I believe, the end of June, to talk about interest earned within the reclamation fund and whether or not it could be earned tax free. Right now, the monies put into the fund are tax deductible, but the interest earned on the fund is taxable, and mining companies are still having great difficulty with that.

Mr. Cable:

I thought this would be the last place we would ever have partisan politics.

What is the Minister's department doing about the streamlining of federal/provincial environmental regulations? Is there any liaison with the Minister's department's federal counterparts?

Hon. Mr. Ostashek:

Yes, we are working with DIAND on that to see what we can do to streamline it. One of the duties of the new mining facilitator is to examine all of that to see what we can do to expedite it.

Mr. Cable:

Perhaps the Minister could educate me on his taxing powers. The Minister said that the federal government is looking at relief on the interest earned as forming part of income. What is the Minister's view on that proposition? Is this government favourable to having the interest earned on these funds non-taxable?

Hon. Mr. Ostashek:

Yes, very much so. We are one of the areas that fought very hard for this proposition. We discussed it in Halifax last December, when we had the Economic and Finance Ministers' meeting. I raised the issue with Mr. Martin at that time, and we are one of about four jurisdictions in Canada that are very supportive of that position. Ontario has been very negative on it, for some reason. They do feel that mining companies should have that break.

Mr. Martin said that he hoped to review it before the end of June, and I hope he lives up to that commitment and we can have a meeting specifically for that purpose.

Mr. Cable:

I have some general questions on the administration of the mineral grant programs. Are there any records kept of the success of the programs through the Minister's administrative staff - I am referring to the target evaluation program and also the Yukon mining incentives program.

Hon. Mr. Ostashek:

The department is trying to do some analyses of them. We do not have a lot of good information, but the department is working to try to get a data base developed.

Mr. Cable:

How would the Minister go about analyzing the success of the prospector grub-stake programs? Why is the taxpayer expending this money?

Hon. Mr. Ostashek:

I guess that is a very valid question. Without exploration we are not going to have mines. I do not know how one evaluates how many prospecting grants it takes for one mine development, but I think one find would pay for the whole program many, many times over. I believe we have to have people in the field.

The grants are not that large: $10,000. Recipients have to file reports on what they have done and what areas they have been working in. The reports are kept on record.

Mr. Cable:

What is it that permits the original grant to flow? How does the government know that this money is not just going into moose pasture?

Hon. Mr. Ostashek:

First of all, there has to be a detailed proposal. The department selects, at random, a certain number of sites to visit during the summer to see that the actual work is going on. A report is filed.

Mr. Cable:

Is that report made available to the general public?

Hon. Mr. Ostashek:

No, it is not available to the general public because it contains confidential information.

Mr. Cable:

Are the geological findings that come out of these reports collected for publication in some sort of general report that is available to the public?

Hon. Mr. Ostashek:

No, they are not. It is very detailed and very specific to the ore prospect that the prospector is working on.

Mr. Cable:

Along the same line, there were technology grants given out under the economic development agreement mineral development program. Specifically, money was granted to Western Copper for solvent extraction. When technology grants are given, who actually owns the technology by the end of the day? Is it the person or corporation applying for the grant, or does the government retain some property or patent rights in the process?

Hon. Mr. Ostashek:

My understanding is that in those arrangements we get a detailed analysis of the research and development that goes into the property, such as the one the Member mentioned, William's Creek, and after a period of about two years, the report is made available to other companies that may be interested in pursuing the same sort of extraction technologies.

Mr. Cable:

Say Western Copper applied for a patent on that, would that preclude any other corporation from using it, or is that part of the deal - that it is to be made available to the general public after the two-year time period that the Minister just mentioned.

Hon. Mr. Ostashek:

The technology to do what they were doing was already patented. They were testing the technology to see how it would work in this extreme northern climate.

Mr. McDonald:

I would like to ask the Minister what he anticipates the role of the mining facilitator to be in the development of amendments to environmental regulations. He seemed to suggest that one of the mining facilitator's principal roles would be in the streamlining of the environmental process. Can the Minister give us more specific information about the precise role of the mining facilitator? I have the job description; he does not have to offer me that. It does not say anything specifically about this particular project. If the Minister could tell me what the process involves, I would appreciate that.

Hon. Mr. Ostashek:

The position is a new position within government and there is still some work going on in defining what the ultimate, final role of the facilitator will be. One of his main duties will be to help mining companies get through the regulatory process, to bird-dog them to make sure that their proposal does not end up in a basket on somebody's desk and not be expedited in a

Page Number 2588

timely fashion. He will also be working with DIAND to try to draw these different regulatory processes into one format, and we are hoping that that format, with the settlement of land claims, will be the development assessment process. The ultimate goal is to get it into one process so that we can reduce the time it takes for companies to go through the permitting process. That seems to be the stumbling block. The companies I have talked to do not have any difficulty abiding by the permitting and environmental regulations that are here. What they want is a timely, expeditious process in order to move their applications through the permitting stage.

Mr. McDonald:

In terms of the development of the assistance process, is the mining facilitator playing the lead here? Is he taking the lead?

Hon. Mr. Ostashek:

No, he is not playing the lead role in it, but he will be working on it.

Mr. McDonald:

Who is playing the lead role?

Hon. Mr. Ostashek:

The assistant deputy minister is.

Mr. McDonald:

The ADM of which department?

Hon. Mr. Ostashek:

The ADM of economic policy and programming.

Mr. McDonald:

So, the lead is in the Department of Economic Development and not in the Department of Renewable Resources?

Hon. Mr. Ostashek:

That is correct. Renewable Resources and the Executive Council Office are also involved in it. The ADM is playing the lead role for the department and there are also representatives from the other departments involved in it.

Mr. McDonald:

I am certain the Minister knows how controversial that will be, so we will ultimately let others express their concerns, if they have them. In terms of the timing of the development assessment process and the efforts that are being made to develop the new one-window procedure, can the Minister tell us when he expects some conclusions to be reached?

Hon. Mr. Ostashek:

I am talking off the top of my head, but I believe that the umbrella final agreement says that, within two years of the UFA being passed through Parliament, that process would be in place. I could check that, but I believe it is a two-year window that we have. We would hope to do it more expeditiously than that, but I believe that is what the UFA allows for.

Mr. McDonald:

Have there been meetings undertaken so far to work this through? Can the Minister tell us a little bit about that?

Hon. Mr. Ostashek:

It is my understanding that the departments are doing some preliminary work but, as the critic will appreciate, CYI has been very busy trying to get the umbrella and self-government agreements through Parliament, so it has not yet come to the stage where they are participating. The department is trying to pull their resources together so they know which direction they are going when the talks and the development of the development assessment process get to the stage where all the parties are involved in it.

Mr. McDonald:

I think that there will probably be some more questions about process development in Renewable Resources, but I would like to ask a couple of questions about the statistics information on page 77 of the main estimates book.

The statistics show the number of recipients of the prospectors program to drop. The estimate for 1993-94 was 34, the forecast is now at 23, and we are expected to decline even further. Can the Minister tell us what the reason for the number of applicants dropping that much might be? Obviously, the funding that they are going to be receiving is expected to drop a bit. Could the Minister tell us what that is all about?

Hon. Mr. Ostashek:

I do not have much to add, except that was the department's best guess at the time it put the budget together.

Mr. McDonald:

What is the reason? Obviously, there is a fairly significant decline from what we expected would be the case in previous years. I understood that this program was actually funded to the same level as it has been in the past. What is the reason for reducing the prospectors portion of the program and expanding the target-evaluation part of the program?

Hon. Mr. Ostashek:

I believe there is still the same amount of funding available for the program, but what has happened in the estimates, at the request of the industry, as the Member opposite has pointed out, is that the numbers in target evaluation have gone up. When one looks back to 1992-93, there were only four, and there were 26 in the 1993-94 forecast. There is an estimate of 25 for 1994-95. It has gone up substantially. I guess, in discussion with the industry, that is where they felt the emphasis should be.

Mr. McDonald:

Was it the Chamber of Mines that recommended that the prospectors' portion of the program be reduced? Is that what the Minister is saying?

Hon. Mr. Ostashek:

I do not know that the prospectors' portion is being reduced; it is just that the demand was there for it. The Member opposite, from his term as Minister, may remember that qualified prospectors receive a 100 percent contribution; grub-staking companies or individuals receive 75 percent contribution; target evaluation individuals, partnerships or junior companies receive 50 percent of the contribution toward the basic exploration work directed at appraising the potential of an unevaluated occurrence, up to $20,000. We do get a better bang for our buck on target evaluation - there is no doubt about that.

I do not have much more to add at this point.

Mr. McDonald:

Were any prospector applicants turned away?

Hon. Mr. Ostashek:

Certainly some were turned away. There was about $1.4 million worth of applications all told.

