Whitehorse, Yukon

Thursday, March 2, 2000 - 1:30 p.m.

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.



In recognition of Arctic Winter Games volunteers

Hon. Mr. Keenan: Today I rise on behalf of the Legislative Assembly to pay tribute to the extraordinary efforts of all who have worked so hard to prepare for the 2000 Arctic Winter Games coming to Whitehorse in just three days' time.

It's a special honour for Yukoners to host the 30th anniversary of the Arctic Winter Games and to have in attendance Her Excellency the Governor General of Canada. Whitehorse will host over 1,700 athletes, cultural delegates, coaches and mission staff from the circumpolar north, including Russia, Greenland, Alaska and northern Canada.

The 2000 games are special in another way as well. For the first time, athletes and cultural delegates from Nunavut will participate side by side with those from the Northwest Territories.

We're also pleased to welcome Nunavik, northern Quebec, back into the games family for the first time since 1986.

The Arctic Winter Games unites circumpolar people in a celebration of athletic and cultural spirit that is unique to the north. I know that all Yukoners share my pride in welcoming the athletes, the cultural delegates, the coaches and supporters from across Canada and the circumpolar north.

I'd like to acknowledge the work and the enthusiasm of the City of Whitehorse in its efforts to bring the games here, and a special thanks to the host society and the thousands of volunteers who have pledged their time and support. Thanks also to the local, regional and national businesses whose sponsorship helps to make the games possible.

To the Team Yukon mission staff, I extend my gratitude for their hard work on behalf of our athletes and coaching staff. Last, but not least, hats off to the athletes themselves, the cultural delegates and the coaches whose devotion to athletic and cultural excellence is a testament to the power of the human spirit.

The true gold in these games is to be found in the camaraderie, the good spirits and the volunteerism that is embodied by the Arctic Winter Games, and on behalf of the Yukon government and all of the Legislative Assembly and the people of the Yukon, I'd like to wish the very best to the Yukon athletes and the delegates of the cultural contingencies and coaches. We're very proud of your accomplishments in being chosen to represent Yukon at the games. May you achieve your personal goals and your personal objectives and, most importantly, have fun.

Thank you, Mr. Speaker.

Speaker: Introduction of visitors.


Hon. Mr. Harding: I notice we have a friend of the Yukon in the gallery. I'd like the members to welcome Representative Jeannette James from Alaska, who is most commonly referred to here as "the little engine that could". She's here to talk about railroads. We'll be meeting with her later, and she's meeting with folks in the Chamber today. So, welcome Representative James.


Mr. Ostashek: Mr. Speaker, it is a great honour for me to introduce my granddaughter, Jamaica, to the Legislature. She's in the gallery today with my partner, Carol Pettigrew, her grandmother. Please help me to welcome her.


Speaker: Are there any returns or documents for tabling?

Are there any reports of committees?

Are there any petitions?

Are there any bills to be introduced?


Bill No. 95: Introduction and First Reading

Hon. Mr. McDonald: Mr. Speaker, I move that Bill No. 95, entitled An Act to Amend the Income Tax Act (No. 2) be now introduced and read a first time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 95, entitled An Act to Amend the Income Tax Act (No. 2) be now introduced and read a first time.

Motion for introduction and first reading of Bill No. 95 agreed to

Speaker: Are there any returns or documents for tabling?


Hon. Mr. Keenan: Begging your pardon, Mr. Speaker, I have a document for tabling, if I may. I have the Beringia Centre budgetary analysis that we provided to MacBride Museum for tabling.

Speaker: Are there any notices of motion?

Are there any statements by ministers?

This then brings us to Question Period.


Question re: Family day homes, CSA standards

Mrs. Edelman: My question is for the Minister of Health and Social Services. The minister's department has recently adopted the Canadian Standards Association standards for children's play spaces and equipment and has applied those standards to family day homes. Mr. Speaker, these standards are to be applied to unsupervised public play spaces for children, such as playgrounds at schools and in subdivisions.

Mr. Speaker, only one of the City of Whitehorse playgrounds and only two of the school playgrounds in the Yukon meet these standards. Yukon family day home operators are very conscientious about supervising the children in their care. The backyards of family day homes are not public spaces provided for the community. They are owned by the day home operators and their families and access is only given to the children in the care of those operators.

Mr. Speaker, why has the minister applied these clearly inappropriate standards on family day homes in the Yukon? Does the minister have misgivings about the supervision of the children in the care of our day home operators?

Hon. Mr. Sloan: No, not at all, Mr. Speaker. I have full confidence in the ability and dedication of the home operators. The issue is one of CSA standards, and with respect to that, we adopted the CSA standards in the mid-1990s as a benchmark for safety for all daycare and family day home operations.

In 1998, the new standards were brought in. We have clearly said that we are not interested in imposing difficulties. We have actually grandfathered in all of the equipment.

The aspect that seems to be most problematic is that of impact absorption on the surfaces. We do know that there have been nine children injured in playground accidents in the licensed daycare spaces and so on in the territory.

We are attempting to work with the family day home operators. There are some legal aspects there that do need to be taken into account, not the least of which is that there has been a recent case in Ontario, where a playground operator was held liable because they did not adopt the CSA standards.

Now, I know that the member will come back and say that Ontario has adopted a different manner. That is true; however, I need to remind her that, in Ontario, there are agencies which license the day homes on behalf of the Ontario government.

I have discussed this with Justice. We are trying to get a clear sense of what this means for us, and I can tell the member that I sent off a letter yesterday to the family day home operators advising them that we would not be proceeding with these standards on family day homes until we had a clear sense from Justice as to where this was going.

Mrs. Edelman: Mr. Speaker, the Department of Health and Social Services, the Family and Children's Services, has asked all family day homes to implement play-space plans with the department. What they have said to these day home operators is, "If you don't do this, then there is a question of legal liability."

I think it's important to realize just how strange these standards are and how inappropriate they are.

First of all, these standards are meant to apply to people's homes. They are on private property. The CSA standards for public, unsupervised playgrounds say the Little Tyke slides - that's the one that's about two feet tall - have to have six feet of sand on either direction surrounding it. I know a case of one family day home operator who had to fill her entire yard with sand so that she could have two Little Tyke toys, this big, two feet tall, in her backyard.

Mr. Speaker, this operator did as she was supposed to, and got the grant to fill her yard, but the sand has been used by every cat in the neighbourhood. She has a giant litter-box for a toy this big.

Mr. Speaker, why is the minister insisting on enforcing these ridiculous rules?

Hon. Mr. Sloan: Well, Mr. Speaker, I have no desire to enforce anything on anyone, but we do have a responsibility to children and a responsibility for children's safety, and that's what we intend to follow up on.

I have had discussions with representatives from family day homes. They have raised some salient points, valid points, and we're taking a look at how we can modify that. We have offered financial assistance in modifying facilities. We have essentially grandfathered in the equipment. We're not asking people to remove the equipment.

The question still comes down to the impact absorption of the surface underneath. We will continue to work with the day home operators, as with the childcare centre operators, and, as I have indicated to the member, I have sought some legal guidance on this. There may be some ways in which we can seek some clarification. We are advised that, basically, unless there is some form of legal waiver, we, being the licensing agency, could be held liable in the case of an accident. We have sought some further clarification on this to see if there are ways that we can make things easier for the childcare operators. We are not interested in imposing anything of great difficulty on individuals or centres. We are trying to work with them, and we are trying to come to this. And, as I indicated to the member, I sent a letter off yesterday to the head of the family day home operators indicating that we would not be moving on with these -

Speaker: The minister's time has elapsed.

Mrs. Edelman: Mr. Speaker, the problem is that everybody becomes liable if you adopt the CSA guidelines. The CSA guidelines don't make a lot of sense. The Canadian Standards Association standards for playgrounds say that play equipment must be surrounded by sand, because it is a soft material for children to land on when they come off play equipment; hence, the issue about impact. Sand in Yukon playgrounds is frozen for nine months of the year. It doesn't matter whether you land on sand or pavement when the ground is frozen, yet the minister's department is forcing people to make their backyards into giant litter boxes. When is the minister going to utilize a little common sense, like the Province of Ontario did initially, and work with the Society of Yukon Family Day Homes to develop appropriate standards for outdoor play spaces for family day homes?

Hon. Mr. Sloan: Well, Mr. Speaker, I think I indicated before that we were attempting to work with the associations in that regard, and we are still attempting to work with the family day homes. The member has raised the issue of Ontario, and I indicated before that Ontario works their childcare and childcare licensing somewhat differently from what we do. I've also indicated to the member that there was a very recent case in which the playground operator was held liable. They were held liable primarily because the nature of the injury was such that the court held that the current CSA standards are the industry standards, and therefore the benchmark that had to be adhered to. Now, that is in Ontario, the province that she's fond of quoting, and perhaps ideologically she's in tune with the premier there.

I can tell the member that we are continuing to work with the association. I have written to the Society of Yukon Family Day Homes, saying that we will not be proceeding until we get some clarification. There may be some ways around this. There may be some avenues for us to resolve this legal issue, and that's what we'll continue to do.

Question re: Family day homes, CSA standards

Mrs. Edelman: This is how the minister works with the day home association and how he works with the day home operators - the same way that he brings up the spectre of legal issues in the background.

Now, the minister goes on and on about how happy day home operators are with the standards, and he has said that on a number of occasions, so let's examine what happens in this case. The minister's department sends out a letter to the operator asking for a playground plan. Then they send out a reminder letter. Then at the next inspection, if you haven't submitted a plan, you are given a non-compliance letter that gives you 30 days to put in a plan for approval. And then, if you still do not submit a plan, you are given a letter saying that if there is no plan submitted forthwith, then your operating grant - your money - is in jeopardy.

Mr. Speaker, day home operators are putting in plans because they are having their livelihood threatened and they had that legal spectre hanging over their heads. They are not putting in the plans because they approve these clearly inappropriate play standards.

Why is the minister forcing day home operators to agree with these appropriate standards instead of working with them to look at the legal issues and the financial issues?

Hon. Mr. Sloan: First of all, I'm very pleased that the member raised the issue of the grants, because, as she will recall, we were the government that lifted the moratorium on grants to day homes last year and have provided support for, I believe, 35 day homes that did not receive the grant before. So I'll thank her for her reminder on that, because it does sometimes slip my mind.

And, as a matter of fact, that was an issue that the - I thank my colleague there because I always need to be reminded of the fact that the Liberal Party did vote against giving those grants to family day homes.

The CSA standards are not standards that we dream up. They are not standards that we enter into capriciously. These are standards that were adopted by the childcare branch back in the mid-1990s, and we've tried to keep pace with the changes in this area, and we are working, as I said, with all groups. I have to remind the member that our first and foremost concern is for the safety of children. I think we're all agreed on that. Now, the member rolls her eyes, but that's one of my concerns, and she talks about the legal spectre. The legal spectre is a very real thing. I think we would be negligent - clearly negligent - if we did not take into account the issue of liability, and liability is a very real aspect. There are such things as vicarious liability, as well.

We are trying to work with those family day home operators. I spoke yesterday with a representative for Justice. We are seeking further clarification, further opinion, and I have asked the department to indicate that we will not be proceeding until these things are resolved.

Mrs. Edelman: Mr. Speaker, if we are going to talk about liability, what about the playgrounds in every single Yukon school here in the territory? Those playgrounds don't meet CSA standards. How come there is one rule for family day home operators and another rule for the government? It doesn't make sense.

Now, there was a subcommittee of the Childcare Board that recently conducted a survey of our 46 registered family day homes. Forty of the 46 family day home operators are not happy with these now very inappropriate guidelines for public, unsupervised playgrounds being applied to their day homes. These are very responsible people, Mr. Speaker. They supervise the children in their care very well, and they are very interested in providing a safe environment in the outdoor play spaces for those children. These standards are ridiculous. The family day home operator is allowed to take her kids to the local playground that doesn't meet the CSA guidelines, but the operator is expected to meet these guidelines in her own backyard. It doesn't make sense.

I'll read to you from the survey that was done. It says: "The most common concern by family day home operators was that of the lack of common sense regarding the application of the CSA guidelines to family day homes. It was generally felt that while the guidelines might be appropriate for the environment they were intended for - for example, public playgrounds - they are not suitable for family day homes."

Mr. Speaker, why won't the minister commit to using a little common sense, not have the liability issue and the money issue over people's heads, and work with the family day home association to develop these appropriate standards? I haven't heard that commitment from the minister yet.

Hon. Mr. Sloan: Well, Mr. Speaker, I'd like to remind the member that such wild and crazy guys as the Canadian Pediatric Association and Health Canada have indicated that they do have some concerns with protective surfacing. They have indicated that, and these are a couple of groups that do agree with the CSA standards. We are not interested in imposing anything on anyone. She makes reference to city playgrounds. It may be of interest to her to know that we have been working with the Yukon Childcare Association and the City of Whitehorse on the issue of public playgrounds. The City of Whitehorse is also aware that there are issues around the liability with their public playgrounds, and they've been working in this regard.

The member may feel that the City of Whitehorse has no business imposing the CSA standards. I would suggest that that's an issue to deal with in regard to the city. As I have indicated to the member, I have sent a letter to the family daycare operators association basically indicating that we're going to hold off on this until we get some legal aspects clarified and find out if there are other opportunities for us.

Mrs. Edelman: Mr. Speaker, the liability issue is very much the case in Yukon school playgrounds. Every school playground in the Yukon is at a Yukon school. Pardon me, I misspoke myself. At every Yukon school, we have a playground, and only two of those playgrounds meet the CSA standards. If the minister is very concerned about liability, then he needs to protect this government from liability issues around those playgrounds at schools instead of trying to take the same standards and apply them to family day homes.

Mr. Speaker, this is a much larger issue than the minister is making out, and he is not speaking to family day home operators and he's not using any common sense in this issue.

Mr. Speaker, I'd like the minister to look at liability legislation, if he's that worried about it, and I'd like the minister to use a little bit of common sense and consider that these CSA guidelines are for public, unsupervised playgrounds and are not appropriate for family day homes. Will he do that?

Hon. Mr. Sloan: Mr. Speaker, I have already indicated that we are trying to work with groups like the Yukon Childcare Association and others. Now, she seems to be broadening her scope to include everything and everyone.

I would suggest that probably Education is looking at their own issues around playgrounds and other public facilities. I know the City of Whitehorse is.

We are continuing to work with the Yukon Childcare Association. We are continuing to work with the family day home operators. I've repeated it now, I believe, for the fifth time, that I've received a letter from the group. They have indicated their concerns with it. We've raised some concerns. I've asked for clarification. I've written back saying we're not proceeding with this until we do get some clarification and address some of the liability issues that are around there. That seems eminently fair to me.

