Finances

Vue d'ensemble du ministère

1998-1999 Budget Address


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Yukon Crest1998-1999
BUDGET ADDRESS

presented by

Government Leader
