Whitehorse , Yukon

Wednesday, November 19, 1997 - 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.

Are there any tributes?

Introduction of visitors.

Are there any returns or documents for tabling?


Mr. Hardy: Thank you, Mr. Speaker. I have a couple of oil and gas information legislative returns for tabling.

Hon. Mr. Keenan: Thank you very much, Mr. Speaker. I have for tabling the 1996-97 annual report of the Yukon Heritage Resources Board.

Speaker: Are there any reports of committees?


Petition No. 4 - received

Clerk: I have had the honour to review a petition, being Petition No. 4 of the first session of the Twenty-ninth Legislative Assembly, as presented by the Member for Porter Creek South on November 18, 1997.

This petition meets the requirements as to form of the Standing Orders of the Yukon Legislative Assembly.

Speaker: Petition No. 4, accordingly, is deemed to be read and received.

Are there any additional petitions to be presented?

Are there any bills to be introduced?

Are there any notices of motion?

Are there any statements by ministers?


Land claims training for government employees

Hon. Mr. Harding: I am pleased to rise today to inform members today of a major policy initiative that the Public Service Commission and this government are undertaking.

The initiative clearly demonstrates the high priority our government has assigned to the successful completion and implementation of land claims and self-government agreements, as well as our commitment to making government work better for all Yukon people.

During the last election, Mr. Speaker, we promised to enhance training programs for public employees. The initiative I'm outlining today relates specifically to training government employees in the key areas of land claims and self-government agreements. This comprehensive training will provide employees with the knowledge and understanding they require about the land claims agreements and the roles and authority of First Nations governments, outlined in the self-government agreements.

This knowledge should become essential as the Yukon and First Nations governments develop new working relationships at all levels.

The Public Service Commission has been working with First Nations representatives to determine the best way to deliver this training. The working group met over the summer to establish terms of reference for the project and chose a First Nation company, Legend Seekers, to design and develop appropriate training modules.

This fall, Legend Seekers began meeting with employees to gauge their levels of knowledge and understanding of the umbrella final agreement and self-government agreements. They will assess what employees need to know to do their jobs better and how best to deliver this information. They will also meet with First Nations that have signed final agreements to obtain information specific to their agreements, constitutions and cultures.

Once the training curriculum is developed, Yukon facilitators will be trained to deliver the course modules beginning in March 1998. The training will encourage participation and accommodate different learning styles. The number and variety of modules developed will depend on the specific knowledge needs of different groups of public employees.

This comprehensive approach will also provide public employees with a clear understanding of individual First Nations' governmental structures, constitutions and culture.

Our government believes that the promise of the land claims and self-government agreements can only be fully realized when all Yukon people and their governments have a good working understanding of how the new governance relationships will function. We are committed to ensuring that Yukon government employees are equipped with that understanding.

The shared approach to land claims training that I have outlined today will benefit all Yukon people because it will contribute to a greater understanding and appreciation of the government-to-government relations between the First Nations and the Yukon government as we move into the next century.

Thank you, Mr. Speaker.

Mr. Phillips: Well, Mr. Speaker, we on this side of the House certainly support the concept of bringing up to speed the government employees with respect to understanding better the land claims agreements and the self-government agreements to the First Nations. I think it's an important task that has to be done so that the agreements can be implemented in the way they are intended.

The concern I have, Mr. Speaker, with the comprehensive training is the issue that we have heard several times since the signing of the first four agreements, and that is the appearance of, in some cases, three different interpretations of what the agreements say. Some people feel, for instance, that the word "consultation" in the agreements - I know that the Government of the Yukon has stated from time to time that they have consulted with the First Nations according to the agreements, and the First Nations have said no, they haven't consulted according to the agreements. The problem is that the agreements are written in such broad language in some cases that there can be more than one interpretation, and the federal government may even have the third interpretation of what real consultation is.

So, what I would like to know from the minister today when he stands to reply is which interpretation the government employees will be instructed on? Will it be the Yukon government's interpretation of all of the agreements? Will it be the First Nations' interpretation, or will it be the federal government's? Because, it has been shown in the past that there are some differences between the three.

I would also, Mr. Speaker, like the minister to tell us - with respect to the project the minister said in his ministerial statement that they chose the Yukon First Nation company, Legend Seekers. I've never heard of that company and I wonder if the minister could tell us who the principals are in that company, and maybe the minister can tell us if the project to select Legend Seekers was tendered, and what the contract price for it is and how long will Legend Seekers be employed in this project? It would be interesting to find out those facts and figures if we could.

Finally, if the minister could, we would appreciate on this side receiving a copy of the training module or training curriculum, once it's developed, so that we can see what actually is being done and how it's being done. And perhaps the minister could give us, as well, a total cost of the overall project and where in the budget this particular cost is coming from. Is this part of the land claims implementation costs that the federal government's paying for, or is this an additional program of the Government of Yukon, and where would we find this particular line item in the budget?

Ms. Duncan: The Yukon Liberal Party caucus is supportive of this initiative.

There is an expression that "society will be judged by..." - and at various times the blank is filled in depending upon what sort of topic you are discussing.

I believe our generation of Yukoners will be judged by how well we implement the umbrella final agreement that was reached. In order to do something effectively, you must fully understand the policy or legislation that you are trying to implement - or in this case, the umbrella final agreement.

I cannot emphasize strongly enough how important that I feel understanding the umbrella final agreement is, not simply for governments and elected officials, but for all Yukoners.

The minister said in his ministerial statement that the promise of land claims and self-government can only be fully realized when all Yukon people and their governments have a good working understanding. I believe that and feel quite strongly about it.

I would like, therefore, to make what I feel to be a very positive suggestion for the minister in this regard. There are a group of Yukoners who are not government employees, whose lives and whose work touches countless Yukoners, and I am referring to the executive directors of non-government organizations, such as the Yukon representative of Ducks Unlimited and the managers of the various chambers of commerce. There are non-government organizations involved in the health and social services field that my colleague from Riverdale South is more familiar with.

I would like to suggest to the minister that this opportunity for training and understanding be extended to that group of people. Now, I understand and appreciate that there are costs involved, and the Member for Riverdale North has asked about costs, and I would like that information, as well.

However, I would like the minister to give this idea consideration. Perhaps for the cost of training materials, these Yukoners could also be involved in this training initiative. If it is at all possible, it would enhance greatly all Yukoners' understanding of this important agreement.

Hon. Mr. Harding: I thank the members for their comments. There are a few points I would like to make in response. Number one, the UFA commands that we undertake this, so we are going to bear some costs for it, but it is something we are obligated to do by our signatures to the umbrella final agreement and it is something we intend to do.

The Yukon Party critic has talked about problems with interpretations out of the UFA and differences of opinion that sometimes occur between individual First Nations, the CYFN, the federal government and the territorial government. The whole point of this initiative is to try and foster greater understanding to lessen the times and the number of times we have conflicting interpretations, to gain a greater understanding of what is actually in the land claims agreement. That's the whole point of this.

We want to, where possible, by approaching this on a joint basis in a government-to-government way, create joint understandings, joint interpretations, shared knowledge and shared understanding. That's the whole reason. The concern is not an illegitimate one from the member opposite, but that's why we've brought this program and this statement forward.

With regard to the line item, we made a strong commitment in the last budget of some money - I believe $250,000 - in the Public Service Commission budget to make good on our commitment to land claims training as it pertains as well to some of the other commitments we have to chapter 22 in the UFA to a representative public service. We believe we can accommodate our commitments that we've made under chapter 22 by having a greater understanding of the land claims agreements together and more knowledge about the agreements together.

And one other point ancillary to that is, in terms of that understanding, we published a lay-language dossier on the UFA so that the average Joe or Mary Yukoner can pick up a copy of this and, without having to read the entire thing, get a better understanding of what is envisioned in the claim and what it speaks to, what the principles are and what the actual nuts and bolts are.

As well, with regard to the suggestion about broadening the training, that has already being done. There are initiatives underway to expand the training, to identify areas in the private sector, possibilities with NGOs could take the form of seminars, and we're still consulting and thinking about those things, but there have been overtures made to organizations about expansion of the training. The point is one that we have recognized and is well-taken by this government from the opposition. I think we have an agreement on that. So we're acting on it and we have been for some time.

These things are new. They're going to take time to develop. We have to consult. We have to work with our partners, and we intend to do that.

With regard to the details of the contract, I'll provide those for the member regarding the questions he had on the tendering, the cost and the people. I'll provide that for the member.

Speaker: This then will bring us to Question Period.


Question re: Social assistance costs

Mr. Ostashek: My question is to the Minister of Health and Social Services. The supplementary budgets, Mr. Speaker, that were tabled in this House clearly show the spending priorities of this NDP government. They show that the priority is to put more Yukoners on social assistance rather than to provide opportunities for Yukoners to go to work. And, as a consequence of those spending priorities, social assistance costs have increased by over $1 million.

My question to the minister is this: does he have any contingency plan at all to try to curb these rising social assistance costs, or is he prepared to stand by and watch them escalate out of control?

Hon. Mr. Sloan: Well, I think, first of all, it's necessary to lay some of the groundwork with regard to these costs. These costs have largely been driven, I think, by three factors, the first one being the demographic increase. We know that we have had a population increase. The second is the increase attributed to unemployment and the third increase - and I believe very strongly - is related to the inability of people to access some of the social safety net that they did previously, specifically the unemployment insurance.

We are monitoring these, but I would remind the member that these are mandated programs. We have a responsibility to people and we intend to fulfill that responsibility. We're not going to be taking any precipitous action to slash social assistance, nor are we going to be trying to cut people off.

Hon. Mr. Harding: A point of order, Mr. Speaker.

Point of order

Speaker: Order. The Member for Faro, on a point of order.

Hon. Mr. Harding: Thank you, Mr. Speaker. I noted the first exchange to take place here, but I do believe that our standing rules say that a question is out of order in Question Period if it's scheduled for debate later that day and we are scheduled to have a full debate on the supplementary budgets this evening.

Speaker: The hon. leader of the official opposition, on the point of order.

Mr. Ostashek: Mr. Speaker, we're going into general debate on the supplementaries tonight. The Health and Social Services department is not scheduled to be up tonight. So, I believe the question is totally appropriate and in order.

Speaker's ruling

Speaker: We will continue the question on the two supplementaries, and we will deal with the matter tomorrow if there are further matters to be dealt with.

Mr. Ostashek: If the members opposite feel uncomfortable, I can start referring to the budget last spring, because they are basically the same documents, and I think that would be appropriate and would be in order, so I think we're nit-picking at this one.

Since I've asked the main question, and the minister has been good enough to answer it, Mr. Speaker, I'll now go to my first supplementary.

This NDP party that's in government now, when they were in opposition, severely criticized the Yukon government for creating the position of a fraud investigator within the social services branch. My question to the minister is, now that we have social services costs escalating, can the minister tell this House if the workload of that office has gone up, has it gone down, or has it remained the same?

Hon. Mr. Sloan: Well, first of all, Mr. Speaker, I think inherent in that question is the assumption that somehow there's a huge amount of fraud going on, and that that's a driver. I think fraud is perhaps one part of the question of overpayments, and I think overpayments can come about as, perhaps, you know, there may be some actual fraud, there may be results of overpayment by people receiving money to which they haven't been entitled, et cetera, agreements to pay back bills, hydro hook-ups and that kind of thing - administrative errors.

With the result of this, since January 1997, approximately $87,000 in payouts have been identified as the result of possible fraud. That represents about one percent of total expenditures.

Overall, we're looking at some reviews of social assistance files. There's more of a problem, I think, in terms of us being able to work with the RCMP in this regard but, overall, I couldn't say that there's been a dramatic increase.

Mr. Ostashek: Well, the insinuation by the minister is that one percent fraud is irrelevant, and we ought not to be collecting it. That's what I interpret the minister to be saying. Nevertheless, Mr. Speaker, I believe a lot of the problems stem from this government itself, from the political masters. I would like the minister to explain to this House, in light of rising social assistance costs - from one reason, as well as other reasons of principle - why his department paid the outstanding tax bill of one of his constituents after the Yukon government has spent many years and many dollars, at taxpayers' expense, to reinforce the principle that people must pay their taxes? Does the minister not feel this is abuse of the social service safety net that we have in the Yukon?

Hon. Mr. Sloan: Well, the member knows that I'm somewhat limited in discussing the details of such a matter, but I can tell the member that there was no political interference in this at all. This was done as a loan under section 27 of the social assistance regulations. If the member cares to take a look at section 27, that identifies what is called urgent but temporary needs. As a matter of fact, this section specifically mentions the question of back taxes.

Question re: Social assistance, back taxes payment

Mr. Jenkins: My question today is for the Minister of Social Services. It concerns a squatter, Mr. Speaker, Mr. Gary Bemis, who had 10 years to legitimize his property under the previous NDP government squatter policy of 1987. Mr. Bemis' property was approved to be transferred to him, providing he paid the outstanding taxes, penalties and interest. Mr. Bemis indicated that he was fundamentally opposed to paying these taxes, and chose instead to go to court, which he subsequently did, and lost in a ruling by the Yukon Supreme Court on July 25, 1995. Mr. Bemis appealed that court decision, but again lost, and was ordered to vacate the property.

The social assistance minister, acting as the white knight, came in at the eleventh hour to rescue Mr. Bemis by loaning him the money necessary to pay taxes, penalties and interest.

My question is why?

Hon. Mr. Sloan: The member knows that I am restricted in mentioning specific cases. I can tell the member that the details on this are that this was granted under section 27. We did not "white knight" this, as the rather colourful Member for Klondike likes to refer to it. This was done under regulations and was done - I'm just trying to see what I can say here - in accordance with approved procedures.

Mr. Jenkins: As the minister knows, or probably has learned since this payout occurred, social assistance paying Mr. Bemis' taxes on an urgent and temporary need, under section 27(1) of the regulations, just does not hold water. This gentleman had 10 years to legitimize his property under the squatters policy and has been in the courts since 1992. That is not an urgent situation, Mr. Speaker.

Can the minister advise the House what other section of the act authorized the minister to do what he did?

Hon. Mr. Sloan: For one point, this was not authorized, as the member so colourfully puts it. This did go through a Social Assistance Appeal Board, not once but twice. The member is asking me to state details of a social assistance case. He knows that I am limited in what I can say. I can tell the member, however, that it was done by procedure.

Mr. Jenkins: We are discussing the principle, Mr. Speaker. In this court decision -

Some Hon. Members: (Inaudible)

Mr. Jenkins: It's a specific case, and the principle surrounding this specific case is what we're aiming at, Mr. Speaker.

In this court decision that went against Mr. Bemis, the Yukon Supreme Court Judge ruled on an action taken by the Yukon government itself, stating that Mr. Bemis was trespassing and he was given 120 days to remove his property and restore the lot to its original condition.

Mr. Bemis did not own the property on which he resided. That's the issue. He does not conform to section 27(1). Can the minister explain how he used a section 27 authorization when it specifically refers to the recipient owning the property? Mr. Bemis did not own the property.

Hon. Mr. Sloan: Mr. Speaker, I would suggest that the Member for Klondike and the word "principle" used together in the same sentence is a bit of an oxymoron. However, I would suggest that, in this case, the details are that Mr. Bemis, as you characterize him, did seek assistance. The Social Assistance Appeal Board intervened on his behalf and that is why the assistance was granted. I did not, as the member likes to suggest, intervene on his behalf.

Question re: RCMP auxiliary program

Mr. Cable: I have some further questions for the Minister of Justice on the RCMP auxiliary program.

The minister wrote to me on January 8 in relation to the RCMP auxiliary program and she stated, "It is important that legislation be developed to ensure the long-term success of the program." When I asked the minister in April whether that was still her view, she said, "Let me assure the member that I wouldn't have signed the letter saying that to him if it wasn't, indeed, my view." Now, yesterday, when I asked the minister again about that quote in her January 8 letter, her position seemed to soften.

So, just for the record, and to confirm whether my understanding is correct or not, is the minister now definitely committed to bringing in legislation dealing with the RCMP auxiliary program?

Hon. Ms. Moorcroft: Well, Mr. Speaker, I'll say this slowly and clearly for the member and hopefully he can understand it. We intend, in the new year, to release a discussion paper to the public regarding policing in the Yukon Territory, dealing with the issue of the auxiliary police, and intend, after receiving responses back from the community, to further deal with how the auxiliary police program can continue in effect. It is our expectation that we let people who are interested in seeing legislation established to give the auxiliary police force legitimacy under a territorial police act -

Mr. Cable: I'll ask the question slowly; I wasn't asking what other people were thinking, I was asking the minister what she's thinking. Is she prepared to commit to this House to bring in legislation dealing with the RCMP auxiliary program?

Hon. Ms. Moorcroft: Mr. Speaker, I'm prepared to bring in legislation to this House dealing with the RCMP auxiliary police program, but I will not be bringing that legislation in until I have heard from the community at large, including the RCMP, including the auxiliary police members, and including other members of the public, both inside the justice community and outside of it, who want to have an opportunity to express their views.

Seems to me, I've been hearing the Liberal Party in this House over the last couple of weeks indicating that they believe it's very important that we consult with the public before we bring in legislation. We have consulted the public before we have brought in legislation and we will do so in the case of policing legislation.

Mr. Cable: Okay, we now have a commitment on the record.

Now, it's my understanding that the members now comprising the auxiliary were originally appointed under the RCMP Act for a one-year term, and that that one-year term was renewed for a further one year. That second-year term has apparently expired, and if my understanding is correct, the auxiliary members no longer have any status; their status is in limbo.

Could the minister tell us whether my understanding is correct and, if so, why the appointments have not been renewed.

Hon. Ms. Moorcroft: Mr. Speaker, I can tell the member that I have been talking about the matter of the status of the auxiliary police with the RCMP. It is the RCMP who can bestow status on auxiliary police members. I'm in communication with the chief superintendent on that matter.

Question re: Northern Network of Services/Gibbs Group Homes

Mrs. Edelman: Mr. Speaker, my question is for the Minister of Health and Social Services.

Does the minister agree that when we privatize services, especially social services, there have to be checks in the system to ensure accountability by checking that services that we are paying for are provided safely and that taxpayer dollars are being spent wisely?

Hon. Mr. Sloan: As a matter of principle, I would assume that that is indeed the case. I sense that the member is slyly going some place with this, so I welcome the question.

Mrs. Edelman: That was thankfully short. A for-profit business operates all the youth group homes in Whitehorse. Are there regular onsite inspections of these homes and reviews of the programs offered and, if so, will the minister provide copies of these onsite inspection reports and program views to the House this week?

Hon. Mr. Sloan: I think the member would have to be somewhat more specific in what she is seeking. If she is thinking of one specifically, I would ask her to give me the name of that so that I can follow up on it.

Mrs. Edelman: Well, I am very pleased to see that the Minister of Health and Social Services is not overreacting again when I ask him about safety issues around youth and his department.

These youth group homes that are operated by a for-profit business have some very high-risk, dangerous and vulnerable youth under their roofs on a regular basis. Are there safety audits being done by the department to ensure safety of staff and clientele and, if so, will the minister provide a copy of those audits to the House this week?

I would presume that the Minister of Health and Social Services knows about the youth group homes here in Whitehorse.

Hon. Mr. Sloan: I do know about the group homes. I do know about the process that goes into monitoring them, but I'm afraid I'm still at a loss, as the member circuitously sets out her evil trap here. So, perhaps she could just come forward with this so that we can go some place with the question instead of making allegations.

Question re: Social assistance, back taxes payment

Mr. Phillips: My question is to the Minister of Justice. The lands branch referred six squatter situations to legal services for court action, one of them being the squatter, Mr. Gary Bemis. Approximately 300 squatters took advantage of the squatter policy introduced by the NDP government in 1987; they agreed to pay the policy and pay their back taxes and ultimately received title to their property over the course of 10 years.

The lands branch referred six squatter situations to legal services for court action in 1992 and one of them was Mr. Bemis. Since that time, the Government of Yukon has been in court several times with respect to this case.

I'd like to ask the minister, if she can, to tell us how much it cost the Government of Yukon - in Justice and in Community and Transportation Services or in any other government department - how much it cost the taxpayer to bring Mr. Bemis to court and to get a judgment against Mr. Bemis with respect to his back taxes?

Hon. Mr. Keenan: I'm the Minister of Community and Transportation Services, and this falls within my responsibility. I do not have any idea on the cost of the mentioned dealings that the member opposite wants. If that is his specific question, I'll certainly have to get back to the member opposite with the costs of the proceeding.

Mr. Phillips: Well, the minister should have known that this type of question would come up. Mr. Speaker, this is a case that has been going on for some time. There are a lot of Yukon taxpayers out there who are very upset, Mr. Speaker, with this government - taxpayers who pay their taxes on a regular basis, and some taxpayers who, in fact, give up a few things so that they can pay their taxes and not be bailed out by Health and Social Services, as Mr. Bemis was.

I'd like to ask the minister if he would come back to this House with a full accounting of the cost to the Yukon taxpayer to take Mr. Bemis to court and win a judgment, as we did, against Mr. Bemis for failing to pay back taxes. What's the total cost to the Yukon taxpayer? I know the minister can get that figure.

Hon. Mr. Keenan: Certainly, Mr. Speaker, I can come back with the details of the case for the member opposite.

Mr. Phillips: Well, it must dismay some Yukoners out there to see the members of the side opposite chuckling and laughing about this particular case, because there're a lot of Yukoners who work hard every year to pay their taxes on a regular basis so they can stay on their property. Mr. Bemis didn't pay his taxes because he didn't have the money. Mr. Bemis didn't pay his taxes, Mr. Speaker, because he didn't believe in paying taxes, and now our social system has picked up the tab, and Yukoners are upset about that. It's not fair, Mr. Speaker.

Will the Minister of Community and Transportation Services come back to this House early next week with a full accounting of the cost of the Bemis case? Would he bring that back to the House for us, please?

Hon. Mr. Keenan: I think I've answered that question twice already. Certainly I will answer it again. I will be bringing back an answer for the member opposite, but I must say to the member that we should certainly remember which government - which administration - put the burden of taxes on all Yukoners. Certainly it was not this government.

Question re: Northern Network of Services/Gibbs Group Homes, audits

Mrs. Edelman: My question is again for the Minister of Health and Social Services.

Mr. Speaker, I have asked for documents to do with onsite inspections and safety audits to do with the only non-profit business that operates youth group homes within the City of Whitehorse - that would be Gibbs Group Homes. I'm not making accusations, I'm merely asking the Minister of Health and Social Services for some documents - the information that his department is supposed to be collecting as a matter of course.

Why is the minister over-reacting and can we have these documents?

Hon. Mr. Sloan: I didn't think I was over-reacting at all. I think I was merely asking for some clarification from the member, since she was the person that seemed to be implying some sort of nefarious dealings. If it does not violate any questions of confidentiality, certainly I can make those available.

Mrs. Edelman: To be clear, I would like to have program reviews of the Gibbs Group Homes and the NNS operation here in Whitehorse. Is that acceptable to the minister, that he will bring forward those reviews?

Hon. Mr. Sloan: As I said to the member, I certainly will bring forward any material that doesn't violate confidentiality. I would, however, ask the member if she could be somewhat more specific. Are there any particular areas of concern that she wants identified or any particular points that she needs to see? Are there particular elements of concern to her that she could give me so that I can direct my department to provide that information?

