Speaker: I will now call the House to order.

We will proceed at this time with prayers.

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

Are there any tributes?

Hon. Ms. Moorcroft: On behalf of all members of the Yukon Legislative Assembly, I rise today to pay tribute to Canada's National Day of Remembrance and Action on Violence against Women.

Ten years ago today, when 14 young women were killed at l'École Polytechnique in Montreal by a man who hated feminists and feared women's economic equality, was a wake-up call for all Canadians on the existence of misogyny in our society.

Since that day, women and men have been working to combat sexism, increase public education about family violence, develop new legislative tools, and provide better support for victims in order to end the violence.

Schools, communities and government are working together to end the violence. Tonight at 7:00 p.m. at Hellaby Hall, a remembrance ceremony will be held. I would ask all members to stand to join in a moment of silence to remember the women who live daily with the threat of violence and those women who have been killed through deliberate acts of violence.

Ms. Duncan: Mr. Speaker, I rise today on behalf of all members of the Yukon Legislative Assembly to pay tribute to a dedicated group of Yukoners. Bernie Adilman, Tom Rudge and Al Nixon and their team of 110 volunteers spent the last 15 months preparing for the first time ever to host the TSN McCain Skins Game north of 60.

Over 1,000 Yukoners gathered at Mount McIntyre this weekend. They waved to family and friends in southern Canada through the live TV broadcast and invited the world to visit through commercials that everyone would want to sit and sing through.

Old friends, some of whom had not seen each other inside a curling rink for well over 20 years, saw one another, renewing friendships and everyone's interest in a game that is still played in almost every Yukon community by all ages.

All Yukoners can be very proud of the accomplishment of these volunteers in pulling this event off. One of the curlers said to me on Saturday night that of all the places they had curled in Canada, this event in Whitehorse had been the best.

The Yukon is made up of people who, when they're told it can't be done, say, "Why not?" and turn around and show that it can. Congratulations to everyone who made this event possible.

And, Mr. Speaker, the curling wasn't half bad either. Our thanks to Middaugh, Martin, Stoughton and Peters rinks, and the TSN crew. Do come back again.

Speaker: Are there any introduction of visitors?

Are there any returns or documents for tabling?

Hon. Mr. McDonald: Mr. Speaker, I have a few documents for tabling.

Hon. Mr. Fairclough: Thank you, Mr. Speaker. I have for tabling the annual report for the Yukon Housing 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?

Ms. Buckway: I give notice of the following motion:

THAT it is the opinion of this House that consumers have the right to know whether food has been genetically modified; and

THAT this House urges the Yukon government to lobby Health Canada to develop a mandatory system for labeling of foods containing genetically modified ingredients.

Mr. Hardy: I give notice of the following motion:

THAT it is the opinion of this House that

(1) Rules set by the World Trade Organization (WTO) govern the flow of trillions of dollars of economic activity across the borders of the world;

(2) The effect of these rules can include restrictions on the formulation of sustainable development, environmental, labour and social policies, thereby threatening the exercise of national self-determination and democratic control of economic order; and

(3) The WTO has failed to integrate into trade policy the concerns of the people, still conducts most of its business behind closed doors, and has been slow to develop relations with non-governmental organizations representing other than corporate interests; and

THAT this House urges the Government of Canada, as a member of the World Trade Organization, to impress upon other member nations the need to practice a new policy of openness which, at a minimum, will ensure the building of structures for meaningful participation of all citizens, including environmental, labour, social, justice and other NGOs, in all decisions on trade liberalization.

Speaker: Are there any statements by ministers?

This then brings us to Question Period.

Mrs. Edelman: Mr. Speaker, my question is for the Minister of Health and Social Services. We are having a real problem in this territory keeping nurses in rural communities. We are starting to have problems retaining and recruiting specialty nurses at Whitehorse General, and in a year, it is going to be much worse. The minister knows this.

Part of the problem is that the incentives we are offering to our rural and Whitehorse nurses just don't compare to what they are offering in other jurisdictions. For example, the N.W.T. is paying more than $6 more an hour than we are. Despite this, I think there is more to our recruiting and retention woes than just coming up with bigger salaries.

The minister has heard from the Registered Nurses Association of the Yukon that they are interested in creating a position outside of government that can study the issue of nurse retention and recruitment in the Yukon. The nursing shortage in Yukon is already at a crisis level, and this is a practical solution. Is the minister willing to consider paying for and creating a position for someone with the expertise in this field to come in and find ways that we can recruit and retain nurses here in the Yukon?

Hon. Mr. Sloan: Well, certainly, we're interested in any practical suggestions that come forward. I heard the report this morning. I haven't received a formal paper on this, but we'll certainly review it when we see it and see what the implications are. We do have a position that is assigned within the Department of Health and Social Services that works exclusively on recruitment issues, but we're certainly interested in discussing with the nurses association any practical suggestions that they might have.

Mrs. Edelman: I'm glad that the minister is interested. Certainly, the position in the Public Service Commission deals primarily with what's happening with the rural nurses, but that's an issue now in Whitehorse as well. Mr. Speaker, another practical suggestion: at the health summit in October, a number of really interesting suggestions came forward about increasing efficiency in health care in Canada. One of those suggestions came from Alberta, where they now have a very well-advertised health line. That services rural Alberta. The line is answered by registered nurses. People are referred to the type of medical service they require and, apparently, the number of emergency room admissions are down as a result of the line being in service. Naturally, costs have gone down as a result as well.

Having such a line in the Yukon, with the calls from the communities being forwarded into Whitehorse at night might help some very tired nurses in the communities get some sleep at night, as only the more urgent cases will be forwarded to the local nursing station. Has the minister considered bringing in such a referral line for rural nursing stations?

Hon. Mr. Sloan: The idea of a triage line or an advice line is something that has come to us and we are looking at the possibility. We are looking at how the RCMP do it with their current after-hours, I guess, call-in system, and it is something that we are interested in doing and seeing if this, indeed, could be a practical utilization up here.

Mrs. Edelman: Mr. Speaker, we're doing very well today. The minister knows that the nursing shortage is a national issue. He must also be aware that the professional development fund that we have here in the Yukon is far less than it is in other jurisdictions - those other jurisdictions that we're competing with for nurses.

Now, having a good professional development program is a proven method of retaining local nurses. One suggestion that I have heard that makes a lot of sense is that we could partner with, say, six or seven universities outside that have very good nursing programs, so we could offer development programs here in the Yukon, some of them with satellite links for classrooms.

Is the minister interested in partnering with outside nursing schools in order to offer competitive professional development programs to Yukon nurses?

Hon. Mr. Sloan: Mr. Speaker, we have had some discussions with some outside universities. I met last year with UNBC, which is a school that, as the member may be aware, has made some dramatic strides in its national standing. We are interested in opportunities of this kind. We have had some discussions. One of the major drawbacks that we have had in terms of such things as a registered nursing program - we ourselves offering it through the college - has been the lack of opportunities for professional training in terms of the different kinds of specialties that we could offer here and so on. But we are looking at some ways in which we can work with outside universities to deliver professional nursing training.

By way of interest, we just attended a job fair in Toronto, and we had a considerable amount of interest in nursing in the Yukon. We think that there is a lot of interest. We have been working very actively on the recruitment front, and we're certainly interested in continuing that and trying to do as many things as we can to make the Yukon an attractive place for people to develop nursing careers and to be involved in not only community nursing but acute-care nursing here in Whitehorse.

Ms. Duncan: Mr. Speaker, I have some questions for the Government Leader. Over a year ago, the Government Leader promised, in a statement to this House, that he was developing a new Yukon. In that same statement, he talked about creating one job at a time.

Unemployment statistics released on Friday prove the new Yukon looks a lot like the old Yukon under the NDP - same NDP mismanagement, same high unemployment rate of 11.8 percent, the third highest in Canada. We're over a year into this era of the new Yukon, and it's painfully obvious to those looking for work that this government is in over its head when it comes to the economy.

When is this one-job-at-a-time promise going to be fulfilled?

Hon. Mr. McDonald: I thank the member for reading from her script. Unfortunately, her script writer did not indicate to her what the latest statistics were with respect to the value of building permits, which are up 85 percent over last year. That's a reflection not only of some people's faith in the economy; it's also a job creator.

So, there is activity. Only this last weekend, I was at the trade and investment round table, which had a lot of excitement as people were talking about their success stories.

Previous to that, I was at the tourism round table and summit, and people were talking about their success stories and the fact that they were working in new areas, and have felt very excited about their prospects.

So, that is the world in which I have it, along with my colleagues, Mr. Speaker. It is a world of promise, hope, a lot of can-do attitude. It is not the world that the Liberals seem to wallow in, which is gloom and doom and negativity. But I think that there are some good indicators showing a turnaround, and I'm happy to be working with the community, various businesses and other organizations around the territory to build the economy.

Ms. Duncan: The world Yukoners are living in has a high unemployment rate. The script I'm looking at is the Yukon Bureau of Statistics unemployment rate, released on Friday. Unemployment in Canada hit 6.9 percent last month; the Yukon, however, has a rate of 11.8 percent. A year after this government promised to create one job at a time, in fact we're actually worse off. Unfortunately we all know that this government is famous for broken promises. This is the same government that promised to cancel the wolf kill, stabilize power rates, settle land claims, finalize DAP, to return the two-percent rollback and to rebuild the partnership in education; the list of broken promises goes on and on.

When it came to power this government said that an unemployment rate of 7.9 percent was too high. Mr. Speaker, when does the Government Leader see the Yukon at least getting back to 7.9 percent? When will the commitment to lower unemployment rates be honoured?

Hon. Mr. McDonald: Well, the member listed off a string of federal Liberal failures. The DAP is federal legislation. The land claims issues that are outstanding are federal in nature. The member talked about stabilizing power rates; I can only say here that the power rates have been stabilized and in fact there has been no change in bills for well over a year. That involved a $10 million investment by this government, in this Legislature, in people's power rates.

The member talks about government action; well, the government lowered taxes this year by four and a half million dollars. There are a whole string of initiatives that the government is undertaking, not only from the tax table, but in telecommunications, in trade and investment, in tourism - in concert with the communities and community organizations - all designed to improve our economic fortunes because we've realized that we cannot depend on the mining sector alone, when the metal prices are down, to save us.

So, it's a can-do attitude. There are lots of initiatives being undertaken. The member doesn't have to list all the federal Liberal failures in order to make her point. All I can say is that this government is undertaking a lot of things, both in terms of direct spending and in terms of encouragement and facilitation, to get the economy moving, and we're doing that with the community itself.

Ms. Duncan: The Government Leader talks about a number of initiatives that this government has undertaken. The Government Leader said that the string of broken promises I reeled off were all the federal government's fault. It's not the federal government's fault the partnership in education is gone. It's not the federal government cancelling the wolf kill. It was this government that made a promise and didn't keep it. This government made a promise that 7.9-percent unemployment was too high. The Government Leader himself made a promise of turning the Yukon economy around one job at a time.

Will the Government Leader answer the question: when will Yukoners see results? When will we see the unemployment rate turn around?

Hon. Mr. McDonald: Well, first of all, Mr. Speaker, the cracks about the partnership in education are just simply not true. There is a good partnership in education. There is a real respect for school councils, for all the partners, for First Nations, for the teachers. There's a real respect for those partners who are determining the makeup of the system and who are involved now in a review of the Education Act. So there is a real partnership. The member is completely wrong on that point, of course.

With respect to the unemployment rate, Mr. Speaker, of course it's too high. But there are also 200 more people working in the workforce this year over last year. There is a larger workforce than there was last year, and that's a sign that people are working, and good things are happening. I wish the members in the Liberal Party would just see, from all the activity that is happening in the territory, from all the enthusiasm that people are showing who want to get things done - I just wish that she would show them some respect too and acknowledge the fact that people are working hard, and they are showing successes, and they are getting things done. Because turning around an economy from a resource-based-only economy to something more than that is a lot of work, and just a few snide questions and negative questions in Question Period aren't going to cut it.

So we're going to work with the community, work hard with the community, undertake a number of initiatives with the community and strategic investments in this territory, and it will turn around, and it is turning around now.

Mr. Ostashek: My question is for the Government Leader. It has been reported that the Minister of Economic Development is on his way to England to wave the Yukon flag at a mining seminar in order to attract mining investment to the Yukon. I understand that mining companies such as Barramundi Gold and Expatriate Resources will also be there.

Mr. Speaker, in order to attract mining investment, however, the government has to have policies that support mining, and they also have to have a proven track record. Actions speak louder than words; consequently, I would like to ask the government leader if his government supports the 32 claims that were staked in the Fishing Branch area and recognizes them as being legitimate claims. The owners of the claims want to know; the Chamber of Mines wants to know, and major mining companies want to know. Can the government leader tell us: are these legitimate claims?

Hon. Mr. Fairclough: Mr. Speaker, this member has asked this question before. I told the member what we have been doing with Fishing Branch and how we have been working with the community and so on. We went as far as including industry in our discussions on what should take place in Fishing Branch. We did things like grandfather in the six new claims. We grandfathered in access to those claims and also the winter road to the Rusty Springs claims. We have done that in agreement with the First Nation, and it was right out in the public. There was a map notation in Fishing Branch. This was going to be a protected area, and still those people have gone out and staked claims. There was full knowledge out there that this was going to be a protected area.

Mr. Ostashek: Mr. Speaker, let the record show that the Government Leader doesn't feel comfortable in answering the question. I have asked the question before, and I haven't received an answer to it. I want to know this: does this government believe that those were legitimate claims - the 32 claims that were staked - and are they going to honour them or, in fact, have they written a letter to the federal government, asking that these claims be rejected?

A simple yes or no. Has a letter been written asking for the rejection of these claims?

Hon. Mr. Fairclough: We haven't written a letter to the federal government requesting these claims to be rescinded.

Mr. Ostashek: Finally. After four questions, we finally get an answer.

Mr. Speaker, the Government Leader and the Minister of Economic Development both admitted publicly that the process of attempting to withdraw the Fishing Branch area from mining was fundamentally flawed, and promised the Geoscience Forum a correction would be made.

The government has now accepted the legitimacy of these claims. Is it the government's intention not to pursue what they said they were going to do, in a news release several weeks ago by the Minister of Renewable Resources, and pursue the federal government to reject these claims? Is the letter not going to be written, now that the minister says it hasn't been written to date? Is it the position of the government that it will not be pursued?

Hon. Mr. Fairclough: I just answered that. I said we will not be writing a letter. We feel that the general public out there knew that this was going to be a protected area, and it was out there for a long time - map notations in place. That's where it's at right now.

Mr. Jenkins: I have a question for the Minister of Community and Transportation Services. Mr. Speaker, our caucus is in receipt of a courtesy copy of a letter sent to the minister, dated December 2, 1999, from the Marsh Lake Citizens Advocacy Organization. The letter makes some serious allegations concerning the formation of a local government for the area. The organization charges the government with denying citizens a vote to determine if a majority are in favour of the local government being proposed, misleading the citizens about the power the local government will have, misleading the citizens about the public support for the proposal, threatening people about losing services, such as fire protection and ambulance service, should the proposal not go ahead.

Is the minister aware of the letter, and what does he plan to do about it?

Hon. Mr. Keenan: Certainly, Mr. Speaker, I'm aware of the letter. The letter was brought to government just last week, as the Member for Klondike has so correctly stated. It is a letter stating that they're going to take the process to the Supreme Court of Canada. I'd also like to say that we, as a government, have been listening to the people of Marsh Lake, and we'll continue to listen to the people of Marsh Lake. There are no threats coming on behalf of this government. What is coming from this government is good work, looking out there and improving rural services for people, asking people what they need in rural services - all those good initiatives - and we'll continue to do those good initiatives, Mr. Speaker.

Mr. Jenkins: Well, the minister said he's listening to the people of that area, but is he actually hearing and taking to heed what is being said? A petition bearing 126 names has been circulated, and it states that the undersigned property owners in the area are opposed to the formation of a local government without a vote being held giving a clear majority to proceed.

Does the minister have a position with the concerns raised by the citizens in the petition?

Hon. Mr. Keenan: Mr. Speaker, it was just last spring when we debated the merits of the Municipal Act, and, in the Member for Klondike's own words, that act is enabling legislation. The member knows that this legislation allows people to do what they wish. It is not precedent setting because this happened in another part of the Yukon Territory, but to absolutely allow the people to form what it is that they wish in the areas of governance.

This community has moved forward to do that. We have had people out from every aspect of the planning area. They have put forth their initiatives. They said that they do want to see initiatives here and that they do want to have a voice because it is the largest growing community. I understand that there is one person out there who has sent the letter. I have reviewed the letter. The letter is with the Justice department now at this point in time, and it's even hard for me to talk about it because it is going through the court system.

So, again, in my attempt to answer the question - and I felt I had answered the question - yes, we will continue to work with the people of Marsh Lake so that we will be able to define what it is that they want in services and government structure and how they might best advise government to fulfill that.

Mr. Jenkins: Well, it's not before the courts as yet. The Marsh Lake Citizens Advocacy organization has asked for a decision from the minister by December 8, 1999, or it will proceed to the courts at that time. It will proceed and, it says in its letter, to force an injunction to force compliance with the wishes of the residents. Is the minister going to wait for a court challenge or is he going to meet with the area residents forthwith and deal with this issue? Or is he just going to wait?

Hon. Mr. Keenan: Going to wait? Mr. Speaker, we're out there doing things for community people. We're working with communities. We've got the rural roads program, we've got so many programs that I'd have to start in alphabetical order to start to list them; and did the previous government have that opportunity? Yes. Did they capitalize or even work to that opportunity? No, absolutely not.

Mr. Speaker, the majority - 61 percent of the residents and property owners - responded to the survey, supported the formation of a local advisory council with the ward system, and that is exactly the way we are going to proceed - with the voice of the people.

Mr. Cable: I have some questions for the Minister of Justice on the Justice ministers conference. Last week the minister was at a meeting of Canadian Justice ministers. One of the topics that came up was the proposed Youth Criminal Justice Act - that's the act that will replace the Young Offenders Act. Now the proposed act puts more emphasis on diversion programs for nonviolent crime, but it is tougher with violent young offenders. Apparently there was a disagreement between Ontario and Quebec; Ontario said the act was too lax and Quebec said it was too severe. Ontario apparently wants to prosecute more young offenders as adult offenders and wants to prosecute youth under 12 for serious crimes. Quebec wants more emphasis put on diversion programs and therapy. What position did the minister put forward on the disagreement between Ontario and Quebec?

Hon. Ms. Moorcroft: Well, Mr. Speaker, I think it's important to point out for the member opposite that while Ontario indicated that the new Youth Criminal Justice Act didn't meet their needs, and for opposite reasons Quebec held the same position, 11 jurisdictions at the table did say that there was a need to move forward with a new Youth Criminal Justice Act. The Yukon is generally in support of the direction that the act takes in supporting a balance of rehabilitation and punishment. There is a concern about funding that was discussed by all jurisdictions. We generally do support moving forward with the legislation, and the federal minister committed to more meaningful consultation with all provinces and territories.

Mr. Cable: Before leaving for the conference, the minister issued a press release saying that she supported the creation of a national working group to look at ways to improve the collection of child support payments. There isn't a specific reference to this proposition in the joint communiqué issued by the ministers, although there is reference to the negative consequences of separation and divorce on children and the support for a federal, provincial and territorial response that will include both service and legislative components. Was there a specific agreement to set up a national working group to look at support payment collection, and what type of legislation do we need?

Hon. Ms. Moorcroft: Not all of the work that gets done at these meetings is reflected in the press release. Yes, there was an agreement to have a working group look to ways of improving maintenance enforcement across Canada. At the present time there are reciprocal agreements in place between all jurisdictions to enforce one another's child support orders. We still believe we can make improvements. All jurisdictions agreed that that was possible and that we would work together to try to find ways to improve our maintenance enforcement regime across Canada.

Mr. Cable: The minister also said in her press release that she was to be a lead speaker on two key issues. One was the restoration of public confidence in the justice system. That issue wasn't dealt with in the joint communiqué from the Justice ministers. What suggestions did the minister put forward on this issue - the restoration of public confidence in the justice system - and what kind of response did she get?

Ms. Moorcroft: Well, Mr. Speaker, again, I would comment that not all the work that was done is reflected in the press release. All jurisdictions were supportive of the work that has been done that the Yukon took the lead on in looking at how we can increase the public's confidence in the justice system. We need to be more open and accountable. Many jurisdictions like the Yukon have held public consultations on such themes as restorative justice. Many jurisdictions have been working to improve their response to violence against women.

Today we were acknowledging the 10-year commemoration of the Montreal massacre. There are four or five jurisdictions in Canada that have brought forward a version of family violence prevention legislation. There has also been a lot of work done in crime prevention initiatives and some cooperative work being done with the Government of Canada and territories and provinces on crime prevention. All of these relate to improving the public's confidence in our justice system.

