Whitehorse, Yukon

Monday, February 22, 1999 - 1:30 p.m.

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




Speaker: It gives me great pleasure to announce that the following students will be serving the Legislative House as pages for the spring sitting. They are Jessica Hughes, Steve Lundberg, Geordo Matechak, Chelsea McCreadie and Jessica Slonski from Porter Creek Secondary School, and Félix Des Lauriers, Jacqueline Frechette, Stephen Mansell and Reta Pyke from F.H. Collins Secondary School.

Today we have with us Félix and Jessica. I would ask members to welcome them to the House at this time.


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

Are there any tributes?

Are there any introductions of visitors?


Ms. Duncan: I would like to ask all members of the Legislature to join me in welcoming many distinguished guests today, but I would particularly like to welcome my parents, Colleen and Tommy Duncan, to the gallery.



Speaker: I have for tabling a report of the Clerk of the Legislative Assembly made pursuant to subsection 39 of the Legislative Assembly Act.

Are there any further returns or documents for tabling?

Hon. Mr. Sloan: I have for tabling the government contracting summary report by department, April 1, 1998 to January 31, 1999.

Hon. Mr. Harding: I have for tabling the Yukon Short-Term Economic Outlook1999.

Speaker: Are there any reports of committees?



Petition No. 9 - received

Clerk: Mr. Speaker and hon. members of the Assembly, I have had the honour to review a petition, being Petition No. 9 of the First Session of the Twenty-ninth Legislative Assembly, as presented by the Member for Riverdale North on December 15, 1998. This petition meets the requirements as to form of the Standing Orders of the Yukon Legislative Assembly.

Speaker: Petition No. 9 is accordingly deemed to be read and received.

Are there any bills to be introduced?


Bill No. 15: Introduction and First Reading

Hon. Mr. McDonald: I move that Bill No. 15, entitled Fourth Appropriation Act, 1998-99, be now introduced and read a first time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 15, entitled Fourth Appropriation Act, 1998-99, be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 15 agreed to

Bill No. 14: Introduction and First Reading

Hon. Mr. McDonald: Mr. Speaker, I move that Bill No. 14, entitled First Appropriation Act, 1999-2000, be now introduced and read a first time.

Speaker: It has been moved by the Government Leader that Bill No. 14, entitled First Appropriation Act, 1999-2000, be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 14 agreed to

Speaker: Are there any further bills to be introduced?

Are there any notices of motion?


Mr. Livingston: Mr. Speaker, I rise today to give notice of the following motion:

THAT it is the opinion of this House that

(1) the development assessment process, or DAP, is an obligation of the umbrella final agreement signed by the governments of Canada, Yukon and Yukon First Nations;

(2) two and a half years ago, the leader of the official opposition stated he had completed DAP, which was at that time a carbon copy of the convoluted federal CEAA and regulatory processes currently in effect in the Yukon;

(3) the development assessment process should be viewed as a process to promote responsible development and respect the environment rather than as a barrier to development; and

(4) the public has provided invaluable comments during the more than 100 days of public consultation just completed;


THAT this House supports the Yukon government's position to:

  1. continue working with Yukon people on the development assessment process legislation and related procedures;
  2. continue working with Yukon people on the federal government's "blue book" initiative to streamline the administration of assessment and permitting processes; and
  3. complete the development assessment legislation only when it is set out in an effective, timely, efficient and predictable development assessment process that adequately reflects the needs of Yukon people.

Speaker: Are there any statements by ministers?

This then brings us to Question Period.

question period

Question re: Economic climate in Yukon

Mr. Ostashek: Mr. Speaker, in 1992, when the Yukon Party government took office, the Faro mine was in the process of closing down; exploration was at an all-time low of some $9 million and unemployment in May of 1993 soared to over 17 percent. To make matters worse, the previous NDP government left Yukoners with a $64-million deficit.

However, due to the economic leadership of the Yukon Party government, 1,500 new jobs were created, Mr. Speaker. Mining exploration totalled more than $50 million, and we left the new NDP government with a $50-million surplus in 1996.

My question to the Government Leader: does he believe that Yukoners are better off today than they were in 1996 when he took office?

Hon. Mr. McDonald: Mr. Speaker, was that a question or a personal fantasy on the member's part?

I also recall, Mr. Speaker, that when the Faro mine shut down, the Yukon Party government responded with tax increases - the first and the largest in recent memory - and the largest spending activity that the government was able to produce for years and years and years.

The problem with the economy at that time was that it was very narrow; it was entirely resource-based, and the Yukon Party did nothing to diversify it or to change it. What has been the challenge for the current government - a challenge that we have met over and over again - is to start diversifying the economy in partnership with the private sector, so that we do not face the boom-and-bust cycle that characterized all of the Yukon Party term of office, and plagued previous governments as well.

Mr. Ostashek: Well, the Government Leader didn't answer the question whether Yukoners are better off today or whether they were better off in 1996, and I can understand that because, if I were him, I'd be ashamed of the economic leadership that he's provided to the Yukon.

Mr. Speaker, you can't blame low mineral prices, you can't blame the Bre-X scandal to explain why there's no exploration in the Yukon, because for our neighbours next door in Alaska exploration is booming, and even with our lower Canadian dollar, Canadian investors are taking it to Alaska to invest.

The difference lies, Mr. Speaker, in economic leadership and government policies.

My question to the Government Leader: I asked if he could explain why he rejected our call for an economic summit, forcing business leaders to call their own economic summit? Will he now admit that he was wrong in not calling that summit?

Hon. Mr. McDonald: Mr. Speaker, the member's memory of even recent events is highly selective and misleading. The member mentioned the situation and tried to compare it between 1996 and today. In 1996 -

Some Hon. Member: Point of order, Mr. Speaker.

Point of order

Speaker: The hon. Member for Riverdale North, on a point of order.

Mr. Phillips: Mr. Speaker, I believe using the word "misleading" to another member is inappropriate language for this House.

Speaker's ruling

Speaker: I would ask the Government Leader to withdraw that statement, please - "misleading".

Hon. Mr. McDonald: I could respond to the point of order, Mr. Speaker, but it doesn't really matter. I will withdraw whatever it was that the leader of the official opposition and his oh-so-sensitive right-hand man feel is the trouble.

Mr. Speaker, the difference between 1996 and today is that in 1996 the Anvil Range mine was open. Today it's not, and nothing could be clearer in terms of the basic underpinning behind which we find ourselves in this territory today. The mining activity in the territory - in the world - has faced a slump in the last couple of years, despite the fact that governments such as ours have been trying to maintain not only a good but an excellent relationship with the mining community in trying to increase the mining activity and exploration activity in this territory, and we've taken unprecedented actions to encourage mining activity - actions that the Yukon Party would never have dreamed of taking.

Mr. Ostashek: Well, Mr. Speaker, one thing about it, whatever actions we took worked. Whatever the NDP has done has not worked.

Mr. Speaker, my final supplementary question to the Government Leader: having failed to demonstrate any economic leadership as Government Leader and as a government, will he now accept the recommendations of the economic summit, which they didn't think needed to be held at all? Will he accept those recommendations?

Hon. Mr. McDonald: Well, Mr. Speaker, the member speaks of the actions that his party took while in office. His party took no actions - none whatsoever. In fact, when the Anvil Range mine was trying to start up, people in Toronto were saying that there was more interest in Toronto in starting the mine than there was in the Yukon Party government.

So, Mr. Speaker, the actions that we have taken, both prior to 1992 and since 1996, are new actions that the government can take to encourage mining activity in this territory.

Mr. Speaker, with respect to the business summit, the businesses that participated in that summit have discussed the actions that they and the government can take. They will be making recommendations to the government, I understand. They have not yet done so. But I am certain that, given all of the consultation that our ministers in this government have taken with the private sector, there is much that the business community wants the government to do that the government is in fact doing now.

Question re: Education department, retirement benefits

Mr. Phillips: My question is for the minister responsible for the Public Service Commission. Mr. Speaker, in the last sitting I raised the issue of the minister doing what is right, ethical and fair for the family of Flo Kitz in recognition of her years of dedicated service as a school teacher in the territory.

The minister, Mr. Speaker, can't plead poverty, because this government just awarded Yukon judges a $23,000 increase without batting an eye, and most Yukoners, largely because of this government, are having a hard time making ends meet.

Mr. Speaker, I'd like to ask the minister: will he now agree to work with the Yukon Teachers Association and amend the collective agreement to enable Flo Kitz's family to receive the $24,000 retirement gratuity that she so deservedly earned?