Mr. McDonald:

Was that for the prospector section of the program - the $1.4 million - or was it for the entire program?

Hon. Mr. Ostashek:

That was for the entire program.

Mr. McDonald:

Perhaps the Minister could ask the department to provide me with an explanation on the reasons for the decline here, some information as to the uptake, and the policy reasons for reducing the portion of the commitment dedicated to prospectors down from what it was, and for target evaluation to go up. Obviously, the prospectors portion is, I believe, 100 percent of expenses up to $10,000. In many cases, this is not the entire cost of prospecting programs, but I do know that there are a number of prospectors who are very interested in seeking some support. They have received it in the past and expect to receive it again. I would like to know what is happening with this particular element of the program.

Hon. Mr. Ostashek:

I will bring that back for the Member.

Mr. Cable:

I have a follow-up question: how long have these three programs been in existence? This is the prospectors, where 100 percent is paid, the grub-stakes where 75 percent paid, and the target evaluation, where 50 percent paid.

Hon. Mr. Ostashek:

I do not know exactly. It has been at least since the late 1980s.

Mr. Cable:

Have any of these grants actually resulted in a mine?

Hon. Mr. Ostashek:

We do not know for sure, but we have heard rumours that some have, and I am sure that some will in the future.

Mr. Cable:

Have any of the prospector or prospector grub-stake grants resulted in sufficient interest in the geology that drilling has taken place?

Hon. Mr. Ostashek:

I know that the chamber feels this is an extremely important part of our program. I do know that some of the prospector work that was done in some areas has progressed

Page Number 2589

to the target evaluation stage. There is some good work being done.

Mr. Cable:

I have no doubt but that that the Chamber of Mines' judgment would be useful in that area. However, I am wondering what sort of feedback we get. Does money just sort of go out the door, and there is no checking that takes place, or do we find out if any of these properties that are being evaluated actually produce something beyond the grub-stake stage?

Hon. Mr. Ostashek:

I just laid out for the Member opposite the checks and balances that are in the system. First of all, they have to have a very good application - a good plan. Then the department does make random checks on them in the field. As well, they have to file a detailed report at the end of the season. I believe there are some checks and balances in place.

On Activity

On Policy and Administration

Policy and Administration in the amount of $478,000 agreed to

Energy and Mines in the amount of $478,000 agreed to

On Economic Policy, Planning and Research

Mr. Cable:

I have some questions similar to the last set of questions on the business development program.

The Minister provided us with a sheet marked "Status of Government Loans", showing under the business development fund a very substantial portion of the loans as being in arrears or written off. On the face value of the loans, that amounted to about $4.5 million, over a face value of $10.678 million. Who is it who actually makes the decision to write off the loan? Is it the advisory board or the government's officials?

Hon. Mr. Ostashek:

It is Management Board that makes the decision. However, that does not mean that the government does not try to collect the monies, but at some point we still have to write off the loan, whether we are still trying to collect it or not.

Mr. Cable:

At what juncture is a decision made that a loan should be written off?

Hon. Mr. Ostashek:

There would have to be a period of time during which we cannot get the person to make payments or re-schedule payments. All of those steps are taken before a decision is made to write off a loan.

Mr. Cable:

I assume that most bankers would have a set of rules on write-offs. Does the Minister's department have a set of rules?

Hon. Mr. Ostashek:

Well, as I said, it is the Management Board directive that dictates how it will be written off.

Mr. Cable:

Who is responsible for the collection? Is that the advisory board? Does it employ lawyers to collect it, or do the Minister's officers do the actual collection?

Hon. Mr. Ostashek:

The department tries to collect it.

Mr. Cable:

It was my understanding that there had been advances made to corporations or individuals that were in arrears on previous advances. Is that correct?

Hon. Mr. Ostashek:

No, that is not correct.

Mr. Cable:

I understand that a substantial portion of the $3,515,000 in arrears has been in arrears greater than one year. Is that correct?

Hon. Mr. Ostashek:

I do not know for sure. We can check on that. I am not sure what portion has been in arrears for more than a year.

Mr. Cable:

Does the department, with the advisory board, have a monthly printout on the status of the various loans?

Hon. Mr. Ostashek:

We do keep a monthly tally.

Mr. Cable:

Would that be computerized?

Hon. Mr. Ostashek:

It is.

Mr. Cable:

Could the House have the benefit of the encapsulation of that computer printout to show the principal amount that is in arrears at the various segments - 90 days, or one year, or two years, or three years - and the amount that is in arrears?

Hon. Mr. Ostashek:

We can do it, but it will take some time. It will have to be done manually.

Chair:

Order please. The time being 5:30 p.m., we will recess until 7:30 p.m.

Recess

Chair:

I will now call Committee of the Whole to order.

On Activities

On Administration

Mr. Harding:

Could the Minister account for the reduction, please.

Hon. Mr. Ostashek:

There would be a savings of $10,000 on the collective agreement, and $13,000 on legislative reductions.

Administration in the amount of $241,000 agreed to

On Research and Analysis

Mr. Harding:

Could the Minister explain the reduction, please?

Hon. Mr. Ostashek:

That would be the same.

Mr. Harding:

The same breakdown? Are the amounts the same as the Minister mentioned for the last one? I am trying to do the addition in my head here.

Hon. Mr. Ostashek:

The figure that I stated of $10,000 for the collective agreement and $13,000 for the legislative reductions is for the entire line item.

Research and Analysis in the amount of $185,000 agreed to

On Economic Policy and Planning

Mr. Harding:

What is the increase in economic policy planning?

Hon. Mr. Ostashek:

It is full year staffing for one position.

Mr. Harding:

Specifically, what is that position for?

Hon. Mr. Ostashek:

That is the policy analyst position that was vacant.

Mr. Harding:

Is that just a general policy analyst or is there any specific area where they are working that decided them to fill this vacancy?

Hon. Mr. Ostashek:

It is just general.

Economic Policy and Planning in the amount of $352,000 agreed to

On Northern Oil and Gas Accord Implementation

Mr. Harding:

This is a very important line. Could the Minister break down the $699,000, please?

Hon. Mr. Ostashek:

Part of it is for staffing - $355,000 is in contract services for putting together the legislation and so on. That is the biggest chunk of it. Along with the staffing, there would be some for outside travel.

Mr. Harding:

That is not very specific. Could the Minister be more specific in terms of where the expenditures are going to be broken down?

Hon. Mr. Ostashek:

I am sorry I cannot be more specific on that this evening. I can get a paper for the Member opposite if he likes.

Mr. Harding:

I will just have to point out that that does not seem too fiscally responsible to me.

Mr. Cable:

I asked the Minister some questions on oil and gas exploration in the southeast Yukon a little while back. The Minister indicated that he had had discussions with oil and gas people - I believe it was in Calgary. Could the Minister indicate with which oil companies he has actually been discussing the matter of exploration?

Hon. Mr. Ostashek:

I believe there were 17 oil companies at one meeting, and then we had private meetings with Cabre Resources, Norcen, and Anderson Exploration, which is operating

Page Number 2590

the Kotaneelee field. We talked with many, many companies, both large and small. Chevron and Hunt Oil were there - we pretty well covered them all.

Mr. Cable:

Could the Minister indicate who is taking the lead in his department with respect to gas exploration in the southeast Yukon?

Hon. Mr. Ostashek:

I am not exactly certain I heard the question right. The Member is asking who in our department is taking the lead with gas exploration in the southeast Yukon? We are not taking any lead in the gas exploration. Anderson Exploration operates the Kotaneelee gas field in southeast Yukon.

Mr. Cable:

No, I was wondering who in the Minister's department is actually promoting gas exploration, making contacts with gas companies, First Nations and other governments, with a view to promoting further exploration.

Hon. Mr. Ostashek:

We are setting that branch up now. The manager of the Northern Accord implementation is the person who takes the lead role in it. He is the one who has been doing the public relations with the oil companies. As the Member opposite said, I was in Calgary myself in February or March, I believe, and met with the oil companies just to encourage them and to make them aware of the fact that the Yukon is one of the few remaining frontier areas for oil and gas exploration in Canada. I believe there have only been a total of 71 onshore wells drilled in the history of the Yukon. It is basically unknown as an oil and gas reserve at this point.

As I said in Question Period and other statements I have made in the House, exploration is very, very expensive in the north. Companies like to work in areas where they are fairly close to infrastructure facilities, such as pipelines, so that if they do have a discovery, they do not have millions and millions of dollars of infrastructure to put in place to bring it to market.

I believe that, in orderly development, we will see explorations begin to expand out from the southeast corner of the Yukon. It is the most logical place to expect further explorations at this time. Anderson Exploration has indicated to us that they would like to do a seismic program in the southeast Yukon. My understanding is that they have been in touch with the First Nations in that regard. We have offered to do whatever we can to help facilitate some arrangement between ourselves, the First Nations and the exploration company for further seismic work in that area.