The member seems to be posturing, but I suggest that she's somewhat behind the times.

Question re: Whitehorse Correctional Centre, staffing from Teslin facility

Mr. Phillips: My question is to the Minister of Justice.

It's my understanding that a competition was recently held for five full-time positions at the Whitehorse Correctional Centre in January, and the competition was concluded and five auxiliary employees were advised by telephone that they were successful.

Prior to the paperwork being completed, however, the permanent job offers were subsequently withdrawn from these employees and offered to the staff from the Teslin Community Correctional Centre. As the minister can well imagine, such actions by the government are bound to cause some hard feelings among the staff.

Can the minister confirm the information and state what plans she has to rectify the situation?

Hon. Ms. Moorcroft: Well, Mr. Speaker, I don't think that the member has presented all of the information. I can confirm that competitions were held and that conditional offers were made, subject to appeal.

The member is also aware that, as I have indicated in this House, we are anticipating shutting down the Teslin facility as of March 31, 1999, on a temporary basis, and that when that occurs, there are provisions of the collective agreement that will apply to any employees who may be laid off at the Teslin facility.

Mr. Phillips: I can tell the minister that there were a lot of disappointed people up at the correctional facility who thought they had permanent jobs and were advised they had permanent jobs, and then were told that, in fact, the jobs were now taken by the people from Teslin. In view of the fact that five candidates had been contacted by the Public Service Commission, advising them that they were successful, and the competition was closed, can the minister explain how, legally, the job offers can be unilaterally rescinded once accepted, and offered to someone else.

Hon. Ms. Moorcroft: As that member should be aware from his previous experience, the collective agreement and the Public Service Act apply.

Mr. Phillips: I'm trying to find out from the minister if they can rescind a verbal job offer. That was the question I asked the minister. Can the minister advise the House if she has any further information about the future of the Teslin jail? Are all the employees in the Teslin jail going to be required to move to Whitehorse to obtain a job, or are they going to be offered some work in Teslin?

Hon. Ms. Moorcroft: First of all, to clarify for the member's information, the facts are that conditional offers were made, dependent on appeals. There have been appeals launched. In addition, where there are lay-off notices given, the collective agreement has protections available for employees. The collective agreement and the Public Service Act will apply.

Question re: Whitehorse Correctional Centre, staff morale

Mr. Phillips: For the minister's information, Mr. Speaker, there are five jobs available, and I understand there is only one outstanding appeal. The other appeals were dropped. But meanwhile, the employees at the Correctional Centre are in limbo wondering what their future might hold for them.

Once again, to the Minister of Justice: the minister has serious staff morale problems developing at the Whitehorse Correctional Centre. The situation has been developing over the past three or four years. There has been revolving-door management at the centre - I believe we have had five managers in three years - and staff morale is at an all-time low. Currently, there are 16 auxiliary positions. Many of these 16 people applied for the five permanent positions. Most of these people went through four to five hours of job interviews to win these much-sought-after positions. Their hopes were dashed, literally hours after they were told they had the jobs.

They were phoned and told that they didn't have the jobs any more. The minister has known for years that the Teslin jail simply wasn't working. I'd like to ask the minister why, if they knew months ago that they were going to transfer the Teslin people to Whitehorse, did they hold a competition here in Whitehorse for all the people here, raise their hopes and give them some expectation that they might end up with a permanent job? Why did they do that?

Hon. Ms. Moorcroft: Mr. Speaker, there were some long-standing vacancies at the Whitehorse Correctional Centre, and a competition was let to fill some vacancies. In the interim, due to a lack of offenders at the Teslin Community Correctional Centre, that facility will be closed down on a temporary basis as of March 31. The Yukon government has a collective agreement with its employees. Under the provisions of the collective agreement, there are protections in place for any employees who may be laid off. We will respect the collective agreement.

Mr. Phillips: This is a caring NDP government, Mr. Speaker. They knew months ago - years ago - that the Teslin facility wasn't working. They were looking at options. What I'm asking the minister is, if they knew they had to do something with the Teslin employees, why did they raise the expectation of the 15 people who are on auxiliary at the Whitehorse Correctional Centre and have them go through the whole charade of an interview for four or five hours, then offer them jobs, and then hours later rescind the jobs? What was the purpose of the exercise - just to demoralize the staff at the Correctional Centre? Because that's what they've done. What will the minister do now to rectify the situation and improve the morale at the Correctional Centre?

Hon. Ms. Moorcroft: Mr. Speaker, the member's charge is nonsense, and he's fear-mongering, as he likes to stand in this House and do. I can tell the member, as I have said, that the collective agreement will apply, that we will do our best to serve the employees in Teslin who are potentially facing job loss due to the closure of that facility on a temporary basis, as of the end of next month. We will respect the collective agreement and the Public Service Act.

Mr. Phillips: The minister never answered the question. The question: why did the minister put the 16 auxiliaries through the process of an interview - a five-hour interview - when they had no intention whatsoever of hiring them permanently. Why would they do that? These people had expectations they were going to get a job and in fact were phoned - five of them were phoned - and told they had the work, and then within hours, or days, were contacted again and told that they were going to fill the positions with people from Teslin. That's not fair to people. I don't care what anyone calls it; I want to know why the minister did that. Why did the minister's department treat those people in that way?

Hon. Ms. Moorcroft: Mr. Speaker, that's not the case, and the minister did not do that. The officials in the Department of Justice and at the Public Service Commission do their work on a professional basis, and they respect the collective agreement that this government has - that we've negotiated with the employees union - and we respect the provisions of the Public Service Act.

Question re: Range Road mobile home park

Ms. Buckway: I have some questions for the minister responsible for the Yukon Housing Corporation. The NDP government has spent $1.9 million on a trailer park on Range Road that no one wants to live in. A spokesperson for Yukon Housing admitted in July 1999 that there is little interest in the park due to the weak economy. That's the first problem: a weak economy - thanks to the NDP government. The second problem is the cost of the lots. This was supposed to be an affordable option for people in older mobile homes. It's not. The government is undermining what little security Yukoners in older mobile homes have. People are not going to give up a spot in a mobile home park with a monthly bay rent for a spot in a mobile home condominium park where somebody forgot to tell the contractor not to cut down all the trees, where they have to first buy the lot and then pay a monthly condo fee, where they can't even park their car beside their mobile home. Look at these pictures, Mr. Speaker. It's a disgrace. It's a wasteland. If the goal was to create affordable housing, can the minister tell us why the lots are not affordable?

Hon. Mr. Fairclough: Mr. Speaker, the lots are affordable. They're some of the lowest lots that can be accessed by the older mobile home owners in the parks in Whitehorse. They're between $25,000 and $30,000 and some of them will be paying as low as $500 a month. This includes mortgage and everything to do with the land. They're not paying pad rent like they do in other mobile home parks, which is close to $300. What they would be getting is improvements to their home, because we do have programs set in place to upgrade their homes to a safety standard and energy efficiency. So, they would be going through that process through the Yukon Housing Corporation. They go ahead with that program and then they can go into these lots. We do have four other people who have been approved through the program and are waiting for spring to have their units moved on to the lots.

Ms. Buckway: Mr. Speaker, people who live in existing trailer parks have crunched the numbers. They've come to the conclusion that this so-called option created by the NDP government is no option at all. Yukon Housing's goal is to eliminate older mobile homes for health and safety reasons. That's a good thing. We support that. What we don't support is that this NDP government, which has no concept of what people can actually afford and how anything to do with money works, has spent $2 million on a project where the lots are no cheaper than existing lots in Arkell.

Mr. Speaker, let me quote from a letter we received in our office. "I thought it was to have been affordable housing lots. $30,000 isn't affordable in my books. The NDP government and their fiscal mismanagement have created this mess. What do they plan to do to get out of it, or are they just leaving it for the next government to clean up?"

Hon. Mr. Fairclough: Mr. Speaker, the difference between our government and the parties opposite is that we are doing things for the people who are in need. We have surveyed people, and they have come forward and asked for an option. We gave it to them, and that will be there for them for all time. When more people are accessing the programs that we have developed in the Yukon Housing Corporation to be able to have a lot in Mountainview Place, then that is available for them.

Ms. Buckway: That was a great answer, Mr. Speaker. It had nothing to do with the question.

The government is doing things to the people in need, not for them. The Government Leader noted the other day that people can't move into this mobile home condominium project, Takhini Bluffs, until the thaw. We went through the entire summer of 1999, and one person moved into this shining example of NDP financial management. We have a $2-million park that nobody wants to live in because the lots are not, as was promised by the NDP, affordable. We're calling the government's bluff on Takhini Bluffs. What are they going to do to fix it?

Hon. Mr. Fairclough: Well, Mr. Speaker, we have been working with the mobile home owners over the past year. Yukon Housing Corporation is again going out and doing more advertising and seeking more interest with the mobile home owners. As of this Friday, you'll see advertisements in the papers about the programs that are being offered through the Yukon Housing Corporation - how people can access these programs, upgrade their units, move them on to a lot that they can own and not put money out for rent each month.

I know the member opposite might not like that, but that's what the people in the mobile home parks wanted and asked us to do. So, we're doing it. The members opposite don't want to do it and won't do it, but we're doing something for them to improve the health and safety issues that are out there.

Speaker: The time for Question Period has now elapsed.

Some Hon. Member: Point of order.

Point of order

Speaker: Minister of Economic Development, on a point of order.

Hon. Mr. Harding: The member opposite, in her question, just responded to excerpts from a letter. Our House rules are pretty clear that when you quote excerpts from a letter, you must be prepared to table that letter, and I would ask her to table that letter to the House.

Speaker: Will the Member for Lake Laberge table that letter, please.

Ms. Buckway: I will, Mr. Speaker, as soon as I can get back to my office and make a copy.

Hon. Mr. Harding: If you will indulge me, Mr. Speaker, during tabling of documents, I had a couple of documents that I wanted to table.

Unanimous consent to revert to tabling returns and documents

Speaker: Order please. Is there unanimous consent to revert to tabling of documents?

All Hon. Members: Agreed.

Speaker: Unanimous consent is granted.


Hon. Mr. Harding: I'd like to table the report on the Team Canada trade mission to Japan for September 11 to 18, 1999, as well as a letter to Bob Nault about the mine assets in Faro being sold.

Special adjournment motion

Mr. Fentie: Mr. Speaker, I move that the House, at its rising, do stand adjourned until 1:30 p.m., Monday, March 13, 2000.

Speaker: It has been moved by the government House leader that the House, at its rising, do stand adjourned until 1:30 p.m., Monday, March 13, 2000.

Motion agreed to

Speaker: We will now proceed to Orders of the Day.



Bill No. 94: Second Reading

Clerk: Second reading, Bill No. 94, standing in the name of the hon. Mr. Keenan.

Hon. Mr. Keenan: I move that Bill No. 94, entitled An Act to Amend the Assessment and Taxation Act, be now read a second time.

Speaker: It has been moved by the Minister of Community and Transportation Services that Bill No. 94, entitled An Act to Amend the Assessment and Taxation Act, be now be read a second time.

Hon. Mr. Keenan: Mr. Speaker and hon. members of the Assembly, today it is my pleasure to discuss the amendments to the Assessment and Taxation Act. This act will allow the designated historic sites located outside of municipalities to be exempt from property tax.

Tax exemption is an important tool to encourage and enable property owners to viably keep and maintain historic properties. Providing additional disposable income to the owners of these properties will provide an incentive for maintenance of the heritage structure.

In order to be eligible for the tax exemption, the property must be designated as a Yukon historic site. This will require a one-time application for assessment by the Department of Tourism's heritage branch under the Historic Resources Act. Designation as a historic site will require the property owner to enter into a historic resources agreement with the Yukon government that provides for the maintenance and preservation or protection of a site. The agreement will outline each party's commitments and will be binding through registration of the document in the land titles office.

Once the property is designated as a historic site, Community and Transportation Services can implement the property tax exemption.

This amendment, Mr. Speaker, also reduces red tape.

Historic sites outside municipalities that are owned by non-profit organizations can be exempted from Yukon government property taxes under the current property tax exemption policy or under the Historic Resources Act. Amending the act guarantees the exemption for these properties rather than the current annual case-by-case review. This amendment also extends the exemption to privately held or leased properties that have been designated as a Yukon historic site.

Mr. Speaker, I'm pleased to discuss a further amendment to the Assessment and Taxation Act, which will allow the deferral of local improvement taxes for electrical and telecommunications services to be increased from 10 years to 15 years.

In the spring of 1998, the government approved the rural electrification policy and the rural telecommunications policy, and these two new policies replaced the former rural electrification and telephone regulations. This is another example, Mr. Speaker, of red-tape reduction. After a year of operation, comments were sought from rural people who were using this program, as a part of the review of the two policies. The review showed that the two policies required slight adjustment, and these revisions, along with the 15-year deferral, were announced in January 2000, and this amendment provides the legislative basis for the extended deferral period.

Under the rural electrification policy and rural telecommunication policy, property owners may amortize the payment of a local improvement charge for services up to a maximum of 15 years. If a property owner is paid an amortized local improvement charge for a stand-alone service, and grid electrical service is then provided to this same area, that person could be forced to pay two local improvement charges at the same time for two types of electrical service.

Allowing the local improvement charge to be deferred for 15 years is consistent with the maximum amortization period and ensures that property owners would pay only one local improvement charge at a time for each type of service. By providing for the deferment of the local improvement charges, property owners are encouraged to support the service extensions. Property owners who do not want the service immediately can still vote in favour of the service but can choose to defer 100 percent of the local improvement tax. They can do that for a period of the deferment, until they hook up to the services or until the property is sold. The deferral option provides temporary property tax relief to these property owners who do not immediately want the service but maintains fairness and equity with their neighbours by requiring them to make the appropriate contribution at a later date. Even though they may not hook up immediately, the availability of service increases the property value, and the ability to hook into the system at a later date is also a benefit to these property owners. I look forward to the discussion with the members opposite during this debate.

Ms. Duncan: Heritage is an integral part of our Yukon identity. It's a valuable component of our attractiveness as a tourist destination. We pride ourselves on our protection of our heritage resources and strive continually to find innovative and effective mechanisms for encouraging the owners of buildings to designate and to protect them. This tax exemption is one of several tools, which can be used to encourage protection of our heritage resources or buildings. The tax exemption being put forward provides legislative certainty to owners that the exemptions will be available to them if they designate their buildings.

When a building is designated, there is an agreement between the owner and the government that steps will be taken to ensure the integrity of the building, both structurally and, Mr. Speaker, in heritage terms.

Unfortunately, improvements to properties usually result in an increase to property tax assessment. This is a disincentive to the owners to make improvements. This exemption removes that disincentive for improvements. It's intended to reduce the tax burden, freeing up disposable income, which can then be used for maintenance on the buildings. It's also intended to guarantee a tax exemption for owners. If you own a building outside a municipal boundary, and that building has been designated a historic site, you'll be guaranteed the tax exemption.