Mrs. Edelman: Mr. Speaker, naturally my concern is with the safety of youth.

Could we also have those documents tabled here in the House and, in particular, safety audits of those facilities?

Hon. Mr. Sloan: I'm assuming that the member from her questions is indicating that there is some kind of safety concern, and I would suggest that once again she might be well-advised to, rather than make unsubstantiated accusations, to perhaps give us the information in question, because, as before, I've urged the member that if she has some concerns she has a duty to bring these forward to the department so that they can follow up on them.

Question re: Social assistance, back taxes payment

Mr. Phillips: Mr. Speaker, I'd like to direct my question to the Minister of Finance with respect to the taxation.

Mr. Speaker, in the Bemis case, Mr. Bemis refused to pay his taxes based on the principle that one should not have to pay taxes if one is a squatter. The court ruled against Mr. Bemis - that he was wrong, that all people do have to pay taxes. Mr. Bemis applied to Health and Social Services under a section of the act to get a loan to pay his back taxes. It is a bit of a stretch of that social assistance section of the act.

Does the Minister of Finance believe that all Yukoners who can't afford to pay their back taxes now can apply to social assistance for money to pay those back taxes by way of a loan? Is that the new policy of this government?

Hon. Mr. Sloan: I'd suggest to the member there, when he says "a stretch," section 27 of the social assistance regulations does allow for the loaning of money to individuals who may not otherwise qualify for assistance. The individual must demonstrate they have the means to meet their needs within a relatively short time, and the section does mention back taxes specifically as an area that can be considered. It also requires an agreement to repay must be entered upon. One of the conditions exists that the individual must "own or reside on the property."

With regard to the question - "or reside" - the question, I suppose, hinges on the question of ownership. While this is a technicality, the individual didn't own the land. He had been on it for 20 years and qualified under the government's squatter policy.

So, I think when the member says that it's a stretch, I think the only thing that's being stretched here is the patience and credulity of this House.

Mr. Phillips: Well, first of all, Mr. Speaker, the courts ruled he didn't own the land, and the act says he has to own and reside - that means he has to own it. Other than this Minister of Health and Social Services and this NDP government, there are very few Yukoners out there who believe that social assistance should be used to pay back taxes of people who refuse to pay their taxes based on a principle - not that they couldn't afford it, but based on a principle that they shouldn't pay taxes. It's a total and absolute abuse of our social assistance system, and this government is condoning it.

Wouldn't the minister agree that this abuse should stop and that this government will never again loan money to any person who opposes paying taxes based on principle, Mr. Speaker?

Hon. Mr. Sloan: Mr. Speaker, first of all, the government did pursue this case, right up until the time that the Social Assistance Appeal Board did provide relief and, as far as I am concerned, the Department of C&TS did its duty, as they were doing.

As a matter of principle, I suppose the question comes down to: would this occur again? We have some difficulty, I suppose, from the department's point of view, about the Social Assistance Appeal Board in this case. However, we did follow their directive and we will be taking some steps to clarify that position in the future.

Mr. Phillips: It's too bad the minister didn't say that in the first place. First, he tried to hide behind the Social Assistance Act, saying he can't talk about a case, and now he's saying it's the board's fault. This government over there is absolutely red-faced over this particular issue, where they came in with social assistance money, money that's supposed to help people in need, not somebody who's opposing a principle of paying taxes like all of us have to pay.

Mr. Speaker, this government should reverse that decision immediately and not forward any more money to Mr. Bemis to pay these taxes, and should demand that Mr. Bemis pay his taxes like every other Yukoner who owns property. That's what Mr. Bemis should have to do, and I'm asking the minister to make sure that Mr. Bemis does that.

Hon. Mr. Sloan: To the best of my knowledge, Mr. Speaker, we didn't step in to bail anyone out. Mr. Bemis entered into a loan agreement, and this is what is occurring now.

Question re: Abattoir business plan

Mr. Cable: I have some questions for the Minister of Renewable Resources on the abattoir. The minister, earlier this week, gave a ministerial statement on the abattoir project, and he told the House that $113,000 of public money will be given to Partridge Creek Farm to get the project off the ground. He then told the House that the Partridge Creek Farm proposal and business plan was chosen by an evaluation team. When asked about tabling the business plan and proposal, he went on to explain that the business plan was confidential, but that he would look into whether the proposal could be released.

This is an issue that has been talked about for several years, with a lot of public input, and now some public money. Could the minister tell us why he views the business plan as confidential, and whether or not he has decided to release the proposal?

Hon. Mr. Fairclough: I believe that all business plans that are submitted to governments are confidential. They have information of companies that should not be in the public eye, and it's believed that we should be keeping that information to ourselves. Mr. Speaker, I said that we'd be looking at whether we would be releasing the other. I have not gotten information back to say that we can release it.

Mr. Cable: I think the theory behind holding a business plan confidential is it might affect the competitive situation of the proponent, and I think we have just acknowledged, or we've realized this week, that the first competitor in the market is the one funded, so it's a bit of a stretch.

Now, the minister released projected production figures for the first year, and from information that has been previously published, this production appears to be about one percent of Yukon meat consumption. Could the minister tell us what the eventual production will be, so we can evaluate the scope of the claims that were made for economic diversification?

Hon. Mr. Fairclough: At this time, it's difficult to say what the numbers could be. We don't know how the industry and market will use the business.

We believe that, in the first year, those numbers that we've put forward are fairly accurate. It remains to be seen in the years to come how many people access and use it. With the feedback we did get back from the public, people seemed to be positive about this move, and we're thankful for that. It all depends, I guess, on the business. We feel that the business has a good management plan and would be successful in years to come.

Mr. Cable: I will ask the question a little differently.

Is it anticipated that in the future this abattoir, to be run by Partridge Creek Farms, will slaughter a significant amount of the red and white meat that will be consumed in the Yukon Territory? By significant, I don't mean one percent; I mean 10, 15, or 20, or 25 percent.

Hon. Mr. Fairclough: It is anticipated that the business will grow. We have said what the business can do in its first year. We believe that it will grow.

We have committed dollars toward inspections, and we believe that, by year 5, the business will grow quite a bit from where it is and we would be providing more and more inspections and dollars toward that business.

Speaker: The time for Question Period has elapsed.

We will proceed with Orders of the Day.




Clerk: Motion No. 82, standing in the name of Mr. Hardy.

Motion No. 82

Speaker: It is moved by the Member for Whitehorse Centre

THAT it is the opinion of this House that:

(1) the Multilateral Agreement on Investment, (MAI), sponsored by the U.S.A., supported by Canada, and currently the subject of secret negotiation by the 29 industrial nations and the OECD (the Organization for Economic Cooperation and Development), represents a major attack levels; and

(2) the democratic process which Canadians so value is seriously threatened by the MAI whose aim is to remove control of the economic process from the people's elected representatives and to consolidate it in the hands of the transnational corporations; and

THAT this House calls on the federal government to cease all negotiations on the MAI and to facilitate full participation of all Canadians in the major decisions affecting our economic future.

Mr. Hardy: I was going to start with a quote, but there was something said in the House today that I feel ties in with this debate. It was said by the Member for Riverdale North, "Never again loan money to an individual." What about the companies? What about loaning a country to a company? This is what the MAI is about. All I can say is, God, he hates the poor. Boy, does he hate the poor. I'll be very interested in his comments today about giving away a country because that's what the MAI is about.

I'll get back to my quote. The quote is from Shawn Ewald, from an article entitled, "The MAI, Making the World Safe for Corporate Criminals. "

"A little known, unelected, unaccountable international trade group called the Organization for Economic Cooperation and Development, the OECD is busily drafting a document called the MAI, or the Multilateral Agreement on Investment."

I'd also like to add to that that the OECD is made up of 29 countries and 447 of the top 500 transnational corporations of the world. Tell me who has the power and who is pulling the strings here.

It's vitally important that we delve into the background, intent and ramifications of this agreement, which would, in the words of a local economist, Luigi Zanasi - and I do believe in asking the local people what they think - who said, "This is to replace one person-one vote, with one dollar-one vote." He also said something that was a little bit bluer but I'll get to that one later.

Because I present this motion, I want to take some time to present the kind of context I feel is necessaryfor an examination of what's clearly a critically important global treaty on investment. I hope this will be helpful to the members for the debate that will come and to those who have only recently learned about the MAI and its far-reaching implications for Canadians.

I'm going to read something out of a book I've been reading lately, and it's about the UN. The UN has had a profound effect upon the world and social policies and directions of countries, and it has had a huge effect on Canada. We were very, very involved, especially through Prime Minister Pearson many years ago. This is Dag Hammarskjold's quote, 1960: "Those who advocate world government and this or that special form of world federalism often present challenging theories and ideas but we, like our ancestors, can only press against the receding walls which hide the future. It is by such efforts, pursued to the best of our ability, more than by the construction of ideal patterns to be imposed upon society that we lay the basis and pave the way for the society of the future."

Thirty-eight years later, we're going to see a corporate view of our society if this goes through, and there's been a lot of work done in order to bring this view around. I see it as one of the final steps in getting complete control.

In 1998, we celebrate the 50th anniversary of the United Nations Declaration of Human Rights. The principles this enshrines bear careful reflection as we survey the world from our current vantage point, especially in light of the MAI, which has been called a charter of rights and freedoms for transnational corporations.

Now, I've heard other comments about it and all the people say it's NAFTA on steroids, but that's their opinion.

In 1948, following the most horrific conflict the world has ever seen, a new spirit prevailed - one committed to ensure that such atrocities would never happen again. That year, the universal Declaration of Human Rights was written and it broke ground on a number of fronts. It affirmed basic human rights for all people - rights like equality, life, liberty and security, regardless of race, colour, language, origin, religion, class or other status.

After the experience of the war, it banned slavery, torture, arbitrary arrest, detention and exile. It established the rights of freedom of movement and asylum from persecution. But the declaration went further and laid out what governments must provide to protect human rights and what citizens have a right to expect of those who govern them. Paramount among them is the right to social security. I quote, "Every one, as a member of society, is entitled to realization, through national effort and international cooperation, in accordance with organization and resources of each state, of economic, social and cultural rights indispensable for the dignity and the free development of his or her personality." Everyone, the declaration asserted, has a right to work. Significantly, everyone has a right to just conditions of work, to remuneration worthy of human dignity, to membership in a trade union, to protection from unemployment, and the list goes on.

By right of citizenship, every person is entitled to a standard of living adequate for the health and well-being of the whole family, including the right to security in the face of unemployment, illness, disability, old age, or other circumstances that lead to a lack of livelihood and are beyond the citizen's control.

Covenants were later ratified by most nations, binding them to a legal and moral obligation to protect and promote human and democratic rights. The individual collective rights delineated in a declaration and a covenant came to serve as a foundation stone for democracy in the modern world.

The declaration of universal human rights and the covenants had a major influence on the world, and their impact was certainly felt here in Canada. They served as a basis for a global crusade to establish universal health and education programs, to end child poverty, and to eradicate infectious diseases. The declaration served as a kind of template for the creation of Canada's social programs and coincided with our country's development into a social nation state, in which all Canadians had equal access to universal education, health care, pensions, social assistance and unemployment insurance.

Our commitment to fashioning a domestic policy ensuring decent wages, working conditions and full employment was very much a reflection of declaration principles. Developing countries used the UN declaration and covenants in negotiating protection for their industries, their national resources, their agricultural and cultural products when they entered into trade agreements. In order to protect their citizens' social and employment rights, many nations maintained state regulatory tools to place certain conditions on foreign companies and investments.

Canada, sharing a border with the world's largest superpower, had become one of the most foreign-controlled, developed countries in the world, so we, too, built up a regulatory framework to ensure protection for our resources, our culture and our social programs. We established protections for vulnerable industries, such as transportation and communications, though some were, admittedly, rather weak. We screened foreign investment and regulated access to energy and water. We established domestic content rules for media, communications and education. The list goes on with that, as well. We made sure our social programs were strictly off-limits to foreign ownership. Generally, during that period, we prospered.

Times have changed. Just on the basis of the motions debated in this Legislature, it is plain to see that the previously unshakable commitments, and even so-called "sacred trusts", have developed some alarming cracks and breaks in them. This hasn't occurred overnight. Even while the post-war process to secure human rights, promote nation/state democracy was being launched, another parallel process was also getting underway. Economic globalization was starting to take root.

I want to draw your attention to several significant developments along both these parallel but, basically, contradictory paths. In post-war years, the U.S. aggressively promoted open global investment in order to advance the interests of its corporations. It assumed the role of global defender of the free market, and its rebuilding of Europe after the war was a project built on a market model of economic recovery, one that led to the growth and dominance of U.S. corporations.

Two important initiatives were undertaken in support of this process. The World Bank and International Monetary Fund were established, supposedly to assist developing countries, but their underlying mandate has always been the expansion and integration of a global financial system through which the U.S. would secure economic dominance in the world.

I would like to expand a little bit on that. It has gone way beyond U.S. economic dominance. It's now transnational corporation dominance. I believe that you could go into any of the Third World countries and see the phenomenal effect - the devastating effect - that these loans have caused in the countries that can't pay them. Our closest neighbor to that one would be Mexico. It is very clear what has happened down there.

The U.S. resisted attempts to set up international trade regulations that would incorporate provisions of the UN declaration. Things like setting up standards for employment, working conditions and social security. In fact, the U.S. even refused to present the charter of the newly formed International Trade Organization to Congress, thereby killing it.

Instead the U.S. created GATT, the General Agreement on Tariffs and Trade, whose main purpose was to open up world markets for U.S. goods by reducing tariff barriers worldwide. Right into the 1980s, the U.S. continued its attempts to secure protection for its corporations through introduction of foreign investment rules in the UN. But, the UN consistently proved unsuitable as a tool for accomplishing this goal; it was just too democratic in its structure and its beliefs, and too committed to the principles of human rights and democracy to accommodate the U.S. agenda. This is partly the reason why the U.S. doesn't pay it's bills to the UN.

In 1974, with many developing nations supporting the direction taken, the UN enacted a charter of economic rights and duties of states which affirmed the rights of member nations to regulate and exercise authority over foreign investment. It stated that no state shall be compelled to grant preferential treatment to foreign investment. It granted nations the right to regulate and supervise the activities of transnational corporations in the national interest. It allowed member states to nationalize, expropriate, or transfer ownership of a foreign property providing compensation was made to do so.

The U.S. voted against this charter - where was Canada? It abstained - easy way out, I guess.

And now for those of you who know something about the MAI, this charter sounds quite familiar because it is almost exactly the inverse in terms of provisions and what it was designed to accomplish.

This, hopefully, we will have an opportunity to explore in more detail unless the feds manage to fast-track this through. And, then of course, once again the people are not going to have a voice.

I'm almost finished preparing the context for this discussion and I would appreciate everybody just listening a little closer because, without the background, it is very difficult to debate an issue like this.

I'm going to quote Tony Clarke, who talks to the trends which eventually gave rise to MAI. He said, "Over the past few decades, the discrediting and eventual collapse of Communism provided fertile grounds for an emerging global regime. Based on ideology that replaces the needs of capital and corporations above the needs and rights of people. This ideology is fundamentally opposed to the notion of citizen and nation/state democracy contained in the UN declaration, a notion that the powerful trilateral commission called "an excess of democracy" in its 1970s paper.

The trilateral commission consisted of a global forum of CEOs and leaders of major industrialized countries which was formed in the early 1970s to restructure the global economy.

Their doctrine, which became known as the Washington consensus, called for governments to relinquish controls on foreign investment and to ensure competitive labour conditions and the dismantling of social programs. They promoted the doctrine that such conditions would eventually produce prosperity and that nations would have to make sacrifices in the interim. It's been called "democracy delayed," and we've seen some pretty dramatic examples of how it works in practice.

Developing countries have consistently suffered as the World Bank and the IMF have grown in their power to exact deep structural adjustments to the policies of poor nations seeking debt-free negotiation. These institutions have used Third World country debt obligations as a way to weaken their national autonomy and to force adoption of a free-market economic model, regardless of the consequences for their citizenry.

Mexico and Zambia, both heavily in debt, were forced to reduce the role of government, particularly when it came to regulation of foreign corporations. They were forced to lower wages, to relax working standards, to slash funds for education, pension and health care, to deregulate transportation, telecommunication, utilities, to replace traditional cultivation practices with giant agribusiness for export. In short, barriers to unrestricted trade and investment had to be removed. Transnational corporations actually secured preferential treatment over local businesses as part of the Draconian measures imposed on these impoverished countries.

Eighty countries who have undergone similar restructuring at the hands of the IMF have also had their sovereignty seriously undermined, and almost all have emerged with a significantly higher level of poverty than when the process began. The UN says these countries have paid their debts with the health and life of their children.

They had very little choice, and if the MAI is ratified, the consequences for the Third World nations in particular could prove much more serious further down the road. This is because - and I'll quote again - "It is widely recognized that the central purpose of the MAI is to limit the role of the state in developing countries." And that's by Andrew Jackson of the CLC, out of Canada.

There are a great many more steps we could talk about in the march toward an absolutely unfettered movement of investment capital and corporate operations. The MAI has been under negotiation, secret negotiation, for over two and a half years, since 1995.

The U.S. chose to negotiate MAI within this context, because it was very clear that other forums in which Third World nations have a stronger voice would never agree to its provisions. They picked the OECD as the forum to do these negotiations.

If you remember the structure of the OECD - 447 transnational corporations, 29 countries - you'll see why they picked it.

So we start with the richer nations and gradually strong-arm the poorer countries into joining us. They would find it increasingly difficult, if not impossible, to attract foreign investment capital if they remain outside the MAI and the conditions that are laid down by 29 countries.

Now this sounds very much like colonialism all over again. It's exactly the way it was done before. The only difference now is, at one time, it was the countries that went out and colonized. Now it's the countries who are the puppets, and the transnational corporations are holding the strings and developing their own colonialization throughout the world. There are no Third World countries represented.

So the controversy surrounding the MAI is about far more than economics, although economics, at root, has always been about ideology, and the ideology here, when you take away all the smokescreen, is pure and simple greed. It's not about helping other countries. The debate that arises is about fundamental principles of democracy - that's our debate - of human rights - that's what we believe in - of nationhood, of true democracy, nationhood, and self-determination, and of our moral obligation to eradicate conditions that give rise to crushing poverty, exploitation and human suffering, certainly not to promote it. The MAI would do so, and that's why I feel so compelled to oppose it every chance I get.

Back in 1960, Stanley Knowles said, "Democracy is not real unless the people, through their elected institutions, control the economic order." The World Bank, IMF, GATT, NAFTA, APEC - which is happening right now - they're in control. They're removing control from the people. I wonder how Mr. Knowles would be feeling right now, seeing the phenomenal change that's happened, and how fast it's happening, how much it's out of the control of people of Canada and around the world.

John McMurtry calls MAI the latest fast-track initiative for replacing democratic government with a transnational framework of private corporate ownership and trade. Its focus is the protection of foreign investment capital and its primary principle is that transnational corporations shall have national status, that is they will receive the same rights and privileges as domestic companies and cannot be subject to any regulation which might promote the interest of the home nation.

Foreign investors are guaranteed access to the wealth of all countries. Think what this could mean for Canada and what it could mean for Third World countries. So, the MAI consists, in large part, of a list of rights for TNCs, transnationals. The paramount right articulated by this agreement is that TNCs be free of all performance requirements, little things like job creation, local hire, minimum wages and purchasing of domestic goods. The list goes on in this, too.

Equally disturbing is the right of corporations to bring suit against the government, be it national, First Nations, provincial, territorial or municipal, if it feels its being unfairly restricted in any of its activities or operations. This right is not reciprocal. Governments have no recourse against any corporate actions or practices which could potentially harm its citizens or its environment.

This is carte blanche for the transnationals, the dawning of an age of corporate rule, the conquest of the final frontier for the free-market economy, going where no one else has gone before. I don't think it'll be settled here. I think if they get this, the next day they'll wake up and look around and say, "What more can we have? How much more control can we have?

I know everyone wants to speak on this. I'm just going to touch on a couple more spots. I'm going to go through some of the areas that the MAI has a profound effect on. I know a lot of people in here, my colleagues especially, have their particular areas that they want to speak on and feel strongly about.

The concerns are jobs, stagnating living standards, increased inequality and disappearing employment security and social programs and huge environmental concerns, and of course on top of it all is our disappearing democracy.

How does it affect the social services? Under current provisions, the TNCs can claim that delivery of public service or subsidies to NGOs providing health or social services are discriminatory. For example, in the view of MAI supporters, maintaining public health care discriminates against the U.S. health care management giants.

Child care, elder care, programs for disabled Canadians - all would be up for grabs, all would have the potential for being completely privatized and turned into profits - profit-driven on the backs of the poor, profit-driven on the backs of the disabled. Viewed from the perspective of the private health care industry, Canada has a lucrative $72 billion market, most of which is funded by governments through public revenues but, due to massive cuts in federal transfer payments for health care plans, the federal Liberals have set the stage for the privatization of medical services. Already we see hospital closures and delisting of health services and pharmaceutical drugs. Once drugs and services are delisted from the public health care system, the market is open for private companies to move in and set up for-profit corporations.

A Canadian-owned corporation known as MDS has recently emerged as a major player in the private health care business, providing services in seven provinces. In 1996, MDS announced joint ventures with hospital chain Columbia ACA and pharmaceutical giant Bristol-Meyers Squibb. Furthermore, the world's largest management consulting firm, KPMG, which master-minded a drive to privatize hospitals in London, has been hired to do the same in Canada.

So, this is not paranoia. This is a corporate strategy to take over Canada's public health care system. Adoption of the MAI would greatly facilitate this process. It's all tied together. They're on the OECD. They're driving it.

There's so much that could be said about how MAI could impact on other aspects of our health and social services. Because we've recently talked about the Canada Pension Plan, I'd like to consider this. If Ottawa decides to reserve a major percentage of the CPP fund exclusively for provincial government bonds, foreign investments firms or banks could challenge this as a violation of the MAI investment rules. Many government policies calling for a portion of pension funds to be invested in community development within our local community could be struck down because they impose performance standards on capital for investment.

The MAI prohibits discrimination in favour of Canadian companies if governments directly support job creation, training, research and development in new investments. Some countries are urging MAI to go further and even prohibit any requirements that a company should maintain or create jobs in return for government support. Even NAFTA - and NAFTA's not a great model - preserved our right to make corporations deliver in return for public support.

What could this mean for our future when so many jobs have already disappeared, never to return, when downsizing and massive layoffs are almost everyday occurrences? One critical role of government - and perhaps the most critical - is to protect its citizens from the most damaging impacts of the free-market forces. A big part of that means reining in corporate greed - insisting that, in return for access to resources, domestic markets and special treatment, corporations must create jobs, good working conditions and cooperate with community development goals - the very things the MAI is designed to prevent.

There will be huge environmental impacts if this agreement goes through. Even the weak commitments to the environment that we find in existing trade agreements would be entirely missing from the MAI. International trade lawyer Barry Appleton says, "The MAI is the most aggressive investment treaty in the history of the world. It could allow foreign resource companies to sue governments for trying to implement their own perfectly legal environmental or resource protection laws and could even allow them to sue governments who try to keep them out of the countries because of a history of environmental destruction elsewhere."

