Whitehorse, Yukon

Monday, February 6, 1995 - 1:30 p.m.

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



Speaker: At this time, we will proceed with the Order Paper.

Introduction of Visitors.


Hon. Mr. Phillips: I would like to call attention of the House to Yukon's newest arrival. Although the individual is not in the House today, he was born on February 4, 1995. Dakota Lee Blackburn was 7 lbs., three and a half ounces. Proud parents are Jeff Blackburn and Sandy Law. This is a fifth generation Yukoner. The grandparents are George and Sheryl Law - Sheryl works with Hansard - and Jack and Pam Blackburn; Pam is an executive assistant in our office. The great grandparents are the Frys of Dawson City and the Law family; Bert Law, as many of us remember, was a city councillor in Whitehorse; and Pat Thompson, Pam Blackburn's mother, is usually a regular in the gallery in the House. This is a fifth generation Yukoner, and I would like all Members to welcome Dakota into the Yukon.


Speaker: Are there any Returns or Documents for tabling?


Hon. Mr. Brewster: I have a legislative return for tabling.

Speaker: Are there any Reports of Committees?

Are there any Petitions?

Are there any Bills to be introduced?

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

Are there any Notices of Motion?

Are there any Statements by Ministers?

This then brings us to the Question Period.


Question re: Centennial anniversaries program

Mr. McDonald: I will try not to bore you with this line of questioning.

The communities are gearing up to take full advantage of the series of anniversary celebrations and have become quite creative in inventing ways to spend the centennial anniversaries program funds. We have heard some vocal critics who say that the fund is inadequate and it represents only .004 percent of each year's total government spending over the next five years.

How is the Minister of Economic Development going to handle public expectations for this fund and the criticism?

Hon. Mr. Fisher: First of all, I also read on, I believe, Friday afternoon, the criticism by the gentleman whose comments were in the paper. That individual, by the way, is not representing the Chamber of Commerce, as one is led to believe from reading the paper. I believe that, because he just announced two days before that he would be running for the Liberal party, this was a bit of an opportunity for him. The Anniversaries Commission program is the largest infusion of money into tourism that the Yukon has ever undertaken.

Mr. McDonald: The fact certainly remains that there are endless meetings going on around the territory, and people are being quite creative in inventing ways of spending very large amounts of money in each community. Can the Minister tell us what the government is planning to do to moderate expectations?

Hon. Mr. Fisher: Even though it is a very large amount of money, there are only so many dollars. My understanding is that some of the communities are taking advantage of our funding to lever other monies - either generated locally or from other sources - so that what may very well be an extremely large project in total, only requires a certain portion of funding from the anniversaries budget.

Mr. McDonald: Even some of the most affluent communities have publicly announced that they are looking for millions of dollars from the government to support projects in their communities. It will be difficult to try to force-fit all of the project ideas into a $9.5 million fund over five years.

The Whitehorse Chamber of Commerce/Tourism erstwhile Liberal candidate says that the funds should be allocated to each community at a level proportionate to the population of each community. Does the Minister accept that notion?

Hon. Mr. Fisher: No, I do not. The government did not necessarily use population as the main criterion for funding programs in the past, whether they were local employment opportunities programs or community development fund programs. Population has to be taken into consideration, there is no question about that. However, it cannot be the only criteria. If that were the case, something like 80 percent of all funding from the Yukon government would go to the City of Whitehorse, so I do not agree with that statement.

Question re: Centennial anniversaries programs

Mr. McDonald: There are a number of very large and ambitious projects being anticipated by communities, including, as we know from media reports and from our own investigations, a large-screen theatre proposed for Haines Junction, a planetarium for Watson Lake and an interpretative centre for Faro. There is anywhere from $6 million to $8.5 million planned for a riverboat reconstruction in Dawson City and a sports building for Carmacks. Each project is large and ambitious.

Could the Minister tell us if he is going to be encouraging communities to scale back their projects so that each community can make an application to the fund and get some financial assistance from the government?

Hon. Mr. Fisher: It will depend on each project. I have not seen the applications that have been received; apparently we have a few now. The technical committee will be reviewing the applications and looking at the criteria. If it becomes necessary to scale back the projects, I think that the department will be speaking directly to the proponents of the project, but that remains to be seen.

Mr. McDonald: Even if we took a couple of communities, we could easily spend the $9 million over five years just to meet the expectations of those communities. Most communities, as the Minister will know, have gone through endless meetings to try to come up with a community consensus for a particular project. Does it not make sense to the Minister that, if there is going to be any scaling back of community expectations, it should be done during the planning stages and not when the final application comes in after the expectations have been raised and the planning money spent?

Hon. Mr. Fisher: I have been on both ends of funding applications. I filled out quite a few of them when I was in Watson Lake and I reviewed quite a few when I worked for the Government of Yukon. Part of the game of applying for government funding - and I think the Member opposite knows full well as former Minister of Community and Transportation Services - is to lever as much money as possible out of the Government of Yukon, and I do not see these as being all that much different. They will all be viewed on their own merit and there will be discussions between the department and the proponents of the projects when the time comes for those discussions.

Mr. McDonald: That does not make much sense because, clearly, the CDF program had a $100,000 limit. The old local employment opportunities program had a financial limit and this program has no limits. That is the reason why some communities are coming up with projects in the neighbourhood of $5 million to $9 million; they feel that if they have a good idea, it will be funded. What is the government going to do to prevent a very serious situation from arising, which is going to leave a lot of hard feelings, a lot of anger in the communities, and ultimately will leave a bad taste in people's mouth when it comes time to enjoying the anniversary celebrations.

Hon. Mr. Fisher: I believe that is more conjecture on the part of the Member opposite. It is his point of view that the LEOP grant did not have an actual limit on it at the beginning. The CDF did not have a limit on it until the last couple of years. As I have said before, there will be discussions about the amounts between the department and the proponents of the projects at a very early stage.

Question re: Northwestel, layoff of employees

Mr. Cable: I have some questions for the Government Leader about the Northwestel layoffs. The news media this morning carried a clip to the effect that one-third of the Northwestel labour force would be laid off. It was in the order of something like 200 jobs.

The Minister indicated, in some questions that were asked a couple of weeks ago, that he had discussed the matter of layoffs and the Northwestel Yukon workforce with the president of Northwestel last summer. Has he had any recent discussions with the president of Northwestel about what is going to happen to the Northwestel Yukon labour force?

Hon. Mr. Ostashek: No, I have not had any recent discussions with the president of Northwestel.

Mr. Cable: Two hundred jobs is about, by my calculations, one and one-third percent of the Yukon labour force. In view of the fairly significant effect on the Yukon labour force, will the Government Leader commit to this House that he will discuss the matter with the president of Northwestel, in order to alleviate the effects of the layoffs?

Hon. Mr. Ostashek: I intend to meet with the president as soon as I get the opportunity.

I want to clarify the record. We are talking about jobs right across the north, not just in the Yukon. The one-third reduction is applicable across the north. They will not relate to that many jobs in the Yukon.

Mr. Cable: That would be one of the things to discuss, because the quote from the news media indicates that the initial view is that there will be approximately 200 fewer employees in Yukon. Currently, we have 650. That would be an interesting point to run to ground.

On the public hearings that are coming up about the rate rebalancing application, has the Government Leader worked up a position yet that he can pass on to the people of Yukon, so that we will know if there is some connection between the proposed layoffs and the rate rebalancing application?

Hon. Mr. Ostashek: First of all, in reply to the Member's preamble, we just phoned Northwestel before Question Period to clarify the number of jobs involved.

There is no doubt that the reduction in the workforce, based on the report, has to do with Northwestel's rebalancing application and competition coming into the Yukon in May 1996. There is no doubt about that at all.

Question re: MacRae access road

Mr. Penikett: And maybe Taga Ku.

I would like to ask a question of the Minister of the Department of Community and Transportation Services, who failed to explain to us last week why his department had spent $20,000 in helping a private developer build the MacRae frontage road. The last reason given by the Minister for assisting the developer in this way was the question of safety, but the Minister also explained to us that where there were issues of safety, he had the power to refuse permits to connect access roads to the highway. Can I ask the Minister why he spent $20,000 of public money, rather than simply refusing to issue the permits if safety was an issue at that site?

Hon. Mr. Brewster: We spent $19,575 for gravel because we had to do our share of the project. We had to bring the two lanes to the access road, which cost $23,400. So we saved approximately $3,825. There was also a culvert installed.

Mr. Penikett: I am afraid that the Minister's integrity may be at issue. He now has given us three different answers why he spent the money. First, he told us it was to achieve maintenance cost savings. That is what he told me and my colleagues in a letter. He then admitted in the House that that was not true. Last week, he told us it was because of safety, and admitted that he could have refused to issue safety permits. Now, he tells us that it was done to save $3,000 on a charge to the government. Is it not true that in every other case of this kind that we have discussed in the House, the private developer had to pay the full costs of such connections?

Hon. Mr. Brewster: We were also able to eliminate three access roads. He could have put in another five access roads, but he did not. By doing what we did, there is not one access road from that property. It all comes in on two roads that have been there for years. The Mount Sima road comes directly into that, and the one on the other end comes in on another road. The private individual had to buy property there in order to provide a proper turn for the trucks that turn in at 90 degrees.

Mr. Penikett: We have a serious problem here. We have had three different answers now from the Minister as to why he did this. He has admitted there is no policy; last week, he admitted that there were no cost savings; and also last week, he said that it was done for safety reasons. He later told us that he could have dealt with the safety problem by simply refusing permits. Can I ask the Minister this direct question: who made the decision to assist the developer with the cost of this road?

Hon. Mr. Brewster: The director of the transportation maintenance branch and the superintendent looked at it and said that it would be a saving of money for them. In addition, there would be three access roads, which is a safety factor. There could have been more, but we prevented that. The director and superintendent felt that they were doing a very good job, and I solidly backed them on it.

Question re: MacRae access road

Mr. Penikett: The Minister has given us three different reasons why it was done. He has told us the director made a decision, but last week he also told us that the former Minister was present at the meeting and in the discussions with the developer. Is the Minister telling us that the former Minister had nothing to do with the decision? Is that what he is telling us?

Hon. Mr. Brewster: The decision to put the surfacing on and have the contractor, as a private business, put the road bed in, was made by the department, and not by the Minister.

Mr. Penikett: This is extremely interesting. The Minister has told us there is no policy. He has admitted there were no cost savings. Last week he claimed that the reason they did it was for questions of safety and then he also told us he could have denied permits to deal with that.

Is the Minister telling us that the department, even after the Minister was involved in the discussions, made these decisions independently of the Minister? Could the Minister tell us this: if another developer wanted to get a similar deal, a similar kind of arrangement, who does the developer approach and how do they work it out?

Hon. Mr. Brewster: He would approach the department.

Mr. Penikett: The Minister has not explained what they do when they approach the department, because he has told us there is no policy. He told us that last week - there is no policy. It is the Minister's job to make policy.

So, what does the developer do? Just go in and say, "I am going to approach the department to see what kind of deal I can make." How does it work? The Minister has changed his position from cost savings, to safety, to some administrative convenience to the department. Yet we know from the Minister's previous answer that there were ministers involved. How do we go about this? How does another developer go about this?

Hon. Mr. Brewster: I could put that right back to the other side. It is the same policy they had, because no policy exists. As a result of what has happened, we are now looking at regulations so that it will be clarified.

Question re: MacRae access road

Mr. Harding: A question to the same Minister: one of my constituents owns and operates a small forestry business and just a little while ago the government asked him to improve his road and his access to the Robert Campbell Highway for safety reasons. For almost two years, I have been asking the Minister responsible for the department to help my constituent pay for the access improvement. The department has been saying no consistently and constantly throughout all discussions.

I would like to ask the Minister this: why did another developer get favourable treatment over my constituent for the same problem and the same issue?

Hon. Mr. Brewster: The access has been put in. It is in the legislative return the Member now has. It was our cost, and the private contractor offered to do it because he had the equipment there. We had no equipment there. He offered to put the access in if we would put crushed gravel on it. That was a saving to us and we decided to do it, plus the safety factor - we had fewer accesses in that area. The three that were there were removed and they are using two that have been there for years and years. If we had not done that, he could have built five more straight in from the property.

Mr. Harding: The obvious point is that YTG has equipment to do this and it obviously did. In the case of my constituent, the government told him that he has to pay for improved access. In this case, the government paid for it for the developer, which is a totally different issue and a totally different practice undertaken by the government. We have an obvious favouritism here and a lack of consistent policy.

I would like to ask the Minister this: what is the policy, in clear terms, and can my constituent, who has been trying for almost two years, obtain some help on this particular road, in accordance with the policy that is now apparently in effect with the Department of Community and Transportation Services?

Hon. Mr. Brewster: As I have said about six times before in this House, there was no policy. The previous government had no policy, and there is no policy now. We are now preparing regulations so that there will be a policy. I might add that the contractor - the private individual - spent $100,000 of his own money to put the road in.

Mr. Harding: The NDP government never paid for private development - work at taxpayers' expense. Now this government is doing it. The situation has changed. The Minister just stood up and admitted that there is no policy. I would like to ask the Minister what my constituent can do to benefit from this. Does he have to come and see the Minister and make a deal, or will this government continue to run on a favouritism, or who-you-know, policy?

Hon. Mr. Brewster: No, he would not come to see the Minister; he would go through the department.

Question re: MacRae traffic study

Ms. Moorcroft: I have a follow-up question for the same Minister about road improvements in the MacRae area. Since the government has seen fit to surface the road on behalf of a private business, it must recognize that increased traffic will create increased safety needs, specifically for lighting on the Alaska Highway in the MacRae area. I would like to ask the Minister if the traffic study that he has promised for the spring will include the Fraser Road, the Pump House Road and the Mount Sima intersections.

Hon. Mr. Brewster: We said that we would look at installing lights there; we did not say that we were going to. This morning, the quote given to me for the lights was $95,000.

Ms. Moorcroft: Constituents of mine have heard the Minister say that safety is worth quite a bit of money. Maybe it is even worth $95,000. Heading south on the Alaska Highway, people pass on the narrow shoulder when traffic is turning left into the MacRae industrial area on Fraser Road. Will the department check whether or not an additional traffic lane is needed on this busy section of the Alaska Highway?

Hon. Mr. Brewster: I will take that under advisement.

Ms. Moorcroft: Workers at the PetroCan station tell me that people often go in the ditch when they turn into the MacRae area. This side of the House wants to see public safety become as much of a priority for the government as spending $20,000 to help private business interests. The Gold Pan Road has already been surfaced. When will the rest of the area be brought up to the same safety standards as the rest of the Alaska Highway corridor in Whitehorse, with proper lighting and a turning lane?

Hon. Mr. Brewster: I have said many times in the House that we will look at it this spring to see what can be done.

Question re: Centennial anniversaries program

Mrs. Firth: I have a question for the Minister responsible for Economic Development - I do not want Members to think that I have put the issue of photocopiers and travel to bed; I will raise that issue again. I want to ask some questions about this government's $9.5 million centennial anniversaries program.

On January 18, the Minister indicated that the department had not received any applications for this program. I now understand that six or seven applications have been received.

In light of the comments made by the individual with respect to the allocation of money not being enough, I would like to ask the Minister of Economic Development if this government is presently examining, or will be examining, the option of providing more money for this grant program.

Hon. Mr. Fisher: No, at this time we are not looking at the possibility of increasing the amount.

Mrs. Firth: That is good to hear.

I have another area about which I would like to question the Minister. Carcross has submitted an application, or is talking about submitting an application for approximately $3 million worth of expenditures. Dawson is looking at $6 to $8.5 million. Watson Lake is looking at $6 million to $7.5 million. The project list from Whitehorse will be in the millions. This is going to be over $20 million worth of applications. How does the Minister anticipate dividing that amount of money among the first $20 million worth of applications that have come forward?

Hon. Mr. Fisher: I have not actually seen the applications, but my understanding is that the actual component of some of these projects would be eligible for the centennial anniversaries program. For instance, if Watson Lake has applied for $6 million, the actual application is a total of $6 million, but the amount that would be eligible under CAP is far less than that.

Mrs. Firth: That brings me to my concern. I have looked through the whole program - the application process and the criteria - and I do not see a set of rules to determine how a project can become eligible for this funding. There is no indication asking if it would be a partial project, if it is to be a full project or if it would be based on any criteria specific enough to even address the issues of the projects that have been publicly discussed.

I would like to ask the Minister responsible for this area if there are going to be some more rules coming forward with respect to a limit on the projects. Also, will it accept only partial projects? The rules are presently very unclear.

Hon. Mr. Fisher: The criteria laid out in the CAP is for long-term benefit, for generation of employment, for tourism-related projects and so on. Each project will be considered on its own merit, using criteria such as I have just mentioned, and taking them into consideration.

Question re: Centennial anniversaries program

Mr. McDonald: I, too, am concerned about the government not being able to moderate expectations, given that there is a $9.5 million program and many of the communities are coming forward with very large projects.

Given that the communities are expected to pay for the planning stages of these projects and, given that there is obviously no possible way in the world that all these projects can be funded under this program by this government - or even 50 percent of these projects - what is the government going to do to reassure communities that the planning funds that they are expending is not money wasted?

Hon. Mr. Fisher: Before we get a little too carried away on the planning cost of these projects, one must remember that this is nothing more than conceptual planning at this stage. There is no preliminary or final design planning involved at all. It is merely conceptual planning and, generally, that can be done by the councils or the community organizations.

Mr. McDonald: A lot of communities are spending a lot of time not only trying to devise a project that has broad community support and the support of all the major stakeholders - an enormous amount of time and energy - but they are also going so far as to try and establish a proper foundation for each project, so that it will not be dismissed as being unrealistic. What is the government going to do to address the concerns about unrealistic expectations?

I hate to harp on this one question, but each of these projects that I and another Member listed today are in the $2 million to $3 million range and up - as high as the $6 million to $8 million range. Even with the project that the Minister cited, which is the Watson Lake planetarium, there is an expectation that YTG will come up with a few million dollars toward that project.

Before this goes too far, what can the government do to ensure that people's expectations are realistic, so that when they do put together a project and seek funding they know that, under stated criteria in the program, they stand a good chance of receiving funded?