Hon. Mr. Harding: Well, Mr. Speaker, I find it disturbing to discuss the memory of someone so well-respected, and for the member opposite to use that memory as a political football in this House, I find disturbing. The Kitz family, according to the contract, was paid out hundreds of thousands of dollars, including pensions that the spouse is still entitled to, as well as one of the children, while they're at university. Those were the benefits paid out, according to the collective agreement. That's what was in the contract. If there is a concern about the contract and what was paid or not paid out, there is a grievance procedure for that matter, which would quickly determine the outcome. It is not appropriate for a minister to intervene in matters that are within the confines of the collective bargaining agreement on an ad hoc basis.

Mr. Phillips: What is most disturbing here is the cold and callous way in which this minister is dismissing this issue. Mr. Speaker, the minister received the letter on December 9 from the Yukon Teachers Association, pointing out that article 47.01 of the collective agreement allows making an amendment, by mutual consent, between employer and YTA. YTA is prepared to give that assent. As pointed out to the minister, this particular change would only affect one past employee of the Government of Yukon, and that's the late Flo Kitz - one employee, $24,000. I'd like to ask the minister why he hasn't even taken the time in this important issue to respond to YTA and, at least, give them some idea of where the minister is coming from.

Hon. Mr. Harding: Well, the member's preamble is inaccurate. I have responded. I have responded in this House. I resent the notion that we're being cold and callous. I'm not politically interfering in the collective agreement. That's an important principle for a minister - not to pick and choose who gets what benefits. The contract clearly lays out what is entitled in cases such as this. It was significant - hundreds of thousands of dollars in benefits, a pension that is still ongoing for the surviving spouse. That is what was contained in the collective agreement, and that is what was paid out. I think it's only appropriate that issues - if there is an issue about the level of compensation - be addressed either through the collective bargaining procedure or through the collective bargaining grievance procedure, and not by direct interference by the minister in these matters.

Mr. Phillips: Well, the minister must not have listened to the question.

Mr. Speaker, there is an article in the collective agreement - 47.01 - that allows the minister to deal with specific issues. That's why it's in there. The teachers' union has written the minister, and asked the minister to sit down with the union, and discuss this one-time-only incident. It won't affect anybody else.

Mr. Speaker, Flo Kitz gave a great deal of her life to the students of the Yukon Territory, and the government has now agreed that in the future anyone else will receive this gratuity. Everyone else will receive it. The government has taken a cold and callous approach to this oversight, Mr. Speaker, that it won't interfere. The minister says, "Hands off, I won't touch it."

Well, Mr. Speaker, I'd like to ask the minister, is he aware that the issue is being investigated by CTV's Goldhawk and, if aired it'll bring national attention, and the hard-hitting stupidity and callousness of this supposedly caring government will be brought out to all Canadians.

Is the minister aware that that's going to happen?

Hon. Mr. Harding: I find it so disturbing to listen to the member piously decry these issues, and use the memory of someone who I know is very well-respected on the floor of this Legislature for no more than a political football. I find that very disturbing.

Mr. Speaker, the collective agreement paid out hundreds of thousands of dollars to the family. There's a continuing pension for the spouse, as a result of the benefits in the collective agreement, for one of the children who is attending university. As I said, the issue was not an oversight; it is in fact a negotiated provision of a collective agreement.

The same provision still exists today, I might add, for managers of the government, under our government and the previous government's government. It was not an oversight. It was changed - or could be changed, subsequent to what happens with the conciliation board report in this round of negotiations - to reflect a different reality. But it was not at this time. That is why the government did not do anything outside of the confines of the collective bargaining process.

The monies that were owed - considerable amounts of monies - were paid out in full.

Question re: Tourism, director of marketing

Ms. Duncan: Mr. Speaker, my question is for the Minister of Tourism.

On December 15, 1997, the Minister of Tourism made reference in this House to the Cabot Corporation of Newfoundland. The minister said, "Certainly it was a wonderful experience." In February of 1998, the Yukon hired the former chief executive officer of the Cabot Corporation. On March 10, 1997, nine months before our minister made those remarks about Newfoundland and almost a full year before the Yukon hired the former chief executive officer of the Cabot Corporation as our new director of marketing, an Auditor General's report on the Cabot Corporation was released. The Auditor General's report tells us that the operation of the Cabot Corporation was not the wonderful experience described by the minister.

Was the minister or his department aware of the Auditor General's report before we hired this individual?

Hon. Mr. Harding: As this is a matter for the Public Service Commission, I will respond as the minister responsible. The issue of the hiring of public servants is within the purview of the specific departments and of the Public Service Commission. In this particular case, and as in all cases, extensive reference checks were completed and it is the practice of the government to rely upon the reference checks and trust the people who are being asked for references - not to check Auditor General reports across the country.

Ms. Duncan: Well, Mr. Speaker, I'll thank the minister of everything for that answer, but in the government's own press release on Friday, the Department of Tourism took responsibility for this issue.

Again, I will ask the Minister of Tourism. There has been a lot of controversy over the last two months about the hiring of the former director of tourism marketing. That controversy has widened and deepened because the minister in this open and accountable NDP government has refused to answer questions about the hiring.

The Auditor General's report outlined a host of irregularities in the operation of the corporation, including the use of corporation credit cards and money for personal expenses. Our former director of marketing was the CEO at the time, the person in charge.

The Auditor General's report was released in March

1997, a year before the director was hired.

Was the minister or his department aware of the report before they hired this individual?

Hon. Mr. Harding: Mr. Speaker, the Public Service Act is very clear - the law. This side of the House respects the law. The law says that the public servants are hired by the Public Service Commission.

Some Hon. Members: (Inaudible)

Speaker: Order please.

Hon. Mr. Harding: Disciplinary matters are not to be handled directly by politicians. In this case, reference checks were done. The Auditor General's report, which the member references, was not researched, because that's not how hiring is done. It's not within the process. You call, you check references, and you trust the people who give you the references. In this case, the references were good. The incident in question came about after the person was hired, based on those reference checks. That's the process.

Ms. Duncan: Mr. Speaker, as far back as December 1997, nine months after the release of the Auditor General's report in Newfoundland - tabled in the House in Newfoundland - the minister told this Legislature that he was planning to hire Mr. Bennett. If he was planning to hire this individual for months in advance, why didn't the minister do his job and find out what happened in Newfoundland? Why didn't the minister bother to find out anything about how this individual does business before he was hired?

Hon. Mr. Harding: Well, the short answer is that the minister doesn't do the hiring in this position or any other in the government, and nor should they, because that is political interference in the hiring of employees within the government, and that's what the law says in the Public Service Act.

So, Mr. Speaker, I say to the member once again: I know she's trying to score some political points here, and she's trying to run some people through the mud, but let me just tell the member opposite that there were reference checks done in the appropriate manner by the department, which is the way it should be. They trust the references. They don't research Auditor General reports across the country to determine who should get a good reference or who should get an opportunity for a job. That's not the way the process works, and if the member thought it through a little bit, she would understand that, but, unfortunately, she's only interested in trying to score some political points at the expense of some Yukoners.

Question re: Tourism, director of marketing

Ms. Duncan: Mr. Speaker, I'd like to ask the Minister of Tourism about the Auditor General's report on the Cabot Commission in Newfoundland.

The minister, had he read the report, would have learned that the Cabot Corporation awarded a $180,000 contract to a company that was allowed to submit their bid five weeks before the proposal was publicly advertised. He would have read that contracts for consultants were routinely handed out simply by recommendation or personal knowledge by a member of the corporation; no tendering of over $424,000 worth of contracts. The CEO of that corporation now works for the Government of Yukon Department of Tourism.

My question for the minister responsible for the Department of Tourism: is this how he thinks Yukon public business should be conducted?

Hon. Mr. Harding: Every time she asks the question, it gets more ludicrous, Mr. Speaker. If you follow the member's premise through, the minister should sit in his office, read all the Auditor General reports on all of the Crown corporations and governments from across the country, then write a list out, give it to the departments and say, "You can hire these people" or "You can't hire these people", depending on what's in the Auditor General's report.

It's absolutely ridiculous.

Mr. Speaker, I want to say to the member opposite that the politicians stay out of the hiring decisions in this government. It's in the law, in the Public Service Staff Relations Act, and it's an important premise that this government respects.

In this case, reference checks were followed. Auditor General reports from across the country were not researched, I grant her that, but that's not the normal process; nor, I suggest, will it be in the future. What was due process was conducted. The reference checks were cleared. The hiring was made and, subsequent to that, the charges came to light.

