187 Hansard
Whitehorse , Yukon
Monday, April 10, 2006 - 1:00 p.m.
Speaker: I will now call the House to order. We will proceed at this time with prayers.
Prayers
Withdrawal of motions
Speaker: The Chair wishes to inform the House that the following motions have been removed from the Order Paper because they are outdated: Motion No. 557, standing in the name of the Member for Klondike and Motion No. 631, standing in the name of the government House leader.
DAILY ROUTINE
Speaker: We will proceed at this time with the Order Paper.
Tributes.
Introduction of visitors.
INTRODUCTION OF VISITORS
Mr. Jenkins: Mr. Speaker, I'd ask all members to join me in welcoming to our visitor gallery a former Deputy Sergeant-at-Arms of this Legislature, an individual born and raised in Dawson City , who is a regular in our visitor gallery, who just celebrated, for the second time in his life, his 69th birthday, Mr. Bob Munroe.
Applause
Speaker: Are there any other introductions of visitors?
Are there returns or documents for tabling?
Are there reports of committees?
Are there any petitions?
Are there any bills to be introduced?
Are there any notices of motion?
NOTICES OF MOTION
Mr. Rouble: I give notice of the following motion:
THAT this House urges the Government of Yukon to continue to encourage the growth and diversification of the Yukon economy.
Mr. Hassard: I give notice of the following motion:
THAT this House urges the Government of Yukon to utilize the territorial health access fund to increase Yukoners' access to family physicians and other health professionals.
I give notice of the following motion:
THAT this House urges the Government of Yukon to examine the establishment of a dogs for drug-free schools program, similar to the program currently being used in Medicine Hat , Alberta .
NOTICES OF MOTION FOR THE PRODUCTION OF PAPERS
Mr. Hardy: I give notice of the following motion for the production of papers:
THAT this House do issue an order for the return of
(1) copies of all writs, summonses, statements of claim or other legal documents filed with either the Yukon Supreme Court or the Territorial Court from January 1, 2003, to the present, in which the Government of Yukon, or the previously named Yukon territorial government, is named as defendant;
(2) a summary statement outlining the final disposition, or current status, of any such actions commenced against the Government of Yukon as of April 10, 2006, including relevant details of any actions that have been withdrawn by the plaintiff or settled out of court; and
(3) a summary of direct and indirect costs to the Government of Yukon associated with any and all such actions in litigation against it.
Mr. Cardiff: I give notice of the following motion for the production of papers:
THAT this House do issue an order for the return of
(1) copies of all correspondence between the Department of Energy, Mines and Resources lands branch and the City of Whitehorse, from September 2005 to the present, with respect to lands in the Holly Street area of the Porter Creek subdivision currently designated under the City of Whitehorse official community plan as greenspace or parkland;
(2) copies of all correspondence, records of meetings, telephone records or other communications between the lands branch and any company or individual with respect to potential development of the above-mentioned lands, from September 2005 to the present;
(3) copies of all correspondence between the Minister of Energy, Mines and Resources and the City of Whitehorse with respect to the above-mentioned lands, from September 2005 to the present; and
(4) copies of all correspondence, records of meetings, telephone records or other communications between the Minister of Energy, Mines and Resources and/or the Premier of the Yukon and any individual or company with respect to the potential development of the above-mentioned lands, from September 2005 to the present.
Speaker: Are there any further notices of motion?
Is there a statement by a minister?
This then brings us to Question Period.
QUESTION PERIOD
Question re: Watson Lake care facility contract
Mr. Hardy: Last week I asked the Minister of Health and Social Services a few questions about the multi-level care facility in the Premier's riding. A few days from now, when we finally receive the information we requested from ATIPP, I suspect I'll have a lot more questions to ask on this matter. Let me ask the minister this: why are the design and planning costs of this project now running over $1.5 million when the total cost of this centre is supposed to be only $5.2 million?
Hon. Mr. Cathers: The Member for Whitehorse Centre is correct in noting that in comparison to the booked cost of the multi-level care facility, the engineering costs and design work were higher than normal. That is due to the fact that when the multi-level care facility project commenced, it became apparent that there were potential structural issues with regard to the hospital, and so there was a review of the hospital and work done to assess what the issues where regarding that.
Mr. Hardy: I've worked in the construction industry for a very long time. Design costs are normally in the range of five to 10 percent of a project's total value. One Yukon architect says he submitted a bid for design and planning work that was very close to the 10-percent mark, but he wasn't even given a chance. Now we see design and planning costs coming close to 25 percent, and most of that has been contracted without any public tenders.
There's something very, very wrong, and we need some straight answers from this minister, because that answer does not cut it. Is he saying the extra work was another million dollars? Is that what he's saying?
What went wrong, and what is this minister going to do about this? This is completely out of control.
Hon. Mr. Cathers: I would urge the leader of the official opposition to note - I will repeat for him the comments I made in my first response - that the reason for the additional cost is the fact that review work of design issues with regard to the hospital, and review of potential structural issues, was done. This had not been anticipated in the project when it was originally designed.
The work and cost he's referring to are due to the review that was done of the hospital, not solely the multi-level care facility. Both buildings are encompassed in that total.
Mr. Hardy: Mr. Speaker, he is saying that it will cost another million dollars in design to take a look at the existing building. Why didn't this government do the work beforehand? Didn't they review the building they were attaching to? Design and planning costs are already more than double what they should be, and there is no way in the world this project is going to come in on budget. It won't come in on time, either, because it's already way behind schedule. The bottom line is very clear.
We're watching another Yukon Party project spiral out of control. In fact, I can't think of one single thing this government has done on time or on budget or even completed. Millions and millions of taxpayers' dollars are just being thrown away. No wonder we're standing here debating such a huge budget. It's not because of new and better services; it's because of waste and incompetence. Will the minister tell the House right now when this project in the Premier's riding will finally be finished, and what will the final cost be?
Hon. Mr. Cathers: Mr. Speaker, again, I thank the leader of the opposition for that question and point out to him, again, that the costs with regard to review of the Watson Lake hospital and the review of what design issues there were, what structural issues there were, were unanticipated. There was also design work done to determine what we would need to do down the road to address these issues. That is not being proceeded with at this time.
Right now the budget only encompasses the multi-level care facility. It does not include a sufficient allocation to address hospital issues at this time, but we did need to do the due diligence and determine if any of the issues regarding the hospital were of a critical or emergency nature that were perhaps creating an existing threat at this time. The hospital is certainly sufficient to meet the needs at this time, but there does need to be work down the road. There will have to be repairs and renovations to the existing hospital, due to some of the structural issues and issues where the design did not, at the time, meet today's current codes.
The leader of the opposition is fond of heckling me and is fond of criticizing the government, but I think in fairness I should point out that his memory as far as the government's successes never seems to contain any of the successes that we have achieved. I would urge him to give consideration to that.
Speaker's statement
Speaker: Before the member asks his question, I would just like to remind the leader of the official opposition that I understand passionate debate, but please allow the members to respond. You have the floor, Member for Mount Lorne .
Question re: Porter Creek land development
Mr. Cardiff: I have a question for the Minister of Energy, Mines and Resources on a subject we discussed last week. According to newspaper reports, officials from the lands branch wrote to the City of Whitehorse on more than one occasion, asking the city to put forward a large parcel of land in the Holly Street area for possible development. I hope the minister is prepared to table all correspondence between the lands branch and the city, but first I'd like to ask him this: did the minister direct his officials to make these overtures to the city, or did department officials undertake this initiative on their own?
Hon. Mr. Lang: In the House, we have to deal with facts. I will certainly table all the information the member opposite requested. What the member said on the floor today isn't factual. The department did nothing of the sort.
Mr. Cardiff: The minister has been quoted as saying he did not know the city had been asking the Yukon government to turn the land in question into a park, yet for some reason his department decided last fall that it should be developed, and that's in spite of the fact that the minister states that the government takes no position. It seems apparent that the government is taking the position that it should be developed.
Somewhere along the line, a prominent Yukon Party supporter and would-be candidate decided to lobby the minister and the Premier for support in approaching the city for an amendment to the official community plan. When did the first conversation take place between the minister and the proponent, who has now been identified? Was it before or was it after lands branch officials began corresponding with the city about allowing the land to be developed?
Hon. Mr. Lang: I remind the member opposite: that is not factual. The department never had any communication with the city on that issue or on that land at Holly Street , so in other words, the facts are these: a gentleman came forward; he had his day in court with the city; obviously the city does not go along with his ideas; the issue is dead. The department at no point contacted the city on developing that land. That land was under community plan and the zoning was in place. So as far as the department being involved in transferring the land or forcing the city to development - that is not factual, Mr. Speaker.
Mr. Cardiff: The idea of turning this land into residential lots is not new, Mr. Speaker, but apparently the idea had been dormant for awhile. Now, all of a sudden, the lands branch and a private developer are both expressing an interest in that area. Maybe it's a coincidence; maybe something else is going on.
Did the minister's officials ask the city to make this land available for development because they knew a private developer was interested, or was it the other way around - the developer got interested after learning what the department was trying to do?
Hon. Mr. Lang: For the member opposite, again, it's not factual. The department had nothing to do with the transfer of land on Holly Street . I want to make it very clear in the House here: the department had no axe to grind on this property on Holly Street , so what the member says across the way is not factual. What he has said in this House has not transpired by our department, so there is nothing going on between the department and Holly Street development. The development is dead, Mr. Speaker.
Question re: Porter Creek land development
Mr. McRobb: I'd like to return where we left off on a line of questioning to this same Minister of Energy, Mines and Resources regarding land disposition in the City of Whitehorse . Let's recap what we learned last week.
The minister has a confidential deal with a private developer on some greenbelt lots in the middle of Porter Creek . Part of that deal involves selling the land in question to the developer for a nominal fee, something far less than market value, according to the developer. A disturbing pattern has emerged. It shows how the minister really has no idea what's going on in his department.
Let's look at one example: the minister said discussions with the city to hammer out a land development protocol are ongoing, but that was news to the mayor, who said in a local paper, “I had asked the minister to tell me when those discussions have taken place. I haven't heard anything about it in months.”
Mr. Speaker, why did the minister -
Speaker: Order please. Ask the question.
Mr. McRobb: Why did the minister say those discussions were ongoing when in fact they weren't?
Hon. Mr. Lang: I appreciate the member opposite and, for the House, I'd like to comment on the quorum in the third party, and the Member for Porter Creek South adds quite a bit to that quorum. We certainly have missed it during her absence here the last three or four days.
In answering the question, again, it is not factual. We have to get facts in this House; we can't quote newspaper articles; we can't quote anything. I have to stand up here and give the member facts.
The facts are that there is no development going ahead on Holly Street . The protocol between the City of Whitehorse and the territorial government is moving along, and the member opposite is not stating facts on the floor here this afternoon.
Speaker's statement
Speaker: Order please. Before the member rises, the minister is getting very close to accusing the Member for Kluane of uttering a falsehood. I understand the nature of the debate here, because I feel that the Member for Kluane is also being very close to accusing the member of a conflict of interest. We have remedies for conflict of interest in our Standing Orders, so I would ask the Member for Kluane to please keep that in mind while asking the questions and the honourable minister while answering the questions.
Mr. McRobb: There is a disturbing pattern here. It shows the minister doesn't know what is going on in his department. The minister had time to make a deal with a fellow member of the Yukon Party and sign a letter on his behalf, but he hasn't the time to sign the land protocol.
Some Hon. Member: Point of order.
Point of order
Speaker: The Minister of Economic Development, on the point of order.
Hon. Mr. Kenyon: Making deals with party members does in fact cross the line.
Speaker's ruling
Speaker: I have a tendency to agree with that point of order, particularly in light of my last statement to the Member for Kluane. I understand the position you are taking, and I just ask the Member for Kluane to rein himself in a little.
Mr. McRobb: Last fall the city wrote to the minister and told him it wanted to turn the land in question into a park. The minister's response - he has never heard of the letter. Mr. Speaker, the minister is out of touch with what is happening in his department. Was the minister aware of the city's request, and why did he choose to ignore it?
Hon. Mr. Lang: In answering the member opposite, last week, when the member had a comment on a letter coming from the city to the government about the park situation, we have no record of that communication. Without any record, I cannot say if it came here or not. So we do not have anything on record that the mayor of this city communicated with our department on the options of making this area a park.
Mr. McRobb: Well, Mr. Speaker, the minister said last week that he writes these letters of support all the time for people wanting to develop land in Whitehorse. The minister said it in Question Period: “It is a letter that I would give to any proponent out there who wanted to present a proposal to the City of Whitehorse.”
I asked him last week to make all those letters public, but he refused to answer the question. The minister has had the weekend to look through his office for all those other letters. I suspect he won't find any, because it's one of a kind.
Again, will the minister table those other letters?
Hon. Mr. Lang: Mr. Speaker, in addressing the member opposite, the City of Whitehorse and the territorial government work in a very positive way to get land out into the general public. We all understand the challenges of doing that, Mr. Speaker, and we on this side are working very positively with the city, working to get that working relationship with the agreement between the city and ourselves.
So the member opposite, again, I would say, is creating an issue that doesn't exist. The member has stood up in the House and questioned whether we got a letter from the city. I have no record of a letter on a park concept. I would like to say on the floor here today that I think that's a great concept and I will work with the City of Whitehorse on that concept.
So the member opposite can rest easy. This minister will work with the city, will do with the land as the city would like to direct us. Once the city gets a plan, we can transfer it to them and move forward. If it's a park that the city wants, we'll work with them for the park.
Question re: Porter Creek land development
Mr. Mitchell: Mr. Speaker, I have some questions for the Minister of Energy, Mines and Resources too. In three and a half years the Yukon Party government has made no progress on the land disposition issue. There has been problem after problem, and this minister has been in the middle of every one of them. It really is time for a new minister.
In November of 2005, the minister received a government report that said there is a lack of clear overall direction with respect to the Yukon government land disposition program. It stated there are massive amounts of political interference in the process. The most recent example of this would be the minister writing to the city on behalf of his friend.
How did the minister decide that this individual would be the hand-picked choice and that he would get a letter of support? Why not someone else in the public? What criteria did the minister use to make this selection?
Hon. Mr. Lang: Mr. Speaker, the latter part of this question has been answered, but I would like to answer the member on the first part of his statement. Again, what we have to do is deal with facts in the House here. The fact is that this government is getting land out. This government is working with the jurisdictions of the Yukon to do exactly what that member says we're not doing. This government is getting land out. This government is working with Yukon stakeholders to do just that, Mr. Speaker, and will continue to do that.
Mr. Mitchell: The minister hand-picked this individual to represent the government and Yukoners want to know how that decision was reached.
Some Hon. Member: Point of order.
Point of order
Speaker: The Minister of Economic Development on a point of order.
Hon. Mr. Kenyon: Whether the person is picked because of party membership or hand-picked - the member opposite continues to cross the line that you already have ruled on.
Speaker: On the point of order, the Member for Kluane.
Mr. McRobb: On the point of order, Mr. Speaker, this is getting ridiculous. We have freedom of speech in here. The leader of the third party merely said the minister hand-picked this individual. What's wrong with that?
Speaker's ruling
Speaker: There is no point of order. However, let me go back to my statement previously, which is that the third party - both members are getting perilously close to making accusations and there are remedies in our Standing Orders, if you so choose. You have the floor.
Mr. Mitchell: Does this chosen individual have experience developing land? Has he developed any land in the Yukon, for example? The minister had agreed, according to the developer, to sell a big chunk of Porter Creek for a nominal fee. Yukoners want to know how this selection was done. It's a simple question and one that the minister needs to answer. We're talking about millions of dollars in land development, and we want to know how a person gets to the top of the minister's list. What criteria are used to select an individual as the government's representative?
Hon. Mr. Lang: Mr. Speaker, the territorial government, the government of the day, has a policy in place on how land is disposed of. Any minister in this government making a side deal with any individual to purchase land is not how governments work. The land will be available to all Yukoners, and there is a process of how land is disposed of, whether it's in the City of Whitehorse or whether it's in the outlying areas. Again I remind the members opposite: the insinuation that anybody is above the law in the Yukon government is not factual. There's a process in place. We follow the process. We're getting land out. We're working with the stakeholders to do just that, and we're working with the City of Whitehorse. This government is doing no less, or no more, than the responsibility we have in managing the land in the territory.
Mr. Mitchell: A report prepared by the government last fall said there is a massive amount of political interference in the process. It also said policy - the minister refers to “policy” - is being developed through ministerial correspondence. That is the case once again today. The minister has simply written a letter and given decision-making authority over a multi-million dollar piece of land to someone else. How did it happen? The minister has been unable to provide an explanation. Apparently there are no policies in place. All a person has to do is visit the minister and the Premier and they can represent the Yukon Party government.
Enough is enough. This minister has had three-and-a-half years. Will the minister develop some clear rules for how people get these letters of support from this minister?
Hon. Mr. Lang: Again, Mr. Speaker, we're off the mark. Community Services did commission an overview of the land policy in the Yukon. We will table that. The opposition tabled the draft. The member opposite wasn't in the House when that happened, but we will work on that draft. That is only good business. We've only had the -
Some Hon. Member: (Inaudible)
Hon. Mr. Lang: Mr. Speaker, do I have the floor?
Mr. Speaker, we've had the management of the lands in the Yukon for three years. Community Services took an overview on how, with all the other things that are coming into place - YESAA and all these other rules, other policies - we as a government should manage the land in the territory. Mr. Speaker, we've addressed that by doing an overview of it, seeing how this Department of Energy, Mines and Resources can work with Community Services to streamline some of the challenges people find in applying for land in the Yukon. That's all that policy is. When it's done, it will be tabled in this House. As I said to the members opposite, when that comes forward, we have a commitment. I think the Minister of Community Services committed to put that policy paper before this House to reinforce exactly what should be done in managing land in the territory.
Question re: Mayo land application
Mr. Jenkins: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources regarding the lands branch. Mr. Speaker, I'd like to ask the minister to confirm that the application process to obtain Crown land here in the Yukon is virtually the same now that the Yukon government is in charge as when the Government of Canada was in charge.