Mr. Phillips: My question is to the Minister of Education. The previous Yukon Party government placed a great deal of emphasis on the teaching of the three Rs in Yukon's education system, with particular emphasis on the teaching of mathematics. It appears to be working as the students' marks for math in grades 11 and 12 improved dramatically in 1995-96 and 1996-97, thanks to the efforts of the math teachers, the students, the parents and the tutors.

Over the last two or three years, however, there has been a crisis brewing in our education system with the math marks of secondary students. Mr. Speaker, I've learned that the grade 12 departmental marks of Yukon students for 1998-99 show 60 out of 164 students having failed, compared to 1996-97, where only 11 out of 122 students failed. These numbers are significantly higher this year. Can the minister advise the House why our marks have dropped so dramatically in the last two or three years?

Hon. Ms. Moorcroft: Well, Mr. Speaker, the Yukon territorial exams and national testing through SAIP indicate that, nationally, Canadian youth are experiencing difficulties with numeracy and problem solving. In the Yukon, we have a new mathematics curriculum that is also in place in the provinces and territories. There has been strong curriculum support for teachers on that new math curriculum.

The member paints a bleak picture, but I think he has been indulging in his usual negativity, which is not reflective of the system as a whole. We do have a good education system.

Mr. Phillips: Well, it appears we have an Education minister who just doesn't want to hear the news. For the past three years, I have been telling the minister that there's a problem in the system and it needs to be addressed. Unfortunately, the minister, as we have heard today, is of a different opinion. I just pointed out that the grade 12 departmental math marks of Yukon students for 1998-99 show a 36-percent failure rate, as compared to a nine-percent failure rate in 1996-97. It has been going down every year since 1996-97.

Contrary to what the minister thinks, there is a problem, and I'd like to know what the department is doing to address this serious downturn in math marks.

Will the minister meet with the partners in education - the math teachers, the student councils and parents - to see what can be done to resolve the problem, and will she commit to making additional resources available to deal with it?

Hon. Ms. Moorcroft: Mr. Speaker, I have just indicated to the member opposite that we have made additional resources available for teacher in-services and program resources to support the new math curriculum. We want our students to do well in math and to do well in all subjects, and we're providing the resources for that to happen.

Mr. Phillips: Well, I'm trying to point out to the minister, with facts from the departmentals, that it's going in the wrong direction. Mr. Speaker, if it was nine percent three years ago, it shouldn't be a 36-percent failure rate today. It should be going the other way, if the minister's putting resources in place to make sure it does that.

I'd like to ask the minister, Mr. Speaker, if she would consider again meeting with the partners in education - the math teachers, the student councils and the parents - to see what can be done about this alarming rate of increase of students who are failing their math?

These students need their math in today's world, Mr. Speaker, and we cannot afford to have this continue the way it is, and I'd like to ask the minister to commit additional resources to this problem.

Hon. Ms. Moorcroft: Mr. Speaker, our government has increased education spending in every budget that we've brought into this House since we formed government in 1996. In addition, I would advise the member opposite that I do have regular meetings with our partners in education, including, most recently, the school councils when they held their gathering for the fall school council conference. We are supporting new program resources and teacher in-services for the math curriculum. We will continue to support math education as well, as education across the spectrum, for our students to do their best in all Yukon schools.

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

Hon. Ms. Moorcroft: On a point of order, Mr. Speaker.

Speaker: The hon. Minister of Justice on a point of order.

Hon. Ms. Moorcroft: I have some legislative returns for tabling.

Speaker: The Minister of Justice will require unanimous consent to return to tabling of documents.

Speaker: Does the House wish to give unanimous consent for that?

All Hon. Members: Agreed.

Speaker: Unanimous consent has been granted.

Mr. Fentie: 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 government House leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Chair: I will now call Committee of the Whole to order. Do members wish to recess?

Some Hon. Member: Agreed.

Chair: Fifteen minutes.

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

Speaker: Committee is dealing with the supplementary estimates. We are on the Department of Government Services. Is there further general debate?

Mr. Jenkins: Last Thursday when we left general debate, we were dealing with the government's recently announced initiative. On November 10, 1999, the minister announced a public/private partnership and the minister said, in part, "Our government recently entered into a major public/private partnership to upgrade the Yukon's telecommunication infrastructure. The total investment for this Connect Yukon project will amount to nearly $21 million, including a distant education component of over $2 million ... Connect Yukon's position in the territory to take its place in the modern world."

Well, Mr. Chair, when you put that kind of money into communications and call it Connect Yukon, the public would be led to believe and understand that virtually everyone in the Yukon was going to be receiving telephone service, and telephone service at a level commensurate with what is expected in the world today, which means a relatively wide bandwidth that would allow for data transmission or Internet access.

But when you go on into the area that the minister specifically spelled out, he identified Tagish, Marsh Lake, Lake Laberge. There's no mention made of the Ibex Valley, Mendenhall or any of the areas of the Yukon that are identified as high-cost service areas. Currently, they are without means of communications other than perhaps M-SAT or manual mobile telephone. When you look at a major capital infrastructure being made by a telephone company or by a consortium of telephone company and government - a government public/private partnership - that capital investment requires CRTC approval. You have to go for CRTC approval, lay out your plans as to what you're going to invest in, what benefits are going to accrue and what kind of rate of return you would be allowed on your investment. Each year, the CRTC receives an application, and sometimes more than one, from Northwestel with their capital investment plans as to what they're going to do and how they're going to do it, and that's ruled upon. In many, many cases, CRTC goes back to the telephone company and says, "We want an explanation of this, this or this, and we will allow this; we won't allow this."

To date, there has been a whole series of applications to CRTC by Northwestel for regulatory approval on various items. Most of them - and virtually all of them - are dealing with applications for the areas that will still be regulated after long-distance deregulation comes to the Yukon. There is not one application currently pending before CRTC that deals with this area that the minister has announced, which leads to the question of why. Where are we at? Because that is the way that the process has to flow.

The minister has not tabled the financial arrangement that the Government of the Yukon has with Northwestel, because there is probably none existing; all there is is a letter of intent with Northwestel. If there is a financial arrangement with Northwestel, could the minister table it forthwith? I would ask that he table that, but all that he has told us about is a letter of intent. We do have a letter of understanding that is most interesting that the minister tabled, and it is on a process for developing a mutually acceptable proposal for implementing communications-technology infrastructure and capacity-development initiatives for the benefit of Yukon and northern British Columbia First Nation communities.

Now, I can understand it's dealing with Yukon First Nation communities. Why we're dealing with northern British Columbia First Nation communities and paying the bill - that requires further explanation. And this letter of understanding is between the Council of Yukon First Nations, the Kaska Tribal Council, the Kwanlin Dun First Nation and the Government of the Yukon. The government gives that group $100,000 in support for their participation, and that's only for the period October 1999 to March 2000. Their support in this participation, in the development of a memorandum of understanding - that's a considerable sum of money for that kind of an initiative, especially when it extends into northern British Columbia. That rationale for extending into northern British Columbia defies the imagination.

Other than that, it's an area that is currently serviced by Northwestel. Now, if that's the reason that the Government of the Yukon is investing in northern British Columbia - because it is the service area of Northwestel - the minister should be able to stand on his feet and identify it, but that information has not been forthcoming.

The minister has advanced a cause. It has the support of a lot of Yukoners, in fact the majority of Yukoners, but when there is an expenditure of public monies such as we are witnessing before us today, Mr. Chair, that deserves the full scrutiny of this House as to how it's going to be done, how it's going to be delivered, and what benefits are going to accrue. If you look at an expenditure of some $21 million - and I had the numbers extrapolated just on a cursory overview of the map using buried cable and using numbers that originated from the State of Alaska - we could cable virtually all of the areas outlying Whitehorse with the exception of a couple of areas that are on the far side of some of the lakes, and they could be well serviced by cell systems, and at less than $3 million to $5 million - that's the number I was quoted, I believe - to put buried cable into all of these areas, and that is a considerable saving over what the government is proposing to spend to service some 600 to 800 lots.

Then when we start looking at it further, Mr. Chair - the cost that Yukon is incurring - it's going to create Yukon jobs, because Northwestel is a company based here in the north and they hire Yukoners. All we have to look at are some of the major projects recently undertaken and completed - well, maybe not completed - by Northwestel.

Let's look at the microwave system and the towers that were put in place up the Dempster Highway. The minister should go back to Northwestel and ask them how many Yukoners were put to work on these jobs. Other than access routes into these sites, really, the majority of the work went to outside contractors, primarily from Alberta. That's what took place.

Then, at the end of the day, this system, which was originally supposed to provide protection to the Yukon in allowing us another path for transmission out of the Yukon - we'd leave Whitehorse if something occurred south of Whitehorse in the transmission through Northwestel. The path that it would follow would be up the Dempster Highway and down the Mackenzie Valley, and it made a bit of sense, but today, some many, many years later, this system still has not been turned up, still is not operating, still is not benefiting Yukoners, other than the MDMRS system operated for the government's own communication purposes.

And yet, when you ask our CRTC how much is in the rate base that Northwestel is allowed a rate of return on, it's still some $17 million at their current rate of return, which is over 10 percent.

So when you add it all up, you start putting that kind of money into the asset base of a telephone company, they're going to be allowed a rate of return. Initially and subsequently, there appears to be very little in the way of jobs for Yukoners, and yet, the candle that's being held out there by the minister is that, at the end of the day, we're all going be linked with a telephone. That's not the case, Mr. Chair. We're not. We are not all going to be linked. There are many, many individuals, many homesteads, many country and rural residential properties in very close proximity to Whitehorse that will be excluded from this process that the minister has identified here today. And yet the money is going to be spent. The money is going to be spent in one way or the other. The minister is suggesting that it's going to be a public/private partnership. When you explore it further, Northwestel is agreeable to accepting a subsidy for the services they provide, but to get into the asset base, that has to be a full-blown application to CRTC - unless, of course, we go totally wireless, which is an option. That is deregulated. That has potential, and more and more we're going to wireless communications.

Why do we have to align ourselves specifically with one telephone company when there are many, many individuals in this field? If we do, as the minister suggested, get into this public/private partnership with Northwestel, at the end of the day that telephone company will have a very good lock on communications north of 60. It could be to the betterment of Yukon; it could be to our detriment, but the way that communications is going in the rest of the world, we're seeing very few of those benefits here north of 60, currently.

Yes, our telephone access charges have gone up, up, up up; our long-distance rates have gone down, down, down, but in comparison to the advertisements that you hear on a daily basis on television, there is a lot of room for more compatible rates to the rest of Canada and indeed to the rest of the world; we are paying a premium price. Northwestel is one of the most profitable telephone companies in Canada.

It is very interesting when you look at their whole rate-making base across the north. We know the eastern Arctic is costing an awful lot of money to service, which gives rise to the question: just how much of a cross subsidy is there from the eastern Arctic to the western Arctic and the Yukon?

We know, and information tabled with CRTC shows, that Whitehorse and the Yukon route is a very profitable route for Northwestel. They not only handle traffic from the Yukon southbound, they handle a lot of traffic originating in the State of Alaska. They also have contracts with the defence department in the U.S. for data transmission and for an alternate route down to the Lower 48 from Alaska.

All of these cost the State of Alaska significant sums of money, which is benefiting Northwestel, which hopefully is benefiting their rate-making zone by allowing them to provide a higher level of service, which we gain a benefit from. But there seems to be little initiative on the part of Northwestel to expend money providing a measure of service to the outlying areas of Whitehorse.

The hue and cry today originating from that company is we have to prepare for deregulation; we have to crank up our access charges, our basic telephone charges, because we know we're going to have to lower our long-distance rates, and to do this, we have to get into rate balancing.

Well, they've won that argument. We now have rate re-balancing, if you want to call it that. We're all now paying two and two and a half and three times what we were originally paying for basic telephone service, without any of the other bells and whistles. All of the add-ons that used to be an additional charge are incorporated into the basic costs.

That's a given. But the promises made to increase bandwidth for the northern part of Yukon from Whitehorse north has not been realized. A lot of the areas that have been promised to CRTC have been put on hold, they've been delayed, and shifted off to the next year. Virtually every application to CRTC shows a great number of initiatives from Northwestel postponing, postponing, postponing.

Now, this company still operates in a regulated environment, Mr. Chair, and a regulated environment that is under the guidance of CRTC, because we're supposed to be under-serviced. But until we see the advent of deregulation, we don't know if there are going to be benefits or not.

The area surrounding Whitehorse is one of the most rapidly growing areas in the Yukon. It has grown significantly in the past number of years, Mr. Chair, and it continues to grow, and the demand is there. The demand is there for a better quality of service where some service exists, wider bandwidth where some service exists and, indeed, the provision of basic service, and what we're all looking at is a decent level of service at a reasonable cost. No one is adverse to paying an access charge that is commensurate with what is paid in other areas, Mr. Chair.

When the minister announces this $21-million initiative, boy, that sounds great. I suggest to the minister that it's probably because there's an election looming right around the corner, and they have to do something, because they certainly haven't addressed the issues surrounding the economy, surrounding the high unemployment, surrounding the decline in virtually every industry here in the Yukon, except our visitor industry, which has shown some growth. But the mining industry is gone; all of the other areas are destroyed because of this government and its policies.

$21 million - at the end of the day, what are we going to have? That's the question of the minister. I'd like the minister to table the arrangements that he has with Northwestel, and I'm not looking for just a letter of intent, Mr. Chair. I'm looking for the full-blown proposal that must have been carefully thought out by any government that was going to invest this size of money.

There has to be a whole game plan that the minister and his department have put together on this initiative. And if there isn't, well, shame on the government, because no one in their right frame of understanding of the political process would proceed without having a clear understanding of where we were headed, how we were going to get there, how we were going to achieve success.

Has this minister done it? I don't know, Mr. Chair. For the information tabled to date, it has been a very loosey-goosey, in-the-background kind of arrangement - very little concrete. The only thing concrete that we know of is that there is $100,000 going to the First Nations for their support and their participation. So, if the minister could table, number one, the letter of intent, the background documentation that reviewed all of this area and led to the decision and conclusion that this was the best way to proceed to provide a balance of Yukon with telephone communication and with added bandwidth that would allow for high-speed Internet access, that would be most appreciated.

I'd also like the minister to explain fully why we are dealing with the First Nations in northern British Columbia on this initiative. First Nations in the Yukon, that's great; but why are we spending a lot of money on this initiative outside of the Yukon? That deserves an answer, Mr. Chair.

Mr. Chair, until we get some answers on these extremely important issues surrounding this expenditure of some $21 million, we're going to be here a little while, because to date the minister has just skirted the peripherals of this issue - an issue that our party supports - and I would look forward to some answers on this very important initiative.

Hon. Mr. Sloan: I see that the telegenic Member for Klondike has used up his television time. I guess he likes watching himself at 9:00 p.m. He probably feels that he contributed something to the debate by that somewhat convoluted presentation there.

I can't figure out whether there was a question in there but I can now assume, given the member's questions, that there is no interest in the Yukon Party in the extension of telecommunication, telephone services, to rural Yukon, and particularly up the north highway. My assumption from the preamble that the member gave is that the Yukon Party is opposed to the Connect Yukon project, and we will take that, accordingly, they are in opposition to this and that therefore they will be hostile to any ventures that we make in this regard.

With respect to the member trying to basically say that I had made reference to only a couple of places in the Yukon and that that was what we were saying as being the restriction on telephone service, I did that for merely economy of time. I can read off the areas that we know - the prime area lots.

Marsh Lake/South M'Clintock/Army Beach, 115 lots; Marsh Lake/North M'Clintock, 18 lots; Marsh Lake/M'Clintock Place, 79 lots; Marsh Lake/Yukon River Bridge, 12 lots; Tagish/Tagish Estates, 30 lots; Tagish/Taku subdivision, 237 lots; Tagish/Crag Lake, 10 lots; Carcross Road/Lewes Lake Road, 12 lots; Carcross Road/Annie Lake Road, 15 lots; Laberge/Jackfish Bay, 48 lots; Laberge/Grizzly Valley, 16 lots; Laberge/Deep Creek, 48 lots; Laberge/Horse Creek, 12 lots; Laberge/Ta'an Band, 14 lots; Takhini River Road, 30 lots; Teslin cottage lots, 54 lots; Mendenhall, 54 lots; Gentian Lane, 11 lots; Dog Track to Drury Farm, 11 lots; for a total of 826 lots that we're aware of.

When we talked about this, I made reference to the larger areas - quite clearly, the areas we saw as being primary needs. I didn't mean to slight anyone; I just merely made reference to some of the larger areas. The member assumed that I was only talking about three areas. We are talking about some 826 lots in the immediate area.

With respect to the memorandum of understanding, the member has made a great deal about the issue of Yukon/northern British Columbia/First Nation communities. I might remind him that the Kaska Tribal Council also incorporates and considers itself to represent the Kaska of northern British Columbia, and primarily in areas such as Lower Post.

With respect to the entire project, the member needs to be aware that the project itself has three components. There is the component of rural telephones, which we are not suggesting for one moment will be single source. We are not suggesting that this is only something for Northwestel. As a matter of fact, how we have structured it is that we will be soliciting other interested parties in making submissions in that regard.

A primary area of private/public partnership - and the member is kind of rolling this all into one and saying this is one massive private/public partnership - is on the development of the telecom infrastructure, which is primarily designed to serve the north highway and to increase our capacity to bring high-speed Internet service to 17 communities and also high-speed data services to most Yukon communities for business applications.

So, we're looking at this as three components. One is the rural telephone program. We're wrapping it up under one name, if you will. The second part is the private/public partnership with Northwestel to deliver high-speed data and Internet service. And the third component is the issue of distance or distributed learning, which is primarily an educational initiative, but we're incorporating that.

The member goes on about the $21 million. I have to remind him that, when he's talking about that, he's talking about the entire package. With respect to the agreement with Northwestel, that is currently being finalized, and I'll present a copy to the member when it is available. I have offered some information on the basic principles underlining the memorandum of understanding between us and Northwestel. I will provide the details.

The member has gone on at great length about Northwestel and its position vis-à-vis issues around service and so on. Those are issues for Northwestel to resolve in terms of the CRTC. They have been given very clear direction, in terms of what they're required to do, in terms of upgrading their service levels in the territory, and I think they will respond. The member has probably seen some ads that they have, where they're trying to solicit some public opinion into what they need to do, in terms of service improvement.

They're very conscious - I have certainly had some conversations with them - of the fact that competition is coming and they need to be in position to be able to handle that, but I think anyone who thinks about it will realize that they are still the major service carrier in this territory, that there will be competition, but I suspect that the competition will be likely on the issue of long-distance services, and I suspect it will be primarily directed in the Whitehorse area, because that's the most economical area for any competitor to come in. Any service that comes in will likely have to use the service, the infrastructure, of Northwestel. I can't see anyone duplicating it or trying to duplicate it.

So I think, with respect to Northwestel, they're very conscious of this. They're very conscious of the competitive environment that they're going to be moving into.

With respect to where we are going, we have felt that it is time that we move the process forward, that we make an investment in the development of telephone services for a large area of unserviced lots. We also feel that we need to do something in terms of, if you will, priming the pump, or giving some sort of incentive to the development of telecom infrastructure, particularly for those communities up the north Klondike Highway. We have also felt that we need to make an investment in our children, in education, to bring them into a competitive environment where they can compete, where we can deliver a number of services to our children in terms of distributed learning and technological education.

So, I think we are working on this. There has been a considerable amount of research that has gone into this. There has been a considerable amount of thought. We have had ongoing discussions on this whole idea. We have been working on this for a considerable amount of time, and we have what we think is a viable proposal coming forward.

I am disappointed, to say the least, that the Yukon Party has withdrawn or, I guess, never extended their support for providing telephone services and providing upgraded telecom services in rural Yukon. I think that's disappointing. I think it does a disservice to many of the people who live in the areas I just read out.

I think it's even more disappointing that the Yukon Party has decided to condemn the people of Dawson, condemn the people up the north Klondike Highway - or they've made a decision not to provide the kind of service that people up there have indicated to us that they do need. We have long taken the view that people in rural Yukon should have advantages in terms of such things as telecommunication and so forth, and distributed learning that the people in Whitehorse have.

I'm quite disappointed that the Yukon Party has decided to withdraw their support for rural Yukon in this regard. It is disappointing, but, needless to say, we will proceed and we will try to resolve these. The member has indicated that he is going to keep us here for a long period of time. I'm quite prepared to go through these. Obviously, there's a lack of support for this, and I am quite disappointed.

Mr. Chair, if I might beg your indulgence, there were a number of questions that were raised on December 2, and if I could just read through some of the questions and some of the responses - I see that you have given your assent to this so I will proceed.

The question was asked: what is the difference between microwave technology and ground-based digital radio, which is the technology of choice for the Connect Yukon project? All Yukon communities, except for Old Crow, are connected by ground-based terrestrial microwave system. The microwave describes this frequency spectrum of radio waves. Signals sent over the radio waves may be either digital or analogue. Our on-off signals are digital, and continuous signal and changes of frequency are analogue.