The MAI says that the government cannot discriminate when awarding licences and concessions, so foreign corporations could challenge preferential access by Canadians to our own forests, energy sources, wildlife, forest resources and other natural resources. Requirements to process resources in Canada or to create Canadian jobs would be disallowed. This is a very serious sellout of the Canadian environment and resources. No wonder environmental groups and Canadian corporations, who depend on Canadian natural resources, are among the first to sound the alarm about the MAI.

I've already mentioned that the MAI contains provisions that allow TNCs to assume political rights equivalent to those of nation states. This is not really new. Corporations have been acquiring political rights under international law and corporate law within countries for years and years. In fact, corporations were granted the legal right to personhood and citizenship in most countries, including Canada, before even women or aboriginal people were allowed or recognized.

What is new is the extent to which a TNC is granted nation state status. Under the MAI, corporations are accorded most favoured nation status, which has always been restricted to select nations, typically on a reciprocal basis. This means that OECD countries are required to extend most favourable treatment possible to not only OECD members, but to their TNCs - transnational corporations - as well.

Further, the MAI would make Canadian governments liable to damages for actions which foreign investors see as unreasonable and discriminatory. International panels would hear these challenges on things like environmental protection or extension of public services. They would go beyond even NAFTA in preventing federal and provincial governments from requiring that Canadians be represented on boards of directors and in senior management of companies incorporated in Canada.

It's interesting to note that Canada's already on the U.S. watch list for possible trade violations arising from our new copyright act. This is the first step to launching a full-scale trade dispute. What is so objectionable about this act? Well, it allows us to compensate the creators and owners of an intellectual property when their products get airplay on the radio, for instance, or when they miss out on royalties because of home copying of tapes, and so on. It's hard enough in Canada for artists and musicians, and other cultural workers, to make a living.

The fundamental MAI rule against any government action that would seem to discriminate in favour of Canadians, but essentially removes all subsidies and protections in support of Canadian media and cultural products. The government promises that culture would be exempt, but the NAFTA exemption has proved to be of little use against challenges from U.S. corporations. These are only promises. Once again, we've heard more promises from the Liberals. They don't come through.

If the MAI has its way, no support for Canadian culture, in any form whatsoever, will be allowed. The MAI exceeds NAFTA in privatization as well, by stopping all discrimination in favour of Canadians if public assets are privatized. This means that if the CBC, our national Crown corporation, were sold off, share sales could not be restricted and maintenance of Canadian jobs could not be made mandatory.

Even NAFTA could be abrogated. We can get out of NAFTA. If we had a government that was strong, we could get out of NAFTA.

Some Hon. Member: (Inaudible)

Hon. Mr. Hardy: The member across asks why. Obviously he hasn't listened for the last 20 minutes.

Once signed, the MAI remains in effect for 20 years. So once this is signed, if it's not working, if it's devastating a country, if the people are starving, you can't get out of it. Future governments, as they change, cannot get out of it - 20 years. The next generation gets stuck with the consequences. We can't create or protect jobs and protect communities. We can't have local hire. We can't have initiatives that help small business. We can't protect our environment and our resources, and we can't protect our poor social programs that so many in the Liberal caucus seem to hate.

I urge everyone to find out as much as possible about the MAI and to learn about the likely consequences should Canada continue on the route it has chosen. I'm very hopeful this debate that we have today will provide movement for Yukoners to inform themselves and demand a say in how this federal government, the federal Liberals, decide our social and economic future.

Here in the Yukon, we believe - on this side for sure, we truly believe - that we have a unique opportunity to do things differently, that we can shape and control our economic development to provide a good quality of life for all our citizens, and that we can do that while preserving the wilderness and the environmental values that we find so important to us in the Yukon, and that on a nation-to-nation basis, our territorial government can join together with First Nations to realize a destiny based on fairness, cooperation and prosperity for everyone.

I can stand here and slam the Liberals for not consulting, for having secret negotiations, for the lies, deceit and denial surrounding the sellout of our country, but I won't at this moment. The federal Liberals are just puppets. They were bought long ago. TNCs are holding the strings.

The vision we have for our communities and our territory is not the vision of the creators and the promoters of the MAI, and I hope that everyone in this House opposes it in every way possible.

Mr. Jenkins: I rise to speak to this motion on the multilateral agreement on investment, and unlike the Member for Whitehorse Centre, who takes just a negative side and amplifies the negative side - doesn't even consider that there may be a positive side that's driving this agreement - let's look at both sides of the equation, Mr. Speaker, and there are two sides to every issue.

Mr. Speaker, money knows no boundaries. Money moves to where it receives the best rate of return on investment - its ROI. And the Member for Whitehorse Centre would have us believe that profit is a four-letter word, but profit, or ROI, is what drives industry. It's what makes Canada the country it is today.

We live in a global economy and it's expanding at a increasing pace, and money is moving around at a very rapid rate. What the MAI is is essentially a corporate bill of rights to ensure that, when money is invested in a foreign country, the ground rules for that investment are laid out and established equally for all.

Canadians have about $170 billion invested abroad, and Canadians want those investments abroad shielded from protectionism governments. At the same time, there's about $180 billion of foreign investments in Canada, and conversely, Mr. Speaker, those foreign investors want their money invested in Canada protected as well.

Canada is a very massive country but a small population base and it's very wise to open ourselves to international trade and investment. The MAI will guarantee foreign investments the same treatment as Canadian firms. No special conditions. No employment quotas. No extra Canadian content rules.

We have to look, just a few years ago, to the debate on the North American Free Trade Agreement or to the debate on the free trade agreement before that between Canada and the U.S., especially on automobiles. That agreement drove the economy of Canada for quite a number of years and contributed significantly to where Canada places in the world.

Our ability to maintain Canada as the best place in the world to live, according to the United Nations, is contingent upon the government levelling the playing field for financing.

Some Hon. Member: (Inaudible)

Mr. Jenkins:

Yes, the member opposite said "our resources." Let's look on either side of the Yukon. Let's look to the southeast to Alberta and the west to Alaska. If anyone here has had the opportunity to travel to any of these areas in the last couple of years, they will recognize that both Alberta and Alaska have booming economies. There's a shortage of labour of all sorts. They're going very, very well, and both of these areas have achieved this as a result of foreign investment and the government in those respective areas levelling the playing field and setting the stage for foreign investment - something this government is failing to do and failing miserably to do. In fact, it's driving industry out.

It is interesting to note that in Alaska the majority of the mining industry is dominated by Canadian firms, unlike the Yukon. Pretty soon, we'll have, probably, one operating mine - and that's if we're fortunate.

Where is the Yukon on this scale, Mr. Speaker? Our unemployment rate is up. It's one of the highest in Canada. Our inflation is up. It's one of the highest inflation rates in Canada. The Northwest Territories is going through a period of deflation. The Yukon is on its way up.

There are no new initiatives on the horizon, because this government is listening to people like the Member for Whitehorse Centre, who wants protectionism. He wants everything sheltered and held in house. These policies that are being advanced by the Member for Whitehorse Centre are going to kill our economy.

Next year marks the fiftieth anniversary of the multilateral trading system. During the past 50 years, globalization has represented huge opportunities for countries and for the businesses in those respective countries for all levels of investment and development. These historic agreements are securing global trading opportunities for all of us.

Just look at some of the areas where Canada has benefited. Our wood products abroad bring home tremendous dollars. Our balance of payments are considerable as a consequence of the trees that grow all across Canada. Yes, we haven't done everything right. There are always areas we can improve on, Mr. Speaker, but overall, Canada has done a very good job in foreign investment, allowing foreign investment into Canada and reaping the benefits with a balance of trade consistently in our favour.

In the telecommunication industry, there are opportunities worldwide because these agreements are benefiting us and it has opened markets to Canadian firms that are providing fantastic opportunities for companies in Canada staffed by Canadians, operated and owned by Canadian investors and foreign investors.

Non-discrimination of foreign investments means that governments treat foreign and domestic investors in the same way. If a government imposes a requirement on investors, why would you apply these more stringently to foreign investors than domestic investors and vice-versa. We want the same opportunities abroad as investors have in their country.

This MAI would make Canada more attractive to foreign investors and would also provide greater protection to Canadian investments abroad. More investments in Canada means more jobs, more jobs for Canadians.

There is going to be a shakeout initially as there was during the first free-trade negotiations -

Some Hon. Members: (Inaudible)

Speaker: Order.

Mr. Jenkins: - but, overall, Canada has benefited significantly from the free-trade agreements that we have negotiated.

Some Hon. Members: (Inaudible)

Speaker: Order please.

Mr. Jenkins: Canada has benefited greatly and the people of Canada have benefited greatly as a consequence of these investments in Canada.

Canada is still the number one place in the world to live. That's been recognized by the UN

Those areas of Canada that are prospering, Mr. Speaker, are those areas of Canada that are under a government that is encouraging investment, allowing for privatization of some of the sectors, and allowing business to thrive - setting the stage, setting the ground rules for all. They are the successful areas of Canada.

I have an amendment to Motion No. 82 that will probably make it more palatable to all. I encourage the members opposite to support this motion.

Amendment proposed

Mr. Jenkins: The amendment to the motion is

THAT Motion No. 82 be amended by adding the word "left-wing" before the word "governments"; and

THAT subclause (2) and the last clause be deleted and replaced with the following:

"(2) the democratic process which Canadians so value is seriously threatened by these left-wing governments whose aim is to remove control of the economic process from the people's elected representatives and to consolidate it in the hands of transnational unions;"

THAT this House calls on the federal government to proceed with negotiations on the MAI to facilitate full participation of all Canadians in major decisions affecting our economic future.

Speaker: Amendment to Motion No. 82, moved by the Member for Klondike

THAT Motion No. 82 be amended by adding the word "left-wing" before the word "governments"; and

THAT subclause (2) and the last clause be deleted and replaced with the following:

(2) the democratic process which Canadians so value is seriously threatened by these left-wing governments whose aim is to remove control of the economic process from the people's elected representatives and to consolidate it in the hands of transnational unions;

THAT this House calls on the federal government to proceed with negotiations on the MAI to facilitate full participation of all Canadians in major decisions affecting our economic future.

Mr. Jenkins: By amending this motion in this manner, what we will do is ensure that there are jobs here in Canada for Canadians. We will ensure that the playing field is level, that investment will flow through to our respective areas, that we have governments in place that encourage investment, that want investment and that are prepared to set the ground rules in an equal manner for all, and I'm sure that when one looks at this amendment, Mr. Speaker, one can see the benefits that will eventually accrue to Canada by negotiating this MAI. The major benefits will flow through Canada through time, but it is of paramount importance that we all support an initiative of this nature and the democratic process which we all hold so dear and we value so highly. It will allow these to continue, Mr. Speaker, and for the benefit of all Canadians.

Thank you very much.

Mr. Phillips: I rise in support of the amendment that's before us here today.

Just a few words on the motion that is before us. Mr. Speaker, I am always somewhat interested in the comments that are made by the Member for Whitehorse Centre when it comes to these kinds of motions. He seems to be very concerned about free trade and international companies and corporations, and this kind of thing, but I see some inconsistencies or some cracks appearing on the strategy of the side opposite. It's interesting to note that, although this member vehemently opposes trade of almost any kind - international trade or free trade - his Government Leader doesn't. The Government Leader went to, I think, China or Asia last year, with all the other premiers and the Prime Minister on a trade mission, trying to bolster trade for the Yukon with international companies and attract investment. He was over there trying to do that. I'm sure he wasn't there just for the Chinese food. I think he was there for a little more than that. I understand that he's making travel plans now to go to South America this winter on another trade mission. I hope he's not going down there just for the cultural activities that are happening. I'm sure he's going down there to talk to investors that may come back to the Yukon and invest.

There are multinational investors and very large companies at the present time, which are supporting industry in the territory. We have Cominco and Hyundai in the Member for Faro's riding, who are international companies and have government support. This is international trade, commerce and investment in our country. It seems that this government is speaking out of both sides of its mouth. The Minister of Economic Development is saying "more trade." We have the Government Leader going on all the national junkets across the country and enjoying the travelling on the pocketbook of the Liberal Party and not saying too much about it - enjoying it. Then we have the Member for Whitehorse Centre, who used to be the member - maybe he still is a member - of an international union that's based in the United States of America and sends some of their dues money down there. There are international ties to them. They go all over North America.

It's okay for him, Mr. Speaker, but it's not okay for others. So I see a problem or a crack emerging on the side opposite where several of the members support increased trade and commerce and freer trade and commerce, and one member over there just wants to trade within the Yukon. He doesn't want to do anything else with anybody, and believes that that's the future.

Well, I have to disagree with that member. I think that that member is dead wrong, and it's kind of ironic, I guess, that we're here today talking about international trade and democratic processes when, if you walk out these doors - I'll ask the Member for Whitehorse Centre to do that - and walk up those stairs and look in the lobby of the foyer of this building, the member will see several displays of local companies who are trying to export their products outside of the territory. And some are being successful at doing so. Some are shipping to the United States and even discussing shipping to other countries - Japan and Russia. There have been discussions with these companies. These are going to provide Yukon jobs for Yukoners.

And I guess the Member for Whitehorse Centre wants to say to them, Mr. Speaker, "Stay at home. We'd rather you didn't trade anywhere else. We'd rather you stayed right here, and the Government of the Yukon will just buy all your products. You don't need to expand any further." I don't know what that member's ideas are.

Like I said, we have the Minister of Economic Development - and I applaud his efforts - making strong efforts, or trying to make strong efforts, to encourage Yukoners to export. The problem is that at the same time they're bringing in a local hire policy under the member that wants no investment from anybody other than Yukoners in the territory - they're trying to close the doors to investment, close the doors to others coming into this territory. It's really inconsistent. It doesn't make any sense.

You know, if you look around the world at the various groups and organizations that are opposing this, it is many of the left-wing thinkers of the world and the left-wing governments, and these particular governments are ones that don't want to see any trade.

Some Hon. Member: (Inaudible)

Speaker: Order.

Mr. Phillips: Obviously, Mr. Speaker, they have a very sensitive spot over there, and I appear to be circling around the edges of it, because they're squirming in their seats, and it's good to see. It's time the left-wingers gather in a group and circled to protect themselves. Everybody else in the world is looking at the world as a smaller place to do business, with the advent of computer technology and satellite communications, and technology that's available out there. There are some Yukon companies right now, Mr. Speaker - I know of some communication companies in this territory who are working with the State of Alaska and other governments to export their technology, because it's considered to be on the leading edge.

I don't know how this member thinks we can shut other people out from coming in and, at the same time, Mr. Speaker, allow our people to go out and be accepted everywhere in the world. You can't have it both ways. You simply can't have it both ways.

I think this motion amends, in a small way, the motion by the Member for Whitehorse Centre, and it really tells it like it is. It really does talk about the federal government, to proceed with negotiations, to speak out on behalf of Canadians, to protect Canadians at those talks, and have full participation at those talks, Mr. Speaker. I think it's a good move.

You know, it's interesting to note that, in the last free trade debate in this country, the Liberal Party of Canada was going to kill the free trade deal. They were going to rip it up. I think Mr. Chretien said he was going to rip it up. Well, Mr. Speaker, he got into government and he sat down with business leaders, with individuals across this country, and he said, "What has the free trade agreement done for Canada?" Mr. Speaker, he realized that it was good for Canada, that it's helped a lot of businesses. In fact, the free trade agreement has helped a lot of Yukon businesses.

Some Hon. Member: (Inaudible)

Mr. Phillips: It has helped Yukon businesses. The member asked me to name one. I can name one: Northerm, a local window business the free trade has helped.

You want others; I'll name you others if you want other businesses. I'll get you a list of businesses that ship to Alaska and deal across the border all the time. There are local art companies and artists who now can trade freely across the border. There are others in this business that can trade freely across the border and this government seems to be blind to that. They don't realize that by putting a motion forward like this, they're affecting some local businesses in this territory, some businesses of which they have put up displays in the foyer of this building at the present time.

That's the kind of motion we have in front of us here today. These guys just don't get it. The Member for Whitehorse Centre wants to slam the door, believes that unions should control the world and that it's only his way.

Well, I don't agree with that member. This is 1997. Come out of your box. It's a big world out there and it's getting smaller with technology and we now can deal around the world at the touch of a computer. People and businesses in the Yukon are doing that. People in business in the Yukon are putting programs together for people all over the world at the present time.

MAI will open up new opportunities for businesses in this country and new opportunities for jobs in this country, and at the same time protect rights of Canadians.

The side opposite has a closed-door approach to this; half of them do. The Minister of Economic Development and the Government Leader, who both like to travel all over the world - and first class many times - to tell people how wonderful the Yukon is to invest in, that they want to invite this kind of investment into the territory - would be the first ones to open their arms to a multinational company that would come into this territory and spend millions of dollars and create hundreds of jobs for Yukoners. They'd be the first ones, and so they should be - so they should be.

It seems they've fallen into the trap of the Member for Whitehorse Centre who has a closed-door approach to investment, jobs and opportunities in this country and that's unfortunate.

Mr. Speaker, I'll be supporting the amendment put forward by the Member for Klondike, because I think it makes a heck of a lot more sense than the motion that we have in front of us from the Member for Whitehorse Centre.

Hon. Mr. Harding: On the amendment, I have to rise to rebut some of the usual shallow analysis of the Member for Riverdale North. He is quite amusing. He does get some levity from this side of the House with his stretches of logic.

Mr. Speaker, the problem with the shallow approach of the Member for Riverdale North is that he fails to understand the difference between free trade and fair trade, and that's the fundamental flaw in his logic, if indeed you can call it logic - and that is a stretch.

This government and nobody on this side of the House has ever been afraid of fair trade. Mr. Speaker, the General Agreement on Tariffs and Trade has actually had considerable support in the New Democratic Party circles in this country for many, many years, and some of the principles of that agreement have formed the basis of our trade policies and practices.

But what this debate today is about is the MAI. It's the extension of arrangements that exist today that give considerable concern, I believe, to many people in this country who are not in positions of power. This is an issue of control. It's an issue of who has the ear of government, and it's clear that organizations like the Business Council on National Issues, which is made of the top CEOs of the country, have considerable authority and ability to influence government and government policy in this country.

Now, Mr. Speaker, I say this because I want to point out, in terms of the shallow critique from the member opposite from Riverdale North, that there is a fundamental difference in what we say in terms of our support for fair trade versus fair trade, and I make no apologies for going out to try and increase export and investment in this territory to try and create jobs for Yukon people, and I know I have the support of my caucus and colleagues on those initiatives. But when the Government Leader went on a recent Team Canada mission abroad, he raised those issues that are important to this debate that were not being raised by Bill Vander Zalm wannabes, like the folks from the Yukon Party.

Mr. Speaker, the types of issues that were raised - child poverty, environmental standards, labour standards - were all raised by our contingent on that mission. And, we will go again to try to create jobs for Yukon people, but we will continue to raise the issues that talk about raising the playing field, bringing it up to a standard that's higher than what exists in many countries in the Third World and other developing nations, and some of the hot economies around the world.

We're talking about labour and environmental standards, health and safety. We're talking about having some concern for the youth of countries that are put to work in factories at very young ages.

We want to not bury our head in the sand, because we realize that major lobbies of the corporations are having considerable influence on policy, and we're not just going to totally stop in terms of our efforts to try and play that ball game, but we want to play that ball game by our rules, and by setting our standards, and by raising our issues. And we're doing that. And we'll continue to do that.

So, Mr. Speaker, there is a fundamental difference between our approach and the approach that would obviously be taken by the Yukon Party.

You know, when the NAFTA was being signed, and just prior to the election, I can remember Prime Minister Jean Chrétien and the Liberals, who had been cackling over there in their non-confrontational way, talking about ripping up that NAFTA agreement. I remember an all-night debate on the parliamentary channel, where I watched Howard McCurdy from the New Democrats say that there is no way when this election is over, if the Liberals win, they will tear up this NAFTA agreement, and he said, "You watch." He was an amazing speaker. He had a very ministerial approach to speaking and it really captivated me. And, every word he said came true.

In response to the following speaker, Prime Minister Chrétien was very animated and said, "This agreement is gone, it's dead, unless we get some serious improvements on labour and environmental standards." Mr. Speaker, after he'd appointed Sheila Copps to go down there and improve those standards, she came back saying she'd got that. At the same time, Mickey Cantor, who was Bill Clinton's trade negotiator, was saying to the people of the States that there were no concessions made on labour or the environment. So, it was clear to the people of this country and clear to the people of the United States that there were no changes on labour and the environment and the Liberal government caved in and accepted NAFTA. That's how we ended up with it.

Mr. Speaker, that is not fair trade. That's free trade. We stand by fair trade.

Now, I've got a lot more to say when we get in the main debate, but on this amendment I just want to say that there's a fundamental difference. And one other fundamental difference, in terms of our approach, is we believe that developing regional economy does need provisions for local business, for local hire. When you talk to people in the forestry industries, they demand that in this territory - that there are local initiatives that create jobs for local people. So, we're responding to that. We believe we can do that and we can still improve our ability to export. We believe we can have the best of both worlds in this territory for Yukon people and for Yukon jobs.

So, Mr. Speaker, we'll continue to work on that agenda and we believe the MAI is just one step forward towards, as it's been put, free trade on steroids and not a step toward fair trade for the people of this country and the people who don't always have the ear of government and the people who are often the first to be exploited when it comes to profit-driven motives.

Ms. Duncan: I rise today to speak about the amendment and the motion before us. Discussions, negotiations about the multilateral agreement on investment, are being undertaken by Canada - by Canada, Mr. Speaker, by our national government. We have two representatives at the national level. We have an appointed senator who speaks ably and eloquently on our behalf, in the other place, in the red chamber. We also have a duly elected representative of Yukon people in the green chamber in Canada's Thirty-sixth Parliament.

Our member was elected by Yukon people to represent our interests at the national level. She was elected by Yukoners to speak on behalf of Yukoners on national issues. Canada's Thirty-sixth Parliament - the House of Commons, the green chamber - is not this chamber.

While I compliment those who have tried to address this motion and who have very eloquently stated the debate, by continually putting forward federal motions - national motions - and especially this motion and the amendment that deals with international issues, the members opposite have shown a complete disrespect for our national representative.

The member has summarily dismissed the House of Commons member's ability to speak on our behalf. Why else would they be insisting we must continually deal with national issues in our territorial legislature if they didn't think that our member could speak ably?

Some Hon. Member: (Inaudible)

Speaker: Order.

Ms. Duncan: Mr. Speaker, if you'll allow me to paraphrase - oh, NDP of little faith. The Member for Whitehorse Centre has put forward a motion that is disrespectful of our federal member. I also draw the member's attention, by comment, to statements made by a member of our Assembly. The Member for Whitehorse Centre urged people at a public microphone on Sunday to attend this important debate, advising 70 people which motion would be debated this afternoon.

We appreciate the heads up, although there are some who would consider that notifying the public outside of this House is somewhat less than appropriate.

The same member referred to the Government of Canada, using expletives and unparliamentary language. Mr. Speaker, I raise these comments because actions of one member reflect upon us all.

This motion and the amendment purport that, somehow, 29 industrial nations are having secret negotiations. I don't know how the learned member - who loves to display his knowledge of language and fine arts - would define secret, but I'm willing to suggest that, whatever the definition of "secret," it doesn't involve 29 industrial nations.