Hon. Mr. Lang: The legislation was mirrored, and application for public land is handled in the same fashion as was in the past.
Mr. Jenkins: The minister is aware of a situation in the Mayo area whereby an application for land was submitted without properly identifying the land in question. Somehow, that application went through the entire process, unknown to other parties who had a vested interest in the area in question.
My question to the minister is how did this happen? What went wrong here? Was it political interference? Was it collusion? Was it a mistake the minister has not rectified?
Hon. Mr. Lang: For the Member for Klondike, I don't process the applications. If this individual went through a process and, somehow, there were horrendous errors, then maybe we should bring it to the people who can fix the errors.
Mr. Speaker, we are the administrative end of this government. We are the political end. We have a vast assortment of people out there to address issues like those the member brings up. If we can't resolve that issue, I recommend that the member bring it to me, and I will direct it to somebody who can address the issue for the Member for Klondike.
Mr. Jenkins: I have brought it to the minister's attention; it hasn't been fixed. I'm here on the floor of the House today, Mr. Speaker, questioning the minister on this very important issue. A land application was made, and it clearly did not signify the area in question. Somehow this went through all the federal process and the land is to be titled to an end-user over the objections of another individual who had third-party interest and wasn't made aware of this land in this quarrying pit.
How does this happen, and why will the minister not take the appropriate action to remedy this situation? This is a travesty of due process.
Hon. Mr. Lang: Mr. Speaker, the Member for Klondike has made himself more clear on the issue. The issue the member talks about is an issue that was done before devolution. Through devolution we acquired the obligations of the federal government. At that point, there was a deal between the individual and the government to title the land. We have to honour that, because that is what happened. The federal government made those mistakes, not this territorial government. We had to honour the federal government's decision. That was the position devolution put us in, Mr. Speaker.
Question re: Granger-Copper Ridge school
Mr. Mitchell: Mr. Speaker, I have some questions for the Minister of Education. Documents we obtained last fall under the Access to Information and Protection of Privacy Act said there should be $700,000 for planning set aside in the spring budget for a new school in the Copper Ridge subdivision. It says the school will be open in August 2008. I asked the Minister of Education to confirm that the Yukon Party government would keep its commitment to build this school, and that $700,000 would be in the spring budget. He said, “The Yukon Party has always done its best to maintain and keep any promises that were made, and I don't see any difference with this one.” Fast-forward to this year's budget. No money for the new school. Does the minister think it is ethical to say one thing in the fall and do another in the spring?
Hon. Mr. Edzerza: I thank the member opposite for his question. Mr. Speaker, I believe members of different parties made promises to build a school in the heat of a by-election. That's not uncommon. People who run in elections have that right. Mr. Speaker, the $75,000 that will be in this budget is to do with school planning for the Whitehorse area.
Thank you, Mr. Speaker.
Mr. Mitchell: Mr. Speaker, it is bad enough when one minister breaks a commitment. In this case, it was two ministers who made this promise - not candidates - ministers. On November 3, 2005, the MLA for Whitehorse West, who was the Acting Minister of Education, said this in a local paper, “The Yukon Party is committed to building a new school in the Copper Ridge area. There is a demonstrated need,” she said. In the same story, the Yukon Party's by-election candidate said her promise for the new school was made to constituents with the total support of the Yukon Party. What happened a few days after these promises were made? They lost the by-election. If the Yukon Party had won the by-election, I am sure that $700,000 would be in the budget for planning. Why are residents in Copper Ridge and Granger being punished for voting for someone other than the Yukon Party?
Hon. Mr. Edzerza: I don't believe anyone is being punished for anything. Mr. Speaker, the member opposite may be trying to make statements that one of the members may have changed directions on the school. However, I want to put on record that, although it is true that there was a school promised, it wasn't promised in this mandate. There were only eight months left, Mr. Speaker. I believe that someday there will be a new school built there. It is bound to happen because of the fast growth of the area. There was land identified in that area for a school so, at a future date, I presume there will be one built.
Mr. Mitchell: Mr. Speaker, the documents from the department actually say, “Project Description: A new kindergarten to grade seven elementary school is required for the expanding Copper Ridge subdivision.” They also say that there should be $700,000 in this year's budget for planning so that the school can be open for August 2008. The budget tabled last week doesn't contain any money for a new school in Copper Ridge. It shows how little this government can be trusted. Mr. Speaker, residents who live in this part of the city are busing kids to other schools because Elijah Smith Elementary School is full. This government made commitments just a few months ago, and now they are being broken. In a survey last fall, this government scored the lowest of any in Canada when it came to ethical standards. It's episodes like this - where election promises are made and then reneged on six months later - that leave people questioning the ethical standards of the government. There is a way to fix it. Build the school.
Speaker: Order, order. Do you have a question? If so, please ask it.
Mr. Mitchell: Will the minister put money in this year's budget and get on with building the school, or does he need the Premier's permission?
Hon. Mr. Edzerza: As much as the leader of the third party would like to lead us down the path with no end, I would like to state that this government is doing the appropriate thing. It really doesn't make much sense to build one school to empty another one. Mr. Speaker, this government is planning to strike an independent committee that will look at some of the issues that we are facing with the school situation in Whitehorse. This committee will be made up of First Nations, school councils, parents, teachers and chaired by an independent member of the public. This government believes that that is the proper process to use, and that's what is happening.
Thank you.
Speaker: The time for Question Period has elapsed. We will proceed to Orders of the Day.
ORDERS OF THE DAY
GOVERNMENT BILLS
Bill No. 71: Second Reading
Clerk: Second reading, Bill No. 71, standing in the name of the Hon. Mr. Hart.
Hon. Mr. Hart: I move that Bill No. 71, entitled Dawson Municipal Election Act (2006), be now read a second time.
Speaker: It has been moved by the Minister for Community Services that Bill No. 71, entitled Dawson Municipal Election Act (2006) be now read a second time.
Hon. Mr. Hart: It gives me great pleasure to be in debate on this very important bill. As minister, the situation in Dawson has caused my colleagues and me much concern. The situation we face in regard to Dawson City's financial insolvency is deeply troubling.
Removing the city's mayor and council was a difficult call to make. We followed the process outlined in the Municipal Act, because Dawson City was well beyond its financial means, as indicated in their financial statement. In short, Dawson was broke. The community would suffer further if strong action was not taken.
We took the action and initiated a forensic audit of the finances, which revealed a serious fiscal position for the community. As I just said, the town was broke.
Mr. Speaker, I'd like to provide the members opposite with a brief chronology of events. In 1998, Dawson had $2.2 million in reserves, $2 million cash in the bank and a debt of $1 million. The town spent $10.4 million on projects and initiatives under a capital funding agreement, which was approved by a previous NDP government. This set the stage for the following situation to happen: the town relocated the fire hall, finished improvements to the swimming pool and built a recreation centre. With that money, the town was also supposed to have started work on secondary sewage treatment. The recreation centre continues to be plagued by problems and has cost Dawson residents millions in construction and legal costs. We are still working on finding a solution for the sewage system for the community.
Dawson's financial problems took root when these projects got off course. The wheels began to come off in Dawson in September of 1999, when the Yukon government and Dawson City signed a capital funding agreement to provide funds to Dawson for the construction of a sewage treatment plant and a recreation centre.
In July of 2000, the City of Dawson tendered a contract for the recreation centre before addressing the sewage treatment plan, a violation of the capital funding agreement. A year later, on September 15, 2000, the Yukon government found out that Dawson awarded the tender for the recreation centre to a company for $6.8 million, when the CFA only allowed for an award of $6.3 million.
This amounted to a $544,000 shortfall. The city's books later showed that over $11.6 million had been spent on the rec centre to date, not including some additional costs. The mounting bills pushed Dawson to the financial brink and put them in an untenable position.
On October 13, 2000, the former Minister of Community Services, under the previous Liberal government, authorized passage of the Dawson bylaw that allowed the city to go beyond its legal borrowing limits. In January 2001, due to Dawson's continued requests for funding and non-adherence to the capital funding agreement, the former Liberal government appointed a financial supervisor in an attempt to restore stability to the city's finances.
It appears that he was instructed to perform only a portion of his duties, as outlined in the Municipal Act. Mr. Speaker, some would say too little, too late. Some would also say if they appointed a supervisor, they must have known something was amiss.
Upon taking office, we enhanced the supervisor's ability to the full aspect of the Municipal Act to ensure that he had the full authority under the act to follow up on the finances of Dawson City. It was obvious we weren't getting the specific information, so we installed a new supervisor for the City of Dawson. This supervisor wrote a report called “The Town of City of Dawson's Trusteeship, Background and Consequences.” The report provided an overview of the reasons the City of Dawson ended up in its financial difficulties. It also talked about the municipal governments and made recommendations on how to improve the design and format for capital funding agreements.
We have acted on the recommendations on the capital funding agreements. They now include improved measures of performance evaluation and accountability.
We no longer allow the construction of multiple capital projects within a single CFA.
To get back to the chronology and the context behind the appointment of the trustee for Dawson, I'd like to point out that, back when I first took office, it was clear that Dawson's finances were not on track. The town could not borrow additional dollars; the previous Liberal government authorized Bylaw 17, which allowed the municipality to borrow up to $4.46 million - well above the statutory limit. The town used the money to refinance an earlier debt owed to the Yukon government and to construct a new recreation centre. Given the situation, the city was simply not able to pay its bills.
The preliminary audit of the town's financial records by the town's auditors in the spring of 2004 showed the best case scenario at the time put the city at $1.14 million in the red. The city underestimated outstanding legal bills and other accounts payable in 2003. The preliminary audit showed the actual deficit amount of $415,000 is more than 300 percent off the original estimates.
Compounding the crisis was the council's failure to abide by the financial plan. In 2004, Dawson City's municipal finances were mired in the red and, as such, the Government of Yukon was compelled to dismiss the town's council and to install a trustee, as per the process outlined under the Municipal Act.
The fact that the Municipal Act contains these provisions demonstrates, from time to time, that municipalities like Dawson City find themselves in an impossible situation. As a senior level of government, we have an obligation to intervene.
Mr. Speaker, we recruited an outstanding individual with a solid record in financial and administrative skills to undertake the role of trustee for the City of Dawson. However, we saw the value of encouraging local participation and continuing the operations of the community, so we structured the town's oversight with Mr. Hayes to work with a local advisory committee.
We sought names for nomination to this committee, and that committee was selected and continued to provide Mr. Hayes with advice from the city. We did not abandon the City of Dawson, but rather we stepped in and provided a level of governance through the trustee and the advisory committee, while providing financial support for operations and services. We could not ignore the operations of the community, nor abandon the citizens who live there.
Since 2004, my colleagues and I have provided management support, financial oversight and funding to the Town of the City of Dawson. In terms of direct investment, the Yukon government has provided $1.6 million toward operating expenses; $1.3 million toward administration, legal fees and other internal costs; $195,000 toward Dawson's sewage planning and testing; we are committed to covering the cost of building a new sewage facility; and $1 million for the Klondike Institute of Art and Culture.
It has been a tough 16 to 17 months for all parties concerned, Mr. Speaker, beginning with the people of Dawson City, who want a duly elected representative city council returned so that the local business of the community can be undertaken by the people of the community. It has been difficult for the government, as well, but Dawson was clearly spiralling out of control and these measures had to be taken before the problems grew larger than they had become.
Our government is committed to returning things to normal for the people of Dawson, to having an accountable, responsible, democratic governing body for the benefit of all Yukoners. My department has been working very hard over the past two years with the trustee and advisory council to find ways to restore Dawson to a fully-functional municipality. Mr. Speaker, we believe it is time for Dawson to take back control of its affairs by electing a new mayor and council and by passing the Dawson Municipal Election Act (2006). This will take place in short order.
All municipalities are required to hold general municipal elections on the third Thursday of October. This year, a general election will be held on October 19, 2006.
Dawson should not have to wait until October, Mr. Speaker. They have waited long enough. Passage of the Dawson Municipal Election Act (2006) in this House will trigger a municipal election on or before June 15 of this year. If the election results in a quorum of council, Dawson City will, for 2006 only, be exempt from the requirement of the Municipal Act to hold an election this fall. We believe that potential candidates for mayor and council are more likely to put their names forward for nominations if they can be assured of some stability. The Dawson Municipal Election Act (2006) is one of the several components of a plan to help Dawson City to get back on its feet. With a new mayor and council, we will be able to get to the business of working toward financial stability for the community.
Mr. Speaker, this government is committed to establishing municipal governance for Dawson City, and the Dawson Municipal Election Act (2006) is a key step in fulfilling this commitment. The next step in restoring Dawson City's normalcy is with a financial plan, and I will be bringing that to the House shortly. While I expect there to be some concern expressed by the members opposite about how important a financial plan is for Dawson, let me remind each of you, that we fully understand the importance of a solid financial position for Dawson City and every other Yukon community. Poor financial planning and the lack of accountability is what created this unfortunate situation in the first place.
Mr. Cardiff: I hope the minister takes this more seriously than the act that he tabled a year ago in this Legislature. I don't recall the exact name - something like the act for the restoration of democracy in Dawson. At any rate, Mr. Speaker, that act, which gave the government more control, provided the means for the government to provide financial stability and to hold municipal elections, but they saw fit, even though it's a year later, not to proclaim that piece of legislation.
The minister said it was cause for concern and it was troubling. I can tell you it was cause for concern on this side of the House. The official opposition has continuously, for the last three years, led the charge on this file regarding the treatment of Dawson City, its municipal council, democracy in Dawson City and the treatment of the citizens there. We are proud to do that, and we will continue to do that and ensure that the minister follows through on his commitments. He didn't follow through on the commitments that he made a year ago in this House with the tabling of the other piece of legislation.
I would also like to point out, while I am on my feet - and we are talking about the municipal election act regarding Dawson - I know that the Member for Klondike is going to stand up and go on and on about how hard done by he feels about the treatment of his community, but I need to remind the Member for Klondike at this point in time, that I stood in this House and asked questions about the situation in Dawson during Question Period and in budget debate and that the Member for Klondike defended the government's position on that and that he can't have it both ways.
I know he is going to do that and I support him in doing that now, but the reality is he needs to think about what he said in this Legislature when he sat on that side of the House.
It's really unfortunate that the government, through this piece of legislation and through the prior piece of legislation dealing with democracy in Dawson City, hasn't taken the full responsibility for their role in what has transpired in Dawson.
The minister talks about a financial plan that was not followed. I would like to remind him that that plan was prepared under the direction of the former government. It was also prepared, to a large degree, by the minister's department. They played a large role in developing that plan.
So to say the government doesn't have a role or a responsibility in what transpired in Dawson City is not factual. This government has yet to own up to the fact that the government actually played a role and bears some responsibility for the situation in Dawson.
Yes, the previous government authorized them to borrow too much money. Was the infrastructure needed in Dawson City? Yes, it was needed. Did the City of Dawson and its duly elected municipal council deserve to be treated like that? I don't think so.
One thing I find really troubling is that the minister continues to make promises about a financial plan or a package for Dawson City, and that they're going to work toward that. What I find troubling about that is they haven't identified anything in this year's budget with regard to debt relief or a financial package for Dawson City.
So, on one hand, there they are. For the last three and a half years, they've been beating up on Dawson City, the municipal council, the citizens of Dawson, saying they weren't responsible, that they weren't spending responsibly, they weren't following a financial plan, yet this government, at the same time, is doing exactly the same thing. They're doing exactly what they criticized Dawson for.
How, when and where is the money going to come from? It's not in the budget. Is this another special warrant? Just in the last couple of weeks, right after the government tables a budget, we've seen them making other spending announcements that aren't included in this year's budget. They have money to do all kinds of things, but it's not in the budget. They did the same thing last year. It's poor planning; it's financial planning by special warrants. When you need money, just go to the till, put in a chit and pull out the money. It's called “a special warrant” - you just go over and ask for the money and you get it. The government feels it can do that without doing the adequate financial planning.
The other part of this, for me, is whether or not we can really believe the government will follow through on this. As I said, the government tabled a document last year that was supposed to provide for restoration of democracy in Dawson City. What we saw was a citizens committee - which was a step in the right direction - but the government has been moving at a snail's pace.
It hasn't been paying attention, as well, to the other documents that have been presented in this Legislature. Most notably, the minister cited the trustee background and consequences document that was done by the second supervisor, Mr. Speaker. The minister talks about municipal elections in Dawson and providing financial stability. That document - the trusteeship background and consequences document - is two years old, and the minister didn't pay attention to what it said. One of the things the supervisor said was he didn't think there would be an uptake, that citizens of Dawson would not be interested in participating in a municipal election nor being part of a municipal council that was financially strapped, and that there needed to be financial assistance provided to Dawson.
Now, the minister says he is going to do that - he was told that two years ago. His own trustee has been quoted as saying exactly the same thing. That is probably why he left. It's like he got frustrated by the fact that the government is not moving forward. There was no sign of an election; there was no sign of anything to fix the financial situation in Dawson City. If you look at the budget, I wouldn't have much confidence in this government to do that.
They've ignored the information that they've been provided by the people they've hired to deal with the situation. They ignored the supervisor's report. They've ignored the recommendations of the trustee with regard to how important it is to have that financial package. It's not like the minister didn't have the tools. The minister had the tools; it's just that he couldn't get the support of Cabinet to proclaim the act that was passed a year ago. As much as I didn't like the tools that were in that toolkit - I felt that they were a little heavy-handed - the minister had the latitude to do something a year ago, and he had the information. You can't tell me that he didn't have the information. So continually we were waiting for more information; we were waiting for more information.
The information surrounding Dawson's debt has not changed substantially over the last year. All you have to do is look at the audited statements, qualified or unqualified. The information didn't change substantially from one year to the other. You could have come up with a figure that would have addressed the problem without having to wait for the information. The government could have put Dawson back on its feet financially and restored democracy a long time ago, without waiting for this late date. To insinuate that they're doing Dawson a favour by allowing them to forego having to go through two municipal elections in a year - well, that's nice on the part of the government. I'm glad that they're doing that, because we go through enough elections here in the Yukon without having to have two municipal elections in one year. But if the government had acted when it should have acted, which was a long time ago, we wouldn't be standing here debating this today.
