Whitehorse, Yukon

Thursday, March 21, 1996 - 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.



International Day for Elimination of Racial Discrimination

Hon. Mr. Phillips: As Members know, March 21 is the International Day for the Elimination of Racial Discrimination and this day marks the anniversary of the Sharpville massacre when, on March 21, 1960, peaceful demonstrators against apartheid were wounded and killed in South Africa. The day was proclaimed by the United Nations in 1966 to commemorate the Sharpville tragedy.

In September 1988, Ministers attending the federal-provincial-territorial conference on human rights agreed to commemorate March 21 in all Canadian jurisdictions.

We should take this time today, and always, to think about the problem of racism and the contribution we can make in our own small way toward lessening its prevalence. The Yukon is fortunate in some ways. We clearly are not immune to the problem of racism but there is a consensus among community leaders as to the direction we should take. The existence of the Human Rights Commission is one indication of this.

Today I had an opportunity to attend a circle in the foyer of this building, and it was very good to see many young people taking part in that particular ceremony and the increased number of people who spoke out. We, as politicians, have the opportunity to put forward public laws that will prevent racial discrimination, but the responsibility really lies with each and every Yukoner and each and every person in the world to do whatever they can to prevent racial discrimination.

I would like, therefore, to offer this tribute to this important ceremony and ask that Yukoners pause to reflect on the history behind this day and the better future to which it points.

Mr. Sloan: I am pleased to rise today on this very significant day dedicated to the struggle to create a more equitable society. This day is the International Day for the Elimination of Racial Discrimination, which occurs annually, as the Minister said, on the anniversary of the Sharpville massacre, March 21, 1960.

It is significant, at this time, while we are speaking of the whole question of human rights, to be reminded of the comments of Maxwell Yalden, the outgoing Canadian commissioner of human rights, who noted in his most recent report that significant barriers still stand in the way of our aboriginal Canadians in economic and social advancement. I think we should all be cognizant of that.

Today, I was unable to join the circle as I was attending the solstice ceremony for inmates at the Correctional Centre. I was very pleased with the sense of positive energy that people like Phil and Harold Gatensby brought to the circle up there, and the kind of work they are doing to assist in the elimination of racial discrimination.

I invite all Yukoners to participate today and join together to try and create the kind of society in which, in the words of Martin Luther King, people are judged more on their character than their colour.

Mr. Cable: At noon hour today, I was pleased also to participate in the circle of friendship and unity organized by the Human Rights Commission. As I was standing there listening to various speakers, I thought to myself that the dark side of human nature is always just below the surface. When we have poor leadership, we get Sharpvilles, concentration camps and gas chambers. When we have good leadership, we get things such as the Human Rights Act and land claim bills. It was particularly pleasing to me to see many of the community leaders out there today: teachers, union leaders and church people.

Eliminating racism is not a hopeless cause. South Africa has made great strides in reducing racism since the 1960 Sharpville massacre, and so we can here in the Yukon.

Yukoners appreciate the need for creating and maintaining a harmonious environment in all of our communities. Racial conflicts cause longstanding rifts among our people who must go on living near and for each other. There is a need for healing in many Yukon communities, but it is possible, through mutual acceptance, trust and sincere communication. May we all work diligently to spring free from racism.


Mr. Sloan: I think it is significant today, the Day for the Elimination of Racial Discrimination, that I bring to the attention of the House the people in the gallery, who represent the Yukon Human Rights Action Network. These individuals represent the government workers who have taken on, as a task, the promotion of human rights in the workplace and in society.

Mr. Harding: I rise today to introduce a guest to the Yukon. Mr. Tom Potter is here from Ontario, visiting his daughter, who works with us in our offices. May other Members join me in wishing him a pleasant stay and a welcome to the Yukon.


Speaker: Are there any returns or documents for tabling?


Hon. Mr. Phillips: I have a document for tabling.

Hon. Mr. Nordling: I have for tabling a list of contracts through December 1995, which I received from the Yukon Development Corporation.

Speaker: Are there any reports of committees?

Are there any petitions?

Are there any bills to be introduced?

Are there any notices of motion?

Are there any ministerial statements?


Post-employment restrictions directive

Hon. Mr. Phillips: I rise today to inform the House about measures we have taken with respect to government contracts and benefits provided to former employees. I have tabled in the House a copy of the relevant document, entitled Directive on Post-employment Restrictions.

During the last sitting Opposition Members called for restrictions on former employees of this government. We recognize that this may be cause for public concern in certain circumstances and we responded in a manner that we believe is fair, reasonable and effective.

A new Management Board directive will prevent government from contracting with, or providing certain benefits to, former employees where such former employees were involved in decisions related to a contract or benefit while with the government, or possess inside information used to obtain the same.

Before speaking about the details of the directive, I wish to emphasize this government's belief in the integrity of its employees and former employees. We are not dealing with a large number of situations or a recurring problem. Incidents of conflict have been very rare and this government is taking steps to simply ensure a level of confidence among the public that a level playing field exists for anyone doing business or contemplating doing business with the government.

This directive applies to former members of the public service as well as former Cabinet staff for a six-month period immediately following an individual's resignation from the public service. This directive also applies to companies controlled by former employees, or to companies where a former employee is a partner or director. To ensure consistency and fairness of application, departments and former employees can obtain advice about the application of the directive from the Public Service Commission.

This government believes that these restrictions will be effective in ensuring that former employees do not have an unfair advantage over other qualified bidders in gaining contracts and benefits from this government.

This government believes that this approach is fair to employees, because it is based solely on the avoidance of conflicts of interest. There is no intention to restrict employees simply because they have worked with the government. This directive is designed to address the real issue, which is to avoid conflicts between a former employee's public duties and responsibilities, and their private interests.

In adopting this directive, the government has chosen a policy of prevention - by placing the onus on government not to award contracts or benefits where a former employee would have an unfair advantage. In our view, this is preferable to legislation that would provide no great assurance of compliance and where enforcement would be through the courts, a much more cumbersome and expensive process. A provision does exist to void a contract and withhold payment if it is revealed that a contravention of the directive has occurred.

The directive also recognizes that there may be instances where it is in the public interest to contract with a former employee who has particular information not available elsewhere or in the time required by government. In such cases, Management Board can waive the requirements of the directive.

We have consulted with both the Yukon Government Employees Union and the Yukon Teachers Association, as well as managerial employees, on the directive in draft form. They have provided useful input, which was fully considered in finalizing the directive. We will now be notifying all employees of the directive to ensure there is a good understanding of its provisions. The directive will come into effect following this notification on April 1 of this year.

We have responded to the Opposition requests and acted on the commitment we made to the House during the last sitting. We have done so in a manner that addresses the public concern without imposing any punitive or unreasonable limits on the rights of individuals. We have acted in a responsible and measured way, as have all those with whom we worked to develop the policy.

I look forward to the support of other Members of the House.

Ms. Commodore: As the Minister mentioned, this directive arose from concerns put forward by the Opposition in the House last year. I have to let the House know that we were a bit surprised at the manner in which it was done. We expected it might be in the form of further amendments to the Public Government Act. We have a lot of concerns with respect to this.

We wonder how difficult it will be to prove that former employees have an unfair advantage with regard to contracts and how much information that individual has been exposed to. How does the government determine if there is a conflict?

In one paragraph, the Minister talked about how this directive also recognizes that there may be instances where it is in the public interest to contract with a former employee who has particular information not available elsewhere in the time required by government. In such cases, the government may waive this directive.

We wonder how often a situation where that might have to be done will arise. There is an issue right now about board members. Will they be included in this? What about a former employee, who is an employee of a contract, and who might have been successful with a government contract?

I notice the Minister indicated he has consulted with the Yukon Government Employees Union and the Yukon Teachers Association. At what level was that consultation? Did they talk about exactly what would be in this directive, or will they be surprised when they see it? Did they voice any concerns, or did they say, "Yes, this is a good idea, and we would like to be part of it"? That is really important.

The other question we have is this: how binding is this directive? If the Minister can change it at will - as it is indicated in this document - that may be possible at some time. If the information that they need right now is not available somewhere else, they will bring in a former employee within that time period. I think that if the government is looking at something that is binding and is going to work, surely it could have been in the Public Government Act with regulations to guide these kinds of things that will take place. I do not see how successful it is going to be, because it is not a binding piece of legislation. It is a directive that can be changed tomorrow.

Mr. Cable: As the the Minister will recollect, we put in a preclusion in the Conflict of Interest (Members and Ministers) Act, not only in relation to contracts with the government, but for the use of information obtained on the job to advance a Member's or Minister's private interest. I am wondering if the Minister had considered including in this directive - we have not seen it yet - this preclusion of post-employment opportunities with third parties who may add to the detriment of the government or may enhance the employee's own private interest at the expense of the government. Perhaps in his reply, he could indicate if that was considered, and if not, why not?

As was expressed by the previous speaker, I would like to hear if it was anticipated that there will at some time be a legislative backdrop under the Public Service Commission Act precluding this statutorily.

Hon. Mr. Phillips: I would be happy to bring more information back to the House when we get into debate and to respond to many of the questions that the Member has raised today. I will comment on a couple of the questions and maybe give the Member an example of where I see the Management Board choosing to waive this directive. For example, if the federal government came down with a budget, and we needed the budget analyzed in Ottawa - we had an employee who worked in our office who was very good at that - we may want to waive the Management Board directive to have that employee give us some advice on the budget.

That might be one instance where it is used. One instance where the directive will come into play is when an individual employed in the Department of Community and Transportation Services, for example, is designing the Dawson bridge, and then ultimately became the director in a company that bid on building the Dawson bridge. That might be considered a conflict of interest.

I can deal with the questions that the Members raised about preclusion when we get to general debate in the Public Service Commission, and I will elaborate more on those concerns then.

Speaker's ruling

Speaker: Before proceeding to Question Period, the Chair said yesterday that the Chair would make a further ruling on the point of order that was raised during yesterday's Question Period. In fact, under our rules, there is no provision for a further ruling when a decision has been made on a point of order.

Standing Order 6(1) states that "No debate shall be permitted on any such decision, and no decision shall be subject to an appeal to the Assembly."

This means that Members may not immediately appeal a decision of the Chair. However, if a Member should disagree with a decision of the Chair, that Member may give notice of a substantive motion to deal with the matter.

We will now proceed to Oral Question Period.


Question re: Whitehorse and Watson Lake airports, funding

Ms. Moorcroft: Regardless of how tempting it is to pursue the Dawson bridge with the Minister of Community and Transportation Services, after the comment we just heard from the Minister responsible for the Public Service Commission, I have a question for the Minister of Community and Transportation Services about the Whitehorse and Watson Lake airports.

I have learned today that Transport Canada has been funding public transportation with over $5 million per year at the Whitehorse and Watson Lake airports, with annual revenues of only $555,000. The Minister stated yesterday, "The Yukon government does not intend to have a $4.7 million debt each year. That will be corrected." How will the Minister make sure there is no debt?

Hon. Mr. Brewster: In the first place, the complete debt for both airports was $4,944,000 and, in fairness, it included a lot of fixing up of the runways at the Whitehorse Airport, which cost about $2 million. The debt is actually running around $2 million - so, I have already cut $2 million off the debt there.

Ms. Moorcroft: I was merely using the information that the Minister brought to the House yesterday. I would like to ask the Minister how he intends to make sure that there is no debt.

Hon. Mr. Brewster: I am not a genius. It was signed over to us yesterday and we have until October 1 to look at it and try to make some improvements. We have already assured the public that there will be no less service. The service there is very good and we intend to carry it on. A committee will be formed by the aviation branch of our department; the public will be brought in and asked to help us make a better airport and bring the costs down.

Ms. Moorcroft: This government says that it believes in cost recovery and does not believe in subsidizing public services with public money. How does the government intend to achieve cost recovery?

Hon. Mr. Brewster: I am one little individual. I am asking the Yukon communities for help, and we are going to form a couple of committees to see how we can give better service and keep the costs down.

Question re: Whitehorse and Watson Lake airports, funding

Ms. Moorcroft: In order to make expenditures match revenues, either the user fees will have to go up substantially or the services will have to come down substantially. Will the government be raising airport fees for air traffic for small airlines and for passengers?