In the case of terrestrial microwave, the digital signal offers better quality, is more reliable, and provides much more bandwidth capacity than the older analogue system. Half the current microwave system within the Yukon is digital but the other half is analogue. The analogue portion needs to be upgraded to digital in order to provide the necessary improvement in services - for example, clarity of transmission and bandwidth to communities. Hence, the description of that part of the Connect Yukon program will include the digital ground-based radio upgrade.

With respect to some of the contingencies related to Y2K, the question was this: how many people will be working standby at midnight, December 31, 1999? How many of those extras are assigned because of Y2K? What is the incremental cost? Information services branch is responsible for the mainframe network and corporate applications equipment. Departments are responsible for their own departmental equipment and applications. Incremental staffing in information services branch due to Y2K will involve an additional five individuals working two to four hours extra on December 31.

Three staff will work for two to four hours on January 1 and two staff members will each work four hours on January 2. In total, and assuming no problems arise, 28 hours of overtime will be incurred, costing approximately $1,500. The property management branch is responsible for the embedded chips in building systems such as alarms, HVAC, security and communications. Staff will be checking all buildings at midnight in order of operational importance. Incremental staffing will involve eight additional staff working at midnight, December 31, to check for problems. In addition, the branch will have an additional 21 staff on standby from midnight to January 4. The total cost expected is $7,372.

With respect to the guidelines and criteria that departments use to determine if someone on contract is, in fact, considered to be a contractor or an employer, it is up to each department to determine whether the business or person they are contracting with is an independent contractor or not. The contracting course is taught by contract services to both government personnel and the public, and includes information on the difference between an independent contractor and an employee. This information is taken from the labour services branch, Workers Compensation and Revenue Canada, and I can provide a copy to members if they are interested.

With respect to falsely signed statutory declarations brought to the attention of contract services and how many of those were reported to the RCMP, we do not know whether any statutory declarations have been falsely signed, but there are two projects currently being investigated by the RCMP as a result of complaints from unpaid subcontractors. The RCMP is investigating all of the statutory declarations involved in the two projects.

The RCMP investigates and makes decision as to whether to lay charges. The RCMP has changed personnel twice in the commercial crime branch, which does these type of investigations. This has contributed to some delay.

Unpaid contractors can submit claims to contract services for up to 90 days following the performance of the work. As there are limited funds available to be withheld from the contract at any given time, it is incumbent on the subcontractors to submit claims as soon as problems arise.

With respect to the other items - the agreement between YTG and Northwestel - I have indicated that, as soon as we get the final agreement, I'll make that available to the members.

With respect to the issue of exporting permits for meat and fish, we have forwarded the issue of exporting permits for meat and fish to Renewable Resources, and they will follow up with not only the member who raised it, but also will look at how they can address this problem.

We have also forwarded the issue of the contract for fuel in Old Crow to Education, who will respond directly to the member.

Mr. Jenkins: It would appear that the minister either didn't hear or refuses to listen to what is being said, because I want to make it abundantly clear to the minister that I support any initiative that is going to allow the extension of telephone service and Internet connection to Yukoners.

What I want to know is that the money is being well-spent and people are getting value for their money, and that this government isn't just spending money to gain re-election - buying the next election, Mr. Chair.

I want to know what is happening with the letter of understanding between this government and the Council of Yukon First Nations, the Kaska Tribal Council and the Kwanlin Dun First Nation with respect to this initiative. The minister went on to say that it's to help the Kaska Tribal Council, who straddle the border in southern B.C., and it's going to help Lower Post.

Well, last time I looked at a map, Mr. Chair, the Yukon did not include Lower Post. Now, maybe there have been some arrangements made with his colleagues in British Columbia to redefine the northern extremes of that province, but I'm not aware of any. So, unless there have been some changes made to redefining the boundary between Yukon and British Columbia, there still remains the issue of what we're doing promoting communications in northern British Columbia.

When we start looking at the 826 lots that are going to be serviced, if you start looking at the total cost at $1,000 per lot, the residents are going to be paying the sum of $826,000. In addition to that, there's the government's involvement. Now, is it going to be a hard-wire connection to all of these lots, or is it going to be wireless, Mr. Chair?

Hon. Mr. Sloan: First of all, I'd like to rectify the false impression given by the member. When we deal with the Kaska, we recognize that the Kaska have taken the position that they also represent their fellow Kaska members in northern British Columbia. We recognize that as inherent in any dealings we have with the Kaska. In this regard, we're not proposing to get into northern British Columbia. I merely said it by means of illustrating that the Kaska see themselves as having some transborder issues.

With respect to the type of service that is available, we haven't dictated what the nature of the service will be - whether it's wired or wireless. What we have said is that we will establish some basic parameters of service, and if, for example, a person who has a wireless capacity or another capacity can deliver the parameters we have in terms of voice quality, 56K modem and so on, and they can do it within an economic framework, then they could be a successful bidder for a particular area.

With respect to wire technology - wires to houses - to the best of my knowledge, the only company that has the right to bring in wire technology is Northwestel, at this point, but we haven't dictated that it has to be wired or wireless. We have simply said that this is what we see as being the appropriate standard, and any company that proposes to service an area like Mendenhall, or a particular area, if they can come forward with a viable proposal that will meet our needs, certainly, they can be in the running.

Mr. Jenkins: Let me take the minister back, Mr. Chair, to his rationale for this letter of understanding between the Council of Yukon First Nations, the Kaska Tribal Council and the Kwanlin Dun First Nation and the Government of the Yukon, because what the minister just stated in the House is wrong. If he reads that letter of understanding, in the first paragraph, it says, "On a process for developing a mutually acceptable proposal for implementing communications technology infrastructure and capacity development initiatives for the benefit of Yukon and northern British Columbia First Nations communities." Northern British Columbia First Nations communities - and the minister went on to specifically name Lower Post. Now, is any part of this initiative going to be outside of our borders, Mr. Chair? That is the question to the minister.

Hon. Mr. Sloan: We would not be interested in supporting anything outside our borders. I will get some clarity on that from the department, but I can say that, when we deal with the Kaska, we understand that they have some transboundary issues. We will provide some clarity on that for the member.

Mr. Jenkins: So let the record reflect that the minister doesn't know, doesn't understand, and is going to seek clarification from the department on this very important issue.

That's point one that I wish to make abundantly clear and I'll forward to that information being provided by way of legislative return.

Hon. Mr. Sloan: We will provide the information for the member as soon as possible. He appears to be adopting his usual bullying, hectoring style. I won't rise to that but I'll merely say that we will address the issue. He feels that he has to posture and puff himself up, probably because he has realized the error of his ways in reducing his support - or backtracking on his support - for the extension of rural telephone service and high-speed Internet and data transmission to northern Yukon and rural Yukon, and I think he has realized that he has erred and so the easiest way for him to deal with that is to puff himself up, posture, generally be obnoxious and to try to imply that we are doing something that is improper. But we're used to that kind of bullying technique and we will not rise to his bait.

Mr. Jenkins: Well, we can always tell when this minister doesn't understand the issue being debated or doesn't have clear and concise answers for direct questions. He goes on the attack, a feeble attack to belittle the questions that he has posed to him that are reasonable questions, very, very direct questions.

But the issue still remains as to what we are doing spending money for northern British Columbia communities. And the minister is going to go back to the department and get that information. He'll probably tell me in the next sitting of this Legislature that he signed a letter on such and such a date, and I'll get it after that session rises, as is the case with most of the correspondence that takes a full 20 days to get from that minister's desk to my desk when this Legislature is sitting, Mr. Chair.

Let's look at the issue surrounding the service to the lots. Has the minister's department gone out and actually costed what would be incurred to hard wire all of these communities in - all of these outlying areas of Whitehorse from Mendenhall to the southern extremities that the minister has described? Has some sort of a cost been detailed there? Because any time that this type of work is done by Northwestel, other than some of the main lines, their construction crews do not have the capacity. It will be outside contractors who will be brought in to put in this infrastructure, or it will be subbed out to one of the local contractors if it's aerial, like Arctic Power. There is some expertise here in the Yukon to do this kind of work.

Now, has a cost been obtained locally or from some of the other suppliers to do this kind of work, so that when we go and sit down with Northwestel, we will have a clear understanding? Because if we go wireless, we're going to be locked into Northwestel, and if we go wired, we're also going to be into the asset base of Northwestel one way or the other. But the deregulated end of it - the wireless end of it - is open to a lot of possibilities and potential.

So, when is the decision going to be made as to which way this government is going to proceed, and has the government got costing for all of these various ways of proceeding?

Hon. Mr. Sloan: We do have costs. We determined them after consultation with technical experts, with Northwestel and with a variety of other suppliers, as to what the cost would be approximately in each area.

The member seems to be assuming that Northwestel is the only player in this. The way we have structured it is that we have opened it up for other bidders, other people who may have an application that they feel may meet our needs and meet our technical specifications. So we have not assumed, particularly on the rural telephones, that Northwestel is the only player. The member seems to be assuming it, but I can tell him right now that, with the way it's structured, other people will have an opportunity to deal with this.

We do have this available, and we feel that it has been done in an appropriate way. We based our figure of a total cost of $4 million on an approximation of knowing that at least 700 of the 800 or so properties can be connected for less than $6,000 each, and we have suggested that that cost would be shared by the service provider, the lot owner and us.

We have also suggested that we think that there will be some opportunities here for other companies, local companies, if they are interested in delivering this kind of service and can meet the kind of needs that we have brought forward to get into the game.

Mr. Jenkins: Well, let's take the minister back to his ministerial statement of November 10, and the minister said, "Our government recently entered into a major public/private partnership to upgrade the Yukon's telecommunications infrastructure."

Now, that's past tense. They've entered into a major public/private partnership. Could the minister advise the House who the private sector partners were with the Government of the Yukon?

Hon. Mr. Sloan: With respect to that reference, that was with respect to the telecommunications infrastructure, which I already indicated we have done with Northwestel. What the member seems to be doing - as I have said before, and I guess I'll have to say it again so it's abundantly clear - there are actually three components that we have lumped under the term "Connect Yukon". Part of it is the issue of telephones, and we have said that we are proposing a method whereby the government would put up $4 million to bring telephone service to some 826 lots, potentially. That would be a cost that would be shared primarily by the government, two, by the service provider who chooses to go into that area to develop a type of service and, three, by the lot owner, who would be asked to pay a certain amount. That's one component.

The second component of the public/private partnership that we have with Northwestel will be directed primarily to the development of telecommunications infrastructure and high-speed data and Internet service. The third component, which will be the distributed learning - and let me just say, in reference to that, we will be putting up some money, Northwestel will be putting up some money to create this public/private partnership - will be done by appropriation, and that's funds that will go forward for appropriation by the acquisition of equipment and the necessary means to do the distributed learning.

The member is asking a question. I have described how Connect Yukon will work, that it is actually three separate components that are interlinked to some degree, because, quite obviously, distributed learning cannot take place without an appropriate upgrade in telecommunications infrastructure.

Mr. Jenkins: Well, Northwestel is the player. Northwestel is going to be the partner and, indeed, is the partner, yet the minister has alluded to other players in this undertaking.

I'd like to ask the minister: where does he envision these other players fitting in, other than as subcontractors to Northwestel? Because, Mr. Chair, any of the regulated areas are all controlled by Northwestel, any of the wired areas are all controlled by Northwestel, and the wireless areas are deregulated, so there is some opportunity there but we have already, hard and fast, established an arrangement with Northwestel. So where are the opportunities for other players going to be in this scenario?

Hon. Mr. Sloan: On a point of clarification, is the member referring to the rural telephones, or is he making reference to the public/private partnership on the issue of telecommunications infrastructure? If he is making reference to rural telephones, then I can tell him that we have a number of companies that have expressed an interest in delivering a phone service to some of these areas.

If he is making reference to the telecommunications infrastructure, there are a number of, for example, Internet server companies, which we are going to invite in to be partners even though we will not be seeking an equity position from them, but we feel that they, as primary delivery modes for communities, need to be part of the process in guiding some of our decisions with respect to the telecommunications upgrade.

Mr. Jenkins: Well, it gets down to the service being provided by additional individuals as being Internet service providers, but the basic provision of service will be done through Northwestel or Northwestel-owned companies. That shines through abundantly clear, Mr. Chair, especially when it is a regulated area.

Let's move on a little bit further into the upgrading of the communications system north of Whitehorse. Presently, there is quite a large section that is still analogue. It is microwave; the radio is analogue. The CRTC has received applications from Northwestel, which date back, I believe, initially to about 11 years ago. The first time they were unsuccessful in persuading Northwestel to allow them the capital expenditure was 10 or 11 years ago. In the next year, they received approval for the capital expenditure to upgrade everything to digital and to install the microwave link up the Dempster Highway. All of the towers up the Dempster Highway were subsequently constructed. I believe there are still two, perhaps three, that are not constructed, and Northwestel has virtually abandoned the project, Mr. Chair. But the upgrading to digital transmission to the northern part of Yukon was all proposed in that CRTC application.

I have written to CRTC, asking them why they have deferred this capital expenditure, and the answer came back from CRTC, after consulting with Northwestel, that there really is no need for it yet. We don't see a need, and yet, if you speak with anyone in the rural parts of Yukon, especially in my area, bandwidth or digital communication is very much needed.

So, in spite of Northwestel having received approval for this major capital expenditure, in spite of them having proceeded with it and moved along significantly on it, they have not completed, and it seems like they're waiting for a Government of the Yukon handout to complete that undertaking, Mr. Chair. Why is that?

Hon. Mr. Sloan: I'm not sure what the member means as a handout. We have said that we concur with some of the frustrations felt by people in rural Yukon. The Government Leader, in his tours around, has heard this on a frequent basis. He has heard the need, the frustration, of people in rural Yukon about their inability to access fully some of the economic opportunities. The member has made reference to the nature of digital versus analogue. I think I spoke on that a bit earlier.

We have said that we can wait for this to go back and forth. We can wait for the CRTC to direct Northwestel. Northwestel has made an argument about their cost and some of the impact that they see, and we have said that we feel that one of the ways that we could expedite this would be an investment of public money, in a similar way that we invest money in other forms of infrastructure. Roads are a form of infrastructure.

I don't think we enter into an arrangement with one of the trucking companies, where we ask them to take on the responsibility of building X number of kilometres of road - in a similar way that, in the past, roads have been built in this country. This is public infrastructure. This is infrastructure that we will all benefit from. We feel that there is a point at which public money needs to go into the development of infrastructure.

We can certainly wait and hope that Northwestel responds to this, and hope that they will get some direction from the CRTC that makes them move on that, but I would suggest that, if we wait, we'll still continue to wait. The member has alluded already to the fact that this has been in the works for some time.

You can wait and you can wait and you can wait, or you can decide that you can move the process ahead by entering into, not what I consider a handout but, in fact, a private/public partnership to facilitate this. The member seems to be basically suggesting that we do nothing, that we sit around and wait and hope that the CRTC in its largesse decides to direct Northwestel to do this. I can tell the member that, on some of the decisions recently on high-cost serving areas, we have had some disappointments in terms of the amount of money that is being suggested, what the tariff is going to be on southern phone calls, and the level of service that Northwestel is being directed to improve, which we feel in some cases isn't high enough.

So, there comes a point, I think, at which a government, a public government, has to say, well, this is an infrastructure analogous to roads, analogous to, I suppose, railroads in the previous century, or whatever, where we, as public government, have to take a bit of a risk and have to make a bit of an investment in the future. Everything that we have heard from rural Yukon, everything that we have heard from the business community, the whole variety of people who have come up here speaking about - I don't care whether it's someone from the Conference Board of Canada or Dian Cohen or even, for example, Dr. Fraser Mustard speaking at the child care conference. They've all said the same thing: that the future lies in information technology; the future lies in information-based businesses. We are restricted here in our capacity. We can either do one of two things: we can sit and wait for that infrastructure to be delivered to us, in which case I would suggest we may wait a very, very long time, or we can take some action to make this happen.

We have chosen the latter course. It's regrettable that the member disagrees with that and disagrees with the idea of extending the telecommunications superhighway, I guess, throughout the Yukon and disagrees with the idea of us moving the territory into the age of information technology. But, regrettably, while we agree with him, we feel that we are taking the right steps. I'm pleased that we are taking those steps, because, certainly, that's what we're hearing from both rural Yukon and from urban Yukon and, certainly, from anyone who is suggesting where this territory should be going in the future.

So, I would just have to suggest that the member, I know, will be basically saying that we shouldn't be working with Northwestel. He seems to be implying - and I can only gather from the tenor of his remarks - that they are, in his opinion, a bad corporate citizen. I would suggest that that is probably not fair. They are a company that employs a large number of people in the Yukon, a company that employs some of his neighbours and mine. It's a company that I think contributes significantly not only to the economic life of this territory, but also to the recreational and cultural life, and I find it regrettable that the member feels that Northwestel has to be the whipping boy on this one, because we feel that they are working in good faith with us and that they are trying to deliver. They will be a good partner for us, and we're going to proceed with trying to make this happen.

Mr. Jenkins: Well, the minister just doesn't get it, just doesn't get it - comparing public highways to the telephone industry. Public highways are exactly that. They are owned by their respective governments or the Government of Canada, built and maintained by those governments. The telephone industry is an investor-owned utility - an investor-owned utility - it is owned by shareholders. In this case it is owned by a parent company and its shareholders, and it is a very profitable telephone company. It is the most profitable telephone company in Canada - and I'm speaking of Northwestel - and you do not get to be the most profitable telephone company in Canada unless you are very politically astute and understand how to maximize your return on your investment, and their investment - Northwestel's investment - is the infrastructure, the infrastructure here in the Yukon and the Northwest Territories and in Nunavut, on which they're allowed to generate a return on their asset base as well as the service they provide. And let us not lose sight of the fact that they do extremely well.

Now part of the process in a regulated utility is that any capital investment has to go to CRTC for its public scrutiny. In the past, Northwestel has been to CRTC for its scrutiny on its upgrading of the microwave from analogue to digital north of Whitehorse, and they have received CRTC approval, but every year they have postponed that investment.

Does that not suggest something to the minister - that they are looking to other investors to come on board, especially when the minister has a carrot hanging in front of their nose that, "We're prepared to put up this kind of money to ensure that this happens." No investor-owned utility is going to make that kind of investment when government will make it on their behalf. I would like to suggest that that is the scenario that is unfolding before the eyes of Yukoners here in the Yukon.

Now, analogue transmission is obsolete. All you have to do is sit in Dawson City and Old Crow and hope your fax is an old paper-roll fax, because once the temperature drops to minus 30 or minus 40 degrees C., that 81/2 by 11 sheet of paper comes in and it is usually three or four feet long - or it can be - because the rate of transmission slows down significantly under low temperatures - and that is if it comes in at all, or if it is not interrupted. So we have a heck of a problem in the northern part of Yukon with this outdated method of communications.

More and more, we are going to data transmission and less and less voice. Voice communication is adequate. We pay a heck of a price for it, but it is adequate. But data is where we need upgrading, and the minister has clearly identified that as a requirement in the northern part of Yukon.

But it comes down to the question of who pays, and the CRTC has had approval for that expenditure by Northwestel to upgrade the analogue to digital for quite a number of years.

Northwestel has gone and installed a whole series of towers up the Dempster Highway. That system is not being used for the purpose originally intended. Why should that sum of money still be in the asset base of Northwestel? And why shouldn't they be made to conform to their original investment plan, which was to upgrade the system between Whitehorse and the northern part of Yukon to fully digital transmission? They're not going to invest that kind of money now that they know that the Government of the Yukon is going to come on board and invest in it, and I'm sure the minister is aware of that. If you go through the CRTC submissions from Northwestel, you'll see that they had a game plan to move the outdated equipment from down south up to here and then move it around on a continuing upgrading basis. That has stopped. That has stopped to the detriment of Yukon, to the northern part of Yukon.

Why? Has the minister explored this with Northwestel as to why they have stopped upgrading, why they're not conforming to their original CRTC submission and upgrading communications between Whitehorse and the northern part of Yukon to fully digital communications? Because that appears to be what we're going to be paying for, and probably paying for it twice because it will ultimately end up in the asset base of Northwestel, and they'll be allowed a rate of return on it.

I might remind the minister that the taxpayer and the ratepayer are virtually the same in Yukon. It's the same individual. But in this case that's unfolding before us, Mr. Chair, it looks like we're going to pay for it twice: once through the rate base of Northwestel and again through the tax base of the Government of the Yukon.

Now, I'd like the minister to explain why Northwestel is not completing their original upgrade plans as approved by CRTC, as deferred for a couple of years, because really that is stage 2 of this whole proposal that's before us here today.

Why isn't Northwestel doing what they said they were originally going to do? I'd like to suggest to the minister, it's because the minister has offered the money to do it. That's the only reason.

Has the minister explored this with Northwestel at all? Could the minister advise the House as to where he stands on this very important issue?