Hon. Mr. Fisher: The deadline for the first uptake of applications is February 7. Applications that have been received by the department will be reviewed by a selection committee, which will determine whether the projects meet the criteria. I expect there will be discussions between the technical committee and proponents of the project. After that type of analysis, and consultation between the two groups, applications will go to a selection committee, which will determine whether or not the projects are a go.

Mr. McDonald: I think this lack of foresight will buy a lot of trouble in the communities, and I think that is unfortunate.

Is the Minister not aware of the tourism train proposal promoted by the Liberal Party? By itself, this project would swallow the entire fund. I speak on behalf of Members who have expressed an interest in this project. They are so interested they want the project to proceed even without a feasibility study and even before the visitor exit survey results are heard.

Can the Minister tell us whether or not they are supporting this particular project, and whether or not they have entered negotiations with White Pass to lease the railbed?

Hon. Mr. Fisher: This side has not entered into any negotiations with White Pass. I have never looked at the application. I am just peripherally aware of the project.

Question re: Abattoir

Mr. McDonald: It is all about competing visions, I suppose.

I have a question for the Minister of Economic Development. Last year, the Ministers in the government were loudly protesting that they supported the construction of an abattoir and were only concerned that the project be realistically priced. Two Ministers committed to provide their personal time and attention to the Yukon Agricultural Association to see the project happen.

In Friday's paper, the Minister responsible for agriculture claims to be skeptical about the need for an abattoir. What is the Yukon Party's position on the abattoir?

Hon. Mr. Fisher: I believe that we have made our position quite clear. We have funding in the Department of Renewable Resources. We have committed to provide up to $200,000 from the department for this project. Again, the project is going to have to have the industry's support. When they are able to determine that industry's support, our funding will be made available to them.

Another thing I would like to point out to the Member is that we have identified and reserved a piece of land on the Takhini River for an eventual abattoir and/or a vegetable storage place.

Mr. McDonald: The original proposal for an abattoir did depend on funding sources other than the $200,000 that the Yukon Party has indicated that it will provide from the one department. Obviously, it depends on other finances available from both the federal and Yukon governments, as well as industry support.

Can the Minister tell us whether or not he believes that the project, as currently conceived in the $900,000 range, is realistic?

Hon. Mr. Fisher: I have not seen the application. I probably read about it in the newspaper at the same time as the Member opposite read it. I do not know exactly what size of building is required, what type of equipment, or what the application entails.

Mr. McDonald: The Yukon Agricultural Association went to great lengths to go through a share offering and to look for local sources of funding. It went through innumerable sites, only to find out that a project in the $2 million range was not acceptable. They now have a project proposal in at the $900,000 range. Can the Minister tell us what it is going to take for them to demonstrate to the Yukon Party that an abattoir is not only needed, but it is realistic, as they have currently conceived it?

Hon. Mr. Fisher: It boils down to where the funding is going to come from and whether the industry supports the project with funding of its own, as well as funding from the Department of Renewable Resources.

Question re: Industrial support policy

Mrs. Firth: I have a question for the Minister responsible for Economic Development about another grant program that this government has - the Yukon industrial support policy. We already know that there are no such things as application forms that exist to apply for this program funding. We understand that the government has been actively discussing support for Loki Gold under this program. I would like to ask the Minister if the government has reached a final decision with respect to this particular initiative?

Hon. Mr. Fisher: No, we have not, but I hope that we will before the end of this Legislature, at which time we will bring the agreement to the Legislature.

Mrs. Firth: It is difficult to know what the government is negotiating when there are no application forms for Loki Gold or any other mining or manufacturing company to fill out when they apply. I would like to ask the Minister who has been doing the negotiating? Has it been the Minister, the president of the Development Corporation, the mining facilitator, or was it someone from the Department of Community and Transportation Services? Who has been doing the negotiating with Loki Gold?

Hon. Mr. Fisher: There have been negotiations by senior people in some departments, but the lead in the negotiations is the mining facilitator in the Department of Economic Development.

Mrs. Firth: There are no specific guidelines in the policy with respect to what should be negotiated, so now we find out that the senior people in some departments and the mining facilitator are negotiating with Loki Gold. I think Yukoners would like to know what is being negotiated. Can the Minister tell us what they are negotiating, in light of the fact that his policy is virtually non-existent?

Hon. Mr. Fisher: The main concern of Loki Gold is the upgrading of the Old Ditch Road. That is essentially what they have been discussing with our departments.

Question re: Faro Real Estate, rent freeze

Mr. Harding: I have a question for the Minister responsible for the Yukon Housing Corporation. Last Wednesday, I asked the Minister to help facilitate an end to the rental freeze by Faro Real Estate Limited in Faro. The freeze has hurt a lot of my constituents who are trying to obtain accommodations in Faro. When I was home on the weekend, it was a topic on everyone's lips in the community. I would like to ask the Minister what steps he has taken to try to help resolve the log jam since he committed to try to help last week?

Hon. Mr. Nordling: I am not exactly sure what contact the Yukon Housing Corporation has had with the issue of the rent freeze. I know that Yukon Housing Corporation is negotiating at the present time with Faro Real Estate Limited to reach an agreement over security that was being asked for. The only thing I can tell the Member right now is that we are set to go to court tomorrow afternoon. At that time, I think we will know what leverage we have to help break the log jam.

Mr. Harding: In the past, Faro Real Estate Limited has proposed that it wants a huge rental increase plus a subsidy from Anvil Range in exchange for renting out the housing in Faro. To the Minister's knowledge, has the company ever opened up all of its books and accounts to YTG or to Anvil Range to prove that it needs a higher-based rental revenue?

Hon. Mr. Nordling: Not to my knowledge. With the mortgage agreement that is in place now, before there is a rent increase, I believe that Yukon Housing Corporation has to agree to it. As I have said before, we are not prepared to agree to huge rental increases. If a modest increase is justified and acceptable to both Anvil Range and Faro Real Estate, then that is what we hope will be agreed upon.

Mr. Harding: I am very concerned about this. The Minister has just said that Yukon Housing Corporation would be prepared to consider a modest rental increase. However, if the government - and Anvil Range, to the best of the Minister's knowledge - has yet to see the books and accounts of Faro Real Estate, how do we know that base rental revenues have to increase at all to accommodate a reasonable profit for the company and to ensure that my constituents have adequate and affordable housing?

Hon. Mr. Nordling: At the moment, we do not know that and whatever rent increase FREL asks for would have to be justified and the Housing Corporation would have to be satisfied that it was needed.

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


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

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

Motion agreed to

Speaker leaves the Chair


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

Motion re appearance of witnesses

Hon. Mr. Ostashek: I move

THAT at 4 p.m. until 5:30 p.m. on Monday, February 6, 1995, Mr. Barry Ernewein, chair of the board of directors, and Mr. Bill Byers, president of the Yukon Development Corporation, appear as witnesses before Committee of the Whole during debate on Bill No. 4, entitled First Appropriation Act, 1995-96.

Motion agreed to

Chair: Is it the wish of the Members to take a brief recess?

Some Hon. Members: Agreed.

Chair: We will take a brief recess.


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

Bill No. 4 - First Appropriation Act, 1995-96-continued

Community and Transportation Services - continued


We will be dealing with Bill No. 4. Is there any general debate on the operation and maintenance or capital estimates?

Hon. Mr. Brewster: In response to a question from the Member for Mount Lorne about the construction of an entrance to Northern Metalic, there was no work done on the entrance to Northern Metalic access as part of the work being done on Two Mile Hill or any other transportation division contracts. All of the Two Mile Hill project, including improvements to access to Jacob's Industries, was conducted as necessary in the reconstruction of the road.

I also have a document to table.

Ms. Moorcroft: I was waiting to see if the information that the Minister has just provided is the full written report that the Minister had said he would come back with on land development practices. Since that is not what I have just been given, but having instead been given the municipality funding breakdown by community, I will ask the Minister about that.

Hon. Mr. Brewster: The department is still working on it. It is taking quite a bit of work. We will get it to her as quickly as we can.

Ms. Moorcroft: Thank you. I will ask some questions in some other areas. I would like to start with some questions related to communications. I have here a legislative return that we received last year regarding the 911 number and, just generally, the emergency phone service.

I am wondering, to start out, if the Minister knows whether or not the numbers have all been standardized in all of the communities now? I know that -5555 is the number to dial for the police, and there were plans to harmonize the emergency phone number so that no matter which community prefix you had on your telephone, -4444 was to reach the nurse, and -3333 was to reach the ambulance and -2222 was to reach the fire department. Could the Minister tell me if that standardization has now been completed in all the rural Yukon communities?

Hon. Mr. Brewster: It has been done wherever it could be done. As I said the other day, we are working on getting an advertisement put into the paper. There will also be stickers that can be placed on the front of telephone books sent out to the communities.

Ms. Moorcroft: The Minister indicated that it would be done wherever it could be done. I believe that some of the communities were not able to standardize the numbers. Can the Minister explain why that was not possible?

Hon. Mr. Brewster: There were a couple of communities where the numbers were already in use. I suspect there is a way that can be changed, but for now that is the situation.

Ms. Moorcroft: I agree with the Minister that we should be able to change it. I think that if you are talking about having the same emergency number for the nurse in every community, and if a private business or individual already has that number, the phone company should be able to change it in the interest of public safety. How many communities are there that were not able to use the standardized numbers?

Hon. Mr. Brewster: I do not have the exact number. There are not a lot of them. I will get back to the Member about that.

Ms. Moorcroft: Has the government considered installing emergency phones on Yukon highways?

Hon. Mr. Brewster: No, we have not.

Ms. Moorcroft: I think that was something that was considered when the 911 service was being called for. Is the government prepared to consider that?

Hon. Mr. Brewster: No; it would be extremely expensive to do. There are no telephone lines in a lot of places. We would have to connect these lines to the dishes and the cost would be enormous for the value it would be to us.

Ms. Moorcroft: We have had some discussion in the Legislature, particularly from some of our Members who represent rural communities, about the capability of contacting the local RCMP on a 24-hour basis. The communities would like to be able to contact their local police officer when an emergency arises. That is presently not the case. The number rings through to the Whitehorse detachment and someone in Whitehorse has to contact the police officer in the communities.

I suppose that is because members are on patrol and not necessarily sitting by the phone. However, the fact is that someone in Whitehorse can reach the police officer. Do the police carry cellular phones or mobile radio systems?

Hon. Mr. Brewster: Yes, I am quite sure they do. These are really Justice questions, but I know that the police in Haines Junction carry them.

Ms. Moorcroft: How long does it take Whitehorse to call the Watson Lake, Haines Junction or Pelly Crossing police?

Hon. Mr. Brewster: I am not up on this. I would prefer that Justice handled these questions. This information is in the Justice budget and not mine.

Ms. Moorcroft: Let me just explain to the Minister that I am trying to approach this from the communications angle. The government is spending a significant amount of money to implement and maintain a 911 telephone service, which provides 24-hour emergency access for Whitehorse callers. The communities have expressed the concern that they do not have the same level of service. I am interested in what kind of communications capability they have.

Does the Minister know whether the RCMP have remote call-forwarding?

Hon. Mr. Brewster: I am not sure what they use. In instances around Haines Junction, the police respond very quickly. The police do go home at night, and they are called at home to go back on the road. I know of no small community that has a 24-hour patrol.

Ms. Moorcroft: I would also like to know the status of communications capability for fire services around the territory. Do all firehalls presently have the telephone interconnect system?

Hon. Mr. Brewster: There are a couple that still do not. It is being put in for Burwash right now, and Tagish has nothing at the present time. I think there is one more, but I am not certain which one it is.

Ms. Moorcroft: This is also a concern for emergency calls to the nursing station. I believe the Carcross nursing station has a telephone interconnect system. In communities that have just one nurse, does the Minister know how many other nursing stations have that capability?

Hon. Mr. Brewster: That is in the Health and Welfare area. I am certainly not up on that, even though the telephone is communication. Health and Welfare look after that completely - not us.

Ms. Moorcroft: Let me ask the Minister some questions related to the 911 budget. Can the Minister tell me what the tariff schedule is and whether the CRTC has approved it?

Hon. Mr. Brewster: Yes, the CRTC has approved the 911 tariff rate. It is 32 cents now. They proposed 60 cents, but it was brought down to 32 cents approved.

Ms. Moorcroft: As the Minister knows, Northwestel has recently applied for a rate rebalancing. Its proposal is intended, in its view anyway, to see the basic rate charges increase and the long-distance rates decrease. Would the rate application for increased basic rates affect the 911 rates in any way?

Hon. Mr. Brewster: No, it should not affect those rates. That is a separate agreement signed between us, the police, Health and Welfare and Northwestel.

Ms. Moorcroft: How long is that agreement in effect?

Hon. Mr. Brewster: We do not have a copy of the contract here, but I am presuming it would be indefinite. We went through a lot to get it hooked up. If it did expire, it would probably be renewed right away.

Ms. Moorcroft: The Minister does not need to bring back a copy of the agreement for me. I was just wondering if it was in effect for two years, four years or a longer period of time.

The Minister gave us the monthly tariff rate for consumers. What would the annual tariff rate be for government? I have a legislative return from December 1993, that broke down the number of government lines. There were 1,632 business lines and almost 100 multi-line business lines, as well as some trunk lines, and 300 single business lines. Does the government have a smaller number of phone lines now - a year later? Can the Minister tell me what the tariff rate is for 911 service for government phone lines?

Hon. Mr. Brewster: The phone lines in the government building are treated like any other commercial lines. We do not have the tariff with us, but I will get them for the Member. Government Services could tell you the number of phones, as that department looks after the servicing of the building.

Ms. Moorcroft: The Minister does not know exactly what the 911 service costs the government, but he will bring that back - is that correct?

I note that the government has applied to intervene with CRTC in the Northwestel rate structure rebalancing. The CRTC has allotted Northwestel a 14-percent rate of return. Is it the government's intention to present an argument to increase it, to decrease it or to leave it the same?

Hon. Mr. Brewster: We were not in favour of the 14-percent rate of return when it was raised to that. We lost that argument with the CRTC. We are opposed to what is going on right now, because I am convinced, having lived in a rural area, that it is going to hurt those living in rural areas more than those in Whitehorse. Our intervention paper is just being completed now. I understand that it will be in my office in the next two or three days. It has to be ready by February 17.

Ms. Moorcroft: Has the Minister already made a commitment to provide us with a copy of the intervention when it is prepared, and if not, could I ask him for it?

Hon. Mr. Brewster: I do not know if I have, but, yes, the Member may have a copy.

Ms. Moorcroft: I would like to ask the Minister a couple of questions relating to convergence, which is the information highway for the north and which could greatly contribute to our social and economic development. There are a lot of differences from one part of the north to the other, and that makes costs higher and market conditions different. One of the ways to reduce those differences is to improve communication, and it could help economic and social development in the Yukon.

Northwestel has prepared a submission to the CRTC regarding the information highway and presented some policy objectives that it would like to take forward. I will be asking the Minister where he stands on the issue.

It is Northwestel's position that the advent of the information highway is essential to reduce distances and to help economic development; it also would provide for improving government services through the north from centralized locations.

Is the Department of Community and Transportation Services in any way helping with the setup and development of the information highway in the north?

Hon. Mr. Brewster: The investment is being looked after by Government Services. I might suggest that it is a complicated issue and I will be very frank with the Member about that. If she would like a briefing, I would probably also sit in on it because it is something new and I cannot really explain it well. I have not had a briefing on it. If the Member would like a briefing, we can certainly arrange it.

Ms. Moorcroft: That might be helpful. Information I had requested a couple of weeks ago when we were starting debate on the supplementary budget was regarding a local area network for the transportation branch. I did get a response to those questions and I am interested in knowing more about how that local area network might plug into the information highway.

Somebody suggested to me that I might be wasting my breath talking about the information highway, because someone might want to straighten and pave it, but I know the Minister is prepared to learn more about it. I will take him up on his offer for a briefing. I will then ask some of those questions of Government Services rather than of Community and Transportation Services.

Does the Minister think that the information highway should be a public utility and that there should be public access, rather than private, to it?

Hon. Mr. Brewster: As I understand this issue, it is all under the control of the Canadian Radio-Television and Telecommunications Commission, which is a government organization that is separate from the government itself.

Ms. Moorcroft: The Minister has indicated that the government is intervening to the CRTC on the Northwestel rate rebalancing application. Is the government planning to intervene with the CRTC regarding the information highway?

Hon. Mr. Brewster: I think that information would also be in the briefing. Quite frankly, I guess I am a square on this issue, because this has popped up over the last two months and I really have not studied it. I think there is a little too much information out there right now that does not do much - p

lease do not get into debate with me on this, because I know you disagree with me.

Ms. Moorcroft: I will ask some questions on what might be a much easier subject with which to deal. I have both general policy-related questions and some specific questions about dumps and waste management. I guess we do not call it garbage any more - we call it solid waste.

For a couple of years now, there has been discussion during Community and Transportation Services budget debates about when the solid-waste discussion paper would be coming forward with some regulations about how we are to deal with our garbage in a responsible manner.

I will begin by asking the Minister to provide me with information about what stage the discussion paper is at.

Hon. Mr. Brewster: This is another area where I am going to try to pass the buck. The last time that this department discussed the matter was in December of 1994 and it has since been turned over to the Department of Renewable Resources, along with the manpower - last April.

Ms. Moorcroft: I was aware that the hazardous-waste program had been transferred to Renewable Resources, but I thought there was some money in the Community and Transportation Services budget for various dumps around the Yukon. I figured that that meant solid waste. I see $155,000 for capital expenditures for solid waste and I believe that there are some operation and maintenance dollars as well. Could the Minister tell us the government's policy on it?

Hon. Mr. Brewster: We actually maintain the dumps because our vehicles are available, but the policy and regulations are made by Renewable Resources.

Ms. Moorcroft: I will make the representation that I think the department should get together on bringing the regulations forward. It costs a lot of money to throw away garbage; it is not free. The city spends approximately $560,000 a year to dispose of garbage once it enters the land fill. It is our garbage, our money, and our resources, and it needs to be our decision as well.

There are a lot of health and air quality considerations regarding residual ash in a land fill. The Minister recently sent a letter to the Hamlet of Mount Lorne regarding its dump. The letter referred to some new burning techniques that it is looking at. I wonder if the Minister could explain what the department has in mind for that.

