Whitehorse, Yukon

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

Page Number 2749

Speaker:

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

Prayers

DAILY ROUTINE

Speaker:

We will proceed at this time with the Order Paper.

Introduction of Visitors.

Are there any Returns or Documents for tabling?

Are there any Reports of Committees?

Are there any Petitions?

PETITIONS

Petition No. 10

Ms. Moorcroft:

I have for tabling a petition signed by 362 residents of the Ross River-Southern Lakes riding, demanding that their MLA support the right to free collective bargaining, which he promised to do.

Petition No. 11

Mr. McDonald:

I have a petition of some 320 or 330 people who are seeking support from the Yukon Legislative Assembly to work with the tenants of trailer parks to design amendments and amend the Landlord and Tenant Act to better protect the stall renters.

Speaker:

Are there any Bills to be introduced?

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

Are there any Notices of Motion?

Are there any Statements by Ministers?

This then brings us to the Question Period.

QUESTION PERIOD

Question re: Yukon Energy Corporation, privatization of

Mr. Penikett:

I have a question for the Government Leader. Over the weekend, the Minister for energy matters met with representatives of the Association of Yukon Communities. I want to ask if the Government Leader has been fully briefed by the Minister about the meeting and can he advise the House whether he and his Cabinet have made any determinations about the future of Yukon Energy Corporation following that meeting.

Hon. Mr. Ostashek:

I was aware that the Minister had met with the association, but I have not been fully briefed on the matter at this point.

Mr. Penikett:

I believe the Government Leader has, however, received a letter from the Association of Yukon Communities, over the signature of the Mayor of Dawson City, which states the AYC's unequivocal belief that the Yukon government should retain sole ownership of the Yukon Energy Corporation, Yukon Development Corporation and their assets. Can the Government Leader tell the House, if, after weeks of debate and questions in the House and in the face of opposition from AYC, he and his party have now made a policy decision that Yukon Energy Corporation and its assets should remain in public hands.

Hon. Mr. Ostashek:

No, we have not.

Mr. Penikett:

The AYC letter says, "We are concerned that the Minister is using his negotiations with CYI to camouflage the ultimate acquisition of Yukon Development Corporation and Yukon Energy Corporation assets by Yukon Electrical Company Limited or one of its affiliate companies." Given the concerns that have already been expressed in the public about the Minister's links to the exploratory negotiator, historical relationship with YECL, et cetera, could the Government Leader indicate to the House if he has respectfully requested the Minister responsible for energy to cease and desist any further efforts to privatize Yukon Energy Corporation?

Hon. Mr. Ostashek:

I believe we are putting the cart in front of the horse here again. When the Member opposite, the Leader of the Official Opposition, was questioning the Minister about it, the Minister said quite clearly that we were going to continue to pursue, with the federal government and CYI, how we could get them involved in ownership of the corporation, and that exercise is still being pursued.

Question re: Yukon Energy Corporation, privatization of

Mr. Penikett:

The fact remains that there have been substantial and secret negotiations about this matter, which were not promptly reported to this House, and the House has already been told that Mr. Terry Boylan has completed his extended contract to conduct exploratory negotiations with respect to selling Yukon Energy Corporation assets to Yukon First Nations. Perhaps the Minister can tell us exactly when Cabinet made, or will make, its decision in respect of Mr. Boylan's report and will he tell us, since Mr. Boylan was contracted by ECO, if ECO or the Minister responsible for energy will be making the recommendations to Cabinet?

Hon. Mr. Ostashek:

As the Member said, the consultant was employed to make some preliminary report to Cabinet and, based on that report, Cabinet would be deciding what the next steps would be. As I just told the Member opposite, Cabinet has decided to continue to explore, with the federal government, CYI's ability to purchase a certain portion of the Energy Corporation.

Mr. Penikett:

The record will show that the initiative for all of these talks began with the proposal from Yukon Electrical. That is a matter of record in this House. AYC has expressed concern about increased electrical rates and the Crown corporations losing their ability to subsidize rates, if privatization proceeds.

Can I ask the Government Leader, if Cabinet decides to proceed or to pursue further negotiations with the First Nations, Yukon municipalities or any other interest, can the House be assured that the government will follow its normal contract tendering procedures in the selection of a negotiator, rather than using the sole-source method to obtain someone who is close to the government?

Hon. Mr. Ostashek:

I have no problem at all telling the Member opposite that that would be the case.

Mr. Penikett:

In a very strongly worded letter from Mayor Jenkins, on behalf of the Association of Yukon Communities, they have requested that full public consultations precede any move to modify either the ownership or the operations of YEC and YDC.

Can the Government Leader give this House his undertaking that no change in the YEC or YDC status will take place before full public consultations have been held?

Hon. Mr. Ostashek:

As I said, we are again putting the cart in front of the horse. We have not even got to that stage yet. We are nowhere near that stage yet. What we are talking about is some active participation by the Council for Yukon Indians or Yukon First Nations - whatever title they want to use - to be a part owner of the Energy Corporation.

Question re: Yukon Energy Corporation, privatization of

Mr. Cable:

I have questions on the same topic for the Minister of the Yukon Energy Corporation, in that the Government Leader has not yet had a chance to read the letter from the

Page Number 2750

Association of Yukon Communities. One of the points that Mayor Jenkins makes in his letter to the Government Leader is that the diversification of ownership will continue to promote increased electrical rates. Is that a proposition that the Minister responsible for the Yukon Energy Corporation accepts?

Hon. Mr. Phelps:

Of course not.

Mr. Cable:

One of the other propositions that Mayor Jenkins makes is that the Public Utilities Board process has become too complicated, and assumedly, too expensive. Is the Minister responsible for the Yukon Energy Corporation taking any steps to either simplify the process or make the rate hearings less frequent in order to reduce the burden to the taxpayer for these fairly complicated proceedings?

Hon. Mr. Phelps:

The government has solicited comments from the board and from some of the interveners, and is examining the situation about the expensive nature of the hearings before the Public Utilities Board. Upon receiving those comments and following further analysis, we will be taking whatever steps we deem to be necessary to bring down those costs.

Mr. Cable:

At the meeting that took place between the Minister and the representatives from the Association of Yukon Communities on Saturday, did the Minister and the representatives meet agreement on any matters? If so, on what matters?

Hon. Mr. Phelps:

We did agree to disagree on a few things. The purpose of the meeting was to explain in some detail the steps we are taking with regard to First Nations and potential ownership, as well as to discuss the items in a letter I received from AYC, which included a series of questions. It was signed by Mayor Jenkins. We did those things. There were no agreements reached. I did advise that, as an association, if they had a unified position on something that was clear, and they were prepared to put together a well-argued brief about their position, particularly with respect to ownership, or whatever it is they are really asking for, we would be more than pleased to receive it and have it analyzed. However, the fundamental principle that we would be concerned about in our analysis was what I see as my mandate as Minister, and that is the reduction of the cost of power to ratepayers in the Yukon.

Question re: Alaska Highway blockade threat

Mr. Harding:

I have a question for the Government Leader.

The discussion between the United States and Canada about the Pacific salmon run has broken down. Due to the migratory pattern of the salmon, the Yukon has an interest in these talks.

In 1985, the then Conservative government exempted the Yukon River from the Pacific Salmon Treaty, and this may not continue to be the case.

Fishers in British Columbia are discussing a blockade of the Alaska Highway, which could be harmful to our economy.

I would like to ask the Government Leader this question: what action will his government take to try to help those desperate workers protect their industry, while protecting our economy at the same time?

Hon. Mr. Phillips:

I think it is appropriate that I respond to the question, as I have had some dealings this weekend with the threat of the boycott.

On Saturday morning I attempted to contact the British Columbia Department of Tourism, as well as the United Fishermen and Allied Workers Union. I was successful in talking to the Minister of Tourism, Mr. Bill Barlee, and he assures me that they are going to do whatever they can to make the fishermen aware of how important the tourism traffic on the cruise ships, as well as the tourism traffic on the Alaska Highway, is to Yukon and Northern British Columbia.

As well, about one and one-half hours ago I had a rather lengthy discussion with Dennis Brown, who is the secretary/treasurer of the United Fishermen and Allied Workers Union. In his words, he has said he has heard me loud and clear, and would like to work with us in doing whatever he can to mitigate any problems that might come out of this. Mr. Brown has assured me that his union would like to avoid the problems of any kind of a boycott and he will pass on the message that I gave him to his board, when planning any future actions.

I think the Member opposite knows how I feel about protecting the salmon resource and I, as the Minister of Tourism, will be writing a letter to the State of Alaska expressing our concerns over the breakdown in the negotiations about salmon and the well-being of the salmon stocks in the west coast of Canada and the United States.

Question re: Yukon River salmon treaty negotiations

Mr. Harding:

I have another question for the Government Leader, and I thank the Minister of Tourism for that last answer.

Last year, the Yukon Party government refused to attend the Yukon River salmon negotiations, which I think showed a large lack of commitment to settle those important fishery issues. Could the Government Leader inform this House when he is going to be prepared to increase the profile of the Yukon Territory at the Yukon River salmon and the Pacific salmon negotiations?

Hon. Mr. Phillips:

I am acting as the Minister responsible for Renewable Resources, while that Minister is away, so it is appropriate that I answer this question as well. The Yukon is currently working very well with the State of Alaska on interim agreements on catch shares during the salmon stock rebuilding program and the stock restoration fund. We are hoping that we can continue these talks.

As the Member knows, the Yukon River was exempted from the Pacific Salmon Treaty, much to everyone's chagrin at the time, and for the last 10 years or so, talks have been ongoing about the Yukon River system.

We have come to some agreements on the biological side on various studies that have taken place on the river and we are now working on interim arrangements on catch shares.

We hope that the recent flare-up in the Pacific salmon talks will not affect our negotiations, but there are some awful hard feelings on both sides, so we are not sure at this time how it will affect us.

Mr. Harding:

Perhaps that Minister should lobby the rest of his Cabinet colleagues to send someone to the table next time and we might get an agreement on the Yukon River salmon negotiations.

I have another question for the Government Leader and I hope he will answer this one this time.

In his report to the Western Premiers Conference, the Government Leader did not mention the Yukon or the Pacific salmon talks in representations that he made, so I can only assume that he said very little about it.

When does the Government Leader plan to get serious about protecting Yukon's salmon fishery?

Hon. Mr. Ostashek:

We have been serious all along - to say we missed a meeting is just misleading, because we had officials at that meeting.

Speaker's Ruling

Speaker:

Order. I would appreciate it if the Member would not use the word "misleading". Would the Member withdraw that word from his answer.

Hon. Mr. Ostashek:

I am sorry; I will withdraw that word.

Negotiations are ongoing and we hope that they will be resolved to the satisfaction of everyone. We have worked very, very hard over the past two years to try to get this concluded and

Page Number 2751

to wrap up the two outstanding issues - that is, the catch shares after stock has been restored and compensation to Canada for the U.S. harvest.

Question re: Accumulated surplus

Mr. McDonald:

I have a question for the Minister of Finance. On April 27, the Minister of Finance stated that the government's priority was to reduce the accumulated deficit over a period of years, and not immediately in one year. And then last week, the Minister appeared to give information that blew that stated priority out of the water. Can the Minister tell us precisely what the latest projections for accumulated surplus will be for March 31, 1994?

Hon. Mr. Ostashek:

As I said in the House last week, these period 13 figures are still rough figures. But, the best figures that we have to date show the accumulated surplus as of March 31, 1994, at $5,956,000.

Mr. McDonald:

So the accumulated surplus as of March 31, 1994, will be approximately $6 million. Can the Minister tell us why, after the detailed financial briefings that caused, we understand, a redraft of the wage restraint legislation, the Minister answered a question in the Legislature and indicated that the accumulated surplus for March 31, 1994, would in fact be a deficit of $3 million to $5 million. Why would he say that?

Hon. Mr. Ostashek:

That was based on the figures that we had at the time. The Member opposite is fully aware that these figures come in at the end of the year. They are still not final. There will be some adjustments made to these figures.

Mr. McDonald:

No, no, no, Mr. Speaker. To be fair, the Minister has indicated that, as of last week, after the new wage restraint legislation came down and after the information came forward with respect to the news about the lapsing funds from last year - the unspent money - there was going to be an accumulated deficit of $3 million to $5 million. Today he has indicated that there will in fact be a surplus of $6 million. Why would the Minister be out by approximately $10 million - in one week?

Hon. Mr. Ostashek:

That is no surprise at all. The Member opposite knows that I read these figures on the projected surpluses into the record during the debate on second reading of the Public Sector Compensation Restraint Act, 1994.

What is not decided yet, and what we are not trying to hide - and that is why we used the $19 million figure - is what to do about the $12 million conversion of the loan to YDC, and whether we are going to convert it to a grant or whether we are going to leave it outstanding as a loan, seeing that YDC is never going to have any money to repay it.

Question re: Accumulated surplus

Mr. McDonald:

I must come back to this. I am sorry, I have another question, but I will have to tie this one down because I do not like getting information from the Minister that seems to change from day to day. We are talking about millions and millions of dollars here.

On May 25, the Minister indicated that there would be, as of March 31, 1994 - and I am quoting from Hansard - "an accumulated deficit of $3 million to $5 million." Today he has indicated that the deficit would in fact be a surplus of $6 million.

All this information comes after the detailed financial briefings that the Minister has had with his officials about the year-end projections for 1993-94. Can the Minister tell us why he is out by approximately $10 million?

Hon. Mr. Ostashek:

I have not had a chance to review Hansard yet this morning. I may have misstated that. I may have meant it to be a surplus rather than a deficit, because these are the figures that I read in during the second reading debate of the Public Sector Compensation Restraint Act, 1994. It was the accumulated deficit and surplus figures that I have in my hand right now.

Mr. McDonald:

I am afraid we are going to have to go over the information that we have received in the Legislature during the past month or so, just to make sure that when one said "deficit" one meant "surplus", or vice versa, because obviously that has some impact on this equation.

Can the Minister tell us how they can project they are going to be in a slight deficit position a couple of years from now, when their spending plans vary by some $45 million from their main estimates, $20 million of which was net funding from last year?

Hon. Mr. Ostashek:

When we go through the debates in Health and Finance, I am sure it will be quite clear for the Member opposite. He will understand what is transpiring and why we have faith in the projections we have put out.

Mr. McDonald:

Last year, we were told we should have faith in their projections, and we were told we needed $8 million in taxes. When the tax plans changed, we had to amend the budget 43 times in order to accommodate $1.8 million worth of changes. Yet, by the end of the year, those spending plans had varied by $45 million - $19 million of which was a surprise.

How can the Minister now tell us that their spending projections two or three years from now are going to be so precise that they expect a slight $1 million deficit, for the year 1996-97?

Hon. Mr. Ostashek:

The entire $20 million was not a surprise, because we have always said there would be $4 million to $8 million in surpluses that would be lapsed. We have said that all along. It is not right to say that the whole thing was a surprise.

Question re: Business development fund, loans outstanding

Mrs. Firth:

I have been asking the Minister of Finance and Economic Development some questions about publishing lists of clients who are delinquent in repaying money they owe the Yukon government. Last week, the Minister said to me that it would be going to Cabinet, that he was quite certain it would receive approval, that I would get the names if everything falls into place and the legal opinion is that the government can do that; he had clearly stated that was his desire; the party had sent that message to government, and he was sure Cabinet would look at it in that light.

Can the Minister tell us today what his policy is regarding publishing the names of people who are delinquent in repaying their loans?

Hon. Mr. Ostashek:

The Member just read off excerpts from a debate that went on in the House, and that is exactly what we intend to do; however, we have to have the policy put in place to publish these names. In fairness to the people who have the outstanding loans, they have to be given a grace period before we make their names public. That is only fair.

Mrs. Firth:

At the rate this government makes decisions, they will probably have a grace period of the next two years before the next election.

I want to ask the Minister a question about another policy issue. I would like to know what the Minister's policy is with respect to contractors who have been successful in receiving contracts from this government, getting business development fund loans to fulfill the requirements of the contracts after they have been awarded, in direct competition to other contractors. What is the government's policy with respect to that?

Hon. Mr. Ostashek:

I believe the Member opposite was given the terms of reference and the criteria for the business development fund loans. As long as people meet those criteria, they are eligible for the loan.

Mrs. Firth:

This question could take up about three days in

Page Number 2752

Question Period; however, I do not have three days, but we will get to it. Clearly, things are out of control with this government at the political level, when it comes to the loans program. We have an incident where a contractor went to the business development fund to get a loan after he had been awarded a contract, and it had been substantiated in this House that he had no involvement with government funding, and had no government funding. The government tables a list of contracts, and what do we find? We find that a loan for $100,000 has been given to this contractor. I then write the Minister a letter and I find that he has had a loan approved for $180,000, and those were supposed to be the terms of the contract. Can the Minister tell us if there is any policy written anywhere in his department with respect to contractors coming, after they have been awarded a contract, and getting money from the business development fund so that they can comply with the terms of their contract?

Hon. Mr. Ostashek:

All that I can tell the Member today is that the applicant must have complied with the criteria that is in place for giving out business development fund loans. These are loans that are not given out at my discretion nor the discretion of the department. They are given out by a board of Yukon people who look at the applicants and decide whether they qualify, and whether or not a loan should be given to them.

Question re: Accumulated surplus

Mr. McDonald:

I have a brief follow-up question regarding some comments the Finance Minister made this morning with respect to the government's finances.

He indicated that he knew that the Department of Health and Social Services would lapse $6 million or $7 million gross spending, but he had no idea that it would lapse $8 million to $10 million. Can the Minister tell us when he, as Finance Minister, believed that the department was going to lapse the $6 million or $7 million gross spending?

Hon. Mr. Ostashek:

I do not know exactly, but I was given the indication some time in March that it was possible. They were not prepared to give me a firm commitment on it at that point, but it was after the change in deputy ministers in the department, I know that.

Mr. McDonald:

Is the Minister aware that he has informed the House and that the Finance officials have informed us during budget briefings that the entire government was expected to lapse between $8 million and $10 million in gross spending, as of the date the April budget was tabled, which would of course leave only $1 million or $2 million available for lapsed funding for all the rest of the departments? Is he aware of that?

Hon. Mr. Ostashek:

Yes, I am aware that we were saying that we could be lapsing as much as $10 million.

Mr. McDonald:

We have some more information, but we will have to explore this a little further tonight.

I would just like to ask another question of him about the comments made this morning. He indicated that $5 million was not going to be sufficient funds for one school. In fact, they needed $35 million to build three schools in the next two years - those were his comments. Can the Minister tell us what kind of schools are going to cost between $11 million and $12 million per school, given that the Minister of Education has complained about schools that cost $7 million to $8 million?

Hon. Mr. Ostashek:

I have no difficulty telling him that. I believe the total projected capital budgets, just off the top of my head, for schools over the next five years is somewhere in the neighbourhood of $50 million. Included in that is one high school that could cost as high as $20 million to $25 million.

Question re: Faro mine, environmental protection

Mr. Cable:

I have some questions for the Government Leader on Faro and Curragh. Numbers such as $120 million have been bandied around for remedial environmental protection in relation to the mine at Faro. Does the Government Leader have any estimate of what is required in the way of remedial environmental projection - the costs associated with that prior to the startup of production?

Hon. Mr. Ostashek:

The Member opposite is quite right. There have been many different numbers bandied around about what the environmental liability is there. I guess it will be a matter of negotiations between whoever the purchaser of the property is and the Department of Indian Affairs and Northern Development about what figure they finally agree to. But, there is a broad range of figures being talked about as the potential environmental liability.

Mr. Cable:

The Minister's predecessor hired a person to be put in the position of mining facilitator. One of the terms of reference for the mining facilitator was to chair an interdepartmental working group of affected departments for particular projects - for example, Casino - to coordinate all aspects of government involvement. Have the mining facilitator and the Government Leader set up the interdepartmental working group to deal with the Faro mine?

Hon. Mr. Ostashek:

The potential purchasers of the mine have not yet approached us. They are fully aware that we have a mining facilitator in place, who is there to help expedite permitting, whatever is required, and we will work with whatever mining companies approach us.