The Kootaneelee field in the Yukon and the field that Anderson Exploration is involved in straddles the Yukon, B.C. and Northwest Territories borders.

Mr. Cable:

What is the status of the onshore management committee? Is it up and rolling and in a position to deal with issues such as have arisen with respect to gas exploration?

Hon. Mr. Ostashek:

That is a process we are now going through. The federal government is supposed to introduce legislation this fall to devolve the responsibility to us. We will have our legislation ready to come forward in the spring session.

Once that legislation has passed the House of Commons and this Legislature, we will have full responsibility for oil and gas development in the Yukon. Right now, as you know, the Northern Oil and Gas Accord has been signed. We do have responsibility, but it still has to be done under federal legislation.

Mr. Cable:

The other part of the problem is that there is some reticence on the part of the gas explorers to spend much money until the land claims issue has been resolved; however, I gather that some mechanism has been set up in the Northwest Territories. I think I put this question previously to the Minister in Question Period, so has the Minister had a chance to determine whether or not that is accurate?

Hon. Mr. Ostashek:

I do not recall the question from the Member opposite. I know that the Northwest Territories still has not taken the responsibility for oil and gas. They have not come to an agreement with the federal government. They are still in the process. The reason that they have been hesitant to conclude an agreement is due to some question as to how the resources in the North Slope and Mackenzie Delta will be divided. It is between ourselves and the Northwest Territories. Apparently, instead of having an imaginary line drawn through there, there will be some kind of benefit-sharing arrangement for offshore oil and gas.

My understanding is that the Northwest Territories has not yet taken over the responsibility for oil and gas.

Mr. Cable:

It is my understanding, and I may be incorrect, that there have been some mechanisms set up whereby the First Nations are involved in the oil and gas exploration, so the issue of land claims has not posed the same problem there as it has here.

Has the Minister, or any of his staff, had an opportunity to discuss the matter with the Kaska First Nation?

Hon. Mr. Ostashek:

The Member opposite has to remember that the Northwest Territories is a lot further ahead in the settlement of land claims than we in the Yukon are. The whole Mackenzie Valley has pretty well all been settled. The Sahtu Dene claims are one of the last going to Parliament now. There may be one more in the Yellowknife area that has yet to sign, then the whole Mackenzie River drainage area, along the western Northwest Territories, will have ...

I see the Leader of the Official Opposition looking at me. He may know something I do not recall.

Some Hon. Member:

(Inaudible)

Hon. Mr. Ostashek:

I think that is one that is still outstanding. From the north down - the Inuvialuit and the Tetlit Gwitchin - have all been signed. A lot of their areas have already gone through the process, and there are clear lines of responsibility.

Yes, we have people in the department who have met with the Kaska people on this issue.

Mr. Cable:

We were in a great debate this afternoon as to whether the economy was good, what the employment figures were, and that sort of thing. It is generally thought in the street that the economy could use a little boost, which is an understatement.

Would the Minister outline what has taken place with the Kaska people? I think the southeast Yukon is primarily a Kaska area for land claims.

Hon. Mr. Ostashek:

I am not certain. I know we have had officials in the department meet with them. My understanding is that Anderson Exploration has been meeting with them. As I said when I was in Calgary, I offered our assistance in anything we could do to facilitate the meetings and to try to come to an agreement so exploration could take place.

I hope that it will in the near future. With oil exploration comes a substantial number of well paid jobs. It is fairly labour intensive, and it would have a real benefit to the Yukon. Once we take over the responsibility, we will have more economic leverage at our disposal - such as royalty holidays or negotiating royalty payments to be structured in such a way that it makes it attractive for oil companies to explore in the Yukon.

The key to it is long-term exploration leases, land certainty and the availability of infrastructure in the event they are successful in finding a major gas or oil field. As the Member opposite can appreciate, we are lacking in infrastructure in the Yukon, and it will take a couple of new finds to be able to expand the infrastructure so they can sell their product.

Nowadays, oil and gas companies are not like they were 20 years ago. They do not go off in the wilderness looking for fields they can cap and leave sit there for 20 or 25 years before they bring them into production. The cost of exploration is far too high, and investors expect to get a return on their investment more quickly than that.

Page Number 2591

While I am on my feet, maybe I could give the Member for Faro a better breakdown on the Northern Accord costs. The personnel costs are $270,500; employee travel is $12,000 in Yukon; $45,000 for employee travel out of Yukon; $315,100 in contract service; service and maintenance of photocopiers, repair of office equipment, $3,000; entertainment - meeting with senior government officials, federal, provincial and members of the business community, $1,000; supplies, $1,000; postage and freight, $500; advertising, $500; programs material, $4,000; communications, $20,000; Other - registration fees, memberships et cetera, $1,500; non-personnel total $403,600; contributions to the Council of Yukon First Nations for consultation, $25,000. That pretty well covers it.

Mr. Cable:

In the conversations that the Minister's officials have had with the Kaska, have there been any concerns expressed by that First Nation with respect to gas exploration going ahead at the present time?

Hon. Mr. Ostashek:

It was an information-only meeting; there have been no negotiations going on to bring the oil company in here. It was just an exchange of information about where we are at, and about what the interest is. As I told the Member opposite a few minutes ago, I understand that the company that is operating that field has been in touch with the Kaska.

Mr. Cable:

Just to confirm - while it was simply an information meeting, were there any concerns expressed that have to be dealt with?

Hon. Mr. Ostashek:

I do not know. I have not had a briefing about what transpired at the meeting.

Economic Policy, Planning and Research in the amount of $1,477,000 agreed to

On Economic Programs

On Activity

On Administration

Administration in the amount of $493,000 agreed to

Economic Programs in the amount of $493,000 agreed to

Department of Economic Development agreed to

Department of Finance

Hon. Mr. Ostashek:

The Department of Finance is asking for $5,043,000 in O&M appropriations for the 1994-95 fiscal year. While the apparent decrease in spending from 1993-94 is some 51 percent, this is a somewhat misleading figure. The 1993-94 figure contains several large provisions for doubtful accounts related to the collapse of Curragh Inc. If these special items were excluded from the 1993-94 forecast, one would see a decrease in spending of $125,000, or a little over two percent. The savings are in the treasury program and largely the result of lower banking service costs, a lower estimate of the public utilities income tax transfer and wage restraint initiatives.

There is no change in the forecast for the workers' compensation supplementary benefits program. As Members will recall, this program tops up benefits paid to workers injured, prior to our own compensation fund coming into existence, to the levels which would be paid by our fund had the injury occurred subsequent to its establishment.

Similarly, the allowance for the bad debts program is budgeted at the same level as the prior year if one factors out the previous year's one-time items.

I will be pleased to answer any questions of a general nature the Members may have prior to getting into the line by line.

Mr. Penikett:

I would like to ask some questions of a very general nature, and I apologize, but I wish I had an opportunity to advise the Government Leader in advance. I did not know when we were going to clear Economic Development, because I think the questions I would like to ask probably can be done without Mr. Sanderson, and he could have happily spent the evening bowling, or whatever it was he was actually going to do.

What I want to do, if I could explain this to the Government Leader, is to take a few minutes to ask some questions about a document to which he has referred to several times in the last year and that I have recently had a chance to read. I am referring to the book Reinventing Government, which the Government Leader has referred to in public as his bible.

I want to ask - if the Government Leader will permit me, since it is his bible; I am not assuming that it is a policy statement in total - some general questions about it as they touch on questions of public administration and financial management. If the Government Leader will be tolerant of that I would be happy to do that. We have not had a chance to talk about these things in any other forum, and I concede that I could have raised the questions under Executive Council Office general debate, but it seems to me to be just as appropriate to do it now.

Could I ask if the Government Leader has any problem with me doing that?

Some Hon. Member:

(Inaudible)

Mr. Penikett:

He does not, he says.

Perhaps, I could begin by noting that in the introduction to Reinventing Government there are five statements of fundamental belief that the authors, David Osborne and Ted Gaebler, have articulated. I am going to read these beliefs and I would like to ask the Government Leader if he would indicate to the House if he agrees with all of them.

The first is, "We believe deeply in government", and in explaining this point, the authors say, "Think of the problems facing American society today: drug use; crime; poverty; homelessness; illiteracy; toxic waste; the spectre of global warming; the exploding costs of medical care; how will we solve these problems by acting collectively, how do we act collectively through government?"

Secondly, "We believe that society cannot function effectively without effective government, something that is all too rare today."

Third, "We believe that people who work in government are not the problem; the systems in which they work are the problem."