Hon. Mr. Brewster: We actually signed the agreement yesterday at 11 o'clock. We do not take over until October 1. Now the Opposition is saying that I am going to raise fees. I am not saying anything of the kind. I am leaving this to committee meetings, which will include the public, and in Whitehorse, will include the city.

Ms. Moorcroft: In announcing this transfer yesterday, I stood up and asked the Minister how the government is going to operate the services. He said, "I can guarantee you that we will not be having a debt." I would like to know if the Minister can guarantee that there will be no cuts in the public service at the airports that would compromise public safety.

Hon. Mr. Brewster: I believe I said yesterday that the 24 employees who are indeterminate will be offered jobs. If they choose not to take them, that is their decision, but I am hoping sincerely that they will. There are three casuals who possibly will not even be there by the time we take over in October; so everybody can come over except the three casual employees.

Ms. Moorcroft: The information I have is that 27 airport employees are funded in the transfer, and job offers will be made to the 24 indeterminate employees currently occupying airport positions. If all 27 positions are funded in the transfer, will they be filling the other three positions, or is this one area where they plan to save money?

Hon. Mr. Brewster: They are casuals, and I am not sure when their terms are up. That will be decided later. We have not had it 24 hours. I do not know what they think we are doing here. I am not a genius; I cannot run a computer and I will not have any idea in just 24 hours.

Question re: Animal protection legislation

Mr. Cable: My question is on a different topic, following up from some questions I put to the Minister of Justice yesterday on animal protection legislation.

Yesterday, I referred to the interdepartmental committee, coordinated by the Department of Justice, which was set up to review the legislative framework around animal protection. Last August, the Minister informed the Humane Society that he intended to issue a release on the committee's findings in the fall - that would be last fall.

In January of this year, the Minister wrote to me saying that he anticipated that the committee's findings would be made available to interested parties, and I quote, "in the very near future". Yesterday, the Minister left the impression that he did not know when the report of the committee would be available. As two target dates have now been missed, c

ould the Minister be a bit more specific? What, if any, target date has he set up for this committee to complete its work?

Hon. Mr. Phillips: Yesterday, I said I would get back to the Member with the information. Unfortunately, I was out of the office for most of the morning and have not had a chance to find out if the department has gotten back to me with the information. I would have to get back to the Member. I do not have it here, and I would hate to try and guess what it might be.

Mr. Cable: I will look forward to the Minister's response.

On another topic, the Minister, in his correspondence, stated that the findings of his committee will be made available to interested parties. Will the Minister, before the legislation is drafted, put those findings out to those interested parties for public discussion, to see if there is general agreement on the findings?

Hon. Mr. Phillips: I do not have a problem with public consultation on any changes to a bill of this kind. As I said, I have not seen the final document, so I do not know what all the changes are. I would like to see that first before I make that commitment.

Yesterday, I also asked the Minister why the Dog Act amendments were being tabled before the overall animal protection legislation package was agreed upon. He did a lateral arabesque to his colleague, the Minister of Community and Transportation Services. He said that Minister had done the deed in tabling the legislation. I asked that Minister the question.

Community and Transportation Services is one of the departments on the committee, so why are the amendments before the House separately before the committee's work is done?

Hon. Mr. Brewster: I am not sure when the Dog Act was originally put in; however, it must have been in the Dark Ages because, as it now stands, if a dog bites a horse or a cow, it can be destroyed, but if it bites a person, it cannot be destroyed. I did not think that was proper in this modern world. I thought we should protect people, but perhaps I am wrong.

Question re: Whitehorse and Watson Lake airports, funding

Ms. Moorcroft: I would like to rumble on past the dogs and ask another question of the Minister of Community and Transportation Services about airport service.

The Minister stood here yesterday and said he could make sure that there would not be a $4.7 million debt each year when the Yukon government was operating the Whitehorse and Watson Lake airports.

The only way to guarantee one can make up that $2 million or $3 million, which is a shortfall between revenues and expenditures, is to get the money from the Yukon public. Why is the Minister saying the government will recover all the money? How will he do it?

Hon. Mr. Ostashek: The Member opposite is getting into the area of formula financing and base adjustments for the transfer. When my colleague said yesterday we would not go into debt with this, he was absolutely right, because there will be a base adjustment to the formula. My colleague was referring to the fact that we will have a committee of the public, along with people in the aviation business, to come up with ideas and solutions of how we can get a closer balance between expenditures and revenues.

Over the last three years, the Members opposite have been very critical about this party not consulting. Now, all of a sudden, they want us to make decisions on our feet before consulting with the public. There will be no cost to the taxpayer, because there will be a base adjustment for the airport transfer.

Ms. Moorcroft: The Minister indicated the government would not run the airline as a service, but as a money maker that is cost recoverable. There are two choices: cut services or raise fees. What will it do?

Hon. Mr. Brewster: I never indicated that at all.

Ms. Moorcroft: The Minister is refusing to answer the question. They want to see airports as cost recoverable. Is this going to apply to all public services?

Hon. Mr. Ostashek: Both the Minister responsible for airports and I have answered that question quite clearly. I would refer to the Member to Hansard tomorrow to see that the question was answered.

Question re: Human rights case, government employee

Mr. Sloan: I would like to direct my question to the Minister of Justice. I am sure that I can anticipate some positive responses, because I know that he shares our concerns about issues such as equality, dignity and respect.

Almost three weeks ago, the Canadian Human Rights Commission found that the Yukon government had erred in the case dealing with Mr. Randhawa. Since that time, a number of things have come forward and I have checked with the Department of Justice and the Public Service Commission. These departments have indicated to me that the government has not removed its appeal to the human rights tribunal. Can the Minister explain why that the appeal has not been dropped?

Hon. Mr. Phillips: It has not been removed at the present time because the legal aspects of the case are still being reviewed. I can tell the Member that the Public Service Commission has contacted the agents of Mr. Randhawa - by the way, this is a case that started under the regime of the previous government some 10 years ago. There have been some ongoing discussions with Mr. Randhawa's agents with respect to this particular case.

Mr. Sloan: Previously, the Minister of Justice said that he did not know the details of this particular case, and that he was going to wait to see the reasons before he made a decision. Now that the Minister knows the rationale for the commission's 1994 decision, will he withdraw the appeal?

Hon. Mr. Phillips: Yes, as soon as this government determines that there are no grounds for appeal. As I stated, this is being reviewed and having said that we are entering into discussions with Mr. Randhawa to resolve this issue. In many of these cases, it does take some time to look at the reasons why the ruling was made in a certain way. As soon as that is determined and I have an opportunity to review those reasons, there will be a decision made.

Mr. Sloan: One of the few positive aspects that has come from this unfortunate case is that the Human Rights Commission did bring forward a series of recommendations to prevent a situation such as this from occurring again.

Could the Minister commit to implementing the recommendations of the commission?

Hon. Mr. Phillips: I can tell the Member that since the complaint arose, the previous government began implementing some of the things that are now recommended in this report, and this government has continued with those recommendations. Many of the recommendations are already in place and the recommendations are being followed.

I can tell the Member that, although some positive things came out of the Human Rights Commission recommendations, this government felt quite frustrated with the time that it took for the Human Rights Commission to make a decision on this matter. Not only did the Government of Yukon pay a price for this, but so did Mr. Randhawa, who has been waiting for two years for a decision that could have been made in two days.

Question re: Public Service Commission, policy

Mrs. Firth: I have a question for the Minister responsible for the Public Service Commission about the announcement of his new policy. Former Ministers have very tough laws and penalties in respect to accepting contracts from the government. There are no exclusions, and no way out around the law - and probably very few loopholes.

The concern of Members was employees leaving government, hanging up a consultant's shingle, getting work in areas for which they had had direct responsibility, and creating an unfair advantage to other businesses.

It was a principle that I thought this Minister supported as an Opposition Member. Obviously he does not now. I would like to ask the Minister why is it just Management Board directives and why did he not bring in a law that deals with this?

Hon. Mr. Phillips: I thought I mentioned that in the ministerial statement. A law of course would be a very costly route for all parties involved. These are the type of cases that can be very difficult to prove in a court of law and, in fact, in this case, the responsibility of ensuring whether or not a contract goes to an individual will lie with the government issuing the contract, and not the other way around. So, if it is determined that there is a conflict with an individual who has some inside information about a particular contract, it will be the government's responsibility to not permit the individual to bid on the contract. It is controlled from our side rather than the way it might have been in the past, from the other side.

Mrs. Firth: An interesting defence - "a very costly venture". I have seen this government bring in laws that were a heck of a lot more costly than this law is going to be, and not even bat an eye.

The Minister maintains it is going to cost a lot because of the court cases, yet, out of the other side of his mouth, he says that it happens very rarely. So I do not anticipate that if it happens very rarely there are going to be a lot of court cases. Therefore, it should not cost a lot.

What is the Minister really saying? Why is it not a law and only a Management Board directive?

Hon. Mr. Phillips: With this particular directive, the department cannot do it on its own. It must come to the Management Board in the end. The bottom line is that it is a management tool that we can use as a directive. It is less offensive to the employees who are now working for the government and those who seek employment elsewhere, and yet it does protect the government from possible conflicts of interest, because it is the government that will determine if there is a conflict of interest. It does not involve the courts, a lot of lawyers and a very costly process for any of the parties to go through, whether it be the government or the individual who has an appearance of a conflict.

Mrs. Firth: I find this offensive to the people who are having to deal with unfair competition. It is not my priority that it is offensive to government employees. We are talking about fairness and fair treatment in the community, and that has not been happening.

It should be a law. It should not be waived by the Management Board when it sees fit. There should be penalties attached, and exclusions should be very, very rare.

I want to ask the Minister if he will reconsider this impotent policy that he has brought forward and move with something that has some teeth in it, can be implemented and can protect people from an unfair, unlevel playing field and advantage. Will he consider doing that?

Hon. Mr. Phillips: The Member for Riverdale South does not know what she is talking about. This particular directive will protect the public from an individual who has a direct conflict of interest from obtaining a government contract. We believe that this is probably the most effective way to do it for everyone involved in these particular situations.

Question re: Training, mining and exploration

Ms. Moorcroft: I have a question for the Minister responsible for Economic Development. Training for mine jobs is part of this government's industrial support policy. Last year the government provided $275,000 to develop and deliver entry-level training in certain communities that had good prospects for mining and exploration jobs.

I would like to ask if the government will be making a similar commitment this year.

Hon. Mr. Fisher: I will have to get back to the Member, because I am not sure if the program is going to be funded again in the next fiscal year. I believe that part of it is ongoing, but I am not sure about additional funding.

Ms. Moorcroft: Perhaps I should address this question to the Government Leader then.

First Nations in Carmacks, Pelly Crossing and Mayo have been working for months with a number of mining companies, Yukon College and the Northern Tutchone Council to develop entry-level training for people in the communities. BYG Resources, First Dynasty, United Keno Hill and Western Copper want to hire local people. Yukon College is ready to offer the program. Will there be any money from the government to support the mine entry-level training?

Hon. Mr. Ostashek: I just received a letter not more than four or five days ago from some of the groups requesting funding for that project. It is under consideration at this time. We are thinking about possibly putting together a trust fund with equal contributions from First Nations, mining companies and government, so that we have a pool of money for training for entry-level mining employment.

Ms. Moorcroft: The Government Leader has received a letter from three chiefs outlining the mine training that they would like to see their people taking so that they can have training and local jobs for people in their communities. I am glad to hear that the government is considering the endorsement of an NDP initiative by setting up a training trust fund.

They do not have any hesitation about going down and staying in fancy hotels in Vancouver or Japan to encourage mining.

I would like to know what they are going to do to encourage hiring local people in Mayo, Pelly and Carmacks to get local jobs in the mining industry. The mining industry is ready to hire. Will the Government Leader make a commitment to fund the training that Yukon College is ready to deliver when the mining companies have indicated that they would like to hire local people?

Hon. Mr. Ostashek: The Official Opposition is flip-flopping again. On the one hand, it is condemning us for bringing mining to the Yukon. On the other hand, it is condemning us for not doing more.

None of those mines is in production. They are all in the permitting stage. We have worked with the Ross River people to develop training programs. We will work with these people to develop training programs.

Question re: Workers' Compensation Board, occupational health and safety review

Mr. Harding: This is a good example of the Yukon Party approach to mine training. They wait until the mines are in production and then say that they are going to train.

