Whitehorse, Yukon

Thursday, March 16, 1995 - 1:30 p.m.

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



Speaker: We will proceed at this time with the Order Paper.

Introduction of Visitors.

Tabling Returns and Documents.


Hon. Mr. Phelps: I have for tabling a report on fraud.

Hon. Mr. Phillips: I have for tabling the Annual Report of the Yukon Arts Centre Corporation.

Speaker: Are there any Reports of Committees?

Are there any Petitions?

Are there any Bills to be introduced?


Hon. Mr. Fisher: I have the honour to communicate to the House the reception of a money message recommending a certain amendment to Bill No. 4, First Appropriation Act, 1995-96.

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

Are there any Notices of Motion?

Are there any Statements by Ministers?


Social Assistance Fraud Report

Hon. Mr. Phelps: Only moments ago, I tabled the report on the incidence of fraud in social assistance. This report represents six months' work by the fraud investigator and student verification teams hired last summer to determine the rate of fraud and abuse within the Yukon social assistance program.

This review came about as a direct result of the social assistance review process that preceded the implementation of reforms. During that review, questions were raised about the extent of fraud within the system. Across the country, other jurisdictions were reporting fraud rates that were quite high. What we are doing in trying to curb fraud is consistent with what my provincial colleagues are doing.

To determine if this was a problem in the Yukon, as Members are aware, we hired a fraud investigator for a six-month period to examine the administrative procedures of the program. The verification officers were hired to verify some 500 active files and determine the actual rate of fraud within the Yukon.

Of the 497 files reviewed, approximately 20 were found to contain irregularities prominent enough to be considered fraudulent and warranting further investigation.

In the last two years, five cases have gone to court and the courts have dealt with the matter. Two more are awaiting court dates; 21 are still under investigation by the RCMP.

It was not our intent to send every questionable file to the RCMP. We were simply trying to avoid paying out more than was necessary. We felt that, in some cases, the overpayment could be a legitimate error. When we first hired the investigator last April, we allowed a two-month grace for people who wanted to come in if they felt they had been overpaid. Many people came forward and repaid the monies they had received.

However, we are adamant that this government will show zero tolerance for social assistance fraud. Every case where we suspect criminality or where a fraud is being committed, we refer to the RCMP for follow-up. The system is there to assist those people who are most in need, not those who think they know how to play the system.

We estimate the social assistance fraud rate in the Yukon is between four and five percent of the cases. If it is not checked, it could reach $550,000 per year. That is what we want to avoid.

One of the steps we have taken is to have one of our workers also serve as a part-time verification officer. We will also be hiring a fraud investigator on a full-time basis. The tender will appear in local papers tomorrow; it closes April 7.

Many time before, you have all heard that we have to do more with less, that we have to use the available monies wisely and ensure they serve the best purpose. We cannot afford to have $500,000 that could be better spent on those most vulnerable and most in need slip through our fingers. We cannot let the few affect the many.

Ms. Commodore: I have a lot to say about what the Minister is doing in his department. I ran out of time yesterday while I was trying to make a point, and I do not want to do that again today.

The last thing I would do is stand here and say that people who are breaking the law should get away with it. I think that somehow or other that has to be dealt with. However, I do have some concerns in regard to what this Minister has done. He has given the impression to those people most in need, whether they are on social assistance or they are children in care, that he is not very concerned. Many people are concerned about his attitude toward them, including many Members on this side of the House.

I would like to ask the Minister if he can tell us how much his fraud squad cost last year? How much did he pay the fraud investigator and the summer students? How much did he save? How does he know that this fraud investigation program can save up to half a million dollars a year? Is it based on projections from cases that were discussed or discovered, or is that just a hypothetical projection? I would like to know that.

I would like to know how much the fraud investigator is going to make, and what the terms of reference are. I want to know who this person will report to. One of the most important things here is what kind of protection the clients are going to have. We have heard many horrible examples of incidents where innocent individuals have had accusations thrown at them. They were made to feel that everyone on social assistance is breaking the law.

I would like to know whether or not he thought that was something that should have been done. What kind of protection do those people have?

I get really concerned every time he talks about doing more for less. Look at the budget for Health and Social Services: in 1992-93, it was $77 million; in 1993-94, it was $97 million; and in 1994-95 it is $97 million. That is not doing more for less. If he is doing more for less, it is for people like the transition home and other programs that probably need the funding the most.

I would like him to at least keep us informed as to what this program is doing. I would like him to pay more attention to the concerns of those individuals who go to his department for help in some way, the people most in need - as he says, innocent people who require the services of Health and Social Services.

We have a Minister from a Tory government who has a non-caring attitude that is a big concern to those people who have to go to Health and Social Services. Could he, some time down the road, or maybe when we get into the budget, let us know exactly how much this is going to cost, and how he can determine that fraud could reach almost $500,000 a year?

For Pete's sake, if he says one more time that he is doing more for less, I will scream. It is not working any more, because people do not believe him. All they have to do is look at his budget.

Mr. Cable: I think it will be useful to explore this issue in detail in the budget debate. It will also be useful to see the numbers that are produced in the legislative return.

The Minister's statement indicated that there were 497 files reviewed. It would be useful to find out whether or not those files were picked at random or if there was some suspicion of fraud to begin with, because that would determine the fraud rate. The previous legislative returns suggested a much lower rate, but anyone can do anything they want with statistics.

I do not wish to minimize the fraud investigation or the enforcement function of the Minister's department, and I do not wish to minimize the value of deterrents, but it should all be put into perspective, as there are other ways to reduce the social assistance budget.

Awhile back, the Minister of Justice issued a press release saying that maintenance recoveries had gone up in this jurisdiction, stating that recoveries are much higher here than in other jurisdictions. I believe that the Minister quoted a number 86 percent, as compared to Ontario, which has a 50 percent recovery rate, and Saskatchewan, which has a recovery rate of 95 percent. This was in part due to the program that was initiated by the federal government in November. The press release that was issued at that time indicated that the federal government estimates that if 80 percent of the child support payments ordered by the courts were paid, the government would save 20 percent of the $7.7 billion that it now spends on welfare and social assistance.

There is some linkage between the amount of social assistance and the absolute amount of fraud and the maintenance recovery program. During the debate, I look forward to asking the Minister where he thinks he can get the most bang for the buck - whether it is in the fraud area or whether it is in the Department of Justice maintenance recovery program.

Hon. Mr. Phelps: Firstly, with regard to the last Member who spoke, the 497 cases were random files. There is a fair amount of substance in the report that has been filed to give a pretty good indication that four to five percent is a pretty reasonable projection of the incidence of fraud in the Yukon, which is consistent with other jurisdictions.

That Member makes the logic error of "either/or" - that there is only fraud to look at or maintenance enforcement, and nothing else. In Social Services, we have gone through a very comprehensive exercise to change many facets of the social assistance program. Some of them are still being implemented and some regulations will come forward as a result of a lot of work over a couple of years.

With regard to the Member of the NDP, who is the critic, the usual negativity shows through. It seems that whenever we do something that is positive and common sense, the NDP really twist and turn, trying to find negative things to say. I suspect that the Yukon public is as sick of that as I am.

With regard to knowing how much there is, it is, of course, contained in the report. With regard to the other comments she made - totally misinterpreting the budget - I can say that on programs such as social assistance - such as alcohol and drug services and how we deal with young offenders - we are doing a lot more for less, and I look forward to hearing her scream. It seems as though she has been screaming ever since we began this session. It is unfortunate, because I think the people of the Yukon are looking for constructive comments and are a little sick and tired of some of the folks opposite.

Speaker: This then brings us to the Question Period.


Question re: Outfitting areas, foreign ownership

Mr. Harding: I have a question for the Minister of Renewable Resources. The Yukon Wildlife Act states that Yukon outfitting territories must be majority owned and controlled by Yukon residents who are Canadian citizens. Yet, when I was flipping through a copy of an international hunting and conservation magazine recently, I found an ad for the sale of a Yukon outfitting business. The ad reads, "Buy now while the Canadian dollar is really down. Hurry. Immigration and investment rules changing soon." This is an obvious attempt to sell another outfitting territory to a non-Canadian and non-Yukoner. I would like to ask that Minister what he is going to do about it.

Hon. Mr. Fisher: There is not much that I can do about that ad. The outfitting concessions must be majority-owned by Canadian citizens or landed immigrants. The Member did send me a copy of the ad, so I am aware of the one he is talking about. If someone did buy that business, they would either have to be a Canadian citizen or a landed immigrant or they would not be able to operate it.

Mr. Harding: That is absolutely wrong. The Wildlife Act states that an outfitting concession - section 89 - may be granted to a naturalized person who is a resident, who makes his home in the Yukon, who is habitually present in the Yukon, and is a Canadian citizen. This ad is an obvious attempt to sell another outfitting territory to a non-Canadian, non-Yukon resident. I would like to hear more about what this Minister is going to do about it.

Hon. Mr. Fisher: We checked the landed immigrant part of it and the residency requirement is one year. We cannot stop the sale to a Yukon resident who is a landed immigrant, or if he is a Canadian citizen, we do not have the authority to stop the sale.

Mr. Harding: That is preposterous. Last year in the debate when I brought this issue up, this particular Minister defended outside ownership of Yukon outfitting territories. Whatever happened to the election promise of the Yukon Party at election time - Yukon for Yukoners. Is outfitting now the same as mining? Is it all open for business?

Hon. Mr. Fisher: That is not true at all. We support Canadian ownership of our outfitting concessions. There is no question about that. The Wildlife Act, as the Member has pointed out, stipulates that one has to be a Yukon resident and a Canadian citizen; however, the Constitution allows for landed immigrants, but we certainly support local ownership.

Question re: Outfitting areas, foreign ownership

Mr. Harding: This particular ad appears in an international hunting and conservation magazine. As I said in my introductory remarks, it says: "Buy now while the Canadian dollar is really down." It quotes the appraised price in U.S. dollars, and it says "hurry" in big bold letters, "Immigration and investment rules changing soon", and then there is a Yukon telephone number.

I would like to ask the Minister: does that look like something that is going to be sold to a Yukon resident?

Hon. Mr. Fisher: I cannot control where someone advertises to sell their business. We can control who owns that business, within the laws of the country.

Mr. Harding: This government has shown no will to do that. When I asked for a public inquiry into what was going on last year with three territories being bought by non-Yukon residents, this government did nothing. They defended selling outfitting territories to outside interests. I have now given them another example and, again, they say they are not going to do anything about it.

I think the government has to either change the law to toughen it up in order to ensure this does not happen, or they have to test the law as it stands to stop outside takeovers. Will he do either?

Hon. Mr. Fisher: We would be willing to test the law to stop outside takeovers; however, if one is a Canadian citizen, a Yukon resident and a landed immigrant, we have no authority and no choice but to allow the sale.

Mr. Harding: We certainly would support a court challenge. We think this government should undertake just that.

This government has had evidence from me and the Opposition that this is taking place in the Yukon. This ad is just another example of that evidence.

Last year, we asked for a public inquiry and some public process for Yukoners to discuss this issue; the government refused to do it.

I would like to ask the Minister if he will now agree to a comprehensive public process to discuss the issue of Yukon majority ownership and control of Yukon outfitting territories?

Hon. Mr. Fisher: There was an internal inquiry last year regarding the particular concession holder to which the Member refers. The department conducted an internal investigation and found, after obtaining legal advice, that the concession holder was perfectly within his legal rights as a Yukon resident and as a landed immigrant.

We have some amendments to the Wildlife Act coming up. I would be quite willing to extend the consultation to include outfitting when that consultation takes place.

Question re: Government employees, job terminations

Mr. Cable: A couple of weeks ago the Government Leader was on the radio talking about attrition and the government. As a consequence of that, there were some questions asked in the House, and the Minister of the Public Service Commission filed a legislative return the other day, dated March 13. I have had some discussions with a union official who is having some difficulty reconciling the numbers stated in the legislative return.

There is an assertion that there were 450 positions that had been "termed" - I believe that means terminated - between November 23, 1992, and February 28, 1995. The first question I have is whether or not those 450 terminated positions are net of any positions created and appointments made?

Hon. Mr. Phillips: No.

Mr. Cable: Then I assume that in balancing off the 450 positions terminated there were a number of new positions that were, in fact, created. It would be useful to get those numbers so that the person who wants to use the numbers can get an accurate idea of what is really going on in the public service.