They could have done that. There are lots of arguments - they had lots of advice from both supervisors and from the trustee. The other thing I find troubling - and this is why the government doesn't want to take responsibility - they conducted a forensic audit that followed the trail of the money, but it never followed the trail of how we got there. It didn't assign the responsibility necessarily where it lay.
This is what I'm saying to the minister, that the minister has to take some responsibility and the government has to take some responsibility for how Dawson got into that situation. The government played a role in managing those projects and in creating a financial plan for Dawson City when it was under financial supervision. When there was a supervisor appointed, the government played a role in that financial plan. That financial plan was flawed, and the minister needs to know that. The minister needs to look at that, and he needs to take the responsibility for it because government does have a responsibility - it was the government that messed that part of it up.
Do we support this bill? Of course we support this bill. I would have supported this bill a year ago. This should have come hot on the heels of the previous bill the minister tabled - only the date should have been changed.
We should have had an election a year ago, and we could have, but it was through the neglect and foot-dragging on the part of this government that we're standing here debating this today.
I know the minister is feeling the heat, and he's a little uncomfortable with what I'm saying, but facts are facts. We could have done this a year ago. We could have done it a long time ago, and we wouldn't be standing here. Things would have been a lot rosier in Dawson. They may even have had another member sitting on that side of the House if they had done it - who knows?
We will support the bill, but I am deeply concerned. There's an indication that there is a financial package coming, some sort of debt relief. They're going to ensure financial stability in Dawson City, but the details are not there and the people of Dawson take no comfort in the words of the government that it's going to do that.
The proof is in the pudding. Let's see those figures and what the government is prepared to do and identify where that money is coming from, because it's not identified in the budget. Once again, we're using special warrants to pull money out of a hat.
We will support the bill, and I look forward to listening to the minister's response to my comments and to the comments of the other members, and I look forward to debating this in Committee of the Whole later this afternoon.
Mr. Mitchell: Mr. Speaker, the people of Dawson have been waiting patiently and have been waiting some more for this legislation to be tabled. I guess I would have to ask just what explanation we can have for why we've waited so long for this two-paragraph, 25-line bill. It should have happened sooner, it could have happened sooner, and it can't happen soon enough.
Now, looking at this bill, what do we have? Clause 2(b) overrides section 52 of the Municipal Act by stating that it will not be necessary for Dawson to hold a general election in 2006 - or a second general election, in this case. So that is certainly good. We don't want to see the people being asked to have an election, knowing that they only have less than half a year and have to stand again. But it is sort of a flying-by-the-seat-of-your-pants approach that this government has taken to Dawson, and to governing in general, to have to do things that way.
Really, this bill is an embarrassment, Mr. Speaker, because this government has had three and a half years to fix this problem. During that time, they continued to delay and stall and do nothing. Now they bring this sort of 25-line wonder forward that we have before us today to override the existing laws of the territory. It's unfortunate that this is not an exception but more the norm for this government, where everything is left to the last minute.
The Premier has indicated in the past that there were five solutions to the situation brought forward by the very able supervisor who was in place. What are those solutions? We still really haven't heard what these five solutions are, just that there were five. Is this current approach one of the five? We don't really know. What were the other options, and why could it not have moved forward any sooner than it has?
Additionally, I am very concerned, we are all very concerned on this side of the House, that neither this bill nor the budget has addressed the issue of the debt that is faced by Dawson. The Premier has said that it will be addressed, but to date there has been no indication of how and when this will happen. It's really a very, very unfortunate way of budgeting - to table a $793-million budget less than two weeks ago and within an hour of the conclusion of the budget speech, have the Minister of Finance announcing in a media scrum that there will be this bill tabled, the Dawson Municipal Election Act (2006), which obviously should go hand in hand with the issue of the debt relief. Surely when the departments were working on this budget, I suspect that the minister's own department would have come forward and said, “This is approximately the amount of money we should set aside to deal with the debt problems in Dawson, depending on what level of debt is deemed affordable for the municipality to carry forward and not simply be overwhelmed by the burden of carrying it.” Yet, we don't have that.
Similarly we've all known the government had promised to assist Yukon College in a pension shortfall. We get a news release last week of a five-year plan with $1.25 million a year to deal with that pension shortfall. It is not in the budget, but it shows $1,251,600 beginning in the 2006-07 fiscal year.
We know there is also the similar problem at the hospital. Is it because the Minister of Finance was trying so hard to table a budget, he didn't want to go below the $9-million surplus that he has managed to leave on paper in this year's budget? If everything the minister has promised - that the various ministers have promised - from waterfront development to all kinds of other memorandums of understanding and letters of commitment were to be budgeted for, then the minister wouldn't be able to stand up and say that everything is rosy. We have a surplus.
I don't think it's a prudent way to operate to table a budget with some of the largest items that we all know - that every citizen in the Yukon who listens to the radio or reads the newspaper knows - that there has to be some form of financial commitment made by this government to assist the citizens of Dawson in getting out from under this rock that they are carrying around. It should be in the budget.
In keeping with the finances of this issue, when the minister stands to give his remarks, I'm hoping that he will be able to inform us just how much money has been expended to date in funding the public trustee and his office and all the other activities that have carried on, without leading to an election or a financial solution for Dawson.
Again, in the spring of 2005 - before my time in this House, but certainly I was a keen observer - this House passed the Dawson Municipal Governance Restoration Act. What's the status of this bill? It has yet to be proclaimed. In that act there was provision made to look at a number of options, such as the consolidation of the whole of Dawson's debt; the issue of a new debenture to cover any such consolidation; the retirement and cancellation of the whole or any portion of the existing debenture debt; the outstanding debentures and the existing debt to the CIBC; the terms, conditions, places and times for exchange of a new debenture for outstanding debentures; and the reduction in the rate of interest on the new debentures.
We know that the provisions were there. We know that they are going to come back and there will be discussion of this, but we didn't get any indication to date as to how much money. I know, because I also hear from people who reside in Dawson that they've heard various amounts floated. Perhaps they will be left with a debt burden of $1.5 million; perhaps it will be less; perhaps it will be more. They are concerned and they want to know, because they still have to move forward. There is still the serious issue of coming up with the sewage treatment facility that the Government of Canada has mandated be addressed.
The people in Dawson want to know just what this government has in mind for them, or does this government have in mind to pass it on to the next Government of Yukon?
In responding to media questions about those five options last year, in answer to a question about one of the options, the Minister of Finance said, “Those are the questions we have to answer. If those options don't answer those questions, then they are not valid options.”
I find that to be a fascinating statement. I am not sure what it means. I think there are options. The Finance minister and the Minister of Community Services should have been able to look at them and, with the help of the officials, determine in less than another year whether they were valid options.
The other comment was, “Dawson City is broke, in debt, and in a terrible financial mess, and we are fixing the problem.” Well, as far as stating the obvious, we've seen it stated.
I'm not going to talk for too long on this. I think it's long overdue. The residents in Dawson would like to have their election. I think it's a shame that this has been delayed to this point so it can be sort of an election goodie for the coming general election, to say, “Look, we just solved it. We've given you your election.” It didn't need to take this long.
We will be supporting this act. We think that it is certainly good news for Dawson. They will once again have elected representatives who can meet with the government of the day and stand up strongly for their community as every other community likes to be able to do. We think it's a shame that for so long they have been treated with statements like, “We'll punish them,” and these sorts of comments.
Again, we would keenly like to know when we're going to be told how much money this government considers that we should be bringing forward to address the issues in Dawson. We hope that we'll hear that in this House and not in another media scrum on a Thursday afternoon, which seems to be the way these things are announced.
Thank you.
Mr. Hassard: Mr. Speaker, it's interesting to hear some of the comments from the side opposite. I don't think anybody on this side of the House was rejoicing when the decision was made to remove the mayor and council in Dawson City at the time. This was an action that took place to resolve some problems. I don't know why some of the members opposite act as though we did it maliciously. The Member for Mount Lorne and I are on the same page already.
My time spent as a municipal councillor was not that long, but this issue of Dawson City and its finances was something that we spoke about at length. It was quite interesting to sit around the table and talk about our finances with the Village of Teslin. Quite often, the comment was made: “Well, perhaps we should just go ahead and spend the money; the government will bail us out. That's what Dawson does. Dawson gets whatever they want, and here we are, scraping to get by, saving our finances, putting money away for a later date to improve upon our infrastructure.”
There's no doubt that many communities in this territory had the same wants and needs that Dawson City did: Teslin, I know for a fact. I was there. We wanted to improve our ice plants and we wanted to improve our arena. There's always room to improve a municipality's infrastructure. But, at that time, we couldn't do that because we were concerned about our finances. Obviously, it was the right choice. I don't believe that Dawson made the same choice. Had they, perhaps we wouldn't be here today, having this discussion.
I heard comments from members on the other side that it's an embarrassment to have this legislation. Well, it's an embarrassment to hear the comment, because we are doing what we feel is best to help the City of Dawson. We on this side certainly have no desire to run Dawson's finances. I can assure you there are lots of other things that we would rather be doing; however, given the position we were in, we had to try and help. I don't know where the members opposite have been travelling lately, because I am out and about talking to people on the street - and many people I talk to are municipal councillors involved with Association of Yukon Communities - and yes, at first there was a concern about a heavy-handed approach - or what they perceived to be a heavy-handed approach. But once the facts were on the table, people who are interested can see that we did the right thing. The debate can go on forever as to when it should have happened; everybody has their own opinion of when it should have happened, but unless you are dealing with the facts and trying to solve the problems, you don't know the time that it can happen. So for members opposite to just 100 percent criticize and say that it could have been done sooner - I don't think that they are being fair. I really don't think that they are being fair to the people who were working on it. I'm not going to say that I was involved heavily to solve the problems, but I did talk to people who were, and at the end of the day I think that most Yukoners would agree that it was an unfortunate situation and hopefully they will find some comfort in how we went about it.
Now, not everyone is going to agree, I am sure, and the members on that side of the House are entitled to their own opinion, but I do support the bill as it is presented. The members opposite need to do more than sit around in their caucus and talk about how bad it is, because not everyone thinks that way.
I am sure there are other people who have some insight as to what they feel went on, but that's my piece.
Mr. Jenkins: Mr. Speaker, this bill is a bill I will support. It deals with one small aspect of Dawson City, and only one. There are many other pieces to this puzzle that have to be put in place before this election will be effective and will result in attracting individuals to put their names forward to run for political office. Let me run down the list for all, once again. This government has to bring closure to the results of the forensic audit. That was a half-million dollar audit that clearly pointed out the irregularities that had been undertaken by the mayor, the treasurer and the city manager. If you want to spend the time analyzing the whole situation, it will clearly identify about $1.2 million to $1.4 million that is highly questionable - perhaps downright illegal - in how it was spent. That's one piece of the puzzle.
I make abundantly clear, Mr. Speaker, that Dawson would not have gotten into the situation they are in had it not been for the Government of Yukon of the day providing the money for Dawson to spend. Yes, there was a capital funding agreement in place that neither side honoured. Then there's the overriding situation where a financial supervisor was appointed, and I don't know how the interpretation of the Municipal Act could be done under his guidance. There was such a thing as $1-million worth of overdraft protection resolution.
You can't do that. The Government of Yukon has in place the Municipal Act, which clearly identifies how a municipal government can borrow money and how it's to spend money. Neither the government in place in Dawson, nor the territorial government overseeing Dawson, understood, adhered to, or followed the Municipal Act. YTG did nothing but flow funding to Dawson.
Yes, there were a lot of capital projects that went sideways. The first one was moving the fire hall and the creation of a municipal office. That went over twice its budget. That should have rung the alarm bells but it didn't. The next thing was the swimming pool, which came in overbudget. It was supposed to be a year-round swimming pool but we're lucky to get 90 days out of that swimming pool now.
Then the city went on to install water meters. This was another project that was done under the auspices of the project management team, which was put in place at the request of the Government of Yukon. One only has to look at the waste-water treatment agreement that I tabled earlier in this House. Look at the one for the waste water, which says that Yukon shall have the sole and unfettered control of the management and administration of the project, including any and all tendering and selection of successful bidders, contractors, proponents, engineering firms, capital financial requirements, for the design and construction of the project. This would also extend to all regular reporting, approvals and court reporting.
The only part of this that is abundantly clear is “Dawson shall assume all of the costs of operating it.”
Mr. Deputy Speaker, there is in place a similar type of MOA between the City of Dawson and the project management team, which was primarily made up of individuals selected by the Government of Yukon to oversee the arena. This arena was seriously flawed in its design - seriously flawed in its design - to the point where everyone knew that the foundation wasn't going to work. Everyone who had been in business or been around Dawson or been involved in construction projects for quite some time clearly came to the plate and said, “Don't do that, it is not going to work.”
But what did this project management team do? The project manager, who was selected by YTG, said it was all the contractor's fault: don't pay him, take him to court. Over $2 million was spent on litigation, backed by YTG. At the end of the day, what happens? The contractor virtually received 99 percent of what he had asked for at the beginning. It's pretty interesting that this government would rather litigate or encourage people to litigate rather than resolve issues, especially when they know they're wrong.
When we look at the waste-water treatment proposed under this government, I have serious reservations if it will work and, more importantly, if it will work for the money that has been budgeted for O&M costs. O&M costs are projected to be $321,000 per year. When you divide that by the number of service connections, you can come up with exactly what cost it will be.
Look at what the Government of Yukon has bootlegged into this proposed waste-water treatment. The facility is designed and will be costed out to deal with all the waste water from outlying rural septic and holding tanks, outside the city limits and beyond. And Dawson shall pay, according to this memorandum of agreement.
There are other areas that are of major concern. There are financial statements we waited so patiently for, and then were told they're not qualified. I'd encourage all members to read the auditor's report to the trustee and ratepayers of the Town of the City of Dawson. This is a qualified audit in that all the opening balances are the same as they were in the previous year and cannot be confirmed. All that is not qualified is the statement of revenues and expenditures for the last fiscal year, period.
While we're on that point, let's look at what has transpired over the last two years. Dawson has been required to debt service its obligations and has done so at the expense of Dawson liquidating its assets - basically selling off a number of buildings and properties - and ignoring much-needed upgrades to the municipal infrastructure. Have a look at the capital expenditures and what was spent in this last fiscal year on upgrades. There are collapsed sewer mains, there are water main breaks that have been patched and where considerable costs will be incurred to dig them up and put them back in the ground in a proper manner. That hasn't been addressed.
I went back through some of the records that I had and the one sewer main that has to be replaced, because it has collapsed, was about a $300,000 bill in the early 1990s. I'd suggest to this House it's probably another $1 million today. So when the government is considering the financial package, it's not just the current debt obligations that the city has: it's to put it on a sound financial footing so it can address its responsibilities to service the community.
And while we're on that, let us not forget that the water and sewer system in Dawson was replaced back in the late 1970s and early 1980s by an act of this Legislature. The waste-water regulations have not changed since that time. Because they haven't changed, the Government of Canada and its various agencies have superimposed conditions on the waste-water discharge that the community has - and, likewise, on other communities. Thus we are in the situation that we are in today.
Let me run these by everyone again: bring closure to the forensic audit, resolve the financial situation - and this is not going to take some Mickey Mouse scheme that I've caught wind of being proposed that sees Dawson retiring its debt by 2026. That's ludicrous. All this does is have you take assets that should be replaced in a normal lifecycle - clearly identified in this financial statement - and amortize them over a longer period of time. That would be like some of us here buying a vehicle and making payments over the next 25 years for that vehicle. It's stupid and ludicrous, and you never receive the value for the product you have. Yes, your payments are lower, but you never get to pay for it, and pretty soon you are replacing it at an eight- or 10-year interval, or even sooner. But you can't do it, because you don't have the money to do it, because you haven't accrued the reserves in that area to move forward.
This brings us to another topic: the reserves set out in this financial statement, which are classified as assets. Well, the reserves are just a paper entity. There is no money there. There hasn't been for quite a number of years. This is contrary to the municipal bylaws, but it is sanctioned by the auditors. It's clearly identified in the management letter as contrary to their bylaws. Nothing has happened.
Then we get to the rec centre. The rec centre, as I've said earlier and many, many times in this Legislature, is usually the heart and soul of a community. That recreational complex in our community is anything but.
Under its old arrangement, it was functional in that the curling club had artificial ice. They don't any longer. The ice-hockey arena went in and the building was not heated so we get ice late in the fall or early winter, and it stays as long as the outdoor ambient temperature is low enough to keep the ice in there. But now that the building has been reconfigured and heated and was designed for artificial ice, the ice doesn't stay as soon as it gets a little warm.
I believe last year we had 60 days odd when we were skating, and this year it was some 50 days. That's great and at the same time it costs $100,000 to heat the building and maintain it. Good design.
The City of Dawson isn't alone in adopting very poor designs, because this government is guilty of the same, Mr. Speaker. One only has to look at a couple of the projects completed in the last few years. Let's look at the new terminal in Old Crow. It was only completed last fall. The foundation underneath that is going to have to be levelled. It's moving all over, Mr. Speaker. The school in Old Crow - the design won't carry the snow load over the library. It's a beautiful, big, open cathedral-type library - they will have to put a post in the middle of it to hold it up. The litany of projects goes on and on and on where the government has failed to address its responsibilities.
When you look at the multi-level care facility in Watson Lake where they are adding on to an existing building, you have to bring the entire building up to the current codes, and it is a B-1 class code where you are going to spend money to bring it to that standard. It should have been done at the onset, but it wasn't done by the federal government, but that's another story for another day.
Let me close by saying this election is but one step. The other steps that have to be resolved are: closure to the forensic audit; addressing the debt load in a meaningful way - not just putting it at zero or four-percent interest amortized over 25 years so that the debt load looks great on paper; and something has to happen to the recreation centre.