I would like to ask the Minister responsible for occupational health and safety a question regarding the occupational health and safety review. The review hiccuped into existence after being originally curtailed by the previous Minister responsible for the Workers' Compensation Health and Safety Board. I would like to ask the existing Minister what the status of that review is and if he knows whether or not there has been a completion date set yet.

Hon. Mr. Nordling: I do not know if a completion date has been set yet. I know that most of the public hearings and meetings have taken place, but I do not know when it will be completed or when recommendations will be made.

Mr. Harding: What is done by this working group will eventually come under the purview of the Cabinet. It is my understanding that the working group has requested adding more time to the process because it wants to add workplace health issues, such as bio-hazards and violence in the workplace, ergonomics, indoor air quality and cold stress - to name a few. The working group also wants Cabinet to review its proposals as a package, and not one by one. Has the Minister agreed to this request?

Hon. Mr. Nordling: That request has not been formally made to Cabinet, but I would certainly encourage that it be put forward. I will not restrict the working group in any way with respect to that review. It had a budget for that, and whatever it can do will certainly be helpful and considered by Cabinet.

Mr. Harding: It is my understanding that that request has been communicated to Cabinet and Management Board. I am a little disturbed that the Minister is saying that he has absolutely no knowledge about it - mind you, this process has been going on for about three years now. Can the Minister check on the matter and see whether or not there has been some correspondence with Cabinet, in order that we can find out whether or not these requests will be granted?

Hon. Mr. Nordling: I can tell the Member clearly - and I told him in the answer to the last question - that there has not been any submission or correspondence with Cabinet about this. The occupational health and safety review is being done by the Workers' Compensation Board. When we receive material and information back from it, if anything further is required from Cabinet, we will certainly consider it.

Question re: Workers' Compensation Board, occupational health and safety review

Mr. Harding: I have a question for the same Minister, about the same subject.

Two out-going labour representatives on the Workers' Compensation Health and Safety Board have complained about the lack of neutrality of the chair appointed by the Minister.

I have also heard concerns raised by people in the occupational health and safety working group that the chair is not acting in an impartial manner and is siding all the time on the side of the employer.

I would like to ask the Minister if he is prepared to revoke this appointment and select a chair who has both employer and labour support.

Hon. Mr. Nordling: I do not think the Member for Faro has the interests of the injured workers at heart. I do not think he has the interests of smooth operation of the Workers' Compensation Board at heart. I think he is certainly cherry-picking comments that were made and playing political games with this. It is a shame that, when he could be far more responsible, he is not.

Mr. Harding: I have had the interests of injured workers at heart for many, many years - long before I even became a politician - and I resent that from the Minister. I also want to say that that is the Minister, who is now with the Yukon Party - it is hard to keep track of what party he is going to be with on a daily basis, but he is now with theYukon Party - and he appointed a Yukon Party operator to chair the board without the approval of labour and employer groups.

Two out-going labour representatives on the board have complained about the lack of neutrality of the existing chair appointed by the Yukon Party.

I want to ask the Minister again: in the interests of injured workers, will he appoint a neutral chair?

Hon. Mr. Nordling: The Member for Faro can attack me personally as much as he wants, and as long as he wants. It is not going to improve the lot of the injured workers and that is what the workers' compensation system, the no-fault insurance system, is set up for.

Mr. Harding: I never personally attacked the Minister. I made comments on his flip-flop in terms of party allegiances - one of the many flip-flops.

In terms of the appointment of this Yukon Party operator as a chair, without the approval of labour, the Minister has compromised the interests of injured workers who want to be sure they have an impartial chair of the Workers' Compensation Health and Safety Board.

Will the Minister appoint someone who has the approval of labour and employers to be the chair and not a Yukon Party patronage appointment?

Hon. Mr. Nordling: As I have said, getting up, attacking me personally, trying to discredit other Members of this House, using Question Period as a licence to attack other Members, to attack their credibility and cast aspersions, is not going to help the situation at the Workers' Compensation Board.

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



Clerk: Motion No. 102, standing in the name of the Hon. Mr. Fisher.

Motion No. 102

Speaker: It is moved by the Hon. Government House Leader

THAT Dave Sloan, the Hon. Member for Whitehorse West, be appointed to the Standing Committee on Rules, Elections and Privileges.

Motion No. 102 agreed to

Clerk: Motion No. 103, standing in the name of the Hon. Mr. Fisher.

Motion No. 103

Speaker: It is moved by the Hon. Government House Leader

THAT Esau Schafer, the Hon. Member for Vuntut Gwitchin, be appointed to the Standing Committee on Statutory Instruments.

Motion No. 103 agreed to

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

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

Motion agreed to

Speaker leaves the Chair


Chair: I will now call Committee of the Whole to order. We will take a brief recess at this time.


Chair: I will now call Committee of the Whole to order. We will continue at this time with Bill No. 9. We are on general debate of the Yukon Housing Corporation.

Bill No. 9 - Third Appropriation Act, 1995-96 - continued

Yukon Housing Corporation - continued

Hon. Mr. Ostashek: Before we continue with the debate, I have to respond to allegations that were made in the debate yesterday.

There have been allegations made that I preempted the outcome of a grievance. That is simply not true in any way. For someone to allege it is not right. I will clarify the record.

On page 2693 in the Hansard, the Member for Riverdale South said, "If the Minister wants to talk about the compromising of the aggrieved person's position, the person who led the charge with this, the Government Leader, the one who called the press conference and tabled the letter in the Legislature, is the person who has to take action with respect to the Public Service Commissioner's ruling regarding this grievance. I think the Government Leader has already made his position fairly clear as to what he thinks happened and who he thinks is at fault, and he has taken a side on the issue and that is the side of the president of the Yukon Housing Corporation..."

That statement is not true. It is not in any way true. I took neither the position of the president nor of the employees in this instance.

In fact, I was not even aware there was a grievance until it was raised in this Legislature. I acted on behalf of some employees who have every right to come to me when they feel that there has been unfounded and untruthful allegations made on the floor of this Legislature and have no opportunity to respond to them.

The Member for Riverdale South stated that harassment had taken place in their workplace and the employees did not agree with the Member's statements. The employees delivered a letter to me and I tabled that letter in this Legislature. I called the press conference.

As for their contravening policy 1.4, they did not contravene any policy. I gave the individuals' names to the press and I told the press who to contact, and by doing so I gave them permission to talk to the press.

I want to make it clear for the record that I did not jeopardize this grievance, and if I am put in a position where I have to make a ruling, I will be able to do that in an impartial setting.

Mrs. Firth: Let us just get the whole issue out, since the Government Leader wants to get the issue out on the table.

When the employees went to see the Government Leader, he got so excited he was practically salivating because he wanted to rush around and do something with this. I would submit that the Government Leader completely lost his focus, his train of thought and his idea of what his responsibility should be about whether or not he should proceed with it. He completely lost focus on what his responsibility was.

Before he did this, he should have known if there was a grievance. He should have known what he was doing. Before he did this, he should have known about the policies. I submit that he did not, or he would not have done what he did.

Then he completely circumvented the Minister responsible for the Yukon Housing Corporation. He rushed to the media to give a press interview - a media event - on it, then he rushed into the Legislature and tabled the letter. The contents of the letter are very specific. The contents of the letter states, without any doubt, that the president of the Yukon Housing Corporation has never committed the action the aggrieved person is pursuing.

By his actions, the Government Leader supported that principle. Whether or not he thinks he did - and he is now trying to say he did not - the impression everywhere is that he supported that principle by the extreme actions he took.

I submit that it was wrong of him to do that - absolutely wrong. It was irresponsible, not well thought out and not deserving of the role of the Government Leader, who should be looking at all sides of the story and considering all views.

I am sure that if the Government Leader had known a grievance had been filed - I should not say that he probably would not have gotten involved because he probably would have. I cannot say that for sure, though. He might have had some second thoughts.

Perhaps the Government Leader did not seek anyone's advice, nor did he think about what he was doing. I do not know what his excuse is going to be, but what he did was wrong. He should not have done it. The employees should have gone to their supervisor who, in turn, should have gone to the Minister responsible. That did not happen.

I am glad to see that the Government Leader is taking full responsibility for this today, in saying that he gave his permission. There was no question in anyone's mind about that, but it is good of the Government Leader to admit it and, in so doing, admit his wrongdoing.

Before this debate goes any further, I think the Government Leader and the Minister should find out what has happened since. I am not about to say it in the House because I think it is information that I should keep to myself. The Government Leader and the Minister had better get themselves informed by finding out what is happening with respect to that letter.

I do not know how long the Minister and the Government Leader want to go on with this debate, but I will sit here until hell freezes over and debate the issue, because that is how strongly I feel about it and how strongly I feel about the aggrieved person in this incident.

I would have had no problem if the employees were angry at me and wanted to go to the Government Leader, or do whatever they wanted to do, if the concern was just about me - but it was not. It involved one of their co-workers. I think that is where someone should have shown some good sense and responsible behaviour, and intercepted it. That was obviously up to the Government Leader, and he was unable to do it, for one reason or another.

Hon. Mr. Ostashek: I will gladly debate this, and will gladly put the blame and responsibility right where it belongs, and that is on the shoulders of the Member for Riverdale South. The Member repeatedly attacks people in this Legislature because she knows they cannot defend themselves and that they have no recourse to get at her. The only recourse the employees had was to come to a Member of this Legislature to refute the unfounded and untruthful allegations - in their opinion - that were being made by her. They are in that workplace.

There is nothing in this letter that refers to a grievance.

Not one word in the letter refers to a grievance. She acted unprofessionally and she should apologize to the employees, not stand there throwing a tantrum. She knows she was wrong - again. She has done this time and time again in this Legislature.

I brought those employees' case to this Legislature - nothing more - and there is nothing in this letter that even hints at the grievance that was taking place. I think she owes those employees an apology.

Mrs. Firth: The Government Leader owes all Yukoners an apology for the job he is doing as Government Leader.

This Government Leader has a responsibility to act in a responsible way. When the employees came to him, there were a couple of things he should have checked out before he jumped on the bandwagon, and he did not. That is his responsibility.

A lot of the employees who signed the letter did not know that there was a grievance. The contents of the grievance are very similar to the disclaimer in the letter. I maintain that it has an impact on the aggrieved person's case by singling that person out as the only person in the department  who has the complaint, while no one else in the department  does. That is not right at all.

This employee had to put up with going back to work the day after the letter had been written and be further ostracized in her workplace. I have never heard of such things. I have never heard of such carrying on and such behaviour.

These are the kinds of things that the Government Leader should find out about before he jumps in with both feet, with concrete in his shoes, so that he sinks up to the top of his head.

I do not understand what the Government Leader is hoping to gain by this. I do not understand it at all. If he does not think he has compromised himself, fine, he can stand up and say that until he is blue in the face.

I know what I am hearing from people who are familiar with the issue. They do not agree with him. He has already taken a side by leading the charge with the letter. When he led the charge with the letter, he should not then say, "Well, oops, maybe I did not agree with it." It is an admission and an endorsement, particularly in light of the extreme actions that the Government Leader took.

If he had just sat in his office and said to the employees that he agreed and they could go ahead and have their press conference and talk to the media, et cetera and gave them his permission, that would have been a different story, but he did not do that. He could have said that he had to stay back from this because he had some responsibilities as a Government Leader and that that the Public Service Commission may recommend to him that he has to take some action here but he wants to keep himself distant and removed from it, which would have been the responsible thing to do. The employees could have had their press conference with his permission and that would have been a different story, but the Government Leader did not do that. He took up the flag, started the parade and he told everyone to jump on and he led the charge, which is not the role the Government Leader should be taking.

I think I know why he did it. I think he did it because he got so excited that he was going to get after Mrs. Firth for something that he just could not see straight. He lost all reasoning power. It is not only me who sees it that way. Everyone who knows about the issue interprets it that way.

There is no way out of this. The Government Leader has made his choices; he has made his decisions. He can say what he wants to say; I am going to stay firm with the way I see the issue, and we will see what happens when the dust settles. We will see what happens after the grievance has gone through its process and whatever else is going to happen. We will see whether or not the Government Leader comes out of this unscathed.

Hon. Mr. Ostashek: There is a workplace harassment policy in place to deal with grievances. We do not need the Member bringing the issues up on the floor of this Legislature and casting aspersions on people she knows absolutely nothing about. She is making unfounded allegations that people do not agree with.