This person also indicated that seasonal adjustments should be made. The figures that were given were a comparison between October 1992 and March 1995. My advice for the Minister is that there may be 100 fewer employees in March of each year than in November. Could we get seasonally adjusted figures, either March to March comparisons or October to October comparisons, so we can see whether or not the Minister's suspicions are accurate?

Hon. Mr. Phillips: I think that if the Member wants to get a more accurate idea about how many employees there are working for the Government of the Yukon, he should go to the bottom of that page, where it refers to full-time equivalents. It states that in 1992 there were 2663 employees, and in 1995 there are 2551, which is 100 fewer. I guess the number would vary from month to month, and I could get the figures that the Member wants, but those are the figures that you should be using. It shows the full-time equivalents and the number of full-time employees working for the Government of Yukon. From 1992 to 1995 there are about 100 fewer employees.

Mr. Cable: The FTEs are bookkeeping entries, and jobs are people. The union official indicated that union memberships are only down by eight positions over that period. Could we also get information relating to the number of management versus union employees so that we can draw conclusions about where this attrition is taking place?

Hon. Mr. Phillips: I can look into that request for the Member. The Member says that we may only be down by eight positions, but there are many people on job-sharing, many people who leave government service from time to time and some who are on part-time. When one looks at the number of FTEs who were on the staff in 1992 and then you use the same period in 1995, there are 100 fewer employees - and w

e have staffed the extended care facility and the Teslin jail facility. When one takes all those into consideration, there is a fairly significant reduction in the number of full-time equivalent people working for the Government of the Yukon.

Question re: Devolution

Mr. Penikett: I have a question for the Government Leader. Yesterday, the Whitehorse Star carried a story about a Department of Indian and Northern Affairs proposal for a one-big-package devolution transfer, which, according to the reporter, includes forestry and the other programs under DIAND. I wonder what the government's position is in respect to its ability to absorb, all at once, all these programs and all these employees, and perhaps even the cost of absorbing what are almost certainly now, in some cases, underfunded programs.

Hon. Mr. Ostashek: The article raised some questions. I am happy for the opportunity to perhaps help clarify the record.

As the Member remembers, the Minister for DIAND stood up in the House of Commons last October and said that he could see devolution being completed in the north in a period of three or four years.

Since then, we have had the forestry transfer fall through. We are talking with the Minister now about negotiating the devolution of the entire package. That does not mean we will immediately take it over, but there would be some time lines set for when each takeover would occur.

We are trying to set up a process to enter into negotiations to devolve what is left of DIAND to the territorial government, but that does not mean that we will take it all over on the same date.

Mr. Penikett: Some of the Department of Indian and Northern Affairs programs are known as land-based programs. Given the confusion created in the First Nations communities about the relative priority of devolution and claims, for the record, does the Government Leader's government intend to negotiate the transfer of land-based programs in advance of the final settlement of the land claims with all 14 Yukon First Nations?

Hon. Mr. Ostashek: It is the Minister's intention to go ahead with the devolution of land, waters, minerals and forestry in one package. He has been in touch with the First Nations on that issue, encouraging them to become involved in the process. This negotiation is still in the preliminary stages. The Minister appointed a private sector person as a fact finder for devolution, and this person was in the Yukon about two weeks ago and met with me, with the First Nations, and other people from DIAND. My understanding is that this person will file a report with the Minister the first week in April.

Mr. Penikett: That raises an interesting question about whether or not Mr. Wright is claiming any responsibility for this particular proposal. Since First Nations have not been involved in the process, there is the question of how they will become involved in it.

At the rate we are going with program cuts, there may be very little left of some of these programs three or four years from now. If this proposal is under serious consideration, has the Government Leader asked Minister Irwin for a moratorium on cuts to programs under negotiation, at least until those negotiations can be completed?

Hon. Mr. Ostashek: Yes, we have. The last time I was in Ottawa, I met with Mr. Irwin, and we were adamant that we could not continue to have these programs downsized. If one listens to what is coming from DIAND now and really examines the federal budget, the programs proposed for devolution to the Yukon have not been cut in this round at the federal level.

Question re: Forestry, consultation with First Nations

Mr. Harding: I have a question for the Minister of Renewable Resources. In the forestry debate yesterday, the Minister told the House that he supported a moratorium on the issuance of new commercial timber permits. I would like to ask the Minister if he feels that this moratorium should be immediately put in place, until a comprehensive forestry policy is developed in the Yukon?

Hon. Mr. Fisher: I think the moratorium for the new commercial timber permits should be until either we take over forestry and have a comprehensive policy, or the federal government reviews its existing regulations and makes some changes.

Mr. Harding: Based on what I have heard from the federal government, I am not entirely convinced that its policy process is going to be comprehensive enough. According to the proposal that was mentioned in the media yesterday, the federal government is now saying that it could be two to three years before we get devolution of forestry. I would like to ask the Minister if he now realizes how important it is for us, as Yukoners, to develop a comprehensive policy, so that we are not having to rely on the federal government? Through the good work and the comprehensive policy development here, we can make the federal government adopt what we think is the right thing to do for Yukon forestry.

Hon. Mr. Fisher: I more or less agree with the Member opposite. However, I think that, in the interim - and we are doing this through my two departments, Renewable Resources and Economic Development - we should work with the federal government so that, depending on the length of time until the forestry transfer takes place, there will be a policy that will address many of our concerns.

Mr. Harding: Certainly, I do not think that we should ignore the federal process, but I think that we, as Yukoners, have to try to enhance what is going on with the federal government. This break of a possible two to three years in devolution is a pure window of opportunity to try to get First Nations again involved in the process and participating, and rebuilding some trust with them. How, specifically, given this new window of opportunity, is the Minister going to reach out and try to involve First Nations in this process again, since they have been pushing so strongly for devolution?

Hon. Mr. Fisher: In our action plan for the provision of a forestry policy, part of the whole process will be consultation with First Nations, so certainly we are committed to it.

Question re: Lands Act amendments

Ms. Moorcroft: I have a question for the Government Leader. The Government Leader received a letter this week from the Chief of the Kluane First Nation about amendments to the territorial Lands Act. Does the Government Leader intend to answer that letter?

Hon. Mr. Ostashek: Yes, at some point we will be answering that letter; it has been sent to the department for drafting.

Ms. Moorcroft: I would like to ask the Minister, then, if he could answer the following question. We have asked this question before but maybe this time he might have an answer to it. What are the principles guiding the amendments to the territorial Lands Act?

Hon. Mr. Brewster: We have already written to the Member and told her that as soon as it is out of the bureaucracy and comes to us she will be getting a copy. We sent that letter on March 6; on March 8 she immediately asked me the same question - when was I going to give it to her. Unfortunately, the other two days were Saturday and Sunday and they did not work.

Ms. Moorcroft: I think the public, the First Nations and the Members of this Legislature are getting really sick of the stonewalling we get in this Legislature. What is the big deal? Why can the Minister not answer the question?

The Minister said that he sent a letter in March. In February I asked the Government Leader a question and he said he would "bring a note back for the Member opposite that provides full details of what has transpired". When is the Minister going to bring back a note with the full details about what is going on?

Hon. Mr. Brewster: It has to go through the Deputy Ministers Review Committee and then it has to go to Cabinet. It will then be released to the public.

Question re: Lands Act amendments

Ms. Moorcroft: I will ask this question of the Government Leader. I think that it is very important that we know who is making the decisions around here. Is the bureaucracy or the Minister giving the guiding principles for amendments to territorial legislation?

Hon. Mr. Ostashek: The Member should be aware by now - she has been in the Legislature long enough - that the political people give the direction and the work is done in the departments. Once the work is complete, it comes back and is approved by Cabinet. It is then released and the Members of this House have copies of it.

Ms. Moorcroft: If that is the case, I wonder why, when we ask questions of Ministers in Committee debate about what their political direction is, they turn to their deputies before they give us an answer. I would like to ask the Minister this question: does he know what the amendments to the Lands Act are? Does he know what the principles are in amending the Lands Act, or is he just not saying?

Hon. Mr. Brewster: I would like to remind this Legislature that a review of the Lands Act was started in 1998. As I recall, we were not even in government then, so we are not really quite as slow as some other people. I have some idea what is in it, but I will not repeat that until it has gone through Cabinet.

Ms. Moorcroft: I guess 1998 is back to the future. What the Government Leader has said in the past is that the purpose of the amendments was to make more land available to Yukoners. I want to ask the government how the Lands Act amendments will make more land available to Yukoners.

Hon. Mr. Brewster: We hope to streamline the process. I would like to correct what I said earlier. It is not going to be another 10 years before it is ready. It was in 1988 that the streamlining started. That meant that it was with the former government for four years before they did anything about it. I can guarantee that it will not be four years -

Some Hon. Member: (Inaudible)

Hon. Mr. Brewster: Quack, quack, quack - do the Members want to listen or not?

Question re: Psychological assessment services

Mrs. Firth: I have a question for the Minister of Education.

I have been communicating with the Minister on behalf of a constituent regarding psychological assessment services. In further researching the issue, I have discovered that the demand for this service far exceeds what is being provided.

The service is currently being provided on a contract basis. Individuals requesting the service can be on a waiting list for as long as 10 months. I believe that Yukoners are finding this unworkable and unacceptable. I would like to ask the Minister what he and his department are doing about this.

Hon. Mr. Phelps: The Member has asked the question, and it has been answered numerous times during the budget debate. I suppose they are running out of questions, which is understandable since this is a record session and we are only half-way through the budget.

The main focus of the problem is that we are one psychologist short, which is the position in Dawson. We are currently trying to fill it. Once it is filled, we will have adequate personnel to do the assessments in a timely manner.

Mrs. Firth: In the Education debate, the Minister indicated that a position for the psychologist that was advertised was offered to a successful applicant, who declined because the position was in Dawson City. I had asked the Minister to consider relocating the job to Whitehorse, so that we do not miss the opportunity to fill the need. I would like to ask the Minister if he has done anything about this yet.

Hon. Mr. Phelps: It is good that she gave me a couple of days to get something accomplished. It is pretty obvious that they are running out of questions.

Yes, I have had discussions with my Cabinet colleagues. I will be going to Dawson tomorrow and will be discussing, among other things, the possible relocation of that position back to Whitehorse.

Mrs. Firth: We are talking about kids who are eight, nine and 10 years old who need help to cope adequately in the school system. They have emotional and behavioral needs that require assessment; they are displaying aggressive behaviour.

I have tried to make a reasonable request today. It does not matter whether I am nice to the government Ministers or if I go after them; they still respond in the same way. I am looking for some commitment from this Minister. I would like to ask him if there is any chance of getting this individual, who is obviously acceptable to his department, to the system and the Government of the Yukon, to reconsider and accept the job in Whitehorse, so that we can fill this urgent need, or is the Minister just dismissing this out of hand?

Hon. Mr. Phelps: Perhaps the Member could check the Blues tomorrow, because I did answer that question in the last response. However, I would like to deal with her preamble a little bit, because I do not really think that Yukoners believe her to be the caring Member and the caring Minister - she was the Minister of Education - she was renowned for one thing and that was cutting off the buses to the same kids.

Question re: Psychological assessment services

Mrs. Firth: Oh, I cannot let this pass. You know, I am not even going to respond to that nonsense.

Five months ago, October 12, 1994, was the closing date for these positions to be filled. I have been asking the Minister in a most reasonable way about this urgent need that has been expressed to me as an MLA. It does not matter if the Minister does not like me and he wants to take shots at me; that is fine; obviously that is what he thinks will work best. I am making this representation on behalf of constituents, on behalf of teachers, social workers, parents, people in the system who have come to me and indicated that there is an urgent need for these positions to be filled. It has been over five months and the Minister has not done anything about it and since the debate on the Department of Education he has not done anything about it.

I would like to ask the Minister if he has given any consideration to possibly approaching the local medical clinics to see if they are prepared, in any way, to provide these kinds of services; in other words, to look at the potential of privatizing this kind of service. Has the Minister done that or even thought about doing that?

Hon. Mr. Phelps: Here is the poor, hurt Member for Riverdale South - she can dish it out, but she cannot take it. She does this constantly, Question Period after Question Period. I am sorry if she cannot take a little of her own medicine.

