Mr. Silver: I would like to begin as I always do with a heartfelt thank you to the constituency of the Klondike for the privilege of representing them here in the Assembly. I want to thank Dawson City for all of the support that I have received over the past five years. It has been an honour representing the Klondike in Whitehorse.
For the record, I will be seeking the support of Dawson residents for another term as the Klondike MLA in the next territorial election whenever that might occur. I’m waiting for some other announcements here, but haven’t heard them. I announced this the day before the session began and I’m excited about the campaign that will happen sometime later this year. No nods from the people across the hall.
Since we met last fall, I had a great deal of time in the Klondike talking with people about issues and also just enjoying all that Dawson has to offer. There is never a dull moment in this vibrant northern community and I would be hard-pressed to find a community that has so much to do in the winter months. Judging by the number of out-of-towners who were welcomed to the Klondike during the Thaw di Gras festival we held a few short weeks ago, clearly this is no secret.
We had Sourdough Sams and Rendezvous Queens come up for our lip sync. Many people actually stayed along for the Sunday chili cook-off, which, this year was, won by Dennis Dunn and Kyla MacArthur. Congratulations to those two. They have been in it every year for at least — I won’t say how many, but this is the first time that they have actually won it. I just so happened to volunteer that weekend and I was a judge.
Getting down to the budget, it is interesting to note that we are already into the 2016-17 fiscal year as we begin debating on the budget. This is the second year in a row that the government made a conscious decision or choice to begin the Spring Sitting after the fiscal year had already begun. The normal course of events is to begin the Sitting, as you know, in late March or earlier to allow time to pass an interim supply bill before the fiscal year actually begins. That didn’t happen again this year for several reasons — one of the main reasons being the government’s inability to make a decision on whether or not to call a spring election and another one would be the astounding turnover in the ranks of deputy ministers in this government. It’s hard to pull together a budget when we need to consult the phone book to find out who has been fired and who is still employed. The amount of money needed for severance packages also kept changing right up to the last minute.
The late call has resulted in the government once again bypassing the Legislature for spending authority by relying on special warrants. It demonstrates a lack of respect, in my opinion, for this Chamber and for democracy. I was critical of this approach last year and here I am again this year.
I want to read from you what Robert Ascah, a fellow in the Institute for Public Economics at the University of Alberta had to say, and I quote: “Special warrants should typically be used only in exceptional circumstances — for instance, when a new government has just been elected and needs more time to bring in a budget, and unanticipated emergencies like floods or fires might also require extra spending when the assembly isn’t sitting.”
But he said he doesn’t understand why a government would routinely convene the Legislature so late that they would have to issue special warrants for that. I am going to quote again: “The problem with the use of special warrants is that cabinet avoids the scrutiny of the legislative assembly. I just don’t think that’s a good way of running governments.” He said democracy demands that any money from the public purse must be debated. Ascah was skeptical of the Yukon government and their explanation that the late federal budget meant it needed more time to finalize its own finances. He said provincial and territorial finance ministers typically meet with their federal counterparts well before the end of the fiscal year, and get a pretty good sense of how to plan for their budgets.
Anyone who watched the Premier’s speech to the Conservative think-tank in 2015 at the Manning networking conference got an early look at a line that the Yukon Party often has been repeating in the last little while. The Premier told Canada’s leading Conservatives, whom he does not want to be associated with as of late, that his goal was to make Yukon a net contributor to Canada. If Yukon were to judge this government on what progress has been made toward achieving that goal — and they should when they go the polls this October — the government would certainly get a failing grade. We still receive the vast majority of our funding from Ottawa, and we are certainly no closer to being a net contributor to Canada than we were 14 years ago. That has not changed in all of the time that the Yukon Party has been in office.
