Minister Hid True Borrowing Costs from Yukoners

25-Jan-2010

Whitehorse – Documents obtained through an Access to Information request have revealed that the Minister of Health and Social Services had knowledge of hospital financing costs while repeatedly sidestepping questioning in the Legislature. Further, these costs are expected to accrue at rates higher than those recently admitted by the Chair of the Yukon Hospital Corporation.

“Once again, the Yukon Party government feigned ignorance and evaded answering Yukoners’ questions,” charged Arthur Mitchell, Leader of the Official Opposition. “Minister Hart was informed a year ago about how much this government’s ‘buy now, pay later’ policy was going to cost Yukoners, but he denied that knowledge and refused to make that important information public.”

January 27, 2009 correspondence between the Chair of the Yukon Hospital Corporation and Minister Hart details anticipated interest rates, terms, and ultimate costs for borrowing related to the Whitehorse nurses’ residence. Despite this, Minister Hart has consistently claimed an inability to answer questions about the financing, even stating on April 27, 2009 that ‘With regard to any kind of borrowing facilities, that is between the bank and the corporation.’

Ranging from 3.03%-3.55%, the estimated rates contained in the correspondence significantly exceed the 2.25% (prime rate) interest rate that will apply during construction. Should the $17 million dollars needed for the residence be paid off over fifteen years, interest costs could range from $4.407 million to $5.219 million. “Yukoners can expect to be paying for this Yukon Party government’s free-spending ways for long after it’s gone,” Mitchell pointed out.

“By allowing the Yukon Hospital Corporation to announce this lower, shorter-term rate without comment, Minister Hart continued to mislead Yukoners about the true cost of this debt,” Mitchell adds. “This evasiveness is characteristic of a government that can’t afford its own spending. Yukoners are going to be saddled with interest payments spanning decades.”

Despite receiving almost $700 million in annual funding from Ottawa, the Fentie government has taken out unprecedented levels of debt. The Yukon Hospital Corporation will be borrowing $67 million to pay for the Watson Lake Hospital, Dawson City Hospital, and Whitehorse Nurses’ Residence projects. As well, the Yukon Development Corporation recently confirmed that it will borrow $100 million for hydro projects.

For additional information contact:
Sheena Smart 667-5081