There is absolutely nothing in this letter that deals with a grievance. She should go back and read it again. She stands there and thinks that she can spout off, that it will correct what she has done, but it will not, because she is as guilty as sin of doing those things in this Legislature time and time again without checking her facts.

I will stand up and defend any Yukoner who wants their voice heard in this Legislature. That is what our role is here. I did not take the side of anyone in this issue. I brought their message to the Legislature because they were totally incensed and offended with the actions of the Member when she told the people of the Yukon, through this Legislature, that they were working in a poisoned environment: they simply do not agree with that position. That is what I did, and she is the one who is fully responsible for this whole debate.

Mrs. Firth: I did not run to the media with the letter. I did not create the issue; the Government Leader did. The Government Leader created this media event and he was the one who compromised himself and the aggrieved person.

Workplace harassment policy - big deal. We Opposition Members have people coming to our offices on a regular basis with concerns about workplace harassment. Do you know why they come to our offices? If they go to the government Members, there is nothing ever done about it. The government Members call a bureaucrat in to ask about the details, and the bureaucrat says, "Oh, you are a wonderful Minister, you do a good job, you understand everything, you are smart. This person does not know what he or she is talking about." The Minister goes, "Okay, that sounds good to me." The poor person who is concerned about harassment has to go away and find another avenue. Well, they did. They came to see me and I am helping them. This aggrieved person knows all about harassment, believe me. I have absolutely no reason to doubt what this person tells me - no reason at all.

No matter what the Government Leader says or how he tries to change what has happened, he cannot get away from the fact that he led the charge; he made the mistake; he did not act responsibly; he lost his ability to focus; he lost it, period.

The Government Leader should have stepped back and taken a look at all the facts. He should have called the Minister in and asked what this was all about. He should have asked the president in and asked him for details. He should have had the employees in and asked them for details, so that all of the issues could come forward before the Government Leader went running off half-cocked to the media.

I do not buy the argument that I have created anything here. I have been steady and holding fast to try to assist this person who was not able to get help anywhere, other than to come to me to get it.

Hon. Mr. Ostashek: It is honourable of the Member opposite to help the person she felt needed help. I am not condemning her for that at all. I am condemning her for making wild accusations in this Legislature that the whole workplace was a poisoned environment. That is what the other employees took exception to. They did not take exception to the fact that one of their colleagues may or may not have had a grievance. They did not mention that. They mentioned the fact that Mrs. Firth painted a picture of a poisoned workplace, which simply was not true, and they were incensed by it. Her job as an MLA is to help a person. I have every respect for that. However, she does not need to cast aspersions on all of the other workers in that workplace while she is doing that. That is what I was responding to. I was not acting irresponsibly. I was acting responsibly.

Mrs. Firth: I did not make any wild accusations. I came in this House and passed on to this government the point that a woman - an employee of this government - had been told that her fingerprints could be found on documents. That was not a wild accusation. That is what the aggrieved person told me. I believed her. I believed that she had been told that. I still believe it, because I have no reason not to believe it. That was the information I brought to the House.

If the employees at the Yukon Housing Corporation did not like it and drew all kinds of conclusions about what my comments meant, I have no control over that, nor does the Government Leader. I have no control over how people interpret what I say - none whatsoever. If the Government Leader was a responsible Government Leader, and if he could have stepped back, focused a bit and taken a little time to think about what he was doing, perhaps he would have taken a different direction. However, he did not do that. That was his big mistake.

Hon. Mr. Ostashek: That Member may not have any control over what interpretation people make of her statements, but she certainly has control over coming into this Legislature, time and time again, being proven wrong time and time again, making allegations regarding a climate of intimidation in the entire workplace. These employees did not feel that was an accurate description of the workplace they were in, and they were incensed by it.

Mrs. Firth: This could go on and on. The Government Leader loves to stand up and yell at me about making wild accusations, like he did the day I came in and talked about the trips to Hawaii and the Caribbean cruises. He screamed and ranted at me, but guess what?

When I raised the issue about the DocuTech, they ranted and screamed at me about wild accusations. Guess what?

They ranted and screamed at me about wild accusations concerning the government employees taking trips at the expense of private companies. Guess what?

I did not come in and say anything about a poisoned work environment. I passed on the message the employee had given me about the particular instance of intimidation. I passed that on to the House because we were discussing RCMP investigations at that time, and how this government can use that threat to intimidate people. Again we were accused of wild accusations, and guess what? We find out that the Deputy Minister of the Executive Council Office is calling about issues like RCMP investigations, conflict of interest to potential employees of the government. These are not wild accusations and allegations. They have been proven time and time again.

The Government Leader should know better. Every time he gets up and says that, it ends up blowing up in his face.

Hon. Mr. Ostashek: The one Member in this House who should know better is the Member for Riverdale South and I suggest to her that she go back and read the Blues and see what she said that day. Then maybe she will find it in her heart to apologize to those employees.

Mrs. Firth: I am not going to apologize to anyone for doing my job. Let that be known, and let me get that on the record right now. I am going to continue to raise questions about what is going on in all departments of government. If other employees come to me with instances of harassment or intimidation, I am going to raise them. That is why these people come to see me. I do not care how unpopular I become. I am not here to be Miss Popularity and have everyone love me. I recognize that. Obviously the Government Leader does not. I am going to help anyone who comes to see me and who needs help. I am certainly not about to apologize for that.

Chair: Is there any further general debate on the Yukon Housing Corporation?

Mrs. Firth: Gosh, I thought we would never get to this.

I have a question for the Minister responsible for the Housing Corporation. In reviewing the balance sheets of the Housing Corporation's financial statements, I see that in 1992 the amount for mortgages was $1.664 million. In the balance sheet as of March 31, 1995, the amount for mortgage agreements and loan receivables is up over $20.465 million.

Can the Minister tell us why there is such a tremendous increase?

Hon. Mr. Nordling: I think so. Since 1992 there have been programs in place that result in mortgages, which are long term, and we took over a considerable portfolio of mortgages from Community and Transportation Services with respect to land sales.

Mrs. Firth: I thought the land sales mortgages from the Department of Community and Transportation Services were something that just happened in the summer. We just discussed that in the House a bit earlier and I was provided with a legislative return of the inventories and so on. I do not think it is worth $20 million.

Hon. Mr. Nordling: I do not have it broken down, but I can do that and bring back the figures.

Mrs. Firth: I have one other concern. Perhaps the Minister could answer the question for me. I can appreciate why the Yukon Housing Corporation may, in a small way, be getting into the mortgage business - although there are some other alternatives that they could probably pursue. Why is the Yukon Housing Corporation in the business of providing mortgages in such an active, costly manner?

Hon. Mr. Nordling: It is part of the change in focus from building and owning to assisting people to own their own homes, rather than the Yukon Housing Corporation owning them. The Yukon Housing Corporation had been asked to take over land sales and the collections for Community and Transportation Services, because Yukon Housing Corporation is better set up to handle that than is the Department of Community and Transportation Services.

Mrs. Firth: In 1992, when the Yukon Housing Corporation first started getting into the mortgage industry, was there some kind of two-year or five-year plan made? Did the Yukon Housing Corporation ever envisage that it would have mortgage agreements and loans receivables well in excess of $20 million when it first started this initiative?

Hon. Mr. Nordling: I am not certain whether or not there was a plan, but in order to fulfill its mandate that is the direction that the Yukon Housing Corporation has taken. The mortgages are recoverable and they fund themselves. It is not seen as the Yukon Housing Corporation spending that sort of money. Everything that is loaned is repaid and the Yukon Housing Corporation has a good record of collecting its debts. I can provide the Members with a statement of the outstanding mortgages and arrears.

Mrs. Firth: I am just reading some information about what I said in the House, and I discover that what I thought I said is correct.

I want to ask the Minister about another issue, though. The mortgages, agreements and loans receivable are up to $20,465,000. The long-term debt noted is $39,926,000. The equity of the Yukon government in the Yukon Housing Corporation is determined by subtracting the debts of the Yukon Housing Corporation from the assets, which include the accounts receivable, mortgages and the stock of houses. The equity was $9,598,00 in 1992, but has fallen to less than $8,500,000 by the end of March 1995, which is a decrease of about 12 percent. Can the Minister tell us why this has happened?

Hon. Mr. Nordling: No, I cannot. I can ask the Yukon Housing Corporation to explain that.

With respect to the $20 million mortgage portfolio - I have a couple of notes that I will give to the Member - I will give the Member a more detailed breakdown. Almost $5 million represents the territorial government mortgage on the Thomson Centre, and something slightly over $3 million relates to lands agreements.

Mrs. Firth: That totals $8 million. Does the remainder represent straight mortgages?

Hon. Mr. Nordling: Yes, some fall under the joint venture program and the owner-build program; some are home-owner mortgages, rental-suite and home-repair mortgages, and there is a remote demo small mortgage. The biggest share can be attributed to the home-owner and home-repair mortgages, which are in the area of about $7 million each.

Mrs. Firth: That comes to a bit more than $20 million - seven plus seven equals 14, and five plus three equals eight. That comes to about $21 million. The March 31 balance sheet states $20, 465,000.

I see the Minister saying he will bring back clarification of these figures, so I will wait to get the new figures - maybe they will add up better.

I also have a question about long-term debt.

The long-term debt of the corporation has been increased from $24.6 million in 1992 to $39.9 million - almost $40 million - in 1995. Can the Minister tell us why the long-term debt has increased so much?

Hon. Mr. Nordling: I can bring back the detail of that. Two of the big items are the Thomson Centre and the lands portfolio.

Mrs. Firth: That will be the $8 million.

When I look at the notes on the debt, it indicates that $14.5 million of the debt is owed to the Yukon government. Does the corporation have plans to repay that portion of the debt? What are they?

Hon. Mr. Nordling: My understanding is that it is comprised of the social housing units, and the money is being paid back as is the money for the lands portfolio.

Mrs. Firth: When will that money be paid back?

Hon. Mr. Nordling: It is paid back as we collect it. Some of the mortgages are long term - up to 25 years, I believe.

Mrs. Firth: It is paid back depending on the term of the mortgage.

I think that is interesting. It could have some impact on the financial situation of the government. Can the Minister provide us with the amounts of money for the different terms of mortgages - perhaps in a chart form? I do not think that would be too onerous a task. How many different terms of mortgages do they have? Are they 10-, 15- or 25-year terms? And for each term, there could be the associated amounts.

Hon. Mr. Nordling: I believe we have that information about mortgages receivable and mortgages payable, and I can get the breakdown for the Member.

Mrs. Firth: Is it anticipated by the corporation that the debt will continue to grow at this rate? From the annual report, it seems that it has been incurred mostly since 1993, so I would like to know what predictions the corporation is making about the debt.

Hon. Mr. Nordling: As I said, the bulk of the increase is the result of the Thomson Centre and the lands portfolio, but the other areas also increase as money is loaned in the programs. It is dollar for dollar. As we will see when we get to the line-by-line debate, the programs have not been taken up as quickly as we budgeted - for example, the home ownership program, for which we budgeted $4 million, is reduced by $2 million, and it may be further reduced because, before we got it started, it was into the slow season. I do not envisage it growing nearly as fast as it has since the program began, when there was the initial surge in uptake.

Mrs. Firth: I am prepared to move into line-by-line debate now, and I will certainly come back to the corporation when I get all the information from the Minister and we are in the general budget debate. I will save the big ticket items for that debate.

Chair: Are we prepared to move into line by line?

Some Hon. Members: Agreed.

Chair: We will now move to line-by-line debate.

On Operation and Maintenance Expenditures

On Gross Expenditures

Hon. Mr. Nordling: I briefly went through this in my opening remarks in response to the Member for Whitehorse Centre. The $250,000 reduction is due to a reduction in interest on our long-term debt expense. Interest costs were not as high as expected, so we have reduced our expenditures by $250,000.

Gross Expenditures in the amount of an underexpenditure of $250,000 agreed to

Operation and Maintenance Expenditures for the Yukon Housing Corporation in the amount of an underexpenditure of $250,000 agreed to

Chair: We will go on to capital expenditures.

On Capital Expenditures

On Home Repair

Hon. Mr. Nordling: I will go through the lines. If there are any questions, we can go back to each one, because I would be getting up and down saying virtually the same thing.

With the home repair program, there was not as much uptake as we anticipated; hence the reduction of $1 million. It is the same for the home ownership program, with a reduction of $2 million.