Ms. Duncan: So, what the minister responsible for the Public Service Commission is saying to this House is that, nine months after a public report was tabled about how an individual handled business, the Minister of Tourism didn't even bother to read the report, didn't bother to do his homework.

Let's look at an example of how that Cabot Corporation did business. The corporation adopted a policy that they'd use a payscale similar to the rest of government, then they changed their mind. Instead, they did things like pay $6,000 in lease payments for vehicles that were never used.

Those vehicles sat in a garage for five months. The CEO of that corporation, the individual responsible, now works for the Government of Yukon, Department of Tourism. Does the minister responsible for the Department of Tourism think that public business should be conducted this way?

Hon. Mr. Harding: The member is not listening to my response. She keeps asking the question. The answer will always be the same to this because that's due process. Neither the Tourism minister, nor myself, interfere in hiring matters. In this case, the process of reference checks was undertaken. The minister is not responsible for reading Auditor General reports for hiring from across the country. What he is responsible for is ensuring that process, which involves reference checks, are completed. In this case they were. The employer of this particular individual was contacted and the employment history was reviewed through the reference process. That was trusted, and the response that led to the hiring was made.

Ms. Duncan: Mr. Speaker, what the minister responsible for the Public Service Commission has said is that a number of background checks were done and that a review of the Auditor General's report was not part of the background check. The Auditor General's report was a public document nine months before the minister stated in this House that he wanted to hire this individual. What type of background checks were done that the department would not check something so obvious as an Auditor General's report?

Hon. Mr. Harding: Mr. Speaker, the member's premise is that because the Auditor General's report is a public document, the minister should have read it himself. We have libraries full of public documents in this House, in this Legislature, in these offices. What is the member's point? I fail to see it.

First of all, the minister doesn't do the hiring. That's the first point. The second point is that the Public Service Staff Relations Act is the law that says hiring is in the purview of the Public Service Commission, and it is in the purview of the Department of Tourism. So, Mr. Speaker, let me say again to the member opposite that extensive reference checks were made. The people who were spoken to were credible people who were trusted. That led to the hiring.

So, Mr. Speaker, once again, let me tell the member opposite that that is the process that was followed. It's a good process, and I believe it's the only one that would actually work. Her premise that somehow departments and the Public Service Commission should read all public documents before making a hiring decision across the country is ludicrous.

Question re: Canada Winter Games, attendance of minister

Mr. Jenkins: Mr. Speaker, I have a question today for the minister responsible for Community and Transportation Services, and it's in the area of sports and recreation.

Last Thursday, Team Yukon left for Cornerbrook, Newfoundland, to compete in the Canada Winter Games. The minister wasn't with them. In the opening ceremonies, Yukoners could see the Prime Minister of Canada, the Premier of Newfoundland, and many other provincial ministers responsible for sports.

Can the minister explain why he cancelled his trip, and he did not go? Especially given that there were meetings scheduled there for all the ministers of sports, to address the issue of new locations for future Canada Winter Games.

Hon. Mr. Keenan: Yes, Mr. Speaker, certainly it was a very difficult choice for me. I certainly believe in the development of sports, and what it does for our communities, especially for our youth, and people such as myself, who take on new sports.

So, certainly it was a difficult decision to make, but I am here. My first obligation is to the people of the Yukon Territory, and will continue to be to the people of the Yukon Territory, and to this Legislature.

Mr. Jenkins: Well, here we have an economic opportunity for Yukon to host the 2007 Canada Winter Games, right here in Whitehorse, Mr. Speaker. But the minister did not even take the time to go to Newfoundland to lobby other ministers. Now, he could have been there, and he could have come back on the weekend, and he could have been in Whitehorse this morning, after attending those meetings, which were very important.

Why did the minister not make the effort to attend these meetings?

Hon. Mr. Keenan: Mr. Speaker, it certainly seems that the buck stops with the minister. That's everybody's attitude on the opposite side of the floor. But this government certainly has a way of doing business, with its staff, with other people and other organizations.

Mr. Speaker, the Yukon Territory is represented at that meeting. The paper has been prepared on behalf of the Yukon territorial government, and presented by the Yukon territorial government. And we'll continue to do good business, Mr. Speaker. Singularly, if I cannot be in a spot, Mr. Speaker, that does not mean that the Yukon is not represented. It means that the Yukon will be represented, even more so.

Thank you, Mr. Speaker.

Mr. Jenkins: Well, why was the minister not there? He sent an assistant deputy minister from his department. That individual only has observer status at the talks between the provincial ministers responsible for sports. Why did the minister delegate his responsibility and relinquish all of the opportunity we had at that time? It's a very important issue for the Yukon. Why did the minister not address his responsibilities?

Hon. Mr. Keenan: Mr. Speaker, I can absolutely agree that it is a very important function, and the Yukon Territory is represented there. We have an MLA in Newfoundland at this very point in time.

What can I say? Well, when the budget has been tabled and when we get into dissecting what is in the budget, he will see the commitment that the Yukon Territory has made and gone for for the City of Whitehorse and the Yukon at large for the meaningful development of youth through sport and recreation, through the games structure. That is what we've done, and we will continue to do good business on behalf of and for the people of the Yukon.

Question re: Workers' Compensation Act review

Mr. Cable: I have some questions for the minister responsible for the Workers' Compensation Health and Safety Board. The minister announced in October, by way of a press release at the time, that a review of the Workers' Compensation Act would begin in early February, and the minister's press release said - that's back in October - that business and labour organizations had a desire to clarify certain sections, to ensure consistent administration of the act, and to improve the appeal process.

So, just what is the minister saying? Is the review restricted to those three issues or is this going to be a total review of the whole act?

Hon. Mr. Harding: There will be some suggested parameters to the act.

Mr. Cable: Well, that's fairly enlightening. Let's just see if we can get just a wee bit more information.

The press release said an options paper was then being drafted - that's back in October, on October 30, the date of the press release - to determine how the act review and the stakeholder consultation process would proceed. Now, that's four months ago. I haven't seen anything on the Web. I haven't seen anything circulated. Could the minister tell us what's going on? Is the option paper done? Has it been circulated? Is the review taking place? Has anybody responded?

Hon. Mr. Harding: Well, Mr. Speaker, when I gave them the long answer, they don't like that, and when I give the short answer, they don't like that either.

Mr. Speaker, the review is underway. We have engaged some consultants to lead the review process. That information I can provide in extensive detail to the member opposite.

We intend to involve very aggressively the board of the Workers' Compensation Health and Safety Board - that's the citizen board. We also intend to involve the stakeholders, and they will be our primary focus. We intend to involve them through focus groups and through the advisory groups that have been established by the board to provide them an opportunity for an extensive level of input into the act review, and it is our hope that we can do it within certain parameters because we want to determine that this act should come forward in the fall of 1999, as was agreed to with the stakeholders last year through a very good meeting I had with them, and we intend to try to stick to that schedule.

Mr. Cable: Okay, maybe out of courtesy, the minister could circulate the options paper so we people on this side of the House could see it.

Now, the minister talked about the review with stakeholders and stakeholder consultations. Now, all the people in the Yukon are stakeholders. Everybody has an interest in ensuring that injured workers are treated fairly. Is the public going to be involved in this review? I haven't seen anything in the newspapers about public hearings. Is this going to take place?

Hon. Mr. Harding: Well, thank you, Mr. Speaker. Let me say to the member opposite that the system is funded by employers, and the beneficiaries of the system are the workers. So, the workers and employers are the actual owners of the system. That's why they'll be involved on a primary basis through the advisory groups as well as through focus groups of workers and employers. However, having said that, I recognize the member's point, and I think at some point we have to have an opportunity for the broader general public to comment and give their views on this particular matter. So, we will be trying to devise a role and an ability to do that throughout the review process leading up to the completion of the review in the fall of 1999.

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



Bill No. 14: Second Reading

Clerk: Second reading, Bill No. 14, standing in the name of the hon. Mr. McDonald.

Hon. Mr. McDonald: Mr. Speaker, I move that Bill No. 14, First Appropriation Act, 1999-2000, be now read a second time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 14, entitled First Appropriation Act, 1999-2000, be now read a second time.

Hon. Mr. McDonald: Mr. Speaker, every government's budget says a number of things about that government, about the economy in which it operates, and about the priorities of the society it serves. This budget is no exception.

It is a budget that balances priorities to deliver a strong economic agenda, a strong social agenda, and a strong environmental agenda.