Fourth, "We believe that neither traditional liberalism, nor traditional conservativism, has much relevance to the problems our governments face today."

The fifth statement of faith, or philosophy, I guess is, "We believe deeply in equity, in equal opportunity for all Americans."

Now, I admit, we are not Americans, except in a very general sense. I want to ask the Government Leader if he shares that sort of philosophical statement by the authors in the introduction to the book.

Hon. Mr. Ostashek:

I do not know if I could say that I believe every word that is written in that book, or that I totally adhere to or believe in all the philosophical statements, but in a broad general nature, I would have to say my answer to that would be yes.

Mr. Penikett:

Let me move on then to a statement in the opening chapter which struck me, and this has a very specific Department of Finance reference. The authors of the book are advocates for a new form of budgeting they call "the expenditure-control budget". I will just quote a couple of sentences here.

"It is called the expenditure control budget. It made two simple changes. First, it eliminated all line items within the departmental budget, freeing managers to move resources around as needs shifted. Second, it allowed departments to keep what they did not spend from one year to the next, so that they could shift unused funds to new priorities."

I am not taking a position, obviously, in whether that is a good

Page Number 2592

thing or not, but I would be interested to know whether that is the direction the Government Leader plans to move, because, of course, it would be a radical change in the way in which Management Board, the Financial Administration Act and indeed, this Legislature, now operate.

Hon. Mr. Ostashek:

As the Member opposite said in his preamble, that is an American book. It works under a bit of a different system than what we do here in Canada. Some of the principles do apply. I believe there is some merit in moving to a more flexible method of budgeting - I do not know how far that would go, but I think it is worth exploring if the end result is that government has managers who are more accountable for their actions. We do hire people at a very substantial salary and ask them to manage and then in a lot of instances, we tie their hands so badly that we do not give them the ability to manage because they are hampered by regulations.

As one of the five philosophies that the Leader of the Official Opposition mentioned, it is not the people in the system who are the problem; it is the system. When we are talking about reinventing government, I know - and I am sure the Member opposite probably knows - that that particular book has been very popular with a lot of managers, not only in the Yukon, but in other areas of Canada. I even understand that some Finance Ministers with social beliefs also adhere to some of the things that are in that book and would like to see some changes in how budgets are put together.

If we are talking about trying to respond to the fiscal realities that governments face today, we have to make some fundamental changes in our system. I believe it is incumbent upon politicians, if they are really sincere in addressing the costs of government, to be open and flexible and be prepared to be innovative and listen to all kinds of proposals and explore all kinds of ways that we can in order to provide a reasonable level of service to our constituents in a far more cost-effective manner.

I believe, somewhere in that book, there is a quote that says that governments cannot be run like a business, because businesses are profit oriented. However, it goes on to say that governments can be run in a more businesslike manner. I believe that is a feeling I share. I believe we can run government in a far more businesslike manner. We cannot model government on a business that is profit oriented, because that is not what governments are all about.

Mr. Penikett:

The Government Leader is quite right about that quote. I believe the paragraph from which that statement about not being able to run government like a business continues to talk about similarities between government and business, but ends by saying that, in government, business theory is not enough.

I would like to make it clear to the Government Leader, as I go through the questions, that it is not my intention to debate every point in Gabler and Osborne. For myself, there are things I agree with and things I disagree with in the book. However, it is important for us, as with the last point, to get some sense of the direction of the government. I am sure that the Government Leader would understand, with respect to the kind of budgeting they propose, that whether I agree with it or not, it will amount to a major change in the way we do things. It is important to try and get some sense of the direction of the government.

I will skip through this, as I do not want to spend weeks on the subject, but I hope that the Government Leader will not misunderstand me and think that I am either agreeing or disagreeing with the proposition; I am not making a statement either way.

Later on in the first chapter of the book, there is a quote that I would like to read. It says, "Today's environment demands institutions that are extremely flexible and adaptable, demands institutions that deliver high quality goods and services, squeezing ever more bang out of every buck. It demands institutions that are responsive to their customers, offering choices of non-standardized services that lead, by persuasion, to incentives rather than commands, that give their employees a sense of meaning and control, even ownership. It demands institutions that empower citizens, rather than simply serving them."

Could I ask the Government Leader if that statement squares with his own views about the way in which government should operate?

Hon. Mr. Ostashek:

I believe there is a lot of merit in that statement. How far we go with it is another thing. As I said, there are broad statements in that book that one cannot expect to just apply to our government here and expect it to work. I think that what that book tries to point out is that it is time for governments to be taking different approaches in how they govern, and not to be afraid to try some new things, and to give their people more power - to empower the people, and allow the people to make decisions.

I am a firm believer that we have to allow our managers to make decisions. Along with making decisions comes accountability for the decisions. I guess that in this day and age, given the financial state of affairs of governments all over, we have to be innovative and look at new ideas for delivering government.

Mr. Penikett:

I thank the Government Leader. I would like to return to his final comment at a later date. I would agree that there is nothing wrong with increasing the ability of managers to manage, but there will also have to be some assurances that they will continue to be accountable to Ministers, and Ministers will continue to be accountable to legislators for what they do.

On the question of accountability, could I ask the Government Leader if he agrees with the general thrust of the statement made by the authors on page 19, which says, in talking about the kind of governments that Osborne and Gaebler? "They empower citizens by pushing control out of bureaucracy into the community. They measure the performance of their agents; agencies focusing not on inputs, but on outcomes." - I take it that they mean outcomes like the unemployment rate, the GDP, how fast we are settling land claims, is the health status of the territory going up, is the recidivism rate going down, are the number of social assistance claims falling, do we have more equality, do we have more social peace, et cetera. Does the Government Leader agree with that general approach by Osborne and Gaebler?

Hon. Mr. Ostashek:

I agree with the general approach, but I do not believe, for one minute, that what they said there contains the philosophical ramblings the Member opposite is making. When we talk about measuring outputs, we are talking about whether the department is providing a good level of service, not just cutting the cost of the department. Are they cutting the cost of the department, and are they satisfying the desires of the people?

I have a different interpretation of that statement from the Member opposite.

Mr. Penikett:

That is very interesting. The previous government wrote some legislation, including the Health Act, which said that what the government does with the money, and what it does for people, should be assessed according to things like the health status of the people of the Yukon and, if we are spending hundreds of millions of dollars, is the health status improving or not?

If you take a close look at any department's budget - the Department of Justice, for example - for years, it had, as one of its goals, reducing the crime rate. We voted a lot of money for that purpose. According to my reading of Osborne and Gaebler, government should be held accountable. If they say they are spending money to reduce the rate of crime, the meaning of measuring outcomes is whether or not they are succeeding in doing that with the money they are spending.

I am quite concerned that the Government Leader does not

Page Number 2593

agree with that approach, because that happens to be one thing I agree with Osborne and Gaebler on.

Let me move on to another question.

In the first chapter of the book, there is a list of some 36 alternatives the authors have identified for service delivery by public employees, ranging from what they call the traditional to the avant garde. Has the Government Leader looked at that list recently? In looking at it, it strikes me that there are a large number of options described as innovative by Osborne and Gaebler - with which I would agree - that have not been tried by this government, among them public/private partnerships, quasi-public corporations, changing public investment policy, convening conferences with non-government leaders, what they call jawboning, and so forth.

Has the Government Leader looked at that list recently, in terms of the kinds of innovations he is contemplating?

Hon. Mr. Ostashek:

To be truthful, I believe it is some 18 months to two years ago since I read the book. I have not had the time to read it again. I have a copy in my office, and I look at it every once in awhile, at certain chapters, but I have not had the time to sit down and go through the book again since then.

Mr. Penikett:

My apologies to the Government Leader. I would have asked these questions earlier but I only got around to reading it recently when I had some uninterrupted time and of course it is not the only work I have read in the last few months. One of the things I have discovered is that there are a lot of critics of the book who are now publishing, and I would just say to the Government Leader that some of them are worth reading, too.

Let me move on to another statement in the book, which I found interesting because it is a statement about education and the importance the authors put on education as a tool of economic development. It says, on page 33, "In 1960, it hardly mattered that 20 percent of General Motors workers were functionally illiterate and 20 percent at Ford and Chrysler could not read either, but when the Japanese began selling cars made by workers who could all read, the big three found they could not compete."

Does that statement sound agreeable to the Government Leader?

Hon. Mr. Ostashek:

Most certainly it does, and that is why we believe we have to spend money on education and that education is an economic tool. It can be to the benefit of all people, but I do not think one measures how well people are doing in education by the amount of money spent on it.

It would be a fallacy to believe that one could solve that problem that way. The problem with governments in the past is that they have tried to solve problems just by putting more money into them, but that does not always work. Sometimes some structural changes have to be made, and those are probably more important than forever increasing the budget while not measuring what is coming out of the programs.