Now according to the government’s own budget documents, the Yukon continues to generate only 12 percent of its own revenue. The rest still comes from the Government of Canada and other sources. There is lots of talk about growing the private sector, but it is not matched by the numbers. When the government came to power, approximately 80 percent of expenses were paid by federal transfer; now, 88 percent of our expenses are paid with other peoples’ money. Because of our economic situation we are less able to stand on our own than we were when the Yukon Party was elected. We raised $114 million in taxes and general revenues in 2011-12. We are expected to raise only $112 million, according to the budget tabled last week. We are paying less and less of our own freight since the government came into power five year as ago.
After five years, the government is doing exactly what the Yukon Party government has always done and that is to spend federal money. The year the Premier was elected, they spent $745 million of someone else’s money — I believe somebody called it “Daddy” today. This year they are spending $925 million of someone else’s money. Now, I get it — we live in a unique place with unique challenges and federal money is key to sustaining the north. But everyone will agree that we should be able to spend it more wisely.
I am quoting here again: “If you don’t stand up for a debt-free Yukon, you don’t stand up for Yukoners.” That was the Premier last week, and it is quite a line. I think the Premier’s speech-writer should take a look at the Public Accounts, which detail the $190-some million in debt that is on the books for the Crown corporations that are part of this government. We have ministers responsible for the Crown corporations; the Crown corporations are part of this government. The lion’s share of the debt has been built up over the last 14 years of Yukon Party rule.
We do not have net debt and we haven’t had net debt since the mid-1990s, I believe. It’s pretty rich to hear the Yukon Party government criticizing any government who does create debt. This government should look in the mirror. It was only a couple of years ago that this government was forced to make a one-time payment of $27 million to the Hospital Corporation to cover some of the costs of the massive debt that corporation ran up under the Yukon Party government 1.0. If this isn’t their debt, why are they paying it down?
The speech also said — and I quote: “… other provinces and territories pay interest on that debt.” Well, Mr. Speaker, so do we. The Yukon Development Corporation, for example, paid $5 million a year to cover the costs of the $100-million bond it issued a few years ago. Now the Premier clearly just glossed over that fact in his speech.
Let’s move to another dubious claim that the budget speech makes. The top of page six of the budget speech says: “Growing our Economy”. In early March, the Yukon government had taxpayers foot the bill for a flyer that was mailed across the territory. It was a report to Yukoners that boldly stated this government is growing our economy. Now, Mr. Speaker, the Conference Board of Canada recently confirmed that our economy shrank last year and in fact shrank for three years in a row. In a few months’ time, the territory’s last operating hardrock mine will be shutting its doors. The government’s own forecast says — and I quote: “Real GDP is expected to contract for the third consecutive year in 2015.” So much for the claim that the government has successfully grown the economy.
When Yukon Party 2.0 came into office in 2011, there were three hardrock mines and, in a few months’ time, there will be none. The government has had successive billion-dollar budgets at their disposal, transfer payments from Ottawa have increased every year as well. Despite this, we have just completed our third year in a row of economic decline — the worst performance in all of Canada.
This government has delivered three years in a row of negative economic growth — the single worst economic record of any place in Canada — yet the Yukon Party has the nerve to produce a brochure, with taxpayers’ money, that claims that it’s growing the economy. The recent federal budget even singled out Whitehorse for extra help for people on EI.
Now the Yukon Party has blamed low mineral prices; it blamed YESAA and the new federal government, but it is unwilling to admit its own role in how we got to the bottom of Canada’s economic barrel. Coasting on high mineral prices, refusing to address regulatory uncertainty, and a habit of meeting First Nation governments in court are all things under this government’s control that could have made a difference with a different approach. It’s a fact that we have the worst-performing economy in Canada and we are producing less and less goods and services each year. Our GDP went down in 2013. Our GDP went down in 2014 and it’s going to go down in 2015. We are the only place in Canada to see our economy shrink three years in a row.
Now we know what happens because of these types of situations: people leave — and people are leaving. We know a growing population grows our economy, but unfortunately the Yukon was the only place in Canada whose population went down in the first quarter of 2016, according to Statistics Canada. Now it will be interesting to watch our population grow or fall, moving forward.