I should also remind the members, if they are not aware, that the Standing Committee on Foreign Affairs and International Trade, which has representation from all parties in the House of Commons, has struck a subcommittee called the Subcommittee on International Trade, Trade Disputes and Investment. The subcommittee is in the middle of seven days of public hearings on the MAI treaty.

The president of the Canadian Labour Congress and chair of the Council of Canadians - well-known activist Maude Barlow - have both appeared before the subcommittee. Members of the general public, including our representatives in Ottawa, speaking for Yukoners, are free to attend these public meetings. The Globe and Mail and the Financial Post - national newspapers - have printed numerous articles on the negotiations that are proceeding in Paris. So much for the negotiations being secret.

Mr. Speaker, the MAI is referred to by four constituents I spoke with only hours ago as the MIA - missing in action bill. This Legislature is missing the action with this discussion.

To the constituents I spoke with, this is costing you $5,200 per day to discuss the MAI. The constituents I spoke with explained a situation to me that makes the MAI-MIA case rather well. The situation was that an individual wins a court case - a conviction against someone who has abused them as a child - a case in which, to some degree, justice has been served, but not completely. The individual has required a great deal of counselling and assistance, and it costs money - a lot of money - to help this person recover from these grievous wrongs. Members of this Legislature know, or should know, as members of the Yukon bar who spoke to me knew, that legal aid doesn't cover a civil action. So, how do we as a society help to ensure that justice is truly achieved and that these individuals are helped?

I referred this member of the bar to the Crime Prevention and Victim Services Trust Act, which was discussed only recently and a short time ago by this Legislature. The member of the bar was unaware of this particular piece of legislation. I don't know, myself, personally, whether or not this particular victim would be able to receive assistance under this act. I thought so, but I said I would do my job as a territorial representative, find out and get this information to this person.

This issue was entirely relevant to this Chamber and to these members. It is important to Yukoners. That's one Yukoners and that's one issue.

In less than the last 12 hours, I have addressed questions on the abattoir from half a dozen different phone calls from constituents - valid, interested constituents who want questions and more information. I spent my evening at a school council meeting learning about the reading recovery program, an excellent program. It generates a great deal of questions, which will be coming forward in this Legislature later in debate.

These are important issues to Yukoners. They are the focus of the work of this Chamber. We have other representatives to do other work. To just waste Yukoners' time to address a subject that members are not fully briefed on and fully aware of is inappropriate.

Mr. Hardy: Well, those are interesting comments. I see the Liberals want to focus on the fact that we should not discuss national issues that affect Yukon people. We should stay away from it. We shouldn't talk about it in the Chamber. We should not talk about the effects it's going to have on social programs. No, let's stay away from it because we're not allowed to talk about it; we're not representing the people of the Yukon on anything national. What a bunch of poppycock. I never heard such ridiculousness in my life.

Minimum wages, investment, trade - we don't talk about that stuff because the Liberal leader has decided to tell us not to. The authority has spoken, so I guess we have to bow down to that. Dare to criticize the federal Liberals, dare to criticize them - it's a scary moment.

They say I'm wrong to raise the issues. The Member for Riverdale - what is it, Riverdale-Marsh Lake, Riverdale North? Okay, Riverdale North. I've got to make sure where he lives. I'm not sure all the time. He says I'm wrong to raise issues like equality.

He says I'm wrong to raise issues like race, colour, language, religion, class structure for people. He says I'm wrong to raise issues about conditions of work and trade. He says I'm wrong to raise conditions about human dignity and how it affects people in the Yukon and Canada and other people throughout the world. He says I'm wrong to raise issues about unemployment.

Well, I'm proud to be wrong in his eyes then, because the MAI - and I think there's a little bit of distortion here - is not about whether we agree with trade or not. It's about what kind of trade the MAI is going to bring in, and what kind of control do we have over our local, national, First Nation, municipal levels? What kind of control do we have over what kind of trade there is? What kind of conditions are attached to it?

We support fair trade. I support fair trade. I support the businesses in this territory that pay their employees well, that do good business, and that can trade fairly with other countries that also do that. I do not support free trade that exploits the rights of working people, that exploits the environment, that creates unsafe working conditions in which people die. I'll never support that kind of trade, and the MAI, unfortunately, is that kind of trade deal. And what's very important, which I think some people have missed here, is that we have no recourse if this is signed. We have absolutely no recourse to stop a transnational company, because those are the ones that are going to have a huge impact on Canada and the Yukon, destroying our environment. They can sue us, but we can't sue them. Is that a fair trade? Is that what free trade is about? I hope not.

Also they say that it's only left-wing. The Member for Riverdale North said it's only left-wing groups that are opposed to this. Well, you should listen to the CBC in the morning.

The pulp and paper industry in Canada is opposed to this deal. Why? Ask yourself why. Why is the pulp and paper industry opposed to this deal, and has come out and spoken against it? Why has the Republican Congress come out and spoken against this deal? Why? This is not left-wing thinking. There's something happening here. Read what's happening here. There is something happening here that is going to devastate fair trade, that's going to devastate the small businesses, because we're not going to be able to compete against Walmart, if they can set the standards of wages as low as they want. So when you stand up and speak, think about who you're speaking for. Is it the people of the Yukon, or is it only for the investors, as the Member for Klondike seems to like? Only the investors, never mind about the people in the Yukon.

This deal will not help the small businesses. This deal is to serve one master only, and that is the transnationals, the corporations that are so huge that many of them have economies larger than most of the countries in this world now, and they are dictating the conditions that we will work under and live under, and they're taking away the democracy. That is the important element here, that people still have to have some control over their country and be able to vote the people in and vote them out accordingly. With transnationals, you can't do it.

So on this amendment, I'm completely opposed to it, and I hope we get off it and get moving on to something that's more constructive.

Mr. Ostashek: I rise to speak in support of the amendment, and I'm going to try to stick more to the facts than to the emotion that has gone into the debate so far.

Before I do that, I do have a few comments I'd like to make in regard to the debate as it has progressed in this House this afternoon.

I will say from the onset that I'm fundamentally opposed to the position put forward by the Member for Porter Creek South, that we don't have the right to debate this issue in this Legislature. I believe in the democratic process, and this is a democratic Legislature, and this is where these issues should be debated.

The government, in their wisdom, whether we agree with them or not - the backbencher has put forward this motion -there's no doubt that they feel very strongly about their position.

Mr. Speaker, we, in my caucus, also feel very strongly about the position that we take, and that's what this Legislature is for - to debate these issues and put our views on the public record. I believe that's my job as an MLA, representing my constituents. While this may not be something that's near and dear to every constituent's heart, or an issue that they're thinking about at the breakfast table every morning, it is an issue that's going to have a fundamental impact on how they live out their lives in this society, how our children live out their lives, and how our grandchildren live out their lives. So, I believe that we are in order in debating this type of motion on the floor of the Legislature.

Mr. Speaker, my colleagues have made some very strong statements on our position on the MAI. The Member for Whitehorse Centre has a fundamentally different philosophical view from ours, and that will be the case. We don't expect a party that has a different philosophical view from us, not even close to us, to agree with the position we're going to take on this.

But I do want to put on the public record some of the things that I believe are important to this debate and some of the things that are important to give our federal government direction. I think it's probably in the main motion, too, but the last clause in the amended motion says that this House calls on the federal government to proceed with negotiations on the MAI and to facilitate full participation of all Canadians in major decisions affecting our economic future. And that is exactly what we're doing here today.

Mr. Speaker, we have some different views of some of the clauses or some of the arguments that have been put forward by some of the left-thinking people in this country as to what MAI will do to our jobs, to our industries, to our small businesses, as we did in NAFTA, as we did in the FTA. There were fundamental differences and I believe that, now that a period of time has gone by, the fearmongering that took place over those bills is now rearing its ugly head again on the MAI and on all of the bad things that are going to happen to Canadians if we support a broadening of our trade horizons and look to a more level playing field to encourage investment dollars in the Yukon.

In the Yukon, as small a jurisdiction as we are, I believe this is one place where we should be looking at that broader picture - not how we curtail investment in the Yukon but how do we make the Yukon an attractive place to invest.

Myself, Mr. Speaker, and my caucus colleagues in the Yukon Party don't believe that is by taking a protective attitude and mentality to free trade or any other kind of trade.

We do not have the financial resources in the Yukon to invest here. We need to have outside investment. We need to have rules of commerce that are competitive with other jurisdictions in the world. My colleague from Riverdale North pointed out that the free trade agreement and the NAFTA agreement have brought benefits to some of the businesses, those that want to take advantage of it. I don't want to see us going backward.

Mr. Speaker, the Member for Whitehorse Centre, when he got up to speak to the amendment, said that the pulp and paper industry is opposed to it. I didn't hear that report that way this morning. I heard that the unions in those industries were opposed to it, but I heard that the mining industry and the forestry industry in Canada were in favour of the MAI. That's what I heard. This certainly isn't an agreement that the unions favour. We know that, but the pulp and paper industry, as well as the mining industry, is in favour of the agreement.

I just want to clear the record on that.

Some of the fears that are being put out by people and organizations who are opposed to the MAI are that the MAI would weaken Canada's ability to create jobs. Well, Mr. Speaker, the FTA agreement and the NAFTA agreement didn't weaken our ability to create jobs. In fact, I say to members opposite, if we look at the economic activity in Canada today and what transpired during the 1990s, and I ask them to think back: where would we have been without free trade?

We have benefited many, many times over from those agreements, and

as the Member for Faro even pointed out when he stood on his feet, the federal Liberal Party, which was against it, saw the merits of it after they got into office. They saw the merits of it. And, we can thank God that they did, Mr. Speaker, because if it wouldn't have been for our exports in the last five or six years, our economy would be doing very, very poorly in Canada. Our deficit and debt would be continuing to grow. We would not have created the jobs in Canada that we have today if it would not have been for free trade and NAFTA. And, I see this agreement, the MAI, continuing to contribute to job creation in Canada, and I don't believe we need to fear any weakening of Canada's ability to create jobs by the signing of this agreement.

In fact, to Canadian investors abroad, the MAI will provide greater access and protection for making Canada's businesses more competitive. To say that this is going to hurt is wrong because, while we allow those companies and corporations and multinationals, as the member from Whitehorse Centre likes to refer to them, into Canada, we have some multinational corporations in Canada that stand to benefit. And, let's just look at one company, Northern Telecom, and look what they have done because of free trade and NAFTA. And look at what they're doing on trade with Asian countries now. Look at the returns they are bring back to this country; look at the jobs that they are creating in Canada.

Are those the kinds of things that the members opposite want to curtail? Or do they expect that this agreement can be all one sided. Do they expect that Canada can protect itself from everybody else and still have all the benefits of an open-trade society? I don't think so. I don't think so.

Another point is that the MAI would free corporations of any obligations to Canadians regarding labour, environmental and consumer protection. From everything I've heard and read and listened to in this country, all residents of Canada are subject to Canadian law and that Canadian law applies to corporations doing business in Canada, whether they are foreign or domestic. So, I don't believe there are any fears there.

The MAI would undermine Canada's culture. We protected culture in the NAFTA agreement to a certain extent and we negotiated exceptions for cultural industries and, from my understanding of this agreement, Canada's culture is not on the table.

The MAI would remove Canada's ability to place restrictions on foreign investment. That's another fallacy that's being put out by the naysayers to this agreement. Now, a vast majority of Canadian laws and regulations do not distinguish between foreign and domestic companies and, therefore, are consistent with the principles of the MAI.

Another fallacy that has been put out - and I believe we heard the Member for Whitehorse Centre speak to it today - is that the MAI would threaten our public health care and set the stage for a two-tier system. That's one that everyone who was against free trade and NAFTA likes to use, that it's going to have a detrimental effect on the integrity of our health care system. My understanding of this agreement is that, as under NAFTA, Canada will preserve the integrity of its health care system. I didn't see anything in the MAI that would limit Canada's ability to adopt or maintain our own policies on provisions of social service, on provisions of education, health care or child care. I don't see anything in that agreement that addresses those concerns or that has a negative impact on those concerns.

Mr. Speaker, another point that's raised by the naysayers is that the MAI will remove regulations requiring foreign companies operating in Canada to hire Canadians. That's another one they like to throw around all the time, that these companies cost jobs. Well, all corporations - both domestic and foreign - are currently required to look first on the Canadian labour market when hiring employees, and this requirement will not change under this agreement.

So, Mr. Speaker, there are a lot of fears being put out by people and organizations that don't want to see this agreement go ahead.

As I said, there are some very diverse and different views on what this will do, but I believe that history has shown us that NAFTA didn't bring the negative impacts that the people who weren't supportive of it said it would. The FTA didn't bring the negative impacts that people said it would bring that weren't supporting it. As with any changes, there are some disruptions - there's no doubt about it - but these disruptions are going to take place whether we have free trade or not.

Let's look at an issue that's going on right today that has nothing to do with this but is a perfect example, and that's the looming postal strike. Here we have an industry that studies have shown is a dying industry - delivering our mail - that is not going to be the big industry down the road that it has been in the past 15 or 20 years. Yet we have some very diverse views as to how we should handle it and some very protectionist attitudes that are entering into the negotiations.

So I believe that the MAI will be good for Canada. I don't believe that it'll be bad for Canada at all. It will still allow the government to review large-scale mergers and acquisitions involving Canadian companies under the Investment Canada Act. It will protect cultural industries, as I have said. It will maintain foreign ownership restrictions to sectors such as transportation, minerals and petroleum. Those aren't on the table. It will preserve the integrity of Canada's health care system, and it will continue to impose and maintain foreign ownership limits when privatizing Crown corporations.

I believe all of the protection clauses are in there that Canadians need to feel comfortable, and I believe the amended motion gives the direction that this House should be giving to the federal government, and that's to proceed with negotiations and to involve the full participation of all Canadians in major decisions such as this that affect our economic future.

Thank you, Mr. Speaker.

Speaker: Are you prepared for the question on the amendment?

Some Hon. Members: Division.


Speaker: Division has been called. Mr. Clerk, would you poll the House.

Hon. Mr. McDonald: Disagree.

Hon. Mr. Harding: Disagree.

Hon. Ms. Moorcroft: Disagree.

Hon. Mr. Keenan: Disagree.

Hon. Mr. Sloan: Disagree.

Hon. Mr. Fairclough: Disagree.

Mr. McRobb: Disagree.

Mr. Fentie: Disagree.

Hon. Mr. Harding: Disagree.

Mr. Livingston: Disagree.

Mr. Ostashek: Agree.

Mr. Phillips: Agree.

Mr. Jenkins: Agree.

Ms. Duncan: Disagree.

Mr. Cable: Disagree.

Mrs. Edelman: Disagree.

Clerk: Mr. Speaker, the results are three yea, 13 nay.

Speaker: I declare the amendment defeated.

Amendment to Motion No. 82 negatived

Speaker: Is there any further debate on the main motion?

Hon. Mr. Harding: I made a lot of my points on the amendment that I wanted to say about this debate. I won't be long, because I think it's important that we vote on this motion today.

Mr. Speaker, we believe in fair trade. We have problems with free trade, as it is envisioned under the FTA and NAFTA, and we have grave problems with how it is envisioned under the MAI. We feel that there's too much control in the hands of economic interests.

The Member for Klondike, of the Yukon Party, said money knows no boundaries, but I want to tell that member that the people of this country know their boundaries, and they are a proud people in Canada. The people in the Yukon are a proud people. They know their boundaries, and they don't, I don't think, believe that money can have absolutely no conscience. I would believe, and I would argue, that the citizens of this country do believe that Canadians ought to have influence and control over economic interests.

Now, he also said that profit is what makes Canada what it is today, and I disagree fundamentally with the Yukon Party on that score. I believe that Canadians have made Canada what it is today. Our resources have made Canada what it is today. Mr. Speaker, the economy and profit are not an end. The economy and profit are vehicles to create an end, which is a better country, a higher quality of life for Canadians, socially and economically.

So, I think there is a really strong philosophical difference between the Yukon Party and the Yukon New Democrats. That shouldn't be any surprise to anybody. But when I hear the members opposite say that profit is what makes Canada what it is today, I shudder, because it is absolutely false, and I think it's disrespectful to what I believe brings Canadians together and makes us different from Americans, from other cultures and other peoples in this world. I think Canadians do realize that there's more to this country than money. I think it's one of the reasons why there's such an aversion by a lot of Canadians to the huge profits that banks are making. People are accepting Canadians, I know I certainly am, as people being able to raise money, to make profit, to have jobs, but the whole corporate veil or the whole common legal system is created, I believe, for the benefit of people. It's designed to create a corporate vehicle for the creation of wealth, the creation of jobs but, fundamental to that, is that those jobs and that wealth are spread throughout the economy and that there's some levelling in our economic system.

I'm not an advocate of the trickle-down approach. However, I do believe that many elements of our economic system depend on entrepreneurs, on investment, and I think we have to be cognizant of that and we have to pursue it. But when we trade, let's trade fairly. Let's recognize labour standards. Let's recognize environmental standards. Let's recognize what it does to the youth of countries that are put to work in factories at five years old. Let's recognize what that does to their future, their lack of education.

You know, the former Government Leader - the leader of the official opposition - said that the NAFTA and the free trade agreement did nothing in terms of coming true regarding the concerns that were raised in the free trade debate. I disagree totally with that statement. Look at what the federal Liberal government has done to health care and education in the two terms in government thus far. They have cut and slashed and offloaded to the provinces and territories to the point where the sacred trust that Brian Mulroney talked about is no longer sacred.

I believe NAFTA and free trade have had, if not cataclysmic repercussions on our economy and on our social safety net, repercussions of a significant nature, and it has impacted and it is a result of those agreements.

I also want to say, in terms of this debate, that the Member for Klondike's statement about driving industry out of this territory is - I don't know where he comes up with that.

I remember the Yukon Party's claims of nine mines in the offing when they were doing their Yukon Party caucus update propaganda sheet. Of course one of those companies was Redel, which was shortly thereafter kicked off the Vancouver Stock Exchange. I guess they're back on now.

Then there was the Casino project, which they always often touted as being just around the corner and, of course, we know that's not the case.

In oil and gas, forestry and mining we have encouraged many positive developments there. Unfortunately, it's very difficult to compete with the impact of Bre-X, which has hammered all the jurisdictions in this country on junior exploration. Anyway, his comment was totally beside the point, but I did feel, as Economic Development minister, I had to speak to it.

We believe that there should be provision for local benefits, for local preference, for local recognition of the contribution of local people to the economy. We believe that certain things in our country are fundamental and should not be touched and should not be the subject of corporate bartering. We do believe that we should have the right as Canadians to establish those things, and when those rights are infringed upon, then I think we have a problem.

So, what this debate is about is fair trade or free trade. What this debate is about is who has control and ear of the leaders of the country and who are the leaders of the country. While we can support the concept of fair trade, we have a grave problem with what the MAI is proposing.

We don't think it will benefit Canadians in the long run, and I think it's the reason that a lot of business corporations of this country are raising concerns about the MAI and I think it's also the reason that the Republican Congress in the United States are raising concerns about the MAI. They don't believe, in the long run, it will be good for democracy; it will not be good for people.

We feel very strongly about this motion. We're glad the Member for Whitehorse Centre brought it forward and we intend to support him and continue to pursue, when we trade as a territory, fair trade. We will pursue that vehemently and we will pursue increased labour standards, increased environmental standards, a leveller playing field. We will try to raise the plain when it comes to trying to create economic development.

Mr. Speaker, we will continue to raise concerns about child poverty and child labour when we trade, and we will continue to fight for those principles.

So, Mr. Speaker, with that, I just say that I support the motion, and I look forward to further debate.

Mrs. Edelman: Mr. Speaker, I am a territorial member of the Legislative Assembly, and as such I consider it my job to represent my constituents on territorial issues.

As Yukoners, we have two fine representatives on the federal level. We have Senator Lucier, and this year we elected Louise Hardy as our new, federal MP. I respect the abilities of both our federal politicians to represent us in the federal political arena. So it makes me wonder why members of this territorial NDP government continuously bring federal issues to the floor of this territorial Legislature on private members' day.

Today, we are speaking to the MAI, another federal issue. Mr. Speaker, I am a territorial representative of the people of Riverdale South, and personally I have plenty to do dealing with territorial issues. Now, if the members opposite are having trouble identifying territorial issues that they might want to spend some time on, then let me know. I have a few suggestions, and I'll give the Clerk copies to distribute to the people on the other side. Let me just start to read some of those issues: alcohol and drug abuse, the abattoir, agriculture, midwifery, parenting, wood smoke, AIDS, home care, mental health, physiotherapy, workers' compensation, rural ambulance services, school dental programs, respite care, EMO, fire protection, land assessments, Yukon highways, quarries, sports and recreation, sewage - one of my favourites - waste disposal -

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

Point of order

Speaker: Mr. Livingston, on a point of order.

Mr. Livingston: Point of order, Mr. Speaker. Could we address the motion that's on the floor of the House, please.

Speaker's ruling

Speaker: Instead of addressing from the list, continue with the motion that's been requested on the main motion.

Mrs. Edelman: Mr. Speaker, my point was that we're wasting our time, and we're wasting money. Thank you.

Hon. Mr. McDonald: I am afraid that I have great difficulty accepting the Liberals' official position in this Legislature on this matter. I won't spend a lot of time dealing with it, because I don't believe that it's helpful to furthering the relevant debate here today.

I am a little bit worried about the tendency amongst the Liberal caucus to either want to defend the federal government - and I'll cite, for example, the cutbacks in the formula financing agreement a few years back - or to try to deflect issues that are, in fact, important to the citizens of this territory, that do, in fact, affect decisions made by this Legislature but which are, of course, national issues. That is why, of course, the federal government has been discussing things like trade issues with provinces and territories for many, many years, knowing full well that these issues do relate to territorial and provincial law-making abilities and are, in fact, quite relevant to territorial legislatures. In fact, territorial and provincial legislatures have been commenting on trade issues for many, many years because they are so important.

Now, the member was reading out some issues here that she thought were more important to deal with. I would point out that many of the issues she recited are, or would, in fact, be directly affected by the multilateral agreement on investment. So, consequently, the fact that the members do not wish to debate the issue today speaks more to an interest in wanting to defend federal interests than speak to Yukon people's interests.

Mr. Speaker, I don't have much more to say about their position than that. I just find alarming the tendency of the Liberal Party to try to deflect attention from their compatriots. I think it's unfortunate because if this position is rigorously held by them, we will find ourselves in a position where we will be discouraged from speaking to a whole variety of issues that may be of relevance to both the federal and the territorial governments, and that truly would be tragic.

Now, listening to the members in the Yukon Party benches, I thought to myself what a wonderful thing democracy was, that even those with limited vision are given a platform, even those who are ignorant about a subject are given a podium on which to speak.

I would point out to the members that there are conservative administrations, even in this country, that have indicated their extreme nervousness about the direction that the MAI is heading in these rounds of discussions, because they are tremendously worried about their ability to remain, as they put it in Conservative terms, competitive with countries all around this world.

And the primary concern is that if we have passed very reasonable laws respecting the environment, respecting the rights of workers and minimum protection for workers, if we pass laws which encourage reasonable environmental standards for such things as sewage facilities, which seems to be of interest to the Member for Riverdale South, then these can be compromised, if any international agreement on trade is so rigorous it allows investment so much room to maneuver in a no-rules environment that their ability to legislate and protect their citizens is greatly compromised.