This budget demonstrates that we listen to Yukon people and take direction from them. It demonstrates a thoughtful and innovative approach to the management of public funds, and it demonstrates that we keep our promises.

This budget presents a vision of a new Yukon. It outlines government's role in developing a stable and diversified economy to take us to the year 2000 and beyond. It acknowledges the challenges we face in the coming year, primarily due to continuing low metal prices and global economic uncertainty. These challenges are outlined in the most recent short-term economic outlook for the territory.

Yukon people know we can no longer rely on a highly specialized boom-and-bust economy with major decisions being made beyond our borders. It is essential that we take control of our own economic destiny.

Yukon people also know that the government's spending by itself cannot create a new, more diversified economy. The task of strengthening our economy requires sharing responsibility and recognizing that every job counts.

The Yukon is an entrepreneurial community. The men and women who give the Yukon its strength have the imagination and the drive to meet the current challenges head on. By working together, we can achieve great things.

Our government has been actively building partnerships with Yukon people to develop a new economy that is balanced and progressive. The result is a series of initiatives we call Economy 2000.

Success in the new economy will come from being creative and from taking risks. It will come from being aggressive in seeking out new opportunities.

That is the vision at the heart of our Economy 2000 initiatives and at the heart of this budget.

This budget will stimulate new economic activity and help create jobs for Yukon women and men. It also maintains our commitment to important public services, such as health care and education.

This is a budget for Yukon families and Yukon people of all ages. It is a budget for communities. It is a budget for workers, for business, for the resource sector and for a healthy, sustainable environment.

In short, it is a budget that meets present needs and looks confidently to the future. It does this by building on the solid foundations of thoughtful, balanced fiscal planning our government has maintained over three consecutive budgets.

At the beginning of our term, we promised a stable and predictable pattern of public expenditures. In three consecutive budgets we have kept that promise.

We promised to maintain a reasonable accumulated surplus, or savings account. In three consecutive budgets, we have kept that promise.

We promised to maintain our commitment to health care and education. In three consecutive budgets, we have kept that promise.

We promised not to impose medicare premiums. In three consecutive budgets, we have kept that promise.

We promised not to raise taxes. In three consecutive budgets, we have kept that promise.

In fact, with this budget we are going well beyond that promise by introducing the most significant tax reform measures in Yukon history.

We promised transparent, long-term capital planning to provide certainty and predictability for the working women and men of the Yukon and for Yukon businesses. This budget keeps that promise.

For the first time ever, this budget spells out the Yukon government's plans for major capital projects over the next three years. This will allow people to see how we plan to maintain a pattern of predictable and affordable investment that addresses their real needs and priorities.

We promised to make electricity prices stable and affordable, and we kept that promise. Our investment of $10 million in rate stabilization will ensure that electricity bills will stay at their current levels for at least four years.

We promised to give priority attention to the settlement of land claims and self-government agreements and to devolution. We have kept that promise.

We promised to bring a spirit of respectful partnership to our government-to-government relations with Yukon First Nations. We have kept that promise.

We promised stable funding for non-government organizations that provide important community services to help them plan their budgets and programs effectively. We have kept that promise. We have even granted strategic increases where necessary.

We promised to involve Yukon people in important decisions that affect them, and we are keeping that promise. Many key elements in this budget are there because Yukon people said they were important. They said it in over 50 pre-budget meetings around the territory, in round-table discussions on tax reform and in community meetings on banking services. We know that government does not have all the answers, and we rely on the public to give us advice. I would like to thank all those who took their time to share their ideas with us. Their input is valuable and a great many of their suggestions have contributed to the design of this budget.

Mr. Speaker, the main estimates for 1999-2000 include the highest level of capital spending our government has ever undertaken. The total capital budget for the year is $94,314,000. Once again, the Yukon is spending a higher percentage of its total budget on capital projects than any other Canadian jurisdiction.

At the same time, we have balanced our spending priorities carefully to achieve a wide range of important objectives. For example, we have continued to reduce expenditures on computers, systems and furnishings for internal government use. This lets us put more capital dollars toward creating jobs and generating economic activity throughout the territory.

On the operation and maintenance side, this budget projects an expenditure of $384,217,000 for the 1999-2000 fiscal year. The minor increase over forecasts for 1998-99 results largely from wage settlements and several new health initiatives we are undertaking this year.

Keeping O&M spending in check in the face of declining ongoing revenues, while still honouring our promise to maintain important public services such as health care and education, has required discipline from all departments.

Taking capital and O&M together, the total estimated expenditure for the year will be $478 million. Our anticipated revenue will be $459 million. In other words, we are investing a portion of our accumulated surplus and initially projecting an operating deficit of $21,427,000 for the coming year, including a contingency reserve. This is a deliberate course of action to put more money back into the economy at a time when Yukon people need it. It is a responsible course of action that still leaves us with a reasonable accumulated surplus or savings account. The projected accumulated surplus at March 31 next year will be about $27.9 million. This is about $13 million higher than the projected accumulated surplus for the end of the fiscal year contained in the 1998-99 main estimates. It is important to consider this in the context of our long-range expenditure and revenue projections.

By running moderate annual deficits in the short term, we can invest in jobs and economic opportunities at a time of reduced economic activity. This will gradually draw down our savings account.

Our projections show that we can expect a slight increase in revenues in about two years. This will allow us to balance the budget and stabilize our spending in the fiscal year 2002-2003. Investing part of the accumulated surplus strategically now maintains the pattern of stable spending that we have consistently promised and consistently delivered.

I would also like to note that the federal budget tabled last week increased the Canada health and social transfer to provinces and territories by about $2 billion. Our Minister of Health and his provincial and territorial counterparts across the country worked hard to get Ottawa to begin reversing the severe cutbacks in health spending we have experienced over the past four years.

While the change does not come close to restoring the transfers to their previous levels, it is a welcome first step. It gives us approximately $2 million more this year to invest in health programs for Yukon people.

Mr. Speaker, the closure of the Faro mine last year resulted in the immediate loss of hundreds of jobs. We must not attempt to minimize the impact this has had on Yukon people and on our economy.

In the face of that challenge, our government has continued to take bold steps to help build a new economy to take us into the next millennium. To do this, we are working closely with business, industry, and labour, as well as municipal and First Nation governments and non-governmental organizations. As delegates to the recent Yukon Business Summit pointed out, the responsibility for making the Yukon's economy work better doesn't rest on government's shoulders alone. It is a shared responsibility and a shared challenge.

Still, government can play an important role in facilitating economic growth. That's why we are forming partnerships to promote trade and investment opportunities for Yukon businesses and workers. For example, we created two major new funds as part of Economy 2000 - the trade and investment fund and the tourism marketing fund. These funds are to support ideas and activities that will help Yukon business people build the capacity to pursue new opportunities outside the territory.

I am pleased to announce that this budget expands these two funds by $1 million beyond the current mark. That means the trade and investment fund and the tourism marketing fund will each get $750,000 in the 1999-2000 fiscal year.

This investment of $1.5 million demonstrates the outward-looking approach we are taking with our Economy 2000 partners in the trade and investment diversification strategy.

We have worked hard to make those partnerships successful, here at home and outside the territory.

The Yukon has been well-represented on trade missions to such places as Alaska, South America and Russia. As a result, several Yukon businesses have had direct exposure to potential new markets for their goods and services.

We have also hosted familiarization tours for potential investors in the resource and tourism sectors. These visitors came from Japan, Taiwan, Korea and elsewhere, to see the Yukon's many economic advantages first-hand.

Last fall, I delivered the message to key decision makers in Washington and New York that the new Yukon is ready to do business, and that we will welcome responsible investment.

The Minister of Economic Development has just returned from delivering the same message throughout Asia. In Tokyo, he told mining investors about mineral exploration and development opportunities in the Yukon.

He also went to Hong Kong, Taipei and Seoul to promote another major Economy 2000 initiative, the immigrant investor fund.

This fund will allow foreign investors who qualify for landed immigrant status to make five-year investments in the Yukon's economy at $250,000 a share.

We believe this fund can attract a substantial pool of capital that will help Yukon businesses expand their activities, create new jobs and broaden our economic base.

The new Yukon film location incentive fund is another Economy 2000 innovation.

This fund is already yielding positive results in attracting film and television production activity to the Yukon. One example is the car commercial filmed at Schwatka Lake, which millions of Super Bowl viewers saw last month.

This year, we're putting $125,000 more into this fund, bringing it to a total of $175,000. This is a positive investment in new and different jobs for Yukon people.