This change to the act is one measure among many that will ensure the protection of our valuable heritage resources. Like all measures to support the designation, maintenance and integrity of our historic, built environment, we support this particular piece of legislation that the government has brought forward.

Mr. Speaker, I note that, for discussion during debate on this particular piece of legislation, municipalities have their own incentives, and that this piece of legislation is for buildings outside of municipalities. There are not very many of these buildings, and the tax loss is anticipated to be insignificant, in terms of numbers, in the overall budget. I would like that information from the minister during debate on this legislation, and I would like the details of discussions with municipalities in order that we're aware of the impact that this legislation will have on them. From my research on this piece of legislation, I gather that it is not precedent setting; however, I would like that confirmation that the minister's officials have sought to obtain. It could prove to be an incentive to municipalities, and I'm looking forward to a discussion on that, as well.

Mr. Speaker, in conclusion, our caucus is in support of this legislation, and we're looking forward to discussing it in detail with the minister during debate.

Thank you.

Mr. Ostashek: Mr. Speaker, I rise today in support of this legislation. We don't have any difficulty with it at all. We've researched it. Our critic has done a tremendous amount of work on it, and we will be supporting the bill.

Thank you.

Speaker: If the member now speaks, he will close debate. Does any other member wish to be heard?

Hon. Mr. Keenan: Mr. Speaker, it's not often that I get the chance to agree with the official opposition or the leader of the third party, but certainly I do take their words as sincere because we, as a government, absolutely feel that heritage is very, very important to us. That's why you see a $400,000 increase in heritage spending over last year's mains as compared to the debate that we're entering into.

It's so obvious that we support it, because we've done it when it wasn't even within our jurisdiction, as we have done with the Taylor House, the White Pass trolleys. A prime example of our heritage protection is what the Minister of Renewable Resources is doing with the protected areas strategy. We are looking to protect and preserve the heritage of the Yukon Territory in many different forms. We're doing it through the forms of financial contributions, an increase of $400,000 for the museums, the historic sites and historic resources. I've given increases to the Yukon Historical and Museums Association. There is a trolley on the waterfront, Mr. Speaker, an integral part of our cultural heritage, which is on display in the foyer of the government building here, now, for the next couple of weeks. Our waterfront development. We've put dollars into the faith and belief that the Dawson City Arts Society is going to be an integral part of the heritage of the Yukon Territory, and we've put forth operational dollars, as I said, to support them in their beginning years.

Yes, Mr. Speaker, it is precedent setting. We've had a write-up in a paper - I forget it's name but it's the national paper on Canadian heritage - and they've used the Yukon as a glowing example of what they thought the other jurisdictions could and should be doing.

So I thank the members opposite for their support. I look forward to the debate, and, yes, I will guarantee that the information required is brought forth during debate.

Motion for second reading of Bill No. 94 agreed to

Mr. McRobb: 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 the House resolve into Committee of the Whole. Are you agreed?

Motion agreed to

Speaker leaves the Chair


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

Some Hon. Members:Agreed.

Chair: Fifteen minutes.


Chair: I will now call Committee of the Whole to order. Committee of the Whole is dealing with Bill No. 99, the main estimates.

Bill No. 99 - First Appropriation Act, 2000-01 - continued

Chair: We are on the Executive Council Office.

Executive Council Office - continued

Chair: Is there further general debate?

Hon. Mr. McDonald: Mr. Chair, I know the leader of the Yukon Party was interested in canvassing issues and, obviously, I would like to give him the opportunity to do precisely that. I guess if the leader of the official opposition has any thoughts, it would probably help keep us going a bit.

Ms. Duncan: Perhaps we could begin by revisiting the issues around the costs of the travelling by the ministers. I wonder if the Government Leader has been able to assemble that information as yet. The leader of the third party indicated that there was to be some discussion and further detail. I wonder if the Government Leader is intending that we will have that after the spring break.

Hon. Mr. McDonald: Yes, Mr. Chair, that information is being put together in the most recent tabulations, in terms of travel. It is being updated. I had a look at some of the work this morning, and I have asked that it be completed, and it will be done shortly.

Mr. Ostashek: I want to explore with the Government Leader some of the developments that happened yesterday which I think have the potential of having some very serious ramifications for the Yukon, and those are the two announcements that were on the radio yesterday of the Northwest Territories Assembly coming out in support of construction of a natural gas pipeline down the Mackenzie Valley. That in itself is alarming enough, but the next announcement right after it was that 90,000 square kilometres of land was going on the auction block for oil and gas development in the Mackenzie Delta. Now, the Government Leader is aware, because he has been around here almost as long as I have, that the Mackenzie Valley pipeline was the preferred route back in the 1970s, for the export of gas from the Arctic. The Alaska Highway pipeline alternative was only born when there was resistance to the building of the Mackenzie Valley pipeline, if I recall correctly.

And then after that came the Dempster lateral, to move the gas from both the North Slope and from the Mackenzie Delta. Now that we have the Northwest Territories Legislative Assembly taking what the reporters call a historic step, to actively promote the construction of a major natural gas pipeline, and the fact that, at the same time, the Inuvialuit are letting a vast piece of land go up for bids, open until April 14, according to the newscasts. It seems to me that this is going to put tremendous pressure on the Yukon.

As the Government Leader knows, we discussed a motion in here the other day about reactivating the Alaska Highway pipeline route. With the gas that's being found off the southeast coast of the Yukon in the Northwest Territories, and with all of the players, it appears, in the Northwest Territories supporting this initiative now, quite conceivably it's going to start snowballing. And we may get left behind because, if the minister - the Government Leader - will recall at the same time as the Mackenzie Valley pipeline was being discussed, there was the discussion of a gas pipeline from the North Slope in Alaska, across the Beaufort, to hook up with the Mackenzie Valley pipeline. So there is going to be tremendous pressure on us on that lateral being put in to get gas out of Prudhoe Bay, as well.

My concern, Mr. Chair, is that under the Yukon Act that we have now, our jurisdiction stops at the low-water mark of the Beaufort Sea. Conceivably, this project could go ahead without us having any real say into whether there's a pipeline built across the Beaufort if it didn't touch on our territory or our jurisdiction. That's one of the reasons I have been vigorously promoting that this issue should be dealt with while we're proposing the amendments to the Yukon Act, so that we have a real say in the Beaufort.

As the minister is aware, both the Northwest Territories and Nunavut have jurisdiction out to the 12-mile limit, and, with the Northwest Territories promoting this gas pipeline, there's a real possibility that they will also be promoting the hookup with the Beaufort, with the North Slope, and I think there would be some very serious ramifications for the Yukon if that were to happen. I believe we need to act very quickly to see what we can do to resist this, to continue to promote the Alaska Highway as the most viable route, and the Dempster lateral, and to try to nip this in the bud before it gets any further.

And I would feel a lot more comfortable if we had Yukon Act amendments that give us some jurisdiction out to the 12-mile limit, as our neighbours do. I think our case would be a lot stronger then, to be able to resist the building of a lateral pipeline to take North Slope gas out, leaving the Yukon high and dry and probably not able to reap any benefits if this project is to go ahead, for many, many years.

So I'm going to allow the Government Leader to comment on that before we go any further.

Hon. Mr. McDonald: I would agree with the member - and I have thought for some time now - that this situation will be moving rather quickly, certainly more quickly than it has for the past probably 20 years. The oil analysts have been talking about a situation where, in the next four to five years, the price for alternate fuels will probably climb steadily. The market for natural gas in the United States, already at this point, is seen to be very lucrative and is only expected to improve in the coming years, making it more and more likely that there would be the need to transport natural gas in high quantities from Alaska southward.

So, in the first instance, I think that there's good reason to start thinking seriously about these being real possibilities beyond the simple jockeying for position between various oil industry and pipeline company representatives, who, in the last couple of months, have been showing some interest and some life in terms of promoting various options and various scenarios for where the gas might be moved.

I think there were some industry structural changes made, in terms of ownership of the natural gas supplies in Alaska, which have also caused the feeling to exist that there is probably a greater chance now than ever before that the stars are lining up for a significant move.

I would mention first of all to the member that the Northwest Territories is starting to wake up itself. The Legislature in the Northwest Territories had a debate a couple of days ago, where they were actually quoting the work that the Yukon was doing and used the Yukon government announcements and what was happening in our Legislature as justification for them wanting to speed up their activity. I was quoted, after the trip to Washington, as saying we had historically promoted the Alaska Highway gas pipeline as an example of the Yukon getting out into the world and hustling for the Alaska Highway gas pipeline route.

So, I think certainly, to an extent, we're playing off against each other but, nevertheless, there is probably some very real activity to consider. I met with Bob Pierce and Foothills representatives before Christmas. He was, of course, promoting a particular route, but he was making a pretty coherent argument that things weren't the same as they had been for the last 15 years and, in fact, they were probably better as a climate for a large project now than they were even in the late 1970s and early 1980s, when this issue was very prominent in people's minds.

It's partly for that reason now that we are preparing for a scenario where we will be advocating forcefully for the Alaska Highway gas pipeline route. The Deputy Minister of Economic Development is, right now, meeting with Foothills in Calgary, and they'll be meeting with me next week to talk about their plans.

In my view, there is some reason to believe that we should obviously be concerned about the Mackenzie Valley pipeline route. It's not to say that there won't ever be a pipeline through the Mackenzie Valley, because there are gas fields there, and a smaller diameter pipeline is perfectly justifiable under any scenario. The question is whether or not that pipeline corridor and that route will be the corridor for Alaskan reserves. If the member will remember, back in the late 1970s and early 1980s, the thinking at the time was that there wasn't going to be an offshore route for Alaskan gas. If it were going to go down the Mackenzie Valley, it would involve a North Slope lateral pipeline, which would involve going through what are now two national parks and the Vuntut Gwitchin settlement lands. I would say that that's a pretty huge barrier at this point for anyone who is considering that particular land route. It is for that reason that they have now talked about going offshore and burying it in the Arctic Ocean seabed.

I can only say that from an environmental perspective, it's probably a very startling proposition. Even if that route were approved, the permitting process would be lengthy - as it should be. I've already indicated to pipeline companies that have come and talked about wanting to consider both routes that, on the face of it, we would probably not only be opposed to such an offshore route; we would probably be very actively opposed to an offshore route for environmental reasons and for obvious economic reasons.

The route offshore, of course, is not permitted. While there may be some support from indigenous peoples in the area - and I don't know that to be the case, but there may be - there are still substantial and very large environmental issues to overcome. I can't conceive of the Yukon government playing a passive role in that process. I'm certain that we would use our resources to ensure that people understood the environmental difficulties associated with such difficult and costly technology, which would be required in order to make that route a reality. There are many complications for the Mackenzie Valley/Beaufort Sea route, and that should indicate something to the proponents, who would have to expect a multi-year permitting process, even if they were given some approvals.

On the other hand, the Alaska Highway gas pipeline is substantially advanced as a project. It has gone through the permitting process. There is a right-of-way. There is an existing act on the books in Parliament that has protected the right-of-way, and, clearly, if one wanted to move on a project quickly, the Alaska Highway route has a number of natural advantages. The work that was done in the late 1970s and early 1980s would not go to waste, obviously. It has reserved an opportunity for us today.

So, we are taking it very seriously, as I say. We have done some analysis of the offshore route and what it would mean to us. I would point out that even if we could apply our laws offshore, it would not apply to the seabed; the federal government would still be the permitter no matter what, because they do not allow the extension of provincial laws offshore for seabed approvals for them, so they wouldn't start with us, obviously.

So, Canada would have the sole jurisdiction here but, nevertheless, we would obviously have a substantial interest, and it has been our approach to this point to make very clear our concerns about that route - our objections to that route - and our support for the Alaska Highway route. Essentially, we've indicated that, if the transmission companies want to work in the Beaufort and down the Mackenzie Valley - or, certainly, in the Beaufort - then they will have an opponent in the Yukon government. If they want to work using the Alaska Highway corridor, then they'll have a proponent in the Yukon government, and the work that we intend to do preparing for potential for transmission of the natural gas, I think will help advocate for the one over the other.

I would point out one other thing, and that is that one of the main reasons why we have identified the Alaska Highway gas pipeline as a preferred route is that it does not disrupt any of the ecosystems in northern Yukon that have been so sensitive to those who have wanted to protect the Porcupine caribou herd, and we feel that this clearly gives yet another advantage to the Alaska Highway route, which oil companies would have to overcome.

We need to understand that, with the right support, no company can overwhelm, even with all its money, substantial interests that Yukon and Yukoners have in protecting the North Slope, and can overcome some national parks policies. So clearly, we have, on the one hand, a route through southern Yukon that has, at least 20 years ago, achieved general consensus, and it has a corridor, it has substantial permitting already in place. On the other hand, there are other corridors that would have to overcome incredible obstacles - environmental, political obstacles - that, at a minimum, would be very time-consuming and probably would be, in my view, unsuccessful.

Mr. Ostashek: Well, Mr. Chair, the Government Leader has to recall that the only reason the Alaska Highway route was attractive was because of the Berger Inquiry that said, "No pipeline down the Mackenzie for 10 years."

The first option was the Mackenzie Valley pipeline. They even started cutting the right-of-way. It was the fact that the First Nation land claims were not settled and there was no support from any of the bands along the route for the pipeline. That has changed quite dramatically, from the newscasts that are out now. We've got the Northwest Territories Legislature coming out to actively promote the construction of it. We've got the Inuvialuit, who are going to be issuing licences for oil and gas exploration in the Mackenzie Delta.

All of those things, as they fall together - the permitting of the pipeline; if there are gas discoveries; if they start - this is closing April 14. It looks like there's a big push on to get some rigs drilling up there, to get some work done. As the member opposite knows, there has already been a lot of work done in the Mackenzie Delta, so they're not starting from scratch, and I just feel that the pipeline from the North Slope, then, is a real possibility across the Beaufort to that, because it would make it very economically attractive if we had all of that gas coming down through one pipeline.

So, we've got a big fight on our hands and we don't have any jurisdiction out there, none whatsoever, offshore. And I believe that the opportunity - and this is what I'm pushing the Government Leader for now - with the amendments to the Yukon Act to try to get equal jurisdiction to what the other territories have - out in the 12-mile limit - would make our case much stronger.

They talked in those days, with the Alaska Highway route, about the Dempster lateral to bring the gas out from the Mackenzie Delta, which crosses right across the migration route of the Porcupine caribou herd.