Of course, there are some of us, too, who feel not only that it is important that we are able to protect our ability to legislate and provide minimum standards in a whole series of endeavours but we also - for some of us at least - concerned about our friends and fellow humans around the planet who also, presumably, are deserving of similar treatment.

We are also concerned and feel, at a minimum, some guilt that our prosperity is maybe achieved because some poor 11 year old had to work a 16-hour shift in a sweatshop some place. Some of us don't ignore those things.

I'll just point to the Trade Canada Mission from last spring, where Premier Filmon, not a notable New Democrat, expressed some concern to the leaders of governments, along with other premiers, that this was human rights, minimum labour standards and minimum environmental standards, something that should be protected in international treaties.

In my view, he was speaking not just because he was worried about the competitive position of Canadian companies, he was worried about the people - for lack of a better term, and this is probably a very good term - who were being exploited for our purposes.

There are people around this country and around this world who do believe strongly in humanitarian values, who do believe strongly that economies are for people, who reject the notion that there can be such things as economic recovery and still have high jobless rates, who reject the notion that the accumulation of wealth is something that has value in and of itself, and that it is somehow disparate or distant from the whole notion of quality of life and ensuring that people do operate in reasonable living conditions.

So this is not the exclusive domain of those people who care in the New Democrats. It's also an observation that has been made by many people in this country outside of New Democratic Party circles.

It is an entirely reasonable proposition to suggest that we do believe in fair trade, that we do want to pursue more trading opportunities for our businesses in the territory, that we do have products to sell, we do have expertise that we can provide, we do have things to learn that will improve the quality of life, not only of our citizens, but people around the planet. And it is a reasonable proposition, at the same time, that people who engage in trade discussions should, at the very barest minimum, be targeting the horizon which promotes more economic prosperity for all people, not just the people who make the investment decisions, not just for the people who are clearly on top of the heap and who are clearly benefiting marvelously by existing private sector activities, but for everyone - that there is an obligation that we think about everyone.

If in our Legislature, and in the modern Canadian tradition - because this is a new thing - we had focused only on the benefit for the scarce few, I don't think that many of us in this Legislature would be re-elected. We have populist roots in this country; we have populist roots in this territory. We respond to people's needs. We feel that we need to dedicate time and energy in this Legislature to speaking not just about the needs of the well-heeled and the people who are the movers and shakers and the people who exchange capital are concerned, but also, and most importantly, some of the things that we've done that we're most proud of are the child benefit for poor children; we have passed a mobile home strategy, which deals with people who live in really crummy living conditions.

We have done a number of things in this Legislature which focus on ensuring that all people can benefit from economic activity, and it would behove us to take these principles elsewhere, beyond our borders, and live by those standards. Clearly, it wouldn't take anyone much time to realize that there are inconsistencies in that approach, that the Canadian government can meet and do business with companies or governments that have not had the same record as the Canadian governments with respect to human rights and others. But what we want to do, ultimately, presumably, is to improve that record and shoot for, not the lowest common denominator, but for some higher standards, for ourselves as well as for others, and where we do recognize that we are living inconsistently in terms of our own trade policies, that we try to improve that record over time. This ought to be a laudable proposition but to make the proposition that the only way that we can be truly comfortable with an entirely consistent position on trade is to operate in an absolutely no-rules environment. That makes no sense and it can very much erode not only the law-making power of this Legislature but it can erode the services, the protections, for the people that we represent.

I think this is a worthwhile discussion. I think this is a worthwhile debate. I think this is something that is quite relevant, not only to the Yukon Legislature but I know it's relevant to other premiers across this country - Liberal, Progressive Conservative and New Democrat. It is a very real issue for all of us and it is precisely for that reason that the federal government has been involving us more and more, not as much as some of us would like, in international trading activity and decision making.

We should be speaking out on issues like this. This is an issue that we should be raising. It is important to us now, and it will be important for us in the future.

Hon. Ms. Moorcroft: Mr. Speaker, I rise in support of the motion before us.

The questions of economics are ultimately questions of values. What values do we assign to activities and to resources?

When we speak of economies, we should be speaking about the care and management of our homes, our community, our world. Economies include our social services, our culture, our labour standards, our environmental standards. Economic globalization, like the multilateral agreement on investment, imposes programs on all governments to completely open their economies to business and investments.

The multilateral agreement on investment, as the Member for Klondike said, is essentially a corporate bill of rights, and it seems that the member who identified it as that had no concern about the human side of the question.

I want to question this headlong rush into international agreements aimed at creating common global rules for everything from telephone company competition to farm policy. There's this unrelenting pressure for a single global market. Do we really want it? I don't think so. Many of us don't.

The official draft text of the MAI gives foreign investors a legal status equal to that of the contracting parties - namely the nation states of the OECD that are participating in these negotiations for several years now.

One section of the MAI would "outlaw any measure that restricts the right of foreign investors to bid on government contracts." Foreign corporations could not be required to buy local goods or hire locally.

Yet, we have the Liberal member standing up and saying there's no connection to the territorial realm in debating this motion. They're fundamentally wrong. If Canada, as a country, signs on to an international agreement, which would allow foreign corporations more rights than citizens and would ensure that foreign corporations could not be required to hire locally or to buy local goods, we're heading for a problem and we're heading for a problem that we'll see right here in the Yukon Territory.

The MAI would also stop governments from passing new regulatory legislation. It would oblige them to gradually roll back existing laws which don't conform to the liberalization goals of the multilateral agreement. If we sign this deal, our existing tax, labour, consumer protection and environmental laws could all be up for review by unelected international panels. One of the first challenges would almost certainly come from the tobacco and alcohol industries that could use the MAI to turn back laws restricting the advertising and promotion of their products, products which cause cancer and kill people, products which drain our health care systems.

Under the MAI, countries that bought into this would be bound in agreements for up to 20 years before they could get out. The MAI would give foreign companies the right to bring in their own labour force. The MAI will not respect safety in the workplace, fair wage laws or reasonable hours of work. The MAI has no provision for equal opportunity or employment equity, pay equity or seniority rights.

In money markets, transnational corporations increase their profits by forcing women in different communities and different countries to compete for the lowest wages. I'd like to speak for a moment or two about the impact on women of the existing international agreements that we have and particularly the harm that the multilateral agreement on investments could cause.

The marketplace takes advantage of women's skills as caregivers in their work in child care, elder care, and as teachers, domestic workers, nurses, political activists, church volunteers. All of this work goes unrecognized, unpaid and devalued within our economy. In developed countries such as Canada, women's work burden is as high as 28 percent more than men. When governments redistribute economic resources toward the trade sector, or give tax breaks to corporations, or eliminate tariffs and other trade barriers, social services are the first things cut to make up for the revenue shortfall.

Given that it is women and children who rely on and use these social services most, they are the ones most adversely affected. Trade as gender-neutral is a myth.

When governments cut funding to our social services, this work falls into women's laps. Minimum wage laws and other labour laws do not address this issue of women's equality in the economy. Our governments willingly surrender our sovereignty to corporate citizens, who seem to have more clout than individuals, communities and organizations concerned with democracy, equality, justice and the protection and sustainability of the environment and a country's resources.

Canada has the second highest rate of the G-7 countries - the seven richest nations - in low-paying women's jobs. The Canadian labour market, like many others, still perpetuates biases in wages, promotion and working conditions. The federal government still refuses, after 13 years of fighting, to enforce federal pay equity legislation, in effect breaking the law.

If the multilateral agreement on investment, the latest bill of rights for multinational corporations, is signed by our governments, women can expect to lose more power over our governments, communities, work, economy and trade. The MAI, in its present form, gives big business the right to be seen as citizens without boundaries, accountability or responsibility.

These corporate citizens will have the right to sue our governments, individuals or organizations that disagree with their agenda - witness the current lawsuit brought against the Lubicon Nation in Alberta by a powerful pulp and paper giant. The MAI will give corporations the right to pick up stakes and leave if they do not feel that the community or country they work in is big business friendly enough or if their profit margins are compromised.

Women still only control 10 percent of the world's economy and own only one percent of the world's land as we continue to make up 50 percent of the world's population. Women are still being denied credit and land rights in countries in the north and south. Migrant workers associations, homeworkers associations, farm women's groups, front-line women's equality workers, community health and social service workers, women's lived experiences must collectively inform any analysis and any strategy.

There are numerous of these women's groups who are thinking and writing about the MAI and about the problems that it will pose for them and for all of us. We have examples from women in Africa, Asia, Latin America and the Caribbean of how women can and do create markets that we control to the benefit of our communities.

Our support for social services, public education, credit unions, small businesses, local farmers, public pensions, health care plans, workers' rights, public day care, food cooperatives and women's equality are all examples of ways in which we are resisting the global corporate agenda. Corporate control is not inevitable and governments still have powers. It is who they listen to and agree to be controlled by that has to change. If it is not appropriate for women, it is not appropriate.

Ultimately, the multilateral agreement on investment represents an abdication of power to wealthy investors and their interests. It means that governments must give up any pretense of truly working for the common good. In essence, this means abandoning the most basic principles of democracy.

The global corporate agenda is not a woman's agenda. It is not a people's agenda. I'm very disappointed with the position of the Liberal members of this House in that they do not support environmental, labour, consumer and women's organizations who oppose the multilateral agreement on investment. I think they are taking a very shortsighted approach if they think that the MAI will have no impact in the Yukon Territory. It will have an impact in this territory and in this country.

We must confront the federal government's direction of supporting the rights of speculative capitalism and transnational corporations' interests above the interests of Canadian women and men and the public good.

Mr. Speaker, I urge members of this House to support this motion.

Thank you.

Mr. Phillips: Mr. Speaker, it's becoming pretty obvious, I guess, to most people that we certainly have a pretty heavy-duty, left-wing government over here that supports these principles. At least they're true to their form.

Mr. Speaker, when I was going to speak to this motion here today, I planned on speaking to the motion primarily about the difference, maybe the philosophical difference, that I see between the Yukon Party and the Yukon NDP, who have raised the motion on the floor of the House, and I have to say, before I get into that, that I was extremely puzzled by the Liberal Party position under its new leader.

I have a real problem, Mr. Speaker, with the position that the Liberal Party is taking on this. They've been known, from time to time, to take no position on almost everything, or take both sides, or come down the middle of the road, and they pride themselves on that - sort of sticking their finger in the wind and feeling which way it's going at the time and then rushing over to that side.

This one is even more different than that. I think it's an error made by the new Liberal leader to choose to go this route, and to say that this particular motion and this particular agreement won't have an effect on Yukoners. I think it will.

The difference is that the New Democratic Party and the side opposite think it's going to devastate us, the way free trade has devastated us, in their eyes, and the Yukon Party feels that it'll bring some benefits to Canada and the Yukon.

The Liberal Party, I guess, doesn't care one way or the other, whether it benefits us or it hurts us. They feel that they have two members - a senator and a New Democratic Member of Parliament - who can represent us well in Ottawa, and we should leave well enough alone.

I've been in this House almost 13 years, and there have been all kinds of issues that happened in Ottawa that affect us, and that happened here that affect Ottawa. It's our responsibility to speak out on those issues, and I defend the right of the Member for Whitehorse Centre to bring this motion forward. I don't agree with the motion, but I defend the member's right to bring the motion forward and discuss an issue that will affect the Yukon people. It will affect Yukon people.

I think it'll be positive, the New Democrats think it'll be negative, and the Liberals don't want to talk about it.

Mr. Speaker, there are a lot of motions that have come forward in this House that we've debated here that have made the local Liberals uncomfortable. There's the gun control. In that one, if we think Elvis Stojko can skate, you should have seen Jack Cable on that one. He pulled off some quads and some triple jumps and other fancy manoeuvres, and came out of it partially unscathed.

We've had motions in this House with respect to cuts to education, cuts to health care, federal government initiatives, free trade - even under the NDP government back then when free trade came in - we discussed that at that time as well. There was a difference then though; the Liberals were against free trade then and they're for it now. So, it was a bit different, but it was something that was debated in the House and debated at that time by the Liberals. I think there was one in the House at that time.

The local Liberal leader asks who that was. I'm not sure many people will remember his name. They remember his claim to fame, but they don't remember his name.

I believe that there are motions that come before us in this House, like this, where we have to stand up and state our Yukon position on it one way or the other. You can't ride the fence. You can't say we have more important things to do. We'll always have important things to do in here, but I'm not totally convinced that this one isn't. I think this one is fairly important. I think it is fairly significant. I think it will affect Yukoners in the future. I think the New Democrats believe it will, too. They think it will in a negative fashion. We think it will in a positive way.

I think it is an obligation to stand up in the House and debate these motions and just because you don't like the motion, or you think they're picking on your parent Liberal Party, is no reason to try and opt out, and I think it was a political mistake to not take a position on this particular motion.

Now, getting back to the motion, I support the MAI because I believe it will help create jobs in the future for Canada, and I think our Government Leader believes that more trade and investment will create jobs for Yukon as well, because he's going on a trade mission to South America. He's not going there on a holiday; he's going there with other ministers to hopefully attract international investment and international interest in investing in the territory.

That's why our leader is going there. That's why he went to China and to Asia. That's why he went to Korea years ago. He wanted investment; he wanted to encourage investment. And, some of those missions by our leaders in the past have paid off.

Right now we have trucks running on the road again; a lot of Yukoners are pleased to see that. One of the reasons those trucks are running on that road is because the investment of an international, multinational company - Hyundai.

Now, that's good; that's creating 300-400 jobs in Faro. If it wasn't for somebody like Hyundai who is involved in it, that multinational company, Mr. Speaker, there would be no Faro. There would be no one else; there would be 400 fewer jobs in the territory. There would be 16-17 percent unemployment.

So, you can't have it both ways. You can't stand up as a government and take a position that you discourage foreign investment, and on the other hand hop on to the Prime Minister's aircraft, arm-in-arm with the Prime Minister, and fly off to South America pretending that you want to attract more foreign investment to the territory.

This agreement will open the door to that foreign investment to the territory, and it will encourage those foreign investors, and will give them confidence that the Yukon is a good place to invest.

The minister responsible for the Woman's Directorate said women are going to suffer. Well, there are women working at the Faro mine; they wouldn't be working there if it wasn't for foreign investment. There are women working in local businesses in the City of Whitehorse who are benefiting from that investment of Hyundai.

Some Hon. Member: (Inaudible)

Mr. Phillips: Well, the Member for Watson Lake said that's without MAI. That's right. He's right. It is without MAI, but there are restrictions now. There is an opportunity to encourage more investment and surely to goodness - I mean both the Economic Development minister and this Government Leader have taken a strong position on attracting new investment. You don't attract new investment by closing the doors, as the Member for Whitehorse Centre wants to do. You attract new investment by opening the doors and by letting more international companies in that will create jobs in our country.

Mr. Speaker, I believe that this is going to be a good move for Canada. In this particular agreement, all residents of Canada are subject to Canadian law and this will apply to all corporations, whether they're foreign or domestic.

Canadian investors abroad - what will it do for them, Mr. Speaker? The MAI will provide greater access and protection, making Canadian businesses more competitive and, Mr. Speaker, we have to get more competitive. We have to be more competitive in the marketplace if we're going to stay alive.

Free trade - I spoke about free trade earlier today and I listened to the left-wing fearmongering of the Minister of Justice talking about the terrible things that were going to happen to us if we get involved in this MAI, if we supported it. Well, guess what? It has helped the Yukon. It has helped some Yukon jobs. It has put some people to work in this territory that wouldn't be to work otherwise. Mr. Speaker, have they lost sight of that? Does that not mean anything to the members on the side opposite? Maybe the members on the side opposite, if they're going to stand up and speak, can tell me what jobs in the Yukon were lost as a result of free trade.

What jobs were lost in the Yukon as a result of free trade? I don't think there were any.

Some Hon. Member: (Inaudible)

Mr. Phillips: Mr. Speaker, the Member for Watson Lake said, "What jobs were created?" Well, there were a lot of jobs created with free trade. A lot of artists, a lot of other people - window manufacturers, stove manufacturers. There are a lot of jobs that have been created with free trade.

Some Hon. Member: (Inaudible)

Mr. Phillips: Well, Mr. Speaker, he says they were there before. That's right. These businesses were here before, but now that they're dealing in the United States and other countries, they have more employees working in the Yukon. They have more people building products and shipping them out to other jurisdictions because of free trade, but the members on the side opposite refuse to admit that.

Mr. Speaker, this is a good agreement for Canada. We have to get into the real world. We do have to compete. There are going to be some growing pains like there are with every other change that we experience through life, but I believe that in the long run this is going to benefit us and that this is going to benefit Yukoners.

There are not too many Yukoners, Mr. Speaker, who have millions of dollars to invest in the territory. Almost all of the large initiatives that are going to come to our territory, whether it be oil and gas, whether it be mineral exploration, whether it be manufacturing, are going to come from outside of this territory. Very few Yukoners have the dollars to establish those kinds of businesses here. There are some businesses that are expanding, but when we're talking multi-million dollar expansions, multi-million dollar technology, multi-million dollar expertise, that's not here yet. We are one of the jurisdictions who will benefit from that.

Mr. Speaker, the members opposite have said that the MAI would undermine Canada's culture. Well, I don't believe it did under NAFTA. In fact, Canada will negotiate an exception for cultural industries. Canada's culture is not up on the table. It wasn't in NAFTA, and it's not now.

The MAI would remove Canada's ability to place restrictions on foreign investment. The vast majority of Canadian laws and regulations do not distinguish between foreign and domestic companies. They're not going to get a break.

If the Member for Watson Lake starts a company up in Watson Lake, he will have to abide by a certain group of laws. If a major Japanese investor came into Watson Lake and wanted to build a sawmill and employ hundreds of people in Watson Lake, guess what? He'd have to abide by the same laws the Member for Watson Lake would, but he would bring his millions of dollars into the territory and employ hundreds of residents of Watson Lake and help the economy.

Some Hon. Member: (Inaudible)

Mr. Phillips:

The Member for Watson Lake says he doesn't need that kind of thing in his jurisdiction. Well, I think he does, Mr. Speaker. I think he does need that kind of infusion of cash into his area, and I think his constituents will be surprised that the member has taken a position that they don't need that kind of investment in his community.

As in the NAFTA, Canada will retain its foreign ownership limits in sectors such as transportation, energy, broadcasting, telecommunications and financial services, and Canada will retain the right to set foreign ownership limits when privatizing Crown corporations.

Is it going to threaten our health care, setting the stage for a two-tiered system? Mr. Speaker, this agreement will preserve the integrity of Canada's health care system and nothing in the MAI will limit Canada's ability to adopt or maintain its own policies. We will make the rules.

MAI would remove regulations requiring foreign companies operating in Canada to hire Canadians. Well, all corporations, both domestic and foreign, are currently required to look first to the Canadian labour market when hiring employees. This requirement is not going to change. It might change in the Yukon, when the Member for Whitehorse Centre is finished with it, and no one else in the world will be able to work here unless you've been a Yukoner for - how long was the workers' advocate - I think he was here about three weeks, and the minister responsible for WCB declared him a Yukoner, so I guess that's what the residency requirement is now to be a Yukoner: about three weeks.

So, you'd have to be here for three weeks before you can get a job in the Yukon if that's the bottom line that they...

Some Hon. Member: (Inaudible)

Mr. Phillips:

The MAI will allow Canada to set conditions as to job creation when granting incentives to domestic and foreign companies.

We've seen investment by foreign companies, foreign car companies and other companies in North America, in southern Canada, where many of the large car companies from Japan have moved into the area, creating thousands of jobs right now for Canadians in the auto industry.

Like I said, I think that if there ever was a jurisdiction that could benefit more than others, it is more likely to be the Yukon. With our natural resources we have here, with the huge amounts of cash that's going to be needed down the road to develop those natural resources, it'll be difficult to find it at home, and I mean not only in the Yukon but even in Canada.

We see now the difficulties that are happening now with Anvil Range trying to raise money on the stock market and how difficult it is for Canadian mining companies presently to raise money. I think the Minister of Economic Development pointed out that the Bre-X scandal did harm to everybody.

Speaker: The member has two minutes.

Mr. Phillips: This kind of change will encourage those investors to come back to Canada. Canada has a great deal to offer the world with respect to trade and commerce, and Canada can benefit from agreements such as the MAI.

I am disappointed with the closed-door approach that's been taken by the Member for Whitehorse Centre. I'm disappointed with the no-approach that the Liberal Party has taken under its new leader with respect to this particular motion, because it's going to affect Yukoners whether we like it or not.

Mr. Speaker, the MAI is a good move. The MAI will create jobs for Yukoners, and I urge members in this House to turn down, vote against the motion as presented by the Member for Whitehorse Centre.

Thank you, Mr. Speaker.

Mr. Cable: I'd like to start by saying I'm not going to cast any aspersions on the Member for Riverdale North. He's a nice guy, basically. A little misguided, but I have no negative comments on his negative comments.

I would like to say, though, that last night I couldn't get to sleep, so I was channel-flicking at this place where I'm house-sitting, and what do I find about midnight, watching the Canadian parliamentary channel? I find a very public hearing on the MAI, the multilateral agreement on investment - presumably part of these very secret negotiations involving these 29 very public countries of the OECD, the nations referred to in the motion. I was listening to the not very constructive background chatter of a Mr. Blakey - I think he was one of the panel members - while people with different views tried to make a point. It was very reminiscent of what's happening today.

Now, the main motion before this House today is a mixture of debatable notions with a flavour of class warfare thrown in to try and market the idea. This debate, initially anyway, is not about who will control our destiny - corporations or the people or transnational unions. It's initially really a debate about the facts, and precious few facts have hit the floor today.

Some Hon. Member: (Inaudible)

Mr. Cable:

One point I'd like to enlighten the member on - the Member for Whitehorse Centre is asking for enlightenment, and of course he recognizes the need for enlightenment, so I'm happy to see he's part way along the road to being cured. This agreement has not, as yet, been signed of course. In fact, it hasn't even been negotiated. We're talking about an agreement in draft form, I believe, that's gone out for parliamentary hearings.

Now, the public debate on the multilateral agreement on investment, so far anyway, is very reminiscent of the miserable and discouraging public debate on the first free trade agreement. The exaggerations and paranoia reigned supreme.

The Member for Whitehorse Centre certainly has a lot to say. Not very much of it is well-informed, of course but nonetheless, right from the heart.

Now, I have memories of Mr. Mulroney and his gang during the free trade debate hauling out a retired judge, well into his dotage, to say that the agreement didn't have anything in it that would affect our social programs and, of course, when all is said and done, many of the backers' claims of the free trade agreement turned out to be exaggerated, and many of the detractors' claims turned out to be exaggerated.

Now, the debate this afternoon reinforces my worst suspicions. When the public debate is all over, very few of us people on the ground will be any the wiser.

I do have some briefing notes though and I do have some points that have been brought up.

Some of the detractors have raised a number of points. One of the main points is that the MAI has no general exclusion for public and social services and, as such, Canada's health care system and other social services would be threatened.

Now, what I'm informed is that Canada will undertake no obligations that would undermine the government's ability to adopt or maintain policies in respect to health care, education, child care and other social services, and that Canada - this is the Canadian government - would take broad exceptions to preserve the integrity of these services as was done in the NAFTA agreement.