Hon. Mr. Brewster: I recall that letter, and I also recall the conversation I had with the community when I was at the meeting. There was a suggestion made about hauling the solids from there to Marsh Lake, but it was considered too costly. The other suggestion was to bring it to the Whitehorse dump, but Whitehorse was going to charge too much. I understand that the department has talked to the community and is going to try a new experiment, but I do not know what it is. I will get back to the Member with a detailed answer.

Ms. Moorcroft: Perhaps the Minister could get back to me about that. I have been contacted by a lot of people around the territory about the issue of waste and how it needs to be effectively managed. People pollute, and we need to work on leaving the area in as natural a state as possible.

I have had representations from people who said that we need to reduce the effect of human activity on our wildlife and on our land and water, and that that calls for more strict enforcement of waste-management measures. It seems we are devoid of waste-management policy. I think a majority of people could agree upon a plan of action if we just recognize that it is a problem we all share.

You cannot just take the garbage and move it to Marsh Lake, or take the garbage and move it to the city dump, and not worry about it any more. We are not immune to pollution.

One area that I have heard a lot about is the Quigley dump, located in the Klondike River valley, which is the source of water for Dawson City. The question is whether or not there is a technical solution to the control of the pollutants that are deposited and leaching from the dump. The Klondike valley supports an assortment of activities, such as placer mining, small industry, residential and commercial use. The City of Dawson maintains a dump within the city limits, which posts signs instructing users to deposit industrial waste at the Quigley dump. There is no regulation about what one can throw away in the Klondike valley dump site. Used engine oil, fish remains, household cleaners, paints, styrofoams, plastic, aerosol cans, batteries, glass and all kinds of other consumer goods and packaging are mixed together and burned in an incinerator. I think if you imagine collecting that soup, leaching it and adding it to your drinking water, you would get, on a small scale, what runs through the taps of Dawson City.

The water table rises and falls. After a heavy rainfall, residents can see where all the tailing ponds have risen equally from one side of the valley to the other. For dump leachings to get to the water table, it is a fairly short distance to travel, especially during spring break-up and the rainy season. Does the Minister know what damage is being done to the water and air by burning dumps in that area?

Hon. Mr. Brewster: During one or two trips I was on up there, we went around to this dump. Although it is inside the city limits, it is our dump. I understand that their dump will be closing down shortly and we have to find another dumpsite. I am not too sure that Quigley is suitable. I think the Member is quite correct that the quality of their ground water would suffer. We have no plans at the present time. We will have to have some, and I would hope that we can come up with something in the spring, along with the City of Dawson, to look after them and the people outside of the city limits, so that they can all get to the dump.

Ms. Moorcroft: This is particularly an issue in a growing municipality where there is a lot of land development anticipated. People question, when they look at their glass of drinking water, just what is in it. Who is responsible for what we consume and for the laws and control of dumps?

Hon. Mr. Brewster: The water was tested on a regular basis by the Water Board. So far there does not seem to be that much contamination, but I certainly would agree that we have to look at where that is right now.

Ms. Moorcroft: The average family of four creates three tonnes of garbage a year. We are dealing with a significant amount of waste. I know that the Minister has said that Renewable Resources will be bringing forward the regulations on this under the Environment Act, but if we have effective regulations and they are enforced, it could certainly reduce the cost to the Department of Community and Transportation Services, which is, in the end, responsible for maintaining the dumps.

Would the Minister support stricter regulations and user-pay laws to come into effect, as well as education on the subject of reducing waste?

Hon. Mr. Brewster: I guess this subject has been with me ever since I have been in the Legislature. Rural communities think one way and cities think another. I would look at any regulations that would cut our costs and improve things. Haines Junction, for example, has a system that we think is working well. It is working well. However, when we make people haul garbage 60 miles, those people object.

If anyone can come up with a good, logical solution, I would do my best to help. The costs, which are increasing enormously, have to be considered.

Ms. Moorcroft: I think we are all looking for good answers. Reducing the amount of waste we generate is one of them.

The government, as a government, also has a responsibility to speed up the time frame of developing regulations, which may mean a user-pay approach or taxing items before they are sold, so that the cost of recycling or reclaiming them is built in.

Is waste oil still going to landfill sites?

Hon. Mr. Brewster: We have a number of waste-oil burners in government garages in a number of places, so that takes care of some of it. I know that at Haines Junction there is a tank that they fill up. I presume it would then come to the site we have in the Marwell area.

Ms. Moorcroft: Does the Minister know if the Carmacks highways yard is going to be moved in the near future? Two of the issues that were raised by a number of people in Carmacks were the dump and the highways yard, which are sitting on prime property that they would like to use for other purposes. Can the Minister let us know what his plans are?

Hon. Mr. Brewster: At some time in the future it is in our plans, yes.

Ms. Moorcroft: Can the Minister be more specific about when "some time in the future" might be and what specifically the plans are?

Hon. Mr. Brewster: It would depend on when we could get money for a thing like that. A lot of other projects are wanted and there are a number of other places that want money for other things. It depends when it will fit into a plan.

Ms. Moorcroft: What is the plan? Is it simply to relocate the highways yard or to look at expanding the dump as well? How are they planning to move things around?

Hon. Mr. Brewster: The dump belongs to the Village of Carmacks, and our plan for the garages, as I said, depends on when we can fit it into the budget.

Ms. Moorcroft: On the issue of Carmacks, can the Minister tell me when the government plans to fix the road in the campground area?

Hon. Mr. Brewster: We are trying to get the municipality and the First Nations to form an association and take it over and run the campground there.

Ms. Moorcroft: I believe that the municipality and the First Nations have pretty much come to an agreement about taking over joint operation of the campground. The question I have for the Minister is whether or not the Department of Community and Transportation Services is going to fix the road before that happens. The position I heard a number of people from both communities take is that the road needed to be repaired and they felt that that was a departmental responsibility.

Hon. Mr. Brewster: It is not actually our responsibility. It is the municipality's responsibility. No, we are not going to fix the road unless that is part of the agreement after the First Nations and the municipality get together on this.

Ms. Moorcroft: I guess that leads me into a question regarding the municipal funding of communities. I have received the breakdown of the comprehensive municipal grants and grants-in-lieu. Can the Minister explain the formula to me for providing funding to municipalities and communities?

Hon. Mr. Brewster: I remember sitting here when Mr. Byblow brought that in. It is really a complex one. I would suggest we give the Member a briefing on it because of its complexity. I remember sitting here for days, when the legislation was being passed. If the Member would like a briefing on that, I can arrange for that.

Ms. Moorcroft: That is twice this afternoon that the Minister has suggested that they provide me with a briefing to answer my questions. I just have to ask the question now as to why the Minister refused my request for a briefing before the budget came in. I think providing a briefing to Opposition Members before we got into general debate on this department's budget might have helped considerably.

Hon. Mr. Brewster: These are specific items and are not the whole budget. It would require different personnel from the department to provide briefings on different subjects.

Ms. Moorcroft: That does not answer the question. I will put it to the Minister again: why did the Minister refuse to provide a briefing to the Opposition MLAs on the Department of Community and Transportation Services budget?

Hon. Mr. Brewster: The simple reason is when the letter was written we were almost ready to come into the Legislature. I did not realize that debate on Finance and the Executive Council would be so long, and I felt that my people would be very busy getting things ready for us to be here.

Ms. Moorcroft: Can I ask the Minister - as a general suggestion and as a matter of future policy - if he would arrange to provide the Opposition with a briefing on his department's budget before we come into the Legislature? The Department of Education has done that for a couple of years, and it has been helpful. I would even venture to guess that because the Opposition sits down with the department and raises questions, information might be more readily available if the department knows what we are looking for.

Hon. Mr. Brewster: I will take that under advisement.

Ms. Moorcroft: I can tell the Minister is just an old hand at this, and I am just a beginner. He is going to take that one under advisement. I will leave it and move on.

I would like to ask the Minister what his priorities are in the transportation branch for road upgrading and road maintenance. Can he give me a sense of what the department views as the most important priorities and how they are determined?

Hon. Mr. Brewster: The most important one is to complete the Alaska Highway, which is the highway from which most others branch off. Then, there is the Klondike Highway to Dawson, and the Top of the World Highway is very important, because that gives us a circle route within the Yukon. Instead of everybody having to go one way only, it provides a circle route on which tourists can see more of the Yukon.

The Dempster Highway is not a priority, but I think we have to look at it because there are more and more tourists travelling on it all the time. It helps keep people a little longer in the Yukon, especially in the Dawson area. The road from Skagway to Whitehorse and the Haines Road are very important, and we have to keep those open. When mining develops more, we will have to bring the other roads up to standards, and we will be moving on them a little faster once we have been assured that there will be mining development in those areas.

Ms. Moorcroft: I am disappointed that the South Access Road did not make it on to the list. That is something that I have been lobbying for over the last couple of years. The South Access Road sees a lot of traffic and it is getting to be in pretty poor condition. It is a really serious safety concern.

Last week I was provided with the estimated costs for the YTG portion of the South Access Road reconstruction, and I would like to know where that stands on the priority list, how much work is going to be done in the current year and whether the Yukon government is planning to improve two lanes or four lanes.

Hon. Mr. Brewster: This year, as I have said a couple of times in the Legislature already, the department is spending some money to repair the one bad corner. We also have to work with the city on this road. The Member is right; there is no money budgeted for massive work on the road this year, but if making repairs becomes very important, it could be seen in next year's budget. However, we do not know for sure.

Ms. Moorcroft: Two years ago and one year ago, both the Member for Whitehorse West - whose constituents are contacting him about this all the time - and I were asking for speedy improvements to the South Access Road. At that time we were told that it had to wait until the Two Mile Hill was complete. Two Mile Hill is now complete and we were expecting to see money in this year's capital budget to improve the South Access Road. I think this should be a priority.

Could the Minister tell me specifically what the government is spending money on and why it is not scheduling the reconstruction for this year?

Hon. Mr. Brewster: The government was going to budget a considerable amount of money, but the City of Whitehorse asked us to wait as it does not have the money for its share of the reconstruction. Since that time, we have made the city an offer where we may do some of their share. This is now in the discussion stages, and the city had asked us not to proceed, because it did not have the money, which is quite a bit of money for the city to gather; therefore, we cut down the amount of money we were going to budget.

Ms. Moorcroft: This is February and the road construction season does not usually start before March. The Minister has indicated that they are now in discussions with the City of Whitehorse. I would think this would be a priority for elected officials at all levels, both municipal and territorial. Could the Minister tell me when he expects an answer as a result of the negotiations he has engaged in with the city now?

Hon. Mr. Brewster: Our budget is made up for this year. We have actually only had two conversations with the city about several ways we could go on this. There has been no agreement yet, and it would be too late for this year, anyway.

Ms. Moorcroft: Does the Minister favour a two-lane reconstruction or a four-lane highway on the South Access Road?

Hon. Mr. Brewster: That is part of the discussions we are having with the city. It is not clear which it wants; however; it will be a two-lane road on our side.

Ms. Moorcroft: I agree with the Minister that that is probably the most sensible approach to take. When the Yukon has thousands of miles of two-lane highways, it is silly to have four lanes for just a couple of miles.

I will again make the representation that I believe it is an important safety consideration to improve the South Access Road and to begin the reconstruction as soon as possible. I hope the Minister will try to hurry that along.

I have some questions regarding sport and recreation funding. A small investment in recreation can yield a large economic return - as well as reduce the cost of vandalism and criminal activity - by providing something for our youths to do. The Village of Mayo and the Na-Cho Ny'ak Dun have been working to set up a community board to do some long-range planning and set up short-term goals for recreation in their community.

Could the Minister tell us how the department is supporting recreational funding for communities in this budget?

Hon. Mr. Brewster: I will get a breakdown for the Member after the break, but it was also in the material that we tabled for the Member. Some of the unorganized communities are now getting grants. There are others, especially First Nations, that are asking to be considered. We have a new sports and recreation paper that should be out shortly and which the Council for Yukon Indians and First Nations have had input into. I have not seen it yet. It should address some of their problems and desires.

Ms. Moorcroft: I do have the return that the Minister already provided about the expenditures to volunteer organizations. I think that is what the Minister was just referring to. The question that we have been asked in the communities is if First Nations now apply separately for funding for recreational activities or if they have to compete with the village for funds.

Hon. Mr. Brewster: Municipalities do not have access to recreational funding in this way; the fund is for unorganized communities. The Vuntut Gwitchin, the Selkirk and the Kluane Nations are already getting some of the funding. Also, the Liard Band, Kwanlin Dun and Carmacks First Nations have requested consideration for funding. We have been holding off on that until we see what the new paper has to say about how the money should be divided.

Ms. Moorcroft: When does the Minister expect that the new paper will be available?

Hon. Mr. Brewster: We just received input from CYI. The department is working on a draft, so it will probably take about a month before it is complete.

Ms. Moorcroft: The former Minister of Community and Transportation Services received a representation earlier this summer about support for heritage groups to receive some Lotteries Yukon funding. They were under the impression that they would be given a fair hearing about funding for those residents of the territory who choose heritage as their preferred form of recreation. I have to say, having worked at the Yukon Archives for a time, that there are thousands of visitors who come to the Yukon who are interested in heritage. They come here to look at First Nations archaeological sites or to investigate the records to see if their families came over the Klondike trail of '98.

Lotteries Yukon disbursements have not included heritage organizations in the past. I would like to ask the present Minister if he supports the principle of considering heritage organizations to be as equally deserving of Lotteries Yukon funding as sports, arts and recreation organizations.

Hon. Mr. Brewster: Heritage has been transferred to Tourism. I believe they get a grant from them. Also, they have access to Lotteries Yukon funding.

Ms. Moorcroft: When did the heritage groups receive access to Lotteries Yukon funds? Can the Minister provide me with more details on that?

Hon. Mr. Brewster: The last one they got was for $53,550, which was directed to Yukon museums under the special project and capital funding category of the Lottery Commission. The Yukon Historical and Museum Association is a client of the heritage branch in Tourism. In 1994-95, the heritage branch was provided with $716,000 in funding to be distributed to the Historical and Museum Association in seven museums throughout the territory.

Ms. Moorcroft: I would like to ask the Minister some questions related to the land pricing policies of the Yukon government. I recognize that this is a complex issue. It is one that we have spent some time agonizing over in Question Period, as well as in budget debates.

We hear from people who suggest that the Minister's idea of minimum lot price, based on development cost, is not related to the real development cost. I am wondering if the Minister can give us some information as to what the pricing policy includes and how they determine the market cost of a lot.

Hon. Mr. Brewster: The policy right now is to collect all the development costs. However, we admit that we have not been good at collecting the administration costs and a few things such as that. We are now looking to see if we can get those included in the cost of the land.

Ms. Moorcroft: What exactly are the elements of the development costs that are factored into the price of land?

Hon. Mr. Brewster: They are the sewer, water, electricity, telephone lines, curb and gutter, roads, legal survey and engineering costs.

Ms. Moorcroft: There is a fairly significant amount of money put into the land development budget for the coming year. Can the Minister give us some information on what the priorities are for lot development?

Hon. Mr. Brewster: The biggest project is to have more lots overall. We plan some in Copper Ridge. That is the biggest project. In addition, all of the small communities have some. In line-by-line debate, I can give you a complete breakdown of what each community is going to get.

Ms. Moorcroft: I would appreciate that. I am sure we are going to have some more debate about lot availability and land pricing. We have the current breakdown of what lots are available. There are 88 fairly high priced top-of-the-line mobile-home lots in Whitehorse and only a dozen residential lots, and no country residential lots at the present time. This is something that we will be following up and I would like to hold the Minister to his commitment to bring back a summary of the land application process, which I understand has changed somewhat recently, at least regarding federal lands and land use permits where there is a First Nation affected.

Hon. Mr. Brewster: In the document dated January 3, 1995, there was a complete breakdown of the total number of lots in the Whitehorse area scheduled for 1995. It is about a five-page document.

Ms. Moorcroft: Is it still the policy of the government to consult with First Nations on any land applications that may affect their area of interest?

Hon. Mr. Brewster: Yes, it is, and they sit on the Land Acquisition Review Committee.

Mr. Joe: I have a question for the Minister. As far back as 1984, studies of First Nations culture started. At that time, I was speaking against it but the First Nations went for it. I saw big money spent on one person's study of First Nations culture.

When they first started the study, they did not even come and talk to the First Nations. Everything was in place already so the First Nations went for it. I think it was $65,000 a year to study the culture.

Any government wanting to go for something like this should gather more information from the elders of the First Nations.

They speak about recreation and heritage. It is all tied together. For recreation, in my riding anyway, there is hardly anything for the young kids to do. There is nothing there for younger people. That is why all the youngsters are hanging around the bar. There is nothing else for them. I have spoken about this here before. Young people need to have some kind of recreation.

Hon. Mr. Brewster: In 1994-95, the Selkirk First Nation received $9,592 in a community recreation assistance grant, it received $4,000 for O&M, a pool for $8,000 and salaries for $12,000. That totals $33,592.

Chair: Order please. We have witnesses coming to appear before the Committee at 4:00 p.m. At this time, we will take a recess.


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

Witnesses introduced

Hon. Mr. Ostashek: The chair of the board was not available, so filling in for him will be the vice-chair, Mr. Ed Chambers.

Chair: At this time, I would like to welcome Mr. Bill Byers and Mr. Ed Chambers from the Yukon Development Corporation. I would like to remind Members and the witnesses to speak through the Chair.

Hon. Mr. Ostashek: As requested by the Legislature, I have asked the president and vice-chair to appear before us to answer questions with regard to the operations of the Yukon Development Corporation and the Yukon Energy Corporation. They will not be able to speak to Members about policy questions, but they can speak about how the operations are managed.

Mr. Penikett: I wonder if I could just begin by asking about some of the key issues that have been before the public in the last little while. Mindful of the Government Leader's statement regarding not asking about policy, I do want to ask questions that touch on policy, but my interest is in knowing the involvement of the board and management of the Yukon Development Corporation and the Yukon Energy Corporation in these issues. I would say that the Government Leader may think I am touching on policy areas, but I want to know to what extent or in what ways the management and directors were involved in the discussions.

In January of last year, we all noted that there was a very clear statement by the government on behalf of the Yukon Energy Corporation that there would be no opportunity for municipalities to buy into the utility. I am not asking for a comment on that policy. I would just like to know if that matter was the subject of discussion with the officers and directors of the corporation.