The Government Leader talked about the potential environmental hurdles that going under the ocean with a pipeline would pose. But the Government Leader has to remember that this pipeline route down the Alaska Highway is going to go under Kluane Lake for a distance of about five or six miles, as well. That's the preferred route that was picked, and the tests are all done. So, this is going underwater on the Alaska Highway - not the same distance, by any means, but it's still there. What I'm urging the Government Leader to do is to seriously consider in the amendments to the Yukon Act that we push for our jurisdiction in the Beaufort so that we have equal footing with the other two jurisdictions in the north.

I see now that, with the support of all the First Nations in the Northwest Territories and the fact that the Inuvialuit themselves would be great beneficiaries of oil and gas exploration in the Arctic, that's going to be a tremendous boost to any consortium that wants to put a pipeline down the Mackenzie Valley, along with the other gas that has already been discovered in the valley and along with the tremendous economic benefits that are going to flow to whichever jurisdiction gets the pipeline.

All I'm urging the Government Leader to do is to do everything in our power to get all the aces we can, to put up the biggest battle we can, to stop that pipeline from going from the North Slope over to the Mackenzie Valley.

Hon. Mr. McDonald: Well, Mr. Chair, first of all, I wouldn't want people to draw the conclusion here that the Yukon government is only paying lip service to this. We're putting a lot of attention into this, given the renewed interest by the industry. I do think that the major impetus for the Mackenzie Valley gas pipeline took place in an environment where people were thinking about the possibility of a North Slope pipeline overland from Alaska through to the Mackenzie Valley.

I would suggest that the hurdles that somebody would have to overcome to punch a pipeline through a national park and over Vuntut Gwitchin settlement lands would just be enormous. I would caution anyone to not waste their money trying.

In terms of the offshore, there's probably a little bit of a difference between a few miles under a lake versus 400 miles under the Arctic Ocean, with ice scouring and ice floes, so I would think that there would have to be some pretty substantial engineering analysis done, as well as a separate and distinct environmental analysis of the project. I think any proponent has a long way to go before they think they have covered all the bases. We would have substantial interest in the environmental consequences of anything that was done in the Arctic Ocean, and we would be a major player at hearings respecting that matter, and we wouldn't be a friendly player either, obviously.

I want to indicate to the member that the Government of Yukon is indeed pursuing the analysis of the various issues that we have to address. We are, of course, seeking to protect our interest by negotiating with DIAND on the shared administrative and legislative responsibilities, revenue sharing for oil and gas management under the oil and gas accord, but I want him to understand that, even with that extension of our interest, we would not be given ownership of the seabed - and unless the federal government decided to change its national policy with all the provinces. They have maintained sole jurisdiction to date, and the chances of them giving it to us in the context of the Yukon Act is probably zero.

They haven't transferred the seabed to any province, and they're not going to start with us. I would point out that they haven't recognized any offshore jurisdiction by the Northwest Territories or Nunavut either.

So the Government of the Yukon is taking every avenue to secure what interest it can. The Yukon government is ensuring that everyone knows very clearly at the outset what hurdles they may have to overcome with respect to their relationship with us or, alternatively, which alliances they can achieve with us when it comes to the transmission of natural gas down the Alaska Highway corridor. We do feel that this is obviously the best, most secure opportunity for everyone. So, we are pursuing it in that vein, and we are beginning to dedicate specific resources in this area. Depending on the circumstances of the discussions that we hold, if there is a requirement for more resources, then I will seek more resources from the Legislature. We will move very quickly to exercise our interests in this matter.

Mr. Ostashek: I understand that the Northwest Territories and Nunavut don't have control of the seabed, but they do have jurisdictional control out to the 12-mile limit, which the Yukon does not have. That's the difference. Nunavut is our newest territory. The Yukon is our oldest territory. Does not the Government Leader believe that we should have equal jurisdiction with our neighbours to the east, the other two territories, when it comes to the Arctic?

Hon. Mr. McDonald: Right now, Nunavut and the Northwest Territories may assert that they have this jurisdiction. Our understanding is that Canada asserts that they do not. Period. It would have to be negotiated, and they are, in fact, negotiating some sharing of administrative responsibilities offshore with us, pursuant to the oil and gas accord.

However, they are not - and this is not even part of the gas accord - prepared to discuss the ownership of the seabed, and they would be prepared to consider the sharing of resource revenues, but they're not giving up the seabed. And they haven't for any province, and they haven't for the Northwest Territories or Nunavut and, no matter what the others say, Canada asserts that it is Canada's - and that's it.

I've done some more work with respect to the Nunavut Act, and the Nunavut Act doesn't even have any reference to the offshore. They have a definition of Nunavut, but it applies to lands. It has been the cartographers who have put the line into the water, but it has not been the definition in the act. Canada maintains very firmly that they have the jurisdiction, and they've maintained that with Nunavut, they've maintained that with Newfoundland, they've maintained that with Nova Scotia and British Columbia.

So, in some respects, we have some advantages. We have a gas accord - an oil and gas accord - which talks about the extension of our laws - meaning workers' compensation, et cetera - offshore, but it will not confer on the Yukon management rights, or ownership, particularly of the resources in the seabed.

So, we have ways, of course, of influencing the whole issue of the transmission of oil and gas. We will exercise every option at our disposal, and I would suggest - and I have suggested - to the oil companies, the transmission companies, that the hurdles that they would have to overcome are huge - substantial - and the Yukon is one.

Mr. Ostashek: Anybody who looks at a map sees that a line is drawn between the Northwest Territories and Nunavut. There is no line drawn between the Northwest Territories and the Yukon. The Government Leader may say that it's the topographers that put it on the map, and there's nothing in the act. That isn't what I was led to believe when we were in negotiations on the amendments to the Yukon Act, but there were certain things in the Nunavut Act that were not in the Yukon Act. I, for one, firmly believe that they ought to be cleared up when we're making the amendments.

While we're on the Yukon Act - I'm not going to go on all day about it. We both know each other's position, but there are some things that ought to be on the public record. As the Government Leader knows, when he put the draft Yukon Act out to the public, through the commission, and the commissioner's report that was filed in December stated that the public needed more education on the amendments to the Yukon Act - what was in it, and what wasn't - the commissioners urged that all three political parties try to reach consensus on the three outstanding issues that we couldn't reach consensus on, namely whether, in fact, there was a Crown in right of Yukon, ownership of land and resources, and the outstanding issues in the Beaufort.

Is the Government Leader going to seriously try to address those issues that were raised by the commissioners?

Hon. Mr. McDonald: Well, first of all, the commissioners noted the issues that were raised by the member himself and urged all parties to the Legislature to try to overcome any differences they have and, hopefully, to try to speak with one voice, not only on the revisions of the act, but the strategy for pursuing those revisions. I met with the chair of the commission, and I committed to him that I would try.

I will try to overcome differences that we may have between us - meaning the member opposite and me - with respect to what to seek and when to seek it with respect to the provisions of the Yukon Act, and I will try. We do have opportunities to get together, and I will commit myself to trying to work with the member to try to overcome the differences. I suspect that in some respects, there are probably no differences in our basic objective. There may well be differences in terms of what strategically one can do in the context of Canada today and what the sensitivities are of provinces and others who have an interest in what happens here. But I will commit myself to working with the member and try to do it in a non-partisan way and live up to my commitment to the commission.

I did indicate to the commission, when they said they wanted a more general explanation as to what devolution was about - they claimed that they were uncomfortable with the lack of public input. They didn't know whether or not this necessarily meant that people were opposed or in favour, but they had heard from a few souls that they were not aware of what the general project of devolution was about or what the general project associated with upgrading legislation to recognize the existing political legislative institutions in the Yukon.

So, we have committed ourselves to continue to communicate with the public in that regard and have asked people to write articles from a variety of perspectives, and we would publish these articles in the paper.

I would point out that the chair of the commission did make it clear to me that the commission still felt that there was substantial support for the project of devolution and changes to the Yukon Act, and that if anything counted from the discussions to date, it was that people thought that it was overdue and we should get on with it as well. So I have agreed with the commissioner that we would try to overcome differences and we would continue with the education campaign.

Mr. Ostashek: I look forward to hearing from the Government Leader and am hoping that we can resolve our differences in the best interests of all Yukoners, because it would be much better if we could speak in a united voice and in a non-partisan manner.

Before I move on about devolution - I believe we have talked about this before. I don't know if it's on the public record or not, but I'll just ask it anyway. I believe that the Government Leader said at the time of the public hearings on the Yukon Act that we could split devolution from major amendments to the Yukon Act. We could go ahead with devolution, as we have with oil and gas - that's with minor amendments - and not have to do what I see as a fairly extensive redraft of the act, which needs to be done, but we may need to take more time than what the devolution timetable allows. Is the government still of the opinion that that is an alternative?

Hon. Mr. McDonald: Yes, obviously it's an alternative to having everything happen at once. At the time that we were discussing the Yukon Act, the potential was there for the federal government to proceed with changes to the Yukon Act immediately. That's what we were given to believe, and I was working with that information.

Things have obviously changed. And the changes to the Yukon Act, which bring effect to devolution, won't happen until next fall, so that gives us more time to try to come to accommodation on a number of issues.

One thing that has changed, clearly, is the attitude by various key federal players. At one time, they gave us to believe that we should accept the Nunavut provisions only and that anything beyond Nunavut was not acceptable. And there were even some people in federal Justice who were somewhat reluctant to engage in any legislative change that would even recognize the paramountcy of this Legislature. That has all changed. There is substantial support from senior ministers in the federal government. There is renewed support now from the federal minister who is going to be advancing this particular act. I've been told since the trip to Ottawa taken by the leader of the official opposition and me that there has been a huge change in attitude in the Department of Justice and DIAND about this legislation and that this legislation has been given a green light by the Prime Minister's Office, and people are making it a high priority. So something has obviously happened, and I would expect that we will not have the same kind of niggling resistance to some elements of the act, which involved the recognition of existing political institutions, that devolution, of course, should take place, and that the transfer of resource management should take place easily. If we decide to proceed with what the member is talking about, there will probably be some resistance to what he is proposing.

I'm prepared to talk to him about how we might give it the college try, so to speak, and hopefully get a common position from all parties here and get as much as we can get in the legislation coming up.

I did indicate to the federal minister on two occasions now that, if we're unable to get all of what we want in the first round of changes to the Yukon Act, whether it be for devolution or on the political institution side or even on the upgrading of language, he and I should commit the governments to a second round, and he said he could support such an arrangement.

Mr. Ostashek: I thank the minister for that, Mr. Chair.

I suggest to the Government Leader that there are some things in his draft act that I don't think the federal government is going to accept either, so one or two more wouldn't hurt too much, I don't think. I think they're going to have some great difficulty with some of the clauses in it, but that remains to be seen.

Mr. Chair, I want to just canvass one other area. I understand that the Premier, or the Government Leader, of the Northwest Territories is going to be over here during the Arctic Winter Games, and there's going to be a meeting with our Government Leader here. Am I correct in that assumption?

Hon. Mr. McDonald: Yes, the member is correct, Mr. Chair. There will be a northern leaders meeting on Saturday from breakfast through to dinner, where Mr. Okalik and Mr. Kakfwi will be present. Fran Ulme from Alaska will also be present for a lunch meeting.

With respect to the act, the member is quite right. There are elements of the existing Yukon Act where they have indicated they would have problems, and they do have problems, and the problems remain.

Mr. Ostashek: Mr. Chair, the reason I asked about a meeting with Stephen Kakfwi, the new Government Leader of the Northwest Territories, is because I happened to tune into a radio interview with Mr. Kakfwi, after his Legislature had selected his as premier - a very extensive radio interview. I was driving down the highway one night, and I got to listen to it in full detail. He made a comment that was very interesting to me. That was that the Northwest Territories basically - I'm paraphrasing - would not be able to set their own course in the future until they had full ownership of land and resources. That was the term he used. It was timely because, at the same time, we're talking about the Yukon Act here.

So, I would urge the Government Leader to discuss that issue with him, in relation to the position that the Government Leader here has taken on that issue, which is one of the outstanding issues of contention among political parties in the Yukon, just to see what the full meaning of Mr. Kakfwi's comments were. Did he really mean full ownership of land and resources? Is that his position, or does he believe that something similar to what the Yukon is doing would be satisfactory? I would urge the Government Leader to explore that issue with him. I'd just ask him if he would do that.

Hon. Mr. McDonald: Yes, I will, Mr. Chair. I don't know precisely what Mr. Kakfwi was referring to. I do know that he has indicated to the media in the Northwest Territories that he believes that the Yukon is way out ahead in terms of devolution and that all northern peoples have something to learn from the process that we have been through. We will, obviously, be exploring the process of devolution - the evolution of the territories. It will probably involve the most substantial discussion of anything on the agenda.

Mr. Ostashek: I thank the Government Leader for that.

I want to move now to an area where I believe the Government Leader is ending up in quite a dilemma, and that's to maintain the schedule of devolution without the finalization of the land claims. Now, the Government Leader has stated time and time again that he believes devolution can go ahead on schedule, even though the land claims are not finalized. Yet we had the Chief of the Kwanlin Dun come out on March 1 - yesterday, I guess - in the paper saying that - and this is as reported. I'm not saying this is as it was exactly said, but as reported - that O'Brien was very fearful of devolution without having a land claim deal signed. Devolution is going to be devastating to Kwanlin Dun unless we have a land claims agreement in place. So, for Kwanlin Dun, we cannot support devolution until we have a final land claim agreement in place.

Now, the Government Leader is aware that back in, I believe, January 1997, the Government of the Yukon and Yukon First Nations signed what the Government Leader portrayed as intergovernment agreements - I portray them as political agreements - that they would work together on devolution and that they would have to have a consensus position on going ahead with it. We had a debate in the Legislature shortly after that as to whether in fact the Government Leader had extended a veto to First Nations over devolution. And I know that both the Government of Yukon and First Nations tried to make great strides and great representation that it was not a veto, but I do recall asking the Government Leader a question in the Legislature: in the event that there was a roadblock, could the territorial government proceed with devolution?

I don't have the Hansard in front of me, but we can research it. I believe the Government Leader replied to me at that time, Mr. Chair, "Well, yes, we could, but it wouldn't be very wise to do so."

So, I guess I'm asking the Government Leader, how does he believe that when we hear that the Kwanlin Dun's talking about maybe three years before they settle land claims? It's certainly not going to be settled in a year or the timetable that the Government Leader wants to adhere to for devolution. How is the Government Leader going to reconcile that? How are we going to get so that we can stay on side on devolution and not alienate First Nations?

Hon. Mr. McDonald: Well, Mr. Chair, first of all, I don't believe that it will be devastating to Kwanlin Dun to have devolution proceed before the land claims settlement. I just don't believe that.