Now, with respect to culture, the detractors have this to say: "The principle of national treatment and the inclusion of rules on subsidies would threaten Canadian culture."

This is what the backers of the proposed agreement say: "Canada will not sign an agreement that would restrict the government's ability to promote and protect Canadian culture. Canada has made it clear that Canada will accept no less than a complete exception for Canada's cultural sector."

And on and on and on.

Many of the bullet points have been dealt with today.

On the issue of control over corporations, the detractors say that the MAI would prevent federal and provincial governments from requiring that Canadians be represented on boards of directors of companies incorporated in Canada. The supporters of the proposed agreement say that Canada will file an exception to permit current measures requiring that a majority of directors on the boards of federally incorporated companies be resident Canadians. Canadians have the same exception in the NAFTA agreement.

With respect to the benefits from foreign investment, the detractors have this to say, "The MAI would prevent governments from ensuring that takeovers and new foreign investment maintain or create jobs in Canada." What the promoters of the agreement say is that Canada, the Canadian government, will preserve the ability to review, under the Investment Canada Act, significant mergers and acquisitions by foreign investors, and that immigration and labour laws in Canada require that all corporations, whether domestic or foreign owned, look first on the Canadian labour market when hiring employees. This would not change under the MAI.

Another significant point made by the detractors of the initiative is the Canadian government would be made liable to pay damages in respect of actions which foreign investors see as unreasonable and discriminatory. The answer to that by the promoters of the bill is that the government would only be liable to pay damages if it were found to have violated provisions of an MAI agreement.

This determination would not be made by the foreign investors, but rather by independent and impartial international arbitrators acting in accordance with clearly established procedures. And on and on and on.

And, of course, the paranoia that one is trying to excite by saying the negotiations have been in secret is easily refutable by following all the public moves that have taken place and, of course, the hearings that are now going on.

The general gist of the attack on the bill, indicating that Canada's sovereignty will be threatened, is met by the following propositions: the government will, number one, retain the ability to review large-scale mergers and acquisitions, as was mentioned a moment ago, involving Canadian companies, and to maintain foreign ownership limits in privatizing Crown corporations. Secondly, the government will preserve the integrity of our health and social programs and, thirdly, the government will require job creation or the conduct of research and development activities in Canada as conditions for receiving investment incentives.

Now, assuming that the mover of the motion understands the motion, which is fairly debatable, I would have to say that when this afternoon is over very few of us will be any of the wiser. The debate has reinforced my worst suspicion, that when the public debate is over many of us will be none the wiser.

We have the motion itself, which is a mixture of left wing polemics, and of course the amendment, which was an attempt to balance those left-wing polemics was fairly well considered, and I have to indicate that the mover of the amendment made some attempt at balancing the somewhat biased view of the main motion, but w

e, in the liberal caucus, find it very difficult to back motions that are full of exaggerations, full of class warfare and full of much thunder and lightening, signifying very little.

And that is the reason that we will not be supporting the main motion.

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

Mr. Hardy: There has been a lot said today about the MAI and everybody puts their different spins on it. I think the people on this side of the House have been quite clear. They have articulated very clearly what the MAI stands for, what it's proposing to bring in. On the other side of the House we haven't necessarily seen that. We've seen it shift off what the agreement actually says and get into a debate about free trade, how we're opposed to it.

They're correct in a sense that we are opposed to free trade. We don't believe in free trade that harms workers. We don't believe in free trade that harms the environment. We don't believe in free trade that exploits the resources that we have in this country and in this territory and all the profits shipped outside.

If you imagine the forestry industry, under this agreement quite easily you could have a huge transnational company come up here, pay what they want, take the logs, ship them outside, employ no one, and there's very little we can do about it under the MAI. It's very clear in what it says. It's a shift of power away from democracy and people in Canada into the hands of foreign national companies.

Why would a federal government do this? There are a lot of people in Canada now starting to question what would drive an elected body to hand over our democratic rights, to hand over the control of this country to foreign national corporations.

It has been suggested that many of them have interests in seeing globalization and the removal of barriers and boundaries, the dismantling of Canada. They have a different vision of what Canada should be and that's fine, but they should be honest about it.

Now the Member for Riverside spoke about my having very little knowledge and I expect that from an old-time lawyer, who often looks down upon people who may not have had the opportunity to go to university. That's a very snotty way of looking at people. He ridicules the knowledge that I have over here. I challenge him on that because what he said didn't really contain anything about the MAI. I challenge him and I wonder if he has even read the agreement as proposed.

The Liberals - and the Member for Porter Creek North was very clear about this - also seem to take tremendous offence that we dare speak about this agreement that's being negotiated and has been negotiated in secret, that people in the Yukon dare talk about this.

The Member for Porter Creek North was very, very clear that we do have a right and I agree with him totally. We do have a right to debate this in the House and it really scares me that their sense of democracy is a limitation on what we can speak about, that they can sit across there and tell us what we can and cannot speak about; that causes a lot of worry for me, but it kind of reflects the MAI's position, the removal of democracy.

Maybe they should read it a little closer, because in it it is very clear. The MAI does interfere with the way we govern in this country. There are no ifs, ands or buts about it.

What is the MAI? It's a bill of rights for corporations. Its purpose is to secure as many powers for TNCs as possible, not to delineate the rights of nations. So, obviously, it's not going to serve as a useful vehicle for protecting national sovereignty and, by so doing, the rights of Canadian citizens and businesses.

We've heard talk that this has not been negotiated in secret, because one of the members - the Member for Riverside - says that he turned the channel on yesterday and saw it being debated. Well, we did go through an election in June. It was hardly mentioned. It was actually denied that it was ongoing, yet there are documents proving that the negotiations have been going on since 1995. What does that say? It was not exposed in Canada until 1997.

So what does that add up to? Two years of negotiations that they say are not secret. No. Well, they should say not. They are the Liberals. They are tied in quite tightly with the feds, and they turn the television on, and all of a sudden it was there. Well, how come it's there? Because in February 1997, it was exposed. There were documents that were leaked, because they sure weren't handed out, by a pretty worthy group called the Council of Canadians, which managed to expose the negotiations that were going on in the OECD, and Canada was one of the leading proponents of those negotiations. But, "No, no, no, we've seen it on TV yesterday, therefore it's not a secret any more." Well, that's right. It's not a secret any more, but they are restricting the debate on it to five weeks.

A major, major negotiation toward trade is being restricted for the public to five weeks, but they've already had two and a half years to negotiate it in secret. Now, this is accountable government to the people? They say it doesn't affect people in the Yukon. Sorry - any trade agreement affects the people of the Yukon. There has been discussion about trade, free trade, fair trade. We believe in fair trade. We believe there should be conditions attached to any type of trade, and the leader spoke well on that already. Other people believe different philosophies. Fine. They believe that the conditions should not stand in the way. They believe in the trickle-down effect, that money will trickle down and reach the grassroots of the impoverished people and everything will be fine. We've seen that happen for many years and there sure hasn't been a growth in prosperity for people.

An example that can be used is the Faro mine, or Faro. It's a very difficult situation to live in a mining town when, any day, it can be shut down. Every day that you're working, you're working under the cloud that the major contributors to this mine - not major contributors, because really the workers are the major contributors to the mine. They're the ones that make the profit. But the investors, who of course deserve a profit from it, can decide that they don't want the mine to operate any more. So the people in Faro live under this cloud every single day, and how many shutdowns have we seen in Faro over the last 20 years? Four? It's not a nice thing to live under, because all of a sudden somebody who does not live here, some corporation that does not have a stake here but has investments all around the world, decides that this one has to be shut down for whatever reasons, and there could be many of them. And they do it - boom. No consideration for the people, no consideration for the town or the impact it has in their community and in all of the Yukon.

Imagine the whole Yukon under that situation, because, in some ways, the MAI does allow that. Many, many small companies will not be able to compete if a large company rolls in here and demands the same treatment and standards we give to the local companies to help them develop. They'll be run into the ground. The chains will destroy them, and that's good. From what I'm hearing, that's good. We should have foreign ownership in just about everything we do. Local ownership is not in the cards.

Now, there has been talk about how great NAFTA has been. Well, NAFTA hasn't been that great to a lot of communities, and it hasn't been that great to a lot of provinces in Canada. There are a lot of spins on numbers and that, but I have some different numbers that point to a different scenario, but we could all think of Ontario and the devastation that has happened in that province. It's not NAFTA that's a lifesaver here. We had trade before NAFTA. We had mines up and running before NAFTA. We had decent wages before NAFTA, and we believe in fair trade.

What are some of the things about free trade and the high standards of living? Have our standards of living really improved? David Morris, in a study - and he studied quite extensively - says it depends on whose standards of living are being considered. Inequality between and, in most cases, within countries has increased. Two centuries of trade has exacerbated disparities in world living standards. According to economist Paul Baroche, per capita GNP in 1750 was approximately the same in a developed country as in underdeveloped countries. In 1930, that ratio was four to one. Developed countries were ahead.

Today it is eight to one. There is a tremendous imbalance in the world with these trade deals. Free trade was supposed to improve our standard of living, yet even in the United States, the most developed of all the nations, we find that living standards have been declining since 1980. More dramatically, according to several surveys, in 1988, U.S. workers worked almost half a day longer for lower real wages than they did in 1970. So, the wages are going down. They've had less leisure time.

Some Hon. Member: (Inaudible)

Mr. Hardy: That's been documented. Some people can laugh at it.

There are different statistics out there and many of them point to NAFTA not serving its purpose and there have to be changes made. It seems though that changes under the federal Liberals is to open it up even more; let's just keep opening the flood gates - no more environmental rules that will protect a country, no more standards for minimum wage and no more standards for a fair wage. And what's this about Yukon hire and local hire - abolish it. Abolish it; it's bad, it's evil the Liberals say. Get rid of it, w

e want to put as many roadblocks in place as possible.

Now, the Member for Klondike, earlier in his amendment talked about the wonderful effect that NAFTA has had. He says, "Alberta's booming." Great, Alberta. Yeah, Alberta is doing pretty good right now. Not in all regions. The forestry area is not doing good. They've overbuilt, and now they don't have the logs to keep the mills running.

Let's look at the boom in Alberta. It started two years ago. It was in a bust for many years, but we only look at the bright picture right at the moment if it serves our purpose. Let's go look three years back when Alberta was in dire straits, and they blew their heritage fund to keep alive - or to give it to their friends. I'm not sure exactly what went on with that wonderful heritage fund that was in the billions.

Some Hon. Member: (Inaudible)

Mr. Hardy: My colleague here mentioned Peter Pocklington. Yeah, he did profit by the heritage fund, and now he's going to sell the Oilers and profit by that and still pay no bills.

Is the picture across Canada really that good? We have more soup kitchens. We have higher unemployment. We have more poverty throughout Canada. The wages have gone down. We're actually seeing more labour strife. Why? People are fighting back, but this is the rosy picture that's being painted by NAFTA. We've seen companies move to Mexico where they can exploit the workers. Then, of course, they come back and say, "Well, if we want to keep our company here, if we want to come back, you have to drop your standards, but that's good for you. That's good for Canada."

Let us attack the people, because it's good to have that investment. Let's not set standards. That's what I hear from across the way, and I expect that from the Yukon Party. That's where they stand and I respect it, because they're very clear about it. I don't have to worry about what they're going to say. It's clear, I understand their position, and I can respect it.

It's the Liberals. First off, they tell us we're not allowed to debate this. "Don't debate it, you're bad." Then they pull out a list and they start to read a list of what we're allowed to debate.

Some Hon. Member: (Inaudible)

Mr. Hardy: My goodness, I dread ...

Some Hon. Member: (Inaudible)

Mr. Hardy: Yeah, the Member for Klondike is, once again, talking about my wife. I know she's a nice person, but leave her alone, okay? She's not here.

I can't understand why people want to criticize a motion such as this when it deals with what's in the MAI. The motion also asks that the federal government, who has been negotiating secretly against the wishes of the people, to stop these secret negotiations and come back to the people and allow the people to be involved in the negotiations for the economic future of Canada and any trade deals that affect it.

I'm just going to close up here and then we're going to have a vote. I expect some very clear positions; it's difficult to abstain in a vote and I'm looking for some very clear positions on the vote. I hope people support this motion, because it is for the future of Canada, and all people should be involved in that decision.

Thank you, Mr. Speaker.

Speaker: Are you prepared for the question on the main motion?

Some Hon. Members: Division.


Speaker: Division has been called. Mr. Clerk, would you poll the House.

Hon. Mr. Harding: Agree.

Hon. Ms. Moorcroft: Agree.

Hon. Mr. Keenan: Agree.

Hon. Mr. Sloan: Agree.

Hon. Mr. Fairclough: Agree.

Mr. McRobb: Agree.

Mr. Fentie: Agree.

Mr. Hardy: Agree.

Mr. Livingston: Agree.

Mr. Ostashek: Disagree.

Mr. Phillips: Disagree.

Mr. Jenkins: Disagree.

Ms. Duncan: Disagree.

Mr. Cable: Disagree.

Mrs. Edelman: Disagree.

Clerk: Mr. Speaker, the results are 10 yea, six nay.

Speaker: The yeas have it. I declare the motion carried.

Motion No. 82 agreed to

Speaker: The time being 5:30 p.m., the Speaker will leave the Chair until 7:30 p.m.


Speaker: I will now call the House to order.


Bill No. 7: Second Reading

Clerk: Second reading, Bill No. 7, standing in the name of the hon. Mr. McDonald.

Hon. Mr. McDonald: I move that Bill No. 7, entitled Third Appropriation Act, 1996-97, be now read a second time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 7, entitled Third Appropriation Act, 1996-97, be now read a second time.

Hon. Mr. McDonald: This bill seeks retroactive approval for an overexpenditure in one department in the 1996-97 fiscal year that ended this past March 31. The Department of Health and Social Services was overspent by $330,000. This was the result of higher than anticipated expenditures on several social assistance and child care programs and for the deficit of the Yukon Hospital Corporation.

In total, of course, the government was underspent by some $28 million for the year, but since the legislative control is by individual department vote, it is necessary for this one item to be covered that was over its appropriation.

Of the total underexpenditure of $28 million, about one-half is being revoted in 1997-98, as included in the supplementary for the current year.

Members will note that the last fiscal year ended with a recorded unconsolidated, accumulated surplus of $48.1 million. Since this figure includes $1.6 million, a special operating income that is not available for general government purposes, the real discretionary accumulated surplus, with which we opened the current fiscal year, was about $46.5 million.

As can be seen from the first supplementary for 1997-98, that figure has been drawn down to some $23.9 million, and it will be even lower once a settlement is reached with the Public Service Alliance.

Thank you.

Mr. Ostashek: Well, Mr. Speaker, that was a very short second reading speech on the supps.

Some Hon. Member: (Inaudible)

Mr. Ostashek: Oh, this is the 1996-97 one you're talking about. Well, I'm sorry I thought I was hearing things, or not hearing things.

This happens time and time again that departments overspend their budgets without authority and have to come back to the Legislature for more money. We have gone on on this issue time and time again, and we really don't have anything to say on this. It's a formality that has to be followed, but at some point in this session, and if not in this session, again in the spring session, I'm going to look forward to debating or questioning the Government Leader about his thoughts of bringing in amendments to the Financial Administration Act.

We brought in some amendments this time, and I think that this is an appropriate amendment that ought to be debated at some point in this House, rather than having our civil service feel that they are breaking the law when in fact there is no penalty for breaking the law.

If they exceed the budget, and there's no penalty for it,they just bring the supps in, after the fact, and have them approved by this Legislature. But I would, at some point, like to clean that up. It was an issue I tried to deal with when I was Finance minister. Hopefully, before the mandate of this government is out, we will be able to rectify that and come to some agreement as to how we can control the costs of government and have a handle on civil servants without having to put them in a position of having the stigma of having to break the law.

Thank you, Mr. Speaker.

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

Hon. Mr. McDonald: I will take the matter up with the member briefly in Committee debate when we get to this item. I want to assure the member that any changes to the FAA may be proposed by any member. Certainly, we will consider putting some options forward, but I will be seeking concurrence, at least, with the official opposition on any changes we do propose to proceed with.

Motion for second reading of Bill No. 7 agreed to

Bill No. 8: Second Reading

Clerk: Second reading, Bill No. 8, standing in the name of the hon. Mr. McDonald.

Hon. Mr. McDonald: I move that Bill No. 8, entitled Second Appropriation Act, 1997-98, be now read a second time.

Speaker: It has been moved by the hon. Government Leader that Bill No. 8, entitled Second Appropriation Act, 1997-98, be now read a second time.

Hon. Mr. McDonald: Mr. Speaker, this bill reflects additional expenditures for the current year contained in the first supplementary estimates, which I tabled last week. These expenditures are in addition to those contained in the main estimates and are the result of several factors that I will speak to in a moment or two.

The net result of this supplementary is to increase the projected current year's annual deficit by $12.7 million, from $9.9 to $22.6 million.

The members will be aware that we began this year with a reported accumulated surplus of $48.1 million. Since this figure contains $1.6 million of special operating agency income that is not available for general government operations, we therefore had $46.5 million of free or unallocated accumulated surplus at the beginning of the current fiscal year.

This supplementary, therefore, nominally draws that accumulated surplus figure down to $23.9 million. We say "nominally" because there is one other matter to keep in mind when evaluating the financial position displayed in the supplementary. These estimates contain no provision for a wage settlement with our employees, other than the teachers, whose arbitration decision is included in the expenditures shown in the supplementary. This decision has resulted in $576,000 being added to the expenditures of the Department of Education.

Our current estimate of the final accumulated surplus position - in other words, our saving account - will therefore be less than $23.9 million, shown on the first page of the supplementary, although the exact figure, of course, is unknown at present and will vary with amount of lapses that will inevitably occur this year.

We believe that a savings level of about $15 million is the minimum that is appropriate for the Yukon. While fairly small, a $15-million reserve would permit us some flexibility in responding to an emergency should one arise. This is why we targeted that level in the main estimates for the year. As well, as we all know, this target was predicated upon a projection of a $10-million annual deficit for the year; therefore, if we start out next year with less than $25 million in the bank and do not permit ourselves to drop below $15 million, we will have to reduce spending from that projected in the 1997-98 mains. There is no magic to this. We simply will not have the same amount of money to spend as we did this year.

It is apparent that, while we are hardly in a crisis situation, money is not easy and we'll have to be careful if we are to stay out of financial trouble. Fortunately, given the improving federal fiscal position, we see no broad base cuts to our transfer payments looming on the horizon, just as we see no significant enhancements coming our way, either.

This supplementary shows significant increases in O&M expenditures for the departments of Education and Health and Social Services. In order to accommodate these increases, we have had to tighten up in other areas. This is reflected in numerous reductions as seen in most of the departments.

In the future, we are likely to see more of these kinds of trade-offs because we are determined about two things. First, we will maintain all crucial services for Yukoners. Second, we will do so with no tax increases and no deficit financing.

Therefore, a process of prioritization has been necessary and will be necessary in the future. I say this because my conversations with the federal Finance minister, as recently as a couple of days ago, Mr. Speaker, have left me with the distinct impression that he's unlikely to volunteer any significant new money for the Yukon in the near future.

I recently toured the Yukon as part of our pre-budget consultation exercise for the main estimates for next year. It is apparent to me that the people of the territory have very definite views on how they wish the government to manage its financial resources. It is quite clear that virtually nobody wants the government to go into debt. This is a message I heard in every community without exception.

I know there may be different views on the size of the accumulated surplus we should maintain, but that is simply a debate about the level of security we should strive for, not whether or not we should be secure.

It is more than apparent that people want basic and essential government services maintained intact, services such as health care and education. Members will not find it surprising that I found almost no one in favour of higher taxes being paid to finance new, or enhance new, programming.

Finally, given the views mentioned above, it also comes as no surprise that our citizens understand the need to keep our expectations in check and that if anything new is to be done there will not be money available to finance it unless something gives somewhere else. This acceptance and understanding of the fiscal realities we face was almost universal, and we intend to be guided by it.

A number of departments have been taxed in the current year to help finance increased expenditures in priority areas, notably in education and health care.

The bill and accompanying supplementary show an increase of $6.7 million in O&M expenditures. As previously mentioned, we are expecting $1.3 million of additional spending in Education and $5.6 million in Social Services for operation and maintenance purposes. In large measure, Education requires new monies for additional teachers in Faro due to the influx of families into the community with the reopening of the Anvil Range mine. The increased O&M allocation also covers the costs of the arbitration award for the Yukon Teachers Association.

The single most important factor behind the need for new funds in Health and Social Services is an increase in volume-driven health care costs, both in and outside of the territory. There are some increases in social services spending, although these are offset in large degree by increased recoveries.

The Department of Economic Development is also asking for an additional $1.4 million in operation and maintenance due to the purchase of a portion of Anvil Range's outstanding power bills.

This amount is entirely recoverable from that corporation.

Finally, members will note an increase in O&M spending for the Department of Tourism. This is largely due to the new Air Transat cooperative marketing program, which is offset to a significant extent by savings elsewhere in the department. As members will know, this initiative will have a significant impact on our access to European tourism, and is a welcome boost to our economy.

The specific items I've spoken to are deemed to be of the first priority to our government. The expenditures on Education and Health and Social Services are needed to maintain basic services. The Economic Development and Tourism items are essential to our economic health; therefore, the required dollars have been allocated to these areas. In order to fund this allocation, it has been necessary to reduce expenditures in other areas. This is reflected in the O&M reductions in other departments that this supplementary reflects. This is the so-called taxing that I spoke of earlier. It is something we must expect to happen in the future. Priorities will have to be funded in whole or in part from existing resources.

Even when there is a decrease in a department's overall O&M requirement, there may be funding redirections within the department that reflect our attention to other priority areas. The ministers will, of course, be prepared to speak to these matters in Committee debate.

Capital expenditures show a gross increase of $17.5 million. This is offset by a $6.6 million increase in capital recoveries for a net upward change of $10.9 million. The vast majority of this increase is simply due to the revote of lapsed 1996-97 capital funding. This lapse is the principal reason for last year's annual deficit being less than anticipated and, in turn, last year's accumulated surplus being $48 million. It is also the major reason for the increase in this year's annual deficit. This pushing forward of spending is an annual occurrence, as I suspect most members in the Chamber know well.

Revoted capital expenditures are primarily within Community and Transportation Services, Education, Health and Social Services and are for projects such as the repairs to the Nares and Teslin bridges, the firehall in Burwash, water trucks for Carcross and Ross River and the youth centre in Old Crow.

Education requires approximately $2 million in revotes for the various school renovations associated with grade reorganization, and the Health and Social Services revote of $4.8 million is for the completion of the new hospital construction, most of which is recoverable.

Other than revotes, the only large item being requested for capital purposes in these estimates is an acceleration of expenditures for the Old Crow school from 1998-99 to the current fiscal year. This acceleration of the expenditure pattern for this project is necessitated by the decision to transport the materials for the new school by winter road, rather than by air. The consequence of this decision is that the school building materials must be purchased this year, and the road must be built prior to breakup this coming spring.

On the other side of the coin, members will note that our total income has increased somewhat, giving increases and recoveries associated with the additional expenditures being requested in the supplementary; however, this increase has been partially offset by a reduction in our formula financing grant. This reduction is a result of normal workings of the formula and reflects changes in the myriad of variables that flow into these calculations.