Hon. Mr. Sloan: Well, I'm at a bit of a loss. First of all, this is the great party of free enterprise and he's just suggested here that Northwestel, because they make profits and make a healthy profit, that somehow profit is a dirty word - as a matter of fact, I think implicit in his preamble there I would suggest he is describing Northwestel as some sort of corporate buccaneer. I would suggest that if he has got some concerns about why Northwestel does not do certain things or why they don't operate in certain ways that that would be better directed toward Northwestel.

Our interest in this project is getting the level of service up for Yukoners. We can sit around and we can wait. We can sit around and beat our breast and drag out every CRTC decision and wail and point to it and say, "Oh gosh, you know, Northwestel should be doing this or doing that." The fact is that if we want the process to move ahead, I think we have to take some decisive action.

The member is assuming that somehow Northwestel will be earning profits on our contribution through its rate base; that can't happen. I've provided some information for the member in terms of our letter of understanding.

He seems to be directing a number of questions that would be more appropriately directed at CRTC. We're interested in getting this project underway. He obviously isn't.

We're interested in delivering improved telecommunication data services to rural Yukon. He obviously isn't. I think, quite frankly, he's trying to use Northwestel as the bête noire of his argument. He has clearly portrayed them in a very negative light. He's trying to suggest that this company is not interested in delivering service. We think that Northwestel is a reputable firm that, in the past, may have had some difficulty in the necessary capitalization to undertake some of these projects. We have suggested that there is a way in which we can invest some public money. Northwestel can invest some of their funds. This is not going to be solely public money. There will be an investment on the part of Northwestel, albeit a smaller investment, but they will be investing funds in this project. And the upgrade of the service will benefit people in rural Yukon. He obviously disagrees with our trying to do that.

Mr. Jenkins: None of these initiatives are new initiatives. They're initiatives that people of the Yukon have wanted for quite some time. People around Whitehorse have wanted phone service. They have wanted adequate access to the phone system, but any time there's an expenditure of capital in the asset base of a communications company - specifically, Northwestel - that is subject to CRTC regulatory approval. Does the minister have an application ready to go to CRTC for this kind of investment, because it's certainly an investment in the asset base of Northwestel?

Hon. Mr. Sloan: No, we have made our submission to CRTC on this. We have argued long and hard about what we feel needs to be done. It was obvious that the CRTC decision on high-cost serving areas didn't address our concerns, and we have chosen to move in this direction.

We're not anticipating any regulatory impediments. I would be very surprised if we did get any regulatory impediments.

Mr. Jenkins: The only way that there will not be any regulatory impediments, Mr. Chair, is if it's in the wireless sector or, conversely, if the funds are provided to Northwestel as an operating grant. Now, is this going to be an operating grant provided to Northwestel?

Hon. Mr. Sloan: No.

Mr. Jenkins: So, the funds are going to go exclusively into the capital side of the communications provider here in the Yukon?

Hon. Mr. Sloan: We are anticipating that we will be investing our money into the capital upgrade of developing the necessary telecommunications infrastructure to bring up service for rural Yukon. The actual investment will require the installation of three towers and some fibre optic connections, additional microwave ancillary networking equipment. We can use existing tower sites and installation of data management systems, and installation of Internet and high-speed access equipment will be required.

We feel that this will benefit the people of the Yukon. Obviously, the member does not see that. I guess this must have been one of those issues that has only arisen in the last three and a half years. I would suggest that there were opportunities before to be involved in some improvement of services to the people of the Yukon and it was not undertaken. So, I guess the question is why?

The member made reference to basically waiting for things to happen. I guess that was the strategy under the previous government. They waited for things to happen, and when they didn't happen they basically argued that something should have happened.

We have selected to actually invest some money and to take some direction in this regard, and we're working with a company that we believe will help deliver the service in this area.

Mr. Jenkins: Well, most of the initiatives that the minister described require CRTC approval, because they're of a capital nature. Now, can the minister spell out who is going to make the application to the CRTC, and how these capital investments are going to be excluded from the asset base?

Hon. Mr. Sloan: The funding mechanism that we're currently finalizing will be as follows: we're proposing a private joint-venture corporation, the Yukon telecommunications council. It will be set up to manage the project. The partners in the joint venture will be the Yukon government, Northwestel, and a consortium of small Yukon businesses. Provision will be made to add First Nation participation later if the need arises.

The small business participants will likely be the Internet service providers, who will be the direct users of the infrastructure, who will provide most of the Internet service in the communities. We have sent out a letter inviting their participation. They will not make a substantial financial investment, but their advice will be critical to the successful application of the project in the communities.

A joint-venture corporation will contract with Northwestel to build and operate the infrastructure on behalf of the corporation. It will act as an agent of the corporation to purchase the assets. Northwestel will contribute its own capital to the project to the extent that revenue projections justify the investment on a commercial basis. This is estimated to be about $3 million.

The remaining $11 million will be required as a public contribution, and that will be from government. Northwestel will lease the assets from the corporation under an operating lease to carry out its contract. The physical assets will not be distinct from those that Northwestel requires to carry on its normal business.

Therefore, Northwestel will have control of the assets while the operator, and there is a provision for Northwestel to buy out the assets at the end of the lease. The government will enter into a service agreement with Northwestel whereby government funds, whatever shortfall in revenues occurs in the operation of the infrastucture, the funding will be designed to the equivalent of repayment of the $11 million public contribution to the project. If the revenue turns out to be higher than projected, the public contribution will be reduced accordingly.

The maximum cost to the government for this agreement will be $1.6 million a year for five years. Six and a half million dollars will be owing at the end of the term; therefore there will be about $3.5 million in interest costs - and so on and so forth.

So what I can do is I can provide the member with some further information on this. Whatever he requires in that regard, we can provide him with information to satisfy him.

Mr. Jenkins: I would like to ask the minister to table a full copy of that undertaking with Northwestel on this Yukon territorial communication council, its structure, its makeup, and how it is going to dovetail into Northwestel.

Once again, though, Mr. Chair, the government, through this new joint-venture corporation, is going into an area that is regulated by CRTC, so someone has to make an application to CRTC for approval to put in this infrastructure because, ultimately, it is going to impact on the rate-making base of Northwestel. Now, who is going to be making that application to the CRTC? What form is it going to take?

Hon. Mr. Sloan: We'll provide the member with further details.

Mr. Jenkins: Have details been worked out in this regard? Because this is the whole crux of the matter - the amount that's going into the asset base of Northwestel from the taxpayers of Yukon, and ultimately that's where that money will end up, and Northwestel will be allowed at the end of that lease period to have that in their asset base and to get a rate of return on it. That's where we're heading, Mr. Chair. There isn't a way around that type of initiative without there being a rate of return on the regulated area. Now, can the minister confirm that that is going to be the case?

Hon. Mr. Sloan: As I indicated, we'll provide the member with further information in that regard, and when we have a copy of the final agreement, we'll present that to the member as well.

Mr. Jenkins: Well, either the minister doesn't know the subject matter of which he is speaking or he's hiding something. We're talking about 21 million bucks - $21 million. That is a large sum of money, Mr. Chair, and I don't care how you cut it, that's a large sum of money, especially when it's going to be invested in the communications infrastructure here in the Yukon and, ultimately, at the end of the day, end up an investor-owned utility. $21 million at their current rate of return is a significant amount of cash in your jeans, so to speak.

We're talking over a couple of million dollars a year on that kind of an asset base. Now, as I said earlier to the minister, Mr. Chair, we're talking about the same person when we talk about the ratepayer and the taxpayer. We're not talking about two different people or different individuals. They're both the same. The taxpayer and the ratepayer are the same. Ultimately, the total cost of this, at a significant markup called the rate of return, will be on the backs of the ratepayer. On the front end, it's paid for by the taxpayer; at the end of the day, it's going to be paid for by the ratepayer with a rate of return.

I don't think the minister has spent very much time exploring the possibilities for this arrangement and its viability, because we're currently faced with the highest costs for communications in North America. The highest cost service area in North America is north of 60. Probably on a stand-alone basis, the Yukon could do very well, but now that we have been associated with Northwest Territories and Nunavut, I don't think there's a hope of our being able to break even on our own, Mr. Chair.

I'd like to take the minister back to one of the applications from Northwestel for CRTC approval for the upgrading of the microwave from analogue to digital, going north from Whitehorse.

Has the minister been made aware that that has been on the table for discussion, that that has been approved by CRTC, and it has not been concluded. Is the minister aware of that, Mr. Chair?

Hon. Mr. Sloan: Yes.

Mr. Jenkins:Has the minister asked Northwestel for their reasons as to why they haven't concluded that upgrade?

Hon. Mr. Sloan: We have had ongoing discussions with Northwestel. We are concerned about getting the service up for people in the territory, and that is our primary concern. I'm not particularly interested in the CRTC and Northwestel and their ongoing disputes.

What I'm interested in is getting this particular technology available to people in the territory. In the letter of intent - I don't know if I got to this particular point - under financial considerations, Northwestel will not include the net capital investment advanced through public investment under the final agreement in its utility rate base. Northwestel will make payments to the providers of the capital investment according to a formula based on excess revenues earned from the investment - which formula will be established by an agreement with the parties. We're currently working this through. Now, I have to say that the member here is raising issues which I think would probably be better addressed by Northwestel. We don't regulate Northwestel. We are interested in working with Northwestel as a partner in this project.

Mr. Jenkins: Well, it seems like we're determined to conclude this initiative with Northwestel - at what cost? It seems like whatever it will take, moneywise, we're going to be spending it. The minister is wrong when he says that most of these questions that I'm posing should best be addressed to CRTC.

He's wrong. These are questions that the minister and his officials should have anticipated and should have addressed. They should have dealt with them, because we're still dealing, at the end of the day, with a regulated utility, regulated by CRTC. To suggest that they're going to be providing funds back to the Government of the Yukon based on excess revenue, is that excess revenue peculiar to the Yukon, or is that excess revenue over the whole of Northwestel's service area, Mr. Chair?

Hon. Mr. Sloan: That would be peculiar to this area, being the Yukon, and peculiar to any return that they get from their investment. Excess revenues will be then directed to defray the public expense.

Mr. Jenkins: That's very interesting, Mr. Chair. A short time ago, I tried to make the case before CRTC that Northwestel should be broken into three distinct operating and cost centre areas: Nunavut, Northwest Territories, and Yukon and northern British Columbia.

Now, that was shot down by Northwestel, saying that they're one massive area, one massive rate base. They couldn't break out these costs; it would be too expensive to break out the costs peculiar to the Yukon.

Now the minister's suggesting that Northwestel's arrangements with the Government of the Yukon are going to break out those costs. I find it very interesting that Northwestel could not do this previously, but now they can.

I'd like to ask the minister what agency of government is going to be monitoring this kind of expenditure? Because, after the fact, there should be some sort of monitoring arrangement or agreement. How is the government going to be monitoring it?

Now, he might suggest the Yukon territorial communication council, the makeup on which we have had a cursory overview, but I'd like to see how the government itself is going to monitor this kind of major expenditure.

Hon. Mr. Sloan: I think I indicated to the member that we are proposing to enter into a structure with ourselves, Northwestel and other private suppliers - a telecommunications council that will have not only the role of giving some direction on how this project should proceed but also on how the project should be managed to the maximum benefit of all people in the Yukon. We are confident that, by this structure, there will be a good deal of public monitoring. Clearly, some of the people such as the Internet service providers are going to have a clear desire to ensure that Northwestel does not try to unduly use its position to vary rates or things of this nature. We feel that not only do we have a role in this but also the business community, which is going to benefit from this telecommunications, should also be involved in it.

Mr. Jenkins: If we look down the road, Mr. Chair, this agreement's going to expire and this sum of $20-odd million will eventually end up in the asset base of Northwestel, one way or the other, and at the expiry of this agreement with the Government of the Yukon they will be allowed a rate of return on those assets. Now, at that point in time - I'm looking down the road, after the expiry of the agreement and we're still talking about a regulated utility, regulated by CRTC - that the assets will revert to Northwestel, is the minister not concerned they will have a dramatic increase in their rates because of this additional capital in their asset base?

Hon. Mr. Sloan: We are confident that the structure that has been put in place will be able to monitor this. We are not suggesting that this corporation will simply be set up, exercise this and then disappear. We would see an ongoing role for this in terms of the management of infrastructure in the future.

The fact is that that there is a clear distrust of a private corporation here, and I would suggest that the member's distrust of Northwestel is largely motivating and moving us into hypothetical areas.

We are prepared to work with Northwestel. We are prepared to work with our private sector partners - the companies such as Internet service providers. We think that the structure we have set up will be able to monitor any areas in that regard.

Mr. Jenkins: Monitor the areas - what the minister fails to recognize is that he is dealing with a utility that is regulated by the CRTC. He is operating in a regulated environment. Never mind what the intentions of any of the parties are; the CRTC still controls this situation. At the end of the lease - the minister has stated in the House, Mr. Chair - Northwestel will own all those assets.

My question to the minister: at that point in time, is he not concerned that, when Northwestel owns the assets, CRTC will not allow a rate of return on those assets, which they justifiably will? And that will trigger a rate increase.

It doesn't matter what the intentions are of the program that the minister has put in place. The reality of it is that he is entering into a regulated commodity - regulated by CRTC. When those assets are transferred to Northwestel, they go into their asset base.

The rules are clearly spelled out that they're allowed a rate of return, and at that juncture, that rate of return would mandate an increase in the rates. Is the minister not concerned after the end of the day, or has he not looked down that pipe that far?

Hon. Mr. Sloan: Certainly, we, you know, would have a concern and we would have looked ahead. I think what the member is doing is he's speculating. He's speculating that Northwestel, the minute that they get a hold of these assets, that they're going to propose a major rate increase. I don't share his pessimism in that regard. I think that the CRTC, in dealing with an issue such as this, would note that some of these assets had been put in place by public investment and would be clearly - I believe, and from our point of view, we would certainly make the case that given the public investment - that there would not be justification for any rate increase - or massive rate increase.

I think that the member is certainly focused on a distrust of Northwestel, and perhaps he might be better to check with Northwestel to see what their intentions are in this regard. Clearly, we don't believe that at the end of the day, as he puts it, that Northwestel is going to be jumping rates unduly. We think that they will recognize - and certainly the CRTC, I think, would recognize - what the role of the public sector in developing those assets would be and operate accordingly.

Mr. Jenkins: Well, I'm not getting into a discussion with the minister, Mr. Chair, on my position or my opinion of Northwestel. That's not what we're here to debate. What we're here to debate is how we get the maximum bang for our buck, how we get the best level of communications for Yukoners at the best cost and sustainable cost - not something that's going to start off low and jackrabbit to astronomical heights down the road. The minister had better get used to working in a regulated environment, because that's exactly where he is today.

Now, it would stand to reason that this structure, as it is being proposed by the minister - that he'd have some sort of an undertaking as to whether it's a workable structure from CRTC. Has an approach been made to CRTC as to this structure and as to the benefits, or is there an alternative way that CRTC would suggest it be structured? Has that area been explored at all? I would bet not, Mr. Chair.

Hon. Mr. Sloan: We have been in ongoing discussions with the CRTC on a whole variety of issues. We have had officials down in Ottawa, and, to date, we haven't had any negative reaction to this. I can't see where the CRTC would particularly be overly concerned in this regard. Is the member suggesting that the CRTC is prepared to put the kibosh on this, or is the member suggesting that he plans to intervene with the CRTC to prevent this project from going ahead? Is that what he's suggesting to us, that he's going to try to intervene to ensure that the CRTC either delays or tries to block this project? Is that what he's suggesting?

Mr. Jenkins: For the record, not at all. It's easy to tell that the minister has had very little, if any, experience in the business domain. Any time you structure a business deal - if it's a significant business deal, which this one is, Mr. Chair - in the private sector you go to the tax department for a tax ruling as to whether this is the best way to structure it. You go and obtain a ruling before you initiate that business venture.

The same holds true for an expenditure of these some $20-odd million of public funds. You would go to the regulatory authorities and see if this is being structured in the best interests of the people, because the interests that are going to be put forward to the regulatory authorities by Northwestel are not necessarily in the best interests of the people. They'll be in the best interests of the shareholders.

It's the minister who has to protect the taxpayer and ensure that we're getting the best bang for our buck. That gives rise to my question: has the department gone to CRTC with an overview of this plan and asked them if they have avoided all of the normal pitfalls that could occur, and if the way that the government is proceeding is in the best interests of Yukon and the Yukon ratepayers? Has the government done that?

Hon. Mr. Sloan: First of all, the member is implying that we did this on our own without any discussion with anyone, in terms of either the industry - well obviously with Northwestel, but also with industry - that we did this without consultation with Finance - that's clearly impossible - that we did this in isolation of Justice - which is clearly impossible.

So if the member's suggesting that this is kind of a pipe dream that we dreamt up, and we didn't do the necessary diligence in that case, I can assure him that it is not.

I can provide the member, although I don't have it here, with any list of interventions and discussions that we have had in this regard, and hopefully that will set his mind to rest.

I would ask the member what his principal objections are to this project going ahead. I would also ask him what his intentions are with the CRTC. Does he plan on utilizing the CRTC to try to block this process? Because we would have some concerns in that regard as to what that would do to our timeline and what would it do to our overall ability to achieve this project, we would be concerned in that regard.

I will provide the member with a list of the consultations and discussions we have had with respective agencies, partners, et cetera.

Mr. Jenkins: Well, Mr. Chair, perhaps after the next election, the questions would be quite in order. I'll probably be the minister and that member will be in opposition asking the questions that he has posed here today.

But given the position of the member opposite currently, it's his responsibility to answer the questions, and I think the minister is giving me probably a lot of leeway in thinking that he would have the ability to structure this. Far be it from my thought process, I knew the minister would have to have an awful lot of help in structuring something of this nature, Mr. Chair.

That being said, my question of the minister is still the same: has the department gone to CRTC to see if this structure will stand the test?

Hon. Mr. Sloan: First of all, I would suggest to the Member for Klondike that he not order the stationery just yet. I would suggest that probably the member's stock in rural Yukon is dropping rapidly as he clearly indicates his opposition to providing a level of service for people in rural Yukon. That is becoming more and more apparent as we go along. I have said to the member that I will provide him with a list of the consultations we have done. I don't have them here with me right now. I will provide it for the member. He chooses to go on on this. Therefore, we can proceed.

Mr. Jenkins: I'm not looking for all of the agencies that the minister's department has consulted with. I just want to know if this plan has been submitted to CRTC for their overview, and I'm concerned from the standpoint that if the government is proceeding with this plan, I want it to be in the best interests of all Yukoners, not just in the best interests of the investor-owned utility.

Hon. Mr. Sloan: I would suggest, Mr. Chair, that we are working in the best interests of the people in the Yukon. We are attempting to deliver them a level of service that has not been provided. We are attempting to provide a level of service, to provide access to such things as e-commerce, to distance education opportunities that have not been there before. If that isn't operating in the best interests of people in the territory, I don't know what is.

The member seems to feel that our discussions with Northwestel are wrong, that we have erred in choosing to work with a Yukon company - the largest, I believe, private enterprise company in this territory.

And I think it's pretty clear from the nature of the questions that Northwestel is somehow not the company that we should be dealing with, because, clearly, the member has some serious problems with them, in terms of what he sees as their business ethics, and so on and so forth.

I believe we are operating in the best interests of people in this territory by trying to deliver a level of service to them that has hitherto fore not been available.

I have said to the member that we will provide the necessary information, and he continues to go on with this. So, I guess we'll just continue on with this line of questioning, but it's apparent - and it's becoming more and more apparent, Mr. Chair - that the member is opposed to this project, that he is opposed to the extension of improved services to people in rural Yukon. That is unfortunate. We are hoping to deliver a better quality of service to people in this territory, and that's what we'll continue to do.

Mr. Jenkins: Well, the issue remains the same. Has this program been submitted to CRTC for their overview? A simple yes or no.

Hon. Mr. Sloan: I'll provide information to the member.

Mr. Jenkins: I can probably answer that question for the minister, Mr. Chair, and the answer is no, it has not, and that exacerbates my fear that Yukoners are going to end up paying for this extension twice - once as a taxpayer, and once again, as a ratepayer. That's what I don't want to see occur, and that is the crux of the whole debate here this afternoon - that Yukoners could be made to pay twice for this extension or this foray into the communications arena by this minister and his department.

Could I explore with the minister the issue surrounding wireless communications? What specifically are the plans in this area? Have we explored the provisions of additional cell sites with anyone other than Northwestel, or has all of the information and background been coming forward through Northwestel or their subsidiary companies?

Hon. Mr. Sloan: Is the member referring to telephones or to the proposed telecommunications infrastructure? I would suggest that we're talking about two different projects.

Mr. Jenkins: Well, the minister is splitting hairs now; they are two different projects but they're synonymous - they are two different projects but they're synonymous. Either one; let's deal with both at the minister's pleasure, and he can elaborate on the wireless provisions with respect to telephone service first.