The devolution accord that the Government of Yukon signed with, among others, Kwanlin Dun First Nation, spoke to the desirability of proceeding with all the negotiating tables, including devolution, and that when one table was successful we would count that as a success and turn our attention to other tables. But that we would not allow the bleeding of one table to another, in terms of devolution to land claims, or we wouldn't hold up land claims because we didn't have devolution, and we wouldn't hold up devolution because we didn't have a land claim. We would honestly pursue every negotiating table, and we are doing precisely that, everywhere.

The First Nation negotiators, including representatives from Kwanlin Dun, have been at the devolution table all along, from the beginning to now. We have indicated to everyone that, if there is an issue related to devolution that affects First Nations, if it is a devolution-related issue, we will resolve that issue, and that devolution should go ahead when we have resolved those issues satisfactorily.

But if it's simply a concern that people want one to happen before the other - like, all the land claims must happen before devolution - then the Yukon government has not subscribed to that. We don't believe that's necessary. We believe that we can be honest partners in all negotiations. We believe that we can resolve the issues and ensure that Kwanlin Dun has a good agreement. We believe that the federal government can continue and retain its ability to represent the First Nations, both before and after devolution, both before and after the land claim agreement to the extent that they retain fiduciary responsibilities for First Nations, and that we can proceed with both. I'm certain there will be some land claims agreements before devolution, but I'm also equally certain that there probably will not be all land claims before devolution. As long as we are honestly approaching all tables with vigour, I believe that that's okay. The federal government and the federal minister have indicated precisely the same thing.

So we will be honest brokers, honest players at the table, but when devolution is complete and ready, devolution, I hope, will happen. When each individual land claim is complete and ready, I hope they will happen.

Mr. Ostashek: Well, Mr. Chair, I don't want the Government Leader to misinterpret me. I believe that we can have devolution and still have honourable land claims; I have always believed that. But the Government Leader went a couple of steps further with those agreements he signed in January of 1997. Whether or not the Government Leader and I believe that we can go ahead with devolution, as of yesterday and as reported, the Chief of Kwanlin Dun did not think that we could go ahead. So that's the dilemma that I'm saying we're in in the Yukon right now. If the land claims aren't completed, according to the chief, he can't support devolution.

So, I guess it gets back to the question I asked the Government Leader in the House a couple of years ago, shortly after he signed these memoranda of agreement with First Nations on devolution, and whether he could go it alone. At that time, he told me that would not be wise. Has he had a change of opinion on that?

Hon. Mr. McDonald: Well, the devolution accord does say that no one has a veto. It does say that we should try to resolve the devolution-related issues at the devolution table and land claims issues at the land claims table. I believe that if, as I have said, devolution concludes before a land claim agreement happens to be concluded, as long as we have been aggressively pursuing both tables, that the devolution agreement should be brought home and concluded. I would hope that we can resolve all outstanding issues on all fronts with Chief O'Brien and with other chiefs. I will move every mountain I can think of to try to achieve that end. However, if I can't get everyone on side, I would still proceed with devolution.

Mr. Ostashek: Well, the minister is on the record, and that's fine. I'm not going to pursue that. I just want to say to the Government Leader that - he says, "As long as we're making an honest effort at the land claims table and one finishes before the other." That's fair. I agree with that, but you have to convince First Nations of that, because they don't believe they're being treated fairly at the land claims table now because of the outstanding issues with the federal government.

I want to move on from the issue of land claims. I'll leave that for now. The minister has answered it in a very clear and concise manner, and that's fine. The minister made the comments last night, I believe, that there may be a hiatus in land claim negotiations because - and I didn't quite understand him, so I'd like him to clarify it today. The mandate to negotiate land claims runs out on March 31. They need a renewal from Treasury Board, I believe, for more funding for it. My question to the Government Leader: is the mandate that's running out in legislation or regulations? My question: did they have to bring in a new act, or amendment to the act, to the House of Commons before funding can flow again for land claims after March 31?

Hon. Mr. McDonald: No, Mr. Chair. What they need to do is get a mandate from their Cabinet for an extension to the negotiations. I'm not an expert on this, so I would encourage the member to either phone the federal negotiator or phone even our negotiators for a more precise explanation, but my understanding is that they need a Cabinet mandate. The previous Cabinet mandate had a drop-dead date to it, which is March 31, 2000, after which they would have no mandate to negotiate anything in the Yukon.

Mr. Nault explained to me that he cannot bridge finance the negotiations because, under Treasury Board rules, he's not allowed to flow money to the negotiations unless he has the Cabinet mandate. So what that means is that he's presuming there will be support, of course, in the Cabinet for the extension. He will be seeking an extension of two years. He indicated clearly that, generally on a fast-track basis, it takes two months to get something through Cabinet in the federal system. That was approximately one month from the deadline, so he said that he would fast-track it, that he would try to keep the window of no release of funds to the smallest possible window, but, at that point, he could not guarantee anything and said that there may well be a period of time - he doesn't know how long - when there will be no operating tables funded by the federal government - meaning no federal negotiators, nor any money flowing to First Nations for negotiations during that window. But he indicated that he would try to keep it as small as possible.

Mr. Ostashek: I can phone the federal negotiator. What I was trying to find out from the Government Leader was whether the mandate was policy, legislation or regulation. That's what I was trying to find out on that issue.

Mr. Chair, quite clearly, we're going to be some length of time yet before we have a settlement, in southeast Yukon especially, and that is an area that concerns me greatly at this time because of the potential for a lot of investment by oil and gas companies on the Yukon side of the line, if we were in a position to let oil leases go. I know we're not in a position to let any go there, because land claims aren't settled there and that's part of the memoranda of agreement that were made by the government and the First Nations back in January of 1997.

But I wanted to ask the Government Leader - we heard this winter that there was $200-million worth of oil and gas exploration on the Northwest Territories side of the line. I don't believe all land claims in that area are completed yet either. I think there are still some outstanding claims in lower Northwest Territories. I may be wrong on that, but I think there is. Along with that newscast that there was $200-million worth of exploration in there this winter, they are forecasting $400-million worth of oil and gas exploration in there next winter. That's a huge number of jobs, and we could certainly use something like that in the Yukon right now.

Have there been any discussions with the Kaska, Liard or Ross River people about some way where there could be an agreement that would be beneficial to both the Yukon First Nations, the Kaska First Nation and the Yukon people - that we could somehow come to some agreement as to how we could allow oil and gas leases to be let in southeast Yukon, pending the final settlement of land claims? I don't think anybody's trying to get ahead of anybody else with an approach like that. I think all of us could benefit from it. The First Nations could benefit from it immensely, the territorial government could benefit from it immensely, the Yukon people could benefit immensely, and I'm concerned that we're going to get left behind because of all the exploration work that's being done on the Northwest Territories side, if it's another two or three years before we can start letting oil and gas leases go in southeast Yukon.

We may not be as attractive an area then, depending on how successful they are with discoveries in Northwest Territories. So I ask the Government Leader, have there been any discussions in that regard? Or, if there hasn't, has he any desire to enter into those types of discussions?

Hon. Mr. McDonald: Well, the short answers are yes and yes. We have recognized that the Kaska negotiating table was caught in what I described, yesterday or the day before, as a catch-22. Unless there's a breakthrough here between the parties, I don't see us getting to a negotiating table, let alone finalizing the negotiations. So we're well and truly stuck. Having said that, there are clear opportunities out there, and there is oil company interest in exploring Yukon lands. And the fact that the two wells in the Yukon - the only two wells in the Kotaneelee area - are some of the highest, if not the highest, gas producers in the country; there is clear interest by the companies.

We did agree to set up what we referred to as an economic table with the Kaska last fall. They've met a few times and I would say that the discussion has been productive with the exception that land claims issues have a tendency to bleed into the economic table. And this is not a replacement for the land claims table; this is supposed to be an economic table to deal with forestry allocations and oil and gas or any other immediate opportunity that may come about. We have even given the Kaska some funding to develop corporate capacity so that they can come to the table with some good advice. I will be meeting with the Kaska shortly to discuss this and other issues. Obviously the economic opportunities issue is something that we care a lot about and everyone has agreed that trying to get people to work should be an immediate priority.

And we do believe that very much. Getting people to work should be our priority if we can, particularly if nothing is happening on the other front and the lawyers have got it in a lock-down situation - perhaps the rest of us can try to get something moving irrespective of that. So we are pursuing that option, and we hope to see progress.

Mr. Ostashek: It just seems to me that it would be in everybody's best interests, and certainly in the best interests of the economic future of the territory, if we could get started in that area. I'd like to speak a little more on land claims here and the transboundary claim. Has there been any increase in the land quantum in the Yukon to accommodate the transboundary claims?

Hon. Mr. McDonald: The short answer is no, but then, there haven't been any negotiations either. We haven't had any negotiations. The closest we came was with the Kaska, and then that was shut down before we got started.

Our position in the southeast has been that the Liard First Nation has achieved substantial resources and a good balance between public and First Nation lands, in terms of balancing out the two interests. The situation in the southeast is that - a number of things have happened to complicate matters. First of all, our basic position has been that we would be prepared to see site specifics and those issues addressed through transboundary claims, but that we are also prepared to consider the Kaska Nation's new notion of a Kaska Nation claim. That's where all the First Nations in Kaska country come together and negotiate elements of a pan-nation claim.

There are two First Nations in the Yukon - the Ross River Dena and the Liard First Nation - and there are a number in northern B.C. We've indicated that we're prepared to explore what that actually means, because it's not clear - not clear to us, at least. In terms of the balancing of lands and resources, we have filled the vessel in the Liard traditional territory with the Liard First Nation, and we are doing so right now with Ross River in the Ross River Dena's traditional territory. How that's apportioned among the nation is something that we're prepared to explore in the concept of nationhood and a claim that recognizes the nation. But in terms of filling the vessel, we're actively doing that with the first-level, domestic claimant groups.

We have the complication that in British Columbia, they have the Nisga'a formula, which is calculating the compensation - both in land and money, and resource values - to First Nations. The Nisga'a formula is substantially less than what the UFA and the final agreements provide in the Yukon. So, we have a problem to address, but it's a problem in British Columbia. But again, because of these overlapping jurisdictions, if we agree to the nationhood concept, then we have to have advance in British Columbia in order for the full claim to be achieved. So, there are some complex issues to overcome, but we need a table to address them. As I have indicated, that table is not there, and the federal government says it won't have a table unless lawsuits are dropped. The First Nation says it won't drop the lawsuits unless the federal government sets up a table - hence, no progress.

Mr. Ostashek: I understand this is a very complex issue. The minister has answered my question on land quantum, and I think that's the right approach for the Yukon to be taking in respect to negotiating with our First Nations. How the Kaska Nation works out their differences, I think, can be accommodated within lands, as long as we're not making any exceptions to what we've done under the UFA for other bands. I think that would open a real can of worms, if we started down that road at this stage of the game.

In regard to that, I see also in this article I was quoting from by the Chief of the Kwanlin Dun Band, that Hammond Dick, the Chief of the Kaska Nation, is asking for a reopening of the land claims agreement, the umbrella final agreement. What is the Government of Yukon's position on the reopening of the UFA?

Hon. Mr. McDonald: Our negotiating mandate is the UFA. I don't know what is meant by reopening the UFA. Nobody has explained to me what someone wants to open up. We've made some changes to final agreements, minor changes based on one small thing or another, since the final agreements were negotiated, but I'm not certain what is being referred to, and I don't want to explore it too much unless I know.

But our negotiating mandate is the UFA. We feel it's a good and fair agreement and, as long as we can overcome some of the outstanding issues about loan repayment, which I think is a real issue for First Nations coming along, I think we can go a long way.

I understand that there are some concerns about the UFA with respect to how it might recognize Kaska nationhood, and I've got a lot of faith in the negotiators to be creative when it comes to dealing with the nationhood concept.

I'll consider whatever issues people raise, of course, in good faith, and I will see what people have to say. I think that we can accommodate a lot through the UFA, and that's our negotiating mandate.

Mr. Ostashek: Yesterday, the leader of the official opposition asked for the breakdown of ministerial travel. Are we going to get that today, before we get out of this department? I'm almost done in general debate here, Mr. Chair, so I don't know how much longer we'll be, but it would have been nice if we could have had it before we got to the line item.

Hon. Mr. McDonald: Well, as I mentioned at the beginning of this afternoon, I asked for the information to be compiled. It was almost compiled. There were a few things that I wanted to see corrected in terms of a tabling copy, so I have asked them to go back and do that. I presume they're doing that now. When it's ready, I'll give members copies.

Mr. Ostashek: I'd like to move on here. If the Government Leader is agreeable, we could just move along and just leave that line and clear the rest of the department until such time as we have it. It's not that we figure it's going to be a big problem, but we would certainly like to have it before we clear the line on Cabinet and management support.

Other than that, the only other question I have for the Government Leader this time is on mirror legislation. I heard some of the discussion with the leader of the official opposition that there is time to bring it in, and it's out there now. Some organizations have been funded to look at it. Can the Government Leader tell me what the extent of the funding is that has been given, and to which organizations?

Hon. Mr. McDonald: First of all, with respect to travel, I'll get the travel information as soon as I can. If the members want to discuss it, we'll discuss it in Finance and you can explore it as much as you want. You can go back to Executive Council issues and do whatever you want.

In terms of the mirror legislation, I've committed to the Chamber of Mines and the Conservation Society, who have characterized that as conservation interests and development interests, that we would provide legal assistance to both interests to hire their own lawyer and ask the lawyer to look through the acts, deal with the lawyers who drafted the mirror legislation - and with the federal lawyers who also can help - and if there were any issues that they've identified, if there were any concerns that they had with respect to what has been drafted, we will try to address those. The policy objective is no policy change but to Yukonize the legislation at the same time. I'm certain we can come to an agreement; it's just that I've committed to providing some legal assistance because the people in the development community in particular indicated that they didn't think they were competent - just being briefed by our government lawyers - to make a decision as to whether or not there was any policy change, so I offered to have them secure their own legal assistance, and that offer is standing. We put some suggestions for assistance on the table. There was one brief conversation I had with one person who said that it wasn't enough - or wouldn't be enough - and I said, "That's not a problem." I don't want to give a blank cheque to the legal community, but we will do what we need to do.

Ms. Duncan: Mr. Chair, during the Government Leader's response to the leader of the third party in discussions about the Yukon Act and follow-up on the trip to Ottawa, the Government Leader indicated there had been some movement and a favourable response. I would like to ask for the record if the Government Leader would be prepared to, not necessarily file with the table, but certainly provide both opposition parties with copies of their receipt of correspondence - not necessarily the outgoing, but the various commitments he has had from other premiers and from the individuals and ministers that meetings were held with when we journeyed to Ottawa. Certainly, I would like to pass on, in a formal way, the positive letter that I have received. I have had a number of them now, indicating that, for example, the Progressive Conservative leader in the Senate has written, indicating that she is particularly prepared to ensure that the Yukon Act, when it reaches the Senate, is dealt with expeditiously. It's part of our Yukon history, and I'd like to suggest that we either file the correspondence on this matter with the Clerk or both parties.