Mr. Cable:

Has the mining facilitator, as part of his duties, determined what the environmental exposure is - the range of costs - and has he produced a report that could be tabled in the House for the benefit of the other Members of the House?

Hon. Mr. Ostashek:

I am not sure that that falls within the terms of reference of the mining facilitator's duties. He is there to help the mining companies through the permitting process and to get roadblocks out of their way. I do not think he is there to do analysis of environmental liability.

Question re: Shakwak Air, Government Leader's involvement

Mr. McDonald:

I would like to get away from the depressing subject of public sector finances for a moment and instead enter the disciplined and reliable realm of private sector finances.

Earlier this session, the Minister said that he was acting as an advisor to the president of Shakwak Air in the disposal of company assets, yet it appears that his involvement in the company, as late as last summer, was much more than he has indicated - including the hiring of personnel and even conducting flight-seeing trips around Kluane National Park.

Would the Minister care to tell us precisely what his involvement with Shakwak Air is, since his disclosure statement first indicated that he was no longer an officer or director of the company? He appears to have been some kind of operations manager, I guess.

Hon. Mr. Ostashek:

If the Member opposite wants to make some allegations and charges, I will be happy to debate them with the Member opposite.

Mr. McDonald:

All we have at our disposal are disclosure statements, and we must ask questions in the Legislature in order to extract the necessary information to determine whether or not something serious should be charged. I have no way of knowing until I ask the question.

I am asking the Minister, given that he indicated in his disclosure statement to the Legislature that he was no longer an

Page Number 2753

officer or a director of the company, could he tell us precisely what his involvement was?

Hon. Mr. Ostashek:

I will tell the Member opposite that I was no longer an officer or a director of the company.

Mr. McDonald:

Given that he is hiring people and selling assets, et cetera, does that then mean that he was the operations manager and sometimes pilot for the company?

Hon. Mr. Ostashek:

I was on the books as operation manager for one reason only. It is a seasonal business and the company did not have to keep changing who the operations manager was.

Question re: Shakwak Air, Government Leader's involvement

Mr. McDonald:

I do not understand; if the Minister is saying that he was only there as a subject of some sort of paper exercise that could not be changed because it was too difficult, could the Minister tell us why he would have then been piloting planes and actually acting as operations manager? Is there some title that he was holding for the company?

Hon. Mr. Ostashek:

If the Member opposite can say how this reflects on my position as Government Leader, and make some allegations, then we will get into it.

Some Hon. Member:

(Inaudible)

Mr. McDonald:

The problem, quite clearly, is simply that the Government Leader, who is paid a full-time wage to do a full-time job, appears to have been flying for the company and acting as operations manager.

There is also the problem that the Minister had led us to believe that he no longer had a relationship with the company, because he resigned as director and president and then continues to have a relationship.

Consequently, we are worried that the Minister may not have been telling us the entire truth and we want to know what that truth is.

I would ask the Minister again: what was his role with the company? What did he do?

Hon. Mr. Ostashek:

It is very, very limited.

Mr. McDonald:

Limited with a company, limited with a government, I suppose. However, there has to be some reconciliation here of the role of private and public business being conducted by Ministers of the Crown. I hope the Minister would take that into account in the future.

Given that the Minister has disclosed in his statement that his only source of income has been remuneration from YTG, can he tell us whether or not he personally received any remuneration for the services he personally provided to the company?

Hon. Mr. Ostashek:

No, I did not.

Question re: Yukon Housing Corporation, proposal requests

Mrs. Firth:

I have a question for the Minister responsible for Economic Development regarding his loan program. In this Legislature last session, a very controversial issue was raised with respect to a contract that was awarded to a local contractor for 14 social housing units. The contract was awarded in October. It was challenged, and a review was conducted, at which time it was revealed that all the financing was in place, that the Yukon Housing Corporation was giving absolutely no financing to the contractor and that the process had been done in a fair manner.

Since that time, the Department of Economic Development loan program - the business development fund, under this Minister's leadership - has approved a loan for $180,000 to the successful contractor. It was approved back in December. Can the Minister tell us why they needed this loan, if all their financing was solid and in place?

Hon. Mr. Ostashek:

That was before I took over as Minister of Economic Development, but I will find that out for the Member.

Mrs. Firth:

I wrote the Minister a letter almost three weeks ago, requesting information about this issue. He signed a letter he sent to me. Is he telling us that he just signed the letter, but does not know anything about the details of the loan?

Hon. Mr. Ostashek:

I am telling the Member opposite that, when I was briefed by the department, they said the normal procedure was followed in granting the loan.

Mrs. Firth:

That is why I asked the Minister as to whether or not there is a policy in place. Does the Minister not see anything wrong with a contractor having been awarded a contract, having to comply to certain terms of the contract, just as all the other bidders had to, and then, after getting the contract, coming to the government to get a business development loan to meet the terms of the contract?

He told me right in the letter that it was for that specific contract. Does he not see anything wrong with that, particularly in light of the fact that things are so out of control and that there is not even a policy in place to cover it?

Hon. Mr. Ostashek:

There are certain policies, rules and regulations in place, and as I say, the money is not awarded by the department; it is not awarded by the Minister; it is awarded by an independent board, and that board must have felt that the applicant qualified.

Some Hon. Member:

(Inaudible)

Hon. Mr. Ostashek:

I do not sit on that board.

Some Hon. Member:

(Inaudible)

Hon. Mr. Ostashek:

Not that I am aware of. I will check for the Member opposite, but I do not believe Ministers sit on it.

Question re: Golden Horn area development regulations

Ms. Moorcroft:

My question is for the Minister responsible for Community and Transportation Services. The Minister is aware that the Golden Horn area development regulations prohibit burning of waste material, and the Minister has previously stated in the House that the existing law may not be enforceable. People need some comfort that their health is not at risk by the burning of waste material.

Is the government planning to do whatever is necessary to make the area development regulations enforceable?

Hon. Mr. Fisher:

There is some question about whether that section is enforceable or not, but it is a requirement of the area development regulations and, as such, we would attempt to enforce that particular section.

Ms. Moorcroft:

Well, it is consistently done in southern jurisdictions, where burning is controlled by zoning, so I would like to ask the Minister this simple question: does the Minister agree with the intent of the Golden Horn area development regulations, that burning of material, including petroleum products and tires, which could create a nuisance or a hazard to other lot owners, should be prohibited? Does he agree with that?

Hon. Mr. Fisher:

Even the City of Whitehorse has a no-open-fires bylaw in place, so the Member is right in that respect to other jurisdictions. I would not necessarily want to see a strict, no-open-fire regulation in a place like Golden Horn, but I do agree with the intent of the regulations, although they are, more than likely, poorly written.

Ms. Moorcroft:

Well, I am glad the Minister agrees with the intent and this does not need to be difficult. There seems to be a problem that we are not certain whether or not they are enforceable.

Is the Minister prepared to consider amending the summary

Page Number 2754

convictions regulations to provide for ticketing where offences are committed?

Hon. Mr. Fisher:

I would have to discuss that with my colleague, the Minister of Justice, who is responsible for the Summary Convictions Act. That is certainly a possibility that we will be looking into.

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. 18: Second Reading

Clerk:

Second reading, Bill No. 18, standing in the name of the Hon. Mr. Ostashek.

Hon. Mr. Ostashek:

I move that Bill No. 18, entitled Interim Supply Appropriation Act, 1994-95 (No. 3), be now read a second time.

Speaker:

It has been moved by the Hon. Government Leader that Bill No. 18, entitled Interim Supply Appropriation Act, 1994-95 (No. 3), be now read a second time.

Hon. Mr. Ostashek:

This bill reflects more than one-twelfth of the annual expenditures in several departments. We require the expenditure authority for the month of June, until such time as the main estimates are approved. This bill will grant that authority. We are asking for $38.5 million in voted monies for the month, as reflected in the bill before you.

Motion for second reading of Bill No. 18 agreed to

Hon. Mr. Phillips:

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

Speaker:

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

Motion agreed to

COMMITTEE OF THE WHOLE

Chair:

I will now call Committee of the Whole to order. Are we prepared to take a break 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.

Bill No. 18 - Interim Supply Appropriation Act, 1994-95, (No. 3)

Chair:

We are dealing with Bill No. 18, entitled Interim Supply Appropriation Act, 1994-95, (No. 3). Is there any general debate?

Hon. Mr. Ostashek:

This should not take too long anyway.

This bill reflects more than one-twelfth of the annual expenditures in several departments. The Department of Community and Transportation Services requires more due to highway maintenance projects. Justice will be making its first quarterly RCMP payment. Tourism underspent its interim supply in April and May, but will be making many of those payments in June. Hence, the larger than average sum.

Mr. McDonald:

I just have one question, and I will give it as notice. It is a detail but it may be an important one. I would like to know why the grant to the Arts Centre Corporation is listed at $33,000. The Arts Centre Corporation, of course, is listed as going to receive more than that. I am wondering whether or not the Arts Centre Corporation is receiving monthly payments, or whether it is receiving the full amount, or what. Clearly they would want to take advantage of the grant being paid up front, in order to accumulate some interest income. I am just interested in why this is listed the way it is, and I am more than prepared to accept the answer in whatever form the Minister wants to give it.

Hon. Mr. Phillips:

Perhaps I can shed some light on that, but I can get back to the Member with all the facts. My understanding is that the Arts Centre used to be paid quarterly and that this is one of their quarterly payments. I can get back to the Member on the exact reason for this amount at this particular time.

Mr. McDonald:

Quarterly payments would have suggested that the Arts Centre was receiving $132,000 a year, which sounds low, but when we get to Tourism I am sure that we can discuss the method in which the Arts Centre is funded.

Chair:

Is there further general debate?

Schedule A agreed to

Schedule B agreed to

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Title

Title agreed to

Hon. Mr. Ostashek:

Mr. Chair, I move that you report Bill No. 18, entitled Interim Supply Appropriation Act, 1994-95 (No.3), out of Committee without amendment.

Motion agreed to

Bill No. 53 - An Act to Amend the Social Assistance Act

Chair:

We will move on to Bill No. 53, entitled An Act to Amend the Social Assistance Act. Is there any general debate?

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Title

Title agreed to

Hon. Mr. Phelps:

Mr. Chair, I move that you report Bill No. 53, entitled An Act to Amend the Social Assistance Act, out of Committee without amendment.

Motion agreed to

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

Chair:

We will move on to Bill No. 15, entitled Second Appropriation Act, 1994-95. We are dealing with Health and Social Services.

Health and Social Services - continued

Chair:

Is there any general debate?

Ms. Commodore:

I have a number of questions I would like to ask of the Minister in general debate, but I would like to make a couple of comments in regard to some of the issues at hand.

I will start off with the young offenders program. First of all, in the last election, the party in government talked about changes to the Young Offenders Act. One of the particular sections they wanted changed or included in the Young Offenders Act was to make the names of possible dangerous offenders known. I do not want him to stand up and say, "Well, it was not a promise that I made;" it was done by a member of his happy coalition - or not-so-happy coalition any more, I hear. Will he tell us, and other people out there who are concerned about what is going to be

Page Number 2755

happening with the Young Offenders Act, if he has made any representation at his Justice Minister meetings, or if there is some move within his department to look at the Young Offenders Act and change it? And, if he is talking about changing it, what does he propose to change in it?

Hon. Mr. Phelps:

I am not in the Yukon Party. What has been transpiring is that, yes, I have had the opportunity to attend a federal/provincial/territorial meeting of the Ministers of Justice. The issues on the Young Offenders Act came up at those talks with regard to the issue of publicizing the names of dangerous offenders. We had some discussion on that.

As the critic may or may not know, the proposal by the federal Minister, at that time, was, and remains, to proceed with revision to the Young Offenders Act in two stages: first, to put forward, as an interim measure, amendments to the act as quickly as possible and, second, to go through a thorough consultation on, and review of, the entire act.

With regard to interim measures, there was some discussion about the proposals of the Minister that related to the Liberal red book. One of those issues has to do with dangerous offenders and the publication of their names. The feeling, which I supported - at least, on an interim measure basis, and there was more or less a consensus around the table - was that we ought to be looking not at the publication of the names of dangerous young offenders, but steps to ensure that certain authorities would be given these names, such as schools, so they would be aware of young people who were potentially dangerous. I supported that and look forward to seeing how it is going to be contained in the new bill when it comes forward.

That would be an interim measure. There will be a more wide-ranging debate on that issue, and other aspects of the bill, when they conduct the full review, which will take time.

I might add that one of my concerns, as I expressed up front, is that the interim bill ought to be targeted at a few things that we can accomplish, and not be a bill that is going to get bogged down in Committee. Otherwise, why call it an interim bill. There were some immediate changes that I wanted to see take place. I did not want to see those sacrificed by including some stuff that might not go through Parliament fairly quickly.

The other main issue that I wanted to see resolved right away, and that seemed to have a consensus at the table, and I spoke out about it, is the ability to administratively change young offenders between open and closed custody.

Ms. Commodore:

I am concerned about the other things the Minister has been talking about that might be included in this act. He suggested that there were interim measures being taken.

I know that there had been some lobbying on behalf of some individuals to lower the age from 12 years of age to - I am not quite sure what it is. We all know that the act, as it exists right now, does not meet the need. In a lot of cases, it does not appear to be working. Possibly there have to be other measures taken, rather than changes to the act.

I would like to ask the Minister if he would give me some information - if he does not have it now, he could give it to me later on - about where the Yukon is coming from in regard to the changes, and what kind of changes his government is proposing for the Young Offenders Act.

I would also like to ask him this: since there is a proposal to make schools and other institutions aware of young offenders who might be in the vicinity, does this also apply to adult offenders? I know that I can get further into that when we get into the Department of Justice, but I would like to know if it is something else that is also being proposed.

Hon. Mr. Phelps:

I have mentioned about sharing of information between the Young Offenders Act and the administration of it at the provincial/territorial level and sharing that information with social agencies, which is a position that is extremely consistent with what we have already done in this government, vis-a-vis - where we do not require the federal government allowing us to - agreeing to share information between the departments of Justice and Social Services and Education. It is my feeling that with respect to dangerous young offenders sharing that information between the social agencies most affected is entirely consistent.

The Minister backed off on the main thrust of the Liberal red book changes when we made the argument about trying to get something that is going to go through and not get bogged down; he backed off a bit and suffered a lot of criticism from the press right away, when they had their press conference after the conference, but they had in mind some very specific changes with regard to dangerous young offenders such as making it easier to bring them in to adult court and extending the sentences under the act to 10 years for first degree murder and seven years for second degree murder, if they remained under the Young Offenders Act.

Making it easier to elevate young offenders to adult court and extending the murder sentence maximum experienced a lot of opposition from at least three of the provinces led by Quebec. It was in the context of those discussions that it appeared more and more obvious to me that there was not going to be consensus on them. I was proposing that we back off on the contentious issues and get some of the other things done.

I said at the time that dangerous young offenders were not a large issue in the Yukon like they are in other provinces. We have some problems, but we have not had the really sensationally bad events that we have seen played out in the media in Ottawa and Toronto with shootings and so forth.

I should say that Mr. Rock came back with a letter to the Minister saying that he was going to go back to his initial position regarding the red book changes and put them forward in his bill. I wrote back saying, in essence, that I could support that, but my concern, which I made very clear - I did not repeat it in the letter - was that I did not want to see what I saw as positive things for our administration up here getting bogged down because of the emotional issues, that it could await a thorough review of the Young Offenders Act.

Ms. Commodore:

The Minister knows, and I know, that putting our young people in custody, whether it is open or secure, does not appear to be working and that the majority of these young people end up back in custody; then, when they reach adult age, they are under the Criminal Code or other acts and they end up doing time in adult jails.

The Minister has indicated some big changes in his administration in regard to children at risk and the kind of things he is proposing to do with those young people - hopefully preventive measures. I am really interested in that, but the information he has given has not been that specific. I do not want him to waste a whole hour letting me know what some of those initiatives are, but I am interested in finding out exactly what programs are going to be offered. I am concerned about the large number of aboriginal children who end up in custody. I think the percentage is something like 40 percent. I am not sure of the exact percentage, but it is high. I mentioned before about individuals in his department who frown on cultural programs. It is pretty scary to know that someone who holds such a high position has those feelings. I have talked to a number of individuals who worked in the system but who are no longer there; they said they met with a lot of resistance. The Minister and the former Minister from our government, I know, have spoken very positively on the kind of things that need to be changed, but once the Minister is through making those announcements and saying all those great things, they seem to hit

Page Number 2756

a roadblock once they get back to the department.

I would like some kind of assurance from the Minister that there are a lot of changes being made. He may stand up and say that the Advisory Council on Indian Child Welfare has indicated some changes that are going to be made but I do not know exactly what their criteria is. If they were to suggest to the Minister that certain changes be made, are they taken very seriously?

One of the things that was mentioned previously was in regard to the parent foster model homes - I cannot remember the exact term, but there was a recommendation made by that council.

I do not know whether or not that is correct, or whether it came from other jurisdictions or people who had been in jurisdictions where those foster homes were used for young offenders in open custody. Would the Minister provide me with a list of the new initiatives and the kinds of things they are working at toward crime prevention among young people? As I said, custody, open or secure, is not the answer. Most parents and people who work in the system know that.

Hon. Mr. Phelps:

I just signed a letter to the Member in response specifically to the progress being made at 501 Taylor and the new programming - specifically, what it is and how it is going to be done. It is a fairly thorough analysis. I hope she gets that today. I signed it first thing this morning.

In addition to that, which I think is significant, we are looking, with regard to kids at risk, to encourage the establishment of youth centres, based on what I would loosely call the Carcross model.

There is a working committee in Whitehorse called YES, which is specifically looking at getting some cooperation between the City of Whitehorse, our departments and service clubs, and some leadership people from the young people, to get something started as a youth centre for those kids who are partaking in the organized sports, and so on.

In Whitehorse, we are also looking specifically at the potential for summer programming at two or more of the schools. We would hire a couple of people to work on programming, using the schoolyards, and so on. It is my personal view that would probably be beneficial, in terms of a lot of things, including a feeling of ownership of the school and less vandalism.

We are moving ahead fairly quickly with Kwanlin Dun with regard to their programming for kids, the vast majority of whom are not involved in organized sports, and so on.

Likewise, we intend to carry this push into the communities. There has been a large expression of interest. It is a matter of getting people moving and the resources and facilities in the right places and seeing how they might be made available through cooperation. That kind of general thrust is one that I feel is very important.

The other issue we are looking at is working with communities themselves - their healing camps, et cetera - to see what active role might be played by them.

I think those are kind of the highlights, but the first thing that has really been moving - aside from the Carcross one - and is actually being implemented as we speak, is the 501 Taylor model.

Ms. Commodore:

The Carcross model, as I understand it, was opened on the initiative of the Minister responsible and I think that, of course, a teen centre of any kind is needed, probably, in every single community.

If we are looking at kids at risk in all of the other communities, I am a little bit concerned about resources for the centres when they are opened. We can talk all we want about what we are going to do, the changes that are going to be made, and how we are going to work with these young people, but there have to be financial resources available to them. I know the struggle that different organizations have to try to raise funding for certain programs - and I think the Minister is also aware of that.

Can he tell me whether or not all of these plans for the future includes financial resources to run the teen centres and to provide the programs that will be available within those centres? Or will they tie in with the programs that are available right now that will be implemented, possibly at 501 Taylor or some other place?

I did not see any money in this budget for those new initiatives. It might be there, unseen, at this point in time. He has already indicated that a lot of money lapsed last year, and possibly money lapsed this year. Are we going to be looking at making financial resources available to the kids at risk?