There was another item that I wanted to note from the Premier’s Manning speech last year. He praised our — and I quote: “proven regulatory and permitting process” when it comes to mining. We had the Premier telling a national audience of Conservatives that everything was great with our permitting system. Here at home, it is a different message entirely. In this year’s budget speech, the Premier said that we need to — and I quote: “… modernize our mining regulations to create greater certainty, regulatory streamlining and a more integrated approach to permitting…” So nationally in front of Conservatives, everything is blue sky; a year later in the budget speech, it’s a totally different message.
Our regulatory system is broken, and we have just managed to avoid a court battle because the new federal government is committing to fix the mess of the former Conservative government in Ottawa and this government. The Yukon Party government likes to present itself as a defender of mining. When it was elected, Yukon was one of the most attractive regions in the world. Since then, we have tumbled down the Fraser Institute rankings, and who does that hurt? Well, it hurts Yukon companies. Under this government, we have lost the Keno mine, the Wolverine mine and the Minto mine. We are coming out of a commodities supercycle, seen once in a generation, and we don’t have a single operating hardrock mine with a long-term future here. Now, as an election looms, the government is scrambling to develop a mineral strategy and starting to ask the Government of Canada to fund new infrastructure projects that have been drawn out, frankly, on a napkin. Speaking of the mineral development strategy, we know that it was scheduled to go to Cabinet recently and was pulled from the agenda at the last minute.
We know that one of the defining accomplishments of this government has been to ratchet up uncertainty for investors, particularly in the resource sector. That uncertainty is reflected in the latest rankings in the Fraser Institute mining report. It was also reflected in the mineral exploration in the territory, which is down by 18 percent again this year. It has dropped almost every year that Yukon Party 2.0 has been in the office. Ongoing court battles with First Nations and regulatory uncertainty have tarnished our relationships and have tarnished our reputation as being a good place to do business.
A perfect example of this is the Yukon Party’s botched attempt to amend Bill S-6, or YESAA. Regulatory uncertainty is a huge problem right now in our resource sector. It comes up when I meet with mining companies and oil and gas companies that want to do business here. It is one of the reasons our economy has shrunk for three years in a row. It is one of the reasons we continue to drop in the Fraser Institute mining rankings. It is one of the reasons exploration has dropped almost every year since the government took office. It wasn’t that long ago the Premier was singing the praise of YESAA. This is him in 2013 — and I quote: “Frameworks like YESAA enable us to harness the momentum of the past decade and turn it into sustainable economic growth.”
Mr. Speaker, three years ago, this government was praising YESAA to anyone who would listen. Now, as it tries to duck responsibilities for the role it has played in creating the only economy in Canada that has shrunk for three years in a row, there is no love for YESAA from this government.
With regard to a government blaming low mineral prices, here is a quote from Yukon Party 1.0: “… Yukon’s climb to the top of the rankings has absolutely nothing to do with world mineral prices; it has everything to do with us — this government — making the changes necessary to restore investor confidence in Yukon.”
I’ve said it before and I’ll say it again: when things are going well, the Yukon Party will take the credit; when things are going bad, it’s YESAA or it’s the world mineral prices. Last week, the new federal minister was here to start cleaning up the mess left by this government after its YESAA review.
Before the last election, this government and all Yukoners were aware of problems in our mining regulatory system. The Yukon Party platform stated it would — and I quote: “Continue to work with the Government of Canada to resolve the issues pertaining to the problems with the Yukon Environmental and Socio-Economic Assessment Act and the Yukon Waters Act.”
Despite that, the government is now only getting around to working on resolving those issues. Unlike the Premier, who now blames low mineral prices, the Fraser Institute does not even mention this — instead pointing the finger squarely at this government and its regulatory problems.
Yukoners know the government holds the Fraser Institute survey in high regard. They couldn’t stop talking about it when the Yukon was moving up in the rankings. Now that the Yukon is sliding down the rankings, the world mineral prices are all to blame; YESAA is to blame.