I've made a number of suggestions, and if the government thinks that these financial statements are accurate and they are bang-on, well maybe they can buy the arena for its book value and lease it back to the city for a buck a year. That'll solve the financial situation. The recreation centre situation has to be resolved. It's going to be $1 million in two-year old dollars to fix the roof, never mind the foundation, so it might pay to do something to the roof, Mr. Speaker, and look at a new location for the arena. I've proposed that to the government, and I'm hoping they will see their way clear to doing something about it. There have been a lot of mistakes made in Dawson City, and YTG is in this right up their ying-yang in funding it and seeing that it will take place.
Mr. Speaker, Dawson could not have spent the money that they did had it not been for the fact that Government of Yukon provided them with that money.
That's how they got to where they are today. And, yes, there were expenditures made like a drunken sailor with a brand-new VISA card. But, my gosh, the government knew about it and there was a financial supervisor in place, but the Municipal Act was not being adhered to or followed, right under the nose of the supervisor. Let's make it abundantly clear: the majority of the blame for this falls on the previous Liberal administration for not following the Municipal Act and for not ensuring that the supervisor followed the Municipal Act.
There was a basic lack of understanding by a number of officials on what the Municipal Act said and how money could be borrowed and how a municipality was to function. That I find appalling. So it is time for the Yukon government to fess up, acknowledge their responsibilities, move forward and address those four areas: closure to the forensic audit, the financial debt load of the city, the rec centre, and waste-water sewage treatment. An election will bring together the tools to restore democracy to Dawson.
Thank you very much, Mr. Speaker.
Mr. Rouble: Mr. Speaker, it is my honour and my pleasure to rise today in support of this bill. Mr. Speaker, this is one more step in resolving the very unfortunate situation in Dawson. Now, earlier today, Mr. Speaker, we heard the leader of the Liberal Party comment that this didn't have to take this long. Well, Mr. Speaker, I don't think this needed to happen at all.
The whole situation in Dawson could have been avoided if those who had chosen to spend more than they had coming in had chosen to use some fiscal restraint, and if those who were in a position of being a responsible overseer had executed some of that responsibility and ensured that the council's spending was in the realm of being realistic.
We also heard a lot about responsibility. A lot of the responsibility has been tossed on this government. I find that's not the place where the responsibility lies. That's one of the important things we need to discuss when discussing this issue.
Mr. Speaker, did the Yukon Party government sign a capital funding agreement that included the rec centre and the sewage treatment plant? No, that was an NDP decision. Was the contribution agreement enough to do both projects? Most would say no. Was it a good idea to include two projects in the same contribution agreement? Again, I think most people would say no. Did the Yukon Party government violate the capital funding agreement by tendering out the rec centre before addressing the sewage treatment concerns? No - again, that was a decision of the council.
Did the Yukon Party government commit to several capital projects all at the same time? No, that was the council. They were the ones who committed to spending more money than they actually had. They had the power to do so. They were the duly elected government - a government that, I'm sure, when they were in power, realized the situation they were creating and the consequences they would have to live with, and they planned for it. They must have done the math.
Mr. Speaker, did the Yukon Party government increase the borrowing limit to the town? No. It was the previous Liberal government that gave the town more rope with which to hang itself. Did they have other options? Sure. I'm sure we could all think of different options for how to address the city's shortfall, how to address the city's situation, where they needed additional infrastructure in the community. And, Mr. Speaker, was it the Yukon Party government who got away with just scribbling a receipt on a napkin after he bought a round of drinks? No, those were the actions of somebody else.
Now, Mr. Speaker, this all contributed to the mess that we found ourselves in. We've taken action and steps to find out how big the problem actually was. A new supervisor was appointed, and when we found that Dawson City was broke and unable to meet its financial obligations, we followed the Municipal Act and dissolved the council.
I don't think it was a decision that anyone wanted to make. No one wanted to go in and remove a duly elected official. But if you follow the Municipal Act, that is what is called for. It's an incredibly unfortunate situation when the town goes broke, when the elected officials have chosen to spend more than they could afford to and when they made decisions that come back to haunt them and result in additional lawsuits and additional situations that pop up, so they're in a situation where they can't make payroll, so to speak.
Mr. Speaker, there have been many challenges in this situation. The Yukon Party government has one objective, and that's simply to get Dawson City back on its feet, to get an elected council back in place and get a financial plan in place - one that will empower the elected council to pay its obligations, its debt and to provide for its responsibilities to the citizens of Dawson.
Mr. Speaker, we all make choices and, before we make those choices, we typically look at what the consequences are. Well, the duly elected council in Dawson has made some choices and now they are going to have to live with the consequences.
We've heard a lot about the need in Dawson, about the need for infrastructure, but when we look at needs - in our organized society - we have to look at the responsible way of addressing that and have to identify the responsible way of dealing with it. We can't simply say, “Hum… we have a project we need to do. We'll just sign a cheque and when it bounces we'll go back and ask somebody else for the money.” I don't think that's how you run your household, Mr. Speaker. It's certainly not how I run my household and it is certainly not how a town can run its affairs.
The other argument that we've heard - it has some merit but I don't think it has as much weight as other people have given it - is where the government is responsible for everything because they are the ones that allowed the funding.
If you go and increase your VISA card, I do believe that VISA has a certain amount of responsibility to check and see if indeed you're a worthy credit risk, but it certainly isn't VISA's fault if you choose to go out and spend it on a vacation and fritter it away. It's not the person who loans the money who is responsible for it; it's the person who spends the money who is responsible for it.
Was it wrong that the previous Liberal government extended the credit limit? Sure it was. They knew when they looked at the math that the town didn't have the cash to make the payment. I think it is reprehensible that the government would allow them to get into that situation, but we have to remember who cut the cheque; who signed their name on it. They're the ones with the responsibility; they are the ones committed to living with the consequences.
Mr. Speaker, there are some situations in Dawson that I know the government is looking at, where there is a certain legitimate question about who is responsible for this expense. Is it a territorial expense, or should it be incurred by the city? It would have been nice if these discussions had happened in advance, before the bills came due, before the credit companies started making the phone calls, but that's the situation we find ourselves in, and now that's the situation that needs a solution. As I've said before, this is a government that believes in finding solutions. It looks at a problem head-on and finds a way to resolve it. That is exactly what we're doing.
As the minister announced, he will soon be unveiling a financial plan for the community. This bill commits to having a duly elected council back in place by June 15. Mr. Speaker, I think that's a very important step in getting the town back on track. The best solution for dealing with local municipal issues is a municipal council. They are the ones in the community; they are the ones on the street; they are the ones who know their infrastructure needs, and they are the best ones to do it.
So this bill allows for a council to be elected and for that to happen quickly. Also, it allows for them to stay in place after the next municipal election, as it really would be an awkward situation to get elected before June 15, only to once again have another election in the fall. The government recognizes that. It's not a situation that should be forced on the city. That's the reason for the clause in here.
Now, I heard the leader of the third party comment about the number of lines. I guess it could have been longer, but it is short enough to address the needs. It gets the community's elected council back on track, and it doesn't put any additional undue hardship or frustration on the community by forcing them to go back to the polls in the fall.
Mr. Speaker, this is a good bill. It's good news for the community. There's still work to do. There's still work to do in recognizing what is the responsibility of the municipality and what's the responsibility of the territorial government and where is the money going to come from to cover all these outstanding debts. There is also work to be done to make sure that a situation like this doesn't happen again and that other communities or other organizations don't start following the Dawson model of financing, in which you tender first, commit first, build first and then find the money afterward. That is not a fiscally responsible way of dealing with the situation. I hope that we find a way to address the situation in Dawson, but not one that validates that decision process, because building first, committing first and finding the money afterward isn't a responsible way to do business. It's not a responsible way to run a government.
Mr. Speaker, I am certain that this government will live up to its responsibilities, and it will address the recognized needs in the community of Dawson as the government has committed to in the past. This bill is one more step in addressing the situation, and it is one that I endorse, and I encourage all members to endorse it as well.
Mr. McRobb: Mr. Speaker, I just want to put some concerns on the record. I'll be very brief. I've been listening to responses for well over an hour now to this bill, that apparently everybody will be voting for. So that raises the question: why have some members spent so much time on something we're all going to support? There has been a lot of finger pointing going on in the past hour, and I would say it's rather needless. This government has had nearly four years to get its act together with respect to Dawson City. It has failed to do so until about one minute until midnight on the political clock. Here we are, practically into the next election campaign, and we're finally getting around to dealing with this.
I just listened to a backbencher get up and speak, and there was nothing new in what he said. It was just what the minister has already put on record. That leads me to the greater concern, Mr. Speaker, that spring sittings of the Legislature are primarily to deal with the budget. We currently have before us the largest budget in Yukon history. Given the government's propensity to disagree with the opposition side, it is likely this sitting will only be 30 days long. That's going to leave us with something in the neighbourhood of 10 to 12 days to debate this large budget, so why are we wasting the time of the House going on and on about a piece of legislation that we all agree with? I urge all members to dispense with wasting time. Let's pull up our socks and get down to business.
Hon. Mr. Lang: I appreciate the member opposite and the concerns his party has on the debate of this subject. This is a very important subject for Yukon. The member opposite, the Liberal Party and the issues in Dawson didn't go well for the party at that time. The forensic audit points out some glaring errors, Mr. Speaker - not errors, but the Member for Klondike can list the things that happened in Dawson and of course the backbencher - as the member from the Liberal Party calls him - brought up the fact that none of this was done under the Yukon Party's watch, Mr. Speaker. Again, the responsibility lies with the government of the day. We did our homework on this. We went to work, first of all, to find out what was happening in Dawson. Where were the issues? We were surprised, as I imagine the taxpayers were, once we got the forensic audit, to find out how that community had been managed in the past. Of course, we as territorial government do accept some of the responsibility for what happened in Dawson. The issue of the day was a very big issue for the government of the day.
According to correspondence, there were political decisions made to extend their credit and liability. That was done from the political arm of the government. I want to remind the member opposite that the bureaucratic part of the government does take some directions when issues like this are brought up and I am sure Community Services did bring up the issue about debt ratio. But the government of the day - the Liberal Party - decided to override those decisions and move ahead with the economic package to Dawson City.
Without the footwork that this government did - and I remind the House that the Member for Klondike was part of this government for two years - we went to work to bring light to what this government or what the Yukon could do to bring Dawson back to its municipal standing, and that was important for us as a government. But to say that it should be done any time sooner than we've done would be folly. We had to put our man in place; we had to put the management team in place in Dawson. We had to get a picture of what happens over 12 months. As the Member for Klondike reads off, these are audited financial statements. That's not the basis we were looking at from a management point of view. We are looking at a 12-month window here, 12 months of tight management to see just what Dawson brings in and what it costs to run Dawson.
I understand the Member for Klondike's concern, because it is his community. I understand the concern about capital money. He mentions water mains; he mentions sewer. All those things are questions that are out there. The financial package that we put together for Dawson has to be realistic, not only to Dawson, because Dawson has to live within that structure, but it has to be realistic for us as a government and for other Yukoners.
As the member from Teslin said, in a municipal situation we have to balance - because we are the government of the day - our decisions in the eyes of other communities. I know that this has dragged on for a lengthy period of time. The forensic audit is still out there. The RCMP are doing work. There are all sorts of things still going on. I think the commitment we made here today with Bill No. 71, the Dawson Municipal Election Act (2006), triggers one small step so that Dawson can get an elected body in place and move forward with the management. This will not work without the other step. It's a financial plan.
Dawson cannot move forward - as the Member for Klondike said - with an unrealistic burden on the community. Taking the debt that the City of Dawson owes and extending it into the future - 28 years or whatever plan the Member for Klondike insinuated was out there - is not going to work. That's unrealistic. Dawson is not going to put forward a mayor and council that is going to work with those kinds of handcuffs on.
This government has to be realistic about the debt that Dawson City can manage as taxpayers, and also the treasury of the Yukon. We also have to put things in place to make sure that these kinds of issues that arise cannot happen again.
In a perfect world, there is something that could be put in place, but the perfect world doesn't exist when it involves people. What we want to do is minimize Dawson's exposure to another situation. That's another thing that's very important - checks and balances.
I guess we all read the forensic audit. The forensic audit cost $400,000. When the member opposite was on this side of the House, he recommended we do that, to find out the city's situation. This forensic audit is a scary document involving a community that was absolutely financially out of control. We can point fingers at individuals; we can point fingers at governments; we can point fingers at whatever, but the fact is that this is very damning. It's not only damning to the community of Dawson, but it reflects badly on the Yukon as a whole. The Liberal government of the day allowed this to go on. Now, when the Member for Klondike mentions the fact that they couldn't do it unless the territorial government was complicit in it, the Member for Klondike is dead right. Dawson could not have spent the money if the territorial government of the day wasn't complicit in the act.
Now, when the members from the Liberal Party or the Member for Klondike point fingers at the bureaucracy, that's not fair. I think if you were to flesh this out, you would find out the politicians had something to do with this. Because the letter of instruction came from a minister of the day, and that minister belonged to a Liberal government. Now, was the decision for this financial package made in the Premier's office, Mr. Speaker? Is that where it was made? Was that how this decision was made, so the paper chase on how this happened, I think, leads toward a political decision. Now, our government - the Yukon Party government - inherited this.
Now, I'm not quite sure what the government would have done if in fact they were elected, Mr. Speaker. This was not going to go away. This was an issue that was festering. This was a bankrupt community with situations arising that caused the author of this to write a scary document that is 100-and-some pages long about the management of a community. This will be used as a document of reference on what not to do in a city and what not to allow individuals in a city to do. This will be held up in the Yukon 50 years from now as how not to do things.
Instead of going backward and pointing fingers, like the members from the third party talk about - it's time that we move forward and we shouldn't look back and point blame - the problem with the issues that arose was they were such big issues done on their watch and this hasn't gone away. This is just the start.
The Member for Klondike is dead right - dead right. Not only do we have to put a business plan together for the City of Dawson that it can live with and that the taxpayers can pay realistically, they need some infrastructure done. When we appointed the town administrator - who, by the way, is highly qualified - and went forward with this plan, his job was not to build infrastructure. His job was to find out where we were at the end of the day and how we could address Dawson's issue.
Now, the minister who is in charge of this situation is following, step by step, how we as a territory - as Yukoners - are going to solve Dawson's issues. As far as the Member for Klondike insinuating in some fashion that we would do anything that would be detrimental to the community, I say that is dead wrong.
But it takes a certain period of time as we work through this and address the issue of Dawson's financial viability. By doing that, we have to get a picture of what it costs to run the City of Dawson, what does Dawson City bring in, and then, at the end of the day, do what the Liberals didn't do - put the package together and say that this is a realistic budget for Dawson. I'm sure the Minister of Finance will come up with the resources that are needed to move forward on this question.
But for the Yukon to forget the party of the day that allowed all of this mayhem is folly. If we don't learn from our past, how can we go forward? The Liberal Party of the day, the one that says that we've debated this too long - why wouldn't they say we've debated it too long? This is bad news, Mr. Speaker. This is how that party managed the Yukon. I want Yukoners to understand. You cannot sweep this under the table. This is not another Liberal easy fix. This is a huge issue in the Yukon. And this is on top of other issues that that party - that government - created when they were in power. To think that that government was in for such a short period of time and created these issues that we're still talking about over a three-year period. They were only in power for a hiccup of time, and they created such a financial mess that we've been working on one issue for three years, and we're still not there. We've committed to go forward with Bill No. 71, the Dawson Municipal Election Act (2006). This government is committed to go out there, put a team together - hopefully Dawson will do that - and have a mayor and council in place.
Before that happens, another part of this equation that was crafted by the third party is that we have to put a financial package together. It has to be realistic and involve the infrastructure money that the Member for Klondike talks about - all the things that it takes to move forward with the City of Dawson.
I will, of course, support this bill, as all other parties will support this bill, but I'm not going to be comfortable without debating the fact that the third party was 180 percent responsible for this. This is a big bill that they hung around the neck of all the taxpayers of the Yukon. I look forward, on this side of the House, to fix it up.
I support this bill.
Mr. Hardy: It's always a challenge to follow the Member for Porter Creek Centre, but I have to agree with him on many of the points he made. There is no question about it - we cannot forget the past if we want to ensure we don't repeat the mistakes in the future, or even the present. There is no question that we have to learn from the mistakes of previous regimes. I agree with him that the two and a half years of Liberal rule in this territory did not set an example that any government ever wants to repeat. There was a reason why the public booted them out after two and a half years. It's probably the shortest period of time that any political party has ever been in power. There is a reason for that. I stand to be corrected on that, but I actually believe that's true. I'm sure I'll get a note if I'm wrong.
It's really surprising that the Member for Kluane spent about four or five minutes telling us that we should not debate this, that we should not talk about it. We have no right to talk about democracy or what has been happening in Dawson City and the troubles that it faces.
To stand there and make the assertion that we should not be wasting our time in here - first off, we are not wasting our time. Democracy is never a waste of time, Mr. Speaker. That member should not have made those statements because, in making them - let's think about it. What did he say? The Member for Kluane basically said that his own leader was wasting the time of this Legislative Assembly. When his own leader of the Liberal Party made comments about the situation in Dawson, when his own leader stands up and asks questions in Question Period, that member undermines him and says, “You are wasting your time by those comments.” And then he accuses all of us of wasting time.
Sorry, Mr. Speaker, I can't agree with something like that. And that's a shame, because if that's the kind of representation that the people of Kluane are getting, then I think they are being poorly done by.
Saying that, there are obligations; there are responsibilities that we all have. There may be a portion of responsibility that sits with the NDP previous. Now, the Member for Porter Creek Centre pointed blame directly at the two and a half year Liberal period in power and that is true. There may be a small amount of responsibility that even the NDP has, just as there is a responsibility that also lies with the Yukon Party, since they have come into office and have been working on this file.
The criticism that has been directed to date has merit - at all levels. We should never shy away from our responsibilities; nor should we ever shy away from accepting responsibility for our own actions, Mr. Speaker.