Hon. Mr. Sloan: Mr. Chair, we have said that, with respect to wireless versus wired telephones, we have left the issue open. We have basically set some parameters of service delivery. If a wireless operator or someone who is proposing an alternate technology could provide that and it meets our parameters, then they would be available to do that.

Wired technology has some advantages as well. We've left that issue open. We've basically said whoever can deliver it for the appropriate cost, that's what we will go with.

Mr. Jenkins: Has the government gone out for an expression of interest from anyone else other than Northwestel, and how have they proceeded? I haven't seen an ad on this anywhere, Mr. Chair.

Hon. Mr. Sloan: We will be putting out requests for proposals in this area. We expect to be doing that very soon, and anyone then who has a level of service that they can deliver can deliver that and they can deliver it as long as it meets our needs.

Mr. Jenkins: Are those needs bandwidth? Do they include bandwidth also?

Hon. Mr. Sloan: On the rural telephones, we have set a standard for individual line access, modem speed capability of 56K for fax and Internet, and the service can be wired or wireless, depending on the technical assessments done in each area.

Chair: Do members wish to recess?

Some Hon. Members: Agreed.

Chair: Ten minutes.

Chair: I will now call Committee of the Whole to order. Committee is dealing with general debate, Government Services.

Hon. Mr. Sloan: The member asked a question with regard to representation to CRTC. We have made representation to CRTC, and they're in agreement that the Connect Yukon project makes sense, and they're in favour of this idea of public/private partnerships.

With respect to earning a return on the Connect Yukon project, the equipment that's purchased as a result of public money will not go into Northwestel's books as an asset. Therefore, they can't earn a rate of return on it.

As Northwestel introduces new services that can use the Connect Yukon infrastructure, they will not have to impute the cost of the bill. Therefore, the rates of the service will be lower.

With respect to our involvement in regulatory matters, the Department of Government Services telecom group is actively involved in all regulatory matters. The CRTC is undertaking a major new regulatory review of Northwestel over the next year, and we'll be actively participating. It will be determined how Northwestel will be regulated and what their rate of return is.

I think, finally, with respect to some of the principals behind Northwestel, CRTC won't force Northwestel into undertaking the Connect Yukon project on their own, because they feel that it is unprofitable to provide this type of new services to rural areas. Therefore, they would be in support of a public/private partnership such as we have proposed.

Mr. Jenkins: The other issue, Mr. Chair, that we're facing is the ever-changing environment that we're working in. The advancements in communications are growing on us at a rapid speed. The minister might be running out at this juncture and spending $20-odd million on what, a few years down the road, would be considered the old telegraph system, which has now been put to bed.

Given the growth in wireless communication worldwide - and I'll just read from a recent publication, Mr. Chair, of where that's headed: it says that the Yankee Group in Boston predicts that by early 2002, there could be 25 million wireless data users in the U.S. By 2003, other industry officials see 600 million web-browsing wireless phones in operation around the world.

That is the changing environment that we're operating in, Mr. Chair. It's changing at a very rapid pace, so maybe running around putting up more microwave towers is not the solution to our problem. I appreciate the minister at the break running back for a department briefing. The information he brought back was extremely informative, and I'd like to thank the minister for that. It's obvious that the minister does not understand the issue before us, and it's a very, very important issue, Mr. Chair, in that the taxpayers could pay for the service once and then we pay for it again as ratepayers. That sum of money could end up at the end of the day in the rate-making base of Northwestel.

What I'd like to ask the minister, Mr. Chair, in order to explain this process better, is if he would agree to having Northwestel appear before this Legislature in the spring sitting, as early as possible in the spring sitting, so that we could have the opportunity to go through this very important issue with Northwestel officials and perhaps gain a better understanding of where we're at.

Hon. Mr. Sloan: The member rambled all over the place with respect to the technology. The decision to move on this form of technology was based on some studies conducted jointly by the Yukon government, Industry Canada, Northwestel and a number of expert consultants. The conclusion was that the ground-based - and once again I'll throw this term out - digital radio was the best technology for the Yukon's infrastructure. Satellite technology, while initially attractive because of low-entry costs, has had some limitations in terms of capacity and cost of operation.

We believe that fibre optic does have a higher capacity than digital radio but the cost of this technology would have been at least 50 percent higher. Fibre will be used in some areas where it's appropriate. With respect to Northwestel, I might remind the member that despite what he thinks, Northwestel is not a Crown corporation, and therefore I don't have any ability to compel them to appear before this body or any other. I would suggest that if he wishes I can - and I'm surprised he didn't when he had the opportunity to have discussions with Department of Government Services, I assume that he was offered a briefing prior to this budget -

Some Hon. Member: (Inaudible)

Hon. Mr. Sloan: The member is indicating that he was not offered a briefing in Government Services?

What we can provide is a briefing for members on this particular project, and he can raise the questions there.

With respect to this particular project, if he has some questions for Northwestel, we can see if there's someone from Northwestel who could be available to meet with him. I am sure that they would look as ardently forward to this as we all ardently look forward to the member's presence each day with us.

Mr. Jenkins: Well, Mr. Chair, the minister's understanding of departmental briefings is quite evident, suggesting that we had an opportunity to receive a briefing, which we certainly did not. I'm sure, now that he's aware that briefings are not offered for supplementary budgets, he'll go back and rethink his position.

I'd ask the minister once again, Mr. Chair, could the minister approach Northwestel with a view of having them appear before the Legislature early on in our spring sitting? We could probably get right to the crux - Northwestel officials are involved in these kinds of arrangements on an ongoing basis. Most of them have come from telephone companies in other jurisdictions and have a very firm handle on the regulatory process.

So, I would ask the minister that once again. And, Mr. Chair, the precedent has been set. Previously, Curragh appeared before this House, so outside corporations appearing before the House when it involves a sum of money of this magnitude, I believe, would be quite proper.

So, I would ask the minister, encourage the minister, and ask for his concurrence to have Northwestel appear before this Legislature.

Hon. Mr. Sloan: As I have indicated before, the government does not have the ability to compel a private corporation in this regard to appear. What we can do is we can ask them if they would be available to meet with the members, and perhaps we can set up some form of briefing on this particular project, of which Northwestel could be part and maybe address any concerns that they have.

However, I, for one, would suspect that Northwestel would prefer to work in a less public agenda where they would be available to discuss with the members how they see themselves working within this environment, rather than get into a public forum where they might not feel comfortable about some of the issues that are directed at them, and, quite frankly, given the Member for Klondike's animosity toward this particular corporation, I wouldn't blame them.

Mr. Jenkins: Well, I have never heard a bunch of bafflegab like the minister just spewed out here in the Legislature, Mr. Chair.

We were speaking of a company that is a sole provider of communications here in the Yukon - wired communications here in the Yukon. It is the sole provider. They're operating in a regulated monopoly.

We don't have a choice, as Yukoners, to go to company X, Y or Z. We have one company that we deal with, and we are going to be investing, indirectly, a considerable sum of money in that company - Northwestel.

Now, what would be so inappropriate about asking their officials to appear before this Legislature?

Hon. Mr. Sloan: The member seems to be under the misapprehension that we are the CRTC. We are not. We don't have the ability to compel a company like Northwestel to appear before this Legislature. They are not a Crown corporation. Therefore, we can suggest perhaps a different venue in which they could appear, and we will set up a briefing with members on this specific project and offer that particular venue. And I'm sure that Northwestel would be more than happy to participate in that type of structure, but I think, with respect to their appearing before this Legislature, that's something that they would have to make a decision on in terms of whether or not they would choose to go that particular route. I suspect that they have some issues that they would prefer to discuss in a less public forum.

Mr. Jenkins: Well, is the minister suggesting that Northwestel has something to hide? Now, what's wrong with getting this type of information out in the public domain? The minister is taking this vast sum of public money, and he's looking to invest it in the telecommunications industry.

Now, by and large, I applaud that kind of investment. But what I don't want to see is, on one hand, the taxpayers paying that money initially and then, down the road, the ratepayers paying for it again, because that's exactly what will happen under the scenario that has been advanced by this minister here in the House today, Mr. Chair.

CRTC regulates this company and there is no way around an asset once it goes into the asset base of that telco. It will have a rate of return and Yukoners will have paid this sum of money as taxpayers first, and then as ratepayers down the road. That's the issue, that's what I don't want to see happen. This minister clearly doesn't understand where he's at with respect to operating in a regulatory environment and I don't see anything wrong, personally, with asking the sole provider of communications here in the Yukon - Northwestel - to appear before this Legislature. Will the minister approach Northwestel and ask them if they would be so kind to appear before the Legislature and answer a number of questions dealing with this issue?

Hon. Mr. Sloan: Well, I suspect that - Well, we can certainly talk with Northwestel. I suspect that, given the level of vilification that they receive in this Chamber, their interest in appearing before that particular member to be chastised on everything from their failure to follow previous CRTC decisions and so on, I suspect would not be received overly keenly by the company.

What we can do is we can establish a briefing where the member can ask these questions of our staff and Northwestel. I imagine they would appear in a less public forum, but once again I can just say that they cannot be compelled in that regard. I would suggest that since the member has such profound faith in CRTC that he should be exercising what authority he has with CRTC to raise these particular issues with Northwestel.

I think I have addressed the issue of earning return on the Connect Yukon project, and I have indicated that the equipment purchased as a result of public money will not go on the books. Therefore, it can't earn a rate of return. I don't see why the member fails to acknowledge that.

What I can tell him is that we have already had some discussions with CRTC officials on this, and they seem to be supportive of this particular approach. I imagine that if they had some serious reservations about it, they would have raised them with us. Perhaps the member has some issues that he wants to raise with the CRTC. We can certainly establish whatever kind of briefing the member would like to clarify any points of concern that he may have on this particular project.

Mr. Jenkins: The issue is a simple one. Could the minister ask Northwestel to appear before the Legislature? Could he do that, Mr. Chair?

Hon. Mr. Sloan: We can ask, but there's no guarantee that Northwestel would choose to operate in that kind of environment. They may choose a different venue, and I have offered that to the member already.

Mr. Jenkins: Well, perhaps they could help dispel the myth surrounding the information that the minister has presented here in the House today. I'm not comfortable with what the minister has outlined, how this investment is going to work, and how we're going to be paying for it, and I will state categorically, for the record, that we are in favour of any kind of a system that is going to enhance and improve communications here in the Yukon.

I will provide a caveat on that - that Yukoners want the best bang for their buck, and they only want to pay for it once. They don't want to pay for it initially as a taxpayer and then, down the road, as a ratepayer, and the scenario that the minister has outlined will probably achieve that end. I have very strong reservations about that.

So, I think we can probably get to the bottom of a lot of this and get a better explanation with an expert from Northwestel appearing in this Legislature on the regulatory process, because I'm sure that I and my colleagues would have very pointed questions about the regulatory environment in which they work.

I would ask the minister to make sure that he goes to Northwestel on a positive note and suggests that it's in everyone's interest that we get a full hearing and a full review of this undertaking so that we all go into it with our eyes wide open.

Could the minister give his assurances that he'll try his hardest - not pull the wool over our eyes, but keep them open for every eventuality?

Hon. Mr. Sloan: First of all, Mr. Chair, I would suggest that the expression "pulling the wool over one's eyes" implies a measure of duplicity and the fact that I'm lying to this Chamber. I would suggest that that would be improper.

Secondly, having judged the tenor of this member's comments and his vilification of this company and his suggestions and even his last term "pointed questions", I would suggest that the member is implying that he is setting up a situation in which he is going to use any proposed appearance by Northwestel officials as a chance to use them as a whipping post. And I would suggest that, probably, they may not be particularly keen to enter into that role.

I can suggest to the member that I will seek if they have an interest in this. As I said before, we cannot compel. We will offer a different venue, if the members wish, in terms of some form of briefing on this entire project, specifically the issue with Northwestel. I would suggest that while the member postures and preens and says that he is very much in favour of this, for the last three and a half hours, every indication, every suggestion has been exactly the opposite. I would suggest that the member has indicated by his tone, by his nature, that he is not in favour of this project, that he has taken a stand that is clear and unequivocal that he is opposed to the extension of telecommunications infrastructure to rural Yukon.

Mr. Jenkins: Well, nothing could be further from the truth. This minister has gone on and on and on, preening his feathers, spouting on about this wonderful initiative - and it could well be, if the minister understood what the initiative entailed and what it is eventually going to cost Yukoners. Yukoners have a right to know what this service is eventually going to cost them.

Up front, at the beginning, it doesn't appear that there is going to be any costs associated with the advent of this service. The government is going to ante up some $20-odd million, but down the road, what are Yukoners going to be paying for this service? That is the question. The minister has failed to answer it - failed miserably. He has failed to understand the whole issue of working in a regulatory environment or what the concerns are.

It's a utility. It's regulated and it has a monopoly. Their profit is a cost to us, the consumers, Mr. Chair. There's no way around that. In all of the areas currently that will remain regulated by CRTC, Northwestel has gone forward with rate applications. I have never seen such a number of rate applications from a telephone company as I have recently from Northwestel, and I think and feel that we as legislators, duly elected by our respective constituencies, have a right to ask questions, through the regulatory process, of Northwestel.

Yukoners have a right to know what this service is eventually going to cost them. There are so many vague parts to what the minister has elaborated on here today and previously that I am not comfortable, and I am sure that as more and more people become aware of what is going on, they, too, will be uncomfortable and ask questions of this minister.

What is the bottom-line cost to the homeowner at the end of the period of time? I guess that's the question that the minister can't answer, doesn't even have a clue about where we will be at, but that's what the people of the Yukon who are subscribers to this sole telephone company want to know.

Northwestel has the ability to go tomorrow to the CRTC and say that they need all of this in their asset base because of A, B, C and D, and they have done so in the past, and they obtain approval, and that triggers an increase in the cost of phone service.

The minister only has to look at his own phone bill to see what he was paying three or five years ago, as compared to what he is paying now for basic phone access. What he is paying today is a dramatic increase over what he was paying three or five years ago, and for commercial subscribers, the increase has been even more profound, Mr. Chair.

So, I once again urge the minister to have officials from Northwestel appear before this Legislature in the spring sitting, so that we can question them on this initiative. I think the way that the minister has gone around, suggesting we have briefings, he didn't even know that his own department didn't offer briefings on a supplementary budget. That's how out of touch this minister is.

Some Hon. Member: (Inaudible)

Chair: Order please. Order please. Let the member speak.

Mr. Jenkins: Here we have a minister who doesn't even understand when briefings are offered or how they're offered, and a simple initiative, like having officials from Northwestel appear before this Legislature in the spring session, will go a long way, Mr. Chair, to allying any fears that we might have.

Now, I think it's a very respectful request, and I would hope that the minister could go to Northwestel and ask them, in the interests of Yukoners, to appear before this Legislature. I'm not looking for a briefing on the side or anything. I think we can get more out in the open and more of an understanding in a much faster manner if it's done in that format. Would the minister not agree and pursue that course of action?

Hon. Mr. Sloan: Well, first of all, I don't put too much stock in whatever this member says. The word is "allay", rather than "ally". With respect to the $20-some-odd million figure that the member trots out, I refer him to the Connect Yukon project cost summary. If he goes through this - and maybe if he can do the math in his head - on the rural telephone service project component there is $4 million in total budget: $2 million from the government in the form of an appropriation; $1 million from the service providers and $1 million from the lot owners. If we take a look at the telecommunication infrastructure component, which is $14 million, one will see that there is $11 million coming from government and $3 million from the service provider - in this case Northwestel. On distributed learning, there is $2.5 million - that is a government appropriation - and on the project management, $300,000 million, also a government appropriation. So when we take a look at that, we come to about $14.8 million, so I think the member's suggestion that we're putting some $20-odd million of public money into this project is, needless to say, somewhat dubious.

I need to emphasize that we're entering into this project as a business deal, something that we've done before with such things as the - what do they call it? - the MDMRS project.

The member makes reference to Curragh. I think that's an interesting analogy because Curragh was actually approaching this body seeking two things: they were seeking dollars and they were also seeking loan guarantees. This one is strictly a business deal; we're entering into a business deal with these people. I would suggest if the member has some direct questions of Northwestel, why is afraid to ask them of Northwestel? Why is he so afraid to actually go to the company and ask them the questions rather than asking them at the - I'm not sure what we're running here; about a thousand dollars an hour. The member has gone over, time and time again, a lot of his questions that should be directed to the CRTC. Now, given his somewhat dismal track record at trying to hammer the CRTC and Northwestel, I would suggest that he's looking for another venue.

I have offered an opportunity for the members to get the information they want. Obviously they don't want information. What I'm beginning to suspect, or what I really suspect, is that what this member wants is a chance to publicly hammer a company. I suspect that's what he wants them to do. I would suspect that if the Northwestel officials came into this Chamber, their involvement in Connect Yukon would probably be only a fraction of the kind of questions that would be directed at them.

If the member has questions of Northwestel, why doesn't he ask them? I think they have got phones. I'm sure that if the member really wanted to, he could probably get hold of Mr. Boorman or one of the officials in Northwestel and ask the questions. I'm sure that if he has some issues around the regulatory environment and whether or not the CRTC is in favour or opposed to this, why doesn't he call the CRTC? I think they have got a phone.

I have been quite frank in saying, on some of these issues, what we are willing to do. I have said before that I cannot compel a compel a company to appear here. I have said I will ask him. The member is posturing. He has gone on and on and on about this. So, I have said that we would ask Northwestel. I don't know what their interest would be in doing this, but I will also make the offer, yet again, that we will set up some briefing on this particular project and try to address any concerns that the members may have.

Mr. Jenkins: For the record, the minister read into the record a number of dollars, and I would take the minister back to his ministerial statement of November 10, 1999 when the minister stated in the House: "Our government recently entered into a major private/public partnership to upgrade the Yukon telecommunications infrastructure. The total investment for this Connect Yukon project will amount to nearly $21 million..." The total investment for this Connect Yukon project will amount to nearly $21 million.

Now, all we're trying to establish is what the cost is going to be to the taxpayer, and what the cost is going to be to the ratepayer.

Now we have two separate components - the taxpayer and the ratepayer - and they're the same individual, Mr. Chair, and that's what we are trying to establish.

Yukoners have a right to know what this additional service is going to cost at the beginning and at the end of the day, and at the end of the period of this lease arrangement.

Some Hon. Member: Point of order.

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

Mr. Phillips: On a point of order, Mr. Chair. There's a debate going on between two ministers. The Minister of Tourism is sitting over there, whistling and yawning and catcalling from the corner. He should show a little respect for members in the House, Mr. Chair.

Chair: There's no point of order, but I would ask members to refrain from loud heckling and let the member speak.

Is there further debate?

Hon. Mr. Sloan: I'm not sure exactly what the question was there, but I can tell the member - the member referred me back to a statement. I think we gave a total. What I have done is I have provided a project cost summary, showing the breakdown, and that reflects that of the total cost of $20.8 million, some $14.8 million will actually come from the public source. I just want to clarify for the record, because the member has been suggesting, I believe, that we're going to be investing, I think he said $21 million. That's a lot of change in one's jeans, or something to that effect.

So, I just wanted to clarify the point that there's some $14.8 million that is going from the public source.

I'm not sure what the member is going on about, except to say that we have been undertaking a project here that we believe will have a benefit to the public in the Yukon, and particularly to the public in rural Yukon. Mr. Chair, this is not a project where we suddenly decided that we had to get out front and, in effect, lead a parade.

What we did was we had heard from people around this territory and we had heard from people particularly in rural Yukon about some of the limitations that they had upon themselves, upon their chances to participate in business, upon their chances to participate in some of the advantages that the electronic age has brought. Now, those disadvantages manifested themselves in a variety of ways. They manifested themselves in people not being able to get on the Internet, busy signals; they manifested themselves in tremendously long times to transfer data and faxes and things of that nature; but also in other areas, and I alluded to this in some other debates. We were finding increasing limitations in a variety of ways.

And, if I could just note a few of them, some of them were in telemedicine. We had a number of ideas that we would like to increase our ability to do telemedicine. We have had some success in such things as teledermatology and so on, but we felt that there were other areas, and, certainly, other regions of Canada have developed telemedicine to a greater degree. And when we looked at what the limitations were - why can't we do more of this? - it was quite clear that there was a capacity problem.

One of the things that I have heard as I have travelled around the territory, particularly from groups such as childcare workers, particularly from people who are seeking professional development, people working within the Health and Social Services field, is that they were limited in the kinds of course offerings that they could get.

Very frequently what I heard from childcare workers was that they could only access particular courses from Yukon College and, when we talked with Yukon College, yes, this was a problem. They had difficulties in offering higher level courses, and one of the things we heard was that childcare workers could only take this level course and this level course, but they couldn't move on.

So we began looking, trying to address some of these issues. They came up. I have heard, from travelling around to schools, and certainly from my own experience, the question of being able to offer distance education, or distributed education. I know that there have been attempts to offer, if you will, virtual classrooms but, once again, it falls down because we don't have the technical capacity.