All of that does not really matter; the point is, as I have already told the Member, I have discussed the matter with my colleagues, I am going to Dawson tomorrow, I am going to consult with the people there and one of the issues we will be talking about is the possible relocation of that position back to Whitehorse so that it can be filled.

Mrs. Firth: Let the record show that I think I have publicly demonstrated that I can really take it. I spent eight years with that bunch of bandits across the way there, and I still survived.

Point of Order

Hon. Mr. Phillips: Point of order.

Speaker: Hon. Minister of Justice on a point of order.

Hon. Mr. Phillips: That is unparliamentary, and the Member should withdraw that remark.

Speaker's Ruling

Speaker: I believe it is unparliamentary language, and I would ask the Member to withdraw it.

Mrs. Firth: I do not think "bandit" is unparliamentary language, but if it is so offensive -

Some Hon. Member: (Inaudible)

Mrs. Firth: If the Minister of Tourism would let me finish, of course I would do what the Speaker has asked me to do.

Mr. Speaker, you say that is unparliamentary language, and I am prepared to accept your ruling. If Members opposite find the truth that offensive, I will withdraw the term "bandit".

Some Hon. Member: (Inaudible)

Speaker: Order.

Hon. Mr. Phillips: The Member is continuing with the abusive nature of the statement. She knows she is not supposed to do that. She has been here long enough and should obey the rules of the House.

Speaker's Statement

Speaker: Order. I would ask the Member to please withdraw that comment. Otherwise, I will have no choice but to ask her to leave.

Some Hon. Member: (Inaudible)

Mrs. Firth: Mr. Speaker, on a point of order, you cannot ask me to leave the House if I do not withdraw that comment.

I have already indicated I am prepared to withdraw it. I had just said that before the Minister jumped up and made that accusation. I believe I said I was withdrawing the remark, as you had directed me to, Mr. Speaker. I do not know what the Minister of Tourism is getting so hysterical about.

Some Hon. Member: (Inaudible)

Mrs. Firth: Am I to proceed with my question now, after the rude interruptions from Members opposite?

Speaker: Yes, the Member may, but I was referring to the other comment she threw in when she was withdrawing the previous remark. I would prefer everyone to stick to issues with respect to the House and not get into this kind of thing.

Mrs. Firth: This is quite funny. I would like to complete my question if the Speaker could remind me whether I am on my first or my second supplementary.

Speaker: I believe the Member is on her first supplementary.

Mrs. Firth: For my first supplementary, I would like to ask the Minister this question with respect to psychological assessment services, which he obviously is not doing anything about. Why does the Minister need to seek the permission of the community of Dawson City before he can make a decision with respect to relocating this position to Whitehorse?

Hon. Mr. Phelps: As I said, we are travelling to Dawson tomorrow and will be meeting with people then. I do not think 24 hours or a weekend is going to make or break the system. It is interesting that occasionally the Member opposite is divergent from her soul mates, the NDP, in her approach to public life, and one of those divergencies appears to be that she does not believe in consultation, yet the NDP go on and on about it.

Mrs. Firth: When I raised this issue with the Minister during the debate on the Department of Education, the Minister indicated to us that he was quite prepared to look at doing this. The concern I raised with him was that, rather than see us miss an opportunity to hire this person, would he look at relocating the job to Whitehorse. He indicated at that time that, yes, he would. He said nothing about the community of Dawson having to approve that decision - absolutely nothing. Why is he now saying that it has to be approved by the community of Dawson City when it is obviously a need of all Yukoners to have this position filled?

Hon. Mr. Phelps: I did not say that. The position is very clear and straightforward. It is only responsible of me to discuss this situation with the residents of Dawson. I am going up there anyway, and I intend to talk with them about it. I never indicated that they would have a veto over my decision.

Question re: Auditor General's report, presentation of statements

Mr. Cable: I have some fairly exciting bookkeeping questions for the Minister of Finance. The Auditor General's report was filed yesterday, and he had some comments on how the conversion of the Yukon Development Corporation debt to equity was handled. He also made comments on the presentation of the two sets of financial statements - the two sets of books we keep here - and he said, "As noted earlier, the presentation of two sets of financial statements can be misleading. For instance for 1993-94, the unconsolidated statement of operations" - that is the income statement - "reflects a surplus for the year of $14.8 million, after a $12-million adjustment for conversion of the advance to the Yukon Development Corporation to an equity grant." He went on to say that he believes that the adjustment in the unconsolidated statement should have been more properly reflected as an adjustment on the statement of surplus - that is a balance sheet entry - and not on the statement of operations. Does the Minister of Finance agree that the way the conversion of the Yukon Development Corporation debt to equity was presented can be misleading?

Hon. Mr. Ostashek: It should not be misleading. I do not think it should be misleading at all. I do not know how the Member opposite thinks it is.

Mr. Cable: I was not making that position. I thought I was parroting what the Auditor General was suggesting. Why was the conversion of debt to equity treated on the income statement rather than on the balance sheet? What was the reason for presenting the surplus that way? Was it to reduce it from $26.8 million down to $14.8 million, in order to have better political optics?

Hon. Mr. Ostashek: If the government accounting is going to be run somewhat parallel to the accounting of the private sector - if one has a loan on the books and there is absolutely no hope of collecting it, why would one continue to fool oneself about having $12 million more than what one actually has?

Mr. Cable: That is not what the Auditor General was saying. He was suggesting that it was inappropriate as an income statement matter.

In his budget speech, the federal Minister of Finance talked about better management of government, and he said that the Auditor General would report to Parliament more frequently, up to five times annually. Is the Minister going to follow up on that suggestion and have the Auditor General monitor what is going on more often, so we can keep track of these fancy bookkeeping exercises?

Hon. Mr. Ostashek: I know we feel pretty proud of ourselves in the north, but I do not know that our $500 million budget would qualify for an audit by the Auditor General five times a year.

Question re: Fine enforcement program

Ms. Commodore: In a legislative return dated February 20, the Minister of Justice reported that, under the fine enforcement program, the government was able to collect $150,000 in outstanding fines. Does the Minister consider that amount a success?

Hon. Mr. Phillips: Did the government consider that amount a success? I think it is a significant amount, but it is my understanding that it caused a great deal of work to collect that amount of money and it may not have been as cost-effective as other methods the government is now considering, such as sanctions with respect to motor vehicles. These methods would be much more efficient and more effective in collecting fines than what the government was using in the past.

Ms. Commodore: It is my understanding, from everything that has been presented in the House with regard to changes to the Motor Vehicles Act, that this would only include outstanding fines under the Motor Vehicles Act. How does the Minister intend to collect outstanding fines imposed by the courts under other acts, such as the Criminal Code of Canada?

Hon. Mr. Phillips: We are examining various options for collecting fines. I suppose we could expand the Motor Vehicles Act to include that provision in the future, as some other jurisdictions are doing. There are other options of collecting outstanding fines. All that I am saying to the Member is that the department looked at the situation, the money collected, the amount of work and time the department spent to collect that money, and felt it was not a cost-effective way to collect these fines. I rely upon the expertise in the department to make that decision, and I think they made the right decision.

Ms. Commodore: There have been some concerns that this one might be one of the ones that is suffering the consequences of the government dropping its number of term positions. I was a little concerned about that.

I would like to know if, when the Minister talks about the future of the Motor Vehicles Act, he can bring me back information about when he intends to deal with all of these outstanding fines. I understand that they are much higher than the outstanding fines under the Motor Vehicles Act. If he is considering dealing with them under the Motor Vehicles Act - or under some other act - when is he going to do it? Will it be in this session, or some time down the road? Will he look at the fine enforcement program again to find out whether or not there is a more efficient way of doing it?

Hon. Mr. Phillips: I will have to check with the department to see what the plan is with respect to that area. I will get back to the Member with a legislative return.

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


Hon. Mr. Phillips: I move that 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. 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.

Motion re appearance of witnesses - No. 3

Hon. Mr. Phillips: I wonder, Mr. Chair, before we get into the debate on Economic Development, if I might ask the House for concurrence on a motion. Monday evening we do have members of the Human Rights Commission before the House. Tomorrow evening we all get to celebrate St. Patrick's Day.

I move

THAT at 7:30 until 8:30 p.m. on Monday, March 20, 1995, Mr. Jon Breen, Chair of The Yukon Human Right Commission, Ms. Brenda Chambers, Commissioner, and Margaret McCullough, Director, appear as witnesses before Committee of the Whole during debate on Bill No. 4, First Appropriation Act, 1995-96.

Motion agreed to

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

Department of Economic Development - continued

On Capital - continued

Chair: We are dealing with Economic Development, on Energy and Mines, and we are on line item Old Ditch Road upgrade.

Amendment proposed

Hon. Mr. Fisher: I move

THAT Bill No. 4, entitled First Appropriation Act, 1995-96, be amended in Vote 7, Department of Economic Development, program "Energy and Mines" at page 4-4 by deleting the following: "Old Ditch Road Upgrade one dollar" and adding the following: "Industrial Support Policy one dollar".

Chair: It has been moved by the Hon. L.M. (Mickey) Fisher that Bill No. 4, entitled First Appropriation Act, 1995-96, be amended in Vote 7, Department of Economic Development, program "Energy and Mines" at page 4-4 by (1) deleting the following: "Old Ditch Road Upgrade one dollar" and (2) adding the following: "Industrial Support Policy one dollar".

Is there any debate on the amendment?

Ms. Moorcroft: The Members on the side opposite who are hollering "question" seem to be in a bit of a hurry to pass this amendment, but I do have some questions about it.

I would like to know whether the change in the line to "industrial support policy" from "Old Ditch Road upgrade" will make any difference to the intent of how the expenditures are made here. Is it still going to be an expenditure for the upgrade of the Old Ditch Road?

Hon. Mr. Fisher: Yes, it is.

Ms. Moorcroft: We were asking some questions last night during Committee of the Whole and the Minister made a commitment to come back before this session ends with some idea of the government's intentions. I would like to know where this contract stands now. How much does the government plan to spend on upgrading the Old Ditch Road? To what standard will the government complete the road?

Hon. Mr. Fisher: As I have indicated previously, the agreement that will outline the costs, road standards and all of those types of things will be tabled in the Legislature under a motion - I believe that is the way it will be done - and there will be opportunity for all Members to debate it.

Ms. Moorcroft: It would be rather uncommon to have a road upgrade in Economic Development rather than in Community and Transportation Services. In putting in the line item for the industrial support policy of $1.00, does the government intend to spend funds on any project other than the Old Ditch Road upgrade? There are a lot of components to the industrial support policy. Does the government intend to spend any money on other kinds of projects than the Old Ditch Road upgrade?

Hon. Mr. Fisher: For the coming fiscal year we do not foresee any additional expenditures at this time. We have not received any requests. Before we would expend monies, there would have to be a production decision. No company has been in discussion with us that is near that decision this coming fiscal year - other than Loki Gold.

Mr. Cable: I would like to ask the Minister this question: why does he feel he needs this line item? Does he feel he needs this to negotiate the deal, and if so, why?

Hon. Mr. Fisher: I was quite willing to leave it as "Old Ditch Road". The reason it was the "Old Ditch Road" initially was because we had not approved the Yukon industrial support policy, so we put it in as a line item - "Old Ditch Road upgrade". Since the budget has been printed, the industrial support policy has been approved. Taking representation from the Opposition last night during debate, we decided that we would, indeed, change it to "Yukon industrial support policy".

Mr. Cable: I am asking the broader question. Why is the line item, amended or unamended, needed? The Minister has indicated that the deal will be brought to the House. Assumedly, at some juncture there will be a supplementary estimate tabled. He certainly does not need the authority of this House to negotiate loans under any other program that I am aware of, once he has the block authority worked out. What he does need is authority from this House once he has struck the deal. This is an area where we are talking about projects over $5 million, and an area where we do not know what the terms of reference are. There is no legislative backdrop; there is nothing like the Business Development Assistance Act. There is no contractual backdrop; there is no economic development agreement that we can look to for terms of reference. We have a policy that is used as a framework for this negotiation that sort of hatched in the Cabinet rooms and can be changed overnight. We have no idea what the terms of reference will be, other than these few flimsy pages that constitute this industrial support policy. Recognizing those concerns, the Minister has indicated that he is going to come back to this House. Why does he need a dollar in his pocket to start the negotiations?