This government had an obligation to intervene: that's what was said by the Minister of Community Services. He said it in his statement - obligation to intervene. He also needs to recognize that he has an obligation to work with the elected representatives. Unfortunately, they were removed. We did not agree with that. That's the difference. That's why we have debate in here. We have an obligation to allow the people to have their voice. We have said that from day one - my colleague from Mount Lorne has fought for that from day one. Too many years have gone by without proper representation in Dawson City. We feel that could have been put in place a lot sooner. That's our position. The minister disagrees with that - fine. That's what we are here to debate. That's the point we want to make - we believe it could have been done differently. The NDP would have done it differently. The Yukon Party government should not assume that their way was the only way, the only method. Different people might have used a different approach - I say we would have.
Another concern we have is, where is the money in the budget? Was that an oversight? Maybe when we get into general debate, we can find out. If it was an oversight, then admit it. Why is it not in the budget? We feel there is a legitimate question that needs to be answered.
What is forcing the government to move forward now - immediately after tabling a record-sized budget, in which more promises are made, more money is being spent - hundreds of millions of dollars are being spent - but there is nothing there to address the financial problems of Dawson City. It's taxpayers' money. We need to debate that. We need to find out why it wasn't in the budget. They've had a few budgets to address this. The report that the Member for Porter Creek Centre was waving around came out awhile ago.
It didn't come out yesterday. It has been in the hands of this government. They could have moved on it. Mr. Speaker, Dawson has been subject to a litany of broken promises and bad press over the last few years. It has been national. It has been territorial. I think they're tired of it. They want to move forward in their lives.
There have been a lot of promises and there have been a lot of let-downs. The previous minister with the Yukon Party - who is the representative, the MLA for Dawson City - in many ways sings a different tune now. That's not acceptable. It's not acceptable at all. The people of Dawson do not need and don't deserve having their MLA on one side, saying one thing, then crossing the floor and sitting as an independent and now saying another thing. That is not good representation. Who do the people believe? What side of this MLA do they believe? It's difficult for them. I would be very confused if I lived in Dawson City.
What about the multi-use care facility? There was a promise made. It no longer exists. It's not being built. The bridge was a huge, huge announcement. Money was being spent. Millions of dollars have been spent on this bridge. Guess what, Mr. Speaker? That bridge in Dawson City will not be built.
This government keeps saying, “Oh, we're still working on it.” I'm asking this government, if they're still spending millions of dollars, to please stop spending the money because I can assure you they've only got a few months left in their mandate and they will not be building a bridge in that period. It is not in this budget. Admit it; at least over there, admit you're not building a bridge.
It's another promise made and another promise broken in this case. Budget promises, the debt-relief promise, time and time again - we're still not there. Now I guess we are going to see it after the fact. Elections - promises, promises.
We have legitimate questions we have to ask. How much money has been spent so far for the trustee, city administrator and the reports that have been drawn up? What is the total bill to date for government's initiative around the fiscal woes of Dawson City and the election woes of Dawson City? That is a legitimate debate that we can have in here. That's what we're here for. Contrary to what the Member for Kluane says, it's legitimate to ask those financial questions. That's why we are here and that's why we - the NDP - take our responsibility very seriously, and we will stand up here and debate this. That member can go off wherever he wants and tell us we are wasting our time, but we are not. This is taxpayers' money and we have a right to ask these questions. My taxpayers would like to know where that money is going and how it is being spent.
There are other examples. Some people would call it phenomenal hypocrisy that this government can spend millions of dollars on the athletes village, can find millions of dollars for a railway study, just like that - millions, that are only going to give you a bunch of paper, nothing else. More studies, more studies, more studies - but they've struggled for over two years to find a financial package. They have struggled for over two or three years to address the fact that Dawson City has not had a mayor and council in place.
And they have spent hundreds of thousands - if not millions of dollars - during this period with their own people up there. Maybe there's some justification in that. Maybe there's some justification in those reports to find out exactly what went wrong. I don't doubt that. There is no question; there were some serious problems. There is absolutely no question about it. But at some point, we should have moved forward. This has taken far, far too long, from our perspective. We don't believe that it was necessary to go this long. We definitely don't believe that the delay of the election should have gone on this long. We also believe that a financial package could have been put in place, because these reports were done before - quite a while ago.
From my perspective, this government too quickly responds to pie-in-the-sky ideas, wishes of proponents that are promoting rail studies and stuff like that. Too quickly they find that money and but can't find money quickly enough to address serious issues facing our communities. The Association of Yukon Communities has been very clear that they feel this government should have done this over a year ago, and they have been very vocal about that. This government should have listened to that. We wouldn't be here debating at this moment if they would have moved forward sooner.
But to wrap up, I feel very strongly that this is a debate that has to happen, because we don't want to repeat this kind of stuff. We all have to know what's going on. We have to know what it costs. We have to know what happened in the past, and we have to make sure it's on record so that anybody in the future can look at this and see the pitfalls, as were identified by the member who spoke just before me, recognize what should not happen. The Liberals, for their period in government - the two and a half years - have to accept some responsibility at some point, but they shirk it constantly. But they have to accept some responsibility for their two and a half years of chaos that they brought to this territory, and especially to the finances and actions they took in Dawson City.
Maybe then we could all move forward, and finally the people of Dawson City can have a democracy, have their city back, and have the finances in order to move forward, deal with many of the capital works projects that they need to have put in place and have some control over what happens in their neck of the woods and not be controlled from Whitehorse.
Hon. Mr. Cathers: It gives me pleasure to rise in the House today in support of this legislation. I find myself having to agree with the leader of the official opposition in expressing his disappointment that the Member for Kluane would call this debate a waste of time.
I can understand, certainly, that the Liberals may be rather sensitive regarding this topic, considering the record of the previous Liberal government in regard to this issue and their culpability in creating the problem. But this matter is dealing with millions of dollars of taxpayers' money and ultimately resulted in the temporary removal of the Dawson City council from their position and the implementation of a trustee. This is a very serious matter, and it's certainly worthy of debate in this Assembly.
The Town of the City of Dawson arrived in the financial mess that it ended up in due to the actions of the municipal council, but it was also due to the actions and decisions of previous Yukon governments. It was under an NDP government that the capital funding agreement was established, and the problems with that have been outlined by some of my colleagues, including the Member for Southern Lakes, with regard to how that went so badly wrong and how that arrangement created problems.
However, the vast majority of responsibility for the situation lies firmly at the feet of the previous Liberal government. I agree with my colleague, the Member for Southern Lakes, on this. Some say that bringing forward this election act, resolving the financial problems and creating resolution to that in Dawson City didn't need to take this long. It did not need to happen at all; with proper financial management, with proper responsibility and due diligence being exercised by the municipal government of the day and by the Liberal territorial government of the day, we would not have ended up in the situation we are in today, with Dawson being millions of dollars in debt and having no ability to repay it without some assistance from the Yukon government.
The previous Liberal government authorized Dawson to enter into debt far in excess of its limit under the Municipal Act. Dawson could not do that without permission; they had and were given that permission by the Liberal minister of the day. Members have quite accurately compared the situation and made the analogy that it's similar to someone not being able to pay their bills, so they seek an increase in their VISA limit. It does not address the root problem; it does not in any way diminish the fact that they are not paying their bills on a monthly basis or an annual basis.
Instead of taking action to address the problem, the Liberal government of the day simply gave Dawson the authority to borrow more money, to extend itself further into debt. They dug the hole deeper. I can't understand why the Member for Kluane, the newly minted member of the Liberal Party, does not wish to discuss the actions of the party - of which he's a member - and the responsibility that, when in government, they failed to exercise.
They failed to exercise their responsibility to Yukon taxpayers and allowed and assisted the City of Dawson to dig the hole deeper and end up millions more in debt - debt that the Yukon taxpayers ultimately backstop.
If municipalities cease to be solvent, their debt falls on the shoulders of the Yukon taxpayers at large. It was for that reason that our government was forced to take action and implement a trustee in Dawson City. The members will recall that, prior to that, a supervisor had been put in place. This problem has been festering for quite a number of years.
The debt with which Dawson is now faced is a problem. The reason it couldn't be solved before is that, prior to this year - prior to very recently, Mr. Speaker - the year-end for last year were the first financial statements since Dawson's insolvency and since its problems with the council. This is the first fiscal year that accountants would actually sign off on the financial statements as being a full and accurate picture of Dawson's finances.
So the problem previously - in answer to those who question why this could not have been done sooner - is that you can't put together a financial package based on air, on speculation and on unsubstantiated numbers. The numbers are the numbers and anything else is just speculation.
I'm very pleased that we now are finally able to put in place this act, to give Dawson back a municipal government and an elected local government, and to help them dig themselves out of this hole and come back to a situation where they can continue with business and representing the citizens of their town.
The reason why this election act could not be put into place prior to the financial plan being put into place is due to the fact that, without any reasonable hope of being able to manage Dawson's finances, who would want to run for council?
Who would want to put their name forward, recognizing that once there, they would have absolutely no hope, no resources, and no ability to correct the problem and move forward? Now that we have a year-end that has actually been signed off, we can move forward and put in place the financial package to assist the Town of the City of Dawson.
Mr. Speaker, Dawson's problems were caused in large part by the municipal government but, ultimately, the depth of debt could never have been entered into - the scope of the problems could never have been created - without the full complicity and approval of the Liberal government of the day - another Liberal boondoggle. You can see why they don't want to debate the fact, but I hope at the end of the day they and other members will support this act and vote to allow Dawson City to elect a council in June of this year - no later than June 15 of this year - and not have to go back to the polls again for the same municipal elections in the fall.
I look forward to hearing the comments of other members.
Hon. Mr. Edzerza: I've listened to this whole debate with great interest. First, I agree with the leader of the official opposition that any topic that's brought to the floor of the Legislature for debate is worthy of debate.
I would like to start out by saying that this whole fiasco in Dawson has come down to some capital funding agreements that went sideways.
Money that was allotted for certain projects apparently wasn't spent on those projects, and so forth.
However, I think a remedy is needed. To play the blame game is not beneficial to anyone. Regardless of what is said about this, I believe it should be approached in a very positive manner. No one likes to be criticized and condemned for decisions that were made, regardless of whether or not they were accurate. I believe at the time the decisions were being made, those involved probably felt that they were making the right decisions.
I believe it's best to move on and not dwell on this or create more hard feelings for the people in Dawson, and in government, regardless of which government. However, one cannot exclude the municipal government for their involvement in these decisions. They had some responsibility there - equally, I would image. The Yukon government also had responsibilities.
However, I believe that things can move on. The life in Dawson City can be restored. It may take a bit of time, but that's all part of life. Sometimes things work out; sometimes they don't. One just has to look back at the mistakes that were made and learn from them.
That's what education is all about: to learn, to learn from mistakes and continue with creating a positive lifestyle.
I would like to thank Mr. Hayes for his service to the people of Dawson and to all Yukoners by taking on the role of trustee. I'm grateful for his dedication, because it was an extremely tough job to do, a very hard job to do. I can't imagine how he felt sometimes with all the issues coming to surface and having to deal with all the negativism behind what was happening. So I was grateful that an individual such as Ray came forward and was willing to take on that challenge. I feel very confident that he did an excellent job.
Again, as we have said before, YTG did step into the Dawson City situation basically because the town was broke. When a town gets into that situation, I believe there is a lot of panic. A lot of panic comes to the surface and wondering what's going to happen next, what are we going to do, how are we going to survive? All those questions came to life. This government basically did all it could, and that was to maintain some stability in Dawson City.
Stability, financial stability - even that in itself, being able to stabilize that situation, was a relief. It had to have been a great relief to the people in the City of Dawson just to know that there was going to be a positive move to rectify what was happening in the city.
As stated before, a lot of errors were made. I'm not going to dwell on that, because I think that has been kicked around enough on the floor today. The important thing is that the government is actively taking a positive approach to this now, to keep on working at getting things straightened out in the City of Dawson. I listened to the Member for Klondike, and it appears that nothing has moved fast enough for that member. However, at least things are moving. We know from experience - whether historical or present - that things will not always move exactly as you want them to. Sometimes they will move faster, and sometimes they will move a lot slower than you want them to. The important thing is that it has not stopped. It's not stale. It is still moving; it is active, and it has a life of its own.
Once the election takes place, it will restore a bit of confidence back into this city; however, again, because of the financial conditions, it is going to be a little different. The mayor and council that will be elected will know that this history is there. I believe that the people in Dawson are very strong-willed people. They are determined. I am sure they are going to do just fine with getting their municipal government back on track.
As the Education minister, I have witnessed how well they can work together in collaboration with each other - the First Nation government and the municipal government - so I believe that they will work very positively toward reconstructing their government and getting their city back in order. Then again, I think it's beneficial to really look more toward a positive recovery as opposed to at historical events. I know traditionally we always encourage people to not dwell and live in the past, but to seek understanding of it and move on, and that's what has to happen here. We need not have citizens condemning each other for decisions made in the government. We need not have governments fighting each other. I feel now that the decisions have come to where they are today, financially and otherwise, and that things now are on the right track. I believe wholeheartedly that the people of Dawson City will be able to recover from this, move on, learn from the mistakes and get back to enjoying the development of their area.
I do sincerely wish the people of Dawson the best of recovery, and I'm quite certain that they are capable of doing that.
Thank you, Mr. Speaker.
Hon. Mr. Kenyon: I'd like to join with my colleague in giving great thanks to Mr. Hayes for his service to the people of Dawson and, really, to all Yukoners, for coming out of retirement and taking on the role of trustee. We're all very grateful for that dedication, and we're very pleased to have a replacement of equally good calibre.
As has been said many times before, YTG stepped into the affairs of Dawson City because the town really was broke. There's no better word to put into that. Previous NDP and Liberal governments made errors that set Dawson on the road to financial ruin. There was funding by the previous NDP governments for large-scale capital projects without appropriate financial controls. The Liberal government just seemed to simply approve the increase in that. I believe it also has qualified as the shortest lived majority government in the history of the Commonwealth - a very unique qualification.
We are committed to restoring the town to financial health. We did install a trustee with impeccable financial qualifications. We had to do a forensic audit. We have recently received unqualified audits on that. Certain members opposite were vocal at the time that we should do a public inquiry - I think, unaware of the fact that a public inquiry could cost millions and would accomplish little more than the forensic audit was already doing. So really there was no need to go to a public inquiry and spend more money to find out where we lost the money in the first place. It didn't make a lot of sense.
But we are moving forward in developing that financial plan and spending a lot of time on that, trying to address the root causes of Dawson's collapse. There are many wide and varied causes. The RCMP are not known for their speed, and they are still working on the case. I think we will probably still hear from them on that.
We tried to put the right people in the right place to get through all of that. Legislation allows more flexibility and we've tried to look at that aspect of it - getting the right financial assistance packages. I am sure there will be more of that in the future. This legislation will help a new mayor and council take on the challenges without having to go back to the polls in October. It pushes that election to no later than June 15.
One of our big challenges was to be able to have that mayor and council come onside at a time and in a position where they could actually get something done. To have a mayor and council come in when they could not possibly do anything - not to mention the first problem of who in their right mind would want the job? If anybody wanted the job, they probably had no concept of the impossibility of it all.
Really, we have to go through that in gradual successions. It didn't happen overnight. Dawson didn't get to the depths that they were in - and to a degree, are in - in a single motion. It took a long time and many years to make all those disastrous decisions by the previous governments, and it's going to take time to get out of that.
I agree with my colleague, the leader of the official opposition, that it's rather interesting to have a Liberal get up and say that we shouldn't be discussing this or debating it when, in fact, much of the quagmire they are in is by extending the spending authorities beyond that which was legal. Then again, to have Liberals get up and discuss questions like this, given the last few years, is a rather strange thing in any political house in Canada.
Some Hon. Member: (Inaudible)
Hon. Mr. Kenyon: True. It's very true.
It was in such terrible shape in 2004, the municipal finances were so completely tanked, that under the Municipal Act - and in a process outlined in the Municipal Act - the government was compelled to dismiss the town's council and install a trustee. Some of the members opposite would like to give the optics of this that our government merely stepped in and did something nasty. In fact, we stepped in and did exactly what the Municipal Act said we had to do. The fact that the Municipal Act contains these provisions really does demonstrate from time to time that municipalities, like Dawson, do find themselves in impossible situations. We have an obligation to intervene on that.
There has been a whole progression of things. We got the trustee and the trustee put in a new administrative officer. I would like to remind everyone that this government paid the salary of both the trustee and the chief administrative officer. We brought in a well-respected forensic auditor from British Columbia with experience in dealing with high-profile cases. We paid those bills too, Mr. Speaker. He was the one who pointed out that Dawson officials engaged in financial shenanigans. We followed independent legal advice on how to proceed - this was indeed independent - and we stepped up to the plate in the interim on occasions where the town really did get into a cash flow crunch, and we have paid those bills as well.
One of my colleagues previously pointed out - I believe the Member for Pelly-Nisutlin - that it becomes very easy for other municipalities to sit back and say that Dawson got into all these financial problems; they built all these nice facilities, and somebody is going to come in and write a cheque at the end of the day. That's the danger that we run into with that. We have to deal with a wide variety of municipalities and take advice on that. We have to sneak up on this problem and solve it with every bit of due care and diligence that is required.
This didn't occur overnight.
I would like to go back to one point again, because there was so much discussion at the time in the media on conducting a public inquiry. We decided against doing that because they are very, very expensive. We could be looking at $1 million to $2 million with no trouble at all. They also take a very, very long time to complete. The Public Inquiries Act, section 5, empowers a board of inquiry to enforce the attendance of witnesses and compel them to give evidence. It also states in section 6 that the people involved have the right to counsel. Because of these conditions, conducting that inquiry under the Public Inquiries Act becomes horribly costly.
We are committed to getting to the bottom of this. The forensic audit is a much better way to get us the same information. Perhaps it will take a little longer, but if we are going to lay out a couple million dollars for a public inquiry, I suggest that would be better put toward solving the problem than simply putting names on it - which we could probably put on anyway.