The question has been asked: why can't students in another community take a course at F.H. Collins? And, quite frankly, in some of the schools that have fewer numbers of students, their ability to offer a full course selection is pretty limited. When you're trying to administer a school with, say, 70-some odd students, and perhaps 10 of those students are at the senior high level, and you may have one or two in grade 8, perhaps three in grade 9, and so on and so forth, when you're getting into the upper levels, such as grade 11 and grade 12, you may not have the capacity to offer all the course selections.

I have heard, for example, in some high schools - particularly rural high schools - that their limitations on sciences, in particular, are limited largely by the number of students that they have.

You have a certain number of students in grade 10 and a certain number of students in grade 11, so what you often do is offer 10 Bio one term, 11 Bio the other term, and so on.

So, when you begin to look at some of these limitations that we had on our ability to deliver programs, and then when you begin to look at some of the other things - and I made reference in some of our suggestions around service delivery - we have begun to look at other jurisdictions and how they had improved service. We have sent representatives down to look at New Brunswick, where Service New Brunswick has been in place, and they have a very good program down there. But, once again, it became an issue of limitations: limitation and technical capacity.

When we combine this with the frequent concerns that we heard from people in the communities about their own limitations, we looked at what the prospects were for moving the process ahead, we looked at some of the economic disincentives to developing structure. We felt it was incumbent on us to take a measure of leadership in this. So, because of that, we began looking at the whole idea of telecommunications infrastructure.

As we looked at that, we became aware of a couple of other areas. One was the rural telephone service. We could develop telecommunications infrastructure up the north highway, but then we had some 800-odd lots, most of which are in relative proximity to the major urban area, which were unserved by basic telephone service.

So, clearly that opened up something else where we had to look at pushing that agenda ahead.

And then, as we began looking at those two components, we realized that the third component was that we could provide the infrastructure, but then it becomes the issue of providing the equipment, providing the opportunities, to take advantage of that infrastructure - such things as the distributed learning - the kinds of things that we're proposing here to come from an appropriation.

And we did that in concert with Education. We took a look at what was needed, we worked in concert with them to decide the kinds of equipment, the kinds of other services that they need, and we put them together. I mean, we could have rolled this out as three separate projects. We could have, you know, if you really want to get bang for your buck, announced one thing and then a few months later, announced another thing and so on and so forth, but because there was a measure of intermeshing, we chose to roll these under the umbrella of the Connect Yukon. And because of that, we have looked at how we can deliver the service, how we can maximize the opportunities for people in the Yukon, and I believe that this is something that we are attempting to do, and I believe we are attempting to do it in a financially responsible way. The member disagrees with that. He disagrees with the essential premise of it. He disagrees with our decision to partner with Northwestel. He disagrees with a variety of things. That is the nature of political discourse, and I will simply say that we feel that we have moved the process ahead, and I feel that we are making a concerted, reasoned attempt to try to improve services for people in the Yukon.

What I fail to understand, what I fail to understand, is why this antipathy, why this antipathy toward a program that we feel will benefit people in the Yukon? Why this antipathy toward, well, quite frankly, this antipathy toward rural Yukon? Why this decision to oppose something that will bring benefits to many people in this territory? After this entire afternoon's discussion, it is becoming more and more apparent that that antipathy toward this project is locked in an almost obsessive dislike of a company, an almost - I suppose, an almost paranoid - suspicion of that private company's motives, an almost - I hesitate to say - McCarthy-like desire to seize this company by the throat and throttle them, not only within the public or media, but also to do that within the confines of this Chamber.

I guess I find this somewhat disturbing that an individual would use their privilege within this Chamber, and their clear privilege of absolute immunity to vilify a private company. I'm not sure at what point the private company can defend themselves, because this is somewhat irresponsible of the member to be ascribing motives, to be ascribing intent to a company that, basically, has very little avenue to take recourse. They clearly are seen by the member in a very, very pejorative way, and that I find interesting.

The member has frequently in this Chamber sort of sung the praises of private enterprise, yet today, in this Chamber, he began suggesting - or he has begun to suggest, at least to my way of thinking - that profits and the fact that Northwestel, because they do make a profit, are somehow evil.

He has now ascribed a private company that makes a profit as being evil, and he has gone further to suggest that this company is motivated by strictly a measure of avarice and, at the first opportunity, they will seize the chance to prey on the Yukon ratepayer. I have indicated, in some of the things that I have said today, that the earning return on the Connect Yukon project, the equipment that is purchased as a result of the public money, will not go on Northwestel's books as an asset; therefore, they cannot earn a rate of return on it. So I've told the member that; I've told the member that we have discussed with the CRTC the outline of this proposal. He obviously feels that he needs yet another avenue to bash this company. Not content to bash them indirectly by means of this debate, he now wants the opportunity to bring them in and vilify them in a public forum.

I've told the member that I will ask Northwestel if they have an interest in appearing before this Legislature. I have offered some opportunities to address some of his questions in another forum, which he does not see as being satisfactory. He still continues to cling to this idea that he wants a chance to - what was the term - ask some pointed questions. That would be really encouraging. I can just see the folks over in Northwestel jumping with joy at the prospects of being subjected to the tender mercies of the Member for Klondike who we know has had a long and somewhat disturbing obsession with this company.

Chair: Order please. The time being 5:30, this Committee will recess until 7:30 p.m.

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

Committee is dealing with the Department of Government Services. Is there further general debate?

Hon. Mr. Sloan: Before we left, we were exploring the depth of the Member for Klondike's antipathy toward Northwestel. I'm not really sure what the source of this - how shall we say it? - phonaphobia is, but apparently there must have been a traumatic incident during his childhood, perhaps being locked in a phone booth or something of that nature.

Needless to say, Mr. Chair, I think we've addressed some of the questions with regard to the Connect Yukon project, but I will ask the question, and I guess I will raise the point again, that there is an apparent - and I think it has been revealed today - an apparent lack of support for Connect Yukon and an apparent lack of support for the idea of extending high-speed data and Internet services out to the rural communities on behalf of the Yukon Party. I think it's regrettable. I think it's shortsighted, and I hope the Member for Klondike and his minions will reconsider this rather shortsighted and negative approach and join with us in trying to provide a level of service to rural Yukon, which I think is long overdue and well-deserved.

Mr. Jenkins: Well, as usual, the minister simply doesn't get it. I was very hopeful that at dinner break the minister would have had a briefing and come to an understanding of the situation. I was hoping that the minister could have digested something with respect to the impact that this is going to have on Yukon taxpayers and ratepayers. The issue is a simple one, Mr. Chair. Our party supports the expansion of the telephone system and high-speed Internet access to as many Yukon people as possible. The only problem we have is, who's going to pay and how we're going to pay.

Now, the minister doesn't know because, from what he's explained here in the House earlier today, we're going to pay for it, number one, through the tax base, and then we're going to pay for it again through the rate base. So, every Yukoner gets a chance to pay for these great initiatives not once, but twice.

That's what we're taking exception to, Mr. Chair.

The other issue is that there is a certain component that is going to be an investment by government or by the taxpayers of Yukon, and there is a certain investment that is going to come by way of Northwestel, which makes up this $20-odd million. Now, at the end of the day, what is going to be the impact on all of the other phone subscribers in the Yukon, as far as their monthly bill is concerned? What is the impact there, Mr. Chair?

Hon. Mr. Sloan: Well, Mr. Chair, first of all, let me just reiterate, because I have reiterated before and I'll reiterate again. The member is trotting out this figure of $21 million. I think I explained earlier that the actual public commitment on that is $14.8 million.

Secondly, I have explained earlier - and the member seems to be unwilling to accept this - with respect to the equipment that is purchased as a result of public money, this will not go on Northwestel's books as an asset, and, therefore, they cannot earn a rate of return on it.

So, I've explained that before; the member is unwilling to accept that. He persists in his fiction and the needless repetition. I've said it before and I'll say it again: needless repetition. And of course, the member is trying to get this idea that people are going to pay twice. I would suggest that the member is not paying attention to what I have said in this regard.

With respect to the idea of phone rates going up, there are higher phone rates in rural areas. That's not a mystery. These rates are regulated, not by us, but by the CRTC, and we're not anticipating that the Connect Yukon program would have any impact on the rates. We're not suggesting we're going to subsidize rates. What we are saying is that the CRTC will continue to regulate the rates. They have already given Northwestel some directions in terms of service improvement and certainly the whole question of competition is going to impact on Northwestel's bottom line.

So, the member has asked me to predict rates. We can't do that. It's absolutely absurd and the member knows that.

But absurdity is his coin of the realm, so let him continue to venture on and use his ongoing absurdities. What we've said is that the investment that we make will not go on to Northwestel's books, therefore they cannot earn a rate of return on it. I've explained that we've been in contact with the CRTC. The CRTC supports the concept of private/public partnerships such as this. We do not believe that the CRTC will force Northwestel to make the necessary infrastructure improvements because they realize that it is unprofitable to do that. However, what they will do is - they have given support to us in this venture, and I fail to see why the member is continually opposed to telecom services in the territory.

Mr. Jenkins: Let me state categorically for the record again, Mr. Chair, that we're not opposed to the extension of telephone service to rural Yukon. Nor are we opposed to the upgrading to a higher speed and a wider band width to rural Yukon. We're in favour of it - in favour of it, I repeat for the minister. What we are opposed to is Yukoners paying for the service twice: once through the tax base and again through the rate base.

The minister's public announcement on November 10 was quite specific. "Our government recently entered into a major public/private partnership to upgrade the Yukon's telecommunication infrastructure. The total investment for this Connect Yukon project will amount to nearly $21 million."

That's great. Now, $14-odd million is coming from the Government of the Yukon. That is a direct infusion. The balance of the money is coming from Northwestel. The money from Northwestel will go into the asset base of Northwestel, on which they are allowed a rate of return.

Now, the initial investment of the Government of the Yukon is leased back through this entity that is being created, and at the end of five years, these assets will become assets of Northwestel, and they will again go into the rate-making base, and Northwestel will be allowed a rate of return once again. So, at the end of the day, the taxpayer and the ratepayer, who are the same, will be paying for this great initiative twice. Now, there has got to be a way to structure this so that this is not going to be the case, Mr. Chair, and that's why I'm urging the minister to bring into the House officials from Northwestel who can explain this and perhaps provide some guidance - guidance that will allow the Yukoners in rural Yukon to benefit from telephone access, to benefit from a wider bandwidth and the facilities that are associated with it, but not pay for it twice.

I will go back to my original question of the minister: what is going to be the impact of this system on all Yukoners' telephone rates? And given that Northwestel has an infusion of money into this private/public partnership at the onset, they are required by CRTC to get a rate of return. So, there is an initial impact on the rate-making base and, at the end of five years, there is going to be an impact on the rate-making base again.

Now, how much is that going to translate to in the telephone bills of all Yukoners? Can the minister tell us?

Hon. Mr. Sloan: Well, Mr. Chair, we've gone over this time and time and time again, and I imagine we'll keep going over it time and time again for the next few hours.

I will simply repeat what I said before. However, I think what is becoming clearly apparent is that the Yukon Party voted against the Connect Yukon project and we're seeing today that they're reinforcing that position. Despite all their protest to the contrary that they are in favour of the extension of service to rural communities, they voted against it when they had the opportunity and now they're opposing it here.

I've told the member how this will work. He persists in not believing it. Therefore, we will assume that he does not believe what I have said. I make my offer that we will provide a detailed briefing for him on the project, and as he chooses not to believe what we've outlined here, perhaps that will solve his dilemma. He insists that people are going to pay twice. I dispute that. I guess we'll agree to disagree.

Mr. Jenkins: Well, let's go another way. At the end of the day, will this investment by the Government of Yukon and Northwestel have any impact on the rate-making base?

Hon. Mr. Sloan: Mr. Chair, I think I said before that we're not anticipating that this would have any impact on the rate base at all.

What we are hoping is that we'll have an impact on the service level in this territory, which is woefully deficient, and we've indicated that we do not see that this would have any impact on the rates. What we are planning on doing is to try to move the process ahead and to try to deliver quality, high-speed Internet and data transmission to people in this territory in a timely way.

Mr. Jenkins: The minister, Mr. Chair, carefully couched his remarks - "We're not anticipating that this investment will have any impact on the rate-making base." Now, either it will or it will not, and I'm saying that if everything that the minister has outlined here in the House today holds true to course that this will have an impact on the telephone bills of all Yukoners.

Now, is the minister saying that it will not? If so, could he please stand up and say that the investment into this area by Northwestel and the Government of Yukon will not have an impact on the telephone bills of Yukoners initially or at the end of five years when the assets transfer to Northwestel.

Hon. Mr. Sloan: I'm not possessed of the clairvoyance of the Member for Klondike. Obviously, he communes with spirits beyond this world, so I can't really predict the future in the same way that he can. He possibly sits around with his Ouija board and decides what Northwestel is going to do in five or 10 years.

Based on our proposal and predictions, we are not anticipating that there would be any change in the rate structure.

Mr. Jenkins: Well, Yukoners do not have any measure of comfort with, "not anticipating any change". Surely, the minister and his officials must have taken the time to do their homework, and doing their homework would review the impact that this much of a capital contribution - and capital contribution from Northwestel - would have on the rate-making base. This, Mr. Chair, is a public utility. It has a return on its investment. The return on its investment is controlled by the CRTC, and it's called profit. And their profit is a cost to you and me, the consumer.

So, if it is not going to have an impact on the rate base and it's not going to translate into an increase in telephone bills for all Yukoners, I'd like to hear the minister say that, that this investment will not translate into an increase in the telephone bills of Yukoners. Can the minister say that categorically?

Hon. Mr. Sloan: The member is asking me to speculate on a variety of projects. We've basically said that, based on this project, we do not anticipate that it would have an impact on rates. Now, if the member is asking me to predict what the CRTC is going to rule in a number of years, I can't do that. That's impossible. There may be some issues in the future where the CRTC rules on rates. I can't make that prediction. What I can say is that, based on our projections, based on this proposal, this would not have an impact on rates, and this is one of the goals that we have, along with improvement of services.

The member seems to think, in his very clever way, that somehow he's going to nail us down to something here. I can tell him that, basically, we've structured this in such a way that it will be neutral as far as the rates go.

What we have also said is that we are willing to take a chance. We are willing to invest in Yukon people - something that the previous government was unwilling to do. There was no interest in the party opposite during their time to ameliorate the situation for rural Yukoners with respect to telecom. They essentially had the position of doing nothing, and that is how they administered for the four years. They did nothing. They sat on their hands and hoped that something else would happen to improve the situation.

We have made a decision that, based on what we've heard from communities, based on what we've seen, we're willing to make an investment. We're willing to make an investment in rural telephones. We're willing to make an investment in telecom infrastructure. We're willing to make an investment in distributed learning.

That's what we are willing to do. The forces opposite disagree with that. The forces opposite who have protested that they want to see the extension of services to rural Yukoners have voted against it, and they have demonstrated very clearly today that they are opposed to extension of telephone and high-speed data services for people in this territory, particularly in rural Yukon.

We reiterate our commitment to making this happen for people in rural Yukon, and we urge our friends in the Yukon Party to get on the line and come along with us.

Mr. Jenkins: Well, I don't want to rewrite history, but just going back, the Yukon Party was in for four years and they didn't do anything. Well, for eight years before that, the NDP was in power, Mr. Chair, and they didn't do anything either. And the Yukon Party inherited a $64-million deficit.

Now, I'm sure in a few years with this spending pattern that is prevailing, with no idea as to how a regulated utility operates, we're going to be in the same predicament in a few years time, with no money left in the bank.

The issue is a simple one, Mr. Chair. Who pays? We're all in favour of this initiative. We're all in favour of this initiative, but when you analyze this decision of this government, ratepayers in the Yukon and taxpayers are going to be paying for this initiative together, and the taxpayers and the ratepayers are the same individuals.

Now, given that the lease on this investment runs for five years, at which time it transfers to Northwestel, has the minister and his department analyzed the impact that the transfer of those assets, at that point in time, will have on the rate-making base of Northwestel, and how does that translate into the cost for telephone service? Will there be an impact upward or downward?

Hon. Mr. Sloan: With respect to the earning return on the Connect Yukon project, the equipment that is purchased, as a result of public money, will never go into Northwestel's books as an asset; therefore, they cannot earn a rate of return on it. In fact, we expect the opposite will occur as Northwestel introduces new services that can use the Connect Yukon infrastructure. They will not have to impute all the costs of the bill, therefore the rates for the service should be lower.

Mr. Jenkins: So, if this initiative is a very vibrant way of addressing the development of telecommunications, could the minister identify another political jurisdiction in Canada that has used this same method of delivering improvement in service in the same manner as the Government of Yukon is doing?

Hon. Mr. Sloan: Well, Mr. Chair, as I can indicate to the member - and he is probably aware of this - in most areas, telecom infrastructure really falls into the realm of the companies themselves. In this area, we believe that we are one of the first jurisdictions to attempt this, to actually utilize some public investment in a public/private partnership to develop a telecommunications infrastructure.

Now, I guess the question is, well, if they haven't done it any place else, why do it here? We made a conscious decision that we would not get the kind of progress that we needed in telecom infrastructure unless the government were willing to come forward and make that kind of investment. Quite frankly, it's very unlikely - and members have referred to this before - why the CRTC has not pushed Northwestel to get into the development of telecom infrastructure, particularly with the respective digital types of technology, simply because I think they recognize that the cost of developing such infrastructure could not generate the necessary profit base that would be needed. Otherwise, I would imagine that they would have forced Northwestel's hand at an earlier point.

What we've said is that we think for this to develop, we need to be involved. I suspect that had we not taken a bit of a venture here, it would be very, very hard to see how we, or any public government, would force the hand of a private company. Certainly the CRTC hasn't done it, so why does the member think that Northwestel would do this on its own? Has he now changed his opinion of Northwestel, from being a demon to some kind of altruistic force that would do this merely from the goodness of their hearts? I suspect not.

We have taken an opportunity here, I think, to move the process ahead. And, once again, we feel that it's a worthwhile investment in Yukon people and in our future.

Mr. Cable: I've also got some questions about Connect Yukon. The Energy Corporation has carried out a feasibility study on the Mayo-Dawson transmission line - it's many, many pages. This huge binder here is just one part of it, and I gather there are several yards of paper over in the Energy Corporation, yet very little seems to have been done on this project. Both of them are of the order of magnitude of $20 million.

What has been done by this government by way of a preliminary feasibility study? Has the government walked into negotiations without any homework being done?

Hon. Mr. Sloan: Not at all, Mr. Chair. As I indicated before, when we took a look at this we had some discussions. We talked with Industry Canada and we talked with a number of consultants that we brought in, to give us a sense of what it would take to bring up the infrastructure. There is also a considerable amount of data already on this as to what the possible cost would be and what the respective technologies would be. We did considerable research on this, both with Industry Canada as I said, and with consultants and with Northwestel themselves, because they are the owner of the present infrastructure. From that, we got a clear sense of what would be involved in terms of cost and so on and what the prospective technologies would be. Certainly, the satellite versus microwave versus other kinds of technology. Based on that, we made a decision to go with the technology.

It then remained a question of financing, and I think I've outlined how that financing will be accomplished.

And it required some decisions around when and how we would proceed, so that's how we've been working on this.

We've been working with this concept since last spring, developing it and fleshing it out and doing the necessary research. So, no, this wasn't something we entered into lightly.

Mr. Cable: The opposition, to some extent, is working in the dark. Is there a feasibility study document around that can be provided to us so we can look at it? I know the minister has offered a briefing, but a briefing with a document might be of some assistance.

Hon. Mr. Sloan: We can certainly provide some of the background materials for the member, if that would be of assistance. We can provide that in advance of any briefings so that the member can ask questions of why certain decisions were made.

Mr. Cable: I think that would be useful, and I will refer the minister to the Energy Corporation's feasibility study. In that study there are extensive rate projections, and I think that should be, for a large investment such as being made in Connect Yukon, one of the necessary components of any feasibility study. Like, where are we going on rates? There has been an extensive back and forth of debate here on rates, but there doesn't seem to be anything clear. Where are we on system-access charges? Are those going to go up over the course of a few years or are they going to be constant or are they, as I got from the debate, just unknown?

Hon. Mr. Sloan: By the system-access charges, does the member mean - because what we are talking about here, essentially, is a telecommunications upgrade, a telecommunications infrastructure. So, if the member is asking me about such things as the cost to Internet service companies - they will deliver the service within the community itself - we are committed to the idea of keeping the rates for Internet service the same as in Whitehorse. That is one of the principles behind it.

What I can do is I can provide the member with a copy of the letter of intent, which might give him some measure of how this is proceeding and, as I have said, we will provide the members with copies of the final agreement.

Mr. Cable: Yes, I think that would be useful. The minister also spoke about communications with the CRTC, which, I assume, required some sort of document accompanying the communication, and the money that is going into this program, I gather, is going to be funded in part from the immigrant investor fund. I assume there have been some documents exchanged with the federal government, the Immigration department. I'd like the minister to confirm that there were in fact documents provided to the Immigration department and also documents provided to the CRTC.