There are many things in that book that are worth exploring. One that we are exploring is the special operating authorities or the special operating agencies. That is one I am very interested in, and I think there is some merit to it even in a jurisdiction as small as the Yukon. There are parts of our government that would fit well into a special operating agency and that would be very cost effective for the people of the Yukon.

Mr. Penikett:

To respond to the second point first, I am not the brightest guy around but, even with a cursory reading of the document on special operating authorities that the Government Leader gave us the other day, I can see problems with the idea, although I am not adverse to it being considered at all. At some point, I want to give the Government Leader notice of my desire to go back to the question about education, because he said some interesting things that will force us to ask exactly how you do measure the outcome, or the performance, of the education system. The obvious indices that the public uses about school drop-out rates, university admissions or a variety of other things like that are one way of measuring it, but the idea that we actually would measure the outcomes is something that I am sure we would be happy to discuss.

Let me move on to another question. Many times in the book there are quotes about advising against simple-minded approaches to things like cuts. One of them is attributed to a public official named Fernando Noriega, in which he says the answer to cuts in federal funds is not to cut services, but to find new ways of doing things.

Does the Government Leader agree with that general proposition?

Hon. Mr. Ostashek:

Yes, I most certainly do agree that it is the way of the future that we are not going to have the luxury that we have had in the past 20 years of more and more money coming into our coffers. We are going to have to become smarter and wiser and be able to deliver the same level of services for a lot fewer dollars. That does not necessarily mean cuts, but that also means that you are not going to have major increases in funding.

Mr. Penikett:

Moving on to the book, I noticed an interesting statement on page 45, which the authors make much of; namely, that "privatization is one answer, not the answer"; and then they go on to say, "Privatization is not the solution. Those who advocate it on ideological grounds because they believe business is always superior to government are selling the American people snake oil." Would the Government Leader agree with that statement?

Hon. Mr. Ostashek:

I agree with the statement. Total privatization certainly is not the answer. I also agree with the statement that privatization does play a role in delivering some services of government. The private sector can deliver it in a far more cost-effective manner than government. However, in some areas, government will have to continue to deliver services.

The simple answer is that, while I agree with the statement in the broad sense that privatization is one of the tools that government can use, it is not the only tool; it is not the only way.

Mr. Penikett:

I thank the Government Leader for his answer.

Extreme right-wing conservatives in Britain and the United States, among other countries, have been arguing for dismantling much of the public sector, including the school system. However, I am pleased to see that Osborne and Gaebler do not recommend that. In fact, they say, "Public administration of elementary and secondary schools has many problems, but if we turned over all education to the private marketplace, many Americans could not even afford elementary school. Even if we used public vouchers, we would lose one of the fundamental benefits of public education - the chance for children to rub elbows with others from many different walks of life. Those who could afford to would add their own funds to the voucher and buy a better education for their children, leading to extreme segregation by income groups. The shared experience may not be sufficient in market terms, but it is effective in making democracy work."

Does the Government Leader agree with that general principle?

Hon. Mr. Ostashek:

I most certainly do.

Mr. Penikett:

One of the themes of Osborne and Gaebler throughout the book is not that markets are good and governments are bad - quite the opposite. They argue that, as the Government Leader says, we have to be innovative in the ways in which we administer programs. However, they also seem to be very strong advocates of democratic, as opposed to bureaucratic, options. They are in favour of community control, rather than senior government control, of many programs.

I would like to read a short section from page 53, and ask the Government Leader what he thinks of it: "By 1970, a welfare

Page Number 2594

rights movement had emerged to demand more control over the welfare system, a tenants' rights movement had emerged to demand more control over public housing and a neighbourhood movement had emerged to demand more control over urban development and public services.

"Middle-class America joined in with a consumer movement, which sought to give consumers more control over the products made by private corporations; a holistic health movement, which sought to give individuals more control over their own health; a deinstitutionalization movement, which sought to give mental patients more control over their environments; and a general effort to force authorities of all kinds to share their power through sunshine laws, freedom of information acts, right-to-know laws, open meetings, and the like.

"These movements were animated by a common sense that real control over our lives had been lost to the mega institutions of society: big business, big government and big labour.

"Slowly, government has begun to respond. Community-oriented policing is not an isolated phenomena. The same themes of community ownership and empowerment appear in virtually every segment of American public life, and our governments are beginning to push ownership and control of the public services out of the hands of bureaucrats and professionals into the community.

Could I ask the Government Leader what he thinks of the idea of, for example, welfare rights? There is a lot discussion right now about cutting back, hiring fraud investigators, and so forth, which is the traditional authoritarian top-down approach. Has the Government Leader and his Cabinet ever given any thought to the idea that perhaps the problem of social assistance spending might be more democratically and sensitively addressed, if the administration or the direct delivery of these funds was turned over on some contractual basis to a body elected from recipients of these services, who might have a keener sense of who was entitled and who was not, might be able to save the government money, protect the privacy of the citizens and have something that perhaps behaved more justly and fairly than bureaucrats who were more removed from the realities of the lives of the clients? Has the government considered that?

Hon. Mr. Ostashek:

As I said earlier in the preliminaries of this debate, while we can agree with some of the things in the book, some of them do not make sense for a jurisdiction the size of the Yukon. The Member just went on with large quotes of empowerment of people, communities and neighbourhoods. While there is some real merit to that in jurisdictions where we are talking about millions of people, we do not have as many people in the Yukon as they have in 10 city blocks in some cities. So, we certainly cannot call even the Yukon government a big government. I think it is pretty small in the scale of things.

The Member opposite points out the fraud investigator. However, he fails to point out that is only one item the Minister has brought forward in dealing with social reform. As the Member opposite is fully aware, the Minister will be making some statements in the House shortly on other initiatives that he is taking to have a better delivery of the social reform program.

Some of them will, I am sure, be very successful. We will be monitoring it on an ongoing basis to try to refine it. As for turning it over to the people themselves, I do not think that the Yukon community is big enough for anything like that. We certainly have not considered it at this point.

Mr. Penikett:

I have to tell the Government Leader that I think he is wrong about this. This is not a question of scale. This is a problem of what Osborne and Gaebler called different cultures. There is the bureaucratic way of doing things, or there is the new way of doing things, which empower citizens and gives them a sense of ownership and participation.

I use it only as an example. I could have picked any from other departments. The way, in fact, that welfare reform is being handled here is with no involvement by the clients whatsoever, no participation, no ownership. It is, in fact, the traditional autocratic, top-down, bureaucratic process. I know, from talking to the clients, they do not believe there is much sensitivity, sympathy or understanding from the policy makers about there situations at all. I could have picked health services, or housing, or justice - in fact, in justice there is some movement in this direction in the aboriginal community, though there is not very much in the non-aboriginal community. The fact of the matter is, without dwelling on it at length, that we have legislation in place that would allow - already put in place by the previous government, such as the Health Act - the kind of decentralization, empowerment, and community control that these people advocate, but we are clearly not doing it. I would make the point, in fact, that there is a tradition - Jeffersonian democracy in the United States - that argued some of these community control models are easier to put in place in small communities than they are in large communities. They are no less needed in small communities than they are in the large.

Let me read another quote, and ask the Government Leader what he thinks about this. "Health care is a system thoroughly dominated by professionals, but even here a shift toward community is evident. Our health care system was set up to deal with acute care, life threatening illnesses, and injuries. It was so effective that today, most people die of chronic, degenerative problems of old age, yet, we continue to respond with an acute care system of high technology hospitals and highly trained doctors. Ironically, it was our very success at acute professional care that left us with an elderly population desperate for something more."

The next sentence is one I would ask the Government Leader to particularly keep in mind: "Chronic care requires a fundamentally different response - one grounded in the meaning and familiarity of community, family and friends." I ask the Government Leader what he thinks about that statement in light of the fact that we have a chronic care and an acute care facility across the river and it is quite clear to all the people who work in the system that the government is now actively trying to merge the two. Osborne and Gaebler seemed to suggest that that is a very, very bad idea.

Could I ask the Government Leader if he would comment on Osborne and Gaebler's views in that respect?

Hon. Mr. Ostashek:

First of all, the Member opposite is fully aware that they are writing about an American system that does not have a national health plan. There is quite a difference between what they are addressing there and what we are addressing here in the Yukon. I believe that, with a small population like we have, we cannot afford the luxury of having stand-alone departments to deal with specifics. We have to be less professionals and more practitioners if we are going to have cost-effective delivery of health care services.

Mr. Penikett:

I am sorry - the Government Leader has confused me. How does the fact that we have a national health insurance system change anything with respect to the point made by Gaebler and Osborne that chronic care, which is a growing need with our aging population, should be managed differently from acute care, which is the kind of arrangement we have around the hospital dealing with people who are sick or injured? How does the fact that we have a national health care system make any difference at all to the point that Osborne and Gaebler are making here?