Hon. Mr. McDonald: Sure, Mr. Chair, I think it would be a good idea to make sure that we all know what's going on. I guess we have received some good comments from people, and it would be a good idea to have a sort of common binder of information. I, too, agree that this will be quite important to keep in the archives, as well, for posterity.

Chair: Would the members like to recess?

Some Hon. Members: Agreed.

Chair: Ten minutes.


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

Committee will now proceed to the programs in the Executive Council Office.

On Operation and Maintenance Expenditures

On Cabinet and Management Support/DAP

Chair: Is there any general debate?

Hon. Mr. McDonald: There is a slight reduction here, Mr. Chair, due to increased funding for DAP coming from the land claims implementation fund and the savings due to staff being on secondment.

On Administration/Secretariat/DAP

Administration/Secretariat/DAP in the amount of $1,010,000 agreed to

Cabinet and Management Support/DAP in the amount of $1,010,000 agreed to

On Land Claims and Implementation Secretariat

Chair: Is there general debate?

Hon. Mr. McDonald: There is effectively no change, Mr. Chair. The $3,962,000 has been identified for specific implementation projects and funding to UFA boards and committees for 2000-01. This budget has been increased by $29,000.

Mr. Ostashek: Could the minister tell us why the personnel allotment is up? Is this just the wage increases, or what?

Hon. Mr. McDonald: This increase is matched by a decrease in the other allotment. This reflects the distribution of money being used for personnel on various implementation projects of the government. It does not equate to a large increase in personnel; rather, it reflects that implementation recoverable funding for projects throughout government is being reported in greater detail here.

Mr. Ostashek: I wonder if the minister could provide - and I don't need it now, but sometime in the near future - a breakdown on what are land claims costs and what are implementation costs. Is there somewhere in the budget book where I can find that, or could the minister provide us with that?

Hon. Mr. McDonald: I can provide it, Mr. Chair, in terms of the personnel who are in negotiations versus personnel in implementation, and then there are the implementation projects. So, I can break it down into those two categories and provide it to the member.

Mr. Ostashek: The reason I'd like that, Mr. Chair, is because, as the minister is aware, some implementation funding was provided by the federal government to YTG. I'm just wondering - that was supposed to have been up for review. Has it been reviewed, or is it coming up shortly? A review period was built into there because it's a 10-year funding agreement that was supposed to be reviewed after a certain number of years. Has the review been completed? If it has, what were the results?

Hon. Mr. McDonald: The review has not been completed. It is coming up for review, but I can already tell the member that the funding is not enough, and we want more.

Mr. Ostashek: I would appreciate a breakdown so that we could see how close it is to what we're getting from the federal government. If he can include in that breakdown how much money we're getting from the federal government for implementation each year, it would be appreciated.

Hon. Mr. McDonald: I can. As I understand it, money is provided to us that we refer to as "recoverable funds" here. There was also some money rolled into the base for implementation. I can show the numbers.

On Land Claims and Implementation Secretariat

Land Claims and Implementation Secretariat in the amount of $5,593,000 agreed to

Land Claims and Implementation Secretariat in the amount of $5,593,000 agreed to

On Intergovernmental Relations

Chair: Is there general debate?

Hon. Mr. McDonald: Mr. Chair, there is just a small increase in the estimates here. The number of FTEs is unchanged. The saving is being realized from the difference between having a senior management position transferred to Land Claims and Implementation Secretariat and the temporary devolution officer position but, effectively, there is no change in activity.

On Intergovernmental Relations

Intergovernmental Relations in the amount of $2,061,000 agreed to

Intergovernmental Relations in the amount of $2,061,000 agreed to

On Policy

Chair: Is there general debate?

Hon. Mr. McDonald: This is a change as a result of the completion of the major portion of the Yukon economic forums and a special commission on the proposed Yukon Act amendments. As I have indicated to members, if there is a desire to see more community consultation with respect to the Yukon Act, then I would have to seek an addition here in a supplementary. Equally, if there's more activity in economic forums, then I would do the same. At this point, no decisions have been made on either.

On Policy

Policy in the amount of $533,000 agreed to

Policy in the amount of $533,000 agreed to

On Public Communication Services

Chair: Is there general debate?

Hon. Mr. McDonald: The increase is largely here in French language services. $96,000 is for additional transfer payments - is a recoverable amount of money - to assist in language translation projects. That is the major increase. I'm just trying to read some details here.

There's a decrease of $115,000 in personnel in French language services, reflecting a reduction of positions funded in other departments based on funding received in the Canada/Yukon funding agreement. There's also an increase in French language services, relating $39,000 in contracts and $82,000 in program materials.

Mr. Ostashek: Mr. Chair, there has been a fairly husky increase from the 1998-99 year. Can the minister give us an explanation? It's up some half a million dollars.

Hon. Mr. McDonald: Mr. Chair, the large portion of the increase was a result of changes in the French language services agreement, which saw some improvements, as I mentioned before, to the Whitehorse Hospital. There were some long-standing requests for program materials and other things and some increases to activities that the Franco-Yukonnais are undertaking. It slips my mind all that that list is, but that was basically the reason for the increase.

On Public Communication Services

Public Communication Services in the amount of $686,000 agreed to

On French Language Services

French Language Services in the amount of $1,608,000 agreed to

Chair: Any questions on the supplementary information?

Public Communication Services in the amount of $2,294,000 agreed to

On Aboriginal Language Services

Chair: Is there general debate?

Hon. Mr. McDonald: Mr. Chair, there is no change here, as members can see. This last year, we've signed another five-year funding agreement with the federal government. It's expected to continue. Discussions with First Nations with respect to the transfer of aboriginal language services continue. There are some outstanding issues, particularly with respect to the role that the Kaska and Kwanlin Dun will play.

On Aboriginal Language Services

Aboriginal Language Services in the amount of $1,100,000 agreed to

Aboriginal Language Services in the amount of $1,100,000 agreed to

On Bureau of Management Improvement

Chair: Is there general debate?

Hon. Mr. McDonald: No change.

Mr. Ostashek: Mr. Chair, what is happening in the Bureau of Management Improvement? Is there anything happening? Is any work planned for this fiscal year that the minister could share with us?

Hon. Mr. McDonald: As I indicated to the leader of the official opposition, we are going to be having an Audit Committee meeting shortly. We're going to be getting reports from last year that were done by the contract auditors. We are going to be establishing and approving the audit plan for this coming year. I will make the reports public once we have dealt with the reports, and I will provide a copy to the member. Once the audit plan is approved, I will let the member know what the audit plan is.

Mr. Ostashek: Mr. Chair, at this point, we don't have work planned for this Bureau of Management Improvement? Am I hearing that correctly?

Hon. Mr. McDonald: We don't have an audit plan for the bureau of management improvement at this point. There are a number of candidate projects to be considered, but the committee will determine which projects should be audited for the coming year, and I will communicate that to the member.

On Internal Audit

Internal Audit in the amount of $157,000 agreed to

Bureau of Management Improvement in the amount of $157,000 agreed to

On Bureau of Statistics

Chair: Is there general debate?

Hon. Mr. McDonald: There is an increase of $52,000, or 16 percent, due to a reallocation of personnel and program materials to information services to meet priorities for that area. There are centralization and branch repairs and maintenance under the branch management function, which accounts for the remaining $10,000. Under operations and research services, there is a decrease of $66,000 due to reductions of recoveries and an internal reallocation to other elements of the branch.

Ms. Duncan: I have recently been advised that although the Bureau of Statistics in 1992, and possibly again in 1996, produced different statistical profiles on various ridings in the Yukon, they are no longer doing this. Could I ask the minister to have the department advise me as to why they have ceased this particular project?

Hon. Mr. McDonald: I will ask them why they had the project in the first place. I was not aware they had such a project, but I will get the question answered for the member.

On Management and Information Services

Management and Information Services in the amount of $377,000 agreed to

On Operations and Research Services

Operations and Research Services in the amount of $287,000 agreed to

Bureau of Statistics in the amount of $664,000 agreed to

On Office of the Commissioner

Chair: Is there general debate?

On Office of the Commissioner

Office of the Commissioner in the amount of $130,000 agreed to

Office of the Commissioner in the amount of $130,000 agreed to

On Cabinet Offices

Chair: Is there general debate?

Hon. Mr. McDonald: There is $20,000 for casual staff for vacation coverage, and there is $12,000 for salary increments.

On Ministers

Ministers in the amount of $131,000 agreed to

On OIC Personnel

OIC Personnel in the amount of $1,203,000 agreed to

Cabinet Offices in the amount of $1,334,000 agreed to

On Cabinet Commissions

Chair: Is there general debate?

Cabinet Commissions in the amount of nil agreed to

On Public Inquiries and Plebiscites

Chair: Is there general debate?

On Public Inquiries

Public Inquiries in the amount of one dollar agreed to

On Plebiscites

Plebiscites in the amount of one dollar agreed to

Public Inquiries and Plebiscites in the amount of one dollar agreed to

Chair: Are there any questions for the recoveries?

Operation and Maintenance Expenditures for Executive Council Office in the amount of $14,876,000 agreed to

On Capital Expenditures

Chair: Is there general debate?

Hon. Mr. McDonald: Mr. Chair, 100 percent of the capital budget is recoverable. There is no capital spending in non-recoverable programs. The largest capital, of course, is in the Land Claims and Implementation Secretariat. There are a number of implementation projects across departments contained in this vote. The other capital is for various miscellaneous equipment, and it's recoverable both for the Bureau of Statistics from the federal government and for public communications services. That's for French language services.

Ms. Duncan: I don't want to start a lengthy discussion on the differences between capital and O&M, but I'm just curious as to why this figure is not contained in the O&M and is in this capital section. Why is this particular amount in capital?

Hon. Mr. McDonald: Well, there are a number of projects that we typically consider short-term projects. On the implementation side - on the O&M - for example, we fund boards and committees, renewable resource councils - these are ongoing. These projects that are proposed for capital are plan specific, or they're project specific. One good answer is, that's the way it has always been done, and that's why it is being done.

On Cabinet and Management Support/DAP

Cabinet and Management Support/DAP in the amount of nil agreed to

On Land Claims and Implementation Secretariat

Chair: Is there general debate?

On Implementation

Implementation in the amount of $376,000 agreed to

Land Claims and Implementation Secretariat in the amount of $376,000 agreed to

On Public Communication Services

On French Language Services

On Office Furniture, Equipment and Systems

Office Furniture, Equipment and Systems in the amount of $6,000 agreed to

Public Communication Services in the amount of $6,000 agreed to

On Aboriginal Language Services

Aboriginal Language Services in the amount of nil agreed to

On Bureau of Statistics

On Office Furniture, Equipment and Systems

Office Furniture, Equipment and Systems in the amount of $6,000 agreed to

Bureau of Statistics in the amount of $6,000 agreed to

Capital Expenditures for the Executive Council Office in the amount of $388,000 agreed to

Executive Council Office agreed to

Chair: Committee will now proceed to the Department of Economic Development.

Department of Economic Development

Chair: Is there general debate?

Hon. Mr. Harding: Mr. Chair, I'm pleased to introduce the 2000-01 capital and O&M main estimates for Economic Development. In O&M, there is an increase in revenue of $100,000 due to the increase in royalties from the Kotaneelee. The price for natural gas continues to remain strong. Distribution of these royalties to First Nations reflects the increase in the total royalties.

The industrial research assistance program, or IRAP, has been transferred to the Yukon Housing Corporation. This program promotes the acquisition, development and use of technology by Canadian firms and will complement the products and services offered by the trade investment unit.

Finally, there is a small increase in the Yukon Placer Committee, which will be conducting a major review of the Yukon placer authorization.

The CDF program is funded at $3 million. There is funding for a new program for l'Association des Franco-Yukonnais to build a cultural centre. This is in anticipation of funding provided by the federal government and the city.

As well, there is $100,000 for the Alaska Highway pipeline analysis, which is a new expenditure in addition to the efforts already underway by the oil and gas branch in the Department of Economic Development, which complements the efforts they had underway previously.

With that, I look forward to answering any of the members' questions.

Mr. Cable: Let's lead off with the immigration investor fund. I gather that some of that money has moved into Government Services' hands for Connect Yukon. What department is actually the lead department for taking in the money, arranging for the loan contracts, and for dispensing the money? Is that the minister's department?

Hon. Mr. Harding: The member has the prospectus, which explains how the Yukon government fund is set up, and the Department of Economic Development is the lead department.

Mr. Cable: I wonder if we can get an update on the amount of money that has been firmed up. It seems to me the number last fall when we put the questions to the minister was something in the order of $16 million. Is that correct?

Hon. Mr. Harding: Those numbers haven't changed much from that time.

Mr. Cable: So the number is still at the level of $16 million. Is my memory correct? Is that the pool of funds that we have got through this program that is available for investment?

Hon. Mr. Harding: That's ballpark at this point, but I can ask the department to give a further update as to what's happening in processing the applications - in federal Immigration.

Mr. Cable: Is it anticipated that there will be further funds coming from this program, further immigrants that are in the process of being put through the federal government hoops?

Hon. Mr. Harding: Yes, we hope to get as much as possible. I think we have sold some $27 million overall. We will put 30 percent of that in low-risk notes of some fashion to have a guaranteed return, and look to lend out or invest the rest.

Mr. Cable: I wonder if we could go through the mechanics. Let me ask this question: just to confirm, how much has been committed to Connect Yukon? Do we have that number firmed up yet?

Hon. Mr. Harding: There have been some changes. I would invite the member opposite to discuss those with Government Services when we get to that department, but there have been some changes as a result of the CRTC ruling on exactly what will be required, given that Northwestel has essentially been commanded by the CRTC to provide service in areas where I don't think they had otherwise wanted to provide service.

Mr. Cable: Let me ask this question: we have the immigrants providing money to this government through trustees. Who's actually going to be the debtor? Is it Northwestel or the government? What's the arrangement?

Hon. Mr. Harding: The project itself will earn revenues, so it is, in the sense that we have described it, a public-private partnership in all aspects, as we have described it, and the debtor is going to be the project itself.

The Yukon government, by the immigrant investor fund - the regulations are clear: the government cannot guarantee the immigrant funds.

Mr. Cable: Is the minister saying then that there is no exposure to this government if the loans go sour?

Hon. Mr. Harding: I'm saying what the regulations are. We have been over it - that the territorial government cannot, by the regulations of how the funds are structured. With the new program that the feds have out, governments can guarantee the money; in the old program, governments cannot guarantee the immigrants that they would get their investment back.