Mr. Byers: The short answer is no, in the sense that, while there was an awareness of that issue, it was not something that the board considered at all.

Mr. Penikett: I thank the president for his answer.

The president mentioned the board's awareness of the issue. I would like to ask about a key issue affecting the interests of the Yukon Development Corporation, the Yukon Energy Corporation and First Nations, which arises from an understanding of the umbrella final agreement, which was a very important event in Yukon history.

Do the officers of the boards of the Yukon Development Corporation and the Yukon Energy Corporation share the view, as a practical matter, that privatization or a sale of assets of the public utility would require First Nations' consent in order to be consistent with the obligations we inherited under the UFA?

Mr. Byers: As I recall the provisions of the UFA, there is a requirement to consult. First Nations have the right to be involved with the Yukon Development Corporation regarding new development. I am not sure that consent is required for the sale of shares in the corporation. I am not sure that falls within those particular provisions.

Mr. Penikett: I thank the president for his answer, but Mr. Byers is certainly aware that the UFA also requires that at least a quarter of the board of directors be First Nation representatives, and that they are there clearly as delegates of First Nations. One might deduce from that that they would have to consent to some kind of sale arrangement. To what extent were the board and the directors involved in early discussions with the Council for Yukon Indians about the possibility of First Nations taking a share position in the equity?

Mr. Byers: The board has more than 25 percent representation from First Nations. Mr. Chambers can address the board involvement. At the beginning of this issue, in terms of meetings with CYI, the board was not involved directly. In fact, at no time was there any direct meeting between the board or members of the board and representatives of CYI. I participated in some meetings with representatives of CYI, and then I reported on those discussions to the board. There were no face-to-face meetings between the board and CYI.

Mr. Penikett: I thank the president for his answer.

I wonder if I could ask Mr. Byers this: with respect to the meetings that he was just mentioning, was he on those occasions operating under instructions from the board or under direction of the Minister?

Mr. Byers: A bit of both, in the sense that the initiative came from the government to deal with First Nations in regard to the sale of shares to First Nations. As I said, the board was aware of this, but I do not recall any specific direction being given to me at any time by the board. It received my reports basically as matters of information. There were no decisions required of the board throughout the period of time that we were talking to CYI.

Mr. Penikett: Mr. Byers' answer was not clear to me. He said in some sense that he received instructions from both, but he could not recall any specific instructions from the board. Could he, with a moment's more reflection, give us any indication of any way in which the board may have instructed the president in respect of these negotiations with CYI?

Mr. Byers: No specific instructions were ever relayed to me by the board of directors in regard to that initiative. The board made no decisions and gave me no specific instruction or direction.

Mr. Penikett: Did the president, at any time, have a dialogue with the board about the obligations we all have under the UFA to the extent that the board's consent or the First Nations' consent might be involved, or that the First Nation representatives on the board might have some interest or particular role to play during the discussions with the Council for Yukon Indians?

Mr. Byers: No, I never had such a discussion with the board.

Mr. Penikett: It is our understanding that the territorial government's position on the potential sale of some of the assets of Yukon Energy Corporation was discussed with the leadership of First Nations on March 26, 1994, that a two-stage process for privatizing Yukon Energy Corporation was clearly outlined, with the first stage to include First Nations. Was that particular instruction or direction part of any discussions with the board and the president?

Mr. Byers: I do not recall any specific discussion or direction from the board about what Mr. Penikett has referred to as the "two stages". It was all pretty preliminary stuff with our board, and anything that I was involved in, or anything that the board became aware of through me, all revolved around the first stage, if you will, in terms of the negotiations or discussions with CYI.

Mr. Penikett: I would like to ask a two-part question. Is Mr. Byers aware of a letter, which I think has been made public, signed by the Minister of the Energy Corporation to Miss Leah Ziegler of the Utilities Consumers Group, dated March 29, 1994, which is titled "Reprivatization of Yukon Energy Corporation assets", and other information. It indicates that, at that point, Cabinet had not approved a specific negotiating mandate. The second part of my question is, if the president is aware of the letter, did the president or the corporation directors have any hand in preparing that letter?

Mr. Byers: I am sorry. I do not recognize the letter without seeing it. If I could see a copy of it, I might be able to be of more assistance.

Mr. Penikett: Mr. Chair, I would like to make a copy of the letter available to Mr. Byers. I would like Mr. Byers to take a look at the letter, and then tell me if he, or officers of the corporation, or the directors, had any hand in drafting it.

Mr. Byers: I have had a chance to look at the letter. It is dated almost a year ago. I cannot recall the specifics, although I quite likely provided information that was used in the drafting of the letter. I do not actually recall drafting it myself.

Mr. Penikett: I thank Mr. Byers for that response and, with that, I will probably ask for my copy of the letter back.

There was another famous letter, dated August 3, 1994, on this subject from the Government Leader to the then-mayor, Peter Jenkins, who was chair of the energy committee of the Association of Yukon Communities. The letter says, in part: "For clarity, I should advise that the government is not contemplating the sale or diversification of the Yukon Development Corporation." I think this letter was fairly widely circulated, but I would like to ask again if the president of the corporation or the directors had any hand in the drafting of it.

Mr. Byers: In neither case would the board have been involved in the drafting or the supplying of information in the letter. Again, I perhaps provided information that was used in the drafting of it but I do not recall it specifically.

Mr. Penikett: As a matter of practice, when the president was in essence giving advice, giving direction or being solicited for opinions on communications from ministers to the public or ministers to citizens or ministers to Members of the Legislature, is it the president's practice to report such communications to the board or to brief the board on them, or perhaps advise the chair of such transactions?

Mr. Byers: Normally, the board would be advised through the chair of the board. Often, Mr. Ernewein is aware of those types of issues.

Mr. Penikett: Would I be correct in assuming that that was usually after the fact?

Mr. Byers: Probably so, yes.

Mr. Penikett: I wonder if I could ask the president about a document that appears to have been issued under the authority of the Energy Corporation directly, rather than from a minister or from the government, namely a document entitled, "Yukon Energy Corporation Regulatory Review Submission, September 1994".

Could I ask the president if he is aware of that document?

Mr. Byers: The corporation did make a submission in the regulatory review process. Again, without looking at it, I am not sure exactly of what it comprised. We did make a submission, though.

Mr. Penikett: Mindful of the Government Leader's policy statement on August 3, 1994, that, "The government is not contemplating the sale or diversification of Yukon Energy Corporation", I am particularly curious about the statement on page 10 of this document, entitled "Yukon Energy Corporation Regulatory Review Submission, September 1994" - in other words, after the policy statement from the government. Among its headings, as point 9, it states that changes to the utility should be promoted to streamline the application procedures. There are three points that follow, one of which is, "Greater integration of Yukon Energy Corporation/Yukon Electrical Company organization, and/or ownership. This is being examined by YTG. If feasible, it should help reduce external, legal and other costs for future regulatory hearings." Could I ask the president what the corporation meant in that document when the Government Leader, in the previous month, had issued a fairly firm statement that the government was not contemplating the sale or diversification of the Yukon Development Corporation?

Mr. Byers: My understanding of what the Government Leader was saying at the time was that the issue was squarely in the lap of CYI, and that, if there were to be any further discussions, it was up to CYI to arrange the financing and come back to the government with a proposal to purchase the shares. It was in the light of that that this particular document was crafted. The issue, although not actively being pursued, as I understood it, was that there was still the possibility, if you will, of CYI's involvement in the purchase of shares.

Mr. Penikett: The section I quoted did not refer to CYI's ownership of shares. This refers to a statement in a document issued by the Yukon Energy Corporation, which says "Greater integration of YEC/YECL organization and/or ownership. This is being examined by YTG." This is in September 1994. Is that statement made on the basis of instructions from the government?

Mr. Byers: No, it was not.

Mr. Penikett: Does it then come from the board?

Mr. Byers: No, it comes from the staff of the corporation that drafted the document.

Mr. Penikett: Is it normal for staff to take independent policy positions - independent of both the government and the board?

Mr. Byers: The board saw the submission before it was filed in the utility review process.

Mr. Penikett: Would it be fair to say that it is now the position of the Development Corporation and the Energy Corporation board that greater integration of the organization and ownership of these two corporations should be percipient?

Mr. Byers: There has been no decision by the board in that regard. At the time, that issue was outstanding and that is why it is referred to in the submission. The board has not made any policy decision on it.

Mr. Penikett: Forgive me, Mr. Chair, reading this does not suggest that it is just one among several options. It does not only suggest that it is under active consideration, but also that it is under favourable consideration. Could I ask the president how extensively the board has discussed this policy option that he indicated a moment ago was proposed by the staff?

Mr. Byers: It is a difficult question to answer in terms of how extensively they have discussed it. The whole time the discussions were going on with CYI, issues were discussed over a period of several months. There was no one particular occasion on which they looked at that specific issue and made a conclusive decision on it. A lot of this was speculative and preliminary.

Mr. Penikett: This same proposal refers to integration not just of ownership, but also of the organization. There has been some blending of the management. When the president said that "they" - the staff, in other words - were proposing this idea as opposed to the government or the board, does he mean the Yukon Electrical staff, the Yukon Energy Corporation staff, or both? A fourth question would be: how does one tell the difference these days?

Mr. Byers: I have difficulty telling the difference. If I could dwell on the word, "integration'', that Mr. Penikett spoke of, the management agreement between Yukon Energy Corporation and Canadian Utilities has several provisions in it that contemplate integration of staff at a variety of levels.

One, for example, is a provision in the agreement that talks about the integration of financial systems. The issue certainly came up during the 1993-94 general rate application. The consultant for the Utilities Board asked me a number of questions as to why we had not integrated the financial systems of the two corporations and when were we going to go about doing it. There are threads like that in the management agreement, which we have been putting into place.

Mr. Penikett: I would like to come back to the management agreement later. I would ask the president if he would agree that while the Yukon Electrical Company is the manager of the public utility, Yukon Energy Corporation, it is also, in some respects, a competitor in the energy business. The nature of the relationship, while it needs to be close, needs also to be correct in terms of the separation of the interests of the two entities. Would the president agree with that?

Mr. Byers: Yes, I would agree with that statement.

Mr. Penikett: I would like to ask the president about the contract signed with Mr. Boylan. I do not intend to ask the questions that Mrs. Firth will no doubt get to, but I understand that the corporation has now been asked or instructed to eat the cost of this contract. Could I ask if the corporation played a role in negotiating the contract with Mr. Boylan in the first place?

Mr. Byers: No, it did not.

Mr. Penikett: Did the corporation have a role in outlining the contract specifications with Mr. Boylan?

Mr. Byers: No.

Mr. Penikett: I am going to read one of the contract specifications and ask if the president or the board had a role in providing language or advice on this point - I am referring to the contract specifications to Mr. Boylan: "Preliminary study of the pros and cons of a joint-venture partnership arrangement as between CYI, YEC and Canadian Utilities - YECL - so as to analyze and/or preserve the current management agreement between Canadian Utilities and YEC and to assess alternate arrangements that may be necessary or desirable to give effect to the MOU previously provided herein." There are two issues. One issue is the joint-venture partnership with Canadian Utilities, which is again mentioned and, I note, after the August letter. The question of government policy is not clear.

On either of the issues mentioned in that clause about joint-venture partnership or "preserving the current management agreement" - I am not quite sure what that means - was the president of the corporation involved in the language of that clause in any way?

Mr. Byers: I do not think so. I have no recollection of that.

Mr. Penikett: I would like to turn to a related question. No doubt the president will know that awhile back I asked about the audit for the management agreement. It was my recollection that this had been discussed as early as 1991, when I was still in government. The reason the government had an interest in this project was because it wanted to have an audit of the management contract prior to renegotiating a new one with YECL because of the complexities of the relationship between the Yukon Energy Corporation and YECL.

Does the president know why the audit did not proceed before a new management contract was concluded?

Mr. Byers: No, I do not.

Mr. Penikett: Does the president know why it took so long to get the Auditor General underway on this project?

Mr. Byers: I have not gone into the entire history of this thing. The files from 1991 are somewhat sketchy about this issue. As Mr. Penikett will recall, the Auditor General has no statutory authority to perform this kind of a management audit. It required the government leader of the day to write to the Minister of DIAND to seek permission for the Auditor General to do the audit. My recollection is there was a time gap of some six or seven months between the time Mr. Penikett wrote and when the Auditor General was granted permission.

My understanding is that, because of staffing problems within the Auditor General's office, there was a long delay in getting around to their undertaking the audit. When I came to the corporation two years ago, we commenced a general rate application for the test years 1993-94. During that period of time, nothing was done on the audit. The Auditor General did not submit an audit plan until last summer.

Those are the only reasons of which I am aware.

Mr. Penikett: Can I ask the president if he knows if the terms of reference of the Auditor General's audit are public documents? Does the president know that as a matter of fact?

Mr. Byers: They will be made public documents. At a meeting just last week, the board decided that it would release the documents. They will be sent to the Utilities Board, to whom we report. Mr. Cable had requested copies of them, and they will be sent to him as soon as I am able to get a copy that the Auditor General will let me release.

Mr. Penikett: Let me note that the energy critic for the Official Opposition would also be interested in a copy. Can I ask if the president knows if the terms of the contract recently completed between YECL and Canadian Utilities is a public document?

Mr. Byers: Yes, it is.

Mr. Penikett: Perhaps one or two copies could be made available to this body.

Let us go back to the question of rate hearings, utility costs and so forth. As the president well knows, there was a lot of public comment, including that of the Utilities Consumers Group, about the cost of the hearings, the cost of lawyers and accountants and so forth, which was borne by the public. I had understood that, in March 1994, the Cabinet had been actively considering a policy - with which I agree - that the Utilities Board should bear the cost of the hearings, which would, I think, change the nature of them considerably. I noticed in the Yukon News on Friday, January 20, 1995, that there is a quote attributed to the Justice department, which, in a story by Heather Hueston, says, "The Justice department pays the board costs, but it is recommended that the utilities pick up the costs."

Could I ask what the current thinking of the Development Corporation and the Energy Corporation is on that question?

Mr. Byers: The budget for the Utilities Board is part of the budget of the Department of Justice. The cost of the board itself - paying its own counsel, its own members' per diems, and consultants - is within its budget. At the moment, it is not part of the costs of the rate application itself.

The Yukon Energy Corporation would be supportive of those costs also being included in the rates, so that ratepayers are aware of what those costs are as well as the utility costs.

Mr. Penikett: I take it that the current thinking of the Yukon Development Corporation and the Yukon Energy Corporation does not have utilities directly bear those costs. Is that correct?

Mr. Byers: It should be borne by the ratepayers like the rest of the costs.

Mr. Penikett: So, at least according to the news reports there may be a difference of opinion between the Department of Justice and the utilities on this question.

Mr. Byers: I understand that the position of the Department of Justice is to remove that budget, except for some small segment of the administrative costs - and that department would be in a better position than I to answer the question - but that the cost of the hearing of the board would be part of the cost of the general rate application - not borne by the utilities, but be part of the revenue requirement and go into the rates.

Mr. Penikett: They would likely be borne by the consumers in that case?

Mr. Byers: Yes.

Mr. Penikett: Yes. Obviously, that is something that I will have to pursue with the Government Leader during Question Period, but not now.

Could I ask the president or Mr. Chambers if the Yukon Energy Corporation can tell us the status of the Anvil Range negotiations at this point?

Mr. Byers: I understand that you are speaking about the Energy Corporation. At the moment, Anvil Range is obviously back on the system taking power from Yukon Energy Corporation. It is currently paying for that under an interim rate that was approved by the Yukon Utilities Board. I think that it is paying somewhere around 7.1 to 7.5 cents per kilowatt hour. That is an interim, refundable rate, until such time as the Utilities Board makes a determination of the final cost of service.

Since they came back on the system, we have been in discussion with them in regard to what they forecast their consumption of power will be. It has been difficult to get a handle on that consumption by Anvil Range for a couple of reasons. One reason is that they do not have the engineering staff on site that can do the cost calculations for them. Representatives - our senior utility engineer and people from YECL - went to Faro several weeks ago. They went through the plant and had discussions with the staff about what the consumption would be. As a result, and at their request, we developed an estimate of what we think their consumption will be. Those numbers were sent to Mr. Forgaard a couple of weeks ago to get a confirmation from Anvil Range that we have more or less accurately forecasted its consumption. We have not heard back from Anvil Range, so we are still waiting for that. We have to get that information before we can start doing a cost-of-service analysis for the mine.

Mr. Penikett: I would like to ask the president if the could give us a professional opinion about when the Utilities Board may be in a position to make a decision on the Anvil Range rates.

Mr. Byers: I would suspect that it will be late in 1995 or early in 1996.

Mr. Penikett: I have a large number of other questions, but we, on this side, have agreed to share the time. I am going to ask one last, fairly complicated question of the president, which he may or may not wish to take as notice, and then I will stand down so that other Members can ask their questions.

I have been looking at some of the background documents filed by the utilities in the rate applications, and I have noticed an interesting thing. During the time since we formed the Development Corporation and the Energy Corporation in 1987, the net capital assets of the publicly owned corporation have grown from $93,401,000 to an estimated $121,461,000 in 1994 - approximately a 30-percent increase - while the net capital assets of our manager have gone from something like $11 million or $12 million to an estimate in 1994 of $41,427,000, which represents something like 140-percent increase.

Could I ask the president if they have any assessment of the reason or the dynamics for that difference in the change in value of the assets of the private utility and the public utility over the last few years?

Mr. Byers: I cannot answer that question at the moment. I would be quite prepared, though, to respond to it if I can take it under advisement. I just do not know the answer to the question.

Mr. Cable: Mr. Byers and I have had an exchange of correspondence regarding the audit and I have given him a copy of the correspondence. I have also tabled a copy of it, as well as my letter to him of January 20, 1995, and his letters to me of January 30 and February 2, 1995. I refer to the latter letter, which talks, in the first paragraph, about the audit plan. Mr. Byers goes on to say, "While the Auditor General has consented to the release of the audit plan, it has requested that the original proposal for a special study of the Yukon Energy Corporation be regarded as confidential and privileged. The Auditor General will obtain unrestricted copies of this document in exactly the same terms as presented to the board, that can be filed with the Yukon Utilities Board."