With the renovation and rehabilitation of existing stock line item, there is an increase of $40,000 due to a fire in one of the social housing units. Members are probably aware of it. It was a tragic fire.

With the construction/acquisition of staff housing line item, we had budgeted for two units if necessary. They were not required; hence the reduction of the full amount, which was $260,000. The extra $50,000 in the renovation and rehabilitation of existing stock line item was due to foundation work that needed to be done.

Home Repair in the amount of an underexpenditure of $1,000,000 agreed to

On Home Ownership

Home Ownership in the amount of an underexpenditure of $2,000,000 agreed to

On Non-Profit Housing

On Renovation and Rehabilitation Existing Stock

Renovation and Rehabilitation Existing Stock in the amount of $40,000 agreed to

On Staff Housing

On Construction/Acquisition

Construction/Acquisition in the amount of an underexpenditure of $260,000 agreed to

On Renovation and Rehabilitation Existing Stock

Renovation and Rehabilitation Existing Stock in the amount of $50,000 agreed to

Capital Expenditures for Yukon Housing Corporation in the amount of an underexpenditure of $3,170,000 agreed to

Yukon Housing Corporation agreed to


Chair: We will now move on to discussion about the Office of the Ombudsman. Is there any general debate?

Hon. Mr. Ostashek: I will provide some introductory comments on this supplementary.

Vote 23 is a new vote that has been established for the Office of the Ombudsman. Members will notice that in the main estimates for the next fiscal year this vote consists of three activities: Ombudsman, Information and Privacy Commission and Conflicts Commission. These activities correspond to the legislation passed by this House during the last session, that is, the Ombudsman Act, The Access to Information and Protection of Privacy Act and the Conflict of Interest (Members and Ministers) Act.

As was discussed during debate in the last sitting, we are combining these functions under these new acts in order to ensure that services can be made available to Yukoners in a cost-effective manner. It is therefore logical that these activities, which all relate to the officers of this Legislature, be reflected in a single vote.

As well, we are providing a clear statement for the House about the anticipated expenditures of this office and its functions by setting out the budget for this office in a separate vote. We believe this is appropriate, given that the Ombudsman, the Information and Privacy Commissioner and Conflicts Commissioner all report to the Legislature through the Speaker. This supplementary is to provide for the start-up costs for the office of the Ombudsman.

There is $41,000 requested for operation and maintenance for this year. In addition, there is $30,000 allocated for capital costs. This is for office equipment and furniture for the office that will be located on the second floor of the Shopper's Plaza in Whitehorse. The actual costs will be lower, primarily because we have not incurred any personnel or any personnel-related costs this year. The capital costs have been less than anticipated due to the availability of surplus furniture and equipment

I would be happy to try to answer questions.

Chair: Is there any general debate on the Ombudsman?

Mr. McDonald: I have a few questions for the Minister respecting the Ombudsman office. I also have some questions about the combination of offices. The Minister mentioned that there would be a line item in the future for the Information and Privacy Commissioner, the Ombudsman and the Conflicts Commissioner service.

First of all, I wonder if the Minister could untangle the variety of services and tell us what office expenses are expected to be for each service, and which services he anticipates will be combined in some way? I certainly have some feelings about this and I will express those when I hear the Minister's response.

Hon. Mr. Ostashek: It may be more appropriate if the Member was to ask me that question when we get to the mains, so I can have some assistance here to try to disentangle all of the involvements. If we could just deal with the supplementary estimates now, that would be more appropriate.

Mr. McDonald: Perhaps we could raise the matter in the mains. I do not mind doing that, but I do have some thoughts about the selection process of the Ombudsman. Is the Minister prepared to answer those questions now or is he only able to answer questions about the office location and expenses?

Hon. Mr. Ostashek: I can try to answer what questions the Member has. If I cannot, I will take them under advisement and we will get back to them in the mains.

Mr. McDonald: When we get to the mains, is the Minister prepared to answer the questions under the heading of the Executive Council Office, because that person would presumably be there? We could perhaps go through the matter at some length there. I have some thoughts about the Ombudsman. Perhaps, by way of notice I can advise the Minister of my feelings on the matter. The Minister can then respond when he has support staff.

First of all, with respect to the selection of the Ombudsman, I think there is a general expectation that this position will be filled by a Yukoner as soon as the interim period of one year is completed. There is also an expectation that the House will be involved in the selection process for the Ombudsman position. When I say "House," I think there is an expectation that all Members of the House - all Members interested - certainly will have an opportunity to be involved, if not on a hiring committee, on the selection criteria process and maybe shortlisting.

I know there are some strong feelings here, and the end result ought to be that, if at all possible, all Members feel comfortable with the person finally selected for this position.

Precisely what process does the government propose we follow in selecting the Ombudsman?

There is also some question as to the precise process by which the staff for this office will be selected. I think most people acknowledge that the staff will play a significant role and will be the face of the office when the Ombudsman is not here. They will certainly provide the intake service for new complaints, and whomever is staffing the office will have a major impact on how the public regards the legitimacy and effectiveness of the service.

Could the Minister be a little more precise as to how the selection will take place and who will be on the selection board?

I would also be interested in knowing precisely what the Minister has in mind in promoting a public awareness campaign for this service to ensure that complaints that are not supposed to go before the Ombudsman do not, and that expectations are not unreasonably raised. Those issues should, and can, be legitimately raised before the Ombudsman is identified, so people will know they have an outlet they did not previously have in investigating and dealing with complaints people may have.

One concern I have, which I have not had an opportunity to express to the Minister yet, actually relates to the Conflicts Commission. The Minister has proposed some names of persons who might fill the Conflicts Commission posts, and has included among them the Ombudsman as a possibility.

I take the position that we must be fairly careful about combining these services too much. The combination of administrative support for these services, either with other agencies or departments, is one thing we should consider before going too much further. I and my colleagues in the Official Opposition are prepared to be very flexible when it comes to combining the office support. However, there is a very legitimate concern about combining the actual Conflicts Commission, Ombudsman and Information Privacy Commission services together in the same people.

I think that people come to their jobs from different directions. To ask them to provide a variety of different services for administrative convenience may not be a wise thing to do. When the Minister is ready, I would like to spend some time talking about those - in some respects - disparate functions that need to be filled in the coming year. I would like to hear the Government Leader's opinion on those items.

I put those questions forward as initial questions so that the Minister can prepare for them before we get to the Executive Council Office.

Hon. Mr. Ostashek: Yes, we will get into more detail when we get into the main estimates. The Member is right that after this first year, we will be advertising for a Yukoner to become Ombudsman. We will see what comes out of that.

As for the selection criteria to be used, we will be using a format similar to the one used to hire the Ombudsman in Alberta. We consulted with the Opposition. It will have a hand in putting together the criteria. I have no difficulty with that. It is an officer who has to be appointed by a two-thirds majority of this Legislature, so it is important that everybody is involved in it.

Under the staffing of the office, we can talk more about that. However, it was my understanding that it would be done through the Public Service Commission. If the Members opposite have some difficulty with that, I would like to hear from them.

We can get into details of what the department has in mind regarding public awareness. I know that the last briefing note I had stated that there would be a public awareness campaign for the Office of the Ombudsman started in early April.

I thought we had debated in great detail the combining of the services of the Ombudsman and the Conflicts Commission when we debated the legislation. Right from the time we proposed the legislation it was our intention that the Ombudsman would be one of the Conflicts Commissioners. If the Members opposite are having some difficulty with that, we can discuss it again, but I thought we went into great detail about that during the debate. I thought that matter was raised with the Ombudsman when he was here from Alberta. We did cover most of those bases. I will check with my staff, but I believe that is one of the bases we covered because, at the same time, I know we covered the possibility of the Ombudsman also being the Human Rights Commissioner and he gave us the information that this is done pretty well all over the world now. Canada is one of the last bastions that has not yet combined the Ombudsman Office and the Human Rights Commission.

I am prepared to enter into discussions on that. I thought we had discussed it and were pretty well all in agreement on it, but if there are some concerns, we will be prepared to take another look at it. Again, we all realize we have a very small jurisdiction here and the operation and maintenance costs of this office have to be in proportion to the size of our jurisdiction, but we can certainly discuss it.

I think I have covered all of the areas there now, but we can certainly get into detail in Executive Council debate.

Mrs. Firth: I just heard the Government Leader say that the assistant to the Ombudsman was going to be hired through the Public Service Commission. On the "Employment Opportunity: Assistant to the Ombudsman" form, it says very clearly at the bottom, "Please note: this position is not included in the Yukon government Public Service", which is a complete contradiction to what the Government Leader just said.

People who want to get the position description have to come down to the Legislative Assembly office to get it.

Maybe the Government Leader wants to clarify that.

Hon. Mr. Ostashek: The Member was talking about office staffing. I was not talking about the assistant to the Ombudsman; I was talking about secretarial staff. I thought the hiring would be done through the Public Service Commission.

Mrs. Firth: Who is going to do that? Let us stay with the position of assistant to the Ombudsman, first of all. Who is going to hire this person? Obviously, the Legislative Assembly is handing out the position descriptions. It is a fairly brief position description. It has a position summary, some major functions - a, b, c, d, e - problem solving, decision making, and there are only about three or four lines and a short paragraph on these.

When people apply for the position, who will be doing the interviewing? Who is going to make the choice about who the assistant to the ombudsman is going to be?

Hon. Mr. Ostashek: We will get into that when we get into Executive Council Office. I do not have all of those details with me right now.

Mrs. Firth: Who is going to hire the secretaries? Is the Public Service Commission going to put out an employment opportunities notice - similar to the one for the assistant - and put requirements on it, and then hire the support staff for the Office of the Ombudsman? How many positions will there be?

Hon. Mr. Ostashek: As I said, I do not have that information here. We will get into it in the main budget, where we have the budget for the entire office. What we have in front of us now is a $41,000 supplementary estimate to get the office started.

We will have plenty of opportunity to discuss that in the debate on the Executive Council Office.

Mr. McDonald: I have a couple of points to make. I guess we can get into it more deeply when we get to Executive Council Office. Certainly, we should get our positions on the record with respect to the combination of the service.

I agree with the Government Leader that we should be creative when it comes to combining administrative costs. However, I think that is a separate and distinct issue from combining the positions themselves.

I see the Conflicts Commissioner as being essentially a role like a judge, standing back from the fray, and trying to make a reasoned and fair judgment on a conflict that may face a politician.

I see an Ombudsman playing an advocacy role. I see the Yukon Human Rights Commission, from time to time, also playing advocacy roles. From what I can gather from other jurisdictions, the Ombudsman office often plays an advocacy role to the extent that it comes into confrontation with departments and, by extension, Ministers.

I would be very nervous about the concept that the actual positions be combined. I am not certain, in any case, that it would save us any money to combine them. It may save us money to combine the administrative support, but not the positions.

When we get to the selection process for the office staff, I am certain that the details about how this should be worked out will be more clear to the Minister, and we can discuss it then.

We should, at some point, adopt the principle that all Members of the Legislature will have the opportunity to participate in some way. We should ensure that the final selection, in particular, of the commissioners and the Ombudsman are supported by everyone, if we can. If we are unable to do so, a two-thirds majority is the limit that is established in law. We should certainly make an attempt to get unanimous support for whatever selections we make.

Chair: Is there any further general debate?

We will go line by line at this point.

Operation and Maintenance Expenditures

On Office of the Ombudsman

Office of the Ombudsman in the amount of $41,000 agreed to

Operation and Maintenance Expenditures for the Office of the Ombudsman in the amount of $41,000 agreed to

On Capital Expenditures

On Office of the Ombudsman

On Office Furniture, Equipment and Systems

Hon. Mr. Ostashek: I just want to add to this that we will probably not use all of this. We have picked up some materials that we did not have to purchase. There may be some money lapsed.

Office Furniture, Equipment and Systems in the amount of $30,000 agreed to

Capital Expenditures for the Office of the Ombudsman in the amount of $30,000 agreed to

Office of the Ombudsman agreed to

Chair: We will now go to the bill.

On Schedule A

Schedule A agreed to

On Schedule B

Schedule B agreed to

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Clause 3

Clause 3 agreed to

On Title

Title agreed to

Hon. Mr. Ostashek: Mr. Chair, I move that you report Bill No. 9 without amendment.