Hon. Mr. Sloan: As I mentioned to the member, we did consultations with the CRTC. We have met with CRTC officials and outlined what we're proposing. They were in agreement that this project was something that they would favour as a public/private partnership.

With respect to the immigrant investor fund and how that works, I think those questions would be better addressed either to the Minister of Finance or the Minister of Economic Development.

It's my understanding that considerable discussion went into how this could be structured in such a way as to meet the parameters of the immigrant investor fund, but those were done in consultation with Finance and with federal officials. We are basically going to utilize the money coming from this and going to this telecommunication council to administer the project.

Mr. Cable: Well, the immigrant investor fund, of course, is going to attract some interest to pay out the investors.

What sort of interest is being provided to them on the $11 million that I believe is going to be taken out of the immigrant investor fund?

Hon. Mr. Sloan: I actually did have that someplace here, if I could just find it.

I don't have that particular information here. What I'll have to do is get it from Finance and provide it for the member, because I'm not handling that aspect. We're handling the delivery of the program.

Mr. Cable: Yes, I would appreciate that.

I'll tell you where I'm coming from. I'd like to find out what each of the participants in the public/private partnership are getting out of it. What is the government getting out of this proposition in the way of return on investment, or what are the immigrants getting in the way of flow through on return on investment? I'd like to find out what the small business partners are going to get out of it in the way of return on investment. Could the minister provide that to the members of the opposition by way of letter?

Hon. Mr. Sloan: We can certainly do that. I will have to get some of the information from Finance in this regard. I can tell the member that, with respect to the small business - and by small business, we're meaning primarily people in the Internet-serving business - they won't be asked to put up funds for any kind of equity position. We'll be asking them to be partners without having to invest. We're seeking more from their partnership - some guidance, direction and assistance, in terms of determining how this project should be best developed in order to maximize the benefits for Yukon business and communities. So, they will be partners of the telecommunications council without actually having to put up funds per se.

Mr. Cable: Who is negotiating on behalf of the minister's department, or on behalf of the government generally? Has the government retained a negotiator?

Hon. Mr. Sloan: Could the member be more specific? In what respect? A negotiator in our dealings with Northwestel?

Some Hon. Member: (Inaudible)

Hon. Mr. Sloan: No, we've been meeting with Northwestel officials - our department has been - with adequate representation from respective departments. We've had several meetings with Northwestel, formulating this program. We haven't hired anyone separately to negotiate. It's being done by our own officials and folks in telecom who have ongoing relationships with Northwestel, obviously, because of our involvement - telecommunications in government.

Mr. Cable: I was trying to follow the debate between the minister and the Member for Klondike. I gather this deal is set up as a five-year proposition, and at the end of the five years, there is a take-out or a buyout option in Northwestel. Is that correct?

Hon. Mr. Sloan: Yes, it runs for five years and, at the end of five years, Northwestel has the option to purchase the assets for their economic value.

Mr. Cable: I gather, from what the minister said, prior to the buyout, there is an agreement that they cannot put the assets in the rate base. But assumedly after they do buy them, is there anything stopping them putting it in the rate base then?

Hon. Mr. Sloan: Just the fact that, as I indicated before, the equipment that has been purchased with public money can never go on Northwestel's books as an asset, so they couldn't earn a rate of return on that. That's our understanding. I would just say that, due to our discussions with Northwestel and the CRTC, I think that, when we proposed this to the CRTC, if they had had some concerns in that regard they would have made them apparent to us.

What's happening, however, is that the CRTC itself is undertaking a major regulatory review of Northwestel, starting over the next year, and I think they'll be taking a look at issues such this and many others as Northwestel is forced to deal with some of the issues that are coming forward - not the least of which is the competitive environment on long-distance charges.

So, we feel confident that this will not have an impact on future development or future costs. As a matter of fact, if anything, we think that if Northwestel were to introduce new services, one of the things they could not do would be to utilize some of the costs of public money as the cost of building; therefore, they couldn't pass on some of these costs to the public. If they had been involved in the development of infrastructure alone, I think it might have been a very, very different story. But quite frankly, I think it's very unlikely that Northwestel would have undertaken this upgrade of service, because I just don't think that the profit would have been there for them to do it.

Mr. Cable: Well, let's say that that is so. It's difficult for me to understand how, if they purchase the assets, they are precluded from putting them in their rate base. Is the minister saying that part of the deal will be that they will never apply to CRTC to put those assets in the rate base? They will be on their balance sheet, I would assume, because they are going to buy them.

Hon. Mr. Sloan: Well, one of the things that we need to emphasize is that, at the end of the five years, they will be able to purchase the assets at the economic value. Now, what the economic value of those assets are within five years, given the technological change, may be open to some suggestion. I think that if we're assuming that if we put in, say, for example, $11 million, there is an assumption that within five years, those assets will still be worth $11 million, I would think, with technological shifts and so on, that may not be the case. I think, if anything, probably in five years the economic value will be considerably less.

So, our goal is to ensure that the necessary infrastructure gets built, and we're attempting to do this by means of a public/private partnership. I believe that, quite frankly, it would be very, very difficult for Northwestel to turn around and say, with these assets, which were acquired with public money, and this is their current economic value, we should get an increase in our rates. I just don't believe that that could be justified.

Mr. Cable: I'm not making the case for Northwestel, but I just can't see why they couldn't. Buying assets from the government is no different from buying assets from anywhere else, and they go in the rate base, and that's the nature of the game.

I wonder if the minister could check on that and confirm with the opposition that either there is some contractual restraint on Northwestel or there is some legal restraint that we are not aware of that would prevent them from sticking those assets in the rate base.

Hon. Mr. Sloan: Certainly, we are at the point of bringing our agreement with Northwestel to fruition, so it will be considerably more detailed than the letter of intent, and I will bring that forward to the member.

Mr. Cable: I've a number of questions on the City of Whitehorse waterfront development plan. That's a line item in the minister's Government Services budget, but it appears the Economic Development department has a role to play in this. Who's actually driving this train with the City of Whitehorse? Is it the minister? Is he going, "Choo, choo?" or is it the Minister of Economic Development?

Hon. Mr. Sloan: That depends on which train one is talking about - the trolley or the actual process. It's actually coming through Economic Development.

We have been working with the city on this, primarily because we have an existing relationship with them on such things as some of our waterfront development, some of the improvements, some of the developments of the heritage buildings - White Pass, and so on. So, because we've got an existing relationship, we have been the conduit for some of the funds that are flowing to the City of Whitehorse.

Mr. Cable: Who actually negotiated the landscaping contract? That's where the landscaping is along the riverfront here, just below where we are and down past City Hall.

Hon. Mr. Sloan: We did the actual negotiations, but the funds flowed from Economic Development.

Mr. Cable: Is there some kind of master agreement around between the municipal government and the minister's government relating to City of Whitehorse waterfront development, or are these various projects - and there are three of them, so far - done on an ad hoc basis? And I'm thinking of the trolley and Argus Properties and the landscaping contract, which add up to $2.2 million so far.

Hon. Mr. Sloan: With respect to the landscaping on the waterfront, that was done, not only in concert with ourselves and the city, but there was also involvement with the Kwanlin Dun First Nation, which, as the member is aware, has claims on the waterfront. So, for example, they had certain interests that they wanted to see accomplished and, certainly, some economic benefits from that project.

With respect to the trolley, the trolley is more or less a project that we have undertaken in concert with the city. The city will be part of the, I guess, task force and driving that, as well as the Miles Canyon Historical Railway Society, because we had had some discussions with Miles Canyon. Even though this is a project that we want to see happen for the obvious tourism values and enhancement of the waterfront and so on, I had had some very early discussions with the mayor and the city manager outlining what we hoped to accomplish by this.

We've also had some discussions - the consultant we hired to do research and so on had discussions - with Kwanlin Dun who, once again, have waterfront interests. We've also had an ongoing relationship with the Miles Canyon Historical Railway Society, which has indicated an interest in undertaking the running of this particular project for us.

With respect to the Argus project, those funds flowed through Government Services, and they were designed for the development of water and sewer infrastructure along the area that is sort of adjacent to the Argus areas. It was our feeling, as well, that this was something we wanted to see develop because there is considerable interest in the area beyond the Argus Properties in seeing that develop economically. So, we felt that that would be a good use of public dollars to ensure that the infrastructure was developed.

Mr. Cable: Yes, I want to get to the Argus deal, but before getting there I'd like it clarified. Is there some master agreement around with the City of Whitehorse that relates to, "Waterfront development?"

Hon. Mr. Sloan: Not a master agreement, no. The projects themselves are somewhat different in their nature. The waterfront landscaping - the first agreement - was for $750,000 with the City of Whitehorse - waterfront landscaping. $10,000 was retained by Government Services to cover the cost of business incentive programs to contractors. We administered that. The city has worked with both the public and Kwanlin Dun First Nation on the nature of the project, and in August they awarded one contract to Skookum Asphalt. A second contract has been awarded for the area between Rotary Park and Main Street and city council subsequently cancelled that because it would have been over the consultant's estimate.

There was a second agreement, which had to do with Kwanlin Dun. That was $250,000 with Kwanlin Dun to construct part of the waterfront landscaping. This agreement hasn't been finalized as they are awaiting the settlement of some land selection.

The infrastructure development - the third agreement - was for $750,000 with the City of Whitehorse for infrastructure development between the area of Quartz Road and Two Mile Hill, and it is felt that this will provide some long-standing benefits in the future development of the Whitehorse waterfront area.

Then, of course, I outlined what the trolley project was and how we're seeing that proceed.

Mr. Cable: I'll tell the minister where I'm coming from. I'm having a lot of difficulty figuring out how running sewer lines to a piece of marginal property comes under the rubric of waterfront development.

There's a blue document that arrived in my file. I don't know where it came from, but it's entitled Whitehorse Riverfront Plan Summary of Main Land Use Elements. And on the first page, it says, "The Whitehorse riverfront study is intended to result in a land use concept that provides direction for revitalizing this historic heart of the city." Is that the main theme behind this government's deals with the City of Whitehorse - to revive the waterfront?

Hon. Mr. Sloan: Well, I think we're all interested in seeing the waterfront develop. Certainly, I think, there is a fair amount of potential for economic development along the waterfront. Our interests are in seeing this developed and seeing some economic potential flow out of this. We have a direct interest in providing some, I guess, tourism-related infrastructure in the form of the trolley car and the trolley car line to sort of move visitors along the waterfront. Hopefully, in concert with some of the development that the city is proposing, that will cause some commercial development to go into the waterfront.

With respect to the Argus Properties, we were approached by the city, in terms of some of their needs with respect to water and sewer along this area, and we felt that we could support them in making this happen.

Mr. Cable: The landscaping contract has a sketch attached to it, and the landscaping appears to take place from Rotary Park down the river to about Kishwoot Island, but there is no suggestion that it's going to run up the river any farther.

Just what is the minister's view of waterfront development? How far up the river does it go, and does it involve both sides of the river?

Hon. Mr. Sloan: Well, if the member's asking me to sort of speculate, I would say that - well, let me just outline it from the context of what we're seeing or envisaging for the trolley. We would see an initial stretch from, say, Rotary Peace Park down to, possibly, beyond just where the waterfront development was proposed to begin in the initial phase.

The second phase we would see going out to Kishwoot Island and probably extending up to Robert Service Park, but eventually, we'd like to see the trolley being extended farther along, eventually possibly down as far as, say, the industrial area, right through to - well, my eventual goal would be to gradually extend the trolley car out, possibly as far as Schwatka Lake.

Beyond that area, there are some grade problems and basically some other issues that would pose us some problems. So, I see the waterfront as being basically the whole stretch along from as far down as we can get, close to the present grader station all the way out to, say, Robert Service Park and beyond.

I think, however, we're primarily looking at along this side of the river - I guess, the sort of city centre side of the river.

Mr. Cable: I still have some difficulty imagining that some mall development, which is, at one point, a couple hundred yards from the river - if I've understood the geography correctly - has something to do with tourists walking along the waterfront, enjoying our waterfront.

Now, I've heard all sorts of rationales for this project, and this $750,000 worth of taxpayers' money going to a rich B.C. corporation.

There is going to be a reduction in leakage of money out of the Yukon - a real stretch. There's going to be more choice. We're going to buy cheaper socks and underwear, and that, in some fashion, is related to the waterfront. There are going to be some more jobs, construction jobs, and then eventually more retail jobs, and there is going to be no reduction in the other retail jobs. The pie is going to get bigger, which is another stretch. And then there's the equity argument that we stick sewer and water lines in various other places for various other people, which I can't buy. If somebody were to get a piece of moose pasture way down the river and were to come into the minister's office and say, "Look, this is pretty close to the waterfront, Mr. Minister. How about $750,000 for sewer and water lines?", what sort of guidelines would he use for that sort of equitable investment?

Hon. Mr. Sloan: Mr. Chair, we were asked to basically facilitate this transfer of money because -

Some Hon. Member: (Inaudible)

Hon. Mr. Sloan: Well, there are queens and then there are queens, Mr. Chair. The queen of the Klondike has just made a comment.

For this particular project, it was obvious there had been considerable discussions with the city. Obviously, the city was in support of it. They sought the Government of the Yukon's support for a project that they felt had some economic value and that they felt would assist in the economic development of the city. They approached us for support. The support was given and we have facilitated the transfer of money on that basis, that this was deemed to be a mutually beneficial arrangement.

Mr. Cable: Okay. Let's say all of these arguments that are put forward by this government - there is in fact going to be a reduction in leakage. I have never seen any study saying that, and it stretches my imagination. People go out to Vancouver for the trip and then they buy something when they are out there. But let's say there is some merit to that argument.

Let's say there is some merit to the argument that we'll have more choice - we'll be able to go around and get the cheaper socks and underwear. Let's say, in fact, there are going to be more jobs. How does that get us to the point that we have to give this corporation money? Does the minister seriously think that a $35-million project depends upon a $750,000 cash infusion from the government, this government that has been crying about legal aid funding? $750,000 amortized over 20 years, which they could borrow, would cost $75,000 a year. Does the minister seriously think that that project depends on that kind of cash infusion, that the people who are making that investment are going to make their investment based on whether or not they get that money?

Hon. Mr. Sloan: Well, clearly, the proponents of this project had approached the city and had made a case for the proceeding of this project. They clearly had some issues around making this project happen, and they sought some assistance from the city. The city in turn approached us about lending our support for this project. Clearly, the city felt that there were some benefits to it. In this case, we were assisting this project coming to fruition by lending support to the city and lending support in a material way - the development of infrastructure.

Whether or not I believe the project would have gone ahead without this is immaterial. We were asked to respond to a request from the city, and we did, acting on good faith that the city knew what they were doing and knew some of the issues around this project. In fact, they clearly felt that unless there was some infusion, as the member has put it, of public funds, both from the city and, in our case, from YTG, that this project might not have gone ahead. We can only suggest that the city must have been well-convinced of that for them to seek our assistance.

Mr. Cable: Is the minister saying that he takes the assertions of municipalities without ever checking them - that the Mayor of Dawson might come down to his office tomorrow and say, "Look, I need three-quarters of a million bucks for this little project I've got going here," that the minister is just going to write the cheque? Is that what the minister is saying?

Hon. Mr. Sloan: I think we've already given some money to Dawson.

Negotiations on this were done primarily between Economic Development and the city. Because we had the existing relationship and the existing working relationship with the city, we were asked to handle the transfer of the money, as I said, because of earlier arrangements with the city on such things as waterfront development.

I'm not sure if the member took the opportunity during the Economic Development debate to explore this with the minister. I think that Economic Development clearly must have done the necessary groundwork and the necessary consultations with the city for them to decide to proceed with this and to ask us to make the necessary arrangements to work with the city.

Chair: Is it the wish of members to recess?

Some Hon. Members: Agreed.

Chair: Ten minutes.

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

Is there further general debate?

Mr. Cable: I don't want to beat this Argus Properties thing to death, but I would refer the minister to one of the games that corporate Canada has played in the last part of the 20^th century, whether it's Bombardier or the Ottawa Senators or the mall proponents here in the City of Whitehorse.

First of all, you find vulnerable politicians. You find politicians who are worried about losing our aerospace industry or our hockey game or who are worried about jobs, then you build the anxiety up and then you have a bunch of cover stories, like leakage, or losing our game or losing our airplane designers to the United States. Then when you've got the cover stories all in place you put your hand out for some public money, and then that money is taken away from the real needy in our society, not the fictitiously needy, but the real needy. And that's what's going on here.

So, what I'd like the minister to tell me - and whether he's willing to produce the documents that go along with it - has there been any study done on the leakage issue and are there any documents? Has there been any analysis done on whether this project actually depends on the public contribution?

Hon. Mr. Sloan: Well, Mr. Chair, as I indicated earlier, the studies - the estimates on this - were all done by the Department of Economic Development, and I'm not sure if the member brought these issues and concerns forward to Economic Development at the opportune time. We have been asked to facilitate the transfer of the money in this case and, clearly, we trusted that Economic Development had done the necessary investigation and consultation and that we are in concert with the city on this one.

I guess the premise of the member's preamble is that there may be some duplicity here or manipulation by corporate Canada - in this case, I guess, represented by Argus. I would suggest that probably the estimates on the viability of this project - the issues such as leakage and so on - were addressed by Economic Development prior to them coming to us and asking us to facilitate the transfer of money.

Mr. Cable: Both those questions were put - at least one of them, and I think two of them - were put to the Minister of Economic Development in Question Period, and -

Some Hon. Member: (Inaudible)

Mr. Cable: Yes, that's exactly what he said. There was a lot of smoke and steam and a whole bunch of words signifying nothing. So, I was hoping that this minister, as the minister responsible for the line item, would actually have some answers. So, I'm going to leave it with him. Is he going to produce whatever documentation this government has with respect to the leakage issue, and with respect to the necessity of the public injecting cash in this investment to make it work?

Hon. Mr. Sloan: Well, not having access to that particular information, what I will do is forward the member's request on to my colleague, the Minister of Economic Development, and ask him to respond to the member. We have taken note of the questions, and we have no doubt that my colleague, once he has finished nailing down the lynchpins of the Empire, will, upon his return, convey to the member all the information that he seeks.

Mr. Cable: Could the minister ask his colleague to do this in a timely fashion - say, before the next election?

Hon. Mr. Sloan: Well, I know that the Minister of Economic Development is an individual possessed of prodigious amounts of energy - almost frenetic energy, I might say, in some cases. I'm sure that this will be high on his list of to-do items when he gets back - you know, unless, of course, he's been asked by the royal family to stay over and share the shooting season at Balmoral over the holidays. But I would imagine that upon his return, he will be -

Some Hon. Member: (Inaudible)

Hon. Mr. Sloan: I should remind the member that they don't hunt foxes in Scotland.

With respect to my colleague, the Minister of Economic Development, knowing the zeal with which he approaches so many things, I'm sure that he will get right on this, right away. I know that we'll convey on the member's good regards and hopes and prayers for a speedy resolution of this issue.

Mr. Cable: On that note, we'll leave that topic.

I have just one last set of questions. They're quite brief. I mentioned to the minister in a conversation before the House opened this afternoon that I'd been approached by a person who tests check valves. Those are back-flow prevention devices, as they're called by the government, which prevent water or any liquid from reversing its flow. This gentleman wanted to know -

Some Hon. Member: (Inaudible)

Mr. Cable: Moving right along here, it may have something to do with sewage or with the water systems, and this gentleman goes out and tests these check valves for the government, under contract. He was asking just what are the government's intentions in the future. What's the rationale for the program, how many check valves do they see as being necessary to be tested in the future, and when is the next tender call going to go out?

I had mentioned that to the minister earlier, and I referred him to an instructions to bidders for a bid closing September 8, 1999. Has he had a chance to look into that issue?

Hon. Mr. Sloan: Yes, thank you. I won't respond to the puerile and scatological fixations of my friend from the Klondike. His mind roams in areas where the rest of us don't venture.

The City of Whitehorse has requested that YTG provide them with annual certificates of verification that back-flow prevention devices have been inspected and serviced on an annual basis, as per the city's new bylaw.

The list included two devices at the Thomson Centre, one device at Yukon College and four devices at Porter Creek Secondary School. This is a new requirement and certification can only be completed by certified trades people. We could only find two certified companies for this work and invited both firms to submit tenders for the six valves, as required by the city.

The invitation date was August 25; the closing date was September 8. The tenders were submitted from 3C Services and Total Fire Protection. The contract was awarded to 3C after it was verified that they had the proper insurance. It appears that the main valve at the Thomson Centre had to be worked on as the testing failed a couple of times due to gravel entering the waterline. The total amount paid out to 3C Services, due to the above, was $1,140.