First of all, I am a little bemused - I guess that would be the right word - by what appears to be obsessive secrecy both at the corporate level and at the government level, and I would like Mr. Byers to disabuse me of that opinion. I am sure it is not accurate.

What document is he talking about when he says, "The Auditor General will obtain unrestricted copies of this document..."?

Mr. Byers: The document that the Auditor General prepared and submitted to the board bears that title, "Proposal for a Special Study of the Yukon Energy Corporation". It is essentially the Auditor General's draft outline of what this audit would be. It has "confidential" marked on it, and each page has a red heading on it and talks about it being restricted. I called Mr. Beaton, just before the board meeting last week, to confirm that they had no particular problem or objections to the board releasing that and other documents that comprised the audit plan. He indicated no, but phoned me the next morning and said that he did not want me to hand out the document that has all of these red stickers and "restricted", and that kind of stuff on it, simply because it did say that on the face of the document. He said that he would call Ottawa and have clean copies printed, without the restrictions on them. He would order a dozen copies and send them to me. I was at liberty to release those if the board determined to do so. I am as bemused as you, Mr. Cable, with the Auditor General's concern about that particular piece of paper.

Mr. Cable: So what we have is an audit plan that is going to be released shortly, and this proposal.

Some Hon. Member: (Inaudible)

Mr. Cable: There is some noise from across the aisle. We will simply ignore that, I guess. There is also a document, called "Proposal for a Special Study of the Yukon Energy Corporation" which, I gather, is going to be released.

Mr. Byers: That is one and the same document.

Mr. Cable: What about the initial request that went to the Auditor General? I assume it was under section 11 of the federal Auditor General's Act. I went to have a look at the act this morning. It states that, "The Auditor General may, if in his opinion, such an assignment does not interfere with his primary responsibilities, whenever the governor and council so requests, inquire into and report on any matter relating to the financial affairs of Canada or to the public property, or to inquire into and report on any person or organization that has received financial aid from the Government of Canada..." I assume that that is his authority. Are we operating on that understanding? I am not talking about your corporation's authority, but the authority on the other end to do the work.

Mr. Byers: I have never looked into the authority of the Auditor General to do that. I have never had occasion to.

Mr. Cable: It would be useful to look into that. I think it contemplates tabling the report to Parliament. That is my reading of the document.

Has the corporation taken a position on whether or not the report done by the Auditor General will be made public?

Mr. Chambers: I will answer that. That will be a board decision when it comes. It has been discussed in the past, but we do not really know what direction the Auditor General is going to take yet, so how can we make a decision?

Mr. Cable: Perhaps I could encourage the board and president to review whether or not the report will be made public to Parliament. A similar one that was done years ago on the Northern Canada Power Commission was tabled in Parliament.

What sort of information are we worried may become public? Why would that sort of thing, which holds a lot of public interest, not be automatically given to the public by the board, without a lot of humming and hawing?

Mr. Chambers: When the Member sees the proposal from the Auditor General, I think he may have a better picture for an answer to what he is asking. What they are going to do covers such a broad scheme of things. We have not heard anything more from the Auditor General. How can one make a decision of what one is going to do when one does not know what they are going to do?

Mr. Cable: I do not think it is very difficult. The lines belonged to the people, the generating units belong to the people and the contract belongs to the people.

I find it very difficult to understand why we think that information, which will almost certainly have to be given to the Public Utilities Board someday, should have to be kept secret.

Let me ask this question, on the other end of the equation: I gather that it is the position of the Yukon Development Corporation that this sort of audit is not contemplated by section 17(4). It was in the president's letter to me of January 30, 1995. It appears to me to be broad enough to contemplate any report. Why has the corporation taken that position?

Mr. Byers: When Mr. Cable made reference to that section, I looked at it. Our vice-president of finance looked at it, as well. We came to the conclusion that that section was not broad enough to encompass this type of an audit.

I assume that that decision was also made back in 1991-92, when the audit was first requested, because the Auditor General, as I understand it, felt that it did not have the authority to do this value-for-money audit, and that it required special permission to do so. For those reasons, I concluded that that section was not applicable.

Mr. Cable: Let me ask the witness some questions about another topic: the financial well-being of Yukon Energy Corporation.

We have the Faro mining company coming back onstream. It is, apparently, increasing its power demand. There is also, I gather, a return of some proceeds from the receivership. Will this enhance the position of the Energy Corporation enough to permit a rate decrease in the near future?

Mr. Byers: I am not sure if, at this point in time, I can answer that question.

We expect to recover somewhere between $800,000 and $1 million, I guess, with interest - perhaps over $1 million - of the debt that Curragh owes.

I have no idea when that money will be received. How it will be applied will ultimately be up to the Utilities Board. In the last general rate application - Mr. Cable would be familiar with the low-water reserve - there was, at that point in time, some $2.4 million that was intended to offset the additional cost of diesel if, for any reason, the power production in Aishihik was not there. The decision of the Utilities Board was that we deplete that low-water reserve to keep rates down, quite artificially. We are hoping that the money that comes back from what Curragh owes us will build that fund back up to its original level.

As for the rest of the Member's question, I do not know. Until we know more about what Anvil Range will consume, what the results of that will be and it goes to the board, I do not know the answer to the Member's question.

Mr. Cable: Has the consumption significantly increased in the last couple of months since the work on the stripping has started?

Mr. Byers: Yes, it has. If my memory serves me correctly, the last bill we sent to Anvil Range for the past month was about a quarter of a million dollars. That monies, basically, as received by us pursuant to the order of the Utilities Board and the last GRA, is held in escrow. It is just sitting there until we eventually get back to the board and determine how those monies should be applied.

Mr. Cable: I assume the corporation runs off computer sheets to determine its return on investment under various scenarios. Based on the anticipated sequence of events, has it calculated the return on investment of this $250,000 a month coming back into the cash flow, and also the increase in cash that will come when the mine is cranked up into full stream?

Mr. Byers: No. The money that is coming from Anvil Range is not at our disposal, as I indicated. The Utilities Board order requires us to hang on to it; it is in trust. In that sense, it is almost neutral to our cash-flow, because I do not have any access to the money to use it. We have not yet done those kinds of scenarios.

Mr. Cable: When does the board anticipate going to the Utilities Board to get the money out of trust and use it for rate reduction purposes?

Mr. Byers: Given Anvil Range's indication to us that the mill will not open until late summer to early fall, we probably will not make an application to the Utilities Board until some time in the fall - perhaps September. Our preference would be to look at test years 1996-97, so that, with luck, we will be able to make an application so that rate adjustments would occur on January 1, 1996, if we can do it.

Mr. Cable: Given that the last bill was $250,000, which, I assume, is $250,000 more than the monthly bill of a few months ago, would it be accurate to say that the corporation will be $3 million richer by the end of the year?

Mr. Byers: I will accept the mathematics.

Mr. Cable: What are the total sales for the year?

Mr. Byers: Forecasted sales for 1995? I do not have that figure available - I do not think I do. I do not have that figure with me, but I could provide it to Mr. Cable.

Mr. Cable: I thought it was in the order of $25 million. Am I in the ball park?

Mr. Byers: Probably, yes. Our total revenues are around $29 million.

Mr. Cable: I do not want Mr. Byers to have to get out an adding machine, but it appears that there is going to be a 10-percent increase in revenues. Is that not a fair assumption? This is before the mine comes back on full stream, simply from the work that is going on now.

Mr. Byers: It could be. We have not done the mathematics. We are certainly receiving substantial revenues from them on a monthly basis.

Mr. Cable: With that significant increase in the revenues and with the hue and cry that took place over the rate increases, why is the corporation not taking more of an initiative to get to the board quickly and reduce rates?

Mr. Byers: As I indicated, we do not have enough information yet from Anvil Range to make the application. Until we know what the forecasted sales are, our manager cannot do the cost-of-service analysis so that we can go to the board with those numbers. We just do not have that information in hand yet.

Mr. Cable: On another point, the government from time to time has communication strategies on certain political issues that go on. Does your corporation in any way involve itself in the preparation of the communication strategies?

Mr. Byers: No.

Hon. Mr. Ostashek: Perhaps I could just jump in for a minute here to help clarify things. The Member seems to be forgetting that the government does have a rate-relief program in place that is subsidizing power rates in the Yukon right now, and that is one thing that has to be taken into consideration in any further revenues that come to the Energy Corporation.

Also, while on my feet, I just have one question I would like to ask the president or the vice chair. Could they tell the House the estimate of person hours the Auditor General will be spending on the special audit of the YECL contract?

Mr. Byers: I do not think they have ever given us an estimate of the person hours. Did he mean the hours that the Auditor General himself will spend? They have never given us that in terms of hours. They have two people engaged on it, but I do not know what it is; they have only just begun.

Mr. Cable: In relation to the Division Mountain coal project, I gather in Alaska there is a small-megawattage coal plant that the corporation is watching. Are the witnesses aware of the Alaska experience? What sort of rates can one expect from a small coal-burning plant?

Mr. Byers: I am not sure what particular plant Mr. Cable is referring to in Alaska. We have been to Alaska a couple of times at coal conferences, et cetera, but there is no particular plant that we are monitoring. Is the Member speaking of the Healy plant? If so, we have only a general awareness of that one. It is an experimental plant, as I understand it, that the Alaskan government or the federal government of the United States was going to build as a state-of-the-art, virtually non-emission thermal coal plant. My understanding is that they have not started construction and that the capital costs will run as high as $385 million, or something in the range, for a 50-megawatt plant - something of that nature. That is all I think we know about it. I do not know any more about it than that.

Mr. Cable: Numbers that have been bandied around on the Division Mountain coal project indicate that it is 25 to 50 megawatts, if I have heard the numbers correctly. On a kilowatt-hour basis, what range of cost are we looking at?

Mr. Byers: I am sorry; I do not know the answer to that. I could get it from our engineer, who probably has it calculated, but I do not have that information handy.

Mr. Cable: Could the witness provide the House with that figure?

Mr. Byers: Yes.

Mr. Cable: Regarding the term "avoided cost", which is relevant to Division Mountain and any other private development, from where does the corporation get its direction on that calculation? "Avoided cost" has a number of different meanings. Was the present one developed by the government or the utility?

Mr. Byers: Any figures or calculations I have seen or heard the corporation use in terms of the calculation of avoided cost have been numbers generated from within the utility. Since I have been there, there has been no direction from government on that costing. It has been totally generated by our staff or with the assistance of our manager.

Mr. Cable: I do not want to get into policy, but would a clear policy on avoided cost be useful for the purpose of determining the financial viability of stations, such as the one at Division Mountain, or of some alternate energy proposition?

Mr. Byers: Yes, I would agree with that proposition. I think one of the duties of the Energy Corporation staff is to prepare such a policy and present it to the board. There is one old policy on some of the costing related to independent power producers that the Member may recall. It is a pricing policy; it is certainly not a definitive one.

Mr. Cable: There is no policy at the moment on the use of carbonaceous fuels in terms of whether or not they are to be penalized or if they are to be treated the same as every other type of energy.

Mr. Byers: No.

Mr. Cable: I gather there is no policy on how to treat people who wish to hook up to the grid. I do not mean this NUG, or, non-utility government policy that was tabled before, but people, for example, who have a windmill in the back yard and who want to feed in and draw on the grid. I gather that there is no policy in this area, as there is in some other jurisdictions.

Mr. Byers: No, the board has not got a policy on that particular type of grid connection at the moment.

Mr. Cable: On major new developments, such as mines and so on, is the policy clear in the witness' mind as to who is to absorb the financial risk of the development?

Mr. Byers:

I am not sure that I understand the question.

Mr. Cable: Well, let me ask the question in a different way: who, in the witness' mind, is actually going to absorb the financial risk of another Curragh, another Casino or another large deposit coming onstream, if new generating facilities have to be built?

Mr. Byers: It has not yet been resolved as to whether or not it would be the utility or some level of government that would absorb the risk.

Mr. McDonald: Could the president of the corporation tell us whether or not there have been any discussions between the Yukon Energy Corporation and the proponents of Division Mountain coal?

Mr. Byers: The proponents of Division Mountain coal, Archer Cathro, made a presentation to our board some months ago, outlining what they were doing. That is as far as it has gone.

Mr. McDonald: Was any response given by the board to the proponents in any way? Has it sent any signals, one way or another, with respect to this particular project?

Mr. Byers: No. The board just listened to the presentation regarding what was occurring.

Mr. McDonald: Can the president indicate whether or not the board has received any instructions to proceed with coal-fired generation as opposed to any other type of generation, such as hydro generation, or anything else? Has the Yukon Energy Corporation received instructions that coal is the way to go?

Mr. Byers: I would not say that we have received instructions. We are aware of the government's interest in coal generation, but we have not received instructions that we are to do one thing or another at this point in time.

Mr. McDonald: Has the Yukon Energy Corporation adopted a position on coal-fired generation as opposed to any other form of electrical generation?

Mr. Byers: No, it has no firm position on it at the moment.

Mrs. Firth: I have about six areas I would like to cover in questions this afternoon. I would like to start by asking the president of the Yukon Development Corporation this: as president, he is going to be leaving shortly for an extended period of time; I would like to know who will be acting in his capacity when he is away.

Mr. Byers: The acting president of the corporation will be Mr. John Maissan, who is our senior utility engineer.

Mrs. Firth: Do we have a vice-president of the corporation?

Mr. Byers: No, not at the moment. We are recruiting for a vice-president.

Mrs. Firth: I have not seen that recruitment advertised. Has it been publicly advertised?

Mr. Byers: Yes, it was some time ago. I cannot recall the dates of the advertisement, but it was several months ago. The Public Service Commission placed the ad in the newspapers, short-listed the responses, and we have conducted interviews.

Mrs. Firth: Does the president anticipate filling this position shortly?

Mr. Byers: I would hope to, yes.

Mrs. Firth: Obviously, I guess not before he goes away on his trip. Could he give us some indication about when we expect that position to be filled, and whether or not it will be filled by a Yukoner or an applicant from somewhere else?

Mr. Byers: That is a difficult question to answer. There is a candidate whom we interviewed and whom the Public Service Commission is negotiating with at the moment. That person is not a Yukoner.

Mrs. Firth: So, the position is still under negotiation. If that person does not come to an agreement with the Public Service Commission, would the person not get the job or would the Public Service Commission move on to the next person of choice? What is going to happen? When are we going to have this finalized?

Mr. Byers: I would hope fairly shortly. The individual whom we are interested in hiring has indicated an interest in the position. The Public Service Commission is going through whatever steps it takes at this time. I would hope that within the next week or so the Public Service Commission will be able to make an offer, and I hope that the individual will accept.

Mrs. Firth: Can the president tell us who was present at the interview to help recruit this individual?

Mr. Byers: The persons who participated on the interview panel included me, the former vice-president of the Yukon Energy Corporation and a representative of the Public Service Commission.

Mrs. Firth: Could the president give us the name of the former vice-president?

Mr. Byers: Yes, Ron Millos.

Mrs. Firth: That was the individual who was acting as a vice-president on a contract basis - is that correct?

Mr. Byers: That is correct.

Mrs. Firth: That individual is also not a Yukon resident - is that correct?

Mr. Byers: I want to move on to the board and some of the functions of that board. I would like to ask the president or the chair of the board, whomever wishes to answer, this: how often does the Yukon Development Corporation/Yukon Energy Corporation board meet?

Mr. Chambers: The last Thursday of every month. The board members felt that was all that was necessary.

Mrs. Firth: Are most of the matters discussed and issues resolved presented to the board at the request of the board, or is it always information that comes from the Yukon Energy Corporation, Yukon Development Corporation or government?

Mr. Byers: My practice has been to develop an agenda for the board meetings and to forward it to the chair of the board for approval. The normal practice is that matters that are agreed upon by the board chair are placed before the board. From time to time, the board will add its own items to the agenda. I certainly do not own the agenda.

Mrs. Firth: The agenda for the meeting is discussed with the president of the corporation and the chair of the board, and they have the ability to delete items from the agenda? Did I hear that correctly?

Mr. Byers: Yes, if the board chair wishes something deleted, it would be deleted.

Mrs. Firth: That is interesting. Could the president tell me at what point in the meetings the board have separate meetings - the board members serve as the Yukon Development Corporation board and they are also the Yukon Energy Corporation board - to discuss Yukon Development Corporation matters and Yukon Energy Corporation matters?

Mr. Chambers: There are two distinct meetings. One usually follows the other on the same day.

Mrs. Firth: For the record, that would mean the Yukon Energy Corporation also has approximately one meeting a month, on the last Thursday of the month. Does that meeting have its own private agenda?

Mr. Chambers: Yes, it has its own private agenda.

Mrs. Firth: Is that agenda made up the same way as the agenda for the Yukon Development Corporation meetings?

Mr. Byers: Yes, it is.

Mrs. Firth: I have some questions about the Boylan report. We have touched on the details this afternoon. Essentially, the president of the Yukon Development Corporation said the corporation was not involved in drafting up the terms of reference for the contract.

Has the board or president of the Yukon Development Corporation, Mr. Byers, seen the recommendations made by or work done by Mr. Boylan?

Mr. Byers: I have not seen any report Mr. Boylan wrote for the Executive Council Office or Cabinet, and neither has our board of directors.

Mrs. Firth: So they are paying the bill but are not privileged to any of the information?

I would like to ask the president of the corporation about other information that they have been able to see. The Department of Justice recently completed a review of the utility regulatory process, with a view to streamlining or replacing the current public hearing process. Have these recommendations been completed yet and has the board or the president of the board seen them?

Mr. Byers: The Department of Justice held a second meeting of the stakeholders group, or, the working group on, I think, January 19. All of the people who had participated in the two-day workshop met with Mr. Lawson, who was then the Deputy Minister of Justice. He went through the recommendations, not in their specifics, since that will be between the department and Cabinet, but as to the general nature of the recommendations that would be made. I have no idea what has happened since that particular meeting.

Mrs. Firth: So, from his answer, I gather the president does not know whether or not they have gone to Cabinet yet or what the status is of the recommendations.

I would like to move on, but perhaps I could just ask one question: has the president of the Development Corporation discussed, in any way, the recommendations he discussed in a general sense with the Minister responsible for the Development Corporation?