Motion agreed to

Chair: We will move on to Bill No. 10, First Appropriation Act, 1996-97.

Bill No. 10 - First Appropriation Act, 1996-97

Chair: Is there any general debate?

Hon. Mr. Ostashek: I have a few brief comments before we get into questions and answers. I spoke to this bill quite extensively in my budget address. However, some of the points I made at that time bear repeating. I would like to take several moments to discuss some matters I spoke to previously.

The total appropriation being requested here is in excess of $472 million. This is lower than both our forecast expenditures for 1995-96 and the main estimates for the same year. The overall expenditure reduction has been achieved by maintaining operation and maintenance expenditures at more or less the same level as in 1995-96 and by reducing capital expenditures.

Capital expenditures are down some considerable sum - $21.4 million from those contained in the 1995-96 main estimates. Not all of this reduction is a net gain to our surplus, since some $16 million is in recoveries, which will also become apparent.

It is also apparent to the reader of these estimates that our total income is expected to be down approximately $48 million from that shown in last year's main estimates.

As I have just mentioned, $16 million of this decrease is in capital recoveries. The remaining $32 million is through a combination of the formula financing grant, our own tax revenues, established program financing, or the Canada health and social transfer, and operation and maintenance recoveries, including Canada assistance plan recoveries.

Of the $32 million, $20 million relates to cuts announced by Mr. Martin in his 1995-96 budget. This $20 million is a permanent reduction and will be taken from our grant payment each year hereafter.

The remaining reductions are due to prior year adjustments, negative or low population growth due to the Faro shutdown, and low escalators in our formula financing calculations due to cutbacks in provincial local expenditures throughout Canada.

These reductions are part of the normal workings of our formula arrangement and things like population will turn around as the impact of the reopening of the Faro mine works its way into the formula calculations. However, the $20 million reduction that I have mentioned is irreversible and ongoing. We also expect the escalators in the formula to continue to be lower than in the past because of the restraints that are occurring at the provincial and municipal levels throughout Canada. These will be further impacted by the announcements from Quebec made this morning.

In other words, tighter money is a fact of life that this government sees as being the norm in the foreseeable future. Because the reduction in our revenue inflow exceeds the reduction in our expenditures, we are predicting an annual deficit of over $24 million in the 1996-97 fiscal year. This shortfall will be financed from our $32.4 million accumulated surplus.

Of course, this deficit is intentional and is being incurred to ease us into the new period of reduced federal funding that is now upon us. Were it not for this transitional deficit, our expenditures would have to be reduced by another $24.9 million in this coming fiscal year. It is apparent that such a sharp and immediate decline in government spending would have a real and negative impact upon our economy.

Instead of permitting this to occur, we decided to cushion the blow by running an annual deficit and financing it from the accumulated surplus that we have built up over the past three years. In fact, it is precisely for this eventuality that we took the necessary steps to accumulate a savings account.

At the end of the 1996-97 fiscal year, we expect the territorial government to still have on hand an accumulated surplus of approximately $7.5 million. While this sum is adequate for reserve purposes - given current circumstances - it is obvious that further expenditure cuts will have to be made in the following year, since there is a limit to which the surplus can be drawn down.

However, excluding recoverable expenditures, over which we have little or no control, the reductions that will be necessary in 1997-98 will likely not be as extensive as one would think. We believe that this will be the case because we should pick up some additional monies in our formula due to population growth and, perhaps, a reduction of the perversity factor through expected tax-rate reductions in Ontario.

In addition, we would expect some small lapses in net expenditures that may increase our accumulated surplus to some extent. However, I must stress that the restraint at the federal level and throughout Canada will continue to have an impact upon us in the future. We will continue to be faced with difficult decisions in the years to come. We are fortunate, however, that we have incurred no debt as a result of the government's day-to-day operations. The lack of debt and its consequential carrying charges mean that we will not be faced with those wrenching decisions and actions that other jurisdictions in this country are facing today.

In this regard, I cannot help but think how difficult is the task facing the new government in the Northwest Territories - where the accumulated deficit is variously estimated to be from $100 to $150 million by the end of the 1996-97 fiscal year. The taxpayer protection legislation we have introduced will go far to ensure that the Yukon never finds itself in a similar position.

The expenditure initiatives contained in these estimates are numerous and many were highlighted in the budget address and accompanying documents. Therefore, any further detailed description is best left to the Ministers in the departmental debate.

I should mention, though, one change on the revenue side of these documents that will be apparent to Members. It will be noticed that a new transfer, called the Canada health and social transfer, appears in this budget for the first time. This is the new federal program that replaces the established program financing, or the EPF, and Canada assistance plan transfers.

In the provinces, the implementation of these arrangements has resulted in a reduction in the total amount received from the federal government. Here, however, due to the workings of the formula financing arrangement, the change is revenue-neutral. We neither gain nor lose as a consequence of the new regime. The cuts to the territories have come, rather, in the form of a cut to our gross expenditure base under the formula, and in our case it is the $20 million I referred to earlier.

I would be happy now to answer any questions the Members opposite may have.

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 at this time.


Chair: I will now call Committee to order. We will continue with general debate on Bill No. 10.

Mr. McDonald: I have a number of questions of a general nature to ask the Government Leader about this budget. On many occasions, I have indicated that there is disagreement in the House about the claim that there has been a budget plan all along. We have said that on numerous occasions and I do not need to repeat it at length here.

We do have some feelings about the Taxpayer Protection Act, which may be resolved through discussions outside the Legislature. We will see. It does lead to some concerns about what the picture will look like by March 31, 1997.

I would like to ask a few questions about formula financing first and then lead into the expected surplus, and that sort of thing later on.

First of all, under the formula financing agreement, could the Minister tell us when the impact of the operating Faro mine and an operating Loki Gold mine will show up in the formula, in terms of growth and revenues? What is the government projecting in terms of growth in revenue as a result of those two mining projects?

Hon. Mr. Ostashek: There is supposed to be a census conducted on May 14, 1996. I will probably be making a statement about it in the House early next week. That should give us accurate numbers for the grant next year, and that information will be taken into consideration.

Mr. McDonald: So, when we look at the impact of the formula changes and the expected growth in economic activity, when are we going to see a change in the transfer payment and to what extent is the government projecting a change? Is there any thought about that? Is there a ballpark notion about how much the revenues will grow?

Hon. Mr. Ostashek: My deputy minister thinks that he gave the Member something already that showed our projections. It should start showing up in the next fiscal year - the 1997-98 fiscal year.

Mr. McDonald: I have all of the handouts in front of me. I must have misplaced something. I am certain that we will be in general debate for at least the next hour. If the Government Leader can provide me with the information, I would certainly appreciate it. If I did get it, I must have completely forgotten about it and misplaced it.

The department was asked in the budget briefings about federal revenues and about the impact of devolution on the territory if all federal resources currently in the hands of the federal government were transferred to the Yukon government. There was some analysis of what the federal government received in so-called economic rent for the use of minerals, oil and gas, and forest resources.

I received some information from the department about that. The information essentially indicates that the federal government currently receives about $2 million in revenues that would otherwise go to the Yukon government, if those resources were in its hands.

I would like to ask the Government Leader if the department  or government is doing an economic analysis of what it would mean to the territory if all the resources were transferred to the territory - the Yukon government, First Nations or whomever - in terms of the change in the Yukon government's financial picture. Has such a complete analysis been done?

Hon. Mr. Ostashek: No. If we were to do it, it would produce only a ballpark figure. The resource revenue is only a small part of the devolution. There would be an adjustment to the base to adjust what it is costing the federal government now to provide those services.

An example is forestry. When the transfer was going to happen, we negotiated a figure of a $15 million base adjustment. That was after we took off the revenues of some $80,000 that they were getting at the time for it.

To try to calculate the financial impact of resource transfers at this point would be a back-of-the-envelope sketch. It would be far too difficult to make any assumptions based on devolution with the situation the way it is at present. The resource revenues are only one small part of devolution.

Mr. McDonald: To have the administrative costs transferred to the Yukon is obviously a boost to the Yukon government's gross expenditures. However, I am trying to determine what the impact of devolution will actually mean, in financial and economic terms, to the territory.

I will explain it this way. There is an operating assumption in some circles that devolution is essentially going to lead us deeply into a new world of self-sufficiency. If one notes that the transfer of the administrative costs of federal programs will be transferred to the Yukon, that does not improve our self-sufficiency quotient. In fact, it makes it seem even worse.

I know that it is desirable, as a general political objective, for the Yukon to be master of its own house, so to speak, and to have maximum control over resources in its jurisdiction. However, I wonder if there is a financial analysis that demonstrates that, indeed, the Yukon will become self-sufficient - meaning that we will be able to meet our governmental needs as a result of Yukon's ownership and management of its resources. To the Minister's knowledge, has any such analysis been done?

Hon. Mr. Ostashek: No, because it is almost impossible. One has to assume what will develop. I am not sure if the Member opposite is in favour of or against devolution at this point, or what he is trying to lay out in the Legislature. Devolution will give us the opportunity to make our own decisions, rather than have bureaucrats in Ottawa making them. As for being totally self-sufficient, if that is the kick the Member opposite is on, only three provinces in Canada today - after 100-odd years of confederation - are self-sufficient. The rest are all have-not provinces. It is a goal to work toward. Even the have provinces still receive transfers from Ottawa because of our federal system.

To say we will get to the point where we receive nothing from Ottawa is unrealistic. Even have provinces receive transfers from the federal government.

Mr. McDonald: Let me get something straight on the record. I am in favour of devolution. However, there have been some grand statements made that devolution will somehow be the cure-all for all our economic problems. I am trying to determine, factually, what the situation actually is.

I have asked the question, and the Minister has indicated there is nothing to demonstrate we will become more self-sufficient as a result of devolution. In fact, he has made a compelling case that our dependency quotient - just in terms of the Yukon government expenditures - would increase.

There are reasons other than simple self-sufficiency for us to want devolution. I want to make it clear what the actual situation is on this matter.

As we are on the subject of devolution, the general principle of devolution is that the full operation cost of the service will be transferred to the Yukon, and the full administrative cost will be transferred as a precondition for the Yukon government agreeing to take on a service. Is that the general operating principle?

Hon. Mr. Ostashek: Yes, that is a general operating principle.

Mr. McDonald: Was that the practising principle in the airport's devolution for Watson Lake A and B airports?

Hon. Mr. Ostashek: Yes, it was.

Mr. McDonald: Yesterday, the Minister for Community and Transportation Services said, in response to a question in Question Period about the transfer of the airports - and I will just get the quote here so that I do not make any mistakes. I will just read the question, "Can he tell us whether or not the government expects to realize any savings in its management of the Whitehorse and Watson Lake airports?" Mr. Brewster replied, "I can say this: we do not intend to have a $4,700,000 debt each year. That will be corrected."

What debt was he referring to and what corrective action was he anticipating taking?

Hon. Mr. Ostashek: That would be better asked of the Minister himself when we get to Community and Transportation Services and the debate on highways. I said in Question Period today that there is going to be a base adjustment of some $5 million, I believe; I do not have the exact figure, but more than enough to cover the operating cost. That does not mean that the territorial government should continue to operate it on these numbers, and not just say, "Fine, it is costing us that; we can do it." The Minister indicated that they were going to be doing some consultation with the public and with the leaseholders at the airport, to look either at other ways of generating revenue or at limiting the increase in operation and maintenance costs. We do not know what that is going to be at that time but it will be a goal to find a better balance.

In the meantime, there is a base adjustment for an air base and if we can improve on that after the transfer, so much the better for all Yukoners.

Mr. McDonald: I am going to raise the matter with the Minister of Community and Transportation Services, but I would like some general principles stated here and maybe the Government Leader can help us.

When the transfer of the airport was undertaken and the announcements were made, there did not appear to be any admission at the time that this particular service, this transfer, was going to be considered an individual cost centre that had to balance out at some point in the future or for which there would have to be some changes made to ensure that it somehow pays for itself.

I was wondering, qualitatively, how this differs from highway maintenance or any other transportation-related service.

In this particular case, both Ministers indicate that the service itself is running at a loss, technically. They are not regarding this as a public service in the classic sense, but that it is a cost centre that needs to recover more costs. The Member for Mount Lorne asked questions about how that might be accomplished and, firstly, why there was even that orientation. I do not think she got a clear answer, and I would like to see if I can get a clear answer on this question.