That being said, of course, I urge everyone to support this bill and take the next step for Dawson to go toward its recovery. It's not a quick fix; it's not a quick process by any means. As I said, it took them a long time to get there and it will take a long time to dig out. As the old story says, when you realize you are in that much trouble, stop digging. We stopped digging.
Hon. Ms. Taylor: I also rise today in support of this bill. I know it has been said on a number of occasions here this afternoon by just about every member that, with respect to an overview of the history of how we came to the situation that was dealt to us and what we're doing about it today, it's really important that each and every member in this Legislature have an opportunity to put forward their views on this issue.
It is an important matter. A number of events have transpired over the last number of years, a lot of history. Depending on whom you talk to, it may vary. We are here today, however, to talk about setting an election. It's about enabling the citizens of Dawson City to hold an election and to take over their affairs.
Mr. Speaker, I have to put this on record. The Member for Kluane is on record a number of times, not just today but I can recall at least one or two other times when he, unfortunately, instead of speaking to the issue at hand, chose to take time to put forward his views as to why none of us should have the right to speak. Mr. Speaker, just as that member was elected by the constituency of Kluane, we were all elected by the people of this territory, and we are all expected to hold views and to represent the views of our constituents.
While some of us may not always welcome feedback or comments by the members opposite or members of the government, it is our job to roll up our sleeves, to listen, to learn, to move forward and to make those hard decisions that need to be made. We as Members of the Legislative Assembly all have the right to speak, and we all have the right to put forward our views.
So, again, it's really unfortunate that we had to receive that from the Member for Kluane - a little reminder that perhaps none of us are entitled to talk in this Legislature. As such, I am really pleased to hear all the views being expressed by just about every member of this Legislature here today.
As has been pointed out by my colleague from Porter Creek, Dawson City didn't fall into its financial hardship overnight. Rather, this was a series of events and the making of a series of decisions by previous governments, individuals, et cetera. It has been pointed out the previous NDP government did fund Dawson to undertake large-scale capital projects. Unfortunately, there weren't the most appropriate financial controls.
The previous Liberal government permitted Dawson City to exceed its municipal debt limit, according to the Municipal Act. These series of decisions led us to where we are today and to what this government has been dealing with and having to resolve over the last three years. I am very pleased to see this bill come forward and I thank the minister responsible for Community Services. I certainly also thank the officials in his department for enabling our government to come forward to where we are today.
Mr. Speaker, we have undertaken a number of initiatives over the last number of years. At the end of the day, as we are all in this Legislature, we are committed to restoring the financial well-being of the City of Dawson to ensure that, whatever goes forward on a go-forward basis, will set the stage for future municipal governments to be able to carry out their own affairs without having to repeat mistakes or going through what they have gone through over the last number of years.
It is very unfortunate what the citizens of Dawson have had to endure over the last number of years. It has not been easy. It has also not been easy as a government to dissolve the mayor and council, to have to put a supervisor and trustee in place to conduct a forensic audit, to carry out a long-term financial plan and to put those controls in place. It certainly has required a lot of work by a large number of different individuals. I say thank you to all those individuals who have been involved.
We are moving forward as a government with developing the financial plan. A great deal of work has been done already on that front. We hope that we'll be able to make some further announcements soon in this regard.
Again, it's really important that we reflect upon the past and do take the time to ensure that we do not repeat our mistakes from the past, that we learn from our mistakes and that we go forward in a very constructive manner. Most important, flinging more cash will not fix this problem; rather, we have to be more thoughtful in our approach. We have to proceed in a thorough manner and we have to ensure that we fix these problems to begin with, and that the go-forward plan from here will continue to address these issues and will equip the residents of Dawson to take control of their own destiny so they will not return to where we have been the last number of years, whether that be tomorrow or six months or a year.
That is why, Mr. Speaker, this has taken a lot of time. There is no question about it. Do I wish it could have taken less time? You bet. I think all our members on this side of the House would have liked to have had this issue resolved at the get-go, but as with any situation, with any problem, that is our job. When we are dealt a problem, it is our job to solve that problem, and to work with the citizens of this territory to seek resolution to these problems. That is exactly what we have been doing over the last number of years. I think that the time for finger pointing has come to an end. From here on we have to move forward, and we have to put the needs of the citizens of Dawson first and foremost. This bill is certainly taking us in that direction. I'm pleased to support this legislation that will see a new mayor and council in place soon, and that Dawson will not have to go back to the polls in October for a municipal election. I am very pleased to see that all the members on this side of the House will be providing support.
Speaker: If the honourable member speaks, he will close debate. Does any other member wish to be heard?
Hon. Mr. Hart: I'd like to thank everybody - my colleagues as well as members opposite - for their comments with regard to this bill. I'd like to suggest that we are in the process of assisting Dawson City in bringing back a mayor and council so they can operate like a proper municipality. We heard several comments with regard to why it has taken so long, et cetera. Let's not lose sight of the fact that Dawson did not get into this situation overnight - it took years to get there.
Also, let's not lose sight of the fact that in our investigation - for example, a forensic auditor told me it would take approximately three months to do his investigation when we initially discussed it with him. It took almost a year - and that's a forensic audit - to get his work done, because there was incomplete information available for him to do his analysis. There was a substantial amount of time spent on items that we hadn't accounted for in our review.
Yes, the forensic auditor submitted his report last year to the House. He made some recommendations, and we are following some of those recommendations right now, as well as some of the recommendations put forth by the second supervisor. Again, let's look at the delay factor with the supervisor. The first supervisor wasn't doing the appropriate job as identified under the Municipal Act. By the time we appointed the second supervisor and he went in and found out what was wrong, it was too late; they were already broke.
Also, I take note of the fact that the member opposite indicated we hadn't worked with the council. We had worked with the council on several occasions. We developed a plan with the council and asked them to follow that particular plan in order for them to make it happen. We did do that.
It became obvious after discussions with the supervisor that the town wasn't following the plan, so we had little cause to work forward. We received the financial statement that indicated they were in the red, which, again, was contrary to the Municipal Act, and we had to go in and act for the welfare of all Dawson City residents.
We want to go forward. I believe that's the big issue we are on right now. We need to go forward. This legislation assists us with that particular process. It is needed to allow that there is only the one election for them until the next municipal election happens three years from now.
Also, I'd like to thank the people who assisted us on this. I'd like to thank the forensic auditor. I'd like to thank the supervisors who were involved in this particular case. I'd also like to thank the trustee especially. The trustee – when we originally went in there, we were looking for a period of about a year. He gave us that year, plus another year. I think he has done more than a commendable job. I am very pleased with the performance of the trustee. I realize I can't use names. We are really happy with his performance. We've had a very good working relationship with the trustee. We were well aware of things that were happening in Dawson. The trustee worked closely with the advisory committee, and they did have input into the goings on for the city.
Now, with relationship to whether we put capital expenditures into Dawson City, the trustee was there to ensure that the town was operating. His job was not to incur additional expenses. Cash flow was very difficult. We did have to assist the City of Dawson in their cash flow endeavours. So obviously, we've had to be very strict on what does and doesn't get fixed in Dawson. But the Member for Klondike also discussed the fact that we have to look at the infrastructure for the town. We are looking at the entire scheme for the City of Dawson, and we're looking at that from a financial view. We are taking into consideration several of the aspects that he discussed.
Now, the leader of the official opposition also discussed the possibility of some blame with regard to the government. I think that has been identified. We recognize the fact that there has been some government involvement and I stated that previously. I stated it in my address. I have never shirked away from the fact that this is my responsibility. I've extended to the members opposite with regard to the information they requested. I've always provided that information.
Secondly, I've indicated that anything on my watch I am responsible for. I have no problem with that. But I want to ensure that when we go forth with the improvements to Dawson, that we go forth in a proper way and that the new mayor and council can make decisions on what they determine are important items with regard to capital - what are the priorities to them? I don't want the trustee making those decisions. I want the new mayor and council to assist in that particular endeavour and I think that we will be in a position to allow, hopefully, the new mayor and council to get to that point. But the issue here is that I believe it is a good starting point and I look forward to putting this process through and I thank the members for their support for this bill.
Speaker: Are you prepared for the question?
Are you agreed?
Some Hon. Members: Agreed.
Speaker: I think the ayes have it.
Motion for second reading of Bill No. 71 agreed to
Hon. Mr. Cathers: I move that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Speaker: It has been moved by the government House leader that the Speaker do now leave the Chair and that the House resolve into Committee of the Whole.
Motion agreed to
Speaker leaves the Chair
COMMITTEE OF THE WHOLE
Chair: Order please. Committee of the Whole will now come to order. The matter before the Committee is Bill No. 71, Dawson Municipal Election Act (2006).
Before we begin, do members wish a brief recess?
Some Hon. Members: Agreed.
Chair: We will take a 15-minute recess.
Recess
Chair: Order please. Committee of the Whole will now come to order.
Bill No. 71 - Dawson Municipal Election Act (2006)
Chair: Committee will begin with Bill No. 71, Dawson Municipal Election Act (2006). We will begin with general debate.
Hon. Mr. Hart: Again, I thank the members opposite for their support for the bill during second reading. I will just briefly go over a couple of statements I previously made and I'd offer some further discussion here.
We are in the process. This act will enable us to call an election prior to June 15 and the town won't have to have another election on October 19 of this year, as specified under the Municipal Act. This is a one-time action item and this will enable the successful mayor and council to stay in place until the next municipal election is held in 2009.
This is a piece of legislation that was felt was quick and necessary so that we could enable the citizens of Dawson to vote for a new mayor and council and to go forward. In that light, I would like to hear from the opposition members and their comments.
Mr. Cardiff: I only have a couple of questions for the minister. The minister indicated that there would be some sort of a financial package coming forward in the near future. I just have a couple of questions regarding that. I'm wondering if he can indicate at this time when we might see it.
The ability to do this was provided under the piece of legislation that I talked about in my second reading comments - the Dawson Municipal Governance Restoration Act. Would he elaborate on a couple of the options under article 2 of that act with regard to what the government is able to do? If he could indicate what their plans are and when we might see that come forward.
The other question around that is if he could explain to the public and the Legislature - Bill No. 56 went through and this is related to the Dawson Municipal Election Act (2006), because this is the act that is going to provide the vehicle for the financial package that will allow Dawson to have an election, or will attract people to actually run in this election.
Could he tell us why it was so urgent a year ago to pass this act - yet it hasn't been proclaimed? What is the rationale for not proclaiming this previous piece of legislation and does he intend to ask to have it proclaimed in the near future?
Hon. Mr. Hart: We are in the process of finalizing the plan for Dawson. With regard to the specific question, this act allows us to call the election prior to October 15. The previous act has not been proclaimed because it has a sunset clause in it and, until such time as the election is called, then the sunset clause will come into effect and will commence. That is the main reason behind that particular aspect.
With regard to the financial plan - we have been working on a plan to address several of the situations that have been identified here in the House today, and we are currently looking at items on how we can address those issues and still make the municipality a viable operation, and that's what we are in the process of doing. We anticipate having that into the House sometime this month.
Mr. Cardiff: I am not sure if I understand. Bill No. 56 has a sunset clause in it. Is the minister saying Bill No. 56 doesn't come into effect until we pass Bill No. 71? Or is he saying that, when we pass Bill No. 71, Bill No. 56 is no longer necessary?
Hon. Mr. Hart: With regard to the crossover of the bills, the issue is that, because of the sunset clause in Bill No. 56, we want to make sure the supervision is allowed and enables a review of the town's issues. We can proclaim this once the election aspect is underway.
Mr. Cardiff: I understand what he is saying now. At that point, once there is an election underway, Bill No. 56 will be proclaimed and all its items will come into effect, which will allow for the financial package to actually be delivered.
It sounds to me like we're not going to get the details of exactly what their intentions are - whether they are going to consolidate Dawson's debt, issue a new debenture to cover the consolidation, or whether they are going to retire or cancel part of the debt - because part of the debt is covered by the territorial government - or change the terms and conditions or rates of interest. We don't know what they are going to do. It almost sounds like they don't know what they're going to do until such time as they do it, so we're probably not going to get very far with that.
I would like to ask the minister - in consideration of Dawson's financial situation, the fact was alluded to by the Member for Klondike that they have, under the guidance of the trustee, been able to service the debt that they've been saddled with - as near as I can tell, by the financial statements that I've reviewed, provided to me by the minister. They have serviced the debt, but it's at the expense of other things that have been let slide. So, it's a matter of ensuring due diligence, I guess. Some of these things that have not happened in Dawson - upkeep and maintenance that hasn't been able to happen, because they aren't in a financial situation where they can necessarily do everything that they need to do on an annual basis because of the debt servicing. Will those things be provided for in that financial package, so we don't see this thing slide back into the abyss, so to speak? Can the minister commit that those things will be taken into consideration and that Dawson City's financial circumstances will be considered with regard to ongoing maintenance? The future costs - how are they going to meet the requirements that the government is putting on them with regard to the operation and maintenance of a secondary sewage treatment facility and still be able to service the debt - whatever it is the minister leaves them with?
Hon. Mr. Hart: I can assure the member opposite that we are considering all those avenues with regard to the financial plan. We are addressing the issue of the consolidated debt - all their debt. We are also looking at the administration of the sewage facility and its operation and maintenance.
The trustee was put into place to run the town, to basically turn on the lights and turn off the lights when needed. As such, some of the ongoing maintenance or replacements didn't happen. That wasn't his prerogative to do. It was basically to operate the town and keep it functioning. We are looking at addressing many of those situations. All I can tell the member opposite is I anticipate having something shortly.
Mr. Cardiff: Part of turning the lights on and off and looking after the day-to-day affairs of a municipality is ensuring that the proper maintenance is done. Otherwise, you end up in situations where you have things like blackouts or sewer and water failures.
I'm wondering if the minister could provide to the Legislature - he probably doesn't have the figures right in front of him, but if he could provide a legislative return, maybe, with all the costs to date for the government's participation in this exercise in Dawson: the cost of supervisors, the cost of trustees, the cost of forensic audits, the cost of hiring the - I'm not sure whether it was borne by the municipality or the government, the cost of the audited financial statements - could he provide a breakdown all of those costs by a legislative return at some point in the near future?
Hon. Mr. Hart: If the member opposite remembers, I have provided him with that information in the past in written form. I will update the information for the member opposite.
Mr. Cardiff: The minister is willing to do that and I appreciate it. That is basically what I'm looking for - a current status of where we are at, what this has cost the government and the taxpayers of the Yukon, I guess with a view to seeing just how much money we've spent on that.
The minister indicated that we should be able to see a financial plan, hopefully, sometime this month. Will all those details be made public? Does he intend to table this in the Legislature? How does he intend to deal with that? Is it going to be by press release? How does he intend to release that information?
Hon. Mr. Hart: Obviously we will have to debate in caucus and Cabinet how we will deal with this situation. I anticipate that we will be in consultation with the trustee and his advisory council and then we'll be coming forth to present the plan.
Mr. Mitchell: Thank you, Mr. Chair. I have just a few questions to ask of the minister. First of all, on the timing of the financial package, it would obviously be beneficial to the possible candidates for mayor and council in Dawson to have that information prior to an election. Will the minister commit to that information coming out in sufficient time for any candidates to make their decisions regarding running so they would have full knowledge of what that debt relief plan will be?
Hon. Mr. Hart: Mr. Chair, that is our intent.
Mr. Mitchell: Again, I would like to ask why the debt relief proposal - or the financial proposals for Dawson - were absent from the Yukon government and not provided for in some fashion in the 2006-07 budget. Surely the Yukon government has a fairly good idea, based on the most recent audited financial statements for the City of Dawson for December 31, 2005, how much money would be required. Does the minister not think it would be beneficial and more transparent for everyone, had there at least been some stipulated amount of funds - and obviously the amount might have varied in the final equation - but at least to have identified funding for this and therefore giving a more realistic picture in the budget of where the finances for Yukon would be projected for the end of the year?
Hon. Mr. Hart: We were awaiting financial statements from the City of Dawson's auditors and, as such, until such time as we had a specific point from which to start, it made it difficult for us to guess what money was going to be there. Yes, the member opposite is correct. We are aware that we are going to have to do something for Dawson but would it be advantageous for us to put a dollar sign in front of you and then have to come back and triple it or double it or vice versa, or to put a big amount in front of you and have it turn out to be a lesser amount? Once we have the financial statement, we can sit down and have a look at it and hopefully bring in a specific amount to bring to the City of Dawson.
Mr. Mitchell: Well, I agree. It's always difficult to have to correct a number later or change a number, but clearly, we were talking some millions of dollars, so by not putting any number in there, I guess we have an infinite change because there's no amount whatsoever - not even a $1 line item.
I have no problem, and obviously I will be voting for Bill No. 71 so that Dawson can move forward. But regarding section 2(a) that stipulates the appointment of the trustee “would be deemed to be revoked on the swearing in and assumption of office by the duly elected council,” has the government given any thought, or will they give any consideration to retaining the services of either the new trustee, the former trustee, or someone in that capacity, just in an advisory capacity, as a transitional step? It will affect the way the act reads. The moment a council has been sworn in, the trustee is no longer the trustee, and of course that would be the case. But I'm just thinking that someone who has been acting as the trustee would obviously have the expertise and also the intimate familiarity, having been in that position, to perhaps be of some service to the new council.
Hon. Mr. Hart: Once Bill No. 56 is proclaimed, we will have the ability to provide assistance for the citizens of Dawson because that deals with their bylaws and their structure and ensures that they follow the appropriate Municipal Act.
Mr. Mitchell: I am concerned, just from the reports that we've read in the media over the past several months, about the unfortunate necessity to skip a lot of normal, routine maintenance of municipal infrastructure over the past two years in order for the City of Dawson, under the supervision of the trustee, to operate within the available funds.
I'm wondering if the minister's financial plan for Dawson - besides dealing with the debt relief - will provide sufficient funds to perhaps address some of the identified normal maintenance that has been passed over in order to operate within the guidelines?