This growing industry is also a boon to Yukon retailers who supply accommodations, meals, rental vehicles and other goods and services to visiting productions.

Mr. Speaker, one of the key elements of the Economy 2000 has been our ground-breaking decision to look at ways of reforming the Yukon's tax regime to help create jobs and stimulate the economy. Last fall, we convened a tax reform round table to identify tax measures we could introduce this fiscal year. As a result of those discussions with business, industry, labour and other interested groups, I'm pleased to outline some major amendments to our tax system that will promote investment in the Yukon.

The first is a refundable tax credit to encourage mineral exploration and help offset the current challenges facing the industry worldwide. The Yukon mineral exploration tax credit will provide an income tax refund of 22 percent on eligible expenditures for Yukon exploration on new sites. This is the most generous exploration credit of its kind in Canada and sends a strong signal that we want to see responsible mining flourish in the Yukon. This credit will be available for two years starting this April 1.

By making this tax revenue investment of approximately $2.5 million each year, we expect to encourage significant exploration activity in the territory. This budget maintains our commitment, as well, Mr. Speaker, of $506,000 a year for the Yukon mining incentives program and increases our ongoing commitment to the geoscience program.

We are also moving forward in partnership with the mining industry and other community interests to develop a Yukon mineral strategy. Our government will continue to encourage and support this industry that has always been such a vital part of our economy at the same time as we are working to broaden the territory's economic base.

The second Economy 2000 tax reform initiative that I'm announcing today is the Yukon small-business investment tax credit, which will start July 1, with up to $1 million of credit available per year. This will encourage Yukon people to invest here at home and help build local businesses.

This investment measure will provide a non-refundable tax credit of 25 percent on investments in eligible Yukon businesses to a ceiling of $200,000 per business. These investments may be RRSP eligible under federal criteria.

The Yukon small-business tax credit provides a way for local investors to express confidence in our economy. At the same time, it will give small business people in the Yukon greater access to the capital they need to finance growth.

Like the mineral exploration tax credit, this tax measure to support small business began as a recommendation from last fall's tax reform round table. That group also endorsed a proposal by the Yukon Federal of Labour for a labour-sponsored venture capital corporation. This will be a way to encourage Yukoners residents to invest in our new economy. Similar corporations elsewhere in Canada have successfully invested in small business startups and expansions to create new opportunities for working men and women.

This year, we will develop enabling legislation to permit the establishment of a labour-sponsored venture capital corporation in the Yukon. The target date for implementation is January 1, 2000. Investors will be able to claim a maximum non-refundable tax credit of up to $1,500 a year with a share purchase of $5,000. The territorial and federal governments would each fund half of this credit.

Mr. Speaker, these investment innovations mark the first time any Yukon government has used tax reform in a significant way to stimulate economic growth. Once again, it shows that we listen and that we're working in constructive partnerships with Yukon people to build a new economy that works for everyone.

We will be starting a second round of tax reform discussions immediately, to identify other potential tax measures that might be introduced in future budgets.

Our Economy 2000 initiatives include other important steps to improve conditions for Yukon businesses and Yukon workers. For example, the code of regulatory conduct changes how government does business. It requires prior consultation on proposed regulations to keep the regulatory burden as light as possible. As the Minister of Government Services describes it, the approach is regulation if necessary but not necessarily regulation.

We are also working with the community to find ways to reduce existing red tape by streamlining rules and regulations already on the books. These are two practical ways we are responding to requests to make it easier to deal with government.

In keeping with our Yukon hire policy, we have also improved our contract regulations and expanded the business incentive program to ensure that more benefits from Yukon government spending stay in the territory. Our efforts are clearly paying off. This year, 89 percent of the total value of Yukon government contracts has gone to Yukon businesses. Four years ago, just 59 percent of the value from Yukon government contracts stayed in the Yukon.

Finance officials recently visited Yukon communities to discuss renewal of the territory's banking services agreement. Yukon people told us of their concerns and told us what kinds of financial services they want. With proposed bank mergers on many people's minds, one suggestion that frequently arose was for government to encourage alternative financial institutions, such as a Yukon-based credit union.

This spring we will convene a round table to discuss banking services in more depth, including ways to improve access to capital for small businesses. We will also explore options to allow other institutions such as credit unions to operate in the territory.

Another key factor in the new economy will be how Yukon people manage their resources. The Yukon Oil and Gas Act, based on a common regime with Yukon First Nations, represents a major step toward control of our economic destiny.

The Minister of Economic Development has identified general areas where land leases will likely be offered this year. This will take place only after appropriate consultation with First Nations and community interests.

When oil and gas development does begin in the Yukon, under Yukon control, our government is determined to get it right. Responsible development of this resource offers substantial benefits, in terms of jobs and economic opportunities, as well as revenues to support important public services.

This year, we will continue to work in partnership with First Nations and involve the public to develop a fair and effective oil and gas regulatory process that maintains the proper balance between economic and environmental considerations.

Mr. Speaker, one of the brightest spots on the Yukon's economic landscape has been the strong performance of the tourism sector. Last year, the territory played host to the highest number of visitors on record. These visitors are also arriving earlier, staying longer and spending more. The impact on our economy was clear to see in a substantial increase in retail sales in July, compared to the same month a year earlier. The outlook for this year is for continued growth.

With annual revenues of about $125 million, tourism is vital to the Yukon's new economy. It is directly responsible for 2,000 Yukon jobs, and indirectly contributes to many more.

Our government is making sustained efforts to increase tourism year-round and to support the development of tourism products that can compete with other travel destinations anywhere in the world. This budget supports several new Economy 2000 measures that reflect the importance of this growing industry.

Besides increasing our investment in the tourism marketing fund, we will put an additional $200,000 into tourism marketing this year. With this investment, we will build on our successful marketing efforts in Europe, the United States, other parts of Canada and elsewhere.

This year we will also finish expanding the runway at the Whitehorse airport, with an investment of $3.4 million in the 1999-2000 budget.

This two-year project is generating jobs and economic opportunities for Yukon people, besides allowing Whitehorse to accommodate larger aircraft from abroad. By offering both residents and visitors the benefits of more direct flights to and from Europe, it brings the world closer to our doorstep.

Mr. Speaker, up-to-date information is an essential tool in planning how to attract visitors, and meet their needs while they're here. This summer, the Tourism department will conduct its first comprehensive visitor exit survey since 1994. This will provide a clear picture of where our visitors come from, how long they stay, what they do here, how they spend their money, and what changes they think would improve the Yukon experience for tourists.

At a cost of $315,000, the exit survey will create about 30 summer jobs for Yukon women and men this year. While it is important to know what tourists think of the Yukon, it is also important to know what Yukon people think about the future of Yukon tourism in the territory.

The Yukon has undergone a remarkable evolution in the decade since the first tourism strategy was developed. This is particularly evident in the implementation of land claims and self-government agreements. New relationships are developing among Yukon people and governments, and new economic opportunities are arising from a dynamic and growing tourism sector. This makes a full and open dialogue about the future of tourism essential.

Our government promised to consult Yukon people on the development of a new tourism strategy for 2000 and beyond. We are keeping that promise.

This spring and summer, people in every corner of the Yukon will have a chance to share their ideas on how we can derive the most benefit from tourism, without compromising our heritage, our environment, or our community values.

The purpose of this dialogue is to match the priorities of Yukon people with the changing demands of an industry that is becoming more competitive worldwide. Through the Tourism department's arts branch, our government is also looking to the future, with a two-year investment of $900,000 in the new Yukon millennium fund.

With $300,000 in 1999-2000 and a further $600,000 next year, the millennium fund will help Yukon people and visitors join the rest of the world in celebrating the end of one era and the start of another.

The millennium fund will support community events around the territory next year. It will also enhance established programs such as the music festivals and other arts and recreation activities with a millennium theme.

A citizen committee representing a cross-section of Yukon people will decide what projects will receive funding, with a special emphasis on youth, the future and the environment.

Through a millennium speaker's bureau, Yukon people will also have an opportunity next year to hear interesting perspectives on a variety of thought-provoking topics.

The creativity of Yukon people guarantees that our millennium events will make the territory an exciting place to be in 2000. We have a lot to celebrate and a bright future ahead.

In tourism, as in all our efforts to build a new economy, our focus will be to work as an active partner with Yukon people and Yukon businesses.

This is the best way to build on our established economic foundations as we head toward 2000 and beyond.

Mr. Speaker, there is a reason for speaking at such length about our partnership approach to the economy. A strong and diversified economy is the best safeguard for the important public services we provide.