Is it government policy to try to balance the books on this cost centre, so that this service will ultimately pay for itself? Is that going to be an operating principle for devolution? What can the Minister tell us?

Hon. Mr. Ostashek: From what I can tell, you can clearly see the philosophical difference between our party and that one. It would be quite prepared to take over the airports and continue to operate them the way they are without trying to make any improvements to the service and to the cost benefits of the program. That is not the philosophical belief of this side of the House.

At the same time, I point out again to the Member opposite that the Minister said that there will be public consultations before any decisions are made. I would like to add to that. We had a choice. We could either go ahead with devolution or we could have left it to Transport Canada, which would have privatized it. We would have probably ended up without any service in Watson Lake. We did what we thought was best for Yukoners.

Mr. McDonald: I had not intended to get into a partisan argument this afternoon, but the Minister invites me to. I will say this: this Minister and the Minister of Community and Transportation Services sought from the federal government the full cost of operating both airports, a laudable objective, and, according to the Minister's evidence this afternoon, has received the full cost of operating the airports and did not tell the public at all that it is looking for more cost recovery. Clearly, either the service will deteriorate if one takes money from the service or the government has to increase its cost recovery from the travelling public.

The travelling public had every right to expect from this transfer - particularly given that the full cost of the transfer was given to the Yukon government - that the service would not change, and might even improve, thanks to local control, which is, I agree, a laudable objective and certainly not an indication of the different philosophical positions of the government and the Opposition. There are other philosophical differences between the government and the Opposition.

The public had every right to expect that the service would, if not improve, at least stay the same, and that the cost to the traveling public would not increase. They were under the impression, somehow, that this government cared about the cost of airline tickets.

Yet, we are now led to believe - thanks to the philosophical difference between the Opposition and the government - that somehow this government is going to increase the cost to users of the airport, which will ultimately be passed on to travellers, who are Yukoners.

This Minister, in his provocative way, suggests that this is all going to be solved through public consultation, and if we do not agree that we can leave the whole matter up for public consultation that somehow the Opposition is opposed to public consultation.

First of all, I think the legitimate question that needs to be asked is public consultation to do precisely what? Is it to improve services or to find ways that the Yukon government can dig money out of the transfer to be used someplace else and pass on the actual operating costs of the Whitehorse and Watson Lake airports to the travelling public. That is the question that has to be asked, and that is the legitimate question that should be asked - not 10 months from now, but right now.

The government has just transferred this service, and the Minister responsible for Community and Transportation Services very, very aggressively says that he does not intend to have a debt each year, and that it will be corrected, so the Minister regards this particular service as being eligible for full cost recovery at some point and is going to hold public consultations to achieve that objective.

If this is a reflection of the government's philosophical bent, then what is next? Is it only the devolution or is it also highway maintenance and other transportation sectors? Is the full cost of operating the ferry service going to be transferred to the users?

If the Minister intends that everything should be completely user-pay, he should say so, then we will be able to identify a philosophical difference. I will go to the public and I will say, "Yes, we believe that because the federal government transferred the full costs of operating the Whitehorse Airport and Watson Lake Airport to this government you should not see a cost to you as a result of the transfer."

However, the Government of the Yukon felt that this service should be a stand-alone service and should not be supported by taxpayers, because it has a different philosophical position. This different philosophical position is going to mean that the users of this airport have their costs increased.

I would like to know the government's clear position. Have I already received a clear position? Is it cost recovery? Did the Minister let the federal officials know he would be moving in this particular position? I recall, after the NDP government negotiated the Alaska Highway agreement, if that government even hinted or thought about directing some of those funds to other things, the people now in government objected vehemently and vociferously. They moved a motion to suggest that we should not even contemplate it. Now, it is apparently common practice.

Is the money the federal government transferred to this government for the purpose of running the Whitehorse and Watson Lake airports going to be used for these airports, or will it be used in other areas, with the travelling public picking up the difference?

Hon. Mr. Ostashek: The Member opposite should get off that high moral plane he tries to stay on, because he does not fit very well on it. At no time in the debate during the last two days have I heard that user fees will be increased at the airport. This is the kind of fear tactic this Member uses all the time. Negativity and fear tactics are all he knows. He should get off that high moral plane because he does not fit on it very well at all.

Let us talk about the Alaska Highway transfer. Did the former NDP government spend all of the money on the Alaska Highway? No, it did not, and it had no intention to do so. The airport transfer will be treated like any other devolution project in the Yukon. It will go into our base and our formula, and we will absorb the costs of operating those facilities.

Mr. McDonald: First of all, the Member should perhaps lean over to the official on his right and ask him when the transfer agreement was struck for the Alaska Highway; then he should ask if the money that was spent on the Alaska Highway was the money that was transferred for it before he makes any more allegations. Secondly, it was not I who said, "We do not intend to have a $4.7 million debt each year. That will be corrected." I did not say that. The whole issue could have been quickly resolved by either the Minister of Community and Transportation Services or the Government Leader saying that they do intend to continue operating these airports at the existing level of service and do not intend to increase the fees or user fees for the travelling public.

I still do not have a clue what the Minister of Community and Transportation meant when he talked about wanting to eliminate the $4.7 million debt each year. Until that can be explained, we will continue to ask questions; that is our job.

If the Minister objects to being looked down on by someone from a higher moral plane, then he has the option of joining those people on the higher moral plane.

Some Hon. Member: (Inaudible)

Mr. McDonald: Good grief. This Minister of all Ministers makes a comment about having to step down to do so. I will stand here all afternoon if necessary to get an answer to this question: what did the government mean by saying that there was a $4.7 million debt?

I will say this, as well: if the Minister does not give me an answer, the deal of 35 days is off. I insist on an answer. If the Minister is just going to sit back and stonewall, then there is no deal. The understanding was that the Minister was going to give us information.

What did the Minister mean? What did the Minister of Community and Transportation mean by saying that there was a $4.7 million debt that will be corrected? What did he mean by that?

Hon. Mr. Ostashek: We will answer any questions in this Legislature, but we may not give the answers the Member opposite wants - or likes. However, we will answer questions. When we get to that department, the Member can certainly ask the Minister what was meant by that statement.

What I have said that the Member did not say is what the Member opposite is alleging, that is, that users of the airport were going to pay more money - he did not say that.

Mr. McDonald: The Minister obviously understands what the Minister of Community and Transportation Services said if he knows what he did not say. I am going to ask the Minister what he did say. The Minister said that there is a $4.7 million debt, and added that it will be corrected. What does that mean?

Hon. Mr. Ostashek: When we get to the Minister's department, the Member can ask him what it means.

Mr. McDonald: The Government Leader just said he knew what it did not mean. He was involved in the transfer, he is the Government Leader, he was involved in the process of devolution and knows what the policies are. What does it mean to say that the debt will be corrected?

For the record, the Minister of Community and Transportation Services is sitting there, looking at me.

Can someone tell me what it means, so that I might know what the policy is on devolution matters, and whether or not there is going to cost recovery. I do not want to go out to the public and mislead them into thinking that something else is happening, but I can only gather, from what the Minister said, that there is cause for concern. I would simply like to hear some words of comfort that any concerns we have are not justified. That can be done by explaining what it means when the Minister said that there is a $4.7 million debt each year - an operating loss for the two airports - and that it will be corrected. What does it mean?

Hon. Mr. Ostashek: The Member can go on all day if he does not like the answers he is getting from this side of the House. The Minister was quite clear in his plan for the airports. He said that they are going to public consultation with the leaseholders and all the people involved. He did not say that user fees would go up at the airports. He did not say he is going to cut services at the airport. As for how the airport transfer is handled, it is transferred the way any other devolution project is handled. It goes into our base and we provide the service.

Mr. McDonald: The Government Leader has expressed himself on the matter of his objectives about devolution. He indicated the government would take over the services and cut the fat. That was the first signal we had that caused us concern.

Now the Minister for Community and Transportation Services says that there is an operating loss at the airport of $4.7 million each year, and that it will be corrected. So, we have two statements that seem to be a signal for concern.

Can the Minister tell me what the consultation will be all about when they get that started? What is the objective of the consultation?

Hon. Mr. Ostashek: I would be happy to answer the Member, but I think that is a question better directed to the Minister who made that statement and who will be responsible for the consultation.

Mr. McDonald: The Government Leader just told me, in response to my concerns, as he was dismissing me out of hand very aggressively, that any concerns I had could be addressed because the Minister is going to public consultation. The obvious question is this: consult about what? Is it about service levels? Is it about the cost of the airport? Will the consultation refer in any way to the desire not to have a $4.7 million operating loss each year? What is the purpose of the consultation?

Hon. Mr. Ostashek: Perhaps I will have to draw a picture for the Member opposite. I would suspect the consultation is about the operation of the two airports in the Yukon Territory. The terms of reference for the consultations will be worked out, as the Minister said. The transfer is a little more than 24 hours old.

Mr. McDonald: There was not much of a picture drawn there. There is a lot of colouring to do. Whether or not the transfer is 24 hours old or 24 years old or 24 minutes old, the questions still remain. The government has signed a deal, and the deal suggests that there will be a transfer for the full cost of the operation and maintenance of the airports. That is what we understand the deal to be.

Now the government has indicated that there is an operating loss each year that will be corrected. To me, that is a very clear statement that they have targeted this particular service as being something that should not operate at a loss. Am I wrong on that point?

Hon. Mr. Ostashek: Yes, I believe the Member opposite is totally wrong on that point, because the money from the devolution goes into the base. This government has stated that it will have balanced budget legislation in this territory and it will have, but that is just one of the costs in our base. There is no program - the Member knows this, because he was in government - that operates in isolation from any other program.

Mr. McDonald: That is good and I think I agree with the Minister. Now what does it mean to say that there is a debt that will be corrected?

Could the Minister of Community and Transportation Services help us here? Could we get past this point, because this is a fairly serious point.

Hon. Mr. Brewster: Well, you know I came up in a world where you did your best to keep your books balanced and that one is out a little. There was also $2 million spent on a runway that will not be there next year, which brings that down.

I have never once said - I do not know why the Member is putting words in my mouth - that there were user fees or anything even considered. We do know that if a private company had taken over the operation of the airport, they would have had five years to stand on their own feet, but that cannot be done in the Yukon, because there are not enough people. We know that, and that is why we have taken this over.

This government has done its best. I have always done my best and I will continue to do so to keep this debt-free and balanced. Members do not have to put words in my mouth and say that I said there would be a user fee, because I never once said that. Today is the first day that I have used that word in this Legislature.

Mr. McDonald: The Minister has got all the alarm buzzers running at this point. Let us leave out the whole notion of user fees or service cuts for a minute and let me ask the Minister this: he says he believes in balanced books. He said yesterday there is a $4.7 million debt each year and that it will be corrected. How does he intend to balance the books?

Hon. Mr. Ostashek: That Minister's department is coming up and the Member opposite will have plenty of time to question him on his department. I would prefer to go on with general debate on the main estimates.

Mr. McDonald: There is a principle here with respect to devolution and the financial terms of devolution, and that is what I am focusing on in general terms. I thought I understood devolution. I thought I understood the government's position on the financing of devolution - that they were going to take the full costs associated with devolution and have those costs transferred to the Yukon so there would not be service cuts. Whatever misstatement the Government Leader might have made with respect to cutting out the fat and all that sort of thing, we at least felt we understood that the transfer of the service would mean that the government would get the full cost, and that there would be no attempt to make these individual transfers cost-recoverable - or, as the Minister of Community and Transportation Services says, to balance the books.

The hospital, for example, is another service that has some revenues, and it has much higher expenditures. We received some funds from the federal government to operate that hospital. Is the operating principle of the hospital transfer such that, in the Minister of Community and Transportation Services' words, it should have its books balanced? I presume balanced means the revenues and expenditures for that particular operation are the same. Is that an operating principle for the hospital or for any other devolution of which the Minister is aware?

Hon. Mr. Ostashek: I gave the Member opposite the principles of devolution. Everything goes into the base. He knows that; I know that. I do not know why he is trying to make a big issue of something that is not an issue.

We will be providing the service to the people of the Yukon. The cost will come out of our general revenues, like they do for the hospital, the health programs or anything else. It is not the principle of this government or any other government to operate any program on a program-by-program basis.