Hon. Mr. Hart: Maybe what the member opposite reads in the paper aren't always true and factual items, obviously. I have had a good, as I mentioned previously, relationship with the trustee. He has informed me that they have maintained the specific items that need to be maintained. As I mentioned to your learned friend recently, we are looking at that situation with regard to the financial plan. The trustee's job responsibility was to keep the city operating in the minimum aspects. It will be up to us to deal with the new mayor and council with regard to those aspects.
Mr. Mitchell: I should note that I was not just referring to idle speculation in the media but rather comments quoted in the media by the former trustee in regard to some of those decisions that had to be made. Presumably, since the trustee made those comments, they were accurate.
Referring to the other piece of legislation that will also be tied into this when the package finally comes forward, the Dawson Municipal Governance Restoration Act, in section 2, there are a number of possible ways of addressing the situation of the debt, from consolidation to issuing a new debenture to retirement and cancellation of a whole or portion of the existing debt. Is the minister prepared to give us any indication of which one or several of those options he is now looking at?
Hon. Mr. Hart: I will be providing that information shortly, and all those options are currently open to us. We will be looking at whatever options provide us with the best opportunity to enable the citizens of Dawson to operate as a municipality.
Mr. Cardiff: I have one more question. I was looking again at Bill No. 56 and some of the things that need to happen. I am wondering whether or not all the pieces are in place for this to take effect, or if Bill No. 56 actually has to be proclaimed in order for these things to happen. In sections 4 and 5 of Bill No. 56, the minister is requiring Dawson - which means the corporation of the City of Dawson - to enact some bylaws. One is a procedural bylaw and the other is an indemnity bylaw. I'm wondering, for starters, whether or not those bylaws have been enacted or if we have to wait for this bill to come into force for that to happen. Do we leave that up to the new city council, or can it be done by the trustee and the citizens' group that is currently looking after Dawson?
Hon. Mr. Hart: Bill No. 56 merely requires an order-in-council to Cabinet. It will not take that long and will have to be signed off by the Commissioner. We have already changed the bylaws with regard to travel, et cetera, with regard to city council.
Mr. Cardiff: The only other question I have with regard to this is the minister's control over this and how long - I mean, he has a short period of time to go anyhow. By the time municipal elections roll around in the fall, we may have a new Minister of Community Services who will be responsible. So I don't know.
The minister basically has the authority to approve or disapprove bylaws when it comes to indemnity and procedure. He also has some other fairly wide-sweeping powers in section 3. I guess my question is: how long does he envision this act continuing in force? Because basically, what it says is, for a period of five years from the day on which it came into force - we don't know when that's going to be - or the other one is, until the total principal amount of Dawson's debt is reduced to three percent of the current assessed value of all real property in Dawson - which is the threshold that is stated in the Municipal Act. So if the financial package reduces it to below that three-percent threshold, is the act going to be proclaimed and then repealed within months if the financial package is sufficient, or does the minister intend to hold on to those powers of approving or disapproving changes to bylaws and the other powers that Bill No. 56 affords?
Hon. Mr. Hart: Just so the member opposite is aware, he pointed out the situation we're currently looking at.
Mr. Cardiff: The minister obviously doesn't know what's going to happen. That should be comforting to the people of Dawson, if they're listening today. We have two pieces of legislation, a financial package we haven't seen yet and the minister doesn't know what the plan is with regard to Bill No. 56, which hasn't been proclaimed and may be repealed, or perhaps it will have to be amended or something - we don't know.
At this time, Mr. Chair, I have no further questions.
Mr. Jenkins: I have a few questions for the minister on this piece of legislation and what will flow from it or what will take place. My constituents are very concerned about four components, as I outlined earlier. Bringing closure to the forensic audit - let's start there.
As the minister knows, the RCMP are investigating this matter, and I know the minister cannot comment, nor will he comment on that issue, but at the same time, the trustee has proceeded civilly. Where is that issue at now? Is there any further action contemplated? Demand notices have been served on three parties - where is the civil action?
Hon. Mr. Hart: With regard to the civil action, all that action has been left for the new mayor and council to decide which action they would like to take. I didn't want the trustee to go through that process.
Mr. Jenkins: Oh, yeah, so dump the responsibility that the minister is clearly responsible for on a new council - is that what the minister is saying?
Hon. Mr. Hart: I'm not even going to respond to the member opposite.
Mr. Jenkins: Let me get my head around this: the minister instructed the trustee to proceed civilly, served demand notice on the former mayor, the former CAO and the former treasurer for the amount specified in the forensic audit, and the minister is not prepared to carry through with or conclude the civil action. He is going to wait until a new mayor and council are elected and ask them to proceed or make the decision on what to do. Is that what the minister is saying?
Hon. Mr. Hart: We have served notice for the amount owing on all three of those representatives and invoices have been sent. All that information has been conducted through independent legal advice on how to approach that. Notices have been sent to all three of those individuals of amounts owing as per the forensic audit.
Mr. Jenkins: That's what I said - basically, there is a civil action that appears to be at some stage. I want to know what stage it's at and what the intentions of the department are and what the instructions are from the department to the minister as to how to proceed on this matter. What I hear and what I'm very uncomfortable with is that this matter is going to be left to a new mayor and council to determine the course of action. That's ludicrous.
Hon. Mr. Hart: Before the member opposite leaves his seat, as he stated, it's under investigation by the RCMP right now. As I said, we have deferred this to independent legal advice, and this is what they've advised us to do. And until such time as the other aspects take over and something is decided upon from that particular view, then this is where we are at.
Mr. Jenkins: Well, I know where the minister's at and I know where Dawson is at. But the minister is in the driver's seat and it sounds very much like he doesn't want to just pass the buck; he wants to pass the whole train on to the newly-elected council - because the same holds true for the arena. There are serious structural defects in the design of that arena, yet no initiative has been made by this government, which was complicit in continuing with that structure through the PMT - the project management team - and their officials in the minister's department. No initiative has been made to address the responsibilities the government clearly has to go after the engineers and architects of that building. This appears to be another decision that is going to be postponed for the newly-elected council.
At the end of the day, this is another ludicrous situation that is being downloaded on to a potential newly-elected council. Now, is that right? Because there is not going to be enough money in the kitty to proceed on any of these matters civilly. Is that the intention of the government - to off-load it, to say it's not our responsibility, that it's the responsibility of the newly-elected mayor and council? Unfortunately, they don't have enough money to proceed, because that's exactly what is going to happen, Mr. Chair.
Now, why can't the minister address his responsibilities and deal with these two very important issues? They are very important issues. The minister has decided, through the trustee, to proceed civilly against the former mayor, the former manager and the former treasurer. Why is that decision being stood down? It's not because of independent legal advice. The legal advice wouldn't be to give it to the newly-elected council. That appears to be a decision that's being made somewhere in-house.
We've got two issues: why can't they be addressed at this juncture and why can't the newly elected mayor and council be issued a clean slate on these matters?
Hon. Mr. Hart: With regard to the member opposite's question, I have already addressed the one issue with regard to the invoices to the three individuals, as indicated in the forensic audit. With regard to the other option, the member opposite was on this side of the House when we were discussing this, and he knows full well the answer.
Mr. Jenkins: That's exactly why I am on this side of the House, because the government wasn't prepared to address its responsibilities in this area. This is a very important issue. It's an extremely important issue for the constituents in my riding - the residents of Dawson City.
The trustee was instructed to invoice the former mayor, the city manager, and the treasurer. A half a million dollars was spent on a forensic audit to determine how much money they were liable for. This minister does not want to proceed with collecting that money civilly. Why not? I don't want a Mickey Mouse excuse, that he is under independent legal advice that it should be a decision of the new mayor and council. That's totally out of the question, Mr. Chair.
Hon. Mr. Hart: If the Mickey Mouse entertainment from a professional isn't satisfactory for the member opposite then too bad.
Mr. Jenkins: I thank the minister for his non-answer, but that's an issue that must be resolved. It has not been resolved and the minister has failed to resolve it. That's just incompetence, Mr. Chair.
The same thing holds true with the arena. We have a $10-million structure on the books. It's not worth probably $1 million. There are serious structural design flaws in that building. For the last two years, the minister has had a trustee in place and that trustee has done nothing to go after the engineers and architects who designed that building. Why?
Hon. Mr. Hart: We are going about our process with regard to the citizens of Dawson to ensure that they can operate as a municipality. The member opposite is bringing up issues to which he full well knows why the responses were made. With regard to the debt and the three individuals, the member opposite knows that collecting the debt takes a long time. That process is underway.
Mr. Jenkins: Mr. Chair, what action has this government taken to collect those debts? I mean, some you can send over to Dena Naye Ventures. What action has this government taken? Have they filed a civil action with the courts? Yes or no?
Hon. Mr. Hart: As I indicated before, we are working through independent legal advice with regard to the aspects of these three items. We are following the advice provided.
Mr. Jenkins: Is the minister aware that, as a consequence of the appointment of the trustee and the elimination of the mayor and council, the minister is totally in charge of the affairs of the City of Dawson through his trustee? As a consequence of that position, and as a consequence of the forensic audit that was commissioned by this government - by this minister and this department - that has proved beyond a reasonable doubt that there is X dollars owing to the taxpayers of Dawson City, and indeed to the Yukon, from three individuals. The minister is failing to follow through with good management practices. Why is that? Don't tell me it is because of independent legal advice, Mr. Chair.
The minister could be held liable for those sums of money for not doing his job. Why doesn't the minister follow through and see that this money is collected?
Hon. Mr. Hart: We are following through based on the information we have received. We are going through that process, as I mentioned before. It takes time to process. There are legal aspects that are being reviewed right now, and that is the advice we have been given, and that is where we are going to go.
Mr. Jenkins: Would the minister advise the House if an action has been started before the Supreme Court?
Hon. Mr. Hart: An investigation is currently underway, and until that investigation is complete, we won't know where the intent is to go.
Mr. Jenkins: The minister has not started a civil action, whatsoever? He is going to wait for the new council? Is that what the minister is saying?
Hon. Mr. Hart: We are going to be awaiting the results of the investigation from the RCMP. Depending upon those results, our plan of action will be dictated.
Mr. Jenkins: So, the minister and the department are going to retain the responsibility to recover this sum of money from these individuals - either directly or indirectly. Is that the situation? It's not going to be off-loaded to the new mayor and council?
Hon. Mr. Hart: As I mentioned, we are going to await the results from the RCMP investigation on this and, once we get the results of that, we will know where to go.
Mr. Jenkins: Would the minister just confirm that the Department of Community Services is going to retain the rights to recover this money from these individuals? It's not going to be off-loaded and a decision that has to be made by the new council on whether to proceed civilly. Could the minister confirm that?
Hon. Mr. Hart: We are looking at the results from the investigation. What those results entail will decide what action has to be taken, and it will have to be taken in conjunction with the town.
Mr. Jenkins: Where it suits the government, they assume total and unfettered control of an initiative and where it doesn't suit the government, they off-load it to the newly elected mayor and council. That appears to be very much the case in two very important areas - the matter of the indebtedness of three officials and the matter of the arena.
Let's explore the arena, Mr. Chair. Why has the government failed to take any action against the architectural engineering firm that designed this building that has been shown to have serious structural defects?
Hon. Mr. Hart: He knows all the goings on in the City of Dawson with regard to the recreation centre. He is well aware of the situation. He was there during the time the construction took place. He is also aware of what action has been taken or hasn't been taken against the architect. As he mentioned, that's why he is over there.
Mr. Jenkins: I'm over here because the government has failed to take any action on any of these very important initiatives. They failed miserably and totally, Mr. Chair. Here we have a $10-million arena that cannot be occupied unless you shovel the snow off the roof, and it can only be used when it is about 15 to 25 degrees below outside. That's the only time you can get natural ice in the arena. So here we have an arena in the north that is on the books for more than $10 million. It's pretty interesting.
These are two areas where the government should be in the driver's seat, and yet there has been a total lack of action.
The minister made a very good first step by getting in a forensic audit, but he has not followed through on the results of the forensic audit. The same thing holds for the building. The trustee brought in a structural engineer to have a look at it and substantiated that there are very significant design flaws and there are very significant foundation flaws.
Let's just deal with the roof. The roof basically meets minimum code requirements for its snow-load carrying capacity. What hasn't been calculated in the equation is the residual snow load, when the roofs are of different elevations. If it's all the same elevation, it's not a problem, because the wind whips off some of the snow. But as soon as you have a snow load build-up, like there is there, it has been known - it has been documented, Mr. Chair. What I want to know is: why has the minister not instructed the trustee to take action against the architectural engineer? Is it because of a cozy relationship in the department with this firm? What gives? Nothing seems to transpire, and this is the same firm that designed other buildings in the Yukon that have serious flaws. No one appears to be willing to do anything. Why?
Hon. Mr. Hart: Mr. Chair, there was a report commissioned by the trustee on the arena, not only dealing with the roof but with the structural part of it. They are moving forward on that report, based on the third-party engineer on that. There are plans for making repairs, or they were made already to at least utilize it for a last season. We anticipate they will be able to utilize it this season but, as the member indicated, maybe not in the same essence as Whitehorse for their aspect. But that is what the trustee was doing. It was basically to enable them to at least utilize it for some period of time.
Mr. Jenkins: Well, the minister is right in some respects, but the structural engineer that was engaged clearly indicated that there would have to be major alterations made to the roof. That money was applied for from the department. It was approximately $300,000 odd for a patch-up. It was about $1 million a year and a half ago to fix the roof properly - the roof alone. The department turned down that money.
What the city ended up doing was liquidating a bunch of their assets. They gutted the arena, took out all the Styrofoam that was on the floor, all the plywood, sold that, got minimum dollars, just to get gravel in there and get it levelled. The roof has not been fixed. The minister has failed to recognize his responsibility and his liability.
Chair's statement
Chair: Order please. The Chair appreciates the Member for Klondike's zeal and wide-ranging interest in issues that relate to Dawson. However, the matter under general debate now in Committee of the Whole is the Dawson Municipal Election Act (2006). The Chair is having difficulties connecting issues that the member is discussing with the piece of legislation before us today. We are in general debate on the Dawson Municipal Election Act (2006), and I would like the members to continue on this topic.
Mr. Jenkins: Mr. Chair, I respect your ruling. In order to elect a council in Dawson City, the slate is going to have to be cleaned up; otherwise, we can elect council after council after council. If they are not provided with the tools - and if this government doesn't do its homework to ensure that there is sound footing for a new municipal council - Dawson will stay exactly where it is, and this same situation will repeat itself in extremely short order. That's where we're at - that's the relevance in connecting the dots here. It's a business model. I'm sure we could structure it so that somebody could earn a master's degree studying the situation in Dawson.
There are two extremely important areas - the issue of the civil action to collect the money - which the minister is clearly responsible for - and the issue of the civil action to determine cause for a very faulty arena. I would encourage the minister to read some of the decisions of the arbitrator who clearly finds a lot of the information provided by the project manager and the project management team to be erroneous, if not downright lies. Mr. Chair, these are some of the areas that have to be cleaned up. Until they are, Dawson will not be able to move forward.
Let's look at debt restructuring and debt forgiveness. This is also an extremely important area and it needs to be addressed in an appropriate manner. Dawson needs to have the tools because Dawson needs to spend a considerable amount of money in upgrading the infrastructure. I'm sure that, as soon as the sewers back up again into the Yukon Housing Corporation duplexes, and the minister responsible for Yukon Housing Corporation gets after the Minister of Community Services for not getting the appropriate repairs done to the system - because for the past two years, really, no major repairs have taken place. It has been on an “as needed” basis.
The city has been cash-flowed by liquidating its assets and by not addressing the importance of maintaining its infrastructure. That's a reality. You have only to look at the financial statements, Mr. Chair, and look at the cheque registry at the end to see where the money is being spent. There is no understanding of financial statements, cash flow, and the importance of maintaining municipal infrastructure.
Is it the government's intention to sell off any more of the city's assets before a new mayor and council are put in place?
Hon. Mr. Hart: It is our intention to assist the citizens of Dawson, and we are working to do that in the best way that we can and the best way we have been advised through the trustee for that purpose.
Items that we are working with - there is no intention, that I know of, between now and when we provide something for the citizens of Dawson, of selling anything that belongs to the city, other than what has already been completed.
Mr. Jenkins: I didn't get the ending - other than what, Mr. Chair?
Hon. Mr. Hart: Other than what has already transpired.
Mr. Jenkins: For the record, the minister has confirmed there will be no sale of any other city assets.
That's what I heard him say, Mr. Chair. Because currently there are a number of other assets under consideration to be sold that I have serious reservations about.
One of the other burdens the new mayor and council are going to be burdened with is the agreement for the provision of secondary sewage - waste-water treatment. That is a draconian agreement, if ever there was one. It limits the liability of the city and all the O&M goes to the city and, if it goes above a certain value, all the liability flows to the city and the city shall indemnify and save harmless YTG for their total and unfettered arrangements in all these areas.
There's also another agreement in place of a similar nature. I would ask the minister to table that in due course before the end of this sitting. That agreement is between the project management team and between the project manager and the City of Dawson. That agreement has been buried. It was drafted by YTG and it clearly identifies who's liable for what.
The project management team is indemnified and saved harmless, as is the project manager, for the arena. All the liability appears to flow directly to the city. This is another area that has to be addressed. That's probably why the minister does not want to get involved in the arena, because it flows back on the decision-making side, directly to the Government of Yukon and the project management team, which was structured by Community Services.
Is the minister aware of these agreements, and will he produce them?
Hon. Mr. Hart: With regard to what agreements took place before I took office, I am not even going to pretend that I know where they were. With regard to the arena, those were agreements signed by the mayor and council.
Mr. Jenkins: Just like the agreement for the waste water that the trustee signed on behalf of the city, it's binding on its heirs and successors, and so is that agreement. That agreement is binding on this minister and the trustee. The minister must be aware of that agreement. I would ask that he produce that agreement. Will the minister do so?