Hon. Mr. Ostashek: Perhaps I could enter debate for a minute just to clarify that. We must have the line item "industrial support policy" identified in the budget to legitimize the negotiations under it. We need the $1.00 vote because we do not know what the total cost will be, and that is not the only place in the budget where there is a $1.00 vote. There are other $1.00 votes in the budget. There are fewer now than there were in the past, because we do not like $1.00 votes either, but we need to have the approval of that line item in the budget to be able to negotiate for the Old Ditch Road under the industrial support policy.

Mr. Cable: Yes, that is what the government has been saying, but the question I am asking is why. We do not need a $1.00 item for the Minister to fly to Ottawa to negotiate with Mr. Martin. Does he mean that every negotiation this government carries out with anybody at any time on any matter needs a line item? Is that what the Government Leader is saying?

Hon. Mr. Ostashek: What we need is a line item to identify what it is going to be negotiated under and where it is going to be charged to in the budget. The Member says we do not have a line item for going to Ottawa. We have money approved in every department to travel. We have those approvals. We have to have approval identified somewhere. That is why it is identified in the Economic Development budget as a $1.00 line item. We have made the commitment not to just bring back a supplementary in the fall but to come back to the House to debate the agreement. We want to see it debated on the floor of this Legislature. We want to see if there are any weaknesses in it. We want to make sure that everybody feels comfortable with it. We have made that commitment and we intend to follow through on that commitment, but we need to have something identified for the project.

Mr. Cable: Will the Government Leader give us these two commitments: that there will be no changes in the industrial support policy, because it could be done in the Cabinet room without the scrutiny of the House, and that any deal that is negotiated will clearly set out that it is subject to the approval of the Legislative Assembly?

Hon. Mr. Ostashek: I have no difficulty doing that.

Mrs. Firth: I find the Minister's comments somewhat contradictory to the comments rushed down to us in the Legislature last evening, when we were debating this particular line item. There was a note hastily sent down to us - the Minister has it there - saying it is okay to have this other line in here - that we really did not need a line item, all we really needed was the total vote authority for the department. Now the Minister is saying something different - that we need a line item. It is a completely different story from what we were told last night.

The Minister is saying "no". Perhaps he would like to stand up and read the note into the record. I am waiting for someone to bring me the Blues, but perhaps the Minister wants to do that.

Hon. Mr. Fisher: The Old Ditch Road is a specific item. Even if it is included under a program one wants to call the industrial support policy, if the money is spent on the Old Ditch Road, one will be fine as far as the Auditor General is concerned. I think that is what the Member is getting at.

However, we wanted the vote authority specifically for either the Old Ditch Road or the Yukon industrial support policy. I said that last night. I am not hung up on whether it is called "Old Ditch Road upgrade" or "industrial support policy".

In future years, these votes will come under "industrial support policy". This year, it was initially called "Old Ditch Road" because we did not have the actual policy approved. Now that the policy is approved, and on representation from the Opposition, it is better to have it under "Yukon industrial support policy".

Mrs. Firth: I do not think the Opposition recommended that this be changed to "industrial support policy". I recall when the Minister first told us that he was going to amend his budget to put the industrial support policy here, I told him at the time that I was not prepared to support it. The reason I was not prepared to support it was because I was not prepared to support the concept of giving the government a blank cheque of $1.00 to fulfill the objectives of the industrial support policy, and because the policy was so lacking in substance and was so sketchy and vague that we in the House did not know the criteria, the terms or what was being negotiated under the industrial support policy. I still feel the same way. I know in the industrial support policy it says that it will be debated in the Legislature, but if we are not sitting, does that mean that the Minister is prepared to call a special sitting of the Legislature to debate the deal that is made with Loki Gold under the industrial support policy?

Hon. Mr. Ostashek: Yes, that is exactly right. We will recall the Legislature if the Legislature is not sitting. We will call a special sitting every time one of these come up under the industrial support policy.

The Member has stated that she is not prepared to give a blank cheque, but we have other items that are identified with a dollar because we do not know the final costs, but they are voted through. I do not see this as being any different from the others. The government needs the authority to do this. The government has made the extra commitment because we want the Legislature to be comfortable with the industrial support policy. We believe it will work, and we are prepared to call the Legislature back into session if the Legislature is not sitting at the time.

Mrs. Firth: That is the commitment I was looking for, because so far we have not had that commitment from the government.

Some Hon. Member: (Inaudible)

Mrs. Firth: The Government Leader is stating that he thought he said it before, but I did not hear him say that. If the Minister is giving us a commitment to reconvene the Legislature - prior to the next official calling of the Legislature, which I know will probably not be until December - so that we may debate the industrial support policy, then I would be prepared to accept and support that line item.

Amendment agreed to

On Industrial Support Policy - previously stood over

Industrial Support Policy in the amount of $1.00 agreed to

Energy and Mines in the amount of $2,513,000 agreed to

On Economic Policy, Planning and Research

Chair: Is there any general debate on the program, economic policy, planning and research?

On Oil and Gas Resources

Hon. Mr. Fisher: This is comprised of furniture, shelving, map cabinets and office equipment in the amount of $5,000; computer software and hardware for Yukon petroleum resource management system in the amount of $45,000; for a net of $50,000.

Oil and Gas Resources in the amount of $50,000 agreed to

Economic Policy, Planning and Research in the amount of $50,000 agreed to

On Economic Programs

Chair: Is there any general debate on the program, economic programs?

On Business Development Fund

Hon. Mr. Fisher: This is comprised of contributions to the chambers of commerce: $36,000 for the Yukon Chamber of Commerce and the remainder for the communities, for a total of $50,000, and $1,000,000 for the business development fund loans, for a total of $1,050,000.

Business Development Fund in the amount of $1,050,000 agreed to

On Economic Development Agreement

Hon. Mr. Fisher: The administration of the EDA includes the following: six term positions to March 31, $486,000; planning subagreement, $869,000; forestry subagreement, $332,000; tourism subagreement, $1,264,000; Renewable Resource subagreement, $1,551,000; small business support subagreement, $741,000; for a net of $5,243,000.

Economic Development Agreement in the amount of $5,243,000 agreed to

On Centennial Anniversaries

Hon. Mr. Fisher: That is for the centennial anniversaries program , which was debated in the House for the amount of $5 million.

Mr. Cable: Which department is taking the lead role in the distribution of the funds? Is it the Minister's department or the Department of Tourism?

Hon. Mr. Fisher: The Department of Economic Development is doing the administration of the fund. Both departments are involved in the distribution.

Mr. Cable: Is there some sort of interdepartmental committee struck and, if so, who actually chairs it? Will one of the Minister's officials chair it, or will it be chaired by the Tourism department?

Hon. Mr. Fisher: There are two committees. A technical review committee has been formed. We do not have names here, but it is made up of people from both the Tourism Department and the Economic Development Department.

Then, there is the decision-making committee that is made up of two Ministers, one from each department, two deputy ministers and the Anniversary Commissioner.

Mr. Cable: There were some questions put to the Minister in Question Period in the last few weeks about what appears to be a value of requests that total much more than the initial $5 million allotment.

In his answers, the Minister suggested that some of the applications may not be totally eligible. At the present time, does the demand for government funding - not the entire cost of the projects - exceed the $5 million initial allotment?

Hon. Mr. Fisher: It is hard to tell. As I stated during Question Period - perhaps it was during debate - a couple of weeks ago, the initial uptake was something like $27 million. In fact, a large percentage of them - I cannot remember the exact numbers - were not eligible for capital funding at all.

The departments are working with the communities so that we can get an idea of what is actually eligible for our funding and what they will have to take out of their own coffers. It was a very preliminary intake of projects; it was just ideas that they had. The department wanted to get a lot of ideas, and we did; there were a lot of ideas from the communities.

Mr. Cable: I believe the number the Minister quoted was $27 million. That included the communities' portion, I assume, as well as ineligible projects. The demand was therefore something less than $27 million, I assume.

Is the analysis sufficiently far along to permit the Minister to tell us whether or not there will be an oversubscription? I assume we are not going to get projects totalling exactly $5 million. We will get either an oversubscription or an undersubscription. What does the Minister expect at the present time?

Hon. Mr. Fisher: We are not at all at the stage where we can say that we have $6 million or $3 million worth of requests. We are not at that stage yet. We are still talking with the communities. We are analyzing some of the projects that are further along, but I really cannot say at this time where we are with commitments.

Mr. Cable: When does the Minister expect that the decisions will be made for this initial $5 million, and when has he set the time line for the next batch of applications?

Hon. Mr. Fisher: I would hope that we have some approvals some time in May. The next intake for these is around the middle of July - July 15, I believe.

Mr. Cable: A comment that was made to me was that the time period between those two events is too short for a community or organization that was rejected in the first batch to get their act together for the second intake. Does the Minister feel that? Does he think that the time between the middle of May and the middle of July - two months - is sufficiently long for the communities or the community organizations or the First Nations to revise their application?

Hon. Mr. Fisher: If it were the case that a project was absolutely and totally rejected because it did not fit the criteria, the community would then have only a couple of months to come up with something else. However, remember that the initial intake is only to get ideas.

Again, if the project was totally rejected - no part of it would fit the anniversaries program - and because there was obviously the interest to get a project together, we would then work very closely with the community to make sure that the next project it brought forward would meet the criteria.

We are not asking for detailed planning of these projects on the first intake. We are looking for ideas, not an actual cost-benefit analysis, or that sort of thing, at this point in time.

Mr. Cable: If, as is likely, the draw on the first batch of funds is greater than $5 million, the Minister and his colleague will have a job prioritizing among projects within communities and projects among communities. I asked the Minister some questions about that during Question Period.

Are there terms of reference for prioritizing projects between communities? Let us say Watson Lake comes in with two or three for $5.6 million, and Whitehorse or Haines Junction comes in with a project $5 million. How is the Minister going to decide? Will he flip a coin? What will he do?

Hon. Mr. Fisher: I hope it does not come down to flipping a coin. We will be looking at the merit. This is a hypothetical question the Member threw at me.

If we have several projects - one in Watson Lake, one in Whitehorse, and one in Haines Junction - and they exceed the amount we can spend, we will have to work with all three of those communities to see if we can lower their expectations. We have to look at the merit of the projects - the short-term and long-term benefits and the relevancy to some anniversary.

If all the projects were equal, we would then have to work with each community to try to get them to downgrade their project to some extent so we could fit the project to the budget.

Mr. Cable: Is the Minister saying that there are no terms of reference for prioritization - that is, either within communities or between communities?

Hon. Mr. Fisher: The program does have criteria. It describes the project description, the broad community support, the anniversary focus, the market demand, the financial forecast, the applicant equity - how much the community is going to put in - the benefits, the operation and maintenance costs, the applicable plans - does it fit the official community plan. Those types of things will all be checked. Internally, we have some criteria that we use to measure each of these.

Mr. Cable: What I am asking is whether or not there are some global terms of reference. I assume that this program was started to provide tourist attractions. There are certain tourist flow-ways, if I can call them that - or, entry points is another description - where the dollar spent would be more efficient than it would be in some other places. Will that be one of the terms of reference for deciding among communities?

Hon. Mr. Fisher: Yes it is. That would fit under market demand.

Mrs. Firth: I want to ask quite a few questions about this program, and express some concerns that I have about the program, other than my not being an enthusiastic supporter of the grant program itself.

I understand that, in the past, the practice has been that the government does not make the content of the applications and requests public until after the money is awarded. That has traditionally been the process for people applying for loans or grants from the Department of Economic Development. What happens is that people apply, the department makes a decision, and then later we get a list saying who the successful applicants are.

I would like to ask the Minister if he would consider changing that process in this circumstance for this program. We have already been provided with quite a few of the prospective projects by way of the newspaper, a chamber of commerce bulletin - public meetings were held and projects were discussed. We have a glimpse of what kinds of projects are coming forward. Because it is such a large expenditure of money, I think it would be of interest to us, as Members of the Legislature, and probably to the public, to be provided with a list of what all the projects are. I would be quite interested in knowing what this $27 million worth of projects are.

We are not compromising any particular business or individual here, because they really are not eligible for this money; it is more or less communities or non-profit groups. I think that I make a reasonable argument for that information to be made public, so that we can examine it. Maybe I could ask the Minister to respond to that first issue before I continue with a couple of other issues I want to discuss with him.