Mr. Cable: What is the deal between the immigrants and the debtor, whomever the debtor winds up being? Is there a standard agreement for repayment, and is there a standard interest rate that is accumulating on the outstanding loans?

Hon. Mr. Harding: Yes, it's two percent per annum.

Mr. Cable: Could the minister provide the House with a copy of the standard agreement that, assumedly, his department has had some say in, between the immigrant and the prospective investment?

Hon. Mr. Harding: Yeah, I can provide information along those lines.

Mr. Cable: On another topic, there was a budget briefing document provided to our researchers this morning. Does the minister have a copy of that with him? It's a fairly extensive document.

Hon. Mr. Harding: I do now.

Mr. Cable: Okay. I'd like to turn to the last page of the document and refer the minister to the section that's designated "Business loans, 1985 to December 31, 1999". That shows that there were 245 business loans, assumedly under the business development fund and, of those loans, 54 have been written off, assumedly as bad debts, and 46 are in arrears, for a total of 100 delinquent loans. That means 40 percent of the loans turned out to be delinquent and the amounts, which are in the columns to the right of the number of loans indicate that 38 percent of the amount of money that was loaned out turned delinquent.

With these numbers in front of the minister, is he of the opinion that this business development fund was a success?

Hon. Mr. Harding: I guess that depends on whom you talk to. We've done some comparisons with bank loans and banks' standard rates of collection, and I must say that hasn't been done in some time but it wasn't as alarming as some may think when they look at these numbers.

However, it's risk money. There is no question. When you put money into the communities and some places where the banks don't traditionally lend, you're going to lose some of it. In this case, over the years, some people haven't paid the bills that I would have liked to see them pay. Some of the collections are still underway. There are some big arrears out there that this government is trying to collect on, and people should be paying their arrears.

Mr. Cable: I think, even as a high-risk loan, when you have 40 percent of the loans delinquent and 38 percent of the dollars delinquent, that is either written off totally or in substantial arrears. It is hard to consider that this program was a success.

What sort of review of the business loans has been done by the department to determine whether this program really delivered on what it was supposed to deliver on?

Hon. Mr. Harding: We are busy trying to diversify the economy, Mr. Speaker. I have all resources trying to look ahead. However, the Yukon Party did an extensive review of the business development fund, and, you know, the member can judge for himself whether it was a success or not. I can tell the member that we are still trying to collect on a number of outstanding loan payments here, which I think can and should be collected. That will change those numbers quite dramatically.

Mr. Cable: I know the minister is busy trying to diversify the economy, and more power to him. But down at the end of the road, the taxpayers are entitled to some analysis as to whether this money that sort of flows out has been productive. That was one of the points that was made at the business summit: how are we evaluating these programs? Let's just use the trade and investment program as an example.

As the minister will note from the briefing document that was given to the research staff this morning, there are three pages of trade and investment fund approved projects for the present fiscal year. Just what sort of deliverables are we looking for from the various grant recipients? There appears to be - I'm just eyeballing it; there are three pages of them - maybe 100 grant recipients, something of that order, anyway. What do we ask these people to provide to the government, after they have the money and after they have gone out and spent the money?

Hon. Mr. Harding: Well, the board has discussed this issue quite extensively. They have to provide, obviously, accountings of where their expenses are going in advance of the trip, and there's some checking on that beyond that.

As well, we have done some questionnaires and some follow-up surveys with them on what their successes have been, what their experiences have been, where they have perhaps erred. We have done some analysis of opportunities and contracts that they have obtained. We have done an analysis of new employees that they have hired. All of that is being done, as well as new export numbers, which we're now publishing quite extensively.

It is still the same export methodology in determining export numbers, as was always the case but, now, we're actually publishing the top 25 goods and their value.

Mr. Cable: Okay, then let's look at one aspect of what the minister just said, the number of jobs created. Is there some recapitulation - periodic recapitulation - of the number of jobs created by the money that is advanced under the trade and investment fund?

Hon. Mr. Harding: Yes, we try as best we can to do that. I had this debate with the member opposite, and it's a little difficult to determine what could be attributed to the trade and investment fund. Take Yukon Brewing Co. Ltd, just as one company. They have received a substantial amount to change their labeling to get into export markets in Ontario and other areas. This summer, they will go from 3.5 to nine employees. Can the trade investment fund claim that we were responsible for nine, six or 5.5 new employees, or can we come up with some other abstract way of determining the effect of the funding that was provided by the board and the government through that route? It's very difficult to ascertain. I'm sure that if we put down 5.5, the opposition would argue that the fund and the commitment of the government shouldn't be able to take full credit for that. So, it's difficult to put numbers on.

The bottom line is that many of these companies are hiring more people and telling us that they are reaching new markets and signing new contracts that they otherwise wouldn't be able to sign. I think the opposition has copies of pages and pages of testimonials to that effect.

Mr. Cable: I'm not interested in testimonials. Obviously, if somebody received money from the government, they're not going to turn around and say it was a waste of money. I think that's fairly obvious.

Let's look at another loan here, the one to Circle A Enterprises Yukon Ltd. I'm not picking this out for any particular reason, but it's one that piqued my curiosity - the smoked Arctic char marketing for $14,700. What, for example, would that particular grant recipient have had to demonstrate to the government, by way of a deliverable, to prove that the grant had a return on investment to the taxpayers?

Hon. Mr. Harding: A lot of that work is done in advance. The technical review committee analyzes the plan for the application itself, analyzes the expenditures; it's then taken to a board, which is a very large board of a wide cross-section of the community. They analyze the plan and determine whether the planned outcome would be consistent with the objectives of the program in terms of expanding trade markets and in terms of expanding the economic pie of the territory. A decision is made on that basis and there is follow-up work done.

Sometimes, if the project doesn't come off, the funding lapses and the recipients don't get the funding. For example, if part of their plan is to market a new product over the web and something happens in the German or Asian or American market, where they may be trying to target, and it doesn't come off, then they don't receive the funding.

As well, one of the things we try to do is mentoring and follow-up business work with them.

So, that's what the businesses have to do. The board periodically asks for analysis and follow-up records to be provided, and follow-up discussions on different grants that were provided under the funds, and that's how it's accounted for.

Mr. Cable: So, what the minister is saying is that, at some juncture, after the money has been disbursed and, after it's been spent, there will be a deliverable that will correlate the objectives of the fund with what the recipient has done, whether it's job creation or increasing a market somewhere or whatever. Is that what the minister is saying?

Hon. Mr. Harding: Yes. We have to ensure that the objectives and the planned expenditures actually meet what was undertaken.

Mr. Cable: Is there any periodic recapitulation of the deliverables under the fund? Does the minister get monthly reports, or does he get quarterly reports, or is it sort of a hodgepodge, a periodic report by way of each and every grant? What does the minister actually see at some juncture?

Hon. Mr. Harding: There are reports done. There have been follow-up questionnaires done, a whole range of areas. There's an analysis - I'm pretty sure that even the receipts have to be provided for expenditures. The board, when it meets - and we meet bi-monthly - reviews previous expenditures. So, there's quite an extensive list of checking up on things.

Mr. Cable: Is there anything that the minister would like to share with this House? Does he get a monthly report or an annual report on the success of the program?

Hon. Mr. Harding: Yes, I can provide the member with some information. I thought we already had, but I can provide him with some information.

Mr. Cable: The briefing notes this morning provided to our staff showed that, under trade and investment, there was a personnel of two marketing promotion officers. What are the terms of reference for these two public servants?

Hon. Mr. Harding: I don't have specific terms of reference with me, but they are essentially a project hit squad. They are people who are given files with clear deliverables, and they go out and work on those projects. They also do a lot of casework. We have an incredible number of businesses now working through the trade investment branch, on trying to do export work. The seminars that we have put on and the export trade discussions are usually attended by at least 50 to 100 businesses, if not more. So they work with these clients and, when things come more and more to fruition and we think we might get a deliverable for the territory, then oftentimes these project officers are given these files to see where the government may be of some assistance, whether it's from a mentoring capacity, or whether it's from a marketing capacity, and just how we may help these businesses become export successes.

Mr. Cable: It sounds as if the government responds to applicants, rather than searching out trade and investment opportunities. Is that the conventional drill, that the marketing promotion officers would get a file, I think as the minister said. The file assumedly would walk in the door from the proponent. Look, I've got a log house or I've got some smoked char, or I've got this or that that I want to export - can you give me a hand? Rather than the promotion officers going out and analyzing the market. Is that the way it works?

Hon. Mr. Harding: Not really. It could be both. If we go on a trade mission and we're talking to someone, or we meet with someone, as we often do, and we find opportunities in that direction, that way, in that manner, in the proactive manner, rather than the storefront - wait for something to happen. We do that as well.

Mr. Cable: What is the minister's department looking at at this particular moment? Is there anything initiated by the department itself, any sector of the economy that it is focusing on?

Hon. Mr. Harding: Well, right now, we are seeing whether we can get some of that HRDC grant money. We are putting a lot of effort into that. No, I'm just kidding, being cheeky, Mr. Chair.

We have a lot of initiatives underway, a lot of businesses - as I told the member opposite, we had a project officer, for example, working on oil and gas initiatives. We have had a project officer working on Autumn Industries. We have had project officers working with many individual businesses. The member will know that there has been a lot of work done with some of the home builders in Chile - Yukon home builders trying to work in Chile. That has taken an inordinate amount of work. They are working on that. There have been a number of projects in Taiwan, organizing trade missions there. There are some specific business opportunities there that have been identified and which people are following on. The member will know now - or maybe he doesn't - that Listel Hotels is looking at English-as-a-second-language opportunities in the territory, in Japanese tourism. They own hotels in Japan and Whistler and Vancouver and elsewhere, I believe.

I can't remember off the top of my head. They're doing some work, for example, with Matthew Lien and Yukon Brewing. So, we try and help these businesses and these people coming into the territory to invest their money. A whole bunch of very time-consuming initiatives are being worked on.

Mr. Cable: In the handout this morning, there are a number of transfer payments, and under "trade and investment" there are seven grants - the Yukon Chamber of Commerce, the Federation of Labour and Yukon College. What are these recipients doing in the trade and investment area? What have we got them doing under contract?

Hon. Mr. Harding: I can provide the member with some information on that in the sense that we have project agreements. If he wants them, we can get the contribution agreements over to him in due time. They perform a whole range of functions for the government in terms of providing advice. They also are conducting - for example, in the case of the college, the contribution there is for English-as-a-second-language work. With regard to the Chamber of Mines, they obviously do, as the member knows, a lot of work in terms of mining promotion, which is obviously export related and investment related. If you look at the Yukon Business Service Centre, they have extensive amounts of export and investment knowledge and work with businesses. When you look at the labour people involved there, they are the voice of labour in the territory. They are members of the Trade Team Yukon. They sit on the partnership.

So, each of the players has a specific role to play. Sometimes we'll ask the Chamber of Commerce - for example the Yukon Chamber - to represent the Yukon at the Alaska State Chamber of Commerce, and they go on behalf of the territory and we will fund a fee-for-service agreement with them in that respect. And I think some of the $36,000 here for the Yukon Chamber is for that purpose, just last year.

Mr. Cable: No, I don't need the documents. I don't want to see a pile of paper flowing across here, but the minister, in general terms, has indicated that these proponents are each receiving funds in the trade and investment area. They're providing services to the government or information to the government. Is that what he's saying?

Hon. Mr. Harding: Services, information, policy advice - yes.

Mr. Cable: On another topic, the minister the other day talked about working with Northern Cross to look at a fuel refinery to take the oil in Eagle Plains, I believe it is, in the Northern Cross area - a small refinery, which, I gather, would produce diesel and, perhaps, some heavier fractions, like furnace oil and other fuels. Who initiated that study? Was that something that Northern Cross came to the government on, or did the government set that in motion?

Hon. Mr. Harding: Well, over the time that I have been minister, I have probably met with Northern Cross 20 or 30 times. We have a good working relationship. I respect the fact that they were, essentially, guinea pigs, for lack of a better word, in terms of their delving into what wasn't even under our control for an oil and gas resource at the time and put a lot of money into the territory.

Their initial plans were to service this local market. They have some other holdings - I believe in Ontario - where they do this. They have a natural-gas well that services an agricultural complex. They work on a very small scale and try to find niches that the big players just aren't interested in.

I respect their commitment to that endeavour. One of the problems they faced, though, was that they have seen a placer industry for which demand has gone down as the price of gold hit $230 an ounce last year - some of the lowest prices in the last 20 years.

Faro was going to be one of their big customers, because they wanted to use their product in the heating plant and, as well, the Yukon Energy Corporation which, with Faro down, needs less backup diesel, plus they had technical problems. So, it became pretty clear to Northern Cross that their opportunities to service a local market here were becoming limited. One of the things they had envisioned doing was investigating what they called at the time a topping plant.

We had a number of discussions about this about a year or so ago - as it became apparent that the Faro mine was still down and the price of zinc was 49 to 50 cents - about what other alternatives there were. Plus, they had a lot of technical work that they did on the Yukon Energy Corporation generators. They went out and bought an old generator from the old Northwest Territories Power Corporation. You know, we kind of "mucked around", for lack of a better word, for a year or two. We decided that the best thing to do was to possibly look at further refining the product. I thought it would be good public policy for Yukoners, and we agreed to cost share. I think they're paying the largest portion of the study. I think it's going to be about $120,000. From a public policy perspective, we thought it was a worthwhile endeavour.

As I said yesterday, they were the only game in town, in terms of supplying the local market in the oil and gas industry. They have done some work on it already. I met with them last night, with one of their local members of the board of directors, Mr. Rick Nielsen, who is the president of the Yukon Chamber of Commerce. We discussed this further, and they have already started on it.

Mr. Cable: The minister touched on the various - I guess we can call them "experiments" that were set up. Has it been determined definitively that this product cannot be used in the diesels here or in Dawson?

Hon. Mr. Harding: Not definitively, but there is a lot more work to be done if they want to do that. That's why they bought the generator from the Northwest Territories Power Corporation. There are lots of issues. I know there are lots of issues with everything but, for example, they use it in Dawson, the effect on the generators there - some questions were raised by some of the owners of the generators. I forget whether or not they're Caterpillar. I think they're Caterpillar. There were some warranty concerns. All of this stuff just kept coming up and up. One year, it was paraffin. Another time, it was water we had problems with, so they bought a centrifuge and tried to centrifuge the water out.

So, the short answer is no, it's not completely definitive; the long answer is, they have decided that it might be more beneficial in the long term, and worthwhile, to really look hard at the topping plant.

Mr. Cable: I don't know if the minister's a student of history, but I think the Norman Wells operation started up during the war with something like a couple thousand barrels a day, and was used primarily, I think, initially, for the military.