Hon. Mr. Phelps:

There will be some, and some from savings within the budget. That is the story of 501 Taylor. We are able to provide an awful lot there for a lot more kids who are under the probation services and court jurisdiction to a large extent, but not just that. They are often people who are recommended by agencies other than a court. We will be - because it is a ministerial priority - looking at coming up with some money. Regarding whether we should be coming up with all of the money - just how much is going to be needed, and how much is it realistic for us to provide - I firmly believe that throwing money at this problem would be a tragic mistake. I believe that one of the reasons for the success of the Carcross model is the fact that the young people raised a lot of the money themselves. They hammered nails and worked with some of the parents, so that there was a sense of ownership in the facility. A lot of people donated money; a lot of organizations were involved. All of those things give you something that is truly a community-based kind of program.

When we deal with a community such as Ross River, for example, we would hope that we would get funding from some local organizations, from fund raising assistance from volunteers, and money from the Department of Indian and Northern Affairs and from the First Nation, as well as from other sources. When we deal with a place such as Dawson City, the city has a responsibility to come up with some of the money, and we would hope the First Nation and DIAND would provide some as well.

We are not simply walking in and saying, "We will do everything for you." We do not think it would work, if that were the case. We feel that there has to be a commitment, not only from government, but from the kids, who should take the leadership role in those particular initiatives, and from some of the parents and other volunteers in the community.

I can say that the other area that is of concern is the money that is available to organized sports and the arts. Should some of that not be made available for this type of activity for kids - from lotteries and so on? That is going to be an area that I, personally, am going to certainly express my concerns about. It is not the most popular thing to say, because a lot of people feel that they, and not these kids, should have the money. I think it can be argued that some of it ought to be going to this type of venture in some of the communities.

Ms. Commodore:

The Member for Whitehorse West asked if they would support money for skate boarders, and I believe I asked the Minister responsible for Community and Transportation Services if his department would have money available for skate boarders if they applied for that funding and it fit the government's funding criteria. The Minister replied yes at that time, but I do not know what has happened since.

My number-one question is: does the Minister support the skate boarders in their move to have their own skate boarding area? I know that I had discussions with skate boarders about that.

I have about three or four other questions that I would like to ask the Minister.

Firstly, what kind of funding does the Carcross Teen Centre get and where does this funding come from - if they get any at all; I do not know.

Page Number 2757

The other question I have is in regard to all the other programs. I believe the Minister has indicated in Question Period that the personnel who are working at 501 Taylor Street will all be kept on and redeployed. I cannot remember the exact term that the Minister used, but some of the personnel will be used to work in some of these programs that are going to be available to the young people. Some of the kids who will be sentenced to open custody will be going to foster homes for young offenders. The Minister has not indicated when those homes are going to open. I think he mentioned that there is one kid in open custody right now.

I have another question in regard to that, and it may be included in the letter, but I have been told that his probation officers have directed their officers to not recommend open custody and he was not aware that that was the case. I think if that were the case, then we would have a bit of a problem, because if they are directed not to recommend open custody, the other option is secure custody, or recommending that they be under parental care. That is okay, too, but could he give me information... Oh, the other one was in regard to the cost. Since he is keeping on the 10 employees who are at 501 Taylor and he will be contracting out and paying foster homes for these young offenders, is there going to be a cost savings somewhere? There are 10 people who will still be getting paid. They will be providing programs, so ongoing money will be needed for that, plus we are going to be opening four foster homes in the Yukon for young people who are sentenced to open custody. Are there cost savings somewhere in that?

Hon. Mr. Phelps:

The Member is quite correct in that there are some additional expenses. The rate for the foster care would be $70 a day - there are four of them - and, when they do not have a kid, $30 a day standby. One of the savings involved is that there will be a reduced use of auxiliaries. There will be some auxiliary positions that will not be required because, as I understand it - I do not have the breakdown, and I have not looked at it recently - there are a couple of people moving up to work at the young offender facility up the hill.

There really is no saving. The intention is to redirect the money to a more broadly based program. It is going to do a lot more in terms of dealing with numbers and bringing kids back into the community, focusing on the assessed needs of the kids, getting them involved in education and training, and helping them to get jobs, and that kind of thing, as well as counselling and fairly in-depth sessions relating to specific offences, of which they may have been convicted early in the program.

With regard to the kind of funding that has been made available to Carcross, I will have to get back to the Member on that. The initial contribution from the department was $5,000, and the First Nation put in $5,000. I think that was a per annum contribution. I know we gave them money under the health investment fund, most of which was for the conference that was held last November in Carcross. That was around $4,000 or $5,000. I would have to get more detailed information about the other money.

Ms. Commodore:

The Minister has indicated that training will be provided in those foster homes for young offenders sentenced to open custody, and probably some of that information is in the letter he has written to me. When we were in government and proposing 501 Taylor, of course there was a big uproar from the Opposition at that time that we were going to be housing these young people in neighbourhoods and that neighbours should be aware that some of these kids were extremely dangerous. I would like to ask him if the position on kids sentenced to any kind of custody has changed on whether neighbourhoods should be warned that they will be living in their neighbourhoods. I am not suggesting that I have that position but I would like to ask what notice will be given and how it will be given.

The Minister knows that a lot of these children are sex offenders and they have been convicted of that; they have been convicted of assault and all sorts of other things that people in neighbourhoods might think could be dangerous to the people in that area. I would like to ask him if he could maybe respond to that concern.

Hon. Mr. Phelps:

A lot of the information is provided in the letter. To put it briefly, the department has people who will be talking to the neighbours. There is no requirement for zoning changes, because they are not group homes. The department has people who will be giving close supervision and ongoing support and assistance to the foster parents. We feel that some of the complaints in the past about group homes, et cetera, have been a lack of that kind of support from the department.

Yes, we will be having people go door to door to discuss the creation of foster homes within the neighbourhoods. Two of these are in Whitehorse.

Ms. Commodore:

I have some questions that I will be asking on behalf of individuals who are concerned about young people and the care that they are going to be given. As I mentioned before, I am not being negative about the individuals who will open their homes for these young people. It takes a special kind of person to do that, but we all know that foster homes in other jurisdictions have not always worked. And, as a matter of fact, some of them have been pretty bad, so I am hoping that that will not be the case here.

In regard to the training that will be provided to them, will that include - and I will give him a list - first aid, crisis intervention, behaviour management, lay counselling, adolescent development, special needs such as cultural, emotional and mental, and parenting skills, if they are not already parents, and who will provide the training?

Hon. Mr. Phelps:

Some of those questions are in the letter I signed off. I will undertake that other details will supplement that information.

Ms. Commodore:

Training is being provided by the open custody facility right now and that is in regard to restraint. We have heard, in the past, about certain forms of restraint. Kids have told me that some of the restraint measures are pretty brutal. That is coming from the children who have chosen to meet with me to talk about some of the problems that they see. I would like to ask the Minister whether or not there is some specific training given to people who are working in young offender facilities, and will that kind of training be provided to foster parents of these young offenders?

Hon. Mr. Phelps:

Again, I will have to come back with that level of detail. The issue of the appropriate type of restraint, and circumstances that can be dangerous to a worker in a facility, is a very important one. All I can say is, whatever is being done, I am assured by experts in the field who work in the department, is consistent with methods utilized elsewhere.

Ms. Commodore:

What is the infrastructure that supports the foster parents? Are we looking at ongoing consultation with professionals? Ongoing training and training as needed? If we find, six months down the road, that further training has been identified, will that be provided?

Also, there will be 24-hour professional support for critical events. There might be a need for the RCMP to be called in for certain needs, or maybe therapeutic resources should be made available. Will there be ongoing support for foster parents' emotional needs? Because looking after a young offender - even sometimes looking after one's own children - can be pretty scary and one needs a lot of training even to do that in one's own home. We are dealing with young offenders in this case, who do have a lot of emotional and physical problems.

Hon. Mr. Phelps:

The support will be ongoing. We will have people dedicated to that support. They will be operating out of the

Page Number 2758

young offender facility. The training, and that sort of thing, will also be ongoing, as well. There is no intention to reduce our commitment to kids at risk, and that includes the kids in open custody, but rather to enhance the program. It is our very fundamental belief that we are looking at a very important area of crime prevention, and that is really where it is at.

Ms. Commodore:

I asked the Minister about other training that could be available. I mentioned counselling in physical and sexual abuse, depression, suicidal behaviour, and those kinds of things. Will there also be life skills and conflict resolution included in the training?

If the Minister is not able to give me that specific information now - and, again, it might be in his letter to me - could he please provide me with it?

Hon. Mr. Phelps:

The letter covers most of this, in some detail. Anything that requires more detail, as a result of our conversation here this afternoon, will be supplemented by additional information.

Ms. Commodore:

Would the Minister let me know when 501 Taylor will be officially closed and the new foster homes for young offenders opened?

Hon. Mr. Phelps:

There is no one in that facility now. The programming at 501 Taylor has started. My recollection of the details in the letter is that it would be available in an emergency situation, pending the opening of the foster homes, in the short term. All these things are well into the transition stage.

Ms. Commodore:

When will the foster home be open, and will training be provided to them prior to that? If someone is sentenced to open custody right now, and if homes are not available, will they be going to secure custody?

Hon. Mr. Phelps:

To the extent that this might happen when homes were not available, no, they would use 501 Taylor as an interim measure. I think it is important to understand that, unless some kind of crisis materialized that was not anticipated, we are looking at a situation where we have personnel ready to work with the new foster parents on an ongoing basis. Without getting too much into hypothetical situations, the feeling is that we are very close to being in a position to place a child in a foster home. Should that happen, the issue of need for additional training, or enough training to open the home, would be covered by temporary placement in the existing premises.

Ms. Commodore:

Under the list of contracts that was provided to us in the House, there were three contracts awarded to an individual - one for $5,000, one for $9,000, and one for $2,500. One of these was for young offender supervision, one was for supervision of a high-risk young offender, and another one was for supervision of a high-risk young offender. I am wondering why we are contracting people, in addition to what is already available, to supervise young offenders?

Hon. Mr. Phelps:

I am going to have to get back with this, because I am not certain. We do have some very skilled professionals who have worked for the department on a contractual basis from time to time - they do not work full time. They take on certain responsibilities for a certain time, and then they take a holiday, because of burn-out and so on. We do have some people available to work on contract, and this occasionally happens. This may be the kind of situation that explains those contracts, but I could be mistaken. I will make sure the answer is forthcoming.

Ms. Commodore:

We have auxiliaries who come in from time to time. The Minister said that he will let me know. In addition to auxiliaries, it appears that we are using an individual to supervise young offenders. If he could let me know whether or not auxiliaries might be used - I guess we are assuming now that the auxiliaries will no longer be employed by this department, because 501 Taylor is closing. If further supervision is needed for certain individuals, because of a problem that they may have, the government will continue to contract people to supervise high-risk individuals.

I will not say the name of the individual who was listed under the contracts, but I think if they go through the contracts they will recognize the circumstances that I have mentioned. Would the Minister let me know whether or not auxiliaries will be employed and whether or not they will continue to use a specific person under contract?

Hon. Mr. Phelps:

We employ many auxiliaries in the department and we will continue to do so. On the issue of having one or more people available on contract, we are talking about highly qualified and trained professionals who will work on the basis of specific contracts, but cannot really be considered auxiliaries, because they are not on call; rather, they are only there to lend their area of expertise in certain circumstances. That is quite different from my understanding of most auxiliaries, who are on call to go to work in an institution or a facility such as the young offender facility or 501 Taylor Street.

We were talking about having professionals available. We will have a contract for professionals who can work with kids for a short period of time and lend exceptional, professional skills to particularly traumatized or emotionally upset children.

Ms. Commodore:

Will 501 Taylor be renovated to accommodate the new programs? If that is the case, how much will it cost?

Hon. Mr. Phelps:

I will have to come back with the details, but I am not aware of anything that is at all major.

Ms. Commodore:

In November of last year, Judge Lilles, who I believe is one of the authors of the Young Offenders Act, made a speech to the Ontario Social Development Council. Has the Minister read that speech? I only ask that because there is a lot of information contained in that speech that I find quite interesting.

Hon. Mr. Phelps:

No, I have not read the speech; however, I have read some news reports about the speech.

Ms. Commodore:

Under the list of contracts, there are two contracts for the Nursing Options group to provide nursing to the open and secure custody children. I am just wondering whether or not they are on call, at that sum, to service the nursing needs of these young people.

Hon. Mr. Phelps:

Yes, that is a contract that has been ongoing for some time. There was some discussion about placing them with staff people, but it was our position that we would not be doing that. They also provide similar services at Whitehorse Correctional Centre.

Ms. Commodore:

I know this is not Justice, but I thought WCC already had a nurse.

Hon. Mr. Phelps:

WCC has had a contract with the same private organization. There has been some discussion about changing that but we decided not to.

Ms. Commodore:

Under the list of contracts, $14,000 went to Poundmakers Adolescent Treatment Centre. I would like to ask the Minister how often children are sent there and whether that only includes status Indians.

Hon. Mr. Phelps:

It is for status Indians - that is my understanding. It is not for a lot of people - the figure is for one or two. Of course, these are the kinds of issues DIAND reimburses us for.

Ms. Commodore:

I have some questions about the service provided by the Woods Christian Home. We had a long debate about that in the last session so I am not going to go into it in depth. According to the contract list, I understand that they receive a number of contracts to provide a number of things. The first is the contract for almost $800,000. The Minister I think told me in the last session that they were given that contract and they in turn

Page Number 2759

provide funding to the Northern Network of Services in the Yukon. I wonder whether or not that is the case. Do they provide a certain amount of money in a contract to provide the service or do they get paid on a case-by-case basis by the Woods Christian Home?

Hon. Mr. Phelps:

In effect, the Northern Network of Services is a subsidiary of the Woods Christian Homes in Calgary. I am not exactly sure of the relationship and how they manage their own operation but, for all intents and purposes, it is one and the same operation, run here by their people.

Ms. Commodore:

Under the list of contracts, there was a contract that went to Woods Christian Home. I will list them, because I would like him to respond to all of them. There is one to Woods Christian Home for alcohol and drug counselling, and lifeskills, for $25,000. There was another one to the Woods Christian Home for the Hillhurst program. I do not know what that is, and I would like the Minister to tell me. This one was for $26,000. This is in addition to the $800,000 they already get. There was one to Woods Christian Home for $41,000 for an exceptional needs program, and one more to Woods Christian Home for the evaluation supervision of $11,885.

That is a lot of money going to this group, or program, which has been quite controversial. I am not going to get into that. We did during the last session. The Minister did provide me with some information, but not as much as I wanted.

Could he give me some indication of who provides these different programs? Are we paying the Northern Network of Services to provide this service? Do they come to the Yukon? I am a little curious, because we are looking at a large amount of money - almost $800,000, then, in addition, all these other contracts, which are quite substantial. For that amount of money, we should be getting a lot of services provided for our young people, and we should see some kind of progress among our young people.

Hon. Mr. Phelps:

The Woods facility in Calgary, which also operates the Northern Network of Services here, is dealing with extremely traumatized kids. There are certain treatments that the facility up here is unable to provide. There are certain types of cases that are beyond the local scope and, in those cases, the department continues to send the extremely traumatized kids out to the facility in Calgary.

It was never my understanding, when I was made aware that this new facility was going to open up here, that it would be able to do everything that the parent company could do in Calgary. There was a desire by the previous government - and I uphold it completely - to bring back the services, as much as possible, to the Yukon to deal with these kids in their home setting. Many of the kids, of course, are aboriginal and the chance of getting them back into their cultural surroundings and their families and First Nation are much enhanced by having the program, to the extent possible, operating in the Yukon. It was never the understanding of the department or me that they would be able to do everything here for the kids that can be done for some of them in Calgary. It is those who need the extra kinds of treatment who are sent out.

Ms. Commodore:

Can I just ask him if he would provide me the information that I asked for in regard to what these contracts are? There is one for alcohol and drug counselling and life skills for $25,000. What do they do? It is for the Hillhurst program. I do not know what that is and I had asked for information. If he could provide me with that information, and the information for the $41,000 exceptional needs program, I would appreciate it. Because they are substantial amounts, I would sort of like to know.

I would also like an explanation for the next one, for $11,885. I will expect that he will send me that information some time very shortly.

Hon. Mr. Phelps:

Certainly.

Ms. Commodore:

I am going to be going on to something else right now and it is in regard to social assistance recipients. The Minister announced some very big changes to the social assistance program. I would like him to provide me with some information about the recipients. I know it is very difficult to get specific information, but I would like specific information about how many people are on social assistance - that is not hard to get - or how many people are there because of job loss and how many people are there whose unemployment insurance has run out. Could he let me know whether the social assistance rate for status Indian people has increased or decreased, because I do not know that.

One of the other things that I wanted information about is the hostel to provide shelter for transients. He mentioned that that was going to be included in the new reform. I am really curious about how that is going to take place. When do we expect him to look at this home for transients - I think he said transients, I might be wrong here.

In any event, it is a hostel for the homeless. How will the department define who will be eligible to be accommodated in that home and what kind of funding are we looking at? Since we are going to be saving money, this is one project that I am sure will cost additional funding.

Could the Minister respond to those issues?

Hon. Mr. Phelps:

A hostel for transients is something that we will be looking at; it would be a hostel for transients. There are various options that might be looked at. Possibly some non-governmental organizations might provide them, such as Maryhouse, which might be cheaper than continuing with our traditional, transient policy. We will be looking at those things, because the idea is to save money on transients.

There was a question about changes to the amounts for social assistance to status Indian people, and my understanding is that there has not been any change, and that those amounts are based on our rates, which have not changed.

Ms. Commodore:

The Minister has indicated a real big change in regard to single parents or mothers who stay home and collect social assistance when they have young people at home. It is indicated that a change will be made from six years to two years, and many individuals were very upset about that, because we do know that many mothers do go to work when their children are quite young and sometimes even babies; however, there should be an option for some of these people to stay home with their children if they choose to - for specific reasons such as moral or religious reasons. People feel that the Minister is downgrading one of the most important jobs in society and that is raising a child and that the option should have been left open for those mothers to stay at home if they choose.

If a mother refuses to go to work or refuses to take part in any of the programs that are available to them once their child reaches two years of age, what happens to that mother?

Hon. Mr. Phelps:

We are running into an area of philosophical difference, I am afraid, between this Minister and the critic. We believe, and the fact is, that social assistance is there as a last resort. It is a safety net. It is not there to accomplish some of the other ends that the critic is addressing. On quite a few occasions at the meetings that I went to, there was a strong concern expressed by women who had been, or continue to be, single parents, who said, "Look, I have had a job. I have worked and had kids. I have taken the 17 weeks off that has been provided for me under the law, and I do not see why someone on social assistance should have more rights that I have as a parent."

I concur. I think that is a very difficult question to answer. The purpose of social services is to operate as a basic safety net. We

Page Number 2760

have reduced the program from six years to two, for the youngest child. At the end of that two years, the single parent is expected to take training and/or look for employment. We will be providing additional monies for child care, and so on, in order to assist in that regard. We are also providing more enhanced training and on-the-job working opportunities through programs such as Social Assistance Recipients, which we have increased this year, and intend to increase next year.

I feel that in the long run this is appropriate and will be, from my point of view at least, effective, in that it will have some parents looking for work and/or training much earlier than they would be under the existing old program. With regard to what happens if the unfortunate situation arises where someone refuses to obey the rules regarding social assistance, they will face the normal sanctions that they would face now if they waited until their children were six years old and then refused because they felt that they should stay with their kids until they were 12. Without getting into detail, they would be the same kinds of sanction. Sure, they could lose their eligibility for social assistance, and then have to be looked at thereafter under hardship provisions. I suppose there are other options as well. In essence, the rules are there, and the rules must be obeyed by all people, as citizens of Canada.

Ms. Commodore:

In Question Period, I asked the Minister about the eligibility for supplementary/special needs, and he indicated that seniors and the disabled will be exempt. My question at that time was in regard to a battered woman who would have had to leave her home in the middle of the night to seek other accommodation and have to go on social assistance. I asked whether or not she would qualify if she was in need of those benefits. In some cases, I am sure it could happen that she would not qualify as a senior, if she had young children, unless she was a grandmother, and she would not qualify as a disabled person. However, she would be disabled in the sense that she is a battered woman.