Mr. Byers: With all due respect, I am not prepared to answer questions about what I, as a deputy minister, have discussed with my Minister.

Mrs. Firth: I do not think it is an inappropriate question to ask. Perhaps I can take it up with the Minister later. If the president of the Yukon Development Corporation has seen the recommendations, I will have to ask the Minister if Cabinet has seen them, if he has had an opportunity to discuss it with the president of the Yukon Development Corporation. I do not think that would be an unusual conclusion, or something that would be unusual to happen. If the president does not feel comfortable answering the question, I will put the question to the Minister later.

I will move on to asking the president of the Yukon Development Corporation a question about negotiations concerning the restructuring of the Yukon Energy Corporation. We have already been told that the current status of the negotiations with CYI is that the door is still being held open. I would like to ask the president what meetings have occurred with representatives of the Association of Yukon Communities or the mayors of specific communities, to discuss matters of restructuring the Yukon Energy Corporation?

Mr. Byers: I am only aware of two, but there may be others that I was not privy to. I attended one meeting with Mr. Phelps, when he was the Minister. It was an Association of Yukon Communities meeting that took place in the city hall in Whitehorse last fall, during which the matter was discussed with the AYC. I believe it was also discussed at its annual meeting in Mayo, but I was not present at that time.

Mrs. Firth: At a lunch meeting, I just happened to see the Mayor of Watson Lake, the Mayor of Whitehorse, the executive director of the AYC and some representatives of the Yukon Development Corporation and Yukon Energy Corporation. I guess that it was a social luncheon, and that there was no particular discussion with respect to Yukon Energy Corporation. I wonder if the president could clarify that for me.

Mr. Byers: Yes, the Member is correct. We did have lunch with the energy committee of the AYC, but the issue of the sale of assets of the corporation was not discussed. We basically had asked for the meeting so that we could open lines of communication with that group, rather than carrying on a bit of a war by correspondence. We talked about a number of issues, but that was not one of them.

Mrs. Firth: I believe I remarked at the coincidence of it, since it was just after the Government Leader had announced in the Legislature that all negotiations and discussions between AYC and this government with respect to restructuring of energy had died. I believe there was an outstanding commitment that the Minister responsible would wait for communications from some of the communities with respect to that restructuring. It would not be unusual for one to draw the conclusion that there was some communication damage control going on.

Are there going to be ongoing negotiations with AYC with respect to restructuring?

Mr. Byers: I have no knowledge of any plan to have discussions with AYC about restructuring. The discussions we propose to have with AYC have nothing to do with that issue.

Mrs. Firth: I want to move on to the issue of Loki Gold and negotiations that are presently taking place with this government with respect to the Yukon industrial support policy. Has the president been involved in these discussions at all? Has his advice been sought with respect to this issue?

Mr. Byers: No, not in respect to the industrial support policy. Our relationship with Loki Gold is simply in talking about their power requirements.

Mrs. Firth: Who spoke to whom at Loki Gold about the power requirements?

Mr. Byers: I do not recall who from Loki Gold. I was not present at the discussions. Those kinds of technical discussions are normally conducted by our senior utility engineer and Mr. John Carroll from YECL or other representatives from our manager.

Mrs. Firth: I have just one or two more questions. I know that the Leader of the Official Opposition wants to ask more questions.

I have a question about the rate-relief program that the government presently has in place. In a memo from Mr. Byers, the president of the Development Corporation, to Mr. Ostashek regarding the rate-relief program, it says, "I wish to advise you that we are actively engaged in the development of proposals for Cabinet as to the ultimate termination of the current rate-relief program." I would like to ask the president if those proposals have been completed and if it has been sent to Cabinet?

Mr. Byers: No, they have not.

Mrs. Firth: Could the president tell us when they expect to have them completed?

Mr. Byers: No, I cannot give the Member a specific date. I am somewhat dependent on our manager and the Alberta Power staff in Edmonton to produce those cost scenarios for us. They are in the process of doing that now, but I really do not know when they will be available. I hope it will be in the not-too-distant future.

Mrs. Firth: The last paragraph of the letter refers to having all the financial figures and calculations completed some time in September, that we will then know for certain if the Yukon Energy Corporation and the Yukon Electrical Company Ltd. have achieved its goal of a no-rate application in 1995. When is it anticipated that that information will be completed?

Mr. Byers: That portion of the information is completed. If Anvil Range Mining had not come back on the system, we would not have had any reason to have a rate application in 1995.

Mrs. Firth: Have there been any projections done with respect to any other mines coming on board, such as Loki Gold?

Mr. Byers: Yes. There are a number of potential mines. Carmacks Copper is the one major mine that will probably come on in the not-too-distant future, and it is the one that will most certainly take power from the grid.

As I understand it, the other mines being contemplated, including Loki Gold, will probably generate diesel power because their requirements are reasonably small and the cost of extending the grid to where those mines are would not be in the best interest of the mining companies. They would not be interested in contributing to the capital.

Mr. Penikett: I want to ask about the rate-relief program. Late last summer or fall there was some discussion internally about the termination of the rate-relief program. I want to know what the position of the Energy Corporation was on the future of the rate-relief program and whether the president and the board had an opportunity to consider it and what their conclusions were.

Mr. Byers: I am not certain what discussions the Member means. The rate-relief program, as I have understood it and as the board has understood it, was always a two-year program to expire at the end of 1995.

Mr. Penikett: It is true, is it not, that rate relief, as the Government Leader said a few minutes ago, has been assumed to be a continuing need, given the difference in cost between the hydro zone and the diesel zone and between the policy decisions made by Cabinet about the cost to residential consumers as opposed to commercial or institutional consumers.

What I am interested in is not the cost-of-hearings questions we were asking before but the issue of the rate-relief program in the context of the desire by the Yukon Utilities Board, for example, to move toward cost-based rates, which I think is one of its recommendations.

Mr. Byers: I think I am perhaps misunderstanding the question. The current rate-relief program that is protecting people's bills and keeping them at a certain level is due to expire at the end of 1995. The other issue is the revenue-to-cost-of-service matter. At the cost-of-service hearing that the Utility Board held a few years ago, a recommendation was made that the utilities move toward cost of service for all classes of customers - not just industrial classes. At the moment, there is a subsidy across the entire system, as the Member is likely aware. I may not have these percentages entirely accurate, because they seem to fluctuate a bit, but roughly speaking, residential ratepayers pay about 75 percent of the cost of service. The government class pays about 158 percent of the cost of service. Commercial customers pay around 117 to 120 percent of the cost of service. The Utilities Board recommended that we strive for an appropriate range, and I think the numbers are 95 percent on the low end, to 110 percent, which is more like the national average than what we are at here.

At the moment, the 1962 rate-design order-in-council that the Utilities Board functions under prohibits the Utilities Board from making those particular changes, although the board had made the recommendation. It has not, however, been put in place yet. The order-in-council would have to be changed to allow the Utilities Board to shrink those two parameters.

Mr. Penikett: I recall slightly different numbers from those indicated by the president. I seem to recall the Government Leader saying the other day that it was 70 percent, but the number I recall was that residential consumers were paying 75.2 percent. The argument in a document that I saw was that governments were paying 146.2 percent of their costs. I understand that it is the view of the Public Utilities Board that that is not in the interests of conservation or of wise energy use.

The question I am getting at is this: what is the view of the Energy Corporation board on that question? Does it believe that we should be moving toward a structure where residents pay an amount that is closer to the actual cost of production, and institutional customers pay proportionately less than they do now?

Mr. Byers: The position of the Energy Corporation is that we do move toward the recommendation of the Utilities Board to bring all classes closer to the cost of the service.

Mr. Penikett: That would produce significant increases for residential consumers. Could I ask the president this: what is the view of the board about the speed at which we should be moving toward paying cost-of-service rates?

Mr. Byers: The ultimate decision will be that of Cabinet. However, when we put a proposal to Cabinet, our recommendation would be that it would be over quite a lengthy period of time. We would be looking at something in the order of about 10 years to get to about 85 percent for residential customers. That would amount to approximately one percent a year over 10 years. Otherwise, there would be a rate shock. Our recommendation would be that it should be a very long and drawn out process - a very slow, incremental increase - to get to those rates.

Mr. Penikett: I thank Mr. Byers very much for that very precise answer.

I would like to ask a question on the privatization discussions that were going on last year in mid-summer. I had a call from Ottawa at one point. There were discussions at one stage where Mr. Robert C. Struthers was involved in the privatization negotiation discussions. The person in Ottawa who mentioned this to me said they were not clear who Mr. Struthers was working for. We knew that he had worked for CYI and land claims, and his firm, Davis & Co., had worked for the Development Corporation on some occasion. Was Mr. Struthers working for CYI, Yukon Development Corporation or YTG when he was actively involved in the privatization discussionsm and the attempt to get the federal government to underwrite CYI's participation?

Mr. Byers: He was acting for the Yukon Energy Corporation.

Mr. Penikett: Is there any sense of a problem having lawyers who have worked for other parties working on other parts of negotiations in some of these issues?

Mr. Byers: As a matter of fact, that was discussed at some length with CYI. He had represented CYI in terms of the drafting of the detached clauses in the agreement. I think that the parties - CYI and us - saw Mr. Struthers as really a neutral party in all of this, and he was there more or less to explain to the people we were talking to in Ottawa what the agreements struck up with CYI meant, and what their implication were. Since he negotiated them, it was difficult for the federal government to deny the existence of some of them.

Mr. Penikett: I might say that those of us opposed to privatization would not regard him as quite so neutral.

I do not know what the disposition of the witnesses is. Is it the hope of everyone in the House that they will return tonight, or what is the plan?

Hon. Mr. Ostashek: The witnesses were scheduled for one and one-half hours.

Mr. Penikett: Fine, then I will take my other questions up with the deputy.

Mr. McDonald: I see that we are trying to get a lot of questions in under the wire.

The president indicated that the Yukon Energy Corporation discussed energy requirements with Loki Gold. He did not say whether or not energy requirements were discussed with Carmacks Copper. Could the president tell us if there was any discussion about energy pricing with either of those two companies?

Mr. Byers: Yes, we have had discussions with both those companies about the cost of power to those two mines.

Mr. McDonald: Has either industrial customer looked for a cost that is less than the cost of service?

Mr. Byers: To my knowledge, no.

Mr. Cable: There has been a proposition that the price of electricity varies with the price of metals. Has that been followed with Curragh or any other mining development?

Mr. Byers: Not by the Yukon Energy Corporation.

Mr. Cable: As part of the industrial strategy that is being put forward by the government, how does the Yukon Energy Corporation anticipate running with that particular ball? Is it waiting for further instruction on that, or does it have all the instructions it needs to negotiate that sort of an arrangement?

Hon. Mr. Ostashek: Just for clarification for the Member opposite, that would have absolutely nothing to do with the Energy Corporation. They would get paid the regular rate. It would be absorbed by government, and that is why the industrial support policy would be coming to this Legislature if such an agreement was entered into.

Chair: Order please. The time being 5:30 p.m., I would like to thank the witnesses and excuse them at this time.

Witnesses excused

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


Chair: I will now call Committee of the Whole to order. Is there further general debate on Bill No. 4?

Hon. Mr. Brewster: I have handed out to the MLAs a list of lots scheduled for completion in 1995.

Chair: Is there further general debate?

Ms. Moorcroft: We were talking about roads and I would like to ask the Minister about the Long Lake Road. I know that we had a legislative return last year regarding the guardrails on Wickstrom Road. Recently there was an accident on Long Lake Road. There is no yellow line painted on that road and I wondering what the Minister can tell us about improving safety on that road.

Hon. Mr. Brewster: There is no BST on that road and we cannot paint on gravel.

Ms. Moorcroft: Does the road meet the standards for being wide enough? I see that it is a maintained road.

Hon. Mr. Brewster: We maintain some existing roads. If there is not much traffic on the road, we just maintain it.

Ms. Moorcroft: Earlier this afternoon we were discussing the possibility of having a briefing on the information highway. I note in the budget book that part of the responsibility of the deputy minister's office is to participate in national policy-making and regulatory forums on communication matters affecting the territory to ensure that Yukon interests are represented.

I would like to ask the Minister if he can tell us how that particular objective is being met and whether or not the office of the deputy minister is specifically involved in CRTC hearings other than the current Northwestel rebalancing hearing.

Hon. Mr. Brewster: We do participate in as much communication as we can, and we are in contact with the other provinces all the time. If we think we should be at a meeting, the deputy minister or someone else would attend it.

Ms. Moorcroft: On the departmental objective to plan, develop and dispose of Yukon lands and to manage land use activity, earlier I asked the Minister about an Association of Yukon Communities resolution calling for an investigation into land pricing around the territory. I wonder if the Minister can tell us how he is planning to deal with that particular resolution of the AYC.

Hon. Mr. Brewster: Is that with respect to the pricing of lots in the various communities?

Ms. Moorcroft: I am looking for my copy of the resolution. It was passed at the Mayo AYC meeting. It wanted the government to look generally at land pricing around the territory and to conduct an investigation into the appearance that policies did not seem to be consistent.

Hon. Mr. Brewster: I think I know what the Member is talking about now. That was around Haines Junction, and they were talking about federal land. The assessment done by the federal people was very, very high on one lot and quite a bit lower on another lot of much the same size. The people objected to it, so an assessor came in and straightened everything out. That was a federal matter, not a territorial matter.

Mr. McDonald:

My first question deals with land development. The Minister passed out a sheet, titled "Lots Scheduled for Completion in 1995", which identified 210 lots in Copper Ridge and a number of other urban residential lots elsewhere. Previously, he handed out a lot-availability document for the City of Whitehorse, which lists 257 lots coming onstream. I am not taking issue with the figures here; there may be good reason for that variation in numbers, but what I am trying to do is get a better impression of what the department anticipates will be taking place in the coming years and get some sense of what the department feels will likely happen in terms of land sales - all with a view to determining what the land bank is going to be looking like now or at the end of the 1995-96 fiscal year.

What can the Minister tell us about expected land sales that will draw down the number of lots available?

Hon. Mr. Brewster: We forecast - and hope - to sell 43 lots in Cowley; two lots in Logan, multi-family; 125 in Copper Ridge, and 20 in Whitehorse North in 1995-96.

Mr. McDonald: Seventeen further lots that have been purchased from the department will likely see construction this season. Given that they expect another 125 lots in Copper Ridge - which we will call, for lack of a better term, the "Cadillac lots", or the fully serviced lots - are they anticipating that just over 200 lots will be used for construction purposes this coming year?

Hon. Mr. Brewster: Of the 125 lots on Copper Ridge, there are already 70 sold; however, that does not mean that there are homes on them.

Mr. McDonald: The department expects that approximately 200 lots in total will see construction in the coming year. Is that correct?

Hon. Mr. Brewster: We are figuring that the number will be between 170 and 205.

Mr. McDonald: How does that compare with the figures from last year in terms of lots sold and houses under construction?

Hon. Mr. Brewster: We sold 136 last year, but that does not mean that they all have homes on them. Some people may not have decided to build their homes yet.

Mr. McDonald: The 130 lots do not include the 70-some lots the Minister has already mentioned will be available for next year. Is that correct?

Hon. Mr. Brewster: Yes, that is correct.

Mr. McDonald: The department expects that approximately 200 new lots will be available for construction this coming year. That compares with approximately 130 fully services lots that were sold and available for construction this past year. Am I summing it up properly?

Hon. Mr. Brewster: Yes, that is very close.

Mr. McDonald: Goodness knows, we are not looking for precision here. Given that the government expects approximately 200 lots in sales, what do they expect the value of the land bank to be at that time?

Hon. Mr. Brewster: Would the Member prefer that I table the breakdown covering everything?

Mr. McDonald: The inventory of the land bank was expected to be about $25 million by March 31, 1995, according to the handout. The department expects to spend approximately $8 million more on land development and expects to sell approximately $8 million worth of land, because it forecasts an inventory of approximately $25 million for March 31, 1996. Is it correct that there will be about $8 million in land development and the department will recover those costs?

Hon. Mr. Brewster: On March 31, 1995, there is $9,450,000.

Mr. McDonald: I am interested in the inventory itself. I am performing a double track here. I am trying to track the land bank - that is the total amount of land that is held in inventory. I have my reasons, in terms of government finances, to be interested in that. I am also tracking the amount of land development that is going on, of a particular type of land, in the City of Whitehorse. The Minister I am sure is aware of my interests there.

I have been advocating for some time that we pursue lower cost land options, and I am dismayed that we continue to construct only top-of-the-line lots. I am interested in how fast those lots are going to be taken up. I am interested in how many lots the Minister thinks is necessary to hold in inventory for this purpose. Ultimately, I will be interested in why we are not developing more lower cost options.

My initial question right now is about the land bank, and I am interested in how much land is going to be held in this land bank. My interest there emanates from the concern I have expressed during the Finance estimates debate, that we are holding a lot of cash in developed land, which ultimately draws down the interest that we could otherwise have received from the cash in the bank, and ultimately has lead, in the past, to there being banking charges, which we had historically not had to pay. If one ties up more and more cash in land inventory, consequently one makes less interest and one might have to pay banking charges. In the last few years, that has been as high as $500,000 or $600,000 in a single year. That is my interest in considering the land bank, but I am not going to be asking the Minister the ultimate question about policy with respect to how much land should be held in inventory because obviously I should be asking the Finance Minister about his thoughts on that question.

However, I think I have what I need from the Minister with respect to land inventory. I am interested in knowing about the land the government is developing that will be high-quality, fully serviced lots. Does the government expect, given that the federal government is going to be releasing 41 lots in March, a sufficient supply of top-of-the-line, top quality lots for the next couple of years, or are we going to be looking for further developments? What is the plan of action?

Hon. Mr. Brewster: The plan of action is to try to get a two-year surplus so that we are not always short. In this way, people can purchase a lot but do not have to rush around in the spring and immediately work it in order to meet the requirements of an agreement. The way it is now, they are released in the spring. If we can get a surplus of lots, people can buy one and take their time working on it.

Mr. McDonald: Essentially, the Minister will have achieved that goal with the construction this year - is that correct? In terms of the two-year surplus, the government will not be trying to accelerate construction even faster for top-of-the-line lots?
Hon. Mr. Brewster: We hope to have the lots by this fall.