Hon. Mr. Hart: I will investigate and determine whether we can provide that to the member opposite.
Mr. Jenkins: That's not good enough, Mr. Chair. I'm looking for a firm commitment. This is a very important issue because it shows the flow of liability - where it starts and where it ends. This agreement was structured by the Department of Community Services to save harmless and indemnify the project management team in exactly the same manner as this indemnification is written in the waste-water agreement. It's a very important issue and its consequences are far-ranging.
Now, the department is very much aware of it. Why isn't the minister? There is a lot of liability flowing out of that, Mr. Chair. There is a potential to recover a considerable sum of money on that arena, which would, if that came through, assist the city in building a new arena. Doesn't the minister see the folly here? We have a $10.7-million arena that you probably couldn't get a half a million dollars for. And it's an impediment to the whole community. The way these agreements are structured by Community Services on behalf of the project management team, which involved officials from the Government of Yukon, there appears to be a lot of butt-covering here that I am extremely uncomfortable with.
Now, once again, I'll ask the minister to produce those agreements. They're there, they're readily available, and they should be made public.
Hon. Mr. Hart: We provide standard boilerplate information with regard to our agreements with all municipalities, not just the City of Dawson. We are following through with those particular projects that we deal with in other municipalities.
In regard to the member opposite's request, as I indicated, I will investigate on his behalf and produce to the House the documents that he requested, when we find them.
Mr. Jenkins: Let's hammer this down a little bit closer than the way the minister responded. I'm looking for a firm commitment that, before the end of this sitting, the minister will table these two agreements. There is one with the project manager and there is one with the project management team. It's written in virtually the same format as the waste-water agreement, Mr. Chair. It clearly identifies who is indemnified and saved harmless, and it is everybody but the city.
T hat was put in place when the Government of Yukon flowed the additional funding to the city, and it's binding on the heirs and successors.
The minister should be very much aware of this agreement and the reason it hasn't surfaced is because it clearly identifies who in the Government of Yukon was complicit in this whole situation. Look at what is happening with $1.2 million to $1.4 million of expenditures by a former mayor, a former city manager and a former treasurer. As near as I can calculate, they are liable for about $1.2 million to $1.4 million worth of stupidity. At the same time, we have a $10-million arena that the government and the project management team was completely and heavily involved in, and yet we can't get to the bottom of that situation. Why not?
Will the minister just confirm for the record that he will produce those agreements that clearly show who is indemnified, who is save harmless, and basically what we're looking for is the contract between the project manager and the project management team. That project management team and that project manager flowed money, not just to the arena but into the waste-water project. It flowed into the water metering. The water metering was an additional cost of about $1.5 million. The arena - it's on the books for $10 million. From there, we're going into the waste-water treatment, and $4.5 million was supposed to have been spent on that. When I looked at the justification of that expenditure, that was another big joke. But that money is gone.
And the bottom line is, the city could not have spent that money had the Yukon government not flowed those dollars to the city. They put terms and conditions on that money, and part of those terms and conditions included a project manager and project management team, which were basically the Government of Yukon and an official as the project manager hired on the recommendation of the government, along with a complete indemnification drafted by the Government of Yukon.
That is an important document that should come forward. Can the minister confirm that he will table that?
Unparliament language
Chair: Order please. Before the debate continues - the Chair has heard the member use phrases today like “stupidity”, “incompetence”, “butt-covering” - phrases that are obviously beneath the dignity of this Assembly. The Chair has the expectation that such a long-standing member of this Assembly, with such strong debating skills, can rise above this type of language and carry himself in a manner that all members can respect and feel comfortable with.
I ask the member to act as all Yukoners expect us to act in our Assembly and to reflect that in his choice of language.
Hon. Mr. Hart: As I stated previously, I am not aware of the specific item that the member opposite is talking about. I will investigate this and find out if it exists, but I will assume that any agreement that was signed on behalf of the government and the municipality would be vetted through the Justice department, and it would go through the normal process prior to going out for signing. Every agreement from our department has to go through the Justice department to ensure that the appropriate clauses are in, or not in, when we deal with a local municipality and/or the federal government.
Mr. Jenkins: Mr. Chair, I respect your rulings but, if I had said anything that was dishonest, I would have been called to order.
On the issue of the secondary sewage, could the minister confirm that the memorandum of agreement was drafted by the Department of Justice?
Hon. Mr. Hart: The document was drafted by our department but it would have been vetted through Justice per their normal review process.
Mr. Jenkins: There are two bylaws and they are extremely important to Dawson, but is it the minister's intention, after calling the election, to appoint a supervisor to oversee Dawson City? A simple yes or no.
Hon. Mr. Hart: We are looking at possibly somebody there to assist the new mayor and council in its operation and to be there as guidance for them for a period of time, until they get their feet wet.
Mr. Jenkins: Was the minister's intention to appoint a supervisor? Yes or no?
Hon. Mr. Hart: As I stated, we'll be looking at having somebody there to assist Dawson with that particular aspect and, if it is indeed necessary, we can appoint somebody.
Mr. Jenkins: So, Big Brother is alive and well and will be watching in the form of a supervisor, is what the minister is trying to couch. Is that not correct, Mr. Chair?
Hon. Mr. Hart: No, we haven't made a decision specifically on that item, because I haven't done it. So, for the member opposite to say that Big Brother is sitting over top of the citizens of Dawson - I don't think so.
Mr. Jenkins: If we can go back to the secondary sewage issue, because there were two ways that the minister can keep that in place. It can be amended, but its terms and conditions are binding and will even last after the expiry of the MOA. How can this be amended so that the burden of responsibility and liability is vested more on those who are making the decision? With respect to the secondary sewage, virtually all of the decision making is being done by YTG. Why don't they have a corresponding amount of liability associated with that decision making?
It's a document that gives Yukon the total right to do whatever they want, how they want it, and in any manner they want - sole and unfettered control of the project, including contracting, including selection of contractors, including selection of engineering firms, type of system, location of system, everything. Yet, all Dawson does is pay and live with the consequence. I don't want the minister to back up to the beginning of time, but there is an issue here.
There's an issue that the liability should be shared equally. We can back right up to 1978-79, when the Dawson City Utilities Replacement Act was passed by this Assembly. The waste-water regulations have not changed since that time, up to today. They have not changed, and it was designed to meet the waste-water regulations in place in 1978 or 1979. As a consequence of those waste-water regulations not being made current, what has transpired is that other federal agencies - like the federal Department of Environment, like the Department of Fisheries and Oceans - have come along and insisted that the Water Board superimpose other conditions and terms on the discharge standards that have to be met. Those discharge standards are always met at the end of pipe, but in Dawson City they take the sample right from the toilet bowl. It's pretty interesting how things have come into place.
Chair's statement
Chair: The Chair would just like to remind the member of our Standing Orders, including chapter 8, dealing with Committee of the Whole. Section 42(2) states, “Speeches in Committee of the Whole shall be strictly relevant to the item or clause under consideration.” We're currently in general debate on the Dawson Municipal Election Act (2006), and the Chair is having a great deal of challenge finding the relevance of the discharge standards and the source of sampling to this piece of legislation.
I'll ask the member to stay focused on the piece of legislation under debate today.
Thank you.
Mr. Jenkins: Let me help the House here, Mr. Chair. There is the issue of restoring a duly elected council to a community here. You don't want to have them saddled with liability that far outstretches their financial capacity or their overall ability to address. That's the issue. It all ties back to the election and this bill, in that you want to have a duly elected council that has in place all the appropriate tools to address their responsibility.
That said, Mr. Chair, we're just about there. I know the minister is anguishing under the pain of having to deal with these many issues, but I have confidence in this minister. The department will tell him how to do it and we'll have another agreement in place and we can move forward.
Let's go back to the supervisor that the minister is intending to put in place after this bill has passed - I will support the bill. How long does the minister envision this supervisor - or, as he calls it, this “help” - continuing? Because most of the help the City of Dawson has received from the Government of Yukon has gotten it to where it is today - in a financial quagmire, with no secondary sewage, no arena to speak of, and all with capital funding agreements where both sides of the equation failed to live up to the terms and conditions. That's when the wheels came off the cart.
The question was posed as to whether it was an apple or a turnip cart, but that's too much detail and I'm sure that would get us off topic, Mr. Chair. So, I think we had best not go there.
Could the minister give us an indication of how long this help is going to be provided to the City of Dawson and who is going to pay for it?
Hon. Mr. Hart: We are looking at providing assistance to the new mayor and council during this transition period to that process, to ensure that they understand what it is that they are doing, to ensure that they are following the proper procedures as per the Municipal Act on that particular basis, and we will assist them in that particular venue to ensure that citizens of Dawson have an appropriate and functional municipality.
Mr. Jenkins: Now, given that the Municipal Act hasn't changed since the last time the wheels came off the cart, and given that the supervisor's role is basically the same supervisor's role under potentially a newly-elected council as it was previously, how is the department going to ensure those safeguards are there? Because they had every opportunity before but it was the government that failed to live up to a capital funding agreement - and the City of Dawson - and under the direction of a supervisor previously - the first supervisor - things were going on like an overdraft protection resolution to borrow a million dollars from the bank. Doesn't anybody read the Municipal Act? The city only has the ability to borrow two ways. One is for cash flow purposes at the beginning of the fiscal year, which must be repaid in early July, and the second way is a debt load, which they had exceeded a long time ago.
Now, nothing has changed in the act. The supervisor can be appointed either way. How can the minister ensure that things are not going sideways again? Wouldn't it be prudent to ensure that parts of Bill No. 56, like the procedural bylaw, are kept in place and adhered to? In essence, that is where everything started going sideways in Dawson City - as well as not following the capital funding agreement.
Every municipal council throughout the Yukon - every duly elected municipal council - has been very fiscally prudent and has anguished long and hard over expenditures. They've done a very good job, by and large. I have the utmost respect for those who dedicate their time to municipal politics. By and large, with the exception of my community, they've done a very good job.
Does the minister not recognize at this juncture that the department failed to follow the Municipal Act, and will he assume a great deal of the responsibility for the department's involvement in the debacle in Dawson City - and the way it went sideways, and why it went sideways? Supervisor No. 1 could have done a lot but, according to that supervisor, everything was great. That was not the case, Mr. Chair.
How is the minister going to ensure that this is not going to take place again? Will he ensure that parts of Bill No. 56 are adopted and followed and not deviated from?
Hon. Mr. Hart: We are considering all those options with regard to what the member is discussing. We are looking at, obviously - we were, as he indicated, not too happy with the first supervisor's responsibilities. That's why we changed his responsibilities. Even then, we still ended up hiring a second supervisor.
Is the member opposite indicating that, for example, the past trustee was not fulfilling his duties for the citizens of Dawson? We're looking at maybe utilizing somebody of that calibre to ensure that they follow the actions that are needed. I still am only looking at a short-term interim basis to allow them the transition period to grow.
Mr. Jenkins: Well, we've got the minister to admit that they weren't very happy with the first supervisor. That's a good beginning. But the department was very complicit in what went wrong there, too, Mr. Chair. With their involvement, there is a liability, but as the only people who are being forced to wait for an arena that is structurally sound, or waste-water treatment that meets the standards that have been imposed on it by the courts, Dawson pays and pays. Mr. Chair, we have the highest utility charges in the Yukon. We have, I believe, the highest tax rates in the Yukon - because it's a uniform and consistent assessment.
We've got some of the highest taxes we're paying, some of the highest utility charges for water and sewer that are paid in the Yukon - the highest - and this government is going to add to it with secondary sewage. What is the minister doing about that across the Yukon Territory to level the playing field?
Potable water is a basic necessity of life, and yet, across the Yukon, where services are provided by Community Services, some of the rates haven't changed since the 1960s. In other cases, where water is delivered by private firms, it's $200 or $300 a load. In Dawson's case, my water and sewer bill for my private home - I believe it's around $1,900 that's invoiced - $1,800-something or $1,900. Now, that may include the garbage, which is $50 or $75, but it's right in that ballpark.
Now, if you add to it what is being proposed in this secondary sewage agreement, that all the O&M costs will be the city's responsibility, and dump that on a newly elected council - well, they're in the swamp so deep, they might as well throw in the towel before they even start.
Again, if you're going to impose any conditions on a newly elected council, let those conditions be at a level that that duly elected council can afford and that the residents can afford and accept. That's not the case in what's being proposed here.
Does the minister have a comparison of water and sewer rates across the Yukon? Can he see the folly of adding another $600 or $700 per service connection in Dawson City for secondary sewage? That would bring the cost up to $2,400 to $2,600 a year, depending on how you charge it. Mind you, if it's a prudent newly-elected council, they could get in and set the government rate for Yukon Housing Corporation at about $3,000 a house and set the rate for a school at about $25,000 a year. That could be done, too, but that wouldn't be fair and reasonable. Based on what is going on here, neither is what is being proposed in this agreement, which is binding on this newly-elected council that we're hoping to have in place.
Will the minister go back and examine this agreement and propose amendments to it that make it much more workable, Mr. Chair?
Hon. Mr. Hart: As I mentioned before when the member opposite brought this question up, this is a standard boilerplate we provide when we're dealing with all our municipalities. Also, in that discussion, there is a clause in there that enables the changes to be made, providing consensus is reached by both parties. I don't foresee anything in the future that would negate us from working along with that particular aspect.
I will state, though, that we are also exploring all the opportunities with regard to the sewage facility on a national basis, in order to keep the O&M costs and the cost of the facility down and within the affordable range for the citizens of Dawson.
Mr. Jenkins: All we have to define now, Mr. Chair, is what the minister deems to be affordable, because there is quite a gap between what the residents in Dawson City deem to be affordable and what the department is advising the minister is affordable.
Now, I don't know if the minister has extrapolated any of these numbers from the total O&M cost indicated in this secondary sewage memorandum of agreement. Has the department done that based on the number of service connections?
Hon. Mr. Hart: As we are looking into the situation for the citizens of Dawson for this particular facility, we are looking at our cost generating for it and we'll be identifying what those pieces are going to be specifically for the citizens of Dawson. As I indicated, we are looking at the national scene to see what is changing on that venue that might provide us with an opportunity to change the situation in Dawson. Currently there seems to be some opening in that area and we're exploring that as we speak.
Mr. Jenkins: I listened quite diligently to what the minister had to say but I couldn't extrapolate very much from what was said that bore any resemblance to the question that I posed.
What is the cost that the department has assessed for individual service connections for the proposed secondary sewage treatment system?
Hon. Mr. Hart: There is no individual service connection cost identified.
Mr. Jenkins: I'm sure there is, Mr. Chair, because that's about the first thing you do. You look at the total estimated cost, and it's about $320,000. That said, if you divide that by the number of service connections, you'll get a cost-per-service connection. That's what I did. I'm sure somebody in the department must have done exactly the same thing to extrapolate what the cost is going to be. That's relevant.
When you see an MOA, unless you spend the time looking at it and looking at the consequences of that MOA - we're not going to get anywhere electing a new council if the minister burdens them with this kind of responsibility.
So let's sum up where we are right now. I've asked the minister to bring closure to the forensic audit by way of the civil action that the government should have begun. But they're not going to undertake to do anything there. They're going to wait for a newly elected council and get them to make the decision as to whether they proceed against these three individuals. They're waiting for the results of the RCMP.
They've already sent him a bill and told him they are taking action, but no civil action has been filed before the courts as of yet. RCMP and the criminal side - that is another situation; we are not even going there.
Let's look at the debt restructuring and forgiveness. From what I have seen to date, any extrapolation of the numbers on restructuring would see Dawson debt-free by 2026. That is a lot of responsibility to be dumped on a newly elected council. Here you go, we want to elect the mayor and council - but you have to make the decision as to whether to proceed civilly against the former mayor, the former treasurer and the former city manager and, by the way, you don't have any money to do anything. Oh, yes, on debt restructuring, we are going to reduce the interest rate, amortize it over a longer period of time and you'll be out of debt by 2026.
On t he arena, where the government made a lot of the decisions through the PMT, we're not going to go after the architects and engineers. We're going to leave that to the new council to make that decision. That litigation is potentially $1 million odd for either side. But, “Oh, by the way, you don't have any money to pursue it, so don't bother.”
And then we want to attract a new mayor and council to a secondary sewage issue - secondary sewage that's covered by a binding agreement that flows to the heirs and successors of the community and will see their water and sewer costs increase by between $600 to $700 per service connection, as near as I can figure. Sounds great to me. Sounds like a really great way to attract a new mayor and council - burden them with the responsibilities, have them move forward on all of these things. “Oh, and we could probably sell off a few more of the city's assets to cash-flow you, so you can debt-service the Yukon government loans, like you've been doing up until now. Don't bother doing any maintenance on the sewer lines that are collapsing, and don't bother in the summertime fixing the water mains that are broken and patched up in the winter. And, while we can probably save a few more bucks by not going through the normal routine of de-liming the wells and pulling the submersible pumps out and having them rebuilt on a regular, scheduled basis, wait until they fail- they might last a little longer.”
Mr. Chair, seeing the time, I move we report progress.
Chair: Mr. Jenkins has moved that we report progress. Motion agreed to
Hon. Mr. Cathers: I move that the Speaker do now resume the Chair.
Chair: Mr. Cathers has moved that the Speaker do now resume the Chair.
Motion agreed to
Speaker resumes the Chair
Speaker: I will now call the House to order.
May the House have a report from the Chair of Committee of the Whole?
Chair's report
Mr. Rouble: Committee of the Whole has considered Bill No. 71, Dawson Municipal Election Act (2006), and directed me to report progress on it.
Speaker: You have heard the report of the Chair of Committee of the Whole. Are you agreed?
Some Hon. Members: Agreed.
Speaker: I declare the report carried.
Hon. Mr. Cathers: I move that the House do now adjourn.
Speaker: It has been moved by the government House leader that the House do now adjourn.
Motion agreed to
Speaker: This House stands adjourned until 1:00 p.m. tomorrow.
The House adjourned at 5:59 p.m.