Hon. Mr. Fisher: The Member's suggestion may very well have some merit. I do see some problems with it. Some of the applications are quite detailed. We could provide some details for information purposes. I think that we could probably do that, and I would be willing to talk to the department about it.

I would not want to see people trying to judge these projects just on the name and the dollar amount, because all of the other details will be looked at by the technical review committee. They will be going back to the community and asking questions. There is going to be a lot of information that just would not be possible to get out to a large group of people. I will talk to the department about doing more of a summary, outlining the projects and the dollar amount, and we will not worry about whether or not it is eligible. I think that we might be able to do that to give Members an idea of the magnitude and the interest in the program.

Mrs. Firth: I would be interested in having that much information, if that is all that the Minister was prepared to give. I do know that, as Opposition Members, we have been lobbied by some groups who have these ideas and who come to us and make full presentations. I am not asking for the information so that it can be judged on the basis and concerns that the Minister has raised. It is very difficult to look at a project with a dollar figure and say that this one is worthwhile and this one is not without having the details. I guess the advantage that I would have as a Member of the Legislature is that if I know who is applying and I have some idea about the project, then if I need further information I can contact whoever is making the application. I think other Members in the Legislature may be interested in that as well. I do not see any difficulty with other groups wanting to see something that might be a bit similar or to see if they could work in concert with another community. I think it would be a useful tool in assessing what people want to do.

Hon. Mr. Fisher: I want to discuss it with the deputy minister and the people involved in the program, but I agree. Right here, standing on my feet right now, I do not see any reason why we cannot do it. If we cannot, I will commit to the Member that I will very quickly, in the next day or so, let her know. If we can, then we will circulate those in summary form for all Members.

Mrs. Firth: I want to follow up on some of the concerns that were raised by the previous questioner. It was the concern about how decisions are going to be made among communities. The Minister indicated that he thought that might be hypothetical, but I say to the Minister that it is a very real concern to me and I am sure it is probably a concern to the communities, because there is so much disparity between the amount there is to spend and the demand for the money. The demand is five times - almost six times - the amount of money there is to spend.

When I read the centennial anniversaries programs criteria, I do not see anything in it that is specific enough about guidelines to determine why one project in one community would be more beneficial than a project in another community. So I do not know how the department, the team and the committee are going to be able to say whether one project in one community is going to be more beneficial than another project in another community and how they are going to divvy up the money. There is nothing about what the expectation of the government is regarding the economic potential. It is all very vague. They talk about numbers of jobs created and economic potential to the community, but what may be economic to one community may not be to another.

It may cost more in one community to derive the same economic potential than it would in another. I think the Minister can get the gist of what I am saying. To create four or five jobs in Watson Lake, we may have to spend $3 million, but to create the same number of jobs in Dawson City, we may only have to spend $2 million or so. I find it difficult to get around how these decisions are going to be made. The Minister made some comments about how the government will talk to the communities to see if they would be prepared to downsize or re-evaluate their requests.

The one request with which I have some familiarity, as we had a briefing on it, is the planetarium-office administration complex in Watson Lake. I could see the government approaching them and asking them to take certain aspects out of that request, but I think it will be a very cumbersome and burdensome exercise. I think the guidelines presently in place regarding this whole program are inadequate to deal with problems the Minister and his department have yet to face when it comes time to decide which projects should go ahead and which should be turned down.

Of great concern to me is how the department or the committee plans to make these decisions. Who is going to get preferential or priority treatment over whom? I would like to know how the Minister, his officials and his Cabinet colleagues are going to address this. Cabinet will have to give final approval for the funding of these projects, and I am interested in how they will make all these determinations in the context of the existing guidelines.

Hon. Mr. Fisher: I share the Member's concerns to a certain extent, but I believe that the staff of the departments will be able to bring the project into reality - something that is realistic for the community when it looks at the O&M costs and all that sort of thing. The community must be able to handle future O&M costs.

I think that in the back-and-forth discussions with the communities, they will be able to come to something that will fit both our budget and the desires of the community. It could be, as the Member for Riverside suggested, that we may have to flip a coin. I do not think we would do that, but it if it did come down to the point where we have two very good projects competing for a certain number of dollars, and we have done everything we could with the community, then I suppose that it would have to come down to a Cabinet decision.

Mrs. Firth: That raised a couple of questions - that last statement about the Cabinet decision. I will just make a note about that so I do not forget to ask about it.

I would like to discuss the point that was raised by the previous questioner about the point-of-entry communities, which would be Watson Lake, Dawson and Haines Junction - the communities that regularly have the tourists passing through them.

I think it is going to be perceived by some people that perhaps these communities may get more money than, say, a community that is out of the way or considered to be off the beaten path, such as Mayo. I know the community of Mayo. The Silver Trail committee has been struggling desperately to build a tourism industry and to get people to come to visit. They need attractions for tourists. I think the geography of the Yukon and the location of the communities is going to present some challenges for the committee.

I do not know if the Minister has anything further to add to that, but it is a concern of mine. I would feel a bit more comfortable if I knew exactly how the department is going to address those concerns.

Hon. Mr. Fisher: The Member has made a good point, and it has been discussed within the department and with me. The Member for Riverside brought up similar questions.

We want to look at a lot of different things. For instance, what we will be looking for in market demand is the tourism value and the entry points - Watson Lake, Beaver Creek, and so on. Then, the question arises that Watson Lake is an entry point, but those same people have to pass through Teslin, so what does one do about Teslin?

I think that, when we look at the market demand and the benefits for the community - both short- and long-term, as I said before - the impact on the community, the O&M costs of the facility, who is going to pay for it, how they are going to pay for it, I think that, generally, we are going to get projects to the size that can, in fact, be handled and are needed. To get to that point is going to take a lot of work on the part of our department.

Mrs. Firth: The Minister has indicated this afternoon that they hope to have approvals by May. That is not very far away. Are there some projects for which the Minister thinks the analysis will be completed? Could he give us any idea if he thinks it will be a few, or one, or several? I find it hard to believe that, in that short period of time, they are going to actually start approving money for some of these projects.

Hon. Mr. Fisher: I will just outline the process. As I have mentioned before, the initial process was to get some ideas from people, and we received a lot of really good ideas.

Mrs. Firth: Is that approval for money?

Hon. Mr. Fisher: It is not approval for money. Maybe I could just run through this quickly so that everybody can have a bit of an understanding. Is that necessary?

Mrs. Firth: It is not necessary. I understood from the Minister's comment that it was approval for money, so that is why I was surprised that we would have some of these projects approved by May, but the Minister is indicating that it is not so I do not need him to run through the whole process. I am familiar with it.

Could I ask him another question then, and this will be the last question I have. He said that Cabinet would have to make a decision if there were competing interests. Is it only if there are competing interests? Perhaps he could give us some information as to exactly what involvement Cabinet has with respect to the final decision making.

Hon. Mr. Fisher: I do not expect Cabinet to have to make a decision on this. We have the decision-making committee, which, as I said before, is comprised of two Ministers, two DMs and the Anniversaries Commissioner. We were talking about a hypothetical case where we have everything worked out exactly the same and if the decision-making committee were unable to actually make a decision then they would have the opportunity to take it to Cabinet for further input.

Could the Minister tell us how many solid project proposals they have received for this $5 million of funding?

Hon. Mr. Fisher: I cannot recall right now, and I have no notes on the exact number of ideas that came in.

Ms. Moorcroft: We are familiar with various projects, from speaking with people in the communities who have been looking for support for their particular projects. I am curious about how much in excess of $5 million has been applied for, when one puts together the projects that have been submitted from various communities.

Hon. Mr. Fisher: That will all be in the summary we do. I am pretty sure we can produce one for the Members. The total amount - including ineligible portions that some municipalities were including and other parts of the project the communities would be totally responsible for - was $27 million.

Centennial Anniversaries in the amount of $5,000,000 agreed to

On Centennial Events

Hon. Mr. Fisher: This is the events portion of the centennial anniversaries program. There were two components: projects and events.

Centennial Events in the amount of $50,000 agreed to

On Allowance for Bad Debts

Hon. Mr. Fisher: We explained this expenditure last night.

Allowance for Bad Debts in the amount of $1.00 agreed to

Economic Programs in the amount of $11,343,000 agreed to

Capital in the amount of $6,429,000 agreed to

Department of Economic Development agreed to

Hon. Mr. Fisher: Mr. Chair, I move that you report progress on Bill No. 4, entitled First Appropriation Act, 1995-96.

Motion agreed to

Bill No. 3 - Third Appropriation Act, 1994-95 - continued

Department of Government Services

Hon. Mr. Nordling: The supplementary O&M request of $429,000 represents an increase of 1.8 percent, while the capital request of $938,000 represents an increase of 15.8 percent.

On the operations and maintenance side, the principal additional requirements relate to personnel needs in various branches, and adjustments to spending estimates in supply services branch for maintenance of pool vehicles.

The property management personnel budget has been impacted by the transfer of grounds-keeping functions from the Department of Education. This increase of $65,000 is offset by a decrease of a similar amount in the budget of the Department of Education. Relating to property management service delivery also, is a supplementary request for $36,000 to fund new responsibilities for supervising school heating plants in communities, using building engineers as required by code.

On the capital side, numerous renovation projects have commenced in various buildings. These projects total an additional $755,000. Facility needs in Whitehorse and the communities were identified in order to maximize benefits from spending to improve the life expectancy of buildings, or improve the internal environment for occupants. In addition to the renovations to improve building environment quality, funds in the amount of $85,000 for the epidemiology study of the main administration building are reflected in this supplementary request. It is expected that this study will provide much-needed information about certain materials that are believed to be present in the building, and possibly related to health concerns raised by employees. Funds for rebates have been identified in the business incentive program administered by this department. The rebates are directly linked to the capital project spending of other departments. The amount identified for rebates is based on historical claiming patterns.

The other significant new request is for $85,000, which has been used to commence systems development needs analysis work in supply services and property management. The information systems plan for Government Services, which was completed in the fall of this year, identified numerous areas requiring systems to identify information needed to support program delivery decisions. Further funds have been identified in the 1995-96 capital budget in order to continue this initiative.

I have listed the highlights of the supplementary request. If the Members wish, we could move to Bill No. 4 and I could open general debate on the O&M and capital now, or, if the Members wish, I am prepared to finish general debate on the supplementary.

Mr. Deputy Chair, I move that you report progress on Bill No. 3.

Motion agreed to

Deputy Chair: We will now move on to Bill No. 4.

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

Department of Government Services

Deputy Chair: Is there any general debate?

Hon. Mr. Nordling: Throughout the offices and work spaces of Government Services employees, one will find posters prominently hung, which outline the mission and vision of the department, and which are the cornerstones of the department's planned activities. These principles are based on the following concepts: results versus process; outcomes versus procedures; final products versus being busy; enabling for customers versus control; and a "can do" attitude. Another concept is to make the processes invisible to our customers.

Within this framework of principles, Government Services will be striving for incremental progress and measurable results. Government Services is one of the few departments to actually show an increase in planned O&M expenditures over the prior year. This reflects some key strategic decisions made regarding internal structure funding to support the operations of all departments and Crown corporations.

As Members are aware, many of the expenditure areas in Government Services directly reflect indicators of aggregate activity in other areas of program delivery within YTG. With Government Services providing a central, common service, supported by technical expertise, program departments are freed up to focus on delivering core programs to the public.

The alternative to management by Government Services, as a core service, would be the duplication of resources throughout all departments for similar activities. This is neither a good use of funds nor of human resources.

In reviewing its services, Government Services is focusing on the following questions: what does delivery of this service mean to our customers, to Yukon taxpayers, to the private sector and to employees?

Private sector vendors and suppliers will be asked to participate in Government Services program reviews. Employee involvement in review and change is strong.

As we all know, change cannot be implemented successfully when it is dictated from on high.

Strategic direction is being provided and employees are being challenged to review their own work processes and services in order to identify the ways to improve services to our customers in an efficient and cost-effective manner. In support of this customer-focused approach to service delivery, the department will continue its significant investment in employee training.

The Department of Government Services is eager to dispel the myth that, as a central agency, it represents unnecessary overhead. This myth will be proven wrong through actions focused on improving efficiency in service delivery and re-evaluation of services to ensure that the priority needs of our clients are being met.