There is money in the budget to work on a mine licensing improvement initiative, which, according to this government, will clarify the roles of the regulatory agencies and make sure that the many levels of our regulatory system work well together. This project has been mentioned a few times in recent months but, strangely enough, there has been no information about it on the government’s website. There’s a brief outline of it on the Water Board’s website, for some reason. It is work that should have been done five years ago but, nonetheless, it is now underway. I wish the government every success on this project, and I hope it avoids the approach that it took with regard to Bill S-6 and the participation of Yukon First Nations.
I’m afraid that, when you add it all up, it’s a little too late for this government to help the mining industry. The damage in our industry is already done; the regulatory uncertainty and the antagonistic approach to First Nation relations mean that it’s too late for Yukon Party’s mining vision.
I’m going to move on to the speech delivered last week. It is clear from the blueprint announced last week that an election is definitely coming. The Yukon Party government’s plan is to try to buy Yukoners’ hearts and minds with their own money. This is the main theme of the document.
As our economy falters, the government is throwing every dollar it can into public circulation. A look at the long-term plan, however, shows a huge spike in the capital spending for this year and it drops off dramatically after the next election. What the territory needs is a consistent project-building schedule that ensures local contractors receive the lion’s share of the work and keeps those dollars in the Yukon. Mining is boom-and-bust; government spending should not be.
The only thing holding the government back from spending even more on capital in the lead-up to the election is the massive growth in operation and maintenance costs of the government itself. A look at the historical increases show that, since 2016, O&M is up $234 million, while capital spending is only up $69 million. Once again, this is the party that is continually trumpeting its private sector beliefs while the reality is something very different — larger and larger governments, more and more spending on itself. In the last 12 months, the number of private sector jobs in the Yukon dropped by 900 — so much for the private sector growth the government likes to hang its hat on. Our economy is once again being driven by how much money comes out of Ottawa and, luckily for this government, that number continues to grow every year.
The document also shows the Yukon Party government has spent down the surplus. They spent it down from $223 million to $52 million in just the last two years alone as it ramps up spending. This has become the typical cycle with this government. As an election approaches, they begin building more new projects than local contractors can handle, resulting in employment for larger firms in the south. This kind of pre-election spending leads to rushed, poorly planned and overbudget projects. Trying to cram a great deal of spending into a short window will also result in more jobs going to Outside contractors. I met with business groups last week that had been watching this approach being tried over and over again. The result is always the same, they say — Outside contractors coming up and picking up the extra work with no extra benefit going to Yukon workers or the Yukon at all. The short-term political goals of the government are the top priority, not properly managed and well-timed spending.
Mr. Speaker, the largest project in the budget — the continuing care facility for seniors in Whistle Bend — is being built by an Outside contractor; we all know that. This is a project that wasn’t even mentioned, by the way, in the Yukon Party’s platform. The second-largest project, the new hospital, is also being built by an Outside contractor. The latest contract for Faro cleanup was just awarded by this government to a company from Alberta.
Another large project, the overbudget F.H. Collins school, was just completed by an Outside contractor. Now, the Premier was busy telling Yukoners to buy local on budget day. If only this government practised what it preached. These three projects alone total over $200 million, and many of the jobs have been and will be filled by Outside residents. Most of the profits will also flow outside the territory.
Speaking of F.H. Collins and given this government’s poor record when it comes to managing these capital projects, I was not surprised to see that another $4.3 million has been added to the cost of F.H. Collins school, bringing the total to $55.3 million. In the last year, the government has been forced to return to Management Board to ask, yet again, for more money on this overbudget project. This is an example of a project that was rushed before the 2011 election. We all remember the Premier and a former Minister of Education with their golden shovels out before the last election to mark the beginning of the construction of the new school. Two and a half years later, construction had not even started and the contract for the building of the school was finally awarded to a company from Alberta. This was done on purpose, I might add, because of the way the government wrote their tender. It made it virtually impossible for a Yukon company to win the bid.