Hon. Mr. Phelps:

I will get back with the answer to this specific issue. My understanding is that there is a fairly tightly constrained discretionary power vested in the director to look at those kinds of exceptional cases. I suspect it would come under the discretionary power of the director to grant the extra services.

Ms. Commodore:

It is really difficult to believe that we would disagree that raising children would not be one of the most important jobs.

The Minister says the policy will not apply to parents of disabled children. Could he tell me how his department defines "disabled"?

Hon. Mr. Phelps:

I will have that definition sent to the Member. The issue is not our disagreeing on how important it is to raise kids and how important the role of the parent is; the issue is what the appropriate role of social assistance is in all this.

Ms. Commodore:

When he provides me with the information about defining a disabled child, would he let me know if learning and speech disabilities qualify as a disability?

While I am still on my feet, one of the other things the Minister mentioned in his ministerial statement was that the Head Start program would accommodate 45 clients in the coming year. Is that a total of 45, or is it in addition to another number?

Hon. Mr. Phelps:

It is a total. Last year, we were able to accommodate 30, and this has gone up by 50 percent because of our increase in funding.

Ms. Commodore:

I have another question about the flat-rate income exemption. The Minister mentioned $50 for a single parent and $100 for a family.

Could the Minister explain how these numbers were reached, what they are based on and if he plans to incorporate a cost-of-living increase into these numbers for the future?

Hon. Mr. Phelps:

The $50 was not for a single parent, but for a single person. Families, which include a single parent, will be $100.

It was based on a look at what kinds of changes we felt would be appropriate in the circumstances and to strike an appropriate balance between encouraging people to work - to collect and to be paid - both sides of the equation - things like maintenance payments, because there would be some net benefit to the kids - while on the other hand, it recognizes that the basic essence of social assistance is a safety net, and not intended as anything more.

The department went through a lot of calculations to determine what the end result might be. We looked at various options and felt this was the most appropriate balance.

Ms. Commodore:

The Minister has indicated that he has hired a fraud investigator, and I am sure this person is working full time. If the position is no longer needed and the Minister is satisfied that he has been unable to find anyone who might have been defrauding his department, is this person going to be let go?

Hon. Mr. Phelps:

The contract is for an initial six-month term with a renewal clause in it for an additional six months, if I recall correctly. With respect to the renewal, we would be operating solely on the advice of the department. I personally have never met the person hired by the department.

Ms. Commodore:

I have some questions in regard to statistics, on which I will give the Minister notice. On page 151, there are statistics regarding fostering, and there is a title, "Foster Homes That Were". I do not know what the Minister is talking about and I would like him to explain what that title means, possibly with more information with regard to foster homes.

The information I need is probably more extensive than what he can provide me with today.

He talks about foster homes that were, and how many were under review. The statistics tell us that there were approvals that were regular, relative, restricted/emergency, board and special needs - I do not know exactly what each and every one of those terms means so if he could provide me with that information following this debate, I would appreciate it.

Hon. Mr. Phelps:

It looks like someone has been reading too much Winnie The Pooh and transposed some of that poetic licence onto the page, or else it was a typo.

Ms. Commodore:

I will be asking him for an awful lot of information when we get to the different pages. On page 160 - and I have already mentioned the issue - there are statistics about young offenders. The Minister has mentioned figures regarding a total of 123 young offenders in Whitehorse and 19 in the communities. There is information about those young people who are in care.

An awful lot of First Nations people end up in our care. I think on page 160 it mentions that there are 38 First Nations children who are young offenders and 104 other offenders. I will ask the Minister again if the First Nations total of 38 includes only status Indian First Nation kids.

Hon. Mr. Phelps:

The Member has added the two columns together to arrive at some of those figures. I will ensure that the Member receives an appropriate response. I suspect that it is as she suspects, status only, because I would agree with her observation that there seems to be a much greater proportion of First Nation kids tied into the system.

Ms. Commodore:

I have some questions with regard to the Minister's ministerial statement about the new approach to victim services.

I understand a lot about the issue, because the problem was occurring while I was still the Minister and I knew that some changes had to be made.

I would like to ask the Minister if he would let me know how much involvement there was from front-line workers and people

Page Number 2761

in the system. Was there input from them? How much input was there from the communities? The Minister has indicated that services may be provided on a fee-for-service basis to communities. We know that violence is ongoing and that, in almost all cases, services are needed immediately. If there is nothing available at that very hour, then something is lacking. We know that we have had some pretty traumatic things happen in communities where the departments of Education, Justice and Social Services have had to send groups of people out to the community to deal with situations.

I would like the Minister to tell me how much involvement there was from the communities and were the communities consulted with regard to these new initiatives that are going to be replacing the compensation for victims of crime program, and if there is additional money available.

He mentioned that he did not know how much money there was in the fine surcharge fund. That might also be in the letter, because I asked him that in Question Period.

The other question I would like to ask him is how much money is owing in that fund from the victim surcharge that was added to a fine.

I have a lot of questions that I would like to pursue in regard to what is going to be available under his new programs. I will probably ask them at a different time throughout this session, but could he let me know the answers to the questions I have asked him?

Hon. Mr. Phelps:

I will certainly have the answers to the specifics for the Justice debate.

On the question about fee for service, let us understand a couple of things. First of all, we are not referring to privatization. We are referring to the potential for different communities to respond in different ways to our initiatives. We are looking at a situation in the smaller communities where we are unable to provide a full-time, or perhaps even half-time, person dedicated to only one kind of service, or one program. There has to be a broadening of job description, which can be achieved in various ways.

The community may decide it wants to hire a counsellor who will be generic and do counselling on a fairly broad array of things, or they may want to, in the justice system, look at somebody who would be trained and do, say, probation work on a fee-for-service basis - being paid only by the number of kids or adults who require probation. We are looking at the reality where the number of people on probation at a given time in Carcross may be six to eight - the average case-load in Whitehorse for a probation officer is something like 60 - and we have to find a rational way of hiring people to provide services.

A lot of the decision making will be done in consultation with the community, as we identify the kinds of money we have available and the kinds of options they may wish to explore. Victim services is only one aspect of what will have to be provided, and it is hoped it will be provided by community people, in the long run, at least. The fee for service might be somebody who does that on a client type basis, and would also be doing other things on the basis of the number of clients, just as JPs now operate on a fee-for-service basis.

Ms. Commodore:

The Minister indicated in his ministerial statement that he hoped to have more resources in place and he has just given me a brief rundown of what he expects. I would like to ask him when he expects to have more resources in place, how he is going to achieve that and what kind of resources they will be. Could he provide me with that information in writing? I would like to have that in addition to what he has already indicated because people are asking these questions. He knows it and I know it. It is a concern in the communities.

I have another question about children in care. We used to have a large number of children who were taken from their parents by the courts and put into permanent custody. I have talked to some women who have been able, over the years, to get their lives together and straightened out, but have had to fight very hard to get their children back, even after permanent custody has been awarded to the department. I had the opportunity to read a report that was made by a psychologist concerning at least one person who I know fought very hard to get her child back.

I am not a psychiatrist and I do not pretend to know exactly what they look for, but this woman was very disturbed; she had responded to the whole report but disagreed with a lot of the information that was asked and indicated that they did not write down any of the good stuff she told them, but only the negative stuff. She felt that as they were analyzing her they did not have an aboriginal woman in mind when they did it but, rather, some person who was a perfect person, and that she would not have qualified unless she fit into whatever that was. She was very disturbed about it. I did read the analysis that was completed and I could see what she was talking about.

I am just letting the Minister know that that observation has been made by a parent, but I have talked to other parents who have lost their children through the courts over the years, as well. I would like him to let me know what kind of statistics we are looking at right now in regard to the permanent custody of children - both aboriginal and others - and temporary wards of the department. I know we have a problem but I would like to also know the number of children who have gone back to their homes.

Hon. Mr. Phelps:

I will endeavour to get those figures for the Member. I understand the concern. There is nothing quite so emotional as dealing with this particular issue. It can certainly be very frustrating for parents, for people trying to help parents, for staff and for the people in the department. Because it is such a highly emotional area, in a position such as mine or, as the Member opposite said, where we are not really qualified in the areas of psychiatry, or even with the kind of specialized training some of these workers have, we have to rely on them, to some extent, and insist that they be sensitive, and then try to satisfy ourselves, to the best extent possible, that there is no sense of racism implicit in the decisions they make.

I am sensitive to the issues advanced by the Member, and I can only say that I want to be reassured, from time to time, that the department is acting as sensitively as it ought to, under the circumstances.

Ms. Commodore:

There was a lot of anger among people who provide homes for battered women about the cuts in the funding. The Minister is aware there was a controversy. I have asked questions in the House, and he probably even received letters, although I am not sure of that.

Are we looking at further cuts? I know we are talking about this year's budget, and there was a major cut to the Help and Hope Society in Watson Lake of almost $30,000, a cut of $10,000 to Kaushee's, and an increase to the home in Dawson. As I said, if they gave them an increase of $30,000, we would have agreed to that.

These are major programs offered by this government. Since they claim to have a policy of zero tolerance of violence toward women, I and the women who take advantage of these services do not understand the contradictions in what they are doing.

Could the Minister tell me if there is a possibility of further cuts, or if there is even a possibility, since he is going to have money left over, of giving funding back to some of the homes for battered women? While he is answering my question, could he let me know about the report that was done on Kaushee's transition home? Is it done and, if it is, is he going to table it? Will it be available?

Hon. Mr. Phelps:

The report on Kaushee's Place is not

Page Number 2762

finished yet. With regard to what is to be done with that report when it is received, I have not taken a position on that. I will have to discuss with the department the appropriateness of keeping the report private or making it public.

There is a great deal of sensitivity surrounding the issue of making certain kinds of things public involving the workers and the board of directors at Kaushee's Place.

I would have to think long and hard about the issues before I made a decision. With regard to cuts to some of the programs and the three facilities, the issue is that we are looking at paying an appropriate fee for the kinds of services rendered, and we are demanding that the services be delivered at a reasonable cost.

There were people in my department who felt, in the case of the Watson Lake organization, that they were receiving too much for the services the government was getting from them.

With regard to the two facilities in Watson Lake and Dawson City, there is no intention to necessarily continue to cut funding. The issue is going to centre on the kinds of services provided and the costs of those services.

I have no reason at this point in time to foresee any further cuts there. With regard to Kaushee's Place, much is going to depend on what comes out of this in-depth report that we are going to be receiving, the analysis of what the government is getting and the services that are being provided for the dollars involved.

Mr. Penikett:

I wanted to return for a few minutes to the big picture before we leave general debate.

The Minister tabled a document on Wednesday night showing the lapses in the department for the past year. There is approximately 10 percent of the budget of the department - in fact, more than 10 percent with $2 million - in underexpenditures in social assistance and $4 million-plus in health insurance.

The Minister will recall when we were debating the budget, actually not very many months ago, I tabled this chart showing the trend lines in actual expenditures, trend lines in forecasts and trend lines in the estimates with the bottom line being the red line.

This was interesting because the Minister actually made much in his statement about the fact that he was going to be lowering the rate of growth of the operating expenditures in each of the lines, and yet we had the highest rate of growth in actual budget expenditures that we have ever seen in the department. Some of that was a result of the hospital transfer, but the fact of the matter is that the Minister was still adding $13 million to $14 million in projections.

At the time, he talked about realistic budgeting, and I raised the possibility that, in fact, given that he was controlling the rate of growth in the operating expenditures - or he said that he was - that he was, in fact, over budgeting, which may have turned out to be the case. Without going into who said what, where, and when - nya, nya, nya kind of debate, which the Minister and I have occasionally fallen into in the past - what I want to ask him is really the basic question, and it is this: if last year's budget had $10 million more than was necessary in it, why is he asking for a similar amount for next year? Is he going to present a supplementary, or is he now going to claim that he needs $10 million more than he spent last year, in which case we are going to have one kind of debate, or is he recognizing now that he has asked for more that he will probably need, which would lead to a different kind of debate, as I am sure he will understand.

Hon. Mr. Phelps:

I would like to distribute and table charts that will help me to explain the situation, the rates of growth in the department and the various programs. Perhaps one could be given to the critic who just spoke.

If we look at some of these charts - the top one is the budget and the actuals going back some period of time - it will quickly be seen that the budget was lower than the actuals, year after year. Last year, the budget was in excess of the actuals by the amount stated.

A couple of things happened to the budgeting, and I would like briefly to explain some of the highlights. First of all, it was the first year of the hospital, and the amount put into the mix for the hospital was based on the actual for the year previous under the federal government's operation, and that turned out to be more than was spent. The Thomson Centre was budgeted for, but the opening was delayed, and that had some significance. The out-of-territory medical costs were based on 1992-93 costs in previous years. What happened was that the provinces capped services - capped the beds and so on - and this resulted in per diems outside being down, and more being done here with regard to those kinds of patients. Those are some of the big-picture items on the health side.

On the social assistance side - and if the Member looks at the second chart, the Member can see that, starting in 1989 and ongoing, there was a serious underestimating by government on social assistance expenditures. In 1992-93, it was way under, as in 1991-92. The increase was based on what had been happening over the past number of years and based partly on putting the estimate above the actuals by what had happened in the past year. The third thing that occurred, which resulted in the budget for social assistance expenditures being high, was that the impact of what was happening at Faro was factored in as a very big unknown. And, when the budget was being prepared, the department was not really sure of what was going to be happening there. The fate of Curragh and the impact of whatever might happen was still very much in doubt. There were various projections of what might have happened to social assistance.

Social assistance, of course, also reflects on the big picture. If one just looks at the chart and looks at the straight line from actuals to actuals to actuals as projected, the increase is right on target with what has been experienced for the past number of years. If one looks at actuals to actuals, the increase from 1989-90 to 1990-91 was 14 percent. The next year went from $58 million to $69 million - 18 percent. The next year went from $69 million to almost $78 million - 13 percent. The actual of $77 million to almost $87 million this year is 12 percent. Our total budget increase from that actual to what is in this budget is projected at 13 percent.

If the Member looks at the page where one finds the social assistance in this budget, we realize, at the time this budget was being prepared, that we were looking at an overage - that the forecast was high.

Pages 161 and 162 show the forecast for 1993-94 as $11.3 million and the estimates as $9.9 million, so we were aware that the increase would not be as large as we had forecast when we were preparing this budget. At that point in time, we were budgeting based on reduced figures - or reduced expectations for what was actually going to be spent this year - but we did not have any final figure for some of these things. So, it is not as though we simply went forward preparing this budget and basing it on the forecast in each case. It is far more realistic, and very close, to the projected increase for the budget as a whole, which is right in keeping with the experience for the last five or six years.

Mr. Penikett:

I have a couple of problems with that. One, the Minister made an announcement in his last budget statement about how the rate of increase in the actuals was going to change, because he was going to be moderating the operating costs. His statement that the trend line is consistent with previous years' experience is one I agree with, but a rate of increase in actuals of 12 or 13 percent - as his chart shows - is simply to restate the problem that not just he and I, but a succession of previous Ministers, have been dealing with.

Page Number 2763

What this first chart, on page 1, shows quite clearly is that the trend line in actuals has a fearful symmetry about it, with the trend line going to the right. What seems exotic is the budgeting. The Minister will recall that, in introducing the 1993-94 budget, which was way over target in actuals, he made much of the fact that he was, as he claimed, realistically budgeting for the first time. He is quite right to criticize previous Ministers for having budgeted less than needed but, even taking into account the reasons he has given, the budgeting was much more than was required.

I have not had a chance to study these charts but, as I look through them, what is obvious is that, even though the budget has gone down for social assistance expenditures - I am looking at chart 2 - the trend line on actuals is still projected to climb. This is interesting, in light of the announced social assistance cuts. Pharmacare is still climbing at a fairly sharp rate. Hospital claims, particularly out-of-territory claims, are still expected to climb; and the final chart, on continuing care, seems to have quite a sharp rate of increase.

The Minister has addressed in his health-cuts ministerial statement cuts in chronic diseases. Of course, that is not the largest program.

I guess the question that I have to ask the Minister is sort of an embarrassing question, but how confident is he about his budget projections? I do not want to get into verbal abuse here, and I do not want to quote the Minister, but he talked about realistic budgeting for the first time, and so forth. How confident is the Minister in the projections that he is providing in the request to the Legislature in the 1994-95 estimate?

Hon. Mr. Phelps:

Based on the programs, if we are out, the money comes back to the government. It is not money that we can spend. I am relatively comfortable that they are at least enough.

I would like to send over to the critic a page that shows the percentage increases in various programs within health over the past number of years, and that give some indication of forecasting problems that we have, because there is no question that there is a need for additional analysis about why the increases and decreases over the years have been so dramatically up and down.

If you go across the chart you will see the situation in medical travel. There is an increase of eight percent in 1991, 27 percent in 1991-92, five percent in 1992-93, and it is down by one percent this year. We are forecasting seven percent.

We have discussed chronic diseases, but if you look at some of the other areas, there seems to be a lot of bouncing going on from year to year. Hospital claims out of the Yukon goes from minus four percent to an increase of 16 percent, down five percent, an increase of 19 percent, an increase of eight percent for this year, and that has put it at 26 percent for 1994-95.

There does have to be a further analysis of some of the factors that are coming to bear here. We are in a situation where, for example, out-of-territory hospital costs, where one or two kidney, liver, or heart transplants can mean several millions of dollars to our costs.

I would be the first to admit that there is not, and never has been, and perhaps never will be, a complete understanding, but we do intend to focus more effort into an analysis of what has been happening. I personally hope the social assistance curve - chart 2 - which shows a remarkable drop off - and the 15-percent increase will prove to be slightly high. I would like to think it is going to be more like the 10 percent we experienced over last year, but that is not a huge difference in terms of actual dollars. Perhaps it will be an even lesser increase than that. There is no question in my mind that there has been a tightening up, but that is not the only cost driver, and we are not here to pretend it is just because of the good work of a Minister or everybody in the department, and that that is the only cause-and-effect relationship with which we are faced.

The budget can be defended on the basis of not being totally out of sight, based on historical data and comparisons. In my view, it can be defended in that, as the Member opposite raised during general debate some time ago, our population figures are not really accurate, partly because, of all the cards that are out, we do not know if everybody is still living here. As well, part of the forecast was based on the very uncertain impact of the mine shutdown by Curragh.

Mr. Penikett:

Forgive me for smiling slightly. This is not a happy subject, but I recall being on the other side of the House and explaining that these numbers needed more analysis, and in fact, some of them were very hard to explain and were laughed at by the then Members of the Opposition saying, "Make some tough decisions; get on with it."

Let me simply say that a rate of growth of 12 to 13 percent in this department's expenditures is not sustainable. I think the Minister knows that. I am not doing anything more than stating the obvious when I say that.

The Minister will know that, for example, that famous left-wing economist who was Deputy Minister of Health in Ontario, Michael Dector, was the first one in a long succession of Conservative, Liberal and NDP governments who actually got the rate of growth down to one or two percent a year, which was the first time they actually got it within the means of the territory.

I do not want to flog a dead horse here because it seems to me, given the promises that were made about the accuracy of the budgeting last year, and probably every year before that by successive Ministers - because they were all trying to do their best - but I just think that we have to be, as the Minister might say, from Missouri on these numbers, too, and ask some questions.

I want to leave the Minister with some questions that I do not expect him to answer now, but I would like him to come back in writing. When I look at this collection of charts, the only one that shows - in the health field - a fairly modest rate of growth is the one on medical travel. The Minister has indicated that at some point he is going to be looking at ways to cut or to cap medical travel, but he has not yet been clear about the kind of details or the kind of mechanisms that he is considering in capping such expenditures. He will understand that this is a cause of some considerable concern in rural Yukon, so I want to make sure we get an answer.

I want to know if the Minister is considering a deductible. A $250 deductible was being considered in the department at one point as one of the options. If he is considering a deductible, what level is it?

Is the Minister also considering caps on in-territory travel, such as from rural communities to Whitehorse for services at the hospital, rather than just the out-of-territory travel subsidies?

One particular chart interests me, and I would like to get some detailed projections for the cost of in-territory and out-of-territory travel for the 1994-95 estimates before we clear them, if that is possible.