Government Services employees are energized to meet our mandate and vision and will provide services to our client departments in a framework supported by the management and service principles developed by the department.

Like other departments, Government Services is being challenged by our clients to meet an infinite demand for services within a framework of finite resources. There is always a list of "to do" items raised by departments to which we cannot reasonably respond. It is imperative, therefore, that the expenditure decisions supporting initiatives provide the best value for money to our client departments. Similarly, it is important that Government Services be positioned to provide the desired services for client departments in the most cost-effective manner. This objective alone accounts for the planned investments in vehicle replacements and computer assets.

These are not frivolous expenditures - ones that can be deferred year after year. These assets are the tools that directly support the ability of departments to deliver mandated health, education and tourism services to the public.

Government Services is converting three of its operating units into special operating agencies. These units are the Queen's Printer, fleet vehicles and property management. These agencies will remain part of the departmental organization responsible to the Deputy Minister of Government Services. The Minister will continue to be answerable to the Legislature, Cabinet and its committees with a primary focus on ensuring a clear and stable policy framework to guide agency operations.

The agencies will operate within the existing human resources framework for government departments. Agency staff will be government employees and the provisions of the Public Service Act, the collective agreement and other personnel directives and policies will be applied in the normal manner.

What will make these units unique in this government will be their charter documents, which will empower the agencies to carry out specific program activities described in their charters, combined with a business plan that will establish specific service delivery accountability measures.

As a program of the Department of Government Services, the agency is a public agency subject to all legislation, directives and policy that are applicable to a government department, except as specifically authorized by the charter.

Furthermore, as a program of the Department of Government Services, the agency will be a contributor to the overall mission, mandate and vision of the department. The charter will cover the agency mission and mandate, services, markets, reporting relationships and financial and management frameworks. At this point, the agency personnel are completing the charter documents and working on business plans. The budget, as presented, does not yet reflect any arrangements specific to the agency financial and operational needs, as these have not yet been finalized.

Once the cycle of operating as a special operating agency has commenced, the business plans for each agency will be brought before this Legislature. The business plan will be the document against which the annual performance of the agency will be judged. Rather than identifying individual items of expenditures, such as telephones, contracting services and personnel, the business plans will focus on deliverable services, financial budgets, anticipated work volumes and performance targets, such as measurable costs per unit of service.

The financial framework for the special operating agencies will be designed to accompish three objectives: first, to enable the agency to operate on a business-like basis, making resource allocation decisions on the basis of a rational financial model; second, to enable the agency's customers to operate on a business-like basis, making resource allocation decisions that take into account the full cost impact of those decisions; third, to enhance the accountability of the agency for achieving meaningful results, and to provide the means for the agency's activities to be debated in those terms in the Legislature.

A key feature of the accounting structure will see the agency operating on a fee-for-service basis, obtaining some of its operating funds from fees paid by its customers. Customer departments will be responsible for obtaining the funding they require for services and will thereby be accountable for the volume of services required. The agency will be accountable for the unit costs and the delivery of those services.

For the first year of operation, 1995-96, services to many customers will still be funded out of the vote for the relevant programs as presented in this budget. In subsequent years, services will be provided on the basis of written service agreements, the terms of which will be negotiable within the context of normal business activities of the agency. Fees will be negotiated in advance and will be based on the anticipated costs of delivering the agreed-upon package of services. The customers will know their costs in advance and the service agencies will be accountable for controlling their costs. A full implementation of this funding approach will be reflected in the 1996-97 budget submission.

While only these three units have been designated to convert to special operating agency status, employees throughout the department are being challenged and encouraged to adopt an SOA-like mentality, to think outside the box when looking for solutions to problems raised, and to make a true commitment to improvement of service to our customers.

As part of the plan to refocus our activities to meet our client departments' needs, Government Services is reviewing program activities in conjunction with budget alignments. The purpose of this review is to determine how to increase accountability for budget and expenditure decisions.

Where we find Government Services budgets for a service, but does not add value to the customer receiving the service, we will consider transferring funds for that service to our customer departments. This would mean that Government Services budgets would decrease, while line department budgets would increase.

It is becoming obvious that the responsibility for resource-use decisions must be at the line department level. In this way, accountability for expenditures is directly linked to program delivery and becomes more controllable.

One example where this approach is being considered is in the delivery of Hansard services. Government Services currently budgets for this service on behalf of the Legislative Assembly Office and offers contract management services. The expertise of the Queen's Printer could be accessed by the Speaker and the Legislative Assembly Office, as required, for service evaluation, without the Queen's Printer directly controlling the use and management of the funds for this program.

In the area of information technology, the department is responding to government-wide needs in a number of areas. Integrated systems and data to support business operations are supported through this budget request. The primary emphasis in this budget year will be on human-resource and financial-management information systems, together with land information management/information systems.

By developing modular systems, supported by flexible, current technology platforms, we will ensure that investments in the information systems are best suited to the needs of the government, now and in the future.

The department has also focused on using technology to improve service delivery to the public. Examples of initiatives in this area are the following: the networking of Whitehorse local area networks to allow information sharing and electronic document interchange; the addition of communities to the Yukon network, increasing access to the information highway through Internet, and the upgrading of personal computers.

In the area of information technology, departments are working together to solve business problems. The information resource management committee of deputy ministers has an increased responsibility for providing advice in the creation, management, and sharing of corporate information.

Information services branch, through its recent reorganization, has identified account managers who will have direct responsibility for liaison with departments and the acquisition of services to meet the specific business needs of that department.

A project-team approach for common systems projects has been adopted. The effective and efficient use of resources will be achieved by numerous activities of the information services branch. The integration of voice and data lines, the adoption of the information resource management plan for hardware and software acquisitions and the centralization of network management are several examples of contributions to maximize resource use.

Since the last session, the department has completed a telecommunications strategic plan. The fundamental principle of this strategic plan has been to develop a telecommunications infrastructure that benefits the Yukon, while ensuring overall corporate cost effectiveness. The optimization of basic services will permit the reallocation of existing funds, budgeted across departments for communications, to enhance the telecommunications services in other areas.

To date, savings have been obtained in two areas. First, the telephone sets used by YTG were purchased from Northwestel in order to eliminate the monthly rental fee.

This has resulted in a government-wide gross annual savings of $276,000.

Secondly, a toll reduction plan for long distance calling, called "Advantage Service", has been negotiated, whereby YTG is considered to be a single customer. This became effective November 1994, and provides YTG with an overall discount of approximately 30 percent on all direct distance-dialed and credit card calls. The government-wide gross annual savings, which will accrue from this initiative, are estimated to be $360,000.

These savings will be reinvested into the establishment of a Yukon-wide information highway. The supporting infrastructure for the highway is a private government network - YNET. The benefits of an information highway are many. It will support our commitment to the Canadian electronic highway initiative and it will improve communication and reduce costs for government offices through reduced use of long distance, fax, courier and travel costs, since messages can be sent and meetings can be conducted electronically. The networks can be used to provide education and training services to remote communities that would not otherwise have access to some programs.

The networks can improve public access to information by allowing others to connect electronically to the Yukon government and Whitehorse businesses, organizations and individuals. Haines Junction is currently being piloted as the first site, due to its proximity to Whitehorse and its existing infrastructure. This proof-of-concept project will provide necessary experience in order to plan and implement similar strategies in other communities.

Government Services has made significant progress in the implementation of its information resource management strategy. The Information Resource Management Committee of deputies has recognized that, by themselves, information and information systems cannot provide the complete answers unless they are supported by an overall strategy that combines all office equipment.

For example, photocopiers, fax machines, personal computers and local area networks, in addition to the human resources, are all necessary for today's office environment. For that reason, IRMC has requested that Government Services provide a government-wide office automation strategy. When complete, it will provide the government with the direction needed for the corporate management of all these tools. Supply services and information services will be collaboratively designing and undertaking this project over the next several months.

One major subset of an office management strategy is a document management strategy, which will look at the documents produced by the government, how each document is processed and what is done with each document. The DocuTech digital equipment, which has already received attention in this sitting, is the cornerstone to this initiative.

When the full infrastructure is in place, it will permit the linking of computer desktop workstations directly to the DocuTech, permitting the uninterrupted, less-labour-intensive processing of printing requests. With the amalgamation of mail services and the Queen's Printer function, a service delivery model is being established that will significantly decrease the need for the manual handling of documents during the production stage.

In a different direction, Government Services has commenced the development of a comprehensive risk-management strategy, the goal of which is to keep the costs associated with accidental losses to a minimum, using risk control and risk financing techniques. This will result in a policy that will guide departments in their responsibilities for controlling risks and costs.

Educational material and bulletins will also be developed to inform and instruct government employees about the risk-management process. In addition, forms and procedures that support damage-and-loss reporting will be reviewed and revised.

Processes will be re-engineered to ensure the capture and management of information relating to risk management, both in the workplace in conjunction with occupational health and safety in Public Service Commission, and outside the workplace in the general operations of the government.

It is expected that this process will be finalized in the fall of 1995. An interdepartmental working group has been established and has commenced work in recent months on the policy work, which is the building block required to proceed with more complex work in this area.

The building valuation will produce information necessary to the analysis of options for risk-funding coverage. In addition, a study will be undertaken to determine actuarial future losses and provide estimates for funding that would be required for a self-insured program.

Until the appropriate mix of risk retention and risk transfer strategies are identified, the government will continue to purchase third-party insurance as a means of transferring risk exposure in some areas. The cost of this coverage accounts for much of the O&M funds associated with the vote in the corporate services branch, as it is in excess of $600,000 for 1995-96.

Both the O&M and capital budgets demonstrate the decision of this government to continue to operate a pool fleet vehicle service for use by government departments and Crown corporations. Over recent years, both the operating and maintenance and capital budgets for pool vehicles have been decreased in order to accommodate other government-wide expenditures. This has resulted in a decreased ability to meet the vehicle needs of departments for program delivery, and it has resulted in the need for expensive, recurring, lease arrangements.

The basis of utilization and cost information of a full complement of the fleet was evaluated and ranked. The decision to replace 57 of the 220 vehicle fleet complement is reflected in this budget. The replacement represents 36 vehicles, which became unusable during 1994-95, and another 21 vehicles that will be deemed unusable during 1995-96.

In order to support these management decisions, the department has been working on the conversion of numerous manual information-gathering processes into a database on the vehicle fleet. The profiles of department customers, distribution of fuel, repair and maintenance cost by type of vehicle, age of vehicle and degree of vehicle utilization will be available for the first time in an ongoing, maintainable manner. Fixed and variable costs associated with the fleet management will be reviewed to ensure that optimum benefit is being derived from the approximately $1 million of operation and maintenance expenditures in this area. The reallocation of vehicles to users, based on specific needs for program delivery will be possible, based on concrete utilization statistics and cost information. This is a major improvement in asset management.

On the policy side, Government Services has been leading the review of contract regulations on behalf of the government. While this process has taken significantly longer than originally forecast, the time has been spent undertaking a thorough consultation with both private and public sector stakeholders. Final decisions on the contract regulations will be made this month. While stakeholders found that the fundamentals in the contract regulations were sound, problem areas were highlighted and significant work has been undertaken to address these issues.

Interim documents, which were provided to all Members of the Legislature, identify these issues, the range of opinions with respect to possible changes and the implications of various options. These documents have been the basis on which the requests for changes have been considered. I hope to release the final documents while the House is still sitting. Following the finalization of the policy issues, considerable education and retraining will be required internally to government employees, to ensure that all contracting authorities are fully prepared to implement the direction of the new contracting policy.

Again, Government Services will take a lead role in this area, providing both workshop-format sessions and written materials in the form of a contracting manual for departmental contracting authorities.

In recent years, there have been cutbacks implemented in Government Services that have affected its ability to provide basic building services at a level that ensures public safety, and appearance suitable for a government legislative building.

Where positions were expected to be vacant due to maternity leave or an employee requested leave without pay, the department did not budget for the replacement of the individual, often to the detriment of operations. These shortfalls have been reinstated in this budget to enable the department to respond to client needs in an effective and timely manner.