Mr. McDonald: I have some questions to ask the Minister about waterfront development while the Government Leader is in town. If the Government Leader is in the building, I hope that before he leaves tomorrow we will have the opportunity to discuss waterfront development; otherwise we are going to be in a sticky situation whereby the Community and Transportation estimates are going to clear the Legislature and there will not be a further opportunity to discuss waterfront development. I hope that the Government Leader will be mindful of that and will join us in this discussion.

I have a general policy question to put to the Minister about the budget process. We had some discussion earlier on in the budget estimates debate about the practice of budgeting a dollar for some road construction work and budgeting the full amount for other roads. I will give one example of each to illustrate my concern.

There are two roads that ostensibly lead to mining developments. We were told by various ministers that there would not be any money spent to upgrade those roads or do the road construction work in the absence of a development agreement with the mining company. We were given as an explanation in one department that $1.00 was voted for the Old Ditch Road because there was no suggestion, as of yet, as to who would take financial responsibility for that road construction work. Yet, in Community and Transportation Services, there is $2.6 million budgeted, $1.3 million of which is Yukon government money, for the Freegold Road at Carmacks. To my knowledge - perhaps the Minister can correct me if I am wrong - we do not have a development agreement with Carmacks Copper or any other mine that may be serviced by that road.

Can the Minister explain why some departments have a dollar vote and other departments have estimated the full cost of the reconstruction work?

Hon. Mr. Brewster: We have been talking with the ones on the Freegold Road for a year. We thought they were getting ready to go into production. On the Old Ditch Road, which belongs to the economic development program, they are just starting to work. I believe that either the Government Leader or the Minister of Economic Development has told the Members that we hope to have that in before the end of this session, so that the Members are able to look at the agreement and vote on it. I am still not sure that they are going to come in this year on the Freegold Road. We thought they were, but we have not heard anything about it lately.

Mr. McDonald: I was under the impression that the distinction between whether or not one puts an actual dollar figure in the budget for these mining roads was determined by whether or not a development agreement was signed. We were told by the Minister of Finance, when we pressed him - he eventually punted it to the Ministers of Community and Transportation Services and Economic Development to explain it - that, in the absence of a development agreement, there should not be any money voted, which is why we have one dollar for the Old Ditch Road. Unless things have changed, and there is a development agreement - the Minister suggested there is not - for the mines on the Freegold Road, then we may have something of an inconsistency here, in terms of budget practice. Does the Minister agree?

Hon. Mr. Brewster: As far as the Freegold Road is concerned, it has been there for quite a few years, so what we are doing is improving it in case Carmacks Copper goes ahead. As the Member knows, there is some placer mining in that area, and there is also the possibility of Mount Nansen getting going, as well. It is a road we have been improving year after year.

As to the Old Ditch Road, we only look after it to a limited extent. The rest would have to be improved if hauling occurs, much the same as we are doing here, but we do not have any agreement on that. A number of placer miners and others already use the other road in that area.

Mr. McDonald: I will go back and check my notes, because I recall this Minister saying that, without a development agreement for Carmacks Copper - a clear signal, such as a production decision - this money would not be spent. Does he not recall saying that?

Hon. Mr. Brewster: No, the Member is right. We are now waiting to see. We thought they were going to go this summer, but we have not yet got the final word that they are going to go ahead. If they do not, it is a question of whether or not we will improve that road.

Mr. McDonald: We will just leave it.

My interpretation of the situation is that there is an inconsistency in budget policy. I will raise it with the Minister of Finance at some future date. I do not dispute the claim the Minister has made that, with respect to the Freegold Road, they will not spend $2.6 million unless there is a production decision for the major mine on that road. If that is the case, I will take him at his word.

My only problem, which he may want to think about next time he is sitting in Management Board discussing budgets, is that at least one other Minister, in this particular case, has budgeted $1.00 for a road that could very well go ahead this year, but for which there is no production decision for the mine at the end of the road.

It is not budgeted for, but available, and is to be used for, among other things, the Old Ditch Road. If the Minister can bring clarity to the budget process, I would appreciate it. If he cannot, I will raise the matter with the Minister of Finance once again and suggest to him that he either deal with it or certainly stop bunting it around to other Ministers.

I have a number of very specific items that I would like to pursue in line-by-line debate: in particular the Kopper King industrial development lots, the access road to Yukon College and the Fish Lake Road, all three of which the Minister is at least partially familiar with. I could do it during line-by-line debate, or I could do it now.

I am not too anxious to leave general debate until I have had a chance to talk about waterfront development, as the Minister might appreciate. Otherwise, we might simply have to stand it over, but I do not want to do that. After all the time that we have spent in general debate, I think the Minister will want to have some sense of progress, and I do not want to deny him that. In the absence of calling for general debate to be stood over, perhaps I can deal with a few of the smaller issues right now.

Can the Minister tell us what is happening with the Kopper King industrial lot development? There was some money in the budget last year. I do not know precisely what is happening this year. I do not see much activity on the ground. What is happening there?

Hon. Mr. Brewster: Would the Member please ask the question again? I was busy sending someone for the Government Leader.

Mr. McDonald: I am interested in the industrial lots at the Kopper King site in Whitehorse on the Alaska Highway. Some work has been done on the site in past years. There was some work scheduled for last year, but I am not sure whether or not it actually proceeded.

Can the Minister tell us what is happening with those commercial lots?

Hon. Mr. Brewster: We need an agreement with the city so the lots do not become so highly priced that we cannot sell them.

Mr. McDonald: Could the Minister fill us in on what conditions the city is putting on lot development that would cause the price to rise beyond reason?

Hon. Mr. Brewster: The city is asking us to build frontage roads. If we build up to that standard, we feel that the price of the lots may be too high to sell.

Mr. McDonald: Is there a plan for these discussions to take place? Is this a high priority with the government? Will the Minister also let us know how many commercial lots are available in Whitehorse, because I do not see that in the land inventory, but that may not mean that it is not there.

I am interested in asking about the amount of work that has gone into the Kopper King commercial development so far, and I wonder how much land of this class might be available in the City of Whitehorse. If we are talking about promoting economic development, the availability of serviced commercial lots would seem to be a bit of a factor. I am not aware of that many other developments of this sort that are taking place to encourage new construction on this class of property. If the Minister could give us some sense of what is happening there, I would appreciate it.

Hon. Mr. Brewster: We do not really feel that it is quite that high a priority. We have had commercial land and private land for sale in the city right now.

Mr. McDonald: Is there any sense of what the inventory is or is it just an eyeball guess?

Hon. Mr. Brewster: No, we do not have an inventory of the private industry.

Mr. McDonald: I do not have much more to add. I have heard some concerns about the availability of commercial land. I had been telling people, up until recently, to wait until the Kopper King commercial lots come onstream. I suppose that now there is no point in telling them that until we see some movement.

Obviously, the government has no money budgeted for the Kopper King commercial land. They intend to put this project on hold or not pursue it. What is the reason for not even trying to see it done?

Hon. Mr. Brewster: We are still talking to the city. The project is on hold until we get an agreement with them. We do not want the costs to be so high that they cannot be purchased.

Mr. McDonald: I will make my inquiries to the city and see what I can find out there, myself.

Can the Minister tell us what his department is intending to do to improve access to Yukon Place?

Hon. Mr. Brewster: We have no money in this budget for it but eventually we would like to realign it.

Mr. McDonald: Can the Minister tell us what has happened in the last year or so? There was certainly enough money to undertake a public consultation process, which offered a number of different options for reconstruction. What is the department's current thinking on this point? Is it going to do something in the near future? Is it going to carry on consultations? What is it going to do?

Hon. Mr. Brewster: The most important thing is to find money in the budget for it so it will have to be in next year's budget.

Mr. McDonald: I am going to encourage the Minister to be a little more expansive, because this is a subject of a lot of conversation at the college. Every once in awhile when people spin out on the access road they do raise the issue, naturally enough. Can the Minister tell us how far along in the consultation process they have gone and to what conclusions they have come?

Hon. Mr. Brewster: People in one of our branches are now working with the city. We can bring back information about the status of this, probably by Wednesday if the Member would like.

Mr. McDonald: What is the significance of that date?

Hon. Mr. Brewster: On Wednesday we can bring back a status report of what the committee is doing when it looks at that road.

Mr. McDonald: The Minister says that there is a committee reviewing the road alignment. Apart from this committee level, is there any thinking by the department or the government about an alternate access road to the Alaska Highway? Is it simply a realignment of the existing access road? Could the Minister provide us with a little bit more information? Does the department feel that it has conducted sufficient consultation to know which direction to take?

Hon. Mr. Brewster: No, the existing road does need to be realigned and the department is going to undertake that realignment, but the other road is not being considered.

Mr. McDonald: Could the Minister please repeat that last phrase? I could not hear him as someone was coughing.

Hon. Mr. Brewster: The present road does need realignment; however, the extra road on to the Alaska Highway has not even been considered.

Mr. McDonald: It has been considered by the department in the past. Is the Minister saying that it has not been considered at the political level of government? Given that he is the only person who can answer that, what kind of priority is this government giving to the Alaska Highway access?

Hon. Mr. Brewster: Our main priority is to get the present road realigned. We have not even considered the other road at the present time.

Mr. McDonald: What is the priority given to the other road? Can the Minister tell us if there is any point in looking to the next budget for that road construction? Is the Minister thinking about this happening in his lifetime? Or do I look to my son's lifetime to determine whether or not there is going to be something there if the Yukon Party is still in office? Can the Minister give me some ball-park estimates as to what the government is thinking?

Hon. Mr. Brewster: If we give it my lifetime, then the Member is going to be waiting a long time, because I am going to live for a long time. At the present time, it has not even been considered. Eventually it will be built. There is no question about that. For now, the main priority is to get the existing one realigned and in better shape than it is at present.

Mr. McDonald: I want to point out a couple of things. First, I am certain that the Minister will live a long time. Second, the problem with a single access road to the heavily used college site is not, in long-term transportation planning, a heck of a good idea. I will point out that it was not the NDP government that chose that site. It was the previous government that chose that site, with the understanding that there would be multiple access roads to it in the long term.

In 1992, the Minister's department and the City of Whitehorse had come to an agreement to create an alternate access to the site, primarily for traffic flow and safety reasons. If something were to happen on the existing access road, and emergency vehicles were prevented from going into the site, then obviously the consequences would be quite severe. I believe it is absolutely essential that each Minister of Community and Transportation Services, when they do not address this concern, be fully aware - and it is my obligation to make them aware, if they are not - of the potential consequences if nothing is done to create at least two access roads to this highly used site.

The Yukon College site, as the Minister may be aware, is also considered a high priority site for emergency preparedness planning, and to have a single access road to the site is not considered particularly wise.

Can I get the Minister to acknowledge at least that I have made the pitch and that he has considered it and decided that it is not a priority, so that should something happen at least we will all feel that we have done our duty and made the people in power aware of the consequences to their actions?

Hon. Mr. Brewster: I will acknowledge that the Member has made the pitch.

Mr. McDonald: I am really pleased. It is a job well done. We are all more than happy about that.

I am going to make a pitch now for the Fish Lake Road. I have written to the Minister asking that the Fish Lake Road be improved for a variety of reasons, including the fact that it is one of the more popular recreational roads in the district. There is now a culture camp, constructed by Kwanlin Dun, near the end of the road; there are tourist businesses at the end of the road; there are a number of residents living along the road, and I took the opportunity to go out there. Apparently it is graded or ploughed a couple of times over the winter but I was told by a couple of the residents on that road that they experience a lot of spinning out and spinning off the road, given the road conditions and the level of maintenance.

Given that the Minister has already indicated that road upgrading is not a priority in the near future, can he tell us what the long-term planning is for the Fish Lake Road?

Hon. Mr. Brewster: It is not a high priority with us. The graders dry-blade it a couple of times in the summer, and they clear the snow a couple of times during the winter, as the Member stated.

Mr. McDonald: I trust the Minister is aware that there is a petition coming. I understand there are a few hundred names on the petition, asking the Minister to change the road from "no priority" to a higher priority. I would encourage him to consider the names on the petition carefully and make his decision based on what he understands to be the people's needs.

Can he give us a sense of what would have to happen before it becomes a priority for the government? What useage does the Minister think it should have to increase its priority?

Hon. Mr. Brewster: We would have to compare the road to other similar roads. Our priority is still the main roads where the traffic is heavy. I have been on that road, and it is certainly not impassable, by any means. It will just have to be like some of the other roads. We cannot clear every road when people decide to live some distance from the main roads.

Mr. McDonald: I would point out to the Minister that people who live on that road live closer to the downtown core than do people in Porter Creek. When we are talking about going off to live in the boonies, we should bear that in mind.

For the sake of the record, I would urge him to reconsider the priority given to this road. I would also ask him to acknowledge that the amount of money it would take to make a very significant difference for all of the users of the road - for recreational and residential purposes, and for the culture camp, which is more and more a feature in the life of many Kwanlin Dun members - would only mean a small reduction to one of the large road-building contracts that the department routinely releases nowadays. It would ultimately mean a change in one of the large road-building contracts, which would hardly be missed by anyone. If that is his priority, then that is his priority and I will not pursue it any further.

Hon. Mr. Brewster: I have a short question. A few years ago, there was a recreational subdivision developed on California Beach. The lots were 40-, 50- or 60-foot lots. There were people on a couple of the lots who had moved in full-time and who owned dog teams. I do not think they met with the approval of the rest of the residents. Has that situation ever been addressed through zoning?

Hon. Mr. Brewster: No, not to my knowledge.

Mr. Cable: What sort of zoning does the Minister's department have to accompany recreational lot development? Are there any restrictions at all as to what one can do on the lots?

Hon. Mr. Brewster: At the present time, I do not think that there are any restrictions. If the majority of the people in the area want some regulations, we could certainly look at it.

Ms. Moorcroft: The City of Whitehorse has taken the position that a cooperative and coordinated planning process is required. In particular, the Chadburn Lake Reserve, which encompasses both sides of Schwatka Lake as far as Miles Canyon and the area surrounding Chadburn, Chadden and Hidden Lakes, could become an asset to the community. Schwatka Lake also needs to be protected in order to protect the city's water supply. I know the Department of Tourism is supporting a Canyon City tramway, so the Yukon government does have some interest in this area.

The city has asked YTG to work with it to develop a plan for the area, and First Nations have also requested a coordinated approach to planning and development in this area. That is also in line with the chapter of the umbrella final agreement that calls for regional land use planning to occur.

How does the Minister respond to my representation that the Yukon government should work with the city and the First Nations to develop a coordinated plan for that section of the city?

Hon. Mr. Brewster: We have talked about looking at this, but it is in the municipality's jurisdiction, and it is up to them to do their own planning in their municipality. We do not get involved in any other municipality this way and we are not prepared to get involved here.

Ms. Moorcroft: The Minister just said that they do not get involved in any municipality, but the fact is that the Yukon government does do a lot of development within the municipal boundaries. That is just not a consistent approach to take. Why is he refusing to even consider the notion of working with the city and with First Nations on land planning, if that is one of the objectives of the department?

Hon. Mr. Brewster: Municipalities have their own budgets and it is their responsibility. It is right in the Municipal Act that they do their own planning.

Ms. Moorcroft: Where does the Minister stand then, in responding to the representation that municipalities and Association of Yukon Communities have made, that the government should turn over more land and more autonomy to the municipalities?

Hon. Mr. Brewster: We are looking at that now. If they want more land, they should approach us about getting land to develop.

Ms. Moorcroft: There are a number of Municipal Act amendments that presumably the Minister is considering in the submission that has been received from the Association of Yukon Communities. Can I ask the Minister who, within the department, is working on those changes? Where does that now stand?

Hon. Mr. Brewster: Those working on that in the department are the assistant deputy minister of municipalities and director of community affairs, along with the AYC.

Ms. Moorcroft: What kind of a schedule does that have? Does the Minister expect that there will be amendments prepared within the current year or next year? Does he know?

Hon. Mr. Brewster: We hope to have some amendments this year but we will not have all of them.

Ms. Moorcroft: A concern has been raised about electrical inspections. In fact, we have discussed that along with a few other issues, such as making low-cost land available and the state of trailers in the city. I was looking at the statistics provided in the budget book about how many electrical inspections and building permits there are, and I know the city is also looking at adding some electrical inspectors to its staff. Can the Minister tell me if there is a backlog at all for electrical inspections or whether the present staffing level in the public safety branch is able to accommodate all the inspections needed?

Hon. Mr. Brewster: At the present moment, there is a backlog. Another reason for this is that the city has changed its policy and wants a final inspection before people can move into their homes, so there is a backlog at the present time.

Ms. Moorcroft: Can the Minister tell me how large the backlog is?

Hon. Mr. Brewster: One of the reasons is the change in the city's policy. Inspectors are now called for a final inspection. Previously, there was a system in place whereby a qualified electrician could telephone certain inspectors and receive approval without the inspector actually visiting the building site. Building inspectors were only inspecting about 50 percent of the sites.

With the city making changes in the same way it applies to the rural areas, the requirement for the additional inspections has resulted in an increased number of inspections that need to be done, which has resulted in a delay in the completion of some inspections.

Ms. Moorcroft: I did not hear all of that information so I will ask the Minister to clarify his answer.

I understand that many of the licenced electrical contractors can do their work without an inspection, up to the final inspection, which the public safety branch conducts. I see the Minister wants to respond.

Hon. Mr. Brewster: The way the system once worked, the inspectors would complete about 50 percent of the inspections on site. However, under the new policy of the city, the final inspection must be completed before people can move in to a new building. This has resulted in inspectors having to return again to building sites to complete a final inspection, because the city would not issue an occupancy permit until the electrical inspectors completed a final inspection.

Ms. Moorcroft: The Minister says that now the final electrical inspection has to be completed before an occupancy permit is given, and that is a matter of city policy. I thought that was a matter of Yukon statute.

Hon. Mr. Brewster: We understand it is because the city changed its policy so that it is now the same as it was in rural Yukon, where the last inspection has to be made before people move in. Before that, the city would make probably about 50 percent of the inspections. If the electrician was a qualified professional, the city would take his word for some of his work.

Chair: Is it the wish of the Members to take a brief recess at this time?

Some Hon. Members: Agreed.

Chair: We will take a brief recess.


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

Is there further general debate on Community and Transportation Services?