The final question in this set is this: what consultations with the various health system stakeholders, including the consumers, has the Minister undertaken, or will undertake, prior to introducing the legislative amendments he indicated might be necessary this fall, in order to effect changes in the medical travel program?

Again, I would indicate that I am not looking for answers now, but I would like a written response some time during this session, if that is possible.

Hon. Mr. Phelps:

First, it is only possible to answer them insofar as we have taken any kind of position in Cabinet. I can talk about my thinking a little bit, but that is subject to, in many cases, what would actually transpire. I can say that we are not looking at

Page Number 2764

the $250 deductible kind of model, or deductibles for travel outside the territory, but we are looking at various methodologies to cap increases in costs.

With regard to in-territory travel, we are looking at the non-emergency type of travel very carefully, because we feel that in many cases that kind of travel can be abused.

I would think that the travel for pregnant women, and their stay in town, is something that would not necessarily be changed. However, certainly in our consultations around the communities, many people expressed serious surprise at even receiving a cheque for coming into town on their own, when it was not really any kind of emergency whatsoever, and they were going to be coming in, as most people do, from time to time anyway. It is nothing Draconian, except with respect to a hard look at the real necessity for non-essential medical travel within the Yukon.

Chair:

At this time, we will take a brief recess.

Recess

Chair:

I will now call Committee of the Whole to order.

Is there further general debate?

Ms. Moorcroft:

I just wanted to ask the Minister, before we clear general debate, whether there would be an answer forthcoming soon to the written questions that are on the Order Paper regarding the mandate of the special investigator.

Hon. Mr. Phelps:

Yes, and while I am on feet, I did not want to leave the general debate on the increases of 12 to 13 percent per year on the overall Department of Health and Social Services without making a couple of comments that I do not think I made clear prior to our break.

One of the reasons it is still going up in that straight line is because we have taken on the hospital and the cost of the Thomson Centre. Those are two major new programs that are being really eased in over two years; that distorts the impact that has been the result of some of the cost-cutting measures we have been able to implement. We hope to continue to flatten out the curves for some of the individual programs. The Thomson Centre is very, very expensive. We have increased the number of beds at Macaulay Lodge as well. The hospital was a large increase, although it was not as large as we had predicted. Those are improvements to the quality of life and, the hospital at least, is more than paid for by the budget that was achieved during phase 1 transfers.

My argument, without being at all partisan about it, is that, yes, it looks like a straight line and that we are not achieving any changes, but I am hoping that we will see, as these cuts, these changes to the programs - and that was not totally a Freudian slip - are felt and implemented. The changes, for example, to the medical programs and to the chronic care are not to be implemented until September 1. That is almost halfway through the year. Some of the social services changes will not really be felt for perhaps one or two years. We continue to have some optimism about flattening out that growth curve and we are trying to do it without taking really harsh measures such as those that were recommended to us by at least one Member opposite.

Mr. Cable:

The Minister and I have had some exchanges on what could be classified as a blueprint for social assistance. I would like to briefly review some of the comments that the Minister has made over the last one and one-half years and, in particular, some references he has made in Hansard, just so I can understand what he terms the blueprint for social assistance reform.

The first record in Hansard is the May 4, 1993, exchange in the supplemental debate, I believe it was. It is referred to in the April 28, 1994, speech of the Minister in response to the motion that I put forward on social security reform.

In the May 4, 1993, debate, the Minister set out some priorities. Then, a couple of weeks later, he released the report on social assistance, January 1993, accompanied by a reader's guide, dated May 1993.

At that point, we had what I believe is a statement from the Minister as to where he wanted to go generally, and we had these documents, which set out the identification of issues and an analysis of the various options. At that point, I do not read this as a blueprint.

Are these two documents, together with his underlying statement that precedes them, what he designates as a blueprint for social assistance reform?

Hon. Mr. Phelps:

The report on social assistance then became the subject matter, and the issues therein became the subject matter of decisions made by Cabinet - in particular, the subcommittee on social issues - priorizing some of the issues and saying where we wanted to begin with reform to the report on social assistance.

The subjective element, as opposed to simply the objective element, in this report was injected by Cabinet, which discussed what kinds of options they did and did not want to look at.

Very early on, for example, rate decreases to the rates paid for social assistance were ruled out. That is one thing that is an obvious cost driver. The issues were looked at, and what we ought to proceed with were priorized. The next step was the consultation.

Then, the Cabinet looked at a series of Cabinet documents that dealt with numerous changes to the entire social assistance program, some of them very small, modest ones and some of them rather large.

In the meantime, shortly after the report on social assistance was tabled, we had moved to three fairly important issues that were implemented during the course of last year - issues we felt could be implemented without consultation. Those were the changes to the unemployment insurance loan, which we feel will probably save in the neighbourhood of $600,000 a year - ensuring that those loans are paid back.

The social assistance recipient agreement was signed, sealed and delivered, wherein we spent $200,000 matched by the federal government last year, and that has been increased this year.

There is an agreement with other jurisdictions about sharing information regarding recipients to ensure that there was not double or triple dipping by recipients in more than one jurisdiction.

Mr. Cable:

The document I referred to - the report on social assistance of January 1993 - I think most correctly could be described as a list of things that could be done, not a list of things that the government had decided to do. Is that the correct overview of what that document says?

Hon. Mr. Phelps:

It certainly is. Then, it goes to government to determine which options we ought to proceed on. Those options were examined and priorized by Cabinet. Some did not require consultation with the public, and others did. Three major steps were implemented before we agreed to, moved on and implemented, prior to the consultation taking place, which I just described. Other minor issues were also in that category, and the consultation process dealt with areas that would directly impact on clients and other people in the Yukon. There were consultations with regard to those options. It has been a process that I thought I had made very clear over a year ago.

Mr. Cable:

The process appears to be fairly clear. I think it resulted in one step in this document of February 1994, on what you said about setting priorities for alcohol and drug abuse, health care and social assistance, which I think encapsulates what the Minister and his staff heard when they went around the territory

Page Number 2765

with the social assistance document.

Then, if I understand it correctly, the Minister recently issued a ministerial statement as part of his blueprint - if we can call it that - on social assistance reform. What I am getting at is this: is there something around - some document - that, if one came in from outside the territory, would tell a stranger what the Minister intended to do, and is doing? Is there a blueprint, or something akin to a white paper?

Hon. Mr. Phelps:

There is no white paper. There are a whole bunch of Cabinet documents, which, of course, are confidential and deal with the decisions of Cabinet that were based on the original report on social assistance, which was completed in early 1993.

Mr. Cable:

The Minister, of course, from time to time, has tantalized us with the various elements of his social assistance reform. We are not exactly sure what the whole package is and I think this is perhaps from where our misunderstanding came. There is nothing around that I have been able to find that one could categorize as a blueprint. In the Reader's Guide to the Report on Social Assistance of May 1993, there is identification by the committee of 11 possible areas where social assistance costs could be reduced, and that is a reduction in cost more than a reform.

Has the Minister gone through this whole list, and is he in a position now to tell us whether those 11 possible areas either have been dealt with or are going to be dealt with as part of his overall social assistance reform package?

Hon. Mr. Phelps:

I do not have a copy of the reader's guide with me down here.

Mr. Cable:

Let me go over a few things that are of particular interest to me. The Minister has indicated in this reader's guide that he wanted to step up policing activities to reduce fraud - and of course we have heard a lot of exchanges in the House on that particular issue.

This reader's guide also talks about encouraging labour force attachment for disabled persons and initiating guaranteed annual income for this group. Is that particular item on the menu?

Hon. Mr. Phelps:

Yes, it is on the menu in that, as I have said before in these Chambers, it is the major initiative we are taking to the table with Minister Axworthy regarding social assistance reform. He has expressed an interest in our views on this. It requires a lot of coordination between the federal and territorial governments and that is what we will be working on as a priority issue under the program where, federally, they have $800 million to look at pilot projects of this sort.

Mr. Cable:

I do not want to prolong this. Perhaps the Minister could take it under advisement and provide a legislative return.

Could the Minister indicate to the House which of these possible 11 areas - which are referred to on pages 11 and 12 of the Reader's Guide to the Report on Social Assistance - have, in his view, been actioned, or which he intends to action? Could the Minister also indicate whether there are any other elements besides the 11 elements that are mentioned there?

Hon. Mr. Phelps:

I can do that, but let me say that most of the reform has been announced and is in the course of being implemented. There are a few things that are remaining, and I will provide that kind of report to the Member opposite. Of course, the one that we just spoke of will depend upon cooperation with the federal government in order to get it off the ground, that is, the guaranteed income issue for handicapped people.

Mr. Cable:

On a different issue, the Minister, with his Minister of Justice hat on, attacked, with vigour I could say, the legal costs. I am wondering what took place in his negotiations with the doctors for medical costs. I have heard so far that there is a freeze on the doctors' fees, and that new doctors who joined the territory after April 1 are going to get 50 percent of their billings, with the exception of some specialists. Is that what took place?

Hon. Mr. Phelps:

The fees were frozen. In essence, there was no accommodation made for increased costs by the clinics in town for their staff and personnel, which would be equivalent to a decrease. How much? They say four to five percent, and we probably figure more like two to three percent.

There is an interim measure of the 50 percent for new doctors, with respect to the issue of physician resource allocation, over and above what is here and what might be required to replace them, but that is only for a year, while we work out a more comprehensive resource allocation plan. The base model that is going to be used will be that which is being deployed, and has been for some time, in Prince Edward Island.

It seems to me that the comparison between being harsh with lawyers and doctors is not really a very accurate comparison. We dealt with one issue, and that was legal aid, by saying that we not enhance, or be offloaded, federal programs by the federal government, and that is what occurred there. We are strictly sticking by our word, which is shared by many of the other provinces that, when the federal government freezes or cuts a program, they will not be offloading on to us.

I can tell the Member though, that while legal aid had been going up each year for some time after the freeze, the doctors' fees this year - as he can see from the information provided - were much lower than had been anticipated, close to $1 million dollars.

Mr. Cable:

This issue has been dealt with briefly in the House. I wonder if the Minister, just by way of preamble - I do have some further questions on the doctors' fees - could indicate what the theory is behind cutting new doctors down to 50 percent of the billing rates of the doctors who have been resident here previous to April 1. What is the basis for that theory? What is the reason for it?

Hon. Mr. Phelps:

The theory is that other jurisdictions have introduced very serious measures to prevent doctors from moving into their provinces. The 50-percent fee concept was necessitated by the implementation of B.C. - which we were warned of - of that very measure and to prevent a flood of doctors coming here to relocate for want of anywhere else to relocate - that, coupled with the information that is generally accepted, that more doctors mean a greater increase in the overall quantity of the fees paid in a given year for each doctor by some $100,000 to $200,000 per year. It was forced on us by virtue of steps taken in other jurisdictions. It is an interim measure, awaiting the full development of a physician resource allocation plan.

Mr. Cable:

That proposition would be based on the premise that the more doctors there are, the more misuse of the system there would be. Is that correct?

Hon. Mr. Phelps:

The proposition is based on empirical evidence that, to my understanding, is pretty well accepted in all jurisdictions in Canada - unlike the situation with lawyers, where the more lawyers there are, the more lawsuits there seem to be, even if the population stays the same.

Mr. Cable:

The Minister says "unlike", but it sounds like it is the same proposition - the more bodies there are around, the more wallets that have to be filled.

Let me ask this question. A friend of mine, who left the territory but has been back and forth over the years, and is now a resident here, was in a fairly serious accident. When he came back last year, he phoned around to various doctors' offices to get an experienced doctor to look after him. He found that he could not get a long-time doctor to take him on as a patient, because they were booked and were not taking new patients.

When the Minister decided to proceed with what appears to be interference with the supply and demand of doctor services, was any consideration given to whether or not doctors were taking on

Page Number 2766

new patients and providing adequate service to people who needed service?

Hon. Mr. Phelps:

Some of the newer doctors are taking on new patients; some of the older ones are not. That is quite a normal thing with doctors in all jurisdictions.

This was done in consultation with the department and the doctors, and it was necessitated, as I said, by unilateral action in other jurisdictions.

Mr. Cable:

I was wondering whether there was any analysis of the supply side done. Was it just one or two doctors who were not taking on new patients, or is that fairly prevalent in the medical profession?

Hon. Mr. Phelps:

I am not privy to the analysis that was done. I can have the department send over whatever background information was provided. The main concern was the feeling that there are enough doctors here, under the circumstances. Given the population trends, we had a year in which to implement a new resource plan that would be similar to those already in effect, and have been for some time, in such places as Prince Edward Island.

Mr. Cable:

I have a question on the chronic disease program that could perhaps be dealt with in a line item. Generally speaking, there appears to be, according to somebody who was talking to me, a problem with the chronic disease program design - this is where somebody has private insurance where they generally get 20 percent deductible. If they have significant bills - for example, if they had $2,000 in drug costs - they would get stuck with a $400 deductible, whereas, if they just allowed the public insurance to look after them, they would just get the $250 deductible. To my mind, that would seem to encourage people to get off their private medical plans and stay on the government medical plan, or have I misappreciated the incentive there?

Hon. Mr. Phelps:

The Member raises a very valid issue, and one that was the subject matter of a fair amount of thought and debate within the department and government. First of all, it is a major step forward to force people to use their private insurance plans, because that was not being done. There is no reason why private insurance plans should be off-loading onto government. Secondly, though, for a family with a $500 deductible, for example, the stuff that they would have to purchase, or have purchased for them, by private plan would have to be $2,500 worth of drugs, or similar stuff, in order to be equivalent to the $500 deductible, and half of that for an individual. Suffice it to say that those are the kinds of people that we do not have a problem supporting under this plan. It was initially designed for people who would have a very grave difficulty because of very high costs. I would say that if an individual had a situation where they expected to be using more than $2,500 worth of drugs in a year, they should get off of their private medical plan.

I do not have, as a matter of philosophy, a problem with us supporting that person after the $500 deductible. It is the abuse of the plan that we were trying to get rid of. There is a very major encouragement for a family that is going to spend less than $2,500 to keep their private insurance and a very major inducement for individuals to keep their insurance, unless they think they are going to be looking at drug costs in excess of $1,250 during the course of the year.

Mr. Cable:

What I do not understand, though, is that one does not just figure that one is going to have $2,500 worth of drug costs in 1996. You do not predict those sorts of things.

Why would the deductibles in the private medical plan be meshed in with the deductible in the public plan so that there is no detriment to someone claiming their private insurance?

Hon. Mr. Phelps:

There is no detriment unless something very serious happens. With chronic diseases, it is the kind of thing that is reasonably predictable for most patients. They get on the chronic disease list because of a condition that is chronic. It is not analogous to the situation where all of a sudden something tragic happens, such as an accident.

One of the issues that we looked at very closely was the other side of the ledger: the cost of a cumbersome plan that would deal with what we saw as a very minute problem, a problem that we recognize, but that is not all that great. The cost of hiring a bunch of people to monitor the kind of alternative that the Member is suggesting, in our view, outweighs the benefits.

Mr. Cable:

I am not quite sure I understand. Those two alternatives will continue to co-exist, side by side. Most insurance companies, if I recollect correctly, do not insure you for pre-existing conditions, so one does not go out and plot to pay $100 in premiums and get $2,500 worth of drug costs back. I do not think it works that way. Is there any problem with meshing the two plans together, so the deductibles are the same and so, if someone goes out and buys their own insurance, they do not do so to their own detriment, which appears to be, in some cases, the way this program is designed?

Hon. Mr. Phelps:

All I can say is the analysis done by the department showed that the cost of doing that would be fairly high. We examined it; we discussed it, and we felt that this simpler methodology was better and, if there were cases where somebody was going to, in effect, be faced with paying more much more than the deductible - a family paying more than $500, because their cost went over $2,500 - I have no problem, in my mind, with their cancelling their insurance. I do not think that is going to have a very big impact, when one considers all the cases where the private insurance companies are going to have to pay now, where they have not had to under the previous plan.

Chair:

Is there further general debate?

On Policy, Planning and Administration

Mr. Penikett:

I just want to make one very quick representation.

The Minister may have noticed that I was complimentary when the present deputy came to join the department, because it had been my objective view - it is not a partisan comment, at all - that this was the department spending large sums of money that would benefit from having, on staff, a competent economist, or a good financial analyst. The discussion earlier today about the difficulty of accurately predicting expenditures in different programs, the financial trend lines, and so forth, if nothing else, would warrant that. I also have been around long enough to know that the department's early predictions about the actual costs of programs has often been way off base, and I do not blame anybody in the department for that. I just think the program managers were not people who were trained to do that kind of analysis or, in fact, could be expected to quickly acquire the expertise.

I am not asking a question here, so much as saying that, whatever may happen in terms of the staffing of the department, it is my view that this is a department that really does need that kind of clear-headed economist, or financial analytical skills, in its senior ranks.

Hon. Mr. Phelps:

I thank the Member for his representation, and I agree with him entirely.

Policy planning and administration is down from $2.6 million for the year to $2,277,000 for the 1994-95 fiscal year - a 13-percent decrease. This is due to the following: personnel changes account for a net decrease of $69,000. These relate to the addition of the term personnel officer and records clerk, and is offset by reductions of hours worked by secretarial and policy analyst positions. Reorganization of duties within the finance branch has resulted in the elimination of a 0.5 full-time equivalent property services clerk.

A decrease in other O&M is largely due to a decrease in costs

Page Number 2767

associated with the Thomson Centre recruitment relocation funding, which is a one-time allocation in 1993-94. Funds have been reallocated to provide the communications officer with her own advertising and travel budget. Health and Social Services is reduced by $10,000, from $50,000 to $40,000. This is reduced to bring the number of meetings of this council in line with the Advisory Council on Indian Child Welfare and the Child Care Board.

On Activity

On Administration

Hon. Mr. Phelps:

Again, this is down from the forecast, and I apologize for the notes; they are still based on the forecast.

This is due to the following changes: secretarial position decreased to .5 full-time equivalent - that was $38,000 for the assistant deputy Minister of Health; personnel costs in the policy unit have been reduced by $63,000; accommodation of reduced hours by policy analysts and the addition of a records clerk transferred from Government Services through the decentralization of the records station under present arrangements. Policy analysts count for 2.5 full-time equivalents shared among four analysts; the .5 full-time equivalent property services position was eliminated due to internal reorganization of duties in the amount of $32,000; increase in term personnel officer in the amount of $64,000, transferred from the Thomson Centre; decrease in the policy and planning branch of $63,000 for contract services and program materials. This includes a one-time payment made in 1993-94 for the health promotion survey, which was $41,000; program material transferred to the communication officer in the amount of $10,000; a reduction in other contracts in the amount of $12,000; a decrease in the Thomson Centre recruitment relocation costs in the amount of $237,000, which is a one-time allocation; a decrease of $4,000 for supplies and program material; an increase in the communication officer budget in the amount of $39,000 for advertising, travel and community consultations; and the reduction in funding to Health and Social Services Council in the amount of $10,000, which I have already described.

Administration in the amount of $2,277,000 agreed to

Policy, Planning and Administration in the amount of $2,277,000 agreed to

On Family and Children's Services

Chair:

Is there any general debate?

Hon. Mr. Phelps:

Briefly, the highlights are that this amount is up by one percent from the forecast. Increases were forecast in family and children's services of 18 percent; placement and support services of five percent; and child care services of four percent. These increases are offset by reductions in program management of three percent and youth services of four percent.

These are the highlights. The following initiatives will be undertaken: the use of mediation to resolve child protection disputes will be explored during 1994-95. A steering committee consisting of judges, lawyers, child protection social workers and representatives of Mediation Yukon was formed in 1993 to discuss the appropriateness of mediation as an additional tool for conflict resolution with families who were involved in the child protection system. The steering committee will monitor a pilot project in 1994-95.

The child abuse treatment centre will be enhanced by the addition of one full-time child care worker. This will bring the number of staff in the unit to three full-time staff. The Children's Act provides for adoption information disclosure services for people who have been adopted under the act. The demand for this service is high. In 1994-95, a permanent half-time position will be assigned to carry out the government's responsibilities in this area.