In the operation and maintenance increase of $921,000, the principal cost increases are as follows: $539,000 has been added for the reinstatement of personnel positions previously left unfunded due to employee absences during 1994-95; $190,000 has been added to accommodate price increases in basic service agreements for insurance, workstation and system software maintenance and recording services, like Hansard; $132,000 has been added to deal with market increases in rental rates associated with the vast leased portfolio of commercial office space; and $100,000 has been reinstated to reflect actual service demands forecast from client departments in the area of vehicle fuel.

New initiatives in this operation and maintenance budget include the following: the services of a systems administrator for the Department of Government Services; the services of a half-time program analyst to assist with the growing need to detail, analyze and evaluate program performance; the development and printing of contracting manuals for use by departmental contracting authorities to support responsibilities under the contract regulations; new training initiatives for regional staff in the area of building engineering to meet legislative requirements; and, technical staff in the information services branch in the area of local area network installations, in order to replace expensive contracted services with internal knowledge and capabilities.

Chair: The Member has now spoken for 30 minutes, which is the time limit in Committee of the Whole. Does any other Member wish to speak?

Hon. Mr. Nordling: Mr. Chair, if there is unanimous consent, I have about three minutes left - or less.

Chair: Is there unanimous consent?

All Hon. Members: Agreed.

Hon. Mr. Nordling: I thank the Members of the Opposition for their indulgence.

On the capital side of the budget, the significant increases are primarily in the area of systems development to support departmental operations and the area of the central mainframe facility and corporate systems development.

The department updated its information systems plan in 1994. The plan had been updated last in 1988. A range of needs for systems development were identified as a result of the assessment of current business operations and existing supporting information systems in use throughout the department.

In general terms, the biggest, or most significant, findings were the proliferation of manual information systems, which are lacking in capacity to provide the fundamental operational data needed to support business decisions. Particular areas of concern are the risk management program in the corporate services branch and most of the information systems in the supply services and property management branches. Either no information systems exist or the current environment is one which patches manual systems together with inadequate electronic systems to produce minimal information. This environment breeds inefficiency, frustration and sometimes misinformed decision-making.

In the information services branch, the roughly $3 million budget supports information technology for the entire government.

The increase of approximately $1 million is attributed to two main areas: the central facility infrastructure and corporate systems development.

The $775,000 budget for the central facility supports mainframe facilities shared by all installed systems and workstations.

Major expenditures for 1995-96 include $399,000 for additional disc capacity for the mainframe due to the increase in the number of corporate systems being developed and implemented, together with the corresponding increase in data residing on the mainframe; $124,000 for software upgrades for the AS400 computer, which principally supports Community and Transportation Services and Supply Services applications; $102,000 for software upgrades for the 9121 mainframe computer; and, $70,000 for LAN technology.

The corporate systems development budget will support investments in geographical information systems, commonly known as GIS, human-resource information systems and financial-management information systems. While the GIS investment will take the government into new areas of computer-supported activities, the human-resource and financial-management information systems investments will target the replacement of outdated, fragmented, non-integrated systems currently in use. The present computer systems in these areas are not efficient and are driven by labour-intensive processes that have significant overlaps and duplications built in.

In order to position the departments to better manage program decision making, improved systems are necessary.

As I mentioned, continued investment in the pool vehicle fleet will continue in 1995-96. This upgrading accounts for the increase in the supply services branch budget.

In property management, expenditure reductions are forecast due to the 1994-95 emphasis on building maintenance and upgrading. Thirty-nine facilities are supported by the capital maintenance and upgrades activity. Major projects planned for 1995-96 include $150,000 for the Watson Lake administration building renovations, $75,000 for underground fuel tank assessments in various locations to ensure the tanks are not leaking, $65,000 for siding, windows, doors and electrical lighting upgrades at Yukon College.

A significant increase in expenses in the area of building development administration is anticipated in order to support records drawing, upkeep for as-built plans, contract dispute resolutions and inspection design reviews. Concerns in these areas have been raised by private sector contractors repeatedly in recent years, and this budget reflects a commitment to the improvement of these aspects of the building development program area. In addition, the department has committed funds for a new estimator position, and an additional project inspector position.

The estimator position is required to provide cost-estimating capabilities during the budgeting and design phases of a building project to control budget scope prior to tendering. The project inspector will work as part of the building development team for each project, and will increase the department's onsite presence during construction, in order to provide greater control of the project and reduce cost overruns.

The department is responding to recommendations of the Auditor General and the Public Accounts Committee in this area. In the common facilities area, the large decrease from the 1994-95 forecast is primarily attributable to renovations undertaken in 1994-95 to convert the old liquor store in Watson Lake to useable office space.

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 Bill No. 4?

Mr. Harding: I do not really have much more to say after those brief opening remarks by the Minister. I think every one of my questions has been answered. I kind of have goose bumps all over listening to all the good talk about mission, vision statements, goals and objectives. I just want to say to the Minister that the establishment of goals and vision and objectives and service principles are wonderful stuff, but can be just a little bit overdone.

I remember, at probably the low point in my life, after the third year of university, back in Nova Scotia, I decided not to go back for the fourth year, and looked around for a job. The only job I could find was that of a door-to-door cookware salesman in Providence, Rhode Island. I went down for the job as a cookware salesman and the company that I worked for would, every Monday afternoon, have a pump-up session with the manager of the company and the owner. They would buy you pizza and talk to you about your mission, goals and objectives, and how you could establish them to better your income and better the income of the owner of the business.

Every Monday we used to get all pumped up about our mission and we would go out and we would sell cookware. Unfortunately, I never turned out to be very good at it. I think I lasted about two weeks down there, but I suppose the moral of the story is that, while it is important, it can be overemphasized.

I have a number of questions for the Minister. I probably do not have as many questions as the Members to my left have - and perhaps they should be more appropriately on my right, but they sit to my left, anyway.

I do have a number of questions, because this department intrigues me. I must say that I am not that well versed in the workings of Government Services. It does seem to me to be a bit of a moving target these days, but I am slowly struggling along with my other portfolios as critic for areas such as education and renewable resources. I am starting to learn more about Government Services and getting some more concerns raised with me from people in the public, and I am also starting to understand the issues. I closely followed the issue of DocuTech, which was the subject of some attention in this sitting, as the Minister's speech described it, and I am sure it will receive further attention in this debate.

The first issue that I would like to raise is a constituency issue about the Chateau Jomini project. I raised that issue in Question Period with the Minister some time ago. He indicated to me that he agreed with the principle put forth by the Mayor and council of Faro, which was to publicly tender the Chateau Jomini complex, so that it could be sold to a private enterprise.

At that time, the Minister stated that he agreed in principle with that principle. He stated that he would be interested in pursuing it and was hoping to have a bid proposal set up so that he could issue tenders by spring.

Could I get an update today from the Minister on where the issue of the Chateau Jomini stands, given that I raised the issue with him over a month ago?

Hon. Mr. Nordling: I expected us to deal with the issue quicker than we did. There were a few issues to deal with. Apparently it was on the books for an amount of money that has to be written off.

To make a long story short, and at the risk of the MLA for Faro scooping the Mayor of Faro, Mr. McLachlan, who is waiting to hear from me - he may hear this announcement - I will be writing to Mayor McLachlan that we have agreed to offer the Chateau Jomini to the Town of Faro for $1.00. Depending upon what happens with that offer, we will see if there is anything else that needs to be done.

Mr. Harding: So it is a "have I got a deal for you" kind of thing. Along with this $1.00 offer, are there any outstanding liabilities of the project that the town would have to assume, along with this $1.00 purchase?

Hon. Mr. Nordling: No, not that I am aware of. Apparently it was on our books and, through a previous agreement, we were somehow carrying it at a value of $639,000, but that will be written off so the Town of Faro will have it free and clear.

Mr. Harding: What kind of principles will be asked of the town in terms of development? Would it be the town's to develop as a municipal economic development project, or will it be free to put it out to tender for a private business to pursue? Are there going to be any fixed guidelines that the Town of Faro will have to follow if it does decide to take the offer of $1.00?

Hon. Mr. Nordling: There would be no strings attached. The Town of Faro would be free either to develop it for its own use or to sell it on the market if it so chooses.

Mr. Harding: If I am hearing the Minister correctly, the arrangement he is prepared to work out is the offering of the Chateau Jomini, free and clear, to the Town of Faro, with no other strings attached, and that the Town of Faro - its elected municipal officials - will be able to develop the building in any manner they see fit. Is that correct?

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

Mr. Harding: I think that it could be a good facility for the community. It is rather an eyesore now. We got started on the development of the project prior to the last election, but we were only able to get half way. The demolition part of the project was completed, but we were not able to even start on the construction. There is still a big chute sticking out on the side from when the sides were gutted, but nothing has been put back in since then.

There is a lot of interest in the development of business in Faro. We need a location for a number of businesses. There are also other going concerns in the community that would like to have a space to occupy.

I hope that the town council, in conjunction with the people of Faro, will be able to arrive at some good conclusions. It is a good initiative by the Minister to do what he is doing. Once the deal is done, if the town council chooses to accept it, I will have some communications from them, because I have received some representations about the future of the building, as well.

There will no doubt be some pretty active bidders in the community for Chateau Jomini. It will be a big project for the municipal council. They are going to have to make sure that it is a level playing field and that there is community involvement in how it is handled. I am sure they are going to do that. I would just say to the Minister that I look forward to seeing it develop.

On another issue, the Minister mentioned in his soliloquy the status of the contract regulations review. In the wonderful prose contained therein, he stated that he felt that the contract regulations review may receive a final decision this month. I wonder if he could elaborate on that. I would like to know more about the status of the contract regulations review. We can go on to other details afterwards.

Hon. Mr. Nordling: The contract regulations review has been completed and there has been Cabinet approval of new contract regulations. The hope is that we will be able to start the implementation as of April 1. At present, we are familiarizing the departments with the new regulations and new Management Board directive, which contains the detailed internal policy.

I have just been advised that we expect new regulations to come into effect on April 15.

I can provide the Member with the final documents early next week. I think the Member had interim documents. The final ones will be available, as well.

Mr. Harding: I thank the Minister. We received some of the interim documents after the briefing on special operating agencies.

I was doing some research for the debate, and I dug out some of the questions we asked during Committee of the Whole debate on Tuesday, May 17, 1994, about the contract regulation review.

As the Opposition critic, I have a few questions, and then I will turn it over to the Member for Riverdale South and the Member for Riverside for any questions they may have on this subject.

At that time, we were looking at a target date of the end of June for taking something to Cabinet. In his opening remarks, the Minister alluded to problems raised by contractors. Could he be more specific about those problems? I will then ask him if he thinks we have adequately addressed them.

Hon. Mr. Nordling: We had hoped to have this done during the summer. Most of the contractors and others involved were busy and they asked for more time. We met again in the fall and, again, we hoped to have final decisions made before Christmas. We were again asked for a little more time for input. As a result, the final documents were not finalized until January.

It was a series of delays to make sure everyone had their say and no one felt we had rushed them, pushed anything through or put anything over on them. I hope the delay will result in better acceptance and a smoother implementation.

Mr. Harding: When were the initial regulations developed first sent to Cabinet?

Hon. Mr. Nordling: I believe Cabinet first looked at the documents in January 1994. They were approved in February, I believe. The whole process started before I became the Minister, so it has been quite a long, involved process. We find ourselves almost back where we were in 1992, recognizing value-driven contracts and price-driven contracts as two different categories. We are coming almost full circle with these.

Mr. Harding: Without getting into the details of Cabinet discussions, the documents originally went to Cabinet in January. The Minister said that the reason for the delay was the fact that some of the people in the industry had concerns, but they went to Cabinet some time ago. Did Cabinet also have some concerns, or was this just a reflection of things the department was hearing raised by the general public?

Hon. Mr. Nordling: The majority of the concerns were from contractors and consulting engineers with respect to value-driven contracts and the different thresholds for sole-sourcing invitational bids. Another issue that Cabinet waited on was a discussion of whether or not legal services should be within the contract regulations or if they should have the exemption that they had traditionally enjoyed.

Mr. Harding: I would be anxious to see them, but in the way of a preliminary explanation from the Minister, we have the interim documents. There probably will not be that much change. I would like to know how these contract regulations are going to strengthen accountability?

Hon. Mr. Nordling: What we have is a set of principles and the Management Board directive containing the detailed policy. The contracting authorities will be given more responsibility. Everything will not be completely written out for them. They will have to justify, during the evaluation process, the tender that is accepted and explain why.