What sort of installation are we looking at here - like, a couple hundred barrels a day, a couple thousand? What's the order of magnitude that Northern Cross is looking at?

Hon. Mr. Harding: I have to confess, my technical knowledge of this issue is about as limited as it comes. They were discussing volumes last night, and it depends on a number of factors. If, for example, a Minto mine came up, to what's going on in the placer field, to how much they put in the capital costing - or how much they put in the capital investment, excuse me - in the product. They start explaining, well, you could add this, and you could add that, and if you add this, it would do this much more, you could refine it that much more, which means you could use it for this type of product.

So, these are all variables and questions that I certainly don't know the answer to, but the study will have to look into what level of capital investment is justified, vis--vis the market that exists. So, in terms of the scale and volume, I could probably give you a ballpark, and I'll get that for you.

Mr. Cable: I would appreciate that. Reading the article and the minister's comments, it appears that we're talking about diesel but we're not talking about gasoline. Is that correct, in this topping plant?

Hon. Mr. Harding: Well, in the discussions last night, that wasn't ruled out. I mean, conceptually, I see that as a bit far-fetched, but I'm certainly no expert on the subject. When they're talking capital investment dollars, ballpark between $15 million to $30 million, I guess it depends on what you want to spend on the capital up front.

My understanding is, technically, they could do gasoline, but it would involve that much more expenditure up front, and would you get it back from the local market?

Mr. Cable: We all share the minister's desire to see some action in the economy. Let's say this thing gets off the ground. When is the report due, and if it's favourable, when would they start digging holes and building refineries?

Hon. Mr. Harding: You know what they used to say about Joey Smallwood: he used to promise a new refinery every election. I'm not going to do the old Joey number, may he rest in peace. I have to get that information for the member opposite. I'm trying to recollect, based on the briefing I have had. My understanding is that they have started already, and the impression I get - just a basic impression - is that we are looking at three or four months.

Mr. Cable: Has Northern Cross indicated to the minister - I don't want him making a lot of promises here - the lead time, if, in fact, this proposition looks like it has some merit? Could they start this year, for example, or would it be next year or five or six years from now?

Hon. Mr. Harding: No, I think they want to get going. I think they have sunk about $7 million into their investment here already - if I remember the numbers correctly. I think they want to start getting some payback for that. I get the sense that if the numbers add up and they can do some financing, they would be in the business as soon as possible.

Mr. Cable: Just one last question on that issue: could the House get a copy of the terms of reference for the feasibility study?

Hon. Mr. Harding: I'll provide whatever I can. I don't think there is a problem with that, but there may be some confidentiality provisions with Northern Cross, from a competitive perspective. I'll check on that and try to provide everything I can for the member. I don't think there will be a problem.

Mr. Cable: Well, if there are some specific issues that warrant confidentiality, perhaps those could be blacked out or omitted or whatever, and I look forward to receiving that.

Now, I asked the minister some questions on the Skagway and Haines deals in Question Period, I think it was yesterday, and we got partway down the road in looking at the issues. I think the minister said that these land purchases are insurance. Just in case our American friends get overly aggressive and start to lever us around, we've got someplace to stick a port or a wharf down in the panhandle. Let's say for a moment that that's a good insurance policy, there are some questions about the fine print in the policy, though, and whether the premiums are worthwhile, and I'd like to look at that.

Where does he see in his crystal ball that this thing is going? Are we looking at the government sticking a wharf out into the Lynn Canal or up in Haines, or are we looking at soliciting a public/private partnership, or are we looking at leasing it to private business under some long-term contract? What's his thinking?

Hon. Mr. Harding: If we're talking about Haines, the dock already exists. We'd be purchasing an operating dock. There's one there that exists right now, and it operates on a very small scale.

What we're focused on now primarily are the legal issues around the permitting and making decisions around whether the preferred option is to purchase the company and, if that's the case, what are the liabilities of the company; if you purchase a company, you get the permitting that the company had already secured, should you purchase the shares, should you lease it? Those kinds of issues, as were identified when we initially brought this up.

I see this port authority - and we discussed this with Skagway. Things have changed dramatically from the comments read out by the member opposite. Now, I'm aware of the comments that were made in Skagway. One of the problems we had, though, is that it was such a competitive process that it was very difficult for us to be open and forthright with everybody involved because Yukon and Skagway are both small places, and things get around. Prices get bid up and competitive forces move. So, those are some of the reasons for some of the earlier concern from Skagway. I think that by talking to them about port authorities where they would obviously have some significant say - because they are going to be incredibly important for us to work closely with - I think we have allayed some of their concerns.

If we make a decision to move ahead with the purchase of the Haines situation, we are going to have to operate it in its small scale. There are some revenues, and I think it could be a minimal cost to do that, but it may also be a money-maker. I know that in our conversations with the people in Haines, from the borough and the city, they are completely on side and excited about it and welcome the Yukon. The reception we received was most hospitable, and there was some very good coverage of the meetings we had in Haines - in their paper.

So, we see it as a route for western Yukon in the long term. If you talk to the Yukon Mining Advisory Board, which has Cominco and junior companies, and companies like Minto on it, they absolutely think it's a great idea and are fully supportive because they see the pressures in Skagway, as well. So, that's a thumbnail sketch of our vision and where we're headed.

Mr. Cable: I gather one of the things that the minister will have to deal with in Skagway is the fact that the City of Skagway's community plan - or their zoning bylaw or whatever it is - does not permit a dock in that particular area where the property is that is being purchased. Is that accurate?

Hon. Mr. Harding: Not quite. I don't have a copy of it here, but there is a telephone book-sized community plan that was tabled in October 1999 where this site is identified in the community plan as a future site for - I think the specific wording is - light-industrial commercial use. It is described as the only remaining developable parcel of waterfront land that could have a dock and port. There are some issues, and obviously we would have to work closely with the town, and I think we can do that. It may not be us who have to do this; it may be 30 years from now that this Legislature, Americans and Canadians will work on these issues.

Mr. Cable: I'm not sure what the minister said. It's something like being pregnant: you either have the zoning or you don't. He said "not quite." Is the zoning there? Is it accurate? Is it the type of zoning that is needed?

Hon. Mr. Harding: The member, in his preamble, talked about both the zoning and the plan, so I said "not quite." The plan identifies it as a possible place. My understanding - and I haven't talked to the lead on this in my department for some time - is that there were some issues surrounding the zoning. So, in the future, according to the plan, it's possible. Right now, there may be some issues with the zoning. But we're not building a port right now.

Mr. Cable: No, we're not building a port right now, but if it's an insurance policy, assumedly you don't want to get five or 10 or 15 years down the road and find out that the policy doesn't cover what you're supposed to be doing.

Does the minister anticipate getting the necessary zoning in place at some time in the near future?

Hon. Mr. Harding: I think it would be a longer term objective. We want to work out some of the specifics about how we might approach some of the collective port issues we have with the City of Skagway together. The Yukon government has been talking to the City of Skagway for many, many years and no moves have been made. Long before I was the minister, the previous government, the government before that, when the now Government Leader was the Minister of Community and Transportation Services - back in the 1980s they had conversations with the city about doing something on the port. They had been concerned about it as a city for a long time. There's a debate in the community in some circles about industrial use versus tourist use, so we've got to get that straightened out in terms of our relationship with the City of Skagway - what we can do together now that we have this piece of land to further develop the port to ensure that we have good usage with the existing White Pass and other port facilities and the AIDEA terminal as well.

Mr. Cable: What other options were looked at as opposed to, say, the insurance policy approach? And I should say to the minister that I basically don't see anything wrong with that approach, if, in fact, he's exhausted other possibilities. Did he look at a long-term contract with White Pass or a long-term contract with anybody else to ensure our access to the panhandle?

Hon. Mr. Harding: All options were looked at. We did extensive work. We looked also at how the road debate might turn out, and how that might influence this. There was extensive analysis done. We had Tait Consultants meeting with Alaskan officials. And, of course, Tait being a former White Pass executive, if my knowledge is correct, was fairly familiar with the company, their strategic planning. Every option, I can assure the member opposite, was looked at.

Mr. Cable: Are those balls still in the air with this insurance policy, or have they been discarded?

Hon. Mr. Harding: Let's just say that I think our position is much better now that we have an insurance policy.

Mr. Cable: With respect to the Haines purchase - well, let me go back a step. I gather the options have been exercised with respect to the Skagway property but not with respect to the Haines property. Is that right?

Hon. Mr. Harding: That is my understanding.

Mr. Cable: What is the minister's intention? Let's say he has to use his insurance policy somewhere down the road, or some government has to. Are the Haines and Skagway property purchases alternatives, or is it anticipated that there could be a dock in both Haines and Skagway?

Hon. Mr. Harding: We're definitely going to have a Skagway dock. With Haines we're still in due diligence. But I would like to exercise both options. I think it's good in the long term for the Yukon. If you look at some of the discussions that we're having about the pipeline - I mean, my officials are in Calgary today meeting with Foothills. I may be wrong about this, but I see that as an excellent staging opportunity out of Haines for that work. If they have to barge and ship things up, it's a very quick route to do that. And I think in the long term, if you look at Dakwakada Forest Products and some of the things that they want to do - in my conversations with them, they are very excited about the port. I have had conversations with their business managers about it, and they want to use the port in the future. So, I think we need both and we should have both, because, although it's a fair dollar, in the long-term scheme of things, it's a small price to pay to ensure we have some access.

Mr. Cable: The minister sent me a letter on February 14 with respect to the Chilkoot lumber dock in Haines. I gather from the letter that the Haines option is a three-point option. You can lease the property, you can purchase the property, or you can purchase the corporation that owns the property. Is that correct?

Hon. Mr. Harding: Yes, that's right. The advantage of purchasing the dock is that you don't have to deal with - if you buy the shares of Chilkoot, then there's a potential problem with liabilities that Chilkoot had. So, we're looking at that right now and trying to ensure that we don't buy their liabilities. If we buy the dock, we may have problems with getting the existing permits that Chilkoot had, in terms of the environmental permitting - there's a whole list of permits that have to be obtained. If we lease, we don't really have the long-term asset. So, they are all three live options, and we are examining all of them.

Mr. Cable: I was kind of curious - in the letter the minister sent me, he said the actual profitability of the business has not yet been ascertained. He said, "The due diligence carried out to date indicates the dock has limited activity, but low overhead." Just out of curiosity, how was the option price determined, if we didn't know the value of the corporation or the value of the dock? Like, where did the number come from?

Hon. Mr. Harding: In negotiation with the owner, and the owner was entertaining - what happened, because this is so competitive right now, is that, whenever someone else starts mucking around with something - I keep using that word, and I don't know why - starts investigating certain things, others get interested. So, whether they are cruise ship companies or others who might have been interested before, they all of a sudden become interested. That puts the holder of the property in a pretty good position.

So, we were able to gain the option at that price. That's what the market was going to bear.

For example, this dock has been eyed up by other cruise ship and ferry interests and when we, through our agent, started investigating it, the value started going up. That's how the number got arrived at.

Mr. Cable: Is the minister prepared to provide the option agreement to the House so that we can have a look at it?

Hon. Mr. Harding: I don't see why not. I will check and ensure that there's nothing - there may be something again on confidentiality that we might have to black out on Chilkoot, but we'll check and I'll provide the member whatever I can.

Mr. Cable: Yes, I'd like to see that if that's agreeable.

Just one more question, though. When does the option have to be exercised? I think the minister talked originally about them being six-month options.

Hon. Mr. Harding: I'll get the member the for-sure information on that, but we had an initial period where our deposit would be returned. We went past that, so we're in that deep. "Deep" - that's a good term for a port. We're in that deep, and I believe we have six months, with an option for an extension. But I'll get the for-sure details for the member.

Mr. Cable: What's the minister's thinking at the present time? Does it look like we're going to buy that property or the corporation?

Hon. Mr. Harding: I'd sure like to. I think it would be a good move for the territory. Whether I'm sitting here after the end of this year or not, I think it's a good long-term move.

Mr. Cable: I have some questions on the numbers that were provided to us this morning and some of the information that was provided to us this morning.

I wonder if the minister would flip over to - the pages aren't numbered, so I can't tell you what page it is - the geological surveys part of the -

Some Hon. Member: (Inaudible)

Mr. Cable: I'm sure the minister wouldn't just make it up.

The geological surveys, just what are they up to? Is there any particular area of the Yukon that's being mapped? What are the public servants who are in that particular section doing? If, in fact, they're mapping a particular area - there's some background noise here. Maybe the Clerk can turn the fan down.

What does the geological survey do? Does it respond to the miners? The miners walk in the door, and they say, "Look, there's a hot area there and we need some legwork done?" Or do they go out and pick an area themselves? What's the relationship with the mining community like?

Hon. Mr. Harding: Prospectors play a large role, through YMIP I think, and through their other financing venues in terms of liaising with the geological branch. They do a lot of their own work on their own, based on their determination of mineral values. As well, we use them to do surveys where protected areas candidates are being identified. So, there's a wide range of ways they can be distributed to work in a particular area.

Mr. Cable: What is this group doing at the present time? Are there any long-term projects that they're focusing on, or is it just sort of a general assistance to the mining industry?

Hon. Mr. Harding: Well, I think there are long-term projects underway. As I said, they're working in areas that are being looked at for protected areas. The Renewable Resources minister has mentioned Eagle Plains. There has been extensive work done up in that area, as I understand it. They've done a lot of work, as the member probably knows, in the Finlayson area and other known high-potential areas for minerals in the territory.

I can try and provide the member with a brief outline of some of the highlight projects coming up for this year. I'd like to see him out knocking on rocks, but some brief information would be helpful for the member, and perhaps I'll provide that.

Mr. Cable: Mr. Chair, I move we report progress.

Motion agreed to

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

Motion agreed to

Speaker resumes the Chair

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

Mr. McRobb: Committee of the Whole has considered Bill No. 99, entitled First Appropriation Act, 2000-01, and has directed me to report progress on it.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

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

Speaker: It is moved by the hon. government House leader that the House do now adjourn.

Motion agreed to

Speaker: The time being close to 5:30 p.m., this House now stands adjourned until 1:30 p.m., Monday, March 13, 2000.

The House adjourned at 5:25 p.m.

The following Sessional Papers were tabled March 2, 2000:


Beringia Centre: budget related information (Keenan)


Team Canada Mission to Japan (September 11 to 18, 1999): summary of Trade Team Yukon's participation in (dated February 2000) (Harding)


Faro mine assets (sale of) and mine clean-up plan: letters related to, dated February and March 2000 (Harding)


Range Road trailer park: letter dated April 9, 1999, to Member for Riverdale South regarding concerns (Buckway)