A youth health promotion team will be established, consisting of two permanent half-time positions. The team will work with Yukon schools and other services for children and young people to increase awareness about health issues.

Net child care expenditures are estimated to increase by $300,000. This includes a projected increase of $464,000 to the subsidy program, and a decrease of $164,000 to the direct operating grant.

No changes in the direct operating grant are anticipated at this time. After four years of consultation and development, revised child care standards will be introduced as regulations pursuant to the act. For the second year in a row, the federal government will fund the Yukon child care training project. Training activities carried out as part of the project by Yukon College are aimed at improving the quality of child care in the Yukon by training child care workers. The open custody facility at 501 Taylor Street will be changed, and we have spoken about that. The adolescent sex offender treatment program, begun in late 1993, will be consolidated and linked to other related services established. The youth probation supervisor has been reassigned to focus her efforts exclusively on this program.

On Activities

On Program Management

Hon. Mr. Phelps:

There is a decrease from the forecast due to the following changes: transfer of accounts payable clerk from youth services to program management, $48,000; $2,000 drop in other; contracts - a decline of $79,000 in the safe places initiative; $74,000 in contributions, and $5,000 in supportive program materials. This is due to a lack of demand for new facilities, as some facilities, for example Carmacks, are First Nation-operated, and funded by the Department of Indian Affairs and Northern Development. There was a decline of $5,000 to teen-parent access to education - this is at their request. Kaushee's Place decreased by two percent. There is a reduction to the Advisory Council on Indian Child Welfare of $23,000 - it is reducing to four meetings per year. The Skookum Jim Friendship Centre contribution increased by $47,000 to support an additional counsellor.

That is from $55,000 to $102,000. The department is now supporting two full-time counsellors. There is a reduction to Health and Hope of $29,000. The department will fund six beds in each community at the same per diem. The Dawson safe home is up $3,000.

Program Management in the amount of $1,850,000 agreed to

On Family and Children's Services

Hon. Mr. Phelps:

There is an increase here. Funding is up to $1,277,000 million for the year from $1,086,000. This is due to the following changes: there is an addition of an RCMP position, at $30,000, which is jointly shared with Justice, a position to work with the domestic violence investigation unit of the RCMP, and is a YTG position on secondment to the federal government; a .5 person year for family life coordinator, now called youth health promotion, at $30,000, transferred from health services; 2.5 unfunded social work positions are now permanent FTEs, at $142,000; the Questar contract has been increased by $5,000 due to an increase in the volume of after hours child protection services - that contract is now $85,000 - Family support contracts are down by $15,000 as a result of an increase in family and children's service social workers.

Family and Children's Services in the amount of $1,277,000 agreed to

On Placement and Support Services

Hon. Mr. Phelps:

This is up to $2,117,000 from $2,010,000. The increase is due to the following changes: an additional .5 full-time equivalent adoption disclosure worker, $28,000; an increases of one full-time equivalent child care worker position, $38,000, which is an SS11 position; a decrease in activity management administration requirements, $2,000, due to efficiencies; an

Page Number 2768

increase in volume of employee travel out of the Yukon to escort FAS/FAE youth, $3,000; an increase in contract services for child care workers to provide one-on-one care for FAS/FAE children, $30,000; adoption subsidy price increase, $10,000.

Placement and Support Services in the amount of $2,117,000 agreed to

On Child Care Services

Hon. Mr. Phelps:

This is increased for the year and due to the following changes: a decrease in personnel costs of $3,000, due to expected salary cost reductions; child care initiative fund decrease of $121,000, which is the contract with Yukon College, which is $274,000 and recoverable from the federal government; a subsidy increase of $464,000 - from $1,836,000 to $2,300,000, reflecting a 25-percent increase; direct operating grant decrease of $164,000 - from $1,182,905 to $1,019,000, which is a 14-percent decrease; child care subsidy and direct operating grant funding levels subsidy increases, attributable to volume increases driven by a number of factors, such as an increase in lower income wage earners, an increase in people attending educational institutions for training, a projected increase of spaces and the decline in the availability of informal child care.

The direct operating grant decrease of $164,000 reflects funding required to meet 1993-94 projected actuals. These actuals are based on a funding moratorium put in place in September and will continue into 1994-95.

The Yukon Child Care Board and the department are reviewing the direct operating grant funding formula and will be recommending changes during the year.

Child Care Services in the amount of $4,732,000 agreed to

On Youth Services

Hon. Mr. Phelps:

There is a decrease due to the following changes: the transfer of an accounts payable clerk to program management, $48,000; changes to youth services programming results in diminished need for auxiliary and overtime costs - a $160,000 decrease, to $300,000 - and funds in this area will be transferred to fund open custody foster home contracts and will be reflected in supplementaries, with the expected implementation of open custody changes being June; staff redeployment to closed custody has resulted in casual reductions of $18,000; as part of the reorganization, the elimination of the co-ordinator's position, which is vacant, and one program worker position at Raven's Wing, for $132,000; the program has one health and social services staff and .5 teacher provided by Education to provide services to eight youth; increase in after care of one full-time equivalent, formerly culture programs, $56,000; reduction in Raven's Wing support costs, $8,000; lower expected costs for youth probation assessments, $41,000; increase in day program costs, $10,000; decrease in after care administration support, $4,000; increase in in-territory residential treatment, $23,000; increase in wilderness camp funding, $25,000; and out-of-territory treatment, $25,000.

This is transferred to the family and children's services branch from regional services. There is a decrease in net changes to group home contracts and support costs, $38,000, and the redeployment of open custody staff - the 10 positions, which I think I have provided.

Youth Services in the amount of $6,040,000 agreed to

Family and Children's Services in the amount of $16,016,000 agreed to

Chair:

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

Recess

Chair:

I will now call Committee of the Whole to order.

Before we begin, I would like to remind the people in the gallery not to participate in the debate in the House tonight.

On Social Services

Chair:

Is there any debate on social services, the program?

Hon. Mr. Phelps:

We went through the major highlights in general debate and unless there is some specific question I would just as soon go line by line.

On Activities

On Program Management

Hon. Mr. Phelps:

The following changes are worthy of note: increase in personnel costs, $4,000; minor increase in operating costs, a decrease of $227,000 due to movement from grants and contributions to contracts for Teegatha'a Oh Zheh; under community support services, an increase in Crossroads funding to reflect estimated actuals of $50,000 - the funding in 1992-93 was $444,000, in 1993-94 it was $336,000, and 1994-95 will be $386,000.

There is some funding for the Learning Disabilities Association of $6,000, which is a result of the rationalization of services the department is purchasing from this organization; and a decrease to Yukon Association for Community Living of $14,000.

Program Management in the amount of $1,270,000 agreed to

On Alcohol and Drug Services

Hon. Mr. Phelps:

There is an increase in this line; the funding is increased. There are two additional full-time equivalent outpatient treatment counsellors in the amount of $103,000; one full-time equivalent prevention worker for $59,000; increase in supports in the amount of $22,000 required to support full-time equivalents; increase in costs for roadside treatment in the amount of $11,000. There is an additional $54,000 for a move to a new space allotted for alcohol and drug services, which is offset by a reduction in personnel costs at the detoxification centre in the amount of $49,000, due to staff providing in-house work as opposed to the work being contracted out and the use of the auxiliary staff being reduced. The increase in operating expenses at detox is $3,000.

Mr. Cable:

Does the Minister's department see an increase in FAS and FAE children coming through the school system as a result of alcoholism in the territory?

Hon. Mr. Phelps:

It has vastly increased in the school system, but we do not know whether or not that is an actual increase or just a matter of our having more knowledge about the existence of FAS/FAE and the causes for it. There has been a fair amount of publicity over the last number of years with regard to the issue.

Regarding the incidence of alcoholism, that is something that is decreasing in some areas and increasing in others. As I mentioned some time ago during debate, when we were last in Health and Social Services, we have some concerns about the secondary analysis that has been performed in the alcohol and drug survey. It has just been released to the department to look at.

Ms. Commodore:

I have a question about the Yukon Liquor Corporation and Health and Social Services, because it deals with FAS/FAE children. Labels on liquor bottles have been in existence for two or three years. Is there any move within the two departments to do a study to find out whether or not that has been effective?

Hon. Mr. Phelps:

Not precisely on that issue, but there is talk of getting a better partnership in terms of the kinds of advertising that is undertaken by both, and also looking at the kinds of contribution that the Liquor Control Board might make toward some programming in our department. It is going kind of slow in terms of that cooperation.

Alcohol and Drug Services in the amount of $1,650,000 agreed to

On Social Assistance Services

Page Number 2769

Hon. Mr. Phelps:

We have discussed the changes at some length. There is a decrease in use of auxiliary personnel, $32,000; additional funding in contract services, $35,000; the increase in SARs by 50 percent or $100,000 to $300,000, which is matched by the federal government. Those are the highlights.

Social Assistance Services in the amount of $9,930,000 agreed to

On Community Support Services

Hon. Mr. Phelps:

There is an increase for home care of $70,000, which is auxiliary. There is an increase to support independent living counsellors of $90,000, which reflects actual costing right now; the Teegatha'a Oh Zheh move from grants and contributions of $227,000; a decrease in general operating expenses, $3,000; an increase in funding for the pioneer utility grant, $167,000 up from $174,000 to $341,000 to reflect actual cost of this grant; a decrease expected in VRS subsidy of $1,000.

Community Support Services in the amount of $2,630,000 agreed to

Social Services in the amount of $15,480,000 agreed to

On Health Services

Chair:

Is there any debate on health services?

Hon. Mr. Phelps:

We have gone through a fairly lengthy debate with regard to the general observations I would make. I think we have covered most of them. I would be prepared to move to line by line.

On Activities

On Program Management

Hon. Mr. Phelps:

There is going to be an increase here, which is a direct result of phase 2 of the health transfer negotiations and that, of course, involves transfer of the remaining programs, particularly community health programs and nursing stations. This phase will require additional support and, of course, this was one area that was lapsed because of the delay from the federal government in getting phase 2 initiated.

All of the costs are fully recoverable from the medical services branch of the federal government. Those are the highlights.

Program Management in the amount of $1,098,000 agreed to

On Health Insurance

Hon. Mr. Phelps:

One of the major changes here is that the line item no longer includes the contribution to MSB for the operation of the Dawson and Mayo facilities. This decreased the budget by $1,112,000. The budget for those two facilities is now included under community health.

Other decreases include $130,000 in the communicable disease unit and $120,000 in mammography contract services, as these are now included in the Whitehorse General Hospital operating budget. There is a reduction in out-of-territory hospital costs, reflecting decreased volume trends, which are partly a result of changes in the health systems in the provinces.

Mr. Cable:

We have been around this horn a few times with some questions that I asked the Government Leader and the Minister.

In the budget speech, one of the items read as follows: "Specific health reform announcements will be made during the sitting by the Minister of Health and Social Services. The reforms that will be announced are anticipated to significantly reduce health care insurance costs."

When I asked the Government Leader what that amounted to, I think he referred me to the Minister, and I think the Minister started to answer that question, but we do not as yet have a definitive answer of what the savings will be. Is there a document available that sets out all of the significantly reduced costs?

Hon. Mr. Phelps:

I would have to have that information assembled and provide it as a written answer to the Member. We gave estimates of specific changes to specific programs in the ministerial statement a couple of weeks ago. There are other changes that we could point to that we see as savings, or at least a reduction in anticipated increases.

There is a requirement for a further analysis of some of the trends. That is something that we have also covered to some extent in general debate.

Mr. Cable:

Could the Minister give us a general order of magnitude of the savings for the present fiscal year - that is the fiscal year ending March 31, 1995? Just a general figure - like $1 million or $2 million or $10 million.

Hon. Mr. Phelps:

On a 12-month basis, the decrease in the chronic disease program, because of changes, was to be about $500,000 a year, but it would take place halfway through the year because it will not be implemented until September.

The changes resulting from the formulary would, it is estimated, save something in the order of $100,000 per year.

The kinds of efficiencies being already implemented by the new hospital board are mounting and I would anticipate an additional saving of, I would hope, in the range of $1 million.

With regard to other issues, such as physician resource allocation, we are really talking at this point in time about capping to some extent those services until the new plan is in place about a year from now.

There are a large number of savings we could point to, but there are a lot of other issues that will impact upon our costs, which are more subject to the vagaries of the general economic climate.

Mr. Cable:

If I heard the Minister correctly, he is talking of something in the order of $2 million - I believe he mentioned $1 million and $100,000, or was it half a million dollars? I could not track all the numbers there, but it seemed to be something in the order of $2 million - is that correct?

Hon. Mr. Phelps:

There is about $600,000 or $700,000 in the programs we have already announced the changes to, and up to $1 million in terms of the hospital cost savings and other cost savings in the system. Some of these savings have been built into the figures.

The problem is that when I say something like $600,000, we are talking about half a year, so cut it in half. The implementation period is not going to be until September 1.

Health Insurance in the amount of $26,098,000 agreed to

On Yukon Hospital Services

Hon. Mr. Phelps:

The operating budget of the hospital was less than was initially anticipated. The initial budget was really a reflection of the actual cost when it was still under the federal government. The contribution to the hospital was reduced by $50,000 to better reflect actual operating results. There was one-time funding in last year's budget of $176,000 for program development, which is not required this year. Contract services have been reduced by $41,000 because the operational review has been completed, and the actual cost of that review was only $10,000 because of the generous assistance of the B.C. Ministry of Health officials who came up here and did the review. There is an increase of $19,000 in the contribution to First Nations health programs, as a result of the escalator.

Yukon Hospital Services in the amount of $16,948,000 agreed to

On Community Health

Hon. Mr. Phelps:

There is a little over $1 million - $1,010,000 - added to the operating cost of the Dawson/Mayo facilities. The difference between this amount and the amount noted under the health care insurance, of $1,012,000, is because YTG only pays a portion of the community health facilities, as opposed to hospitals, outside of Whitehorse. The sum of $100,000 was added to the contribution to the Second Opinion Society for the prevention of hospitalization and for preventive health.

Page Number 2770

There were decreases of $74,000 due to reduced personnel costs through the reorganization of hearing services. The waiting lists are down to an acceptable two-week period in that program. There is a decrease of $91,000 in overtime and personnel costs for the ambulance unit; $26,000 in reduced communications costs; a $10,000 reduction in the Mental Health Review Board to reflect the expected number of required meetings.

Community Health in the amount of $5,958,000 agreed to

On Continuing Care

Hon. Mr. Phelps:

The increase in this item is largely due to the full-year cost for the operation of the Thomson Centre, which accounts for $1,687,000 of the increase, and the reallocation of regional home care to this line item, which may be changed. We are in the process of re-examining that, but this is for the purpose of the budget as it sits at this point in time. A large proportion of the regional home care program is operated at McDonald Lodge. That was transferred to the continuing care program the previous year. This transfer resulted in an increase of $200,000; there was an increase in operation costs for Macaulay Lodge, $125,000, which is for the extra eight beds. The Thomson Centre has a total capacity of 37 beds, with 14 under construction. The Whitehorse General Hospital is using a 10-bed unit for patients from the pediatric ward of the old hospital during construction.

Continuing Care in the amount of $8,327,000 agreed to

On Vital Statistics

Hon. Mr. Phelps:

The increase of $25,000 is due to the reductions in salary expenditures to reflect actual costs for the .5 full-time equivalent French language services position. That position is now reflected in the Executive Council Office, and the cost is fully recoverable from the federal government.

Vital Statistics in the amount of $65,000 agreed to

Health Services in the amount of $58,494,000 agreed to

On Regional Services

Chair:

Is there any general debate?

On Activities

On Program Management

Hon. Mr. Phelps:

In this department, there is a decrease due to the following: .5 secretary added to Carmacks, which was previously unfunded and has now been made permanent, $24,000; increase in overtime call-out costs, $19,000; community support coordinator in Watson Lake is now reflected under health services and community health, a decrease of $60,000; the French language social worker, now reflected in the Executive Council Office, a decrease of $67,000; a further decrease of $10,000 is due to minor reductions in office expense.

Program Management in the amount of $1,831,000 agreed to

On Family and Children's Services

Hon. Mr. Phelps:

The main changes here are as follows: an increase in assessments of children in care, $25,000; an increase in family support contracts for children in care, $69,000; an increase to contribution agreement for Yukon Family Services Association, $17,000; an increase in federal child benefits, $17,000; an increase for the Kaska Tribal Council contribution agreement of $22,000 from $65,000 to $87,000. This is for two family support workers and represents full year funding. There is a decrease in group home contracts and expenses, $109,000. This is a decrease to the Mayo group home of $63,000, and to the Watson Lake group home of $46,000. Part of that was transferred into the figure for the Kaska Tribal Council.

Family and Children's Services in the amount of $1,523,000 agreed to

On Social Services

Hon. Mr. Phelps:

The net effect is zero, but there was a $133,000 increase in social assistance, and a decrease of the same amount in community support personnel, which went to Health Services.

Social Services in the amount of $2,163,000 agreed to

On Juvenile Justice Services

Hon. Mr. Phelps:

The highlights here are an increase in assessments of children in care, $8,000; increase in community development materials, $2,000; reduction for out-of-territory treatment, $8,000; transfer of $50,000 to Family and Children's Services for child welfare - residential services for wilderness camps - that is $25,000 - and out-of-territory treatment for youth, $25,000.

Juvenile Justice Services in the amount of $32,000 agreed to

Regional Services in the amount of $5,549,000 agreed to

Department of Health and Social Services agreed to

Chair:

We will move on to Finance. Is there further general debate on Finance?

Department of Finance

Mr. McDonald:

Yes, there is some debate. What I would like to do, if the Minister is willing, is to try and tie down some numbers that seem to have been floating around in the media, and in the Legislature, so that we can both use the same information, and we will both be able to ensure that it is reliable.

The Minister will know that we are primarily interested - if we are to determine the base situation for this current fiscal year - in the amount of unspent money available from 1993-94. We are also interested in knowing the accumulated surplus position of March 31, 1994, which was about two months ago.

The reason why I am asking the Minister to tie this down is because we have had a number of different figures presented to us, and I am not sure what is and is not true.

In the area of lapses, or unspent money for 1993-94, the initial budget papers presented in late April indicated that the unspent money or the lapse would be in the neighbourhood of $1.4 million. That was considered to be a net amount, not a gross amount. At the same time, the Minister admitted on April 26, 1994, shortly after the budget was tabled, that the net lapse would be in the $5 million range rather than the $1.4 million. He based that figure on a projection of $8 million to $10 million gross spending lapse.

Of course, we all know that a briefing with Finance took place in late May, just last week, after the Minister got back from Gimli. At that briefing, the Minister discovered that we were lapsing a fairly sizable portion of money, certainly much more than the $8 to $10 million gross and the $4 million to $5 million net lapse that could be applied against the $13.3 accumulated deficit.

On May 25, 1994, the day the Minister responsible for the Public Service Commission brought down the wage restraint measure, the Minister indicated that there would be a $8 million to $10 million net lapse. The Minister indicated that during Question Period. He followed that up by indicating that that would mean a $3 million to $5 million accumulated deficit for March 31, 1994.

Now, five days later, that $8 million to $10 million net lapse was bumped up to $19.3 million net lapse - on a $30 million gross. It appears the surplus has been bumped up to a total of $6 million, and that was admitted today.

I would like to ask the Minister if he could give us some sense of what he understands the final numbers to be for the 1993-94 period and what he could tell us would be the accumulated surplus position - as best as they know it, and admittedly the numbers are not all in - from March 31, 1994, and what the accumulated surplus position for March 31, 1995, would be.

Hon. Mr. Ostashek:

Perhaps I could just go back a little way and give the Member opposite a breakdown of the chronological order in which things fell into place. It may be helpful to him.

In early March, departments were surveyed by telephone to see

Page Number 2771

what potential lapses might occur for the year. A formal variance was not done because of time constraints, the previous session having run until the end of January and the necessity to prepare main estimates for spring tabling.