Mr. Harding: One of the concerns that I have heard is that there is not enough information is available to contractors for bidding. Does the Minister intend to see that somewhat rectified in these new regulations?

Hon. Mr. Nordling: We hope that that will be rectified by putting the evaluation criteria in the specifications that go out with the tender, so that the bidders will know exactly how they will be evaluated.

Mr. Harding: Will the evaluation factors be clearly broken down in all of the information that is going to go out? The Minister is nodding his head yes.

The Minister has said that they have gone full circle on value-driven and price-driven contracts. Can the Minister tell me how that sort of circle metamorphosis took place and the reasons for it?

Hon. Mr. Nordling: I think that the previous government had evolved to a certain point when the new government took over. There was a lot more emphasis put on price with respect to tendering, and there was an attempt to specify, in detail, how bids would be dealt with and accepted. In the last two years, the contracts were divided differently. They were broken up into purchasing contract, consulting contract and services contract categories, rather than simply price-driven contracts and value-driven contracts.

We ended up in the difficult situation of trying to choose a value-driven type contract on price only.

Mr. Harding: I may come back to that.

What is going to be in the new regulations to ensure that we have fair sourcing levels? What are we going to see in these new regulations?

Hon. Mr. Nordling: I can tell the Member what the sourcing thresholds are going to be and what was requested. With respect to value-driven contracts, where price is not the main concern - for example, consulting engineering contracts - the sole-sourcing threshold will be $25,000. That is up from the $10,000, but down from what some of the consulting engineers who bid on value-driven contracts wished. With price-driven contracts, the sole-sourcing maximum remains at $10,000.

Mr. Harding: That is consistent with the directive I received on the contract regulations review.

I would like to talk a bit more about the rationale for the increase from $10,000 to $25,000. Could the Minister give me his reason for sponsoring this increase in sole sourcing? This is an issue that is of serious contention in the public, I believe. I do not think people appreciate or like sole sourcing to a degree where people feel there is a lack of fairness in the process, so his rationale is important here and I would like to hear it.

Hon. Mr. Nordling: I was skeptical as well, but they convinced me, based on two arguments - the main argument being the value of the contracts that they are asked to do. Very seldom are required consulting engineering jobs and services for small amounts; usually the work we ask consulting engineers to do ends up being well over $25,000 to $50,000, and they felt that they were willing to leave it in Government Services' hands to sole source small jobs on an essentially fair basis, or on the basis of getting the most qualified person to do the job.

Another one of the arguments they used, which had been brought up before, was the cost of preparing a bid on the jobs. Even for small jobs, it is very time consuming and costly for them to prepare the bids. They were willing to rely on us and our discretion to go to whomever we thought could do the job best.

Mr. Harding: If these contracts are usually over $25,000 anyway, I would ascertain from that that there are not many that fall within the $10,000 range. I do not really understand what the Minister is trying to achieve. He is saying that most of them are going to have to go through bid preparation anyway, because most of them are over the $25,000 level. Does the Minister not weigh out the public comfort and the public perception of sole sourcing in terms of this increase?

Hon. Mr. Nordling: Yes, I hope that it can be explained to the public. Consulting engineers can defend themselves in that regard. I would not want to put them through the expense and difficulties of preparing tenders for contracts that are very small - under $25,000. They asked us for a $100,000 threshold for publicly tendered contracts. Cabinet was concerned about public perception, so that amount was reduced to $50,000. So, contracts under $25,000 can be sole sourced, $25,000 to $50,000 can be done by invitational tender, and over $50,000 must be done by public tender.

Mr. Harding: I distinctly remember the Government Leader saying that he did not agree with the increase to sole sourcing. That was a very bold statement by the Government Leader, and I would have thought that the statement would have carried significant weight. Is the Minister now saying that the Government Leader's opinion on that has changed?

Hon. Mr. Nordling: Yes, with respect to value-driven contracts. Again, with respect to the price-driven contracts, it remained at $10,000.

Mr. Harding: My recollection of events is that there was a discussion about a contract to a Mr. Boylan, which was, in my view, a value-driven contract when that statement was made. So, has the Government Leader changed his position on value-driven contracts? I think it was clear that he was against a sole-sourcing increase to $25,000.

Hon. Mr. Nordling: I hear the Member for Riverdale South saying something like, "This was for consulting contracts." At that time, we had not divided contracts into price-driven and value-driven contracts. At that time, I believe the Government Leader's position was that it should have been left at $10,000. Since those discussions, we recognized, as the previous government did, that there was merit in separating value-driven from price-driven contracts. All I can tell the Member for Faro is that Cabinet made a decision to go with the higher threshold for value-driven contracts.

Mr. Harding: It is obvious that this Minister carries significant weight in the Cabinet, when such a bold statement is made by the Government Leader. I am sure that will be pursued further by other Members, so I will just leave it for now. If I heard the Minister correctly, he said that the recommendation from the industry was for a cap of $100,000. Maybe he can clarify that, and then I will ask the question.

Hon. Mr. Nordling: Perhaps I was not clear. The professional engineers wanted a $100,000 threshold before the job had to go to public tender. I am not sure, but I believe their position on sole sourcing was to ask for a $50,000 level. On invitational it was $100,000, and everything over $100,000 go to public tender. Cabinet approved $25,000 and $50,000, rather than $50,000 and $100,000.

Mr. Harding: The Minister stated that, along with this recommendation, they put their faith in Government Services to deliver the contracts, and he used the word "small" or "fair" basis. That, to me, certainly sparks a level of intrigue. I could see potential problems for this increase in the sole sourcing if there is no small or fair process working in the system, and I am sure we, in the Opposition, will receive complaints if it is not.

What is this small or fair process for the sole sourcing of these contracts?

Hon. Mr. Nordling: To use what I understood to be the position of consulting engineers as an example, for the smaller jobs the government should simply go to the engineering firm with the most experience in that type of job and sole source it to that firm. The community is not large, consulting engineers and their expertise is quite well known to Government Services, and they were willing to have contracts allocated on that basis.

The Member is right when he says if there are problems with this it will certainly come to our attention and to the attention of the Opposition Members rather quickly. They are not a shy and retiring bunch.

Mr. Harding: If I am hearing the Minister correctly, it is possible, under this system, that the, quote, "most experienced firm" could obtain all of the sole-source contracts.

Some Hon. Member: (Inaudible)

Mr. Harding: The Minister is saying that he has a clarification for that, so perhaps he could clarify.

Hon. Mr. Nordling: The different consulting engineering firms have different areas of expertise. Each firm has its own specialty.

Mr. Harding: There is potential for overlap in those areas of expertise. How would the department deal with that situation?

According to the Government Leader, we are on the verge of an economic boom. Consultants are going to be flocking to the territory and this is going to create problems for this Minister. Can the Minister tell me how he is going to deal with this?

Hon. Mr. Nordling: For the areas that overlap, I would expect that the department would award contracts on some sort of rotational basis, so that it was fair to all of the engineers who provide a good service to the government.

Mr. Harding: That rotational basis is interesting. Could the Minister tell me a little bit more about that? Does he foresee a revolving file, with one sole sourced to this person in that area of expertise, the next to the next one, and so on and so forth?

Hon. Mr. Nordling: Yes, I foresee something like that. As the Member for Faro said, we are about to see a huge boom. I think the availability would also be a determining factor.

Mr. Harding: There might be a huge boom, but I think it will be the sound of angry consultants if this does not go right.

I will leave that issue for a while. I think I am going to enjoy other Members' debate, and then, perhaps, I could follow up on it.

I would like to ask the Minister about the bid challenge committee and what kind of changes we are going to see in the regulations regarding that particular committee?

Hon. Mr. Nordling: The only significant change in the bid-challenge process is that there can be compensation for bid preparation costs that were incurred and the costs of the challenge, which were not available before.

Mr. Harding: What about the committee having some autonomy to suggest changes to the government and government policy? What is the Minister's reaction to that?

Hon. Mr. Nordling: It can do that now. It will continue to have the ability to recommend changes.

Mr. Harding: I would like to ask the Minister about special operating agencies. I would like to ask if these particular special operating agencies, or that concept or philosophy or state of mind - those are some of the terms used to describe them - fit together with the contract regulations changes, and if they will have any impact or effect on these regulations?

Hon. Mr. Nordling: I do not foresee that they will. Most of the work that the SOAs are doing is to provide the service and expertise for client departments. That will not be affected by the contract regulations.

Mr. Harding: My next question to the Minister on his views on this particular subject is if in terms of the process and the consultation, a consensus been reached? Is anyone out there saying the process is wrong, that it is still a problem, or are certain groups happier than others? I do not expect Utopia in any process like this, but I just want to get a sense of the Minister's own estimation of how he feels about the consultation. What issues are still out there that have not been addressed but which people feel need addressing?

Hon. Mr. Nordling: We have done well. We have reached a general consensus, and virtually every group is happy with the regulations as they will be. The only group that has an outstanding issue are the lawyers.

Mr. Harding: Is that not always the way?

One of the issues that I have heard bandied about is with regard to situations in which people bid on contracts and feel that they have lost out and do not receive adequate compensation. Where is the issue of compensation at with regard to these regulations? I would also like to ask the Minister what representations he received from the industry and contractors regarding that issue?

Hon. Mr. Nordling: The only level of compensation is for the bid proposal, preparation costs and costs of the challenge. I think that virtually all of the stakeholders agreed with that. It was based on the federal motion that they had looked at and felt worked fairly well.

I suppose if they are convinced that the government has done something completely wrong or against the regulations, they have the option of a court challenge to recover the loss of profit that they would have had if they had been awarded the tender.

Mr. Harding: The issue of a civil action is certainly an option. I have heard from some contractors that that is a very difficult, time-consuming and expensive process, and that they would like to see something more definitive in a new contract regulations review. Certainly, it is a difficult issue. The issue of civil action is the reason we have a court system designed to deal with disputes, such as this, surrounding contracts. However, I guess some people feel that the government has a higher level of responsibility and fairness and should have its own process, in addition to the process people usually take for contract litigation, which is the civil courts.

The Minister did not mention whether or not there had been any representations made to him about this. Is the Minister saying that there were no representations from the contractor industry regarding this issue? Or, is he saying that people were satisfied with the status quo and the federal system as it stands?

Hon. Mr. Nordling: Yes, they were satisfied - not with the status quo, but with the federal model that provided for compensation for the preparation of an unsuccessful bid and the challenge costs. They also spoke of an alternate dispute resolution process, which will be specified in all tenders. It was developed with the private sector, whereby there would be a discussion on a non-confrontational basis to try to resolve any dispute between an unsuccessful bidder and the government side.

Mr. Harding: It is my understanding that that essentially happens now. Is this some form of formalized, non-binding mediation, or is there some formalization to this?

Hon. Mr. Nordling: The Member is accurate in describing it. There is no formal award for damages. It is a recommendation and not much different from what was done in the past. It is not binding; it would be a recommendation that Government Services would look at to settle the dispute.

Mr. Chair, in view of the time, I move that you report progress on Bill No. 4.

Motion agreed to

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

Chair: It has been moved by Mr. McDonald that the Speaker do now resume the Chair.

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

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

Mr. Abel: The Committee of the Whole passed the following motion:

THAT at 7:30 p.m. until 8:30 p.m. on Monday, March 20, 1995, Mr. Jon Breen, Chair of the Yukon Human Rights Commission, Ms. Brenda Chambers, Commissioner, and Margaret McCullough, Director, appear as witnesses before Committee of the Whole during debate on Bill No. 4, entitled First Appropriation Act, 1995-96.

Further, Committee has considered Bill No. 4, First Appropriation Act, 1995-96, and Bill No. 3, Third Appropriation Act, 1994-95, and directed me to report progress on them.

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.

Mr. Harding: I move that the House do now adjourn.

Speaker: It has been moved by the Hon. Member for Faro that the House do now adjourn.

Motion agreed to

Speaker: This House now stands adjourned until 1:30 p.m. Monday next.

The House adjourned at 5:27 p.m.

The following Sessional Papers were tabled March 16, 1995:


Social assistance fraud: report on the incidence of fraud in social assistance and recommendations as to future actions (dated February 15, 1995) (Phelps)


Yukon Arts Centre Corporation annual report, 1993-94 (Phillips)