As to what the Minister meant by his comments, the Member opposite will have plenty of time to get into that when he gets into his budget. I have given him the principles of devolution. They all go into the base. The costs come forward every year and the Cabinet Ministers figure out how the budget is to be allocated.

Mr. McDonald: There is a problem here, and I think the Government Leader is as well aware of it as I am. I am sure he wishes that I would leave this issue alone.

Some Hon. Member: (Inaudible)

Mr. McDonald: The Minister does not care. Maybe I will continue then.

This issue does involve an important principle. The Minister indicates that there is no such thing as any single cost centre that has to have its books balanced in the government. He says that it all goes into general revenue and there is no attempt to balance the books on any particular service the government provides, particularly when it comes to - or perhaps exclusively when it comes to - those services that are being transferred from the federal government.

The Minister of Community and Transportation Services takes exception to that, apparently, and says that he believes that the books should be balanced. He believes that there is an operating loss each year that has to be corrected. That, to me, is plain English. Either the Minister of Community and Transportation Services has it wrong or he has it right. If he has it right, then we have some concerns on this side of the House.

According to the Government Leader, if the Minister of Community and Transportation Services has it right, he has some problems with the Government Leader, because that is not the principle that the Minister has just expressed with respect to the transfer of federal programs.

Can the Government Leader tell us this: does he believe that the operating loss for the airport should be corrected and that the books should be balanced for the Whitehorse Airport?

Hon. Mr. Ostashek: In the Member opposite's term, there is only one cost centre; it is the whole budget. We have proven that we can balance it, and we will continue to do so.

Many options are open in public hearings. A tremendous amount of land is involved with that transfer. There could be other revenue sources other than user fees for the people who are using the airport. All of these issues can be explored.

Our government, as a whole, will always continue to try and provide the best level of service at the most reasonable cost.

Mr. McDonald: We might be getting somewhere here.

The Minister indicates that there is only one cost centre and that whatever concerns the Minister of Community and Transportation Services has about the operating loss at the airport, he somehow has to think of that in the context of the whole government. I do not know how he can resolve that. I think he will have to think about it.

The Minister goes on to say that the user fees are only one option. He says, and I quote, "User fees are but one option; the government can sell land."

I will let the Minister continue.

Hon. Mr. Ostashek: There are all kinds of options that will come out in the public hearings. There could be more facilities put up there to rent. There could be other ways of raising revenue.

I will not stand here and make a decision about what is going to come out of the public hearings. The Minister said he would have some public hearings to try and see what options are available to him. I just think that this is a ridiculous way for the Member opposite to act. He is trying to create a panic in the public that does not exist.

Mr. McDonald: I am not trying to create a panic at all.

Some Hon. Member: (Inaudible)

Mr. McDonald: The Minister says that I sure as hell am; I am not. I am trying to find out what is happening. All that I can do is listen to the Ministers speak. That is the only input that I have. There are some very significant issues to address. When one Minister says that he wants to balance the books of the airport and airport operations, we obviously have to check it. If the Minister can do anything that can satisfy public concerns, he should do so. However, if he thinks for one second that I am not going to ask questions about what could obviously lead to some significant costs to the public, depending on the options, I am going to ask the questions. There is no doubt that this is worthy of discussion here.

I will raise the matter again with the Minister of Community and Transportation Services. Based on his common-sense language and on what he said briefly this afternoon - that he believes in balanced books in this particular area - I want to know what the heck he means by it, and what is on the table and what is off the table? I think that it is patently obvious that there is a difference of opinion between the two Ministers about whether or not they consider the whole government to be a cost centre or if they consider individual transfers to be cost centres.

I have a few other questions about the financing situation of the government itself. The Minister indicated that the government will be leaving a $7.5 million accumulated surplus, as of March 31, 1997. He also shows a $2 million contingency for other expenditures that might come along or are not clear yet. Can the Minister tell us what kind of expenditures he will be reserving the $2 million contingency fund for?

Hon. Mr. Ostashek: A wide variety of issues could come up, although I believe that each department has budgeted to the best of its ability. As an example, more teachers might have to be hired due to an increase in the population. At this point, we do not have any plans to spend that $2 million. It is strictly a contingency fund.

Mr. McDonald: The contingency last year was substantially higher, and the government spent that contingency and then some or, at least, is planning to. Why was the decision made to leave the contingency at $2 million, if the experience of last year's contingency was higher?

Hon. Mr. Ostashek: Last year, we knew that there were going to be some costs coming in that we could not anticipate when the budget was being put together. An example of that was the Loki road. We knew that we would need some contingency money for that.

At that time, we also knew that we were going to require more teachers in the school in Faro, with the Faro mine reopening, but we did not know how many. In general, we knew we were going to have to spend money on certain things, but did not have a good enough handle on them to include line items in the budget or to increase the line items. That is the difference between last year's and this year's contingency.

Mr. McDonald: Have all the departments budgeted merit increases in this budget? Is the Minister aware of any personnel costs that are not covered as a result of the collective agreement, or current plans that are not covered in the main estimates budget?

Hon. Mr. Ostashek: All the departments were asked to take inflation and merit pay increases into consideration when preparing their budgets.

Mr. McDonald: Was there any contingency for lawsuits, in particular the Taga Ku project?

Hon. Mr. Ostashek: No.

Mr. McDonald: The government in the current year not only spent the contingency, but I think it spent $6 million or $7 million more than the contingency allowed. I think the spending plans were something like $506 million up from $489 million and the approximately $10 million contingency.

Could the Minister tell us, given the spending patterns of the current year, what comfort he can give us that the spending patterns for the next year will not eat up the $2 million and the $7 million surplus that is listed here.

Hon. Mr. Ostashek: The comfort that I can give the Member opposite is to tell him that I do not know of any plans for that $2 million. It was not an issue that this government saw coming up and costing us money; we did not know what the exact cost was and that is why we included the contingency.

Some of the money that was voted in the supplementary was revote money from the previous year. Along with that, we advanced the construction of the visitor reception centre, because there was the possibility of keeping people working all winter. The government advanced the construction of that project, so there would have been more lapsed funds in last year's budget that would have been added to our capital this year. This was a project that was in the budget, and we just advanced it by about six to eight months.

Mr. McDonald: Since this budget was designed and developed, have there been any other discussions about expenditures that are as yet unannounced?

Hon. Mr. Ostashek: We cannot recall any at this time.

Mr. McDonald: Have any of the departments built in any contingencies of which the Department of Finance is aware?

Hon. Mr. Ostashek: No. We do not allow departments to build in contingencies in each department's budget.

Mr. McDonald: The Department of Finance has indicated in the past, and I know this well myself, that it believes that one month's operating expenditures should be held in reserve, and the government has itself expressed some support for this general concept. Of course, $7.5 million is not one month's operating reserve; it is about five days' operating reserve. What is the reason for not trying to hold a reserve of more than the $7.5 million, given the operating objective of, I guess, $34 million for an operating reserve?

Hon. Mr. Ostashek: I believe I relayed to the Member opposite, and I have done so in this House, that $7.5 million would be the bare minimum surplus that we would have. And I believe I have already relayed to the Member opposite that the period 12 variance picked up about $3 million more for us, so I believe our projected surplus at this time is about $10.5 million for March 31, 1997.

Mr. McDonald: Whether it is $7.5 million or $10.5 million, it is still not one month's operating reserve. I think we have picked up a couple of days of operating reserve. Why was this prudent principle not followed in this particular year?

Hon. Mr. Ostashek: Again, the Members opposite condemned us for two years for having too large a surplus. Now, they want to know why we spent the surplus down. We spent the surplus down - and we said why we spent it down in the budget speech, but I will say it again - for the sake of a transition to a lower level of spending without taking a big whack out of it all in one year. Our spending has dropped dramatically from what it was the previous year and it will drop probably again next year. We are moving to a lower level of spending. We believe we can do that and build up enough surplus over the next couple of years to give us that comfort level that everyone would like to have.

Mr. McDonald: If the Opposition is holding the government to account for its own objectives, then the government cannot turn on the Opposition. I am simply repeating the Government Leader's own words to him and asking him why he is not living up to his own objective. I am not saying that I agree or disagree with any of his objectives, even though some of them are inconsistent. I am simply asking him for his opinions on these matters and trying to get some sense of what the financial objectives are.

I asked the question in supplementary debate about the size of the land bank and the carrying charges associated with the land bank, or the lost interest income as a result of the very large land bank. Does the government have a policy on the appropriate size of land held in inventory?

Hon. Mr. Ostashek: We believe that we need to keep one year's reserve of lots at all times.

Mr. McDonald: Is that one year's supply of lots in all classes in all communities? Is that the principle?

Hon. Mr. Ostashek: We would always like to have some country residential lots in reserve, but we never can, because they are in such high demand. However, we do have a supply of building lots. As long as we have enough - I believe we have an average figure of how many homes are built in the Yukon - we can try to keep one year's reserve of lots in supply so that there will always be land available and there will not be pressures for rapidly escalating prices on land, especially in the City of Whitehorse.

Mr. McDonald: I certainly have some questions for the Minister of Community and Transportation Services about that principle. I think the government may have exceeded it in some cases.

Is it the case that there is no objective for the dollar value of land that it be held in inventory?

Hon. Mr. Ostashek: No, we do not have a dollar value on it. It is a judgment call. We believe that we need a one-year reserve of lots available to stabilize the marketplace. Other people may have different ideas on that. However, we feel comfortable with that.

Mr. McDonald: A lot of this leads to an obvious question about future years. Clearly, the government has a budget and spending plan that exceeds one year. The government has indicated to us that it is interested in trying to meet the expenditure patterns this year. That will result in a $24 million deficit for this year, covered out of its operating surplus. However, the government readily admits that such an action cannot continue in future years, because there is not the operating surplus. Clearly, there will have to be cuts made next year.

Can the government give us some indication of its spending priorities in terms of expenditure cuts and expenditures that it wants to protect in the future?

Hon. Mr. Ostashek: Over the last three years, this government's goal has been to maintain the current level for the operation and maintenance of government and not to have it escalate out of control. We have been fairly successful with that. As we move to a lower level of government spending, we have to be cognizant of what is happening in the private sector. We believe that in another year there will be many more jobs created in the private sector, and we do have a discretionary capital budget of some $62 million.

With some minor re-jigging and maybe a little less capital and an increase in revenues, this government does not see a difficulty in balancing the budget next year.

Mr. McDonald: That may well come to pass, coupled with lapsing budgets from the current year. Although, I think that if the expenditure pattern for the current year is the same next year, there may be some very tight moments ahead of us.

I will discuss that at another time.

A question was asked in the Finance committee meeting, where we spoke with Finance officials about a non-government organization receiving its payments up front. The Minister has said, in the past, that Yukon College will receive its payment up front and other organizations will, in all likelihood, receive their payments on a regular, periodic basis throughout the year, but no up-front funding.

I checked Hansard, and the one question that was not answered clearly was whether or not there was a policy with respect to accounting for the fact that the interest income would now be lost by those non-government organizations and whether or not there was any conscious attempt to make up the difference or if there was a conscious understanding that the non-government organizations would have to simply eat the loss in revenue as a result of the loss of interest income.

Can the Government Leader elaborate on the government's policy in this regard?

Hon. Mr. Ostashek: Yes, I can. First of all, anything under $25,000 is paid out in advance once a year, rather than doing the bookkeeping.

They will be made in quarterly payments, except for Yukon College, as I have already said. The policy of moving the non-government agencies to a fee-for-service policy, rather than block funding, which the government has had in place, was debated in this House during the last budget, I believe. We are continuing with that, and all of the contracts have been negotiated, for the most part, on a fee-for-service basis, rather than straight block funding.

Mr. Chair, I move that you report progress.

Motion agreed to

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

Motion agreed to

Speaker resumes the Chair

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

Chair: Mr. Speaker, Committee of the Whole has considered Bill No. 9, Third Appropriation Act, 1995-96, and directed me to report it without amendment. Further, Committee of the Whole has considered Bill No. 10, First Appropriation Act, 1996-97, and directed me to report progress on it.

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

Some Hon. Member: Agreed.

Speaker: I declare the report carried.

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

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

Motion agreed to

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

The House adjourned at 5:30 p.m.

The following Sessional Papers were tabled March 21, 1996:


Post-employment restrictions directive (effective April 1, 1996) (Phillips)


Yukon Development Corporation: contracts current through December 31, 1995 (Nordling)