Our government takes its responsibility to provide social programs seriously. This budget reflects a balanced social agenda for youth, seniors, families and low-income Yukon people. It represents a high level of investment in Yukon people, both in the 1999-2000 estimates and in our three-year capital plan.

I'm pleased to announce two bold, new anti-poverty initiatives that complement each other to make more disposable income available to Yukon families and individuals who need it the most.

The first is the low-income family tax credit, or LIFT, which takes effect as of January 1, 1999.

This will make $500,000 a year in non-refundable assistance available to people who make enough to pay taxes but have a tough time making ends meet.

The LIFT credit is aimed at people with net income of less than $25,000 a year, and will provide an annual benefit of up to $300.

Our government believes that any low-income support measures we take should also benefit the dependent children of Yukon women and men who pay little or no income tax and cannot benefit from tax credits. Today, we are introducing a new Yukon child benefit, aimed at families with children where the net family income is less than $22,000 a year.

We are setting aside $500,000 a year for this Health and Social Services program, which will provide direct support for an estimated 1,100 families and 2,000 children across the territory.

For a family with a net annual income of $15,000 or less, the Yukon child benefit will provide $300 a year for the first child in a family, $200 for the second child, and $150 for each additional child. For example, a single mother with two children and a net annual income of $12,000 would be entitled to a Yukon child benefit of $500 a year. That's an extra $42 a month to spend on her family's needs.

For families in an income range between $15,000 and $22,000 a year, the benefit will be a proportion of the full benefit.

In the case of a two-income family with one child and a net income of $15,000, the combined effect of the Yukon child benefit and the LIFT credit would come to about $322 a year, depending on the income split between the two wage earners.

The Yukon child benefit will not be considered as income in calculating social assistance payments.

This investment of $1 million a year complements initiatives we have already introduced to address poverty, such as the school lunch program, free eyeglasses and prescription medicine for children from low-income families. In the coming months, we will be seeking partnerships with the federal government to harmonize the Yukon child benefit and the Yukon LIFT credit with federal support programs for low-income families.

Our government also recognizes that families with children are not the only ones facing financial difficulty. Seniors on fixed incomes often face similar hardships. That's why we are introducing a new tax measure to provide some relief to seniors who live in their own homes. We will be proposing legislative measures to provide for a new seniors property tax deferral. This will allow a senior in Carcross, for example, to remain in her family home and choose to defer paying property tax until the home changed hands.

This tax relief for seniors would apply to homes outside incorporated municipalities, where the Yukon government is a taxing authority. We are also prepared to work with municipalities that are interested in implementing a similar program within their boundaries.

Mr. Speaker, people over the age of 65 represent the fastest growing segment of our population. This trend presents significant challenges in planning health and social services programs. We intend to work with a variety of community groups on the further development of the Yukon seniors strategy to address the particular needs of our aging population.

For instance, we know a need exists right now for more continuing care beds for those who need a high level of care on a long-term basis. Today, I am especially pleased to announce two major investments in long-term health care for Yukon people.

The first is the construction of a new continuing-care facility in Whitehorse with a capacity of at least 74 beds. This facility will serve both seniors and other Yukon residents who require extensive, long-term care.

At a cost of $14.2 million over three years, this will also be the territory's largest building construction project since the new Whitehorse General Hospital was built.

This exciting project will meet demands for residential high-level chronic care beds for the foreseeable future. It will also create employment for Yukon workers, both during and after construction.

Construction will begin next year, and the new facility will be open in 2001.

To help meet the immediate need for continuing care beds in the interim, we are making a further investment of $645,000 this year to open the seven remaining beds at the Thomson Centre.

In addition, the comments we received during recent consultations in Yukon communities will be used in considering how to accommodate both short-term and long-term needs for home care and continuing care throughout the territory.

Our commitment to provide for the health care needs of Yukon people, without imposing medicare premiums, can be seen in many other items in this budget.

We will invest $1.5 million in the 1999-2000 fiscal year to complete construction of the new health centre in Teslin. This is in addition to the $330,000 in the current budget.

We have provided $200,000 of new money in this budget for a professional development fund for health workers. We recognize the importance of having qualified, professionally trained staff to deliver health and social programs to Yukon people.

This funding will help health workers throughout the territory keep their skills up to date, and will complement the bursary program we recently introduced to encourage Yukon students to pursue nursing as a potential career.

Last year our government introduced the healthy-family initiative to improve the ways we identify and support children at risk. Studies have shown conclusively that every dollar invested in such children can save seven dollars in future social costs.

In the coming year, the department will spend a further $228,000 to expand the healthy-family initiative, including $45,000 for a support nurse at the Whitehorse Health Centre.

This budget also provides $200,000 in new funds to the Child Development Centre for programming that will address the special needs of children with fetal alcohol syndrome. This will be targeted, Mr. Speaker, at enhancing the centre's important outreach services in rural Yukon.

We are also honouring our commitment to a new community-based approach to alcohol and drug treatment by setting aside an extra $200,000 in program support for community treatment centres. That brings the ongoing total for that purpose to $300,000.

Mr. Speaker, patients being discharged from hospital often have the need for medical or social services support once they return to the community. Health and Social Services will spend $140,000 this year to develop hospital-to-home service linkages. The department will also spend $108,000 for outpatient day programming at the Thomson Centre for people with severe mental and physical infirmities, including dementia. Support programs for people with diabetes will receive an additional $98,000 in this budget.

In recent years, the volume of ambulance calls in the territory has increased dramatically. In light of this, we have added $131,000 to the Health department's O&M budget to increase ambulance backup support.

A special allocation of $80,000 will go to help the people of Ross River address community healing needs and support their efforts in community and social planning.

Mr. Speaker, the scope of these new health care investments that I've outlined today illustrates our government's deep commitment to the well-being of Yukon people. Yukon society faces changing health care needs and expectations, rapidly evolving technology, and increasing costs to provide services. It is important that we work together to set priorities for future health investments.

Later this year, the Minister of Health and Social Services will convene a Yukon health summit to get the views of Yukon people on the directions that we should be taking in the delivery of health services.

The importance our government places on having a balanced social agenda can also be seen in our support for Yukon youth.

At the Northern Lights Conference in 1996, young people said they wanted to be heard and respected. They also wanted to be involved in developing a youth strategy for the territory.

Mr. Speaker, we listened and we took action. Young people were central players in creating the Yukon's new youth strategy that we adopted last year.

Like our anti-poverty and seniors strategies, it is a rolling document that can be reviewed and updated regularly. It emphasizes shared decision making with young people and promotes youth participation on public boards and committees.

Youth now serve on the Health and Social Services Council and the Whitehorse Public Library Advisory Board. Other boards and committees are interested in including youth representatives.

The youth conference in Whitehorse a few weeks ago, which was organized and led by young people themselves, was a positive reflection of our government's efforts to give youth a direct voice in training and job-creation projects.

The conference was funded by the $200,000 training trust fund for youth that we created in the first year of our mandate.

This budget makes a further investment in Yukon's young people with an additional $200,000 for youth recreation programming. With the $200,000 already budgeted for strategic recreation initiatives, this brings our commitment to youth recreation programs to $400,000 a year.

Mr. Speaker, this is a direct response to what we heard during pre-budget consultations in rural communities. The need for recreational opportunities for young people came up time and again.

With this investment we expect many exciting and innovative projects to come forward. These will be designed with young people themselves to respond to the specific recreational needs in their communities.

Our commitment to Yukon's young people is also clearly evident in our three-year cycle of school replacements.

This began with the construction of the Chief Zzeh Gittlit School in Old crow, which will be completed, with an expenditure of $400,000 in this budget.

We have also promised our partners in education, who jointly developed a priority list for new schools, that construction will begin this year on a new school in Ross River.

The 1999-2000 budget includes an investment of $5.1 million for that purpose. An additional $2 million next year will complete this project.

This budget also includes $100,000 for design work on the new J.V. Clark School in Mayo. Construction will begin next year with an allocation of $5 million in the 2000-2001 capital budget.

The Mayo school will be completed the following year with a further $2.2 million in 2001-2202 fiscal year.

In the construction of both these schools, we expect to apply the experience gained in building the new school in Old Crow to encourage as much local employment as possible.

Another significant area of government activity is justice. This spring, the Minister of Justice will visit every part of the Yukon to engage people in a major dialogue on how we can ensure that our criminal justice system reflects the needs and values of Yukon society.