At the time that the departments were polled, excluding land development, the hospital and other 100-percent recoverable capital items, the departments identified a potential of $5.9 million in O&M and $2.1 million in capital lapses.

Since the numbers were obviously very rough, a range of $4 million to $8 million was identified as the potential lapses, excluding the 100-percent recoverable expenditures. The rough estimate was that of the total lapse of $4 million to $8 million, one-half would be subject to an accompanying loss of recoveries that were outside the fail-safe provisions of the formula financing agreement. Therefore, the gain to surplus could amount to roughly $2 million to $4 million. In mid-April, the Department of Health and Social Services informed Management Board that they now thought their lapse in O&M could reach almost $7 million. Since the departments had identified $3 million in the March survey, it would increase to $4 million in lapses, of which once again half could be assumed not to be a gain to surplus due to working of recoveries under the formula financing.

Therefore, at this point - mid-April - the total lapse is estimated to be $8 million to $12 million. That is the original $4 million to $8 million, plus the newly identified possibility. On that basis, a favourable impact on the surplus could be $4 million to $6 million.

None of the above includes provisions of the $2.3 million for the Taga Ku loan, which will have to be made on the March 31, 1994, books of account. Therefore, if one takes the Taga Ku loan into account as a reduction of lapses, there will be a range of $5.7 million to $9.7 million, of which anywhere from $1.7 million to $3.7 million would be expected to impact on our surplus.

Firmer figures, but still preliminary, became available last week. These showed quite a different picture. In fact, the lapses have been much greater, although I would caution that it will still be some time before the final figures for the year are known. We will find some more adjustments to the accounts and the Auditor General will find some more adjustments to the accounts.

At the present time, our surplus for the year will be in the neighbourhood of $19.2 million - excluding an extraordinary item that will reduce it by $12 million, about which I will speak shortly.

Underexpenditures are much larger than those originally forecast by a number of the departments. For instance, Health and Social Services has lapsed more than $10.9 million in O&M, which was debated this afternoon. The Department of Education had forecast no O&M lapse in early March but has actually underspent by $1.4 million. PSC will lapse some $1.7 million more than the $20,000 forecast in March. This is largely because leave accruals appear to be far less than expected. Justice had predicted no lapse in March but will actually give up $300,000, and so on and so on.

There have been significant lapses in recoveries of over $15 million. These recoveries will have to be analyzed to determine their impact on our surplus. However, as I stated, the unadjusted surplus is, at this time, sitting on the books at $19,254,976. If this came to pass, we would have an unadjusted accumulated surplus of $5,956,000, as of March 31, 1994.

As I spoke to the extraordinary item previously, and the reason we have not shown it, is because it is an extraordinary item. We will probably be converting the outstanding and longstanding loan of $12 million to the Yukon Development Corporation and the Yukon Energy Corporation to an equity grant, as this will reduce the annual surplus for 1993-94 to $7,254,976. As of March 31, 1994, that would have an accumulated deficit of a little over $6 million.

I will be the first to admit that a $12 million transaction is unusual, and that is why I have used a $19.3 million figure for this year's surplus. We have used it; we are not trying to hide anything.

Some Hon. Member:

(Inaudible)

Hon. Mr. Ostashek:

It is not embarrassing at all.

Some Hon. Member:

(Inaudible)

Hon. Mr. Ostashek:

No matter how we look at it, the only way that the Yukon Development Corporation or the Yukon Energy Corporation could ever repay that loan would be to borrow money, or to remit Yukon Energy Corporation earnings. Those earnings should be reinvested in an electrical generation system, so we might as well just convert it to a grant.

The unusual thing about the lapses that seems to have occurred is that the bulk of them are in operation and maintenance, rather than capital, as was the case in the past years. The lapses, while large, are about average for the past eight years. We certainly thought they would be smaller.

The change in the surplus/deficit position is large, if the numbers provided prove out to be final; however, for the real comparison of the total budget in expenditures and total revenues, we are estimating approximately $500 million expenditures and $500 million in revenues.

The gross spending lapse is approximately 6.7 percent at present. While this is still higher than what I would like to see, it is considerably less than what one would expect if one were to look only at the surplus deficit figures.

Mr. McDonald:

I do not know what to say. I spent the better part of the dinner break and all of last night tracking the claims made by the Members opposite about the actual budget figures. It is an incredible maze, to be sure. Pinning the Minister down about precisely what is lapsing and what is not, even after the detailed financial briefing that the Minister had last week, demonstrates that we are not getting the whole picture and we are not getting an accurate picture.

The Minister said that they have not yet decided whether or not to consider his latest write-off - this is a write-off that I had not thought of; I was thinking that maybe all of the SEAL loans could be written off or all of the CMHC loans might be written off, anything for that deficit, but I had never thought for one moment that the loan to Yukon Energy Corporation, that poverty stricken corporation, might be something high on the Minister's agenda.

I can tell you that on May 25, after the detailed financial briefing and before any such decision announced this latest write-off - the latest in a long string of write-offs - the Minister indicated to me, in answer to questions - and I checked Hansard today, because I wanted to be sure - stated that he had mistaken the word "deficit" for "surplus", or "surplus" for "deficit". However, that interpretation is not possible under the circumstances, based on what the Minister said last week, and after the information had been given to them about the latest, precise figures for the operating and capital lapse for 1993-94.

The Minister did say at the time, quite clearly, that we were still going to operate with a deficit and we were still going to only lapse $8 million to $10 million. There was no word at that point, until it was dragged out of him, that we were going to lapse upward of $30 million.

The Minister knows as well as I do that the lapses of $30 million vary the main estimate target in addition to what has already been turned back by the government. The government, in November, turned back $15 million because they said they could not spend it, for a total of $45 million. This was a government that told us that spring that there was no room in this budget whatsoever - absolutely no room in that budget; every penny, every nickel,

Page Number 2772

every dime had to be spent in precisely the way it was directed.

The Minister knows that when the taxation plans were altered to reduce revenue by $1.8 million, the Minister had us go through this exercise of amending the main estimates budget 43 times to accommodate the $1.8 million. Here we are, the same time the next year, acknowledging that the main estimates, which were considered tighter than a drum, changed in the magnitude of $45 million. That is a lot of money. By that accounting, of course, there is a change in budget projections of nine percent.

Now, in changing those budget projections by nine percent, the Minister has indicated on the radio that if one is earning $50,000 per year and one had to amend one's budget by as much as the government is amending its budget, that it would be a fairly reasonable proposition for a household budget to be out by $2,500 to $5,000. Well, I make about that much money and I would say that I would be toast at home if I were $2,500 or $5,000 out in my household accounting. I certainly would notice $2,500 or $5,000 - the Minister may not notice $10,000, but I would notice $2,500.

I have a lot of questions about this potential decision to write off the Yukon Energy Corporation loan of $12 million. Perhaps the Minister might, at some point, give us a total of all the loans outstanding to anyone, irrespective of whether the government thinks it is ever going to be paid back, because I would like to be able to anticipate these write-offs in the next two years.

If he could do that, I would appreciate it. I would like to ask the Minister precisely what he projects the accumulated surplus to be for March 31, 1995, given what he knows now - both with this potential new loan write-off, and without.

Hon. Mr. Ostashek:

Let me clear the record. It is not a write-off. It is just a matter of changing a loan to a grant. It has absolutely no effect on the consolidated position of the government - absolutely none.

Let us leave that aside, because that was mentioned in the figures that I gave to the press. It was mentioned in the briefing of the morning of June 25 - it is right on the bottom of my notes here.

Let us use the $19 million figure. Let us say that we have a projected annual accumulated surplus of $5.956 million, as of March 31, 1994. The projected surplus as of March 1994-95 will be about $400,000. That is because of the revotes that will come out of that surplus. They will have to come from somewhere.

Mr. McDonald:

Every time the Minister answers a question, it raises a few questions. I would like to ask his reasons why the government wants to change the accounting for the loan to the Yukon Energy Corporation to a grant if it makes no change in the financial consolidated position.

The Minister indicated to me that he was seeking $2.4 million in revotes. I believe he said that yesterday - I have the Hansard here, so I can check the precise date. I look at the accumulated surplus position for March 31, 1995, using the government's budget papers, and we see, as dangerous a proposition as that might be, that the government is projecting a $19.3 million accumulated surplus for March 31, 1994.

They are also projecting a surplus for this current year of $5.6 million. That totals $24.9 million. When one subtracts the accumulated deficit of March 31, 1993 of $13.3 million, that leaves the Minister, as of March 31, 1995, with an accumulated surplus of $11.6 million. If one were to subtract the $2.4 million in revotes - $11.6 million minus $2.4 million in revotes - that does not leave $400,000. Can the Minister explain that, please?

Hon. Mr. Ostashek:

The Member is right. We do have the $2.4 million revotes come off that. We also have about $2.8 million that we did not include in the wage restraint legislation by leaving the merit pay in, leaving the experience increments in and not having the Christmas closure. That amounts to about $2.8 million in the first year.

Mr. McDonald:

If we are projecting an $11.6 million accumulated surplus, if we subtract $2.4 million and $2.8 million, which is $5.2 million, from the $11.6 million, that still does not leave $400,000.

Hon. Mr. Ostashek:

When I said $400,000, I was talking about the annual surplus for the 1994-95 year. The total surplus would be $6,359,000, according to the figures I have here.

Mr. McDonald:

Okay, so the $400,000 is what the Minister considers the annual surplus. Even with the new promise to spend $2.4 million in revotes, and with a change in the public sector wage restraint, we can expect an accumulated surplus, after all of that, by March 31, 1995, of approximately $6 million - is that correct?

Hon. Mr. Ostashek:

Yes, that is correct.

Mr. McDonald:

Can the Minister tell us whether or not he projects any lapses in the 1994-95 year?

Hon. Mr. Ostashek:

No, we are not projecting any lapses. There will be some lapses, as always, which will adjust our position when they are received. We do not know what those lapses will be at this time.

Mr. McDonald:

So the Minister is not going to be claiming this year that this budget is tighter than a drum, I take it.

Can the Minister then tell us, given the comments made by the Minister responsible for the Public Service Commission with respect to savings - I think that the Minister characterized a large portion of these lapses as "unexpected savings resulting from increased efficiency," and indicated that much of these lapses would be permanent savings, precisely how much of the lapses are to be characterized as increased efficiency?

Hon. Mr. Ostashek:

The Member opposite, being a former Minister of Finance, knows how difficult that is. Much of the savings this year are from positions that were left unfilled and that will continue to a great extent, as each position is analyzed. Some of the savings will come from Health and Social Services - the extended health care facility that is budgeted for a full year this year. There are numerous areas where there were some savings in highway maintenance due to a very mild winter. There were tremendous savings realized in overtime costs that may not be there next year, depending on the weather. There were savings this year, there is no doubt about that. Any time that you get operation and maintenance lapses, they are savings for that particular year, at least.

Another thing that the Member opposite will be aware of, from looking at the budget, is that 13 out of 16 departments have come in with lower operation and maintenance estimates this year than the previous year. So, it is very difficult to say if all of the savings will carry over from year to the next or not.

Mr. McDonald:

Well, the Minister will remember our contention that the budget last year was padded. Consequently, if they come in under budget, frankly, I think that is to be expected. I do not think that the Ministers can claim too much credit for tight management on that front alone.

The problem I have is that the Minister responsible for the Public Service Commission made a rather unqualified statement on the radio about the reasons for the unexpected lapses. We knew, or at least we felt we knew, that the gross lapses for last year would be in the $8 million to $10 million range, and when the figure came in at $30 million, the Minister responded by saying that the new government was operating in a much more efficient manner and that was the reason for the lapses. My immediate thought was that the government is going to have to prove it and demonstrate precisely what it has accomplished through efficient management.

If they have found items that are permanent in nature, through efficient management, then they should be deducting those from the main estimates we are proposing right now. The reason why

Page Number 2773

they should be doing that is because these were unexpected, right up until last week.

If the government can prove its claim that it has been more efficient, then, to be true to itself, it is going to have to amend its budget estimates. As the Minister says, from time to time, one cannot have it both ways. I would like to know precisely how much is characterized as increased efficiency. I would point out that the justification for the change in the wage restraint bill - of a total of $8 million over the term of the restraint - was because they felt this was due to increased efficiency. They have already calculated $8 million over the three-year period that is due to increased efficiency. I would like to know where that increased efficiency is.

Hon. Mr. Ostashek:

I cannot break it down on a department-by-department basis. If the Member opposite would just refer to the budget, he would see that the 1994-95 estimate, on the operation and maintenance side of the ledger, is $346,210,000, compared to the 1993-94 forecast of $358,290,000.

The estimate has been reduced some three percent overall from what it was in the 1993-94 forecast.

Mr. McDonald:

I have already stated that the 1993-94 forecast was padded, in our opinion. I think the final year-end projections for the lapse bear that out.

The point I am trying to make is that the estimates that were projected for the 1994-95 budget of $346 million did not incorporate the unexpected savings that were announced last week. These unexpected savings - the extra amount between the $10 million and $30 million - was not known when these budget estimates were produced. These were presumably produced in early April, late March. If what either Minister is saying is true, then we should be expecting the $346 million to be reduced by another amount.

Hon. Mr. Ostashek:

The Member keeps referring to $30 million. Why does he not give the rest of the story: $15 million was recoveries. That is not money we have in our pocket. The fact is, without even knowing what the savings were, the departments were ordered to come in with lower estimates in O&M and they have done that. The Member opposite had the opportunity to question the Minister of Health today, because that is where the bulk of the lapses were. I do not recall the Member opposite even getting to his feet during that debate.

Mr. McDonald:

The problem that I have, quite frankly, is that when the budgets were produced we were told that this budget of $346 million incorporated no lapses at all and any lapses that might occur would be unexpected. So, the comments made by the Ministers on the radio, when they wanted to buy themselves some extra kudos and some extra points, by saying how extra efficient they were, have now come home to roost. Now, it is accountability time.

Frankly, the fact that the Ministers had been unaware of the additional savings - unaware when these budget estimates were produced - and that they have characterized those savings as increased efficiencies when they are, at least in part, permanent in nature, suggests to me that if they can make that claim with any reliability at all, they should be able to demonstrate how much of the extra amount that lapsed is, in fact, increased efficiencies. I think the Minister should answer that question.

Let me point out as well that the Minister says that $15 million of the $30 million is a recovery. How can that be? How can $15 million of $30 million be a recovery - it would only leave $15 million in net funding available. We have been told yesterday that it is $19.3 million. Is he referring to the $45 million that the government is turning back? What is he referring to?

Hon. Mr. Ostashek:

The Member opposite is a former Minister of Finance, and he knows this is the way the recoveries work. They do not just all add up to the same number. He said that in November we gave back $15 million. We also voted $21 million. We voted an extra $5 million for the make-work project, because some of that money we gave back was out of recoveries that we would not get the benefit of anyway. The calculations are always moving. There are always lapses, there are always recoveries, and there are always adjustments to be made on them.

Mr. McDonald:

The comment about the calculations moving is an understatement. I do recall what the Minister now refers to as the make-work project. Those were the savings that the Minister found after he told us that the budget was tighter than a drum, and that they needed every penny of the tax funding. I recall that. Can the Minister tell us this: including the money that was turned back in November 1993, how much in total was the main estimates spending out from the original planned estimate of $483 million?

Hon. Mr. Ostashek:

If the Member would like to continue his questioning, we will have that figure for him fairly soon.

Mr. McDonald:

I have a new question, I guess. The point of the matter, though, is that there is expected to be $19 million worth of lapsed operations funding, for which there is clearly some leeway with respect to how the money is being spent.

First of all, I would like to ask the Minister, with respect to the government's write-off policy - and this is obviously a continuing sore point in the Legislature, at least by us - because that obviously always draws down the surplus. Could the Minister tell us, because I have asked this question before and I would appreciate an answer at some point, how much they actually expect to receive from the amounts that have been written off in the past from continuing payments? I will point out that, for example, in the supplementaries we have in front of us, I believe there is a $1.4 million write-off for Faro Real Estate in Faro for some 380 housing units. I think that works out to something around $5,000 per unit, and the Minister responsible for Community and Transportation Services says they still expect to receive some recovery. Even if one were to liquidate all those housing units, one would expect that, in order to recover the entire amount of that particular loan, they would only have to get approximately $5,000 a unit for each of those units, but the government has decided to write off the loan altogether.

I would point out that on the extended care facility, some funding is still expected on an annual basis from CMHC as their contribution toward that particular project - I think it is $400,000 a year for a number of years - including the Workers' Compensation Board. Of course, that is through operations funding anyway.

I am talking in particular about the write-offs that have been of some contention in the Legislature. Can he tell us what he expects to receive in annual payments as a result of those write-offs?

Chair:

Order please. At this time we will take a brief recess.

Recess

Hon. Mr. Ostashek:

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

Hon. Mr. Ostashek:

Prior to the break, the critic was asking me what we expected to collect on the loans that we have written off, which is really very, very little. There is the $5 million loan to Curragh, on which we do not expect to receive anything.

On the $2.4 million energy loan, we will probably recover a few cents on the dollar at the very best. We know what the sale price of the property is; we know that there are a lot of lien claimants out there; we know that venture funds are trying to make the lien claimants justify their claims and we expect very, very little on that.

Page Number 2774

On property tax, we will probably get $200 from Cominco on the Sa Dena Hes property.

Mr. McDonald:

Could the Minister refresh my memory as to how much CMHC is going to be paying toward the extended care facility?

Hon. Mr. Ostashek:

I believe it is $4.8 million over 20 to 25 years.

Mr. McDonald:

Okay, we will remember that.

With respect to Faro Real Estate, is the Minister expecting to write off the total debt of $1.4 million? Are they expecting to get nothing back?

Hon. Mr. Ostashek:

The Member's guess is as good as mine on what we will get back. There have been no payments made on the loan in over a year. I imagine there is some residual value to the units if they were sold on an individual basis, at some point. That would depend on whether the Faro operation gets up and running again. It is an unknown figure at this point.

Mr. McDonald:

As a prediction, I would suggest that a fairly large portion of the $1.4 million would be retained in some way. Given that some of the other predictions I have made have been accurate, under the circumstances, the Minister can take it for what it is worth, I suppose.

The Minister was going to come back after the break with some indication of what the spending targets established within the main estimates were out for the 1993-94 year - the total gross spending.

Hon. Mr. Ostashek:

The 1993-94 main estimates were $480.7 million, and we will spend about $441 million.

Mr. McDonald:

He is saying they will be out by approximately $39 million. Is that correct? He is nodding in the affirmative.

What percentage is that? I do not have a calculator with me. I will calculate it at some point.

The Minister indicated that Cabinet is considering a conversion of a loan of $12 million to the Yukon Energy Corporation to a grant. He indicated there would be no effect on the consolidated position of the government. What would the reason be for making that change?

Hon. Mr. Ostashek:

The reason we will never get it is that what we would be doing is converting a loan to equity; we would not be writing it off - so the $12 million would still be there; it is just moving it from a loan receivable to an equity grant in the company.

Mr. McDonald:

Would that affect the unconsolidated financial position of the government?

Hon. Mr. Ostashek:

Yes, it would. That is why we reported it separately, and said that we had the $19 million surplus. That is why we said, "Let us use the $19 million figure," and we have been using it in the debate tonight.

Mr. McDonald:

So, the only effect would be that it would draw down what the government states as being their surplus, but it would not change the consolidated financial position of the government at all. Is that correct?

Hon. Mr. Ostashek:

Yes, that is correct.

Mr. McDonald:

I had not thought of that one before, but I have to hand it to the Minister for coming up with it; that is good.

The lapses in capital - just to tie this down, because there may not be another opportunity in a little while; can the Minister tell us precisely what the lapses in capital were, and can he tell us precisely how much lapsed on the Shakwak project?

Hon. Mr. Ostashek:

I do not have the lapses on the Shakwak project. The capital lapses here are Legislative Assembly, $3,000; Executive Council Office, $2,000; Community and Transportation Services, $4,233,000 for 8.6 percent; Economic Development, $3,120,000; Education, $370,000; Finance, $5,000; Government Services, $207,000; Health and Social Services, $3,486,000; Justice, $307,000; Renewable Resources, $75,000; Tourism, $229,000; Women's Directorate, $3,000; and the Housing Corporation net grant capital of $100,000.

