Yukoners Not Getting Full Story on Bonds, says Mitchell

25-Jun-2010
Whitehorse - Premier Dennis Fentie’s sugar-coated version of events surrounding the recent issue of $100 million of bonds by the Yukon Development Corporation means Yukoners are not getting the full story, says Official Opposition Leader Arthur Mitchell.

“The most important information missing from the Premier’s rose coloured view of the arrangement is the fact Yukoners will be paying $150 million in interest over the 30 year life of the bond,” Mitchell pointed out. “This is going to be a very expensive loan that Yukoners will be paying for long after the Premier has been retired from office. It will tie the hands of future governments and limit their ability to provide other services to Yukoners.”

Mitchell also pointed out that despite the Premier’s boasting about the credit rating the Yukon received the bonds still had to offer a premium to investors to ensure they sold.

“In order to ensure investors bought the bonds we had to promise them higher interest than other investments in the market place, higher interest payments that will be paid by ratepayers and Yukon taxpayers until 2040,” he said. “The much ballyhooed credit rating didn’t really buy us a top-notch interest rate.”

Another important question ignored by the Premier is how the government plans to pay back the $100 million principal when the bond comes due, or whether the government has even considered the question.

“Does the government plan to set aside money each year to pay back the principal or is the plan to borrow again when the bond comes due or has the Premier even thought that far ahead,” Mitchell asked. “Yukoners deserve an answer and they have not yet received one from the corner office.”

The Premier’s communication plan for the bond issue is typical of the lack of transparency that the Fentie/Taylor government is well known for, said Mitchell.

“Similar to the ABCP debacle and the Yukon Energy privatization plan, the Premier has refused to be upfront with Yukoners and only shares information with the public he is supposed to serve on a need to know basis,” he said. “Yukoners are looking for a government that is transparent and will tell them the truth.”

The $100 million bond is part of the Premier’s larger ‘go for broke’ approach to governing that also includes $67 million in loans taken out by the Yukon Hospital Corporation.

For additional information contact:
Jason Cunning – 667-8942