Hon. Mr. Ostashek:

My understanding is that the American system is paid for by the client themselves or, if they have insurance, it is paid for by the insurance. Here it is provided by the

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government, and the government says there are no exemptions. When we have a small population like we have in the Yukon, the fact that we are trying to deliver both acute care and chronic care in the same facility certainly should not impact upon what kind of service we are providing.

Mr. Penikett:

I am sorry. The fact that many people have private insurance in the States and the fact that we have a public insurance system should not make any difference at all to the way acute care and chronic care facilities operate. I am sure we want them to be operated efficiently in either case, but I was just trying to find out whether the Government Leader agreed with the Minister of Health and Social Services or Osborne and Gaebler on this point. Clearly he agrees with his ministerial colleague.

There is a lot in this book about the advantages of having tenants heavily involved in the management of public housing in terms of the quality of the buildings, the maintenance, the upkeep of the buildings - in fact, even the social life surrounding the neighbourhoods in which there is social housing, and indeed the health and safety of the children who live there.

Has the government been considering at all any changes that would, for example, make the local housing authorities include more tenants or more clients in the local housing authorities who manage public housing in our communities?

Hon. Mr. Ostashek:

Nothing has come forward that I am aware of, but those questions would be better put to the Ministers responsible for those departments, rather than to me in Finance.

Chair:

Order please. We will take a brief recess at this time.

Recess

Chair:

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

Mr. Penikett:

With the indulgence of the Government Leader, I will just ask a few more questions about his bible. One of the comments I notice that occurs throughout the section from which I am reading is this idea of removing from bureaucratic control to community control. This is a theme that is reiterated over and over again. As I mentioned, we actually have some legislation on the books that would allow us to do that here. I guess I would argue that the self-government agreements the First Nations have are probably consistent with that idea, because they will provide for a lot of devolution.

There is an interesting comment - when we talk about competition and privatization - that they make on page 81. They say, "Where private sector providers do not have to compete, on the other hand, they are just as inefficient as public monopolies," which immediately made me think, funnily enough, of Yukon Electrical, or even the phone company, which is in private hands now but was in public hands, but I doubt if even its shareholders would claim it is more efficient now than it used to be.

One of the things that they have talked about when things are privatized or contracted out and workers lose their jobs in the public sector and end up going to smaller companies, is that they sometimes end up earning less pay and receiving fewer benefits.

They also talk about competitive service providers. Gaebler and Osborne say, on page 103, "A different form of inequity can threaten those who work for competitive service providers. Careful studies indicate that wages paid by governments and private contractors are, on average, fairly comparable. But, some studies suggest that contractors offer fewer benefits, such as health insurance. Governments also tend to be more aggressive than private contractors about hiring and promoting minorities and women." That was a useful reminder that government is under obligations to observe different standards than a private employer, and in many cases, higher standards in terms of health and safety, employment equity and so forth, all of which, we can admit, produce some costs.

How does the Government Leader feel about that? Does he feel that in the effort to control costs, perform efficiently and provide quality services, government should abandon its traditional role of being a superior employer in terms of not necessarily monetary compensation, but in a willingness to do things such as hire the disabled, conduct employment equity programs, promote the equality of women, and so forth? What does the Government Leader think about that?

Hon. Mr. Ostashek:

Certainly not. We have spent 45 minutes doing a book review. We are on page 80 of a book that has some 250 pages in it. I have no problem answering questions in relation to that book, but I think the Member should show its relevance to the budget. This is a budget debate, not a book review.

Mr. Penikett:

That was a terribly witty and clever comment by the Government Leader. I have a very serious reason for doing this. On a number of occasions, the Government Leader has referred to this book as his bible, his standard of how things should be done. We have had very few policy statements from the Government Leader since he came into office on how he intends to go in terms of managing the economy and finances. In fact, some of the statements made about the finances of the government have been less than credible.

I believe that I have every right to ask these questions about the Government Leader's management philosophy, financial management philosophy, and theory of government administration. Since we have not had any coherent statements from the government opposite, I think it is quite appropriate that I ask questions about a book he has referenced as being his standard, his model and his guide.

If the Government Leader wants me to show reference, I can do so, but I am going to have to take more time doing this than I would have done otherwise, because I will then link it to specific cases, specific budget items, specific initiatives by the government, or specific failures.

I had hoped that I could end this in the next few minutes, as I intended to do...

Some Hon. Member:

(Inaudible)

Mr. Penikett:

With the greatest of respect, 45 minutes to discuss the government's management philosophy, approach to financial management and budgeting, is not a long period of time.

Some Hon. Member:

(Inaudible)

Mr. Penikett:

The Government Leader is now wasting time. I would like to get back to asking questions about his approach.

Now, let me show relevance. When the previous government was in office, it had adopted a practice, which applied throughout the government, of having deputy ministers, some of them in consultation with their officials, draft mission statements for the department for the year. These are mission statements that were drafted by the deputy minister and then signed by the Government Leader as a letter from the Government Leader to the deputy minister.

The Government Leader will know that the present Deputy Minister of Finance participated in that mission statement process and was involved in drafting.

Let me very precise, without taking a lot of time. The book the Government Leader has talked about praises the idea of mission-driven organizations, and it talks about how they are more efficient than rule-driven organizations. It talks about their being more innovative than rule-driven organizations.

Does the process of using mission statements - developed by departments and Ministers but, ultimately, written in the form of a contract from the Government Leader, or the Cabinet, and the deputies, say the Deputy Minister of Finance - still operate in the

Page Number 2596

Yukon government?

Hon. Mr. Ostashek:

The departments are reviewing that right now. There are some that had developed mission statements, and they are reviewing that right now. We will probably be proceeding on some basis similar to that, if we feel it is warranted.

Mr. Penikett:

The reason I am asking this question is that this was a system that was put in place - it so happens, by myself - and it was related to the budget. The connection between the mission statement and the budget, in terms of the goals and objectives of the department, the personal and management goals of the deputies, who were the authors of the statement, was in place. It was something that seems to be recommended by these people, and it was in place. The Government Leader says that it may be continued, or it may not. That seems to imply that there were no mission statements written in respect of last year's or this year's budget. Is that correct?

Hon. Mr. Ostashek:

Each department has their goals and objectives outlined. I believe some of the departments did produce mission statements, but I am not sure that all of them have.

Mr. Penikett:

To be very precise, I take it there are not mission statements in the form of a letter from the Government Leader to each of the deputies, including the Deputy of Finance, as there used to be in the last few years.

Hon. Mr. Ostashek:

No, there was not.

Mr. Penikett:

In talking about the method of budgeting, the authors of the book have talked about the changing dynamics - or changing the dynamics - from what they call a spend-it-or-lose-it system to a save-it-and-invest-it system. They talk about the way that managers behave very differently with the two different systems of money. All of us - not just in the Yukon - but all provincial, territorial, and federal governments have had a system, until very recently, where there was often a rush to spend the remainder of a budget at year-end for fear that underspending would have the result of leading to budget cuts in subsequent years.

Has the Government Leader, as yet, been able to make any moves, consistent with what is recommended in this book, away from the spend-it-or-lose-it toward the save-it-and-invest-it philosophy?

Hon. Mr. Ostashek:

It is something that we are looking at.

Mr. Penikett:

How are they looking at it? Specifically, what does he have in mind? Who is looking at it? Is there a committee, or is it the Department of Finance, or someone in the Executive Council Office? Can he say anything about that?

Hon. Mr. Ostashek:

One of the difficulties is that the first step in the process would have to be to change the Financial Administration Act.

Mr. Penikett:

That is a good point. Does the Government Leader have a timetable for trying to move in that direction, including changing the Financial Administration Act?

Hon. Mr. Ostashek:

No, we do not have any definite timetable. Our first two budgets were to get our fiscal house in order. We are looking at many different ways of encouraging departments to discontinue the practice of spending all the money at year-end in the hope of getting an increase in their budget because they spent all their budget. The system, as far as I am concerned, is wrong when we reward the underachievers, or the people who just go out and spend their money at the end of the year, and do not reward the people who are doing a good job of prudent fiscal management. If we can come up with some system - and with changing the Financial Administration Act - to allow departments to keep some of their money, not all of it, I think it would be a move in the right direction.

Mr. Penikett:

On the subject of getting the fiscal house in order, it would be my view that, largely, what has been done is simply moving some of the furniture around.