There is still a problem with one valve, and we'll be installing a filter screen in front of the valve next spring. 3C Services, who did the work, was a previous employee of the Liquor Corporation and it was on the understanding that he had resigned his position prior to accepting this contract. Hopefully this will resolve any questions, and as this is based on an annual certificate of inspection, I would imagine that we'd be doing this on a yearly basis for the city.

Mr. Cable: What's the rationale for the program? Is it an energy saving program? Is that why it's set up?

Hon. Mr. Sloan: Well, this is clearly a request from the city on this, and I'm not sure what the basis of it is. This is clearly a requirement from the city, and since we have the seven devices that are impacted, we were required to present this to the city that we have in fact verified this.

Mr. Cable: This is an inspection service done by the minister's department under some contract with the city, is it?

Hon. Mr. Sloan: No, the city has required us, in our own facilities - Thomson Centre, Yukon College and Porter Creek Secondary - that have such devices that they be verified as working, that they have been inspected and serviced. As we have seen, for the valves, all of them work, and the only one that we experienced difficulty with was the main valve at Thomson Centre, and there has to be the installation of a filter screen, which we intend to do next spring to clear up the problem.

Mr. Cable: I have just one last question, and if the minister doesn't have the figures with him, he can give me a letter on it. How many of these check valves are there around that it's anticipated that the city will want inspection services on?

Hon. Mr. Sloan: What I have listed have been the flow-prevention devices that we have in our facilities: the two at the Thomson Centre, the one at the Yukon College, and the four at Porter Creek Secondary. I'm not sure how many there are globally. We can find that out and provide it for the member.

Mr. Phillips: I have a few questions in general debate.

I want to go back to Connect Yukon for a minute. The Liberal member was asking a few questions, and the minister was going to provide copies of some correspondence or some information to him. I wonder if he could make sure that he provides that to all opposition parties to start with. The minister doesn't have to answer that question. I'll save him some time, as long as he answers it when he does stand up.

The other question I have is, the minister has mentioned several times in the Connect Yukon debate that there are going to be three towers set up. Do we know the location of the towers, and will the towers be isolated towers or will there be roads built to them?

The other issue that I've been asked by residents in the Marsh Lake area, because that has been mentioned quite a bit with Connect Yukon, is when can they expect that area to be dealt with? There's a concern that has been expressed to me that there's an area between just past the Carcross turnoff and Army Beach that is now served with a cellular 400/cellular 800 service and there are quite a few people in that area. Is that an area that's intended to be served?

There is another question that was asked by the Marsh Lake residents at a meeting I attended at the Marsh Lake marina. Right now, it's kind of oddball, because the people from the Carcross Corner in are on the Whitehorse exchange. The people between the Carcross Corner and Army Beach are on the Whitehorse exchange but on the cellular systems, cellular 800 and cellular 400. And the people just beyond that, at Judas Creek, are long distance to Whitehorse. If we're going to be connecting people up, is it going to change anybody's status, vis-à-vis are the people at Judas Creek going to now be on the Whitehorse exchange? Is it going to be long distance into Whitehorse for the people from the Marsh Lake area? Is there going to be any change whatsoever there? The people were asking questions like that.

If the minister will start there, if the minister can answer those questions, I would appreciate it.

Hon. Mr. Sloan: First of all, with respect to providing information to both opposition parties, we can do that.

With respect to the change of status, I would have to check into that to see how it's being anticipated on configuring these areas. I can tell the member that, particularly, sort of the Marsh Lake area is being looked at as four potential areas of service. One is the Marsh Lake/South M'Clintock/Army Beach area, with 115 lots. The second area is the Marsh Lake/North M'Clintock, which has 18 lots. The third area is Marsh Lake/M'Clintock Place, with 79 lots, and the fourth area is the Marsh Lake/Yukon River Bridge. Now, how that will break out as far as which are on which exchanges, I would have to get back to the member there in terms of that level of technical detail, because we don't have that at this point.

What we've done is we have tried to define the service areas on the basis of lots, just for projection of possible costs and so on.

Mr. Phillips: I'd like to make representation to the member while I'm on my feet, Mr. Chair. I think the preference would be that all of the Marsh Lake area, including Judas Creek, would prefer not to be long distance. They would prefer to be on the Whitehorse exchange. They're only 35 to 40 miles from Whitehorse - total - and it is a bit of a stretch to say that it's long distance, per se. I think it would be a very wise move, in any negotiations or discussions that took place, that rather than put the ones who don't have service now on a long- distance service, it would be a better move to put everyone in that area on the Whitehorse exchange. I think you would find support for that. Mr. Chair, I'll look forward to the minister bringing back that information.

I want to move on to another area. I just have a few questions in another area. When an individual company, or anyone, bids a Yukon contract, is there any requirement asked for by contract services with respect to awarding the contract vis-à-vis a city business licence or a territorial - I know we've just done away with territorial business licences - but a city business licence or any kind of licence required to say that you're a bona fide company and you're operating legitimately, so to speak? In some cases, I know there are deposits required for certain bids. But if a deposit isn't required, when we award the contract do we insist on the individual having a legitimate company and that kind of thing?

Hon. Mr. Sloan: Not for submitting a tender, but certainly for the award of a tender they would be required to have a legitimate business licence.

Mr. Phillips: So, Mr. Chair, if an individual bid a job - for example, maybe some video work for the Government of Yukon to do some filming of some kind - and was awarded the job, and in the award process they would then be asked to show proof of a business licence or whatever they had before being given the contract, that the government would not sign a contract with them unless they had a bona fide, legitimate licence - either city, territory or whatever - to do the business?

Hon. Mr. Sloan: Yes.

Mr. Phillips: Would it matter if, under the Partnership and Business Names Act, a company had been struck from the roster and they were no longer legitimate that way? Does the Partnership and Business Names Act have anything to do with a company being legitimate, or is it just something more to do with a company being registered?

Hon. Mr. Sloan: I would have to check into that, but I would assume that it would have to do with being registered. I can follow up on that for the member and get back to him in form of a return.

Mr. Phillips: In the past, we have had a couple of contracts awarded with respect to televising town halls. They have been contracted out to local companies, I believe. Maybe the minister may not have this information at hand, but he can get back to me. Back on September 18, 1999, I believe, there was an hour or two hours of televised activities with respect to the Yukon Act symposium, and there was a contract let - the contract day was September 18, 1999 - and invitationally tendered, and the contract value was $25,000. And the reason I'm asking the question about this one is that we just did another town hall here on October 15, 1999, and that was the Yukon Act live town hall. That one was October 15, 1999, and it seemed to be for the same work and the same type of work, and they went to two different companies, but the second one, only a year later, is $50,265. So it was double the price in a year.

I wonder if anyone bothered to question why there was such a difference in the price. Maybe the minister can get back to me on what the difference was between the Yukon Act symposium one, and the contract number was SS99-02-3065-00948, and the other contract - both of the contracts were given out by the Executive Council Office - was SS99-02-3064-00947. That one was for $50,265; the other one was for $25,000. My understanding, in talking to people who were involved in the town halls - evidently they were both about the same period of time and the same amount of work was done. Maybe the minister could come back to me with an explanation of why one was twice the cost of the first one, and only being a year later.

I don't think it could be inflation. There may be some other reason and maybe the minister could bring that back. Would the minister give a commitment that he would do that? I don't expect the minister to have that information at the ready.

Hon. Mr. Sloan: Yes, Mr. Chair, these are under Executive Council Office, and I will ask ECO for an explanation. I'm not sure what the nature of the contracts are in terms of, perhaps, time or editing or any of those particular issues, but I will ask for an explanation from ECO to be directed to the member.

Mr. Phillips: I believe, Mr. Chair, both these contracts were carried out, for the most part, in the City of Whitehorse. The work was carried out in the City of Whitehorse. So, going back to my first question about business licences or a licence of authority to operate, I wonder if the minister could tell me if either one of the contracts did or didn't have the appropriate business licences and if either didn't have the appropriate licences, based on what the minister said tonight, could the minister tell me why the contract might be awarded if one didn't have a business licence?

Hon. Mr. Sloan: I don't know the company itself, and I'm not sure what its status is, but we can certainly look into that and provide it to the member. We can ask ECO to provide that as part of their return.

Mr. Phillips: My record of getting information from the ECO in a timely manner has been not so good, and so I would maybe ask the minister if he could give me a commitment that this information could come to us tomorrow. The information I've asked for is pretty straightforward. I'm sure that, as the minister said, they require these licences when the awarding of the contract is done, so there must be information there. Maybe there's a check sheet where someone maybe writes in the business licence number or something that can be done fairly quickly so it's not an onerous task. I've given the member the numbers of the contracts and so I would hope that I could get it in a fairly timely manner and I don't have to wait until, as somebody said earlier today, after the next election. I'd like to try and get the information in a timely fashion so I can respond to some concerns that have been raised out there by some people in the general public.

Hon. Mr. Sloan: Well, I can assure the member that he will get the information, hopefully as soon as possible. If not, I will ensure that, after the next election, he does get it, and I will endeavour as the Minister of Government Services after the next election to ensure that the member does get this information in the most timely fashion possible.

Mr. Phillips: I wonder if the minister could give me a letter to that effect, just in the probable unlikely occurrence that he might not be here after the next election? At least, if we had something on record - and if the minister could write it in his own blood, that would be good - and it might pack a little more weight when we take it into the new minister's office. Heaven forbid that should happen, but at least we would have the commitment from the minister written in blood.

The reason I say this is that we have had commitments from this minister on video tape before and this has been denied by the side opposite. Video tape doesn't seem to cut it, so a couple of gallons of the minister's blood in a large signature would probably suffice. We'd know for sure that the minister would be really committed to the project.

But seriously, Mr. Chair, I would like a commitment fairly quickly from the minister because I think it's important to get back to individuals who have asked me what the difference is. I was going through the contracts and it kind of jumps out at you - the difference in the two prices for a similar project - so I'd like to know why there's a big difference. I know in this type of field there can be all kinds of different things that cause it to be different and cause the prices to vary, so if the minister could get back to me I'd appreciate that.

Hon. Mr. Sloan: As the member is aware, health ministers are routinely accused of being heartless. Therefore, not having a heart, it means that we don't have any blood to circulate so, by definition, we would be bloodless. So I can't guarantee the couple of gallons of my blood but what I can guarantee to the member is that we will move with the greatest alacrity and we will try to prompt our friends in ECO to a speedy resolution of this issue, as quickly as possible, to ensure that the member gets the kind of information that he requires.

Mr. Phillips: Mr. Chair, just a little bit of advice to the minister - when he's giving the blood, he shouldn't do it at the Whitehorse General Hospital. He may be left unattended and find himself in a great deal of trouble, in light of some of the comments he has made in the recent past.

Some Hon. Member: (Inaudible)

Hon. Mr. Sloan: Of course, I have full confidence in the staff over at the hospital and that they will do the right thing if I should happen to show up - for all patients, and especially for me. I know that the Member for Riverdale North certainly doesn't wish me any ill adventures.

Some Hon. Member: (Inaudible)

Hon. Mr. Sloan: Never, he says. And we trust him on that. What we will try to do, as our way of paying back his kind thoughts, is get this information on these two contracts to him as soon as possible. I have to remind him that not all contracts do belong to us, and some are in other departments, but we will try to encourage our friends in ECO to move as quickly as possible to provide the information.

Ms. Buckway: The minister had given us a ministerial statement in November, which referred to the government's desire to use Yukon-made furniture. I understand there has been a push on to fill the government warehouses with furniture and to get a catalogue out of what's available. Assets, I'm told, is supplying legs for oak slabs, which were brought in from outside. I don't believe that oak is a native Yukon wood. I gather that there is also a pile of laminate-finished pressboard. There are no factories here that make that sort of product. Can the minister explain where the furniture came from that's in the government warehouses?

Hon. Mr. Sloan: We will follow up on that as soon as possible, and I will attempt to find out the nature of the pressboard, et cetera, et cetera. With respect to the modular furniture, we have been working with manufacturers to develop the Yukon needs and our export potential. We've developed some functional design, and we've been developing prototypes. What we'd like to do is develop a unique Yukon product. That's not to suggest that the Yukon product would be made with all Yukon wood. There are probably some ways in which we can incorporate Yukon wood, but there are also some other materials that will be used.

The basic advantages are that we're seeking a faster delivery time for Yukon customers, we're seeking to develop some economies of scale to encourage the utilization of Yukon-made products, not only by ourselves but also by other agents, private ventures and so on, and we have been working with Northern Cadworks to develop some product specifications. I can look into the materials that the member has raised and get back to her.

Ms. Buckway: Could the minister also advise what the cost is of the furniture that's available from the government as compared to furniture that's available from retail sources in town?

Hon. Mr. Sloan: It would be more costly, that is clear, but I think there are obviously some issues around trying to develop the locally developed manufacturing capacity. We have acknowledged the fact that the cost will be higher. That reflects some of our own costs in the territory in terms of labour and so on. What we will try to do is to get a bit of a breakout on the different comparative costs of the furniture.

However, I think we have indicated that we're willing to pay a bit of a premium on this to ensure that our industry does develop here.

Ms. Buckway: Switching back to Connect Yukon for just a moment, with regard to the minister's technical clarification today, I just want to make sure that we're both singing from the same song book.

The communication system that a telephone company uses could be a digital-based transmission system, just like a broadcast system. And just as the satellites currently in use can carry both the older type analogue transmission technology or the newer digital transmission technology on the same satellite at the same time, we could see a telephone system also using either the standard analogue technology or a newer digital technology. Both could operate through the dish-to-dish system that we've become familiar with as the standard microwave system operating throughout the territory.

That's my understanding of what the minister said. Is this correct?

Hon. Mr. Sloan: Right now, about half of the current microwave system is digital and the other half is analogue, but clearly, digital signals have a superior technical quality - more reliable, greater amount of bandwidth. So, what is being proposed is that the analogue portion be upgraded to digital in order to provide the necessary improvement in service, such as clarity of transmission and bandwidth to all communities.

So, with respect to the description of the Connect Yukon program, it will be a digital ground-based radio upgrade. That is the term that they use.

Ms. Buckway: I'm wondering if the minister can advise if the preliminary information package that was to be sent to all known rural property owners in November of 1999 has in fact been sent.

Hon. Mr. Sloan: I don't believe that at this point it has been. We have been finalizing the arrangements with Northwestel, and that has occupied a fair amount of our time. I'm expecting that it will be coming out in the very near future. We do have some timelines that we have to meet in order to be able to get the first development of telephone service in the summer of 2000. So, we are pushing to try to get that package out to people as soon as possible to apprise them of what is being proposed, but I don't believe it has gone as yet, although we are expecting it very, very soon.

Ms. Buckway: Would the minister expect that it would be gone before the new year?

Hon. Mr. Sloan: That would certainly be our goal. We have to get this information out, and we have to get the process underway as soon as possible, so I would be very, very surprised if we didn't have it out before the new year. I would expect that we would get it out as soon as we possibly could.

Ms. Buckway: The timelines specify that, in December 1999, based on technical feedback from telephone service providers, the Yukon government will establish proposed telephone extension service areas. Service areas will be defined to maximize the opportunities for an area to receive service while holding costs to a reasonable amount.

When in December will we know which proposed telephone extension service areas the government is establishing?

Hon. Mr. Sloan: Well, I think earlier today I gave an outline as what we see as potential service areas and I think that's probably still fairly close to the mark.

I would imagine that there might be some refinement on some of these service areas, but I think, in general, the ones that we have initially proposed would probably be fairly close to what the final arrangement is.

Ms. Buckway: The question wasn't which service areas will they be; the question was when in December will we know? What's the date in December that that will be finalized?

Hon. Mr. Sloan: Well, once again, I would have to speculate on a date, but I would say that certainly before the end of the month we would know.

Ms. Buckway: Is the rest of this timeline, then, reasonable? The minister had suggested that there are some dates that have to be met. Are we, more or less, on track?

Hon. Mr. Sloan: Well, I would say that we are on track. There is a fair degree of work to do on this project. We have said that we would be looking at two years for the telephone extension aspect, and clearly we'd like to get a fair amount done this year.

We're projecting that probably the area that is on the Klondike Highway portion - so, in other words, the areas of Deep Creek, and so on - there are some areas there that, because of the critical mass of the lots, we think that the larger areas could be done much faster because you've got an economy of scale. You've got a large number of lots and so the ones with the greater number of lots would probably be the first to get done and then the others would be done in sequence after that.

Ms. Buckway: Does the minister have a figure in his mind of how many areas will have to vote 65 percent in favour of Connect Yukon for it to go ahead? For example, should the unthinkable happen and only one area supports it, will it still happen?

Hon. Mr. Sloan: It will happen for that area.

Ms. Buckway: So, it will happen area by area, even if a large number of places don't support it?

Hon. Mr. Sloan: That's how we're planning on proceeding. Clearly, this is not something you can force on people. You can't oblige them to take phones because, after all, if an area does agree to go ahead with this, there will be a cost that will be borne by the people in that area - the same way through the RTP process, so we're not interested in forcing this on people.

We recognize that there may be some people and some areas that may choose not to do this. There may be some areas that choose not to do this for economic reasons. There may be some areas that choose not to do this, simply because they don't want that kind of service. But what we're anticipating is that, in each area where it's being proposed, hopefully, the large majority of the lots - and we don't deceive ourselves that everyone will take advantage of this. We feel that for the large majority of the lots, the economics of the prospect will be encouraging enough that people will take advantage of it. Hopefully, they will recognize that, given the reduced costs and clear advantages of reliable, quality telephone service, the majority of the people will take us up on this offer.

Ms. Buckway: In some of the government's information, it says that, in general, any rural lot outside an organized municipality is eligible for the program. So if somebody who lived, oh, I don't know, at Aishihik Lake maybe, where there's only a couple of lots, if somebody like that were to apply, could they be considered for the program?

Hon. Mr. Sloan: If, for example, there was a group of lots, say at Aishihik Lake or Aishihik Village, that decided they wanted to get into this kind of program, one of the things that would have to occur would be an assessment of the respective costs. Just speculating, the costs may be so prohibitively high that they may choose not to take part. We're not ruling anyone out but I think the economics will clearly rule some people out. They just will choose not to try to follow this up.

We think that there will be some areas where people will be able to take advantage of this and there may be some areas where people choose not to.

Ms. Buckway: So, does that mean in an area where there is, for example, 54 lots, the cost would be less than in an area where there is 36 lots? Could the minister advise?

Hon. Mr. Sloan: Well, it's not merely a case of lots. It's a case of lots plus such issues as distance, plus issues such as how far off the main lines, and so on and so forth. There could be, say, 50 lots, but 100 kilometres back into the bush, and, clearly, the economics would be cost-prohibitive. It also could be the distribution of the lots - how the lots are arranged. Are they relatively contiguous? Are they scattered? Is there road access? A whole variety of factors can go into just the overall costs of an area in delivering service to that area.

So, I think it's not merely just a number of lots. I think there are other factors going in there. But clearly, for some of the major areas that we are looking at, such as Tagish and some of the areas out at Marsh Lake, there is enough of a critical mass of lots, as these areas have developed, as they have expanded. They have reached that kind of critical mass, and also they have some advantages in terms of proximity, being relatively contiguous in terms of being along roads, and so on and so forth, that would make the economics fairly attractive in those areas.

Ms. Buckway: I see that the minister is raising more questions than he's answering. I move we report progress.

Mr. Fentie: Mr. Chair, I move the Speaker do now resume the Chair.

Speaker: I will now call the House to order.

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

Mr. McRobb: Committee of the Whole has considered Bill No. 19, Third Appropriation Act, 1999-2000, and has directed me to report progress on it.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

Mr. Fentie: Mr. Speaker, I move the House do now adjourn.

Speaker: It has been moved by the government House leader that the House do now adjourn.

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

99-1-267

Yukon Housing Corporation 1998-99 Annual Report (Fairclough)

99-1-113

Fireweed Fund Corporation: no provisions under Fireweed Fund Act requiring bonding of employees (McDonald)

Oral, Hansard, p. 5458

99-1-114

Data suppression regarding vehicle sales by Stats Canada (McDonald)

Oral, Hansard, p. 5877

99-1-115

Forest fire billings to DIAND: Old Crow invoice, dated December 29, 1990; Pelly Crossing invoice, dated November 6, 1995 (McDonald)

Oral, Hansard, p. 5879

99-1-116

Students (number of) registered in education and nursing-related fields for academic years 1995 to 1999 (Moorcroft)

Oral, Hansard, p. 5669

99-1-117

"School closed" days: explanation (Moorcroft)

Oral, Hansard, p. 5675

99-1-118

Training trust funds: 1998-99 expenditures (Moorcroft)

Oral, Hansard, p. 5670

99-1-119

Substitute teachers' timesheets: process for handling (Moorcroft)

Oral, Hansard, p. 5697 to 5698

99-1-120

Metal working course at Robert Service School: status (Moorcroft)

Oral, Hansard, p. 5702

99-1-121

School council vacancies: process for filling (Moorcroft)

Oral, Hansard, p. 5703