A final determination of the grant figure for the current year will not be known for some time. There could be further variations from the currently reported figure, most especially for final census figures, which could become available in March of next year.

Finally, I would like to point out and emphasize that we have used up our contingency of $5 million in constructing this supplementary; hence, there is no remaining cushion available to us this year without eating further into the accumulated surplus. This is something we must avoid if we're going to, more or less, maintain our expenditure levels next year.

Mr. Speaker, there have been some expressions of concern in the Legislature in the past couple of days about the growth in health care spending. While this growth this year is something that required some special action by the Management Board of government to address, I would like to point out to members that this is not a new occurrence. There have been examples of fairly substantial increased costs in health care services over the last six or seven years. This projected increase is expected to be approximately 5.5 percent of the department's total budget. I would point out to members that in the year 1992-93 to the year 1993-94, a 16.6-percent increase in the department's budget took place.

This increase was reflected by the fact that there was a growth in primarily health care spending that was in some respects volume driven and ironically took place during a period of recession, but it was not an emergency situation then and it is not an emergency situation or a crisis situation now. It does, however, require that we do tune our budgets to ensure that we are spending appropriately and meeting our priority areas.

As I've indicated at the beginning, we wanted to ensure that the priority areas, particularly of health care and education, should be addressed in the supplementary estimates. We have indicated on a number of occasions that we are not prepared to see service levels in these areas decline and consequently we have directed sufficient allocations to meet our commitments.

Now, the members will know that individual ministers will be prepared to answer questions respecting the individual allocations that are being proposed in this supplementary, and when we get to each vote I'm sure all members will take the opportunity to discuss with the ministers the spending proposals and reductions proposals that are being presented. Thank you.

Mr. Ostashek: In my opportunity to debate this supplementary budget tonight, I will not be questioning the figures that have been put forward by the Finance minister because we will do them, as he said, when we get into department-by-department debate. I will have the opportunity after reviewing the Blues to question some of the figures when we get into the general debate on the supplementary budget and when we get into the Finance department.

What I want to do with my time tonight is to point out what we believe is a very alarming trend. Unless it is stopped, and stopped very quickly, this government is going to be in serious financial trouble within a year or two.

I am not concerned about the $22.6-million deficit. I wouldn't be concerned about it at all, but I am concerned about the trend of where this government is going, in only one year, and that is increasing their fixed costs; namely, operation and maintenance costs of government that are going to come back to haunt them. These are costs that are going to go on every year and are going to continue to escalate every year. Now, there may be a little variance from one year to the next, but the fact is that in one short year the operation and maintenance cost of government is projected to be $16 million higher. That is not healthy.

I know the members opposite are going to stand up and talk about the big budgets we had. Yes, we did. But I need only point to the Minister of Finance's budget address book of the spring session. On one of the pages in it there is the historical comparisons of the cost of government. If you are to review those, Mr. Speaker, you will see, from the period 1993-94, from our first budget, to 1996-97, our last budget, the operation and maintenance costs of government were stable - very little variation in four budgets. We now have, with this supplementary budget, a dramatic increase in the operation and maintenance costs of government.

Now, the Finance minister can stand there and say, "Well, would you have us cut health services? Would you have us cut this? Would you have us cut that?" Absolutely not. We didn't have to do that when we were in government. But it's a matter of spending priorities, and the overall cost of their government has gone up dramatically.

I asked a question in Question Period, a while back, on these supplementary budgets, the fact of the Finance minister's calculation of one percent. His rationale was, "Well, if you exclude devolution...". Well, I'm sorry, Mr. Speaker, I don't accept that, because we, too, had devolution in our budgets; we took the first phase of the hospital transfer; we took over airports - just thinking of two, off the top of my head - and yet the record shows that the operation and maintenance costs of government remained stable. They did not dramatically increase, and that's what I'm concerned about with this first budget of this new government. The trend is wrong, and it's going to be a trend that they're going to have difficulty getting out of.

If health care costs go up, then government has to cut somewhere else, but if all you're going to cut is the capital budgets to keep paying for bigger operation and maintenance costs of government, at some point you're going to reach the point of no return.

We don't know, and we won't know until a year from now, what the actual increased costs to this government are going to be over the one year, but according to every indication that we have right now, the trend is wrong. There's not another government in this country that believes they can increase their operation and maintenance costs of providing services to the people. Every government is faced with providing essential services, and no matter what the members opposite say in the heat of debate, we are not asking them to cut back on essential services to Yukoners, but we have given this government many examples of where we thought they could cut the operation and maintenance of government. They haven't been prepared to accept them. We could save them millions of dollars in operation without impacting on the service that they are providing to Yukoners. And Mr. Speaker, I am very, very concerned about that.

One other point I want to make, Mr. Speaker, before I forget about it, is that the Minister of Finance said that it is not unusual to have a large increase like this in Health and Social Services costs, and he pointed to the 1993-94 budget as an example. Now, I'm not sure if the Finance minister has forgotten what has transpired, but if he'll go back and look at the debates from those days, he will see that the 1993-94 main estimates were increased from the 1992-93 main estimates to reflect the true cost of the operation and maintenance costs of government in a previous administration of which the Finance minister was part of. Their budgeting method was to bring in low mains and come in with huge supplementary budgets. The Yukon Party took a different approach. We brought in what were realistic figures for the cost of government, and as a result, our supplementary budgets on the operation and maintenance side were very small in all four of our budgets.

So, that, Mr. Speaker, is the reason that that figure jumped from 314 in 1992-93 to 352 in 1993-94. That also included the first phase of the health transfer, there's no doubt about that. But, from there on, we were able to stabilize the cost of government.

If I had any comfort from this government and this Finance minister that after this one, $16-million shot, they were going to be able to maintain the operation and maintenance costs at that level - even though I believe it's too high - we may be able to grudgingly say, "Well, we'll give them some latitude and see what happens down the road." But, I don't have that level of comfort when I see how this government is spending money. I don't need to point out again tonight, I don't believe, where we think the government can make savings. We've done that time and time again. But we certainly didn't, for one minute, during the last election campaign, during our time in government or our time in opposition, suggest that essential services to Yukoners should be cut. I hope we're very clear on that.

Some health care costs are volume driven, but there are other costs in government that are not volume driven, and there has to be some hard decisions made sometimes. Governments can no longer be all things to all people. We have to govern in a smarter fashion than we have in the past.

The minister continues to make the statement that they're going to maintain essential services to Yukoners and they're not going to increase taxes. Well, I'm sure they're not going to increase taxes. They have a Taxpayer Protection Act to deal with. That's one good reason why they're not going to increase taxes.

They know that the Yukon public wouldn't stand still for it. They know that. But they certainly could spend the taxpayers' money in a wiser manner than they have done in their first year in office.

And as we go through department by department, and as we get more of the information that we requested so that we can be more informed when we get into the budget debate regarding ministerial travels - we ask for contracts and we hear that the government is not going to give them to us, even though we gave them to them in opposition - and current employment numbers of the government. That should not be very difficult to get, because I know, when I was Government Leader, it was presented every three month to Management Board, so it's just a matter of giving us a copy of it, and we may then be able to see where some of the monies are going.

Mr. Speaker, we are concerned about how the commissions are being budgeted, that nobody can get a true accounting of the cost of these commissions because part of it is being paid for out of department budgets, some of it is in the Executive Council Office, and it's almost impossible to get an accurate reading on what the cost of those commissions are.

So, Mr. Speaker, I'm not going to speak forever on the supplementary budget; I wanted to get those points on the record. We are going to be asking questions in great detail on these supplementary estimates that are asking for more money. We're going to be asking why cuts weren't made in some places where we feel there should have been cuts made without having an impact on the Yukon society. We are still of the firm belief that the government could do better by directing more money into putting Yukoners to work rather than paying increased social assistance costs. We don't see a light at the end of that tunnel, that is for sure.

So, we will be debating those points in Committee and hopefully, by the time we're through these main estimates, we will have a better understanding of them and this government will be able to give us a clearer direction of where they're planning to go in the next three years of their mandate.

Thank you, Mr. Speaker.

Mr. Cable: The Government Leader indicated during the original budget debate - and we talked about this a few days ago in the House - that his estimates were cautious and that, with the usual lapses, we could have a balanced budget by the end of the fiscal year.

Prior to the adjustment for the use of the contingency, there is an increase in the deficit of $17 million and some odd, to give us an accumulated deficit of $22 million. If the goal was a balanced budget, then we're off by 4.5 percent on expenditures, if I've done my math right. Now, we've had some initial exchanges on what happened. There are changes in demographics, for example, and we'll want some information on whether the transfer agreement will failsafe these demographic changes. I assume they're population based, and I assume that they're primarily focused in the health and social service area.

Now, the Government Leader, the Finance minister, indicated he wanted an accumulated reserve of $15 million. We will want to know how that goal was decided upon. I think in days past, there was some suggestion that we should have one month's expenditures in reserve. I know we've talked about this in the House previously. So, we'll want to find out how that goal was reached. If you take the $15-million reserve and add it to the $22.5-million dollar deficit for the year - if I've done my math right again - you get a $37-million reduction in expenditures, which is about an eight-percent reduction.

Now, all of us have witnessed the prioritization that has taken place in other provinces. We witnessed the spectacle in Ontario, where the reduction and expenditures has been hammered through by a very ham-fisted government. We've witnessed an exercise in Saskatchewan and one in New Brunswick, where the community generally supported the government's efforts to bring the expenditures in line.

So we want to know what sort of further steps the Finance minister, or the Government Leader will be taking on the process of prioritization with the people. We touched on that a few days ago in the House. We know the Government Leader has been around the territory talking about expenditure reduction and we'll want to hear from him how he is going to formalize the input from the people.

We know that this has to be done very soon. I assume the budget's well on the way to being prepared, so we will want to hear from him what he anticipates will be done before the exercise is over, before the budget is prepared.

With respect to the revenue side of the budget, we've heard the Government Leader indicate that the federal Finance minister has indicated that it's unlikely that there'll be any further increases in the money to be received from the federal government and that, by the same token, he doesn't expect any reductions. Now, it would be useful to hear from the Government Leader whether any of the other revenue sources are anticipated to change in any significant way.

With respect to the commissions - and this has been commented upon by the leader of the official opposition - there was a comment by one of the commissioners recently in the House that his commission was on time and on budget and we haven't seen any budgets. We've had talk about time lines, but we haven't seen budgets, so we'll be asking for the presentation of those budgets.

Some Hon. Member: (Inaudible)

Mr. Cable:

One of the commissioners is saying he has tabled his budget. Well, that's fine. Then if the budget has already been tabled, then we'll just have to search our files and look for it, in which case it won't be necessary to go through that exercise.

Those are the questions that we will be asking over the course of the next few days, hopefully, or the next few weeks, or whatever.

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

Hon. Mr. McDonald: I must say, Mr. Speaker, at the start, in my final remarks on this budget in second reading, that I thank the members for their comments. I think there is a lot that can be addressed in Committee debate and at second reading, and the members were careful not to incite the rhetoric, which makes it very difficult for me to lambaste them at this point, as much as I would very much love to.

Let me see if I can get myself revved up, but if I can't, I'll have to reserve it for some other time.

Mr. Speaker, the leader of the official opposition indicated that he felt that the trend that we were following was wrong and that we were going in the wrong direction in terms of managing the overall government finances, and indicated that the size of the annual deficit - the size of the operation budget, particularly - were signals at least to him that things were going wrong and, ultimately, if left unchecked, would lead to a very, very difficult situation for the government and for the Legislature and for the people of the territory.

I want to point out to the member that at this time last year we projected a deficit of $34.5 million for the year. All but about $1.5 million or so was the responsibility of our predecessors. These were figures that were pumped up to us by departments. We didn't allow it all through the gate, but we allowed most of it and it seemed to be well-justified. There was a small amount of money that we approved for our purposes that members are all aware of. I see them rattling around in their new office space downstairs; that was a result, in part, of part of those expenditures.

There were the costs of transition. Incidentally, the costs of transition of the NDP government was reported to be among the lowest ever that people could remember in the Executive Council Office.

Some Hon. Member: (Inaudible)

Hon. Mr. McDonald: Yes, as my colleague points out, quite rightly, those people who are no longer in the employ of the government receive severance, and that was also calculated into that small amount that I would consider the Yukon New Democrat government responsible for.

But clearly, the bulk of it - and I think I gave the exact figures last spring - was a result of our predecessors spending plans.

Now, that $34.5 million included an overexpenditure on the operation side of $8 million. This year, we are expecting an overexpenditure at this point of $6.5 million on the operation side and a projected deficit of $22 million. I would say, if anything, the government's spending trajectories are going in the right direction, not in the wrong direction.

Now, we are going to have to spend some time - the Member for Riverside and I - on the subject of what accounts for appropriate budgeting under the circumstances. The member suggests that we had started out with a desire for a balanced budget this year, and therefore we are obviously not getting closer to a balanced budget. Well, I have to remind the member - and I'll ask him to go back to the Hansard in the spring - that I was not projecting a balanced budget. I was not seeking a balanced budget. In fact, I was intending to run a deficit budget with a view that lapsed funds for last year will recoup the cost of the deficit.

It's important to note that there was a desire to ensure that we were spending sufficient resources to meet our commitments, to meet the needs of the territory, but not to dip below the $15-million mark in terms of the accumulated savings with a savings account, and we are accomplishing that task, we have accomplished that task, and obviously we will do better than meeting that task by the fiscal year-end, and when all the accounts are in, in all likelihood, the financial situation will be even better than that.

If one understands the government's budgeting situation, not only in this year, but in previous years, the trajectory that we're on does not put us into a crisis situation at all, and it would be wrong and irresponsible for anyone to even suggest such a thing.

Now, the leader of the official opposition says that he doesn't believe that we're going to raise taxes because the Yukon taxpayer wouldn't stand for it. The leader of the official opposition is proof positive that he knows what he's talking about. Clearly, we are not only going to follow our election promises because we believe them to be the right thing for the territory, but we're going to follow our election promises because we have the living proof sitting in front of us every day in the Legislature that those who raise taxes in this territory without justification pay the ultimate price.

Members have indicated that they want to know how much the commissions receive for policy development and what the budgets are. I want to point out to them that the information about commission budgets was tabled in the Legislature in the spring. What we're talking about here is refining spending patterns that were established through the main estimates. We're not talking about veering off in wild new directions. We're talking about fine tuning the main estimates from last spring.

The pre-budget consultations that I undertook this last month in every community of the territory were to talk about long-term budget plans - budget plans into the next year, budget plans that will be announced in the main estimates in the coming year, in the spring. All of those estimates will be made clear to members when we have finalized and constructed the budgets for next year and have adopted our proposals, hopefully, for multi-year spending estimates that I announced that we would be doing this last spring for the next main estimates budget.

Some members have suggested that they are going to make suggestions to us for more cuts that can be made to ensure that we meet our targets. I'm certain that they will come up with something more than the traditional request to cut the minister's pay in half or cut all the Cabinet staff out and cut the commissions' budgets to zero. I mean, if they come up with something that's constructive then, certainly, we will listen to them. I'm a little bit, probably, at variance with the leader of the official opposition on his one suggestion that social assistance costs could have been managed better.

In the last year we have not raised the rates for social assistance; we've faced a volume increase in social assistance, so I'm presuming that the member, while saying that he does not want to cut services, is contemplating a cut in rates to accommodate the increased volume. If that's the case - and I suspect it is - then he will run up against this government that will do no such thing.

We feel that the people who are on social assistance are among the poorer people in the community and the poorest people in the community do not need to be targeted for any special cuts. The rates that we are operating with now are rates that were presumably acceptable to the Yukon Party at one point as they paid them themselves. So, we're not contemplating, to my knowledge, any rate decrease in social assistance.

The other suggestions that members may make to cut expenditures, we'll be more than happy to entertain and perhaps have a bit of a dialogue if we all agree that they have some merit. I must say that, in my tour of the territory, not too many people suggested any expenditure cuts and there were long pregnant pauses in virtually every meeting where I put the subject on the table and asked where they thought a service reduction might take place, whether expenditures may be cut. A lot of the creativity that was previously in the room with respect to how to spend money seemed to evaporate and the suggested cuts were not forthcoming.

That's not necessarily a condemnation of the people present at the meetings, obviously because I, myself, have had difficulty, and do have difficulty from time to time, making suggestions on cuts that may end up hurting people one way or another, but the fact does remain that we must keep our expectations in check in order to ensure that the spending trajectories can be managed for all departments and to ensure that expectations do not get out of line.

I want to point out, Mr. Speaker, that the government has been diligent, not just while it was in office, but during the election campaign when it counted, to avoid bidding wars to excite citizens' interest in new spending proposals. We avoided, probably at some cost to ourselves, the debate, noting that there would be fallout from that - that it was irresponsible - and I have done no different in my time in the communities since then.

I will pass on to New Brunswick and the Premier of Saskatchewan that their cost-cutting measures received great community support. They're still sucking wind from their last cost-cutting round, Mr. Speaker. There may be a slight difference of opinion, even among all the people who felt that certain expenditures needed to be cut. There is certainly great division of opinion as to whether or not there was great community support for those initiatives.

The Member for Riverside did raise a number of specific questions that are probably more appropriately addressed in Committee debate, where we can get a bit of an exchange, questions and answers, clarifications and that sort of thing, so I won't get into any of those in any kind of detail.

I will say, Mr. Speaker, that I feel that this supplementary budget is a measured response to the needs of this territory. I think it addresses the priorities of this government adequately. I believe that it ensures that the primary needs of the territory are addressed and that the long-term health of the territorial finances are addressed, as well.

There are not very many new things in the budget - new occurrences or new happenings - that were not already announced in the main estimates except perhaps, and most notably, the school in Old Crow, but when we get to the Department of Education estimates, I'm certain we can plough through that proposed expenditure.

So, I will leave it at that, Mr. Speaker, and perhaps leave my fighting rhetoric for the first opportunity when the occasion seems to call for it.

Motion for second reading of Bill No. 8 agreed to

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

Speaker: It is moved by the government House leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.

Motion agreed to

Speaker leaves the Chair


Chair: I will now call Committee of the Whole to order. Is it the members' wish to take a brief recess?

Some Hon. Members: Agreed.

Chair: Ten minutes.


Bill No. 7 - Third Appropriation Act, 1996-97

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

We're dealing with the supps. Is there general debate?

Hon. Mr. McDonald: Mr. Speaker, passage of the bill, as I mentioned in second reading, would regularize an overexpenditure by the Department of Health and Social Services for the 1996-97 fiscal year. The department overspent its vote by $330,000, principally to do with social assistance, child care subsidies and the 1995-96 Hospital Corporation deficit.

The Minister of Social Services will be prepared to speak to these matters in more detail in a few moments when we get to departmental votes, and can answer members' questions at that time.

The remaining departments underspent their allotted sums. In O&M, these underexpenditures amounted to slightly more than $2.5 million, while capital was under by some $25.9 million. In the case of the capital, a large portion, about $16.4 million, simply had been carried forward to this year as a revote and is included in the first supplementary for 1997-98.

Our final year-end income was down somewhat from the forecast, but this was simply due to reduced capital recoveries, which accompanied lapsing capital expenditures.

Had it not been for these reduced recoveries, our total income would in fact have increased somewhat because of an increase of $4.9 million in own-source revenues. A portion of this increase, $1.6 million, is due to income of the fleet vehicle and property management special operating agencies and is not monies available for general government operating purposes. It is shown here to conform to generally accepted accounting presentation standards.

The remainder of the increase is due to a variety of ups and downs in various revenue categories. Most importantly, personal income tax is up by $3.6 million, based on new estimates from Revenue Canada. The 1996-97 entitlement is not yet final, and the recorded figure contains adjustments to several prior years.

Liquor tax and profit in the forecast turned out to be understated, over $650,000, as sales continued at a stronger pace than was originally thought likely to occur.

Investment income was also considerably above the forecast because of higher than anticipated cash balances being on hand. These higher balances resulted from the year's deficit being lower than had been budgeted at the time the first supplementary for 1996-97 was prepared.

Finally, motor vehicle licences and fees were over $700,000 higher than the budgeted sum. This increase was more or less evenly distributed between private and commercial licences and bulk-haul fees and reflects more active economic conditions than had been expected.

These changes in the remaining revenue categories are less significant as members can see from page 8 of the supplementary.

The net result of all the final changes in 1996-97 was to reduce the deficit for the year from $34.5 million to $11.5 million, although a goodly proportion of this is simply the result of a shift of the deficit into the current fiscal year, as lapsed 1996-97 capital is revoted. This shift amounts to about $12.8 million, being the sum of the net revote of lapsed 1996-97 capital spending.

As the annual deficit decreased, the accumulated surplus increased and the year ended with us having a reserve of $48 million in the bank, less $1.6 million of special operating agency income. As the first supplementary for 1997-98 shows, this will be drawn down to less than $23.9 million, and that includes no provision for a wage settlement with the Public Service Alliance.

I think that sums up the results for the past year and it's reflected in the supplementary, both on the expenditure and the revenue side.

Mr. Ostashek: I have a couple of questions for the minister on the 1996-97 final supplementary for the year. I would like to look at the income first of all. I may have missed it when he was speaking, but I don't think I heard it. It's not a lot of money, but I would like to know what the figures are. Established program financing is down $651,000. Could the minister tell me why that is?

The Canada health and social transfer - I guess it looks like it's down to $291,000. I believe that's $291,000 that it's down.

Hon. Mr. McDonald: The line item entitled "established programs financing" shows a $651,000 reduction. Of course, the old EPFs were rolled into the CHST. The $651,000 shows an adjustment over prior years that has not previously been calculated. The $291,000 is not considered a significant sum; it is simply a recalculation based on tax points and a variety of factors and it caused for a more precise figure to be identified by the mid-year. You can see that, of course, the general nature of the main estimate in the first instance was calculated into a more precise number once the calculations were done.

Mr. Ostashek: The recoveries are down $8.6 million. I believe I heard the minister say that was basically because of capital projects. Am I correct?

Hon. Mr. McDonald: Yes, that accounts for most of the capital recoveries. There is, as the member can see, on page 3, they are calculated at $9.2 million, total, so one could make the general statement that the recoveries are largely due to the capital recoveries, yes, being down.

Mr. Ostashek: The minister said that there was $25 million in capital lapsed, of which $16.4 he accounted for, I believe, in the hospital. Where was the other $9 million? Or, was $16.4 million revoted? What was the other $9 million, and why was it not revoted, or what happened to the project? Or is it the recovery?

Hon. Mr. McDonald: I can give the member a list. I don't have the list in front of me, but it includes things like some land development items, and that sort of thing, but we can provide a list for the member.

Mr. Ostashek: I just want to make a comment here, seeing how we're all in a fairly mellow mood tonight and talking about numbers, rather than political rhetoric. The minister, in his closing remarks to the main supplementary debate, said that he differed with me when I said the projections were going in the wrong direction, and he felt their projections were tighter than ours. Yet, when I look at the final supp for 1996-97 and the operation and maintenance revised vote, it ends up at $352,000. If we look back to the historic mains - I know we're comparing, a little bit, apples to oranges here - I do know that in 1993-94, when we had a $352,000 operation and maintenance estimate, that was also the year that we had a huge lapse in operation and maintenance, so the costs were not right. So, what I'm saying is that from 1993-94 to 1996-97, $352,000 was the high for both those years. So, I don't see how the minister figures that his projections are tighter than what ours were.