Mr. McDonald:

How much is the total lapsing capital?

Hon. Mr. Ostashek:

The total is $12,140,000.

Mr. Cable:

I was just going through the statements for the Yukon Development Corporation and the Yukon Energy Corporation, and I was wondering if we could just play back the loan conversion. There is money owing by the Energy Corporation to the Development Corporation, and money owing by the Development Corporation to the Government of Yukon. What particular loans are we actually talking about that are being converted?

Hon. Mr. Ostashek:

They were loans that were made to the corporation when the corporation was first established. I guess we could say that to a great extent the money was lost because of a favourite project of the Members opposite: the Watson Lake sawmill.

Mr. Cable:

I am sorry that I asked the question.

Does the Minister have the financial statements for the corporations here with him? Let me read some numbers out. Here is the long-term debt of the Energy Corporation, owed to the Yukon Development Corporation: unsecured advances bearing interest at 9.79 percent, due one year after demand. There is $18 million or so dollars, and there is an unsecured advance of $1.6 million. Then, the Development Corporation - this is consolidated with the Energy Corporation, I think - owes the Government of the Yukon the amount of $12 million. Which loan is it that we are fooling around with here?

Hon. Mr. Ostashek:

It would be the one the Member mentioned: the $12 million loan. In the public accounts for 1992-93, Note 6, advances for territorial corporation, itemizes a couple of advances for the working capital advances for the Energy Corporation and the Development Corporation that total $14,336,000. The Taga Ku loan of $2,336,000 was written off and transferred to the territorial government in the previous year.

Mr. Cable:

If I heard the Minister correctly, it is the Development Corporation loan, as opposed to the Energy Corporation - is that correct?

When was it decided to deal with that $12 million? Is that just a recent phenomenon over the weekend or was there something earlier?

Hon. Mr. Ostashek:

As we said, this is an extraordinary item, and that is the reason we used the $19 million figure. It does not change anything. It has not been done yet - I said we are considering it.

Mr. Cable:

There has to be a rationale for this decision. Whenever it has been made or whenever it will be made, what is the rationale that the Minister is using for converting the loan to equity? I think he mentioned briefly a reduction in power rates. Was that what is driving the decision, or what?

Hon. Mr. Ostashek:

I wish it was a reduction in power rates. The Member opposite, being a former chair of that corporation, would know that the only revenues they have are from the Energy Corporation. We have changed the mandate of the corporation so that any revenues from the Energy Corporation go right back into other power projects or rate relief. Therefore, the Development Corporation will never have the money to pay that loan back to the government. There would be an extraordinary bookkeeping item that would not change the consolidated financial statements of the government.

Mr. Cable:

It is getting late at night. I wonder if the deputy minister could prepare us a brief on the transactions that are contemplated and the rationales for them, so that we can ask some questions in Question Period.

Page Number 2775

A couple of weeks ago, I asked the Minister some questions in the earlier part of the budget debate. I asked him some questions about the surplus, one of which was this: "Is it the government's intention to, at some juncture in the future, rebuild the surplus? If so, what are the government's goals with respect to that surplus?" The Minister replied, "I believe we have said quite clearly that our goal and ambition is not to build up a huge surplus. Our goal is to continue to have a balanced budget...", and he went on to talk about capital projects. That was on April 27, 1994. That was at a time when the surplus was thought to be considerably less than it is now.

Does that remain the Government Leader and Finance Minister's intention - not to build up a huge surplus?

Hon. Mr. Ostashek:

Yes, that certainly remains our contention. We are talking about an accumulated surplus of $5,956,000. That is not a lot of money.

I gave these figures the other day in the House. On discretionary capital, we converted the capital budget to 1986-87 dollars, so that we could really see what is going on. If you look at the discretionary capital over the years, it is consistently going down in actual 1986-87 dollars. In 1985-86, in 1986-87 dollars, we had over $45 million in discretionary capital. That year, discretionary capital made up 90 percent of the capital budget. In the 1994-95 year, in 1986-87 dollars, we are going to have just over $36 million in discretionary capital, making up 38.4 percent of the capital budget.

What is happening over the years is that the operation and maintenance of government is going up, leaving less money for discretionary capital projects. That is excluding the hospital, which is funded by the federal government, and the Shakwak project, which is funded by the American government.

In constant dollars, our discretionary capital has gone down dramatically over the years. In order for us to have any monies at all for capital projects for the anniversary, and to build some new schools in the territory, we have to free up some capital dollars, otherwise we are not going to be able to do those things that all Yukoners want.

Mr. Cable:

Let me put a different gloss on it. When we had those questions and answers, I also asked the Minister about his working capital goals. Working capital is a little different concept than surplus, but it brings you to the same end point - the one used for operating money and the other used for capital projects.

On April 27, I asked if there was a target in dollars for the working capital that the Government Leader would like to see, and he answered "no".

I know the deputy minister, and one of his predecessors, like to see certain levels of working capital. Is there a working capital target at this time the Minister is working toward, and does it, in any way, involve the surplus we have been talking about in the last few days - whatever the numbers are?

Hon. Mr. Ostashek:

No, there certainly is no target, but it would be nice to have $5 million or $6 million in operating surplus.

If we recall the year that we just went through, I believe we had some $400,000 in bank charges, because we could not maintain compensating balances in the account. That is an added expense to government when you are operating so close to the line.

While there is no target set, our targets are balanced budgets. We want to have money for capital projects. In order to have money for capital projects, we have to reduce the O&M of government.

Mr. Cable:

The Minister, last Thursday, in his reply on the public restraint legislation, was asked about the financial problem.

"I would hope that we can convince the Members opposite that we are on the brink of a financial problem. It all depends if one wants to walk right on the edge of the cliff, or take a few steps in and get a bit of breathing room."

What is it that the Minister is talking about when he is talking about breathing room? Is it something to do with working capital or surplus?

Hon. Mr. Ostashek:

If the Member would review the total debate and my comments in there, he would have seen that I gave two projections: one with wage restraint, one without wage restraint. We are saying that, even with wage restraint, there have to be further savings found in O&M of government to reduce the costs of government on the projections we have, based on a one-percent volume increase as well as a one-and-a-half or two-percent inflation increase. Based on those projections, with our expenditures and our revenues, we would be back in an annual deficit position by 1996-97 with wage restraints, and without wage restraints, not taking any possible increase in wages into consideration, we would be back in a deficit position by 1995-96, without further savings in O&M.

Some Hon. Member:

(Inaudible)

Mr. Cable:

Goodness. When the Minister and his deputy designed the budget, was he satisfied with the surplus as set out in the budget books and the working capital and the breathing room that he talked about just the other day? And, if so, what is he going to do with this found money that suddenly arose in the last week?

Hon. Mr. Ostashek:

The Members opposite criticize us, saying that we do not know how to budget. If we look at their budgets, and the Department of Health and Social Services alone, which was debated here today, they consistently underestimated how much it was going to cost them to run the department. Take a look at the graph when they were doing some budgeting.

The Member opposite asked me what we were going to do with the newfound savings. We have already given it back to the employees by not bringing in the merit-pay freeze, the experience increment freeze and the closure at Christmastime.

Mr. Cable:

That met with unanimous approval. Just one more question: the Minister of Health and Social Services has been talking about the savings they were going to come up with. I want to read this passage back because it is one of my favourites in the budget address.

"Specific health reform announcements will be made during this sitting by the Minister of Health and Social Services. Reforms that will be announced are anticipated to significantly reduce health care insurance costs."

When the budget was designed, were those savings programmed into the numbers or are they something we are going to expect by way of a supplemental part way through this year, or toward the end of the fiscal year?

Hon. Mr. Ostashek:

I clearly remember the Member for Riverside asking the health Minister about that this afternoon. Is his memory that short that he has forgotten what the Minister said?

Some Hon. Member:

It was this evening.

Hon. Mr. Ostashek:

Or this evening, even. We went through that debate, because Health and Social Services was the one department that had a large surplus and that was why the Minister was here - to answer those questions for the Member opposite.

Mr. Cable:

I do not want to get anybody testy here, but let me ask these questions. It appears from this budget address that these costs are future costs or future savings; they are not incorporated in the budget. Am I reading his comments incorrectly? "The reforms that will be announced are anticipated to significantly reduce health care insurance costs." Is the Minister saying that those savings are in this present year's budget?

Hon. Mr. Ostashek:

I hate to be standing up an hour and one-half after the Minister of Health went through this debate, relating to the Member opposite what he said. Clearly, some of those will be down the road, and he was capping the expenditures to a certain extent so that there would be no increases. As a result

Page Number 2776

of that, down the road in years to come, there will be some savings out of them.

Mrs. Firth:

I want to follow up on this $12 million extraordinary item because, earlier this evening, I heard the Minister quite clearly announce that the surplus was going to be used to pay that off, and then, just a few minutes ago, I heard him say that the decision had not been made yet.

Could the Minister tell us exactly what the plan is? When are they going to make this decision, and what can we do to stop the government from doing this?

Hon. Mr. Ostashek:

Whether we do it or not really has no effect. We have taken the $19 million surplus, and how we account for the $12 million will not make any difference on the $19 million surplus in our calculations, which we have used for our projections. With the $19 million surplus, we would have a $5,956,000 accumulated surplus, as of March 31, 1994.

It really does not impact on the $19 million for this year, if we show it this way. It is an accounting procedure that will not change the consolidated position of government.

Mrs. Firth:

Why did the Government Leader even come up with this idea? Why are we even talking about this? It is so ridiculous. Why did the Minister stand up this evening and start mentioning this, if it is so insignificant and does not really matter?

Hon. Mr. Ostashek:

It would matter if we were trying to hide the surplus, and came in here and said we only had a $7 million deficit, instead of the $5 million surplus. We have been quite up front with what the figures revealed this year.

Mrs. Firth:

The Minister just had a press conference to tell all Yukoners about the surplus. Who is going to accuse him of hiding it?

I am still trying to figure out why the Minister even stood up in the House tonight and mentioned this. There is not even a logical explanation for it. Can the Government Leader not see how bad the situation looks? Can he tell us why he even stood up and mentioned it, if it is not going to make any difference and is so insignificant?

Hon. Mr. Ostashek:

As I said, the Development Corporation has no ability to ever repay that loan. It is because we changed the mandate of the corporation to state that its profits have to be invested in energy-related projects. At some point, some government is going to have to deal with it.

Mrs. Firth:

Perhaps the Minister could answer a question for us. This is the first we have heard of this in this House in the last 18 months. How long has the government been discussing this issue? Did this just kind of come out of the blue? Has Cabinet discussed this issue? Have all of the other Ministers agreed to it? Is this a party direction? How long has this discussion been going on about the $12 million bad debt and the Yukon Development Corporation not having the ability to pay it off?

Hon. Mr. Ostashek:

We are not writing if off as a bad debt. We have no intention of writing it off. It is just a matter of converting a loan to an equity grant.

Mrs. Firth:

Did the Minister know about this when he was called in Gimli to discuss the situation of the books with the Deputy Minister of Finance? Did they discuss this particular issue then?

Hon. Mr. Ostashek:

It had not been discussed at that point, but I knew that loan was there, and I did discuss it with the press the other day when I had the press conference.

Some Hon. Member:

(Inaudible)

Hon. Mr. Ostashek:

No, I did not.

Mrs. Firth:

The Minister is saying that he did not tell the press before he told us, but he said to us that he told the press about it at the press conference. This is the first I have heard of it, as a Member of this Legislative Assembly. The Minister did not exactly bring me any information about what he had told the press. I phoned his office to ask for information, and I was given a set of charts and graphs that the Minister had provided, but there was nothing accompanying those charts and graphs to explain the position about the $12 million. It is the first that we have heard of it. Obviously, this is something the Minister has had in the back of his mind for a long time now. I am just trying to figure out how this government makes decisions and sets priorities.

Some Hon. Member:

(Inaudible)

Mrs. Firth:

That is a good question, and perhaps the Minister could tell us that. Why are we even discussing this? Why does he even think it is relevant?

Hon. Mr. Ostashek:

I have told the Member why I think it is relevant, but the fact is we are reporting, in the projections now, almost a $6 million accumulated surplus for 1993-94 year. So, it is on the books. We have accounted for the $19 million - the $13 million deficit was there - take the $19 million surplus this year and we are left with $5,956,000.

Mr. McDonald:

I can offer a suggestion as to why they are doing this. I think the suggestion is that the unconsolidated accounts - if the government does decide to do this - will produce a deficit for the year, so they can demonstrate to everybody who comes asking for money from the government that they are broke, that there is a fiscal crisis and they need to extract money from employees' wages and there needs to be a doom-and-gloom message.

It is not going to have any impact at all on the financial consolidated position of the government. The Minister is quite right about that. The unconsolidated position will change and, consequently, the bleakest possible picture will, once again, we shown for the public. I think it is devious, and I do not agree with it.

I think there are a couple of things that have come up in the debate in the last couple of minutes that I would just like to comment on and perhaps ask a couple of questions about.

The Minister asked rhetorically what a $6 million surplus really means. It is just peanuts. I can tell him that a $6 million surplus means at least two years' worth of reduced wages to public servants. If one adds $2 million to that $6 million, one comes up with the total amount of taxes that the government extracts per year from Yukoners, that we were told last year was absolutely, 100 percent essential to balance the budget. That is, in part, what it means.

Six million dollars is an awful lot of money and, given that the government at times, tries to claim that it is budgeting with precision and at other times throws around millions of dollars - $5 million, $10 million, what is that? - suggests that there is a budgeting credibility gap ahead of us here.

Now, the Minister has indicated that three years from now, they are projecting a deficit of just over a million bucks for the year. How ludicrous can one get? Clearly, by the Minister's admission, we are out $39 million in last year's budget - $39 million we are out in our favour - money not spent. Nineteen million three hundred thousand dollars is net money.

Yet, the Government Leader wants to raise the spectre that there are gray skies ahead with only $1 million as an annual operating deficit three years from now. He wants us to believe that he is saying that with every degree of precision. It is absolutely unbelievable that he would make that claim, given the lapses. He has already admitted tonight that we are going to be facing a $6 million - or as high as a $10 million - surplus for March 31, 1995, yet we have not accounted for the lapses that we expect to take place in the current year.

After lapsing approximately $20 million of operating funds, and given that he is projecting budget expenditures this year that

Page Number 2777

are higher than last year, surely he is not going to tell us that he does not expect some operating lapses for the current year. Surely to goodness there is some expectation that we are talking about lapses in the millions of dollars. Last year, we told the Minister that he expect lapses between $10 million and $25 million. We were out by $5 million, because it turned out to be $30 million.

If we were to once again say that he can expect lapses between $10 million and $25 million, surely he could not say this year, as he did last year, that the Yukon Party consisted of tight budgeters and that would never happen to them after what has happened in the last year.

We are talking about major lapses from one year to the next, and the Ministers still have not answered the question posed to them as to where these ongoing savings are going to show up so that we know precisely what available funding from the current year estimates is going to lapse as a result of the increased efficiencies.

We have a serious budget credibility problem here and it becomes more serious when the government projects farther and farther into the future.

They are suggesting that, years from now, things are going to be bleak. However, they said last year that they were going to budget as tightly as possible, and that there was no room to manoeuvre. We were seven or eight percent - whatever percentage $39 million is of a $480 million budget - we were that much out in our projections. The Ministers have really no right to be making projections, as they have, that produce a gloom-and-doom scenario.

We are one-third of the way through the decade of prosperity, are we not?

The question that is really outstanding for me - and this gets back to the point I was trying to make before, and the information I was trying to extract - and that is, what are the savings the Minister is projecting will take place as a result of increased efficiencies? What are these savings?

The Minister responsible for the Public Service Commission - the Minister who laid down this bill that we have coming forward, which is going to have an effect on the surplus position of the government; this bill called Public Sector Compensation Restraint Act, 1994 - in an unqualified way, said that the savings we were seeing now - the newfound savings - were a result of increased efficiencies and would be ongoing. That was an unqualified statement on his part.

The Ministers, in their star chamber, have already calculated that, as a result of these increased efficiencies, they are able to let out $8 million worth of slack to public servants.

What caused them to make that determination? Why is it $8 million over the term of the wage restraint period? What savings - specifically - have they identified as being ongoing, if they feel they have $8 million worth of slack over the next four years?

Hon. Mr. Ostashek:

I find it hard to take the Member opposite seriously, when I look at his record of budgeting, and how badly they underestimated their spending, year after year. The only saving grace is that they had a huge surplus when they came into power. I find it difficult to give much credibility to that.

We have projected these numbers. The Member can put in any numbers he wants. Clearly, what we are showing is the trend. When we talk about savings, the Member opposite is aware that, in our first budget last year, we had eight out of 16 departments come in with a lower O&M than the year before. This year, 13 out of 16 departments have come in with lower O&M estimates.

It is in the budget book.

Some Hon. Member:

(Inaudible)

Chair:

Order.

Hon. Mr. Ostashek:

Maybe the Member for Riverdale South would like to talk, but she can wait until I am done, then she can have her turn.

We have said it time and time again, and the Members opposite can say what they like about the accuracy of budgeting. I would sooner be surprised with a small surplus than a deficit. I would sooner be surprised in that direction rather than with a deficit and not know where the money was going to come from for that deficit.

The Member opposite would not be happy unless the departments could come in right to the cent.

We have stated quite clearly that we have to get the cost of government down. The Member for McIntyre-Takhini is telling me it is quite all right to let the costs of government continue to go up. That is the message he has given us in the Legislature tonight. He has given us the message that we should just not worry about it, just let the O&M of government continue to grow.

He is asking me to apologize for $6 million of accumulated surplus.

I am not about to apologize for that. Clearly, if we are going to have some discretionary capital, for capital projects that are required in the Yukon - to put private sector people to work who depend on those jobs every year - we have to have some money.

Perhaps the Member opposite knows where I can get it. I wish he would tell me. The Member opposite is quite aware that, without the Shakwak project, which is being funded by the American government, and the $47 million Whitehorse General Hospital, which is being funded by the federal government, our capital budget would be fairly small compared to capital budgets the Members opposite had.

As I say, they have been constant dollars. We are spending less in discretionary capital now than we were in 1985-86.

So, clearly, we have to control the costs of government. If we did not have the wage restraint legislation, as I said, the projections are that we would be back in a deficit situation in one year.

The Member can punch in any numbers he wants, but the trend is going to be the same, if he is going to be honest with himself.

In order to break that trend we have to get the costs of operation and maintenance under control, and we are going to continue to do that, and continue to keep working on the operation and maintenance costs of government so that we do have some money for capital projects.

What about the anniversaries that are coming up; what are we going to do for capital infrastructure for tourism-related projects? Where is the money going to come from? Ask the Member for Riverdale South where the money is going to come from. Where is the money going to come from to build schools in the territory if we do not reduce the operation and maintenance costs of government?

I believe that we are on the right track and we are going to continue on that track. You only have to look at the graph to see where discretionary spending is going, and it is going straight downhill.

Mr. Chair, I move that you report progress.

Some Hon. Members:

Agreed.

Some Hon. Members:

Disagreed.

Motion agreed to

Mr. Phillips:

I move that the Speaker now resume the Chair.

Motion agreed to

Speaker resumes the Chair

Speaker:

I will now call the House to order.

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

Mr. Abel:

The Committee of the Whole has considered Bill

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No. 18, entitled Interim Supply Appropriation Act, 1994-95 (No. 3), and Bill No. 53, entitled An Act to Amend the Social Assistance Act, and directed me to report them without amendment. Further, the Committee 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. Member:

Agreed.

Speaker:

I declare the report carried.

Hon. Mr. Phillips:

I move that the House do now adjourn.

Speaker:

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

Motion agreed to

Speaker:

This House now stands adjourned until 1:30 p.m. tomorrow.

The House adjourned at 9:27 p.m.