Let me ask the Government Leader about the bureaucratic behaviour of the managers - in the point he has just made. Osborne and Gaebler are very keen to point out that in an organization that is striving for change and for success, one has to encourage entrepreneurial behaviour, and entrepreneurs, as Gaebler and Osborne say, are people who fail many times. They quote people who told their managers to make sure their organization generates a reasonable number of mistakes, because if they were not failing occasionally, they were not trying hard enough to succeed. I am curious about whether that squares with the Government Leader's approach to deputy ministers in departments, including Finance, and whether it might even extend to his attitude toward previous governments.

Hon. Mr. Ostashek:

As I said, the basis of the book is new and innovative approaches to how we govern and that is what this government is exploring.

Mr. Penikett:

I would just note that some time ago we were arguing about outcomes and I have just actually found the section, chapter 5, where the authors talk about the necessity of developing performance measures that, in the case of hospitals for example, do things like rate patient satisfaction and community and family participation and so forth, so that is obviously something I would want to come back to at some point in the future.

The Government Leader talked just a minute ago about the problem of rewarding failure. In fact, on page 149, Gabler says, "Our tendency to reward failure has literally crippled our efforts to help the poor. Most of the money we spend on the poor, welfare, food stamps, medication, public housing, housing vouchers, child care vouchers rewards failure because it goes only to those who remain poor. A welfare recipient who saves enough money to buy a car so that she can look for work has her grant reduced. If she finds a job, she not only loses her welfare cheque, she loses her medical coverage and, after a year her food stamps are reduced and, if she lives in public housing, her rent often triples."

I know the Department of Finance has certainly looked at expenditures on social assistance in the last few years and has certainly been part of some reviews of these. This philosophy suggests that the kind of punitive measures we have in the Yukon, which discourage people on social assistance from working, may not produce a good result for those individuals and in fact may be financially costly.

Has the Government Leader had any discussions with the Department of Finance about that kind of rewarding-failure problem as it reflects the Department of Finance's analysis of huge expenditures such as those on social assistance?

Hon. Mr. Ostashek:

Yes, we have.

Mr. Penikett:

Has the department or the Minister reached any conclusion as a result of those discussions?

Hon. Mr. Ostashek:

That question would be better put to the Minister of Health and Social Services. As the Member opposite is aware, the Minister will be making some announcements, this week I believe, in the House.

Mr. Penikett:

I will look forward to those announcements and to the opportunity to put some questions to the Minister.

One of the comments that is made repeatedly in this book is about what they call the bureaucratic mode of authority - the top-down method - and the need for there to be accountability for people in the community and, in the case of the school system, for parents and children. I would note that, unlike what is happening in the social assistance field, the Education Act is actually a very good example of what often happened there.

I would like to ask the Government Leader about an interesting section on page 187 and 188 of the book, which deals with training programs that did not work and those that did. They talk about a

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program that was very successful. It involved the steelworkers union, which represents the workers of Faro, which organized their own programs to meet their own needs - using the same money, but achieving a much greater success rate than the others had.

The book, I note, also talks about the program changes of governments with elections, and some of the problems of continuity that should operate in a system but get lost. Osborne and Gaebler must have been thinking about proclaiming bills.

Let me ask the Minister a question that is directly related to the Department of Finance. I am looking at the section of the book here that talks about spending money to save money - investing for return. "A third characteristic we have seen in enterprising governments is an investment perspective. The habit of gauging the return on their spending as if it were an investment is another way to make money, it is a way to save money, by measuring the return on investment, they understand when spending money will save them money. Businesses focus on both sides of the balance sheet - both spending and earning, debits and credits. They do not care as much about the spending side as the earning side. They spend whatever is necessary to maximize their return. But governments look only at the spending side of the ledger. Ignoring returns, they concentrate only on minimizing costs. Frequently, they refuse even to consider significant investments that would generate significant returns, simply because of the cost".

I will not bore the Government Leader by thinking of examples where that has happened in the last few months, but could I just ask him if he agrees with that critique of the way governments work?

Chair:

Mr. Phillips, on a point of order.

Hon. Mr. Phillips:

The Member opposite keeps quoting from a document or a book, and the rule in the House says that, if you continue to quote from a book, you must table it. Would the Member table the book?

Chair:

Mr. Penikett, on a point of order.

Mr. Penikett:

On the same point of order, I would be happy to table the book, except I do not think I can provide 22 copies right now.

Hon. Mr. Phillips:

Thank you. We can wait until tomorrow when the Member picks up copies for all the Members of the House. I think that is appropriate.

Mr. Penikett:

On the same point of order, I will only do that if they promise to read it and then answer a written test at the end of their reading.

Chair:

There is no point of order, and thanks for the sense of humour of the Members on both sides of the House.

Is there further general debate on the Department of Finance?

Hon. Mr. Ostashek:

The Member opposite asked me a very interesting question about whether or not I believed investment was as important as expenditures - I believe that was the question - and whether we should invest for returns in the future.

I have to say that I wholeheartedly agree with that approach, and I think the Member opposite should reflect upon the last session and the $4.5 million for the Alaska Highway. Was that an investment that would save us money in the long run?

Mr. Penikett:

Without repeating that debate, I think our point was that a $4.5 million investment would produce greater long-term benefits for the children and future generations of this territory. Clearly, the Government Leader and I disagree on that.

Let me ask the Government Leader a question relating to the question of investment. I know the Department of Finance invests money. Let me read a quote from page 215.

"We saw the same mindset in Santa Clara. Like Santa Bruno's cable company, Santa Clara's publicly owned electrical utility returns at five percent of gross revenues to the city, but still charges 30 to 40 percent less than its private competitor does in surrounding communities. Thirty years ago, I spearheaded a group of other municipalities to form the Northern California Power Agency, which then built a large 200-megawatt geothermal energy project, as well as the last major dam in California. When tax credits favored wind energy, the utility bought 2,600 acres and leased them out to private companies to build windmills. Santa Clara's water and sewer utility created a solar division, in effect, the nation's first solar utility. It provides hot water units for apartment buildings and swimming pools. The utility buys and installs and maintains the equipment, charging the customer a monthly fee for six months a year to cover the costs."

Then, it goes on, on the following page, "In reality, there are several good reasons why government should sometimes compete with the private sector. Some services are natural monopolies. It is inefficient to string two or three sets of electrical lines or to buy two or three sets of gas lines in the city, for example. In such cases, governments can grant a private monopoly and regulate its prices or they can create a public monopoly. The latter option often delivers a better deal for the public. For 100 years, publicly owned utilities have sold electricities at lower prices than their private counterparts."

I would just ask the Government Leader, not necessarily if he agrees with that, because I suspect he does not, but if he thinks that Osborne and Gaebler may have a point.

Hon. Mr. Ostashek:

I am sure they have lots of points in that book and I do not necessarily have to agree with all of them, and I certainly do not. I am sure the Member opposite does not agree with all of them.

Mr. Penikett:

That is correct. The Government Leader is getting testy about the time here, but just let me skim over a couple of points that I want to make.

One of the things that Osborne and Gaebler do is talk about the importance of prevention in areas like health, which we were moving in that direction some time ago. I am not sure if we still are. Another important point is they talk in a long section here about strategic planning and that different strategic planning processes have different wrinkles, but most involve a number of basic steps. Then they go on to describe them and they talk about the importance of trying to achieve consensus.

I know the Government Leader will want to know this. I was actually talking to a Harvard professor the other day who was talking about how one of the best strategic planning exercises they ever encountered was the Yukon 2000 exercise.

Gaebler, on page 234, talked about strategic planning as not something done once to develop a plan, but a process that is regularly repeated. "The important element is not a plan, but planning, by creating consensus around a vision of the future, an organization or a community, builds a sense of where it is going among all its members. This allows everyone, not just leaders, to understand what direction they need to take. It helps them seize unexpected opportunities and deal with unexpected crises, without waiting for the word from the top." I thought that was an interesting comment, in view of the debate we had the other day about the Council on the Economy and the Environment and annual reviews of the economic strategy.

Let me ask the Government Leader a question that I want to pursue on another occasion, but I will not tonight. I want to pursue it in greater detail. It is about the way in which the Department of Finance keeps its books and the way in which it deals with capital assets. I would just introduce the subject by quoting from the book here, "Physical assets are investments. When a government builds a highway or a dam, it is creating something of value, almost like a savings account. As that dam ages and wears out, its value declines because without expensive repair, it will ultimately give way."

Page Number 2598

In business, that form of spending is called depreciation. Our accounting systems - referring to government accounting systems - hardly notice. At all levels of government, accounting records almost entirely ignore what assets are owned, their state of repair, and their value. These systems therefore imply that it costs nothing to use existing assets, indeed they suggest the opposite. By cataloguing costs of maintenance as a current expense, they make it seem cheaper to use up assets than to keep them in good repair." I would only say to the Government Leader that I generally agree with that observation. I know the Department of Finance does not do this entirely on its own; there is the Financial Administration Act, the Auditor General, and a lot of other people - but I do know that a number of governments are looking at revising the way they do what they call capital budgeting. I do not mean the way we do our capital budget, where we just show the capital expenditures, but the way that they deal with depreciation and so forth. Has the Government Leader been thinking about this, or talking with his deputy about it at all?