Hon. Mr. McDonald: Well, I do make the comparison, Mr. Chair, from year to year, apples to apples, projection to projection. Clearly, what happens at the end of the fiscal year is not yet known, in terms of what the public accounts will read for March 31, 1998. But in making a comparison from the estimate from last year this time to the estimate this year this time, one can't say that things are going to - my take on this is that things are going in the right direction. The member's take may be different. What happens at the end of the year will be, in large part, calculated by the Auditor General.

Mr. Ostashek: Well, I agree with the minister on that. They would be calculated by the Auditor General. We can talk about trends and projections all we want; the simple fact is that the supplementary estimate for 1997-98 is up some $16 million, so we'll get into more of that in the 1997-98 supp.

As this supp shows, only one department went over in operation and maintenance, by $330,000. The $330,000 was all just in one department - Health? Was there only one department that was overspent? Am I correct?

Hon. Mr. McDonald: The member is correct.

Mr. Ostashek: Did the minister capsulize as to why that expenditure was over or did he not?

Hon. Mr. McDonald: Pretty much, yes. But the Member for Whitehorse West, the Minister of Health and Social Services, will be happy to explain it in more detail if the members wish, when we get to that line item.

Mr. Ostashek: I'd like the Minister of Health and Social Services to give us just a encapsulation as to why it was over by $330,000.

Hon. Mr. Sloan: Well, I can give an encapsulated version and, if you like, I can go into further detail.

The primary cause is from higher than anticipated expenditures on statutory programs, such as social assistance and child care subsidies. As well, there's additional funding to cover the 1995-96 Yukon Hospital Corporation deficit. These overexpenditures were partially offset by some savings in other program areas. I can go into some further detail.

Mr. Ostashek: I thank the minister for that. We will get into more details on the spending that are showing up in the new estimates, which are his budget. This is basically mostly our budget from last year. I just wanted a capsulation of why it was overexpended.

Mr. Chair, just back to the Minister of Finance, I would just like to put on the record for now, again, once more, what we talked about, the fact that we have this supplementary budget every year because we have one or two departments that go over their vote, which, according to the Financial Administration Act, is an illegal act for which there is no penalty. I've talked to the minister before, when he was in opposition as well as since he has been Minister of Finance, about seeing if we couldn't change that some way so that there wouldn't be that stigma with overspending.

The minister I think is fully familiar with my views, but for those members of the House who aren't, I think it's wrong to put the stigma on the department if it goes $330,000 over their budget, and yet honouring a department if goes $5 million under. I just don't think that's fair. I don't think it's fair at all to the professionals that we have hired for us. Somebody who misses their target by $330,000 - but only because it's over - it gets singled out. Yet other departments may miss their target by $10 million under, and yet there are no ramifications to that. So, I always believed - and I still do - that it encourages the departments to pad their budgets. I think if there's anything we can do to alleviate that, I would be happy to debate it in this House.

Now, I know the minister said in the previous speech that we could always bring in a bill, but I would prefer to encourage the minister to bring in a bill. Private members' bills and opposition bills have great difficulty passing in the Legislature, and I would sooner use my time in here to convince the Finance minister that we ought to seriously look at that, and we would be supportive of a bill that would alleviate that stigma and yet would satisfy all of us as legislators in this building that there are controls on the department. I think there are other methods that we can use to put controls on departments rather than attaching the stigma of them being poor money managers because they overspent their budget by a few hundred thousand dollars.

Hon. Mr. McDonald: Well, I think the member and I agree that there is a problem worthy of addressing here on this subject. I guess we tend to encourage people to overbudget and then reward them when they do, and penalize the people who are tight budgeters who may go over now and again. We stigmatize them as lawbreakers. Of course, the Financial Administration Act holds deputies responsible for those overexpenditures. Clearly, even though, from time to time, there are members in the House who want to see some Draconian actions taken, clearly that's not responsible nor wise nor the right thing to do. We've simply managed the situation by making the overexpenditure legal after the fact.

I think we should do something. I have not settled on a final course of action. I agree with the member that it should be more the responsibility of the government side to bring forward the amendment. I didn't want to make it seem that only good ideas, as drafted by the government, would be considered, however. If other members wanted to initiate something, I wouldn't take that personally or suggest that that was wrong. However, on a bill such as the Financial Administration Act, I believe there ought to be some notion of agreement on both sides of the House of the basic provisions to be pursued, because this is, in a sense, the constitutional-like document when it comes to money management. I would prefer that those kinds of measures received widespread support inside the Legislature before we start making changes or before we finalize those changes.

If we can put our minds to it, perhaps after the session is over, in the spring the member and I can sit down and talk with maybe the Deputy Minister of Finance, so that we can work through some options. If the Liberal Party critic wants to join the process, I would be more than welcome to invite that person to come, too. We can discuss what changes to the Financial Administration Act might be warranted under the circumstances.

Mr. Ostashek: I thank the minister for that and I will go on public record now as saying, yes, I agree and I would like to move ahead. We'll give our Liberal colleagues a chance to enter into the debate while we wait here and see what they have to add to it, to see if they're in favour of it or not.

I do agree with the minister that this is the type of change that we ought not to get into philosophical debate about on the floor of the Legislature. It's an issue that has bothered me from the time I took over the Finance portfolio and realized that it was there.

I know, in my dealings with the deputy ministers, that it really has an effect on how they do their jobs. Sometimes they're reluctant to do something that they really ought to be doing for the betterment of the Yukon citizens. Just because they don't have that cushion in their vote, they feel they might overspend their budget even though they know, for the most part, there is no penalty for it. Although, I understand from talking to some of them that once in the past there was a deputy minister who got into some very serious problems because of overspending on a budget and it has had an impact on some of our deputy ministers anyhow.

So, I thank the Finance minister for being open minded on it. I'm sure that if we put our heads together with his Finance officials that we can come up with an amendment that will give comfort to the people of the Yukon, give comfort to the legislators on the floor of this Legislature that we haven't written a blank cheque to the deputy ministers and that we do still have control of the public purse. So, I thank the minister for that.

Ms. Duncan: I would just like to state a couple of points with respect to that discussion on behalf of the Liberal Party and our caucus. The issue around post approval, for lack of a better word, is something that I had recently had a very, very lengthy discussion about with former members of Yukon's public service who were quite concerned. I don't have the benefit of the experience of the other two speakers in the House nor of dealing with the Government of Yukon financial statements. It's something that struck me as rather curious. I also understand - and would ask the Minister of Finance to verify this - that the Auditor General has never expressed an opinion about that, has never said, "You could do this better by doing such and such a change." He has never recommended a change to the Financial Administration Act to catch this.

As the former Minister of Finance said, this issue of people breaking the law - and I would first of all like the Minister of Finance to just express an opinion on that, if it's his understanding, also, that the Auditor General hasn't expressed an opinion on that nor has ever been asked, and also to just express our caucus commitment that we would be very interested to participating in discussions on this issue.

Hon. Mr. McDonald: Well, the Auditor General has not made any suggestion for changes.

Of course, we do retroactively approve these expenditures. If we didn't, I'm certain the Auditor General would say something, but clearly, from the period that the overexpenditure takes place to the period that we give retroactive approval, the deputy is technically in non-compliance with the Finance Administration Act, and that's the issue.

The Public Accounts Committee has been asked in the past to review the entire situation. I was Chair of that Committee and I, for the life of me, can't even recall what we concluded. In fact, I don't think we actually got a report - as a matter of fact, now that I think about it. But we did speak through a number of options that we could resurrect; I think we canvassed a number of options. I'm certain that the clerk of that committee has good notes and can resurrect them for us. I would not be so cruel as to ask the clerk to provide us with the actual or draft report. Certainly, a number of suggestions were made that we could canvass once again and perhaps deal with it at our level rather than burden the Public Accounts Committee with it once again, unless of course the Public Accounts Committee chair wants to volunteer to take the matter up once again.

Mr. Cable: Just to follow up on the social assistance increases, and this is probably more relevant to the 1997-98 supp, is the increase primarily due to the increase in the number of beneficiaries of the program or is it a sort of an average amount increase for each of the beneficiaries.

Hon. Mr. Sloan: It's primarily a volume-driven increase. Social assistance expenditures fluctuate fairly dramatically, and as we've experienced, particularly in this case, in August of 1996, we begin to see a spiking up or steady increase in social assistance caseload and expenditures.

The caseloads have increased essentially by about 70 a month over a similar period of time. If we look at, say, August 1995 through September 1996, during the same period of time, expenditures have risen from an average of about $522,000 to about $615,000. But, it's primarily a volume-driven increase.

What we've also seen in this period - well, if we look at June 1996 and June 1997 - is a population increase by about 683 people. I guess the experience has been that over the past three years, about 4.3 percent of those individuals will find themselves, at one time or another, on social assistance. So, we have a volume increase. We also have an unemployment factor. So, those are primarily the drivers on that.

Mr. Cable: The minister, at some juncture in the last couple of days, indicated - he referred to it just in passing a moment ago - the employment insurance program was one of the drivers. Is that a significant cause in the increase of the social assistance usage?

Hon. Mr. Sloan: The information that we have in that regard is a bit difficult to pin down. What we're getting is primarily anecdotal kinds of reference at our regional offices, people indicating that they had the ability to work seasonally for a period of time and then go on unemployment insurance for a period of time. Now, they're finding that, with the changed rules, the number of hours - apparently, it's changed from, I guess, insurable weeks to hours, or something of that nature - that they're not always able to make that. In that regard, it is anecdotal, and it has been coming in from, mainly, our regional offices - our rural offices, if you will.

Mr. Cable: I'm not sure how the failsafe provisions in the transfer agreement work, but would the majority of the increases be failsafed under the agreement due to the population increase that the minister just mentioned?

Hon. Mr. Sloan: I believe that there will be some failsafing on there. The Minister of Finance could probably speak to that somewhat more capably than I, but I think one of the difficulties that we experience is in terms of population figures. There is, in a sense, a lag between published population figures and the adjustments, but as I said, it's not something I'm particularly familiar with.

Mr. Cable: Prior to getting to the Health and Social Services part of the first supp for 1997-98 - and I'm leaping ahead a little bit - could the minister provide us with the number of social assistance users over the last couple of years so that we can track the volume increase ourselves?

Hon. Mr. Sloan: I can certainly provide you with some information in that regard. There is a reasonably useful chart which sort of tracks these that perhaps might be of some use to the member that I could perhaps have reproduced and distributed, and that will show two things. It will show the increases in expenditures and how that is sort of mirrored by the fluctuations in cases, and perhaps that might be of assistance.

Chair: Not seeing any further general debate, we'll go to the book.

On Health and Social Services

On Operation and Maintenance Expenditures

Chair: Health and Social Services, operation and maintenance expeditures, $94,033,000. The supplementary is $330,000.

Hon. Mr. Sloan: This variance is comprised of an increase of $29,000 in policy, planning and administration. This is made up of additional costs prepared for the health transfer and as well a write-off of an account at the Thomson Centre. This is partially offset by contract savings.

In family and children's services, there is an increase of $18,000. This was transfer costs that were up by $200,000 due to continued volume growth in child care subsidies. Most of this was offset internally by a $63,000 saving in personnel expenditures, primarily due to recruitment delays and part-year coverage in youth services by the Native Training Corps, which is funded by the Public Service Commission. There was $119,000 savings in other costs, due primarily to fewer out-of-territory youth assessments, reduced travel and utility costs and fewer sex offender sessions.

Under social services, transfer costs were up $550,000. Social assistance costs in Whitehorse were up by $685,000, but some of this was offset by underutilization in other support groups, particularly the strategic initiatives program. We were also able to offset from other areas of social services programming, such as a $63,000 saving in personnel expenditures in community support services, $144,000 savings in other costs, primarily due to a planned NGO evaluation not proceeding and delays in approved home placements for vocational rehabilitation services.

Under health services, transfer costs were up by $29,000. The transfer costs were up by $406,000, several major adjustments making this change as follows: $658,000 net increase in contributions paid by insured health services, primarily to cover the Hospital Corporation's 1995-96 deficit and to support part-year operations of mental health programs by the Hospital Corporation.

There is a $438,000 increase due to the changing of the Hospital Corporation services to the Thomson Centre from a contract to contributions; a $642,000 decrease resulting from changes in the distribution and requirements for support for Health Canada in northern health services; a $48,000 decrease due to several other smaller changes, primarily the payment of Mental Health Board costs through contracts, rather than a contribution.

The increase in transfer costs was largely offset by savings in other areas, such as a $96,000 savings in personnel expenditures, primarily due to vacancies at the Thomson Centre during the bed expansion. There was a $281,000 reduction in other costs, although insured health insurances increased $469,000. This was more than offset by changing hospital contracts to contributions and restructuring them to reduce costs, miscellaneous contract and training savings in community health and other minor reductions.

Regional services were underspent by $87,000, a decrease that results in the following savings: $46,000 in personnel costs due to vacancies in Dawson and Old Crow; a $40,000 reduction in other costs, primarily due to the use of extended family placements to reduce CIC expenditures and a $1,000 reduction in transfer costs; regional social assistance caseloads were increased $15,000 but were more than offset by $16,000 in net savings from other transfer areas.

Mrs. Edelman: Can the minister give a bit more detail on the transfer at the Thomson Centre? You were speaking so quickly it was difficult to hear what you were saying. At the risk of him repeating it all again, just the area around the Thomson Centre and the changes there.

Hon. Mr. Sloan: I'd hardly call it a risk for me to repeat it, but we have arrangements with the hospital to supply certain services, primarily food services and other services to the Thomson Centre from the hospital, and we've changed some of these services from a straight contract, contracting for so much down to a contribution for a certain amount. This has been primarily, if I recall properly, in the area of food services.

Mrs. Edelman: The issue at the Thomson Centre and the contracting of food services from the hospital, when the federal government owned the hospital - there were a number of sort of nutrition services that went out to the communities and it was never really budgeted for. It was just one of those things that happened. Has there been any movement at the Hospital Corporation level to start getting an indication of how much those services are costing and are the services being continued in the outer communities?

On a contribution basis or is it going to be on a service agreement?

Hon. Mr. Sloan: It would be on a service type of agreement. However, I think we're always looking at how these services can be adjusted and how they can be re-evaluated. For example, we have done some assessment on the delivery of food services from the hospital to the Thomson Centre. We are currently discussing this in greater detail with the hospital, because we believe we can get a somewhat more attractive package from the hospital than what had previously been delivered.

Operation and Maintenance Expenditures in the amount of $94,363,000 agreed to

On Schedule A

Schedule A agreed to

On Schedule B

Schedule B agreed to

On Clause 1

Clause 1 agreed to

On Clause 2

Clause 2 agreed to

On Clause 3

Clause 3 agreed to

On Title

Title agreed to

Hon. Mr. McDonald: Mr. Chair, I move that you report Bill No. 7 out of Committee without amendment.

Motion agreed to

Chair: We will now go to Bill No. 8, Second Appropriation Act, 1997-98.

Bill No. 8 - Second Appropriation Act, 1997-98

Chair: Is there any general debate?

Hon. Mr. McDonald: Well, Mr. Chair, I don't know how many ways I can say the same thing, but I'll give it a shot. We are asking for approval to spend an additional $6.7 million on O&M; that is, about $4 million net and about $17.5 million in capital - that's a $10.9 million net - in the 1997-98 fiscal year, for a total of a little over the $24.2 million.

The O&M figure I've just mentioned is a composite of over- and underexpenditures. As a result, the bill accompanying this supplementary quotes a combined O&M and capital expenditure, which is in excess of these figures. This apparent anomaly is simply the result of our practice of only voting increases in expenditures. Decreases do not require passage by the House.

Despite the fact that more than $24 million in additional spending is being projected for the year, our annual deficit will only increase by $12.7 million; that is, from $9.9 million to $22.6 million. This is the case for several reasons.

Firstly, our income has increased by some $6.6 million, largely as a result of new recoveries which accompany the new expenditures. Secondly, we had, in the main estimates, a contingency of $5 million, a reserve, which we've now decided to use to finance a portion of the supplementary. Some of these, too, account for the difference between the additional expenditures and the increase in the deficit for the year. As a consequence of these supplementary estimates, at year-end, we expect our accumulated surplus to be $23,881,000 less whatever is the ultimate result of our negotiations with the Public Service Alliance. Given that we do not wish to drop the accumulated surplus below $15 million, any year-end sum below $25 million means that we will probably have to cut spending next year from that of this year by that amount.

As I mentioned before in second reading, having toured the communities for budget consultations, I know that Yukoners are aware of our financial situation. There is simply no longer any likelihood of significant growth of federal transfers because the federal government has, by various means, managed to restrict transfers to the provinces and territories quite significantly over the past number of years. In addition to this, and partly as a result of it, the growth of the provincial local expenditures in Canada has slowed considerably, and the rate of growth in these expenditures is an important escalator in our formula financing arrangements. Therefore, we must be prudent in our spending, husband our resources, prioritize the almost unlimited demands upon those resources.

Operation and maintenance spending is increasing in four departments. These include Economic Development to finance the purchase of a portion of Anvil Range's outstanding power bills. This expenditure is recoverable and will be repaid by Anvil Range. In Education, the increase is largely for the Yukon Teachers Association arbitration award and to staff the Faro school to accommodate the mine reopening. In Health and Social Services, the increase is principally volume driven in- and out-of-territory health care costs and an increase in funding for the Yukon Hospital Corporation. Lastly, in Tourism, the increase is for the new Air Transat cooperative marketing program.

The remaining departments all show decreases in O&M as a result of a deliberate taxing of those departments to help fund the increases I've just mentioned.

In addition to the cuts to operation and maintenance, there are also some reductions in the capital expenditures of the Department of Education and the Department of Health and Social Services as part of this exercise.

I believe I have mentioned it in my remarks in second reading, but I think it's worth repeating again: we are going to have to get used to these kinds of processes, because I am certain that they will become a common occurrence in the future. The money to fund new priorities and leave existing programs untouched is simply no longer available.

Mr. Chair, operation and maintenance, of course, is not the only funding being sought in the supplementary. We are also looking for an additional $17.5 million in capital; $16.4 million of this is for lapsed 1996-97 capital spending. The single largest non-revote item is for monies in the Department of Education and Government Services for the acceleration of the spending on the Old Crow school.

Members will be aware that it has been decided to transport the construction materials to Old Crow largely by winter road. This requires that the road be built and materials for school construction be purchased prior to the end of the current fiscal year. These expenditures are virtually all recoverable from insurance proceeds.

On the other side of the ledger, our total income has increased by over $6.6 million due to increased recoveries associated with the additional expenditure items being requested in the supplementary.

This increase in recoveries is partially offset by a reported decrease in our formula financing grant from Canada. This transfer payment is subject to constant adjustment as new information is received from Statistics Canada and the Conference Board and a host of variables that impact upon the formula.

The decrease reflects the latest information available for these variables and is largely due to a smaller than expected July population adjustment from Statistics Canada. The figure is in no way final, and is subject to adjustment for a number of years. Adjustments can go either way, as the currents of economics and demographics change course. Final census figures expected next March could have an impact on this figure, but the direction of any such adjustments is unknown at present.

As I mentioned previously, the end result of all these changes is that we are showing in this document an accumulated surplus of less than $23.9 million at year-end. From that, we must still bear the cost of the impending PSAC settlement.

We know, of course, that there will be some lapses at year-end, but these will largely be in capital and will, in all likelihood, simply be revoted again. Therefore, capital lapses do not, in the end, contribute to an available surplus nearly so much as we may think.

In any event, as our capital budgets decrease, it is reasonable to assume that the magnitude of the lapses will also decrease. As a result, it behoves us to be careful and prudent in our spending, so as to avoid slipping into an accumulated deficit - something I believe none of us wishes to see happen.

If members have further questions, I will be more than happy to answer them.

Mr. Ostashek: Well, we certainly will have some questions; there is no doubt about that.

I thank the minister for the brief overview. I will look at the supps in the morning and probably have a lot more questions.

I just have some questions of a general nature, and I want to go on the record once more, Mr. Chair, in saying that we can talk about trends, we can talk about percentages, we can talk about everything else but, nevertheless, this is the largest operation and maintenance projection that has ever been put in front of this Legislature - in excess of $370 million.

It does cause me some concern. Maybe that concern is premature. We will know one year from now, when the final figures are in.

The minister has projected a $23.8 million surplus, less any monies that will be needed for the settlement with the public service union. While we know this is a projection, we also know that there are lapsed funds every year. The minister says that he's comfortable that the direction of his projections is better than last year's and that the increase is not great in operation and maintenance, so I would like the minister, if he will - if he would care to speculate at this point - say what he feels the lapses will be. I know he's going to say that he doesn't want to do that, but the fact remains that, having been in that chair over there, I know that he has a pretty good handle on what's going to be spent in the remainder of this year at this time.

So, I would just like to ask the minister if he would be prepared to make a guess as to what the lapses will be - a projection as to what the lapses will be - come March 31, 1998.

Hon. Mr. McDonald: Let the record show, Mr. Chair, that I'm chuckling, knowing that it's a mug's game to be speculating too much about these things.

I can tell the member some variables that I do know of that will have an impact on the possible lapses that may occur. Clearly, we know from history that we've lapsed - the member is aware of this - as high as $20 million, and I think even higher at some point. We've also lapsed as low - certainly in this last year - as $2.5 million. We know that, at least in the last three or four years, the range can be anywhere in that neighbourhood. Now, that's a pretty significant difference, between $2.5 million and $20 million.

Another factor that's taken into account is that the member can see from the main estimates to this estimate that a number of departments show reductions in their O&M expenditures. Ten departments show reductions in O&M.

The average reduction is around 1.5 percent of total and this was extracted from their budgets at mid-year in order to help accommodate the increased costs in priority areas of health care and education. Because that O&M reduction came relatively late in the year, it made it slightly more difficult to accommodate and so, consequently I would suspect that that will eat into the lapses somewhat.

Apart from that, I'd have to take some readings closer to the end of the fiscal year before I got a clear sense of what the lapses would be. Those are a couple of major or significant factors which will impact on the amount of lapses. I think that certainly there will be lapses. I just don't know how much.

Mr. Chair, I move that you report progress on Bill No. 8.

Motion agreed to

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

Motion agreed to

Speaker resumes the Chair

Speaker: I will now call the House to order.

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

Mr. McRobb: Mr. Speaker, Committee of the Whole has considered Bill No. 7, Third Appropriation Act, 1996-97, and directed me to report it without amendment.

Further, Committee has considered Bill No. 8, Second Appropriation Act, 1997-98, and directed me to report progress on it.

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

Some Hon. Members: Agreed.

Speaker: I declare the report carried.

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

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

Motion agreed to

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

The House adjourned at 9:30 p.m.

The following Sessional Paper was tabled November 19, 1997:


Yukon Heritage Resources Board, 1996-97 Annual Report (Keenan)

The following Legislative Returns were tabled November 19, 1997:


Oil and gas resources forecast for three of eight sedimentary basins (Harding)

Oral, Hansard, p. 1371


Oil and gas dispositions (federal) in Yukon (Harding)

Oral, Hansard, p. 1375