This consultation will be based on the principles of crime prevention and restorative justice. The aim is to develop community approaches to justice that help prevent crime and ensure public safety, and also restore balance and harmony to the community after crime has occurred. Correctional reform will be one focus of discussion in this public consultation. Yukon people will be asked to consider what is the best way to deal with offenders, including those who need to be segregated from society.

We do know that our major correctional facility - the Whitehorse Correctional Centre - needs to be replaced before long. After the restorative justice consultation, we will be better able to determine what kind of facility we need, and what it will cost. In the meantime, we are setting aside an initial $3.2 million over the next three years, toward the cost of replacing the Whitehorse Correctional Centre.

Mr. Speaker, the development of new intergovernmental relationships is a major part of the Yukon's changing reality. The recent amendments to the Municipal Act demonstrate the evolving and increasingly responsible role of municipal governments in providing public services. Our government considers the strength of Yukon communities as vital to the territory's future, whether or not they are incorporated. As this budget demonstrates, our investment in Yukon communities takes many forms.

Municipal officials have expressed concern for years about the level of municipal block funding, which has stayed the same since 1991. This year, we are increasing the comprehensive municipal grant by $115,000.

Amendments to the Municipal Finance and Community Grants Act this sitting will give municipalities unprecedented flexibility to determine what portions of their territorial block grants will be used for operational and capital purposes.

We have also made a commitment to meet with elected municipal officials annually to review their block funding needs.

In the coming year, we will also provide an additional $25,000 to the Association of Yukon Communities to foster greater participation by municipal leaders in trade and investment initiatives.

Mr. Speaker, this budget contains a number of major investments in community infrastructure throughout the Yukon. For example, we have agreed to help the Town of Watson Lake reconstruct and upgrade its recreation facility. To help get work started and create employment in the area this year, we are investing $2.5 million from the current budget for the facility. An additional $2.5 million in the 1999-2000 budget will bring the territory's contribution to about 90 percent of the total estimated costs of this community project.

Last year, we made a nine-year pledge of $1 million a year to help Dawson City build either a sewage treatment facility or a recreation centre. This budget includes $1 million to maintain our multi-year commitment.

We will provide financial support to build a recreation centre, which is the town's priority, provided the federal DIAND minister makes it clear that the need for a new sewage treatment facility can be postponed.

Last year, we also committed $7 million, over seven years, to help the City of Whitehorse build recreational facilities. I am pleased to announce today that we are increasing that commitment to $9 million.

An extra $1 million is being provided in the current year's budget, and we will also increase our 1999-2000 contribution by $1 million.

That means $4 million will be released by this April to permit the city to start work on a new swimming pool this construction season.

With our $9 million investment, which includes a total of $5 million for the pool, we are helping provide jobs for Yukon labourers and tradespeople this year and into the future.

Our capital budget is supporting a variety of construction projects this year and over the next two years. Besides providing much-needed jobs for Yukon men and women, it confirms our commitment to foster safe and healthy communities.

We believe that rural Yukon has a promising future, and we are prepared to back that belief with positive partnerships and real investments.

This year, for example, we will invest $500,000 more in the fire smart communities program. This is over and above the half-million dollars in the current budget year for projects to reduce fire risks in and around communities.

In the 1999-2000 fiscal year, we will be investing a total of $3 million in the community development fund, including the fire smart communities program funding.

As in previous years, CDF grants will be used to create jobs and support a range of worthwhile projects that Yukon people themselves decide are priorities for their communities.

In the coming year, we are also doubling our investment in the rural roads program to improve transportation infrastructure in rural Yukon.

We will spend $1 million in the 1999-2000 fiscal year for priority road upgrades and improvements undertaken by community contractors throughout the territory. We have also set aside a further $1 million to continue this work the following year.

The major road-building activity in the Yukon this year will be on the Shakwak project. The continuation of this U.S.-funded project is a result of intensive lobbying by the transportation minister and his senior officials. With an expected expenditure of just over $19 million this construction season, the Shakwak project will lead to a significant improvement in the Yukon's highway system. It will also provide business opportunities for Yukon companies and jobs for Yukon workers. I'm pleased to note, Mr. Speaker, that a number of those workers received their job training through programs supported by the Yukon government.

Mr. Speaker, we will also spend $1 million this year for reconstruction work at Grew Creek on the Robert Campbell Highway. An additional $2 million has been identified for roadwork on the Campbell Highway over the next two fiscal years. This investment will improve travel conditions for both local residents and visitors, and provide work opportunities for people in the Faro-Ross River area.

Upgrading work on the Tagish Road will begin this year. Over the next three years, Community and Transportation Services will spend a total of $950,000 on this project.

The department will also replace the Willow Creek bridge on the North Klondike Highway at a cost of $600,000.

In addition to an ambitious program of rural upgrades, this budget also reflects a significant investment in infrastructure in various Yukon communities. Last year, we set aside $294,000 for relocation agreements with Whitehorse waterfront residents. This year's budget includes $669,000 to conclude that process so that waterfront redevelopment can take place. Over the next two years, we will also contribute $1 million to the City of Whitehorse for waterfront landscaping.

This year, we are making an additional contribution of $200,000 to the city in response to the needs of Granger residents for a pumping station to bring water pressure in the subdivision up to standard.

We will spend an additional $350,000 over the next three years to provide a new sewage lagoon in Burwash.

Our long-term capital plan also includes $300,000 over the next two years for a fire hall in the Mayo Road area. We expect that local residents will be heavily involved in the development of that project.

We're also moving ahead on our mobile home strategy with an allocation of $1.5 million in the Yukon Housing budget to complete the affordable lot development on Range Road.

In addition, the corporation has earmarked $1 million for a mobile home park enhancement loan program.

This program will enhance the quality of life for mobile home residents by helping owners improve roads and public safety features.

Mr. Speaker, the people of the Yukon are justifiably proud of the rugged beauty of this vast land. We want to ensure that future generations will be able to enjoy it as much as we do.

We know that decisions we make now about our environment will have an impact far into the future. Similarly, the impact of actions we take here can be felt far beyond the Yukon's boundaries.

Safeguarding the environment is a matter of prime importance to our government.

The cornerstone of our environmental agenda is the Yukon protected areas strategy. It was adopted last year after extensive consultation and is now being implemented with $2.3 million in ongoing funding identified in the O&M estimates.

Through a clearly defined public process, the protected areas strategy will lead to some form of protection for representative areas of all 23 distinct ecoregions in the territory.

Our first goal is to set up protected areas in ecoregions that are not adequately represented, where Yukon First Nations final agreements are already in effect and where there is local interest in protected areas planning.

The priority areas in northern Yukon are the British Richardson Mountains, Eagle Plains and North Ogilvie Mountains ecoregions. The priority in the south is the Southern Lakes-Pelly Mountains ecoregion.

We are now establishing local planning teams for these areas, and our current goal is formal designation of two or three new representative areas by the spring of 2000.

This spring, we expect to complete designation of the fishing branch ecological reserve, which is a special management area under the Vuntut Gwitchin final agreement.

By this fall, we expect to finalize the designation of two other final agreement SMAs, the Tatshenshini heritage river and the Tombstone territorial park.

As well as protecting important elements of the Yukon's ecosystems, the lands designated under the protected areas strategy have the potential to make a major contribution to the economy as areas for tourism and recreation.

Over the next three years, we are committing nearly $1.4 million of the renewable resources capital budget for resource assessments and park systems planning.

In addition, a portion of the $520,000 in the 1999-2000 economic development budget for mineral resource assessments will support the protected areas strategy.

Our ongoing commitment to the environment can also be seen in how we are implementing the 56 recommendations of the Cabinet Commission on Energy. Many of these recommendations were aimed at promoting responsible energy use, including the use of alternative energy sources to reduce our dependence on diesel fuel.

We contributed $3 million of last year's one-time census adjustment to the Yukon Development Corporation to set up a green power fund to promote the use of alternative sources of energy.

We also committed $2 million for research and development on the use of wind to generate electricity. A commercial-scale wind turbine, much larger than the existing one on Haeckel Hill, will go into operation this fall as part of that commitment. When the blades start turning, it will supply enough power to meet the non-heating needs of about 100 Whitehorse families. The size and location of this new turbine will make a strong visual statement about the Yukon's commitment to alternative energy.

Besides the $1 million provided to YDC for energy efficiency initiatives for electricity consumers, in the coming year Government Services will invest over $220,000 in retrofitting public buildings to make them more energy efficient.

The department will also sponsor two community energy management projects through this capital budget. The first is a district heating facility study in Haines Junction, at a cost of $50,000.