Hon. Mr. Ostashek:

I understand that there is some interest in that. The Auditor General is talking to Finance departments in various jurisdictions about that. I have some difficulty with depreciating government assets, because it is a fallacy, first of all. Government assets have to be treated differently from assets of private corporations. Private corporations can divest themselves of their assets. I guess government can, to a certain extent, divest themselves of some assets by privatizing, but I know the Member opposite does not have a philosophical view in that direction. Unless you are able to realize some return, or some revenue from these assets, I do not know what legitimate reason you would have for carrying assets on the books.

Mr. Penikett:

As I said, it is not a debate I want to get into now. I do want to indicate to the Government Leader, at some point in this House, perhaps in the Finance estimates, that I do want to come back to this question, because I do think there are arguments why you would do that. People who argue in favour of showing depreciation argue that you distort your budgets, and you often do not make timely capital expenditures without dealing with depreciation and so forth.

I will just quickly comment that I like what Osborne and Gaebler have to say about training. They talk about the fact that nobody wants poorly trained employees making important decisions, yet few governments spend much money on training. It is interesting that the governments that do often get criticized for doing it. They also make very positive comments about recycling programs, and I would hope that someone in the government would have a look at those.

It is too bad the Minister responsible for the Public Service Commission is not here. They also talked about the need to have good employer-employee relationships. I will just read this quote: "Many public managers believe that unions are the greatest obstacles standing in the way of entrepreneurial government. Certainly, unions resist changes that threaten their members' jobs, as any rational organization would, but most entrepreneurial managers tell us that unions have not been their primary obstacle. The real issue, they believe, is the quality of management. That is a statement with which I would agree.

These people also talk about there being no such thing as a free market. If, by that, they mean a market free of government intervention, I guess I agree with that statement, too.

Following up with the point we were just talking about, they talked about changing public investment policy and about how government invests significant amounts of capital in pension funds, cash balances and reserve funds. Perhaps I am reading him incorrectly, but Gaebler seems to be recommending setting up something like the Yukon Development Corporation to do things much more than that. He also seems to be recommending green taxes and so on.

Let me just finish by pointing out that, on page 252 and 253, these authors make very good arguments for decentralization. I would like to summarize these. Decentralized institutions have a number of advantages, they say. First, "They are far more flexible than centralized institutions and can respond quickly to changing circumstances and customer needs." Second, "Decentralized institutions are more effective than centralized institutions." Third, "Decentralized institutions are far more innovative than centralized institutions." Fourth, "Decentralized institutions guarantee higher morale, more commitment and greater productivity."

I would just like to say, in commenting on that, that not only do I think there is an argument for decentralization, but that says something about the way we should be changing the very hierarchical structures we now have in government.

I do not want to try the patience of the House, but I would like to say to the Government Leader that I enjoyed the opportunity to read this book. There are many agreeable things in there. I do not agree with everything, but with respect to the things with which I agree, I would only express my disappointment that so few of them seem to have been implemented.

The one thing that I would like to say, in a perfectly serious way - and it does not have to be during this budget debate - is that I do think there are some pretty important issues identified in this book about the way the public sector is organized, the way it budgets personnel policies, service delivery, the involvement of clients, empowering citizens and communities. I would say to the Government Leader, in all seriousness, that I would hope, at some point, since these ideas are much on his mind, we would have an opportunity to have a serious and thorough debate on some of these proposals, and that those of us in this House have an opportunity to express ourselves on which of these proposals make sense and which of them ought to be pursued aggressively.

Hon. Mr. Ostashek:

I would look forward to that debate. I am very happy to see that the Leader of the Official Opposition has taken the time to read that book, because there are many things in that book that make sense to me. We are going to need some support from Members opposite for changes to the Financial Administration Act, to bring forward some of these changes that I believe will be a benefit to everybody.

I have a couple of comments, the first one about decentralization. I have a different idea of how the book talks about decentralization than what the Leader of the Official Opposition does.

They are talking about decentralization in many areas other than physical decentralization of a couple of employees of a department to an outflung community 300 miles from the centre. They are talking about the decentralization of decision making within departments. I think that is one of the key areas in that book I can agree with: we should have decentralization of decision making.

We have to empower people. There is no doubt about that.

I find it quite ironic that one of the things I found very interesting about that book the Leader of the Official Opposition failed to mention, and that is instilling competitiveness in our public sector - to put the competitiveness back into the public sector, to take pride in how they do their jobs. There was a perfect example of that in the chapter on the garbage collection in the City of Phoenix, and how that worked. I thought that was a very good example of putting competitiveness back into our public sector, and I think it is one of the keys to having a cost-effective public sector and good delivery of services to the clients. I just expected that, at any point, the Member opposite would be alluding to that, but he failed to do so. At any rate, I will look forward to a debate

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at some point on that.

There are a lot of ideas in that book I believe we can look at incorporating, even in a small jurisdiction like the Yukon. Another one of the areas in that book I recall - as I say, it has been a couple of years since I read it last - was on multi-year budgeting. I thought it had some merit. He also wrote much about elementary and secondary schools, and the book also addressed putting competitiveness back into some schools in the United States, and it has worked very well.

What I got out of the book was that a lot of the issues that governments were trying to address were issues where competitiveness played quite a part in making these areas of reinventing government successful.

They have accomplished some of these things by putting the competitive spirit back into their personnel and departments. I found that aspect of the book very interesting.

I do not think everything in the book would fit the Yukon. However, I think there are things, such as the special operating authorities, that are good. I know that the Member opposite may have some concerns about that because of the unions, but I believe there is some merit to them. I also believe that there is some merit to changing the Financial Administration Act so departments can keep some of their money and not have to turn it all back in at the end of the year. Along with that extra responsibility comes extra accountability. Those safeguards have to be put in place. I believe that can be accomplished.

I look forward to a debate on some of the changes we will be bringing forward. It will be interesting to see what kind of support we get from the Members opposite.

Mr. Penikett:

The Government Leader is right. The authors of Reinventing Government were talking not just about physical decentralization, but also about the decentralization of power. I would like to be quite clear that I agree with both.

In respect to schools, I am not so sure that what they propose in terms of competition for schools is a bad idea, but you have to start with the very basic change in the present government's policy - and the former government's to - about assigning people to schools in Whitehorse. If you are going to have a kind of market-oriented competition, you are going to have to let parents choose which school they want their kids to go to. That will have consequences. If there is a school that is not performing well, it will be underpopulated, while other schools will be overpopulated, which presents problems.

Of course, in rural Yukon, for most cases, there will not be much competition unless you try to get some form of it within schools.

I find it fascinating that the Government Leader mentioned the Phoenix garbage collection system, which was a case where it was privatized and the unions involved immediately demanded a right to bid on the contracts.

If I remember correctly, I think that in one of the major cities where that happened, in eight out of the 10 districts where they had privatized the garbage contract on a regional basis, the former unionized employees had successfully bid and kept the contracts...

Well, the Government Leader is shaking his head; I will look it up for him.

Yes, they eventually got it back. Sorry, I did not mean to suggest they won them immediately; they did not, but they became very competitive. Interestingly enough, when we are talking about competition, that required not just competition, but also a high level of cooperation among the members, which is, of course, one of the things that unions do.

Chair:

Is there further general debate on Finance?

Mr. Cable:

I have a couple of questions but, in view of the hour, I will simply indicate to the Minister that I want to go over these March balloon payments tomorrow. Last year, the Minister provided me with information the deputy had prepared for the last five months of each of the two previous fiscal years.

I would also like to go over the travel allowances that are provided to the public servants.

Hon. Mr. Ostashek:

For the Member opposite, that debate will probably take place next week some time. I will be leaving tomorrow for the Western Premiers Conference.

Mr. Chair, I move that you report progress at this time.

Motion agreed to

Hon. Mr. Phillips:

I move that the Speaker do now resume the Chair.

Motion agreed to

Speaker resumes the Chair

Speaker:

I will now call the House to order.

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

Mr. Abel:

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. tomorrow.

The House adjourned at 9:25 p.m.

The following Legislative Return was tabled May 16, 1994:

94-1-352

Yukon Council on the Economy and the Environment: consultation costs re introducing video lottery terminals and expanding casino gambling (Ostashek)

Oral, Hansard, p. 2547

The following Document was filed May 16, 1994:

94-1-44

Circumpolar Agricultural Conference (Whitehorse, September, 1992) proceedings available; May is National Garden Month (Brewster)