Hon. Mr. Brewster: I would like to give the following information about the Whitehorse waterfront.

Fifteen applications approved under the squatters policy were offered life-estate leases in 1988. None of the applicants accepted the offer. Two buildings have subsequently been destroyed by fire and the debris removed. Five of the remaining 13 applications are First Nation beneficiaries. Survey records indicate that three approved applications are in conflict with private property. One site, for which no application was received, is also in conflict with private property. A 1993 Yukon study indicates that outstanding land claim issues and the lack of understanding of what is permitted by a life estate were the primary reasons for non-acceptance of the life-estate offer.

The life-estate lease is for residential purposes only and is still under consideration. The annual lease fee is $100 and $7 GST per year for the first five years. The lease fee will be reviewed every five years thereafter. The squatter policy requires payment of an $800 administration fee.

The squatter policy indicates that applicants are responsible for the payment of outstanding taxes. The amount outstanding is different for each applicant, depending on the length of occupancy and the value of the structure. If the value of the structure is $12,000, or less, the minimum annual tax is $100.

A life-estate lease legitimizes existing buildings as non-conforming. This means that the building may continue to be used for the term of the lease. No major structural renovations are permitted, except those required to meet minimum health and safety standards. The City of Whitehorse provided its confirmation of the above information on January 22, 1991.

City building permits will be required if the individual decides to upgrade to minimum health and safety standards. Issuance of electrical permits may require some upgrading for the Yukon government permitting process. The Yukon government is prepared to discuss the above information with the area residents to ensure that there is a proper understanding of the life-estate conditions.

I am not the negotiator for land claims and I am not prepared to negotiate here.

Mr. McDonald: I am not sure I understand the importance of the last statement. Can the Minister explain what he is talking about?

Hon. Mr. Brewster: It is simply that an offer was made by the former government to give him a life estate on the property. Right now there is a different situation. The First Nations do not have their land claim. This may be part of their claim. If it is, it would be under them. I am not even sure that the waterfront development will reach that far.

Mr. McDonald: Let me start at another point. I have a feeling that we are going to be a little while on this.

Just to get some things straight, does the statement the Minister read out respecting the status of the area residents and the positioning of the City of Whitehorse and the Yukon government reflect current government policy or does it reflect what was the case when the Yukon Party took office?

Hon. Mr. Brewster: What I am trying to clarify is what happened in 1988. We are still willing to consider a lifetime estate for them, but the buildings have to come up to certain city standards.

Mr. McDonald: I understand what happened in 1988 because the life-estate leases were offered to them in a letter signed by me. I still remember that event and am aware of what that offer entailed when the letter was sent. Is the offer of life-estate leases a live option for this government and this Minister today?

Hon. Mr. Brewster: We would still consider them. It depends on who ends up with that piece of land. If the First Nations do, then it would be the First Nations' problem. If the city does, it would be the city's problem. The city is leading the waterfront development. The rest is in land claims. I am not an authority on land claims, and I will not discuss it.

Mr. McDonald: I am not asking questions about the land claim settlement, because I understood that the land selections were up to the land claims negotiators. If I wanted to ask questions about the negotiations, I would have asked the Minister responsible for land claims at the time we were discussing Executive Council Office estimates.

Even though what we are talking about is really not a land claims matter at all, I was told some time ago that I should be talking to the Minister responsible for land claims in the context of the Community and Transportation Services estimates debate. I have no idea what is going on, in terms of who is speaking for what. All I can tell the Minister is that right now I am not interested in discussing land selections. I am interested in determining what the Government of Yukon's options are going to be for those residents in the area who are not going to be living on settlement lands, after the land claims settlement.

I am talking about what the options are going to be for those people. Obviously not all of them will be on settlement lands, unless the Government of Yukon's negotiating position changes dramatically. We know that a number of the non-beneficiaries will be living on Commissioner's lands. From speaking to the City of Whitehorse, I know that it will regard the treatment of those residents as being a YTG issue. The city certainly does not want its planning process, which, I suppose, they are leading - at least, as far as the Government of Yukon is concerned - bogged down in an effort to resolve issues surrounding squatters on the waterfront.

That is the reason I am asking the questions. This is a very narrow band of interest, but a critically important one. I am asking this question of the Minister, or of any Minister who is prepared to answer: is the life-estate option open to area residents who are not on settlement lands or who will not be on settlement lands in the future?

Hon. Mr. Ostashek: I am going to enter this debate for a few minutes, to see if I can help to clarify the matter for the Member opposite. I think that what the Minister of Community and Transportation Services has said is that it is an option that would still be considered. The government's position as of today is that it is an option that will still be considered. There are some qualifiers on that. From what I see of the breakdown that is there, five of the 13 people who are left there are beneficiaries, three are non-conforming, in that they are infringing upon private lands, and there are five other squatters there who would fall into the life-estate category. What the Minister was trying to say was that the life-estate option is still available for consideration, subject to whatever lands are selected by the two First Nations that have not yet completed their selections on the waterfront. For the lands that are not selected, we will certainly consider the life-estate option.

Mr. McDonald: For those residents who are now on Commissioner's lands without conflicting with private property, and who will be on Commissioner's lands after the settlement, a life-estate lease is an option that will be offered to them - is that correct?

Hon. Mr. Ostashek: Yes, that is correct.

Mr. McDonald: One option that has been suggested by area residents is to compensate them for leaving the area if there is a desire to develop the area in some way or if the planning involves the development of the lands on which they are situated. If the government, or the planning process, decides to see area developed, and wishes to see the houses removed, will the government consider compensation?

Hon. Mr. Ostashek: That is a hard question to answer at this point. I think the first thing we have to do is have some dialogue between the residents and the department. At this point there is no dialogue and there has not been any since 1988, from my understanding. We are saying that we believe they have to be dealt with in an appropriate manner and we are prepared to consider the life-estate option for those who want it and are not on settlement lands.

At this time, I will have to pass on the second part of the question regarding compensation if land is developed and see what the development will be. It may be many, many years before there is any development. At this point it is a fairly hypothetical question.

Mr. McDonald: In a sense it is hypothetical, in that nothing has transpired. In another sense, it is simply letting us all know what the options are in the event that something happens between now and the next time we sit. As I understand it, events could move very quickly once the land selections have taken place and true planning is initiated on the waterfront.

If there is any desire to see that area of the waterfront developed prior to 1998 - we are not talking about a very long period of time - it is important for people who may see development plans overlapping their back door step to know what is going on and what their options are so that they can properly plan.

Now that we have the time, we should be planning so we do not have to face the same situation that constituents of mine living in the Kopper King area faced. Once a private developer had his plans in place, those constituents were given a period of about 45 days to move. We now have the luxury of time to plan and determine options.

How will this dialogue that is proposed to take place be structured? Will the dialogue take place between the lands branch and area residents?

Hon. Mr. Ostashek: As I said, this is a very complex issue. I am sure the Member appreciates that. It has been around for a long time. It has been around since 1988, and I do not expect it will be settled in the next three or four months either. The outstanding land claims issues are still there, so we do not not know which of the residents on Crown land we will be dealing with. We stated today in the Legislature, for the information of the Member opposite and whoever wishes to read the Blues, that the life-estate lease is still an option we will consider, and I believe that is the first step in the process. Once they have a life-estate option, if the waterfront is to be developed, they do have some sort of a claim. The people who want to develop it, or the territorial government, are going to have to deal with their issues. That gives them some security.

Mr. McDonald: How is the dialogue the Minister mentioned going to be structured and when will it take place? Can the Minister of Community and Transportation Services let us know?

Hon. Mr. Brewster: If it is an issue involving squatters, they could probably talk to the department; otherwise, they have to talk to the land claims branch.

Mr. McDonald: I was told by one Minister that a dialogue has to take place between the government and the residents and, yes, we are still discussing the squatter issue on the waterfront.

Can I make the suggestion that, in the absence of any plan, within the next month a meeting is convened on the waterfront, at which time land claim representatives give an update to area residents on the land claims, to the extent that they can provide public information? Perhaps lands branch representatives could bring a map to the meeting and, on a case-by-case basis, indicate where the residents reside, in terms of whether or not they are on private property or Crown land, and what might happen to the residents if they find themselves on selected lands or, if they do not find themselves on selected lands, what the life estate lease option means for them?

There should also be someone who represents building inspections, perhaps from the city, who can explain to area residents in general terms what they need to do in order to meet their obligations under the life estate lease option. Is that something the Minister is prepared to see happen?

Hon. Mr. Ostashek: The issue has been around for a long time, as I said to the Member opposite, and it is not something that is going to be resolved within the next month. We have clearly stated that the life-estate option is something we will look at. The Ta'an Kwach'an have not yet even considered the waterfront and which blocks they want to select there.

It would be premature to make plans without knowing which lands will be selected on the waterfront. The message from the debate in the House today will make it clear to the Members opposite that they can approach the department any time they want, on a case-by-case basis, to review specific pieces of property. Until such a time as we know what the Ta'an selects, and the negotiations are completed with the Kwanlin Dun, it would be premature to move in that direction.

Mr. McDonald: I understood the Minister to say that there should be a dialogue between the area residents and the department. In the absence of any plan at all to have such a dialogue, I made a suggestion about how one might be structured, given what I know the interests of the area residents to be. They are interested in knowing what their options will be before and after land claims. Obviously some technician is in the best position to indicate to them whether or not they are on selected land. Any briefing for area residents does not have to tell them what the actual status of land selections is. Virtually every week people are asking me what is happening with their situation.

A nice way to keep the situation on hold, as well as to give people the maximum amount of information that they are entitled to which can be released, would be to have a meeting of area residents. All that entails is meeting in someone's living room on the waterfront. It is not a new concept; it has happened before with lands branch officials present, obviously before the land claims settlement was finalized.

The process has gone on for some considerable time since the life-estate leases were first offered to people. However, in the last couple of years, things have heated up. The Minister can appreciate that with all the talk about community development, land planning on the waterfront and so on, people are getting more and more anxious about their futures. Letting them know, in a way in which they feel comfortable, would help. They are reluctant to come to the lands branch on a case-by-case basis. They have historically opted to speak with one voice. They would also like to hear from some officials about what their options might be.

I do not understand what the problem is with that.

Hon. Mr. Brewster: Yesterday, or the day before, I was kicked around because I did not consult enough with the First Nation. Now we are trying to leave things the way they are until they get their land, and we are getting kicked around again. Until the First Nation makes up its mind what part of that land is theirs, I do not see how we can make a decision one way or the other.

Mr. McDonald: I am not asking the Minister to make a final decision about any of the residents and their futures. There are a number of options that have been made available - at least tonight - by one Minister, who has indicated that life-estate leases are an option for people who find themselves on Commissioner's lands after land selections. Somebody should explain to them that that is still a live option, and somebody who knows land issues should be there.

If the Ministers opposite want me to be the conduit for all of the information to be provided to the area residents, then so be it; I would be more than happy to be. If I feel the government is dragging its feet, I am going to say so. I am offering the Ministers the option of having the simplest of meetings in the waterfront area. I am only going to ask one more time; I am trying to be helpful. If they do not want to take me up on it, fine. I will be the single conduit of information and I will be the one who sets the tone. If they do not want to accept this offer, that is fine with me.

Ms. Moorcroft: There are a number of outstanding issues in general debate. One of them is the issue of land development. At the Association of Yukon Communities meeting in Mayo, the Minister was asked if he would support municipal control of land development. That was part of a Federation of Canadian Municipalities lobby. I heard the Minister say, "You are trying to get me on an election issue in your riding, and I am not going to comment on it." For the last seven sitting days, the Minister has been pretty cagey about not commenting. He says that he does not know, or he will not say, or it is another department's responsibility, or the Government Leader has to come in and not answer the questions for him, or something else. With land claims and self-government legislation coming into effect, the Minister should be able to state government policy and priorities. This Minister's department is responsible for coordinating land claims research and reviewing procedures for the effective implementation of land settlement and self-government agreements. How is the department fulfilling that objective? What direction is the Minister giving to his department?

Hon. Mr. Brewster: Our function is that, when land claims asks our opinion about something, we coordinate things and give it back to them.

Ms. Moorcroft: Has the Minister read what his departmental objectives and responsibilities are in the budget book? I am asking him to respond to what is the responsibility of the Department of Community and Transportation Services. Can he offer us a cogent thought on how the department is fulfilling its responsibility of coordinating land claims research?

Hon. Mr. Brewster: Our responsibility in that area is to coordinate land claims research and review the procedures for efficient implementation of land settlement and self-government. We have two people working on that with land claims.

Ms. Moorcroft: Is the Minister providing any direction to those two people, or can the Minister read a briefing note that has been prepared for him on how that work is being done by his officials?

Hon. Mr. Brewster: Well, we are having a lot of fun, are we not? First, she asked to have the Finance Minister present. He had the decency to come in, which he did not have to do, and then she gets really funny about that.

When they are working with land claims they work with land claims. Land claims has priority over anything else in the department.

Ms. Moorcroft: It is not in the least bit funny. It is pathetic. Does the Minister not have an answer to the question that was asked of him? He just said they have two people working on it. What are they doing? What exactly are they working on?

Hon. Mr. Brewster: They look at land problems that come to the table and give their advice and work with land claims to see if they can settle them.

Ms. Moorcroft: Earlier, I asked the Minister if he could provide us with some information about how land development takes place in the changing land claims environment. I fully recognize that this is complex and that the land claims agreements are not thin documents. They are quite weighty and deal with a lot of issues, but I asked the Minister if he could let us know how they presently take into account the implications of the umbrella final agreement and the self-government legislation in land development. The Minister's response was that we would give him an awful hard time if he got an "and" and a "but" mixed up and he was not sure he could spout it out straight, so would have to come back in with a legislative return about exactly how it works.

I also understand that there have been some changes. Recently, there was a blockade at Marsh Lake where the Kwanlin Dun was protesting the land use permit that was granted to some foresters, which has resulted in some changes in processing land use applications.

I would like to ask the Minister if he can answer those questions now, or if he can provide any further information to us about how the government is proceeding with land development.

Hon. Mr. Brewster: With respect to the Member's comment about the blockade, that falls within federal jurisdiction. The territorial government was not involved in that at all.

If there is a problem between municipalities and First Nations regarding land, we work in conjunction with the land claims coordinator to reach a solution to the problem.

Ms. Moorcroft: I would like to ask the Minister to elaborate, but I think I have been around that one too many times to frustrate myself on it.

I would like to ask the Minister some questions that address some issues raised by the Little Salmon-Carmacks First Nation. The First Nation made a public statement that they wanted the Municipal Act changed.

The position that the Little Salmon-Carmacks First Nation took was that the Village of Carmacks is eligible for grant money from the territory, in part, because of the members of the First Nation who are counted in the minimum requirement for forming a village.

The First Nation says that it does not have a say in what happens with the money that is allotted on its behalf, and it would like that mistake corrected. Can I ask the Minister to respond?

Hon. Mr. Brewster: From conversations I had with them, they wanted to disband the municipality of Carmacks, which was one of the original municipalities, with the money given to them through this Legislature.

Ms. Moorcroft: Is it a fact, in order to receive municipal funding status, a village has to have a minimum of 300 residents?

Hon. Mr. Brewster: That is the requirement at the present time, but that does not mean that one of the original municipalities can be dissolved.

Ms. Moorcroft: Is it a fact that the members of the Little Salmon-Carmacks First Nation are part of the 300 minimum-population statistic that resulted in the formation of a municipality there?

Ms. Moorcroft: Does the Minister know whether or not there are 300 residents of Carmacks if the First Nations are excluded?

Hon. Mr. Brewster: I do not have the exact figures. It may be less than 300 now, but that does not mean we are going to dissolve the municipality.

Ms. Moorcroft: Does the First Nation have any input into the decision making on the spending of the municipal funding that goes to villages?

Hon. Mr. Brewster: The decisions are made by a council that is elected from within the municipality. If First Nations people in the area chose to run, I suppose that they could be elected there, as they are in other municipalities.

Ms. Moorcroft: I have to point out the obvious to the Minister. It is quite possible that a First Nations member could run for council and be voted in, but there are about 200 band members in Carmacks who are not eligible to vote in the municipal elections.

Hon. Mr. Brewster: They chose to stay outside the municipality.

Ms. Moorcroft: Another fact that the Minister seems to be ignoring, or perhaps he can clarify this for me and perhaps I am mistaken, is that the program dollars the village gets from the Yukon government are based on a head count, which includes the people who live outside the boundary, which includes the First Nation members who are not municipal residents.

Hon. Mr. Brewster: That formula was set in the legislation a long time ago and has not been changed.

Ms. Moorcroft: Another issue that was raised by the chief of the Little Salmon-Carmacks First Nation was the provision of the Municipal Act that requires at least 10 taxpayers to get involved in an appeal to have town boundaries changed. If a First Nation wants to appeal a boundary change, then they require at least 25 people as signatories to argue for a change.

The chief has stated that that distinction is unfair. Can I ask the Minister for his comments?

Hon. Mr. Brewster: I believe the act says that there have to be at least 25 members in the band before they can appeal to the municipality to change the boundary. I might have to check that, but I believe that that is the case.

Mr. Chair, in view of the time, I move that you report progress.

Chair: Are you agreed?

Some Hon. Members: Agreed.

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

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order. May the House have the report from the Chair of the Committee of the Whole.

Mr. Abel: Mr. Speaker, Committee of the Whole passed the following motion: THAT at 4:00 p.m. until 5:30 p.m. on Monday, February 6, 1995, Mr. Barry Ernewein, chair of the board of directors, and Mr. Bill Byers, president of the Yukon Development Corporation, appear as witnesses before the Committee of the Whole during debate on Bill No. 4, entitled First Appropriation Act, 1995-96.

When the Committee was called to order at 4:00 p.m., the Honourable Mr. Ostashek informed the Committee that Mr. Ernewein would not be able to attend and that Mr. Ed Chambers, vice-chair, would appear instead.

Further, Committee has considered Bill No. 4, First Appropriation Act, 1995-96, and directed me to report progress on it.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

Hon. Mr. Phillips: I move that the House do now adjourn.

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

Motion agreed to

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

The House adjourned at 9:29 p.m.

The following Legislative Return was tabled February 6, 1995:


Frontage Road: information pertaining to (Brewster)

Oral, Hansard, p. 764, 765, 778, 791-795