Now we know at least $6 million was spent on a now-scrapped design. This money was wasted and lost. Next to the overbudget and behind-schedule rural hospitals, this project is the poster child for what happens when government tries to ram projects through based on political, and not practical or well-reasoned, deadlines. When the dust settles, we’ll see what the total cost is for this project.
Mr. Speaker, years late and millions of dollars overbudget, F.H. Collins did get built. The same cannot be said about the new rec centre in my home community of Dawson. I was disappointed to see that the entire term of this government will pass without the Yukon Party 2011 campaign promise to build a new rec centre being fulfilled. That broken promise has left my community once bitten, twice shy when hearing claims about the Yukon Party planning to pave the runway in Dawson — not in this budget, but after the election. Dawson is too smart for that, Mr. Speaker. All we heard was the commitment to pave the Dawson Airport runway was left out of this budget. It is another broken promise.
This is one of the projects on the government’s growing IOU list as we head into this year’s election. The budget fails to deliver on promises of a new francophone school, a mental health strategy or a fibre optic line. These are all now just political promises that voters will be left making a decision on. The fibre project is especially interesting considering that the government announced that this project was ready to go last fall.
With all the Premier’s talk about the private sector, I’m sure the business community was looking for an update on the red tape review announced two budget addresses ago. Anyone looking will be disappointed because there is no mention of this in the entire budget. In fact, there hasn’t been any word of this for almost two years now. Mr. Speaker, we support this red tape review.
Just for the record, I’ll let the government know where the Yukon Liberals stand on a few other issues that we’ve heard in this reply so far. The Yukon Liberals — we support the free-entry system for mining. Yukon Liberals also support hydro development. Yukon Liberals support the use of LNG as a diesel alternative. We do not support fracking in the Yukon. The Yukon Liberals support oil and gas development and always has.
We know the NDP opposes fracking. We’re not too sure where it stands on conventional oil and gas development. We will find out very soon, I’m sure, as we all start going into platform mode.
There are several things that I wish were in this budget, and the mental health strategy is one of those examples. We will draw down on that new money that has been announced, but I must say that $1 million over a five-year period does not make a mental health strategy. Having more services for mental health outside of Whitehorse is another thing that we absolutely need — a long-term solution for recycling instead of the stop-gap measures that have been announced so far.
Another initiative that the Premier mentioned in his speech is the so-called reconciliation agreements with Yukon’s unsigned First Nations. This could be a great idea. It’s hard to tell, given how little the government has divulged to date about what is on the table. There has been very little information made public about the mandate of these talks, the budget, the goals and the objectives, how the talks are proceeding, et cetera. Perhaps in ECO debate the Premier can shed some light on these decisions.
The major item in this budget area of Highways and Public Works is Shakwak funding, or lack thereof. The budget before us contains $12 million in funding for part of the Shakwak highway project. That’s a far cry from the $40 million spent in 2006 and even the $25 million spent in 2012.
In recent years, this funding from the United States government for this project has dropped substantially. It gets worse. The funding for the project for future years was cut off by the United States in 2012. Since then, the government has been lobbying unsuccessfully to have this fund reinstated and has almost spent down what monies had been banked over the years. This reserve is now almost empty.
The Premier confirmed in his budget speech last year that the future of this money remains — and I quote: “in limbo”. The Premier himself travelled to Washington to make his case on this funding and said — and I quote: “We will know in two or three months whether or not this work has been successful.” Two years later and there has been no news at all. The Yukon Party’s failure to keep an eye on the ball means that this valuable source of revenue has all but dried up. The lobbying efforts since 2012 have produced no results.
I want to move on now to health care and the government’s plan for a 300-bed Whistle Bend institution for our seniors, but given this government’s poor record when it comes to managing capital projects, I am alarmed to see $67 million set aside to begin construction of this facility. The first phase is for 150 beds, but the building is being constructed so it can expand to 300 beds. With almost no consultation, the Government of Yukon has decided to proceed with this facility in Whitehorse. It will centralize continuing care in a one-size-fits-all kind of way.