The second project will support Watson Lake's efforts to capture waste heat from the YECL generators to heat the new recreation centre and the adjacent school. Other community buildings could eventually be added to that hook-up.

Throughout this year, we will be initiating a number of other projects to encourage Yukon people to help protect our environment by using energy wisely. We are investing another $50,000 in the coming year to continue the work already being undertaken with community environmental groups to study the impact of climate change on our northern environment.

We expect this investment to help launch the Yukon Climate ExChange. This will be a centre for gathering and sharing information about climate change in northern Canada and the rest of the circumpolar world.

The Yukon government has been developing this project in partnership with Yukon College, the Canadian Wildlife Service, Environment Canada, Natural Resources Canada and others.

Yukon Housing will invest $270,000 this year in its residential and commercial energy management programs to help people change from electricity to more efficient methods of heating.

With its ongoing home repair programs and next month's HomeShow '99, the Housing Corporation will continue to show leadership in promoting more efficient use of energy by Yukon consumers.

Another key aspect of our environmental agenda is the development assessment process, which is a requirement of the Yukon First Nations umbrella final agreement. Given the importance of DAP and its far-reaching impacts, our government firmly believes that the draft legislation should not go ahead until Yukon people are satisfied that it meets Yukon objectives. Our goal is clear legislation that protects Yukon lands, waters and cultural heritage, without imposing an unfair burden or unnecessary delays on responsible resource developments or other economic activities.

We intend to sponsor a major DAP workshop later this spring to make sure all concerned Yukon groups and people have the chance to provide full input on this important legislation.

Mr. Speaker, our government has consistently opposed oil and gas development in the critical calving habitat of the Porcupine caribou herd. This herd is essential to the lifestyle of the Gwitchin people on both sides of the Yukon-Alaska border.

In the past, we have helped the Vuntut Gwitchin people of Old Crow and the Porcupine Caribou Management Board bring the need to protect the herd's critical calving habitat to international attention.

During my trip to Washington and New York last fall, I once again brought this issue to the attention of the senior senator for Alaska and to key environmental organizations, including the Sierra Club. The 1999-2000 budget includes a commitment of $100,000 to extend the public information and lobbying efforts to keep oil and gas development out of the 10-02 lands that make up the herd's core calving grounds.

We recently concluded an agreement with the Yukon Conservation Society to create a training trust fund for people working in environmental advocacy. This fund will provide $75,000 in the current year and a further $75,000 in 1999-2000.

Besides protecting the environment and wildlife habitat, our government believes it is important to preserve the Yukon's cultural heritage.

We are continuing to do that with an investment of more than half a million dollars in historic sites maintenance, interpretation and signage in the coming year. We are also investing over $460,000 in assistance for museums and exhibits.

The heritage branch will spend $166,000 this year for the Yukon archaeology program, $115,000 for the paleontology program, and $30,000 for heritage studies.

I am also pleased to announce the seventh tax reform measure in this budget, the heritage property tax exemption.

This exemption means that the owner of a building designated as a heritage site under territorial legislation and located within Yukon government taxing authority would not have to pay property taxes on that building.

This initiative is a signal of our government's appreciation of the Yukon's rich history, just as our environmental agenda signals our ongoing commitment to respect the territory's unique environmental heritage.

Mr. Speaker, we are standing at the threshold between one millennium and the next. In that context, it is important to look forward and to plan carefully for the economic, social and environmental needs of the future. Our government has made great strides in using new technology to deliver services to Yukon people.

In partnership with the federal government, we have made major investments to provide rural communities with public access to the Internet. Two weeks ago, the first Internet transmission of medical diagnostic images flashed from Old Crow to Whitehorse. We will continue to work with rural communities and our high-tech industry to explore new uses of the Internet for medical, educational and commercial purposes.

We are also demonstrating leadership in addressing the problem of the so-called millennium bug. Our government is an active partner in the Yukon's Y2K task force, and our own systems should be fully Y2K compliant before the end of the year.

Information technology is the fastest growing sector in the modern world economy. The boom in electronic commerce means consumers anywhere in the world can now use telephone lines for their financial transactions or buy goods and services from virtually anywhere else, including the Yukon.

This provides exciting opportunities for Yukon businesses, including small, home-based operations. For over a year, our government has been working in partnership with a number of Yukon businesses in the information technology sector and with Yukon College to identify ways to expand this dynamic industry.

This budget moves that partnership forward with an investment of $75,000 to set up a Yukon technology innovation centre in association with this partnership and the Northern Research Institute. In addition, we are contributing $200,000 to a fund that will be administered by the institute and will support research on innovative approaches to using technology.

This is an exciting project that offers great potential for future developments initiated here that can be used throughout the Yukon and beyond. We are confident that this investment in the ingenuity of Yukon people can lead to new jobs, new services and new business opportunities in the territory.

Another key aspect of our investment in the future is our emphasis on training opportunities for Yukon people. Our investment in training trust funds has put millions of dollars to work helping Yukon people prepare for the demands of a changing workplace. We recognize that every job counts. Part of government's role in fostering a healthy economic climate is to make sure that people have access to the skills they need to participate fully in the economy.

Training trust funds can also be a means of stimulating economic activity. The funds we established in Watson Lake last year, for example, contributed directly to the opening of the South Yukon Forest Corporation sawmill. As the Yukon forest strategy comes into effect, we expect that a secure supply of timber will permit the mill to operate year round in the future and create stable employment in southeast Yukon.

In 1999-2000, we are investing a further $1.5 million in training trust funds to help ensure that a pool of trained workers will be available to meet the needs of industry, communities and non-governmental organizations.

Mr. Speaker, the end of this millennium coincides with the end of the Yukon's first century as a territory in Canada. As we enter the next century and the next millennium, we are also entering a new era in our development within the Canadian constitutional family.

The devolution of the Northern Affairs program from the federal government to the Yukon next year will mark our coming of age as a Canadian jurisdiction. Devolution will effectively put virtually all province-like rights and responsibilities into the hands of Yukon people.

This is an enormous challenge and an enormous opportunity. It means we will be in control of our own forests, our mineral resources and our water. We will also be fully responsible for the stewardship of our land.

As I said earlier, the imagination and drive of the men and women of the Yukon give the territory a unique strength.

We are working together to meet the economic challenges that face us now, and to move forward to turn those challenges into opportunities.

So, too, with devolution. By working together with a sense of shared responsibility, we will meet the challenges of devolution and move forward to create opportunities for the future.

To do this, we must forge new, lasting and respectful relations between public and First Nation governments. It is only through these partnerships that all Yukon people will prosper.

Mr. Speaker, over the past hour I have focused on many, many new initiatives contained in this budget. This represents only part of what the Yukon government is doing on an ongoing basis. A great deal has been accomplished in the past few years, thanks to the dedicated efforts of our public employees and the active involvement of the Yukon public. This budget responds to what Yukon people told us about how they want public government to invest their tax dollars.

We have kept our promises to Yukon workers, to business, to First Nations, to the resource and tourism sectors, to conservation groups and to Yukon communities. We have taken bold steps to address the needs and wishes of Yukon youth, seniors, people in need of long-term care and families struggling to make ends meet.

This is a budget for today, with substantial investment in jobs through several major building projects, an aggressive program of road construction and a range of community-driven projects.

It is also a budget for the future, with investments in training, emerging technologies, tax reform, trade and investment initiatives, millennium celebrations, and the full range of our long-term capital plan.

This budget is about moving forward with the settlement and implementation of First Nations final and self-government agreements. It is about sharing responsibility for our future. It is about balancing competing needs and interests. It is about responsible management of limited financial resources. It is about listening to Yukon people and taking their advice. Beyond everything else, it is about working side-by-side with people we serve.

Thank you.

Mr. Ostashek: Mr. Speaker, I move the debate be now adjourned.

Speaker: It has been moved by the leader of the official opposition that debate be now adjourned.

Motion to adjourn debate on second reading of Bill No. 14 agreed to

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

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

Motion agreed to

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

The House adjourned at 3:10 p.m.

The following Sessional Papers were tabled February 22, 1999:


Deductions from indemnities of Members of the Legislative Assembly made pursuant to subsection 39(6) of the Legislative Assembly Act: Report of the Clerk of the Yukon Legislative Assembly (dated February 22, 1999) (Speaker Bruce)


Government Contracting Summary Report by Department (April 1, 1998 - January 31, 1999) (Sloan)


Yukon Short-Term Economic Outlook 1999 (dated February 1999) (Harding)