At the same time, the government just completed the replacement of the McDonald Lodge in Dawson. There were plans to make this a 20-bed facility. Those have been scaled back to only 15 beds. People I have spoken to in my community and other rural centres are interested in staying in their communities. They don’t want to move to a one-size-fits-all facility hundreds of miles away in Whitehorse.
The number 300 — where did that number come from? Not just Whitehorse. That number is from all of the Yukon. We’re not sending our seniors and elders to a one-size-fits-all institution. They are asking why this government is pursuing this centralized approach, instead of focusing on keeping our seniors in their home communities. In my view, the government missed an opportunity to have more beds in rural Yukon. It did so because it seemed to think the solution was one-size-fits-all in Whitehorse.
We can all agree that the demand for continuing care is growing. The Liberal caucus, however, disagrees fundamentally with this government on how to manage that growth. I would like to see the demand in rural Yukon being met in rural Yukon. The government’s approach is to funnel all of our seniors into Whitehorse. One of the planning studies the government is relying on, as it proceeds with the continuing care decision, says that the only new beds built in the future will all be in Whitehorse. We have already heard the concerns of First Nation elders who will not be comfortable in such a large institution. The lack of consultation on this facility speaks volumes about how little this government has learned in its office in five years.
I’m going to change over to Education here. Last year’s budget speech devoted four entire pages to announcing yet another new vision for education. The entire final section of the budget outlined yet another attempt of this government to redesign our education system. It is the third try in a decade, by my count, and it follows the New Horizons project that was just implemented in 2014.
Yukoners, I’m sure, will follow with interest and plenty of scepticism as yet another master plan for education looms. This year’s budget speech barely mentions the new plan. It makes no mention at all of the complete K to 12 curriculum that was promised just a year ago.
It’s hard to put a dollar figure on the relationship of the Yukon government with First Nation governments, although it seems to be the most important measurement this government relies on. We hear regularly of the money that this government says it is giving to First Nations and how we should understand that this means that they are getting along just fine. It is hard to measure distrust in relations with First Nations, but I don’t think anybody will disagree that this government’s willingness and ability to walk side by side with First Nations has been nothing short of a failure. The record is marked by battlegrounds and broken relationships. The Peel case, the Ross River case, Bill S-6 — Mr. Speaker, we need to do better. I am pleased to see actually that the Ross River waste-water treatment facility and the expansion of our water-monitoring network are both included in the estimates before us. Ross River housing is a whole other issue.
I only have 40 minutes for this response, so there are many items I won’t be able to get into, including the government’s position on fracking, the new dam project, the proposed Keno power line, land use planning and the future of the Dawson waste-water treatment facility. We will get to that as the days tick on here in the spring Legislature.
Over the past decade, the politics and policies of successive Yukon Party governments have disrespected First Nation governments and they can now add municipal and federal governments into that mix. They have put their economic eggs into one basket and now, as mineral prices drop, our economy is slowing down. With our resources, our natural beauty and our bright, hard-working citizens, we all have the potential to be a model of success for the entire country. I believe that the potential is not being harnessed, and I also believe that we need a new form of leadership. We need leadership that empowers First Nation governments and consults openly and fairly. We need leadership that listens to our public servants instead of muting them and interfering with their decisions. We need leadership that enables our private sector instead of entangling them in red tape. We need leadership that brings about a better type of politics in the Yukon instead of this us-versus-them approach. The polarizing divides us and ignores our common bonds.
In closing, I want to thank the public sector employees for all the work that they do in preparing this budget, but on behalf of Yukoners, I would like to challenge the Yukon Party government to do better. Yukoners deserve better planning. They work too hard for their money to be wasted, and Yukoners deserve better listening. They are too important to have to fight to be heard.
Thank you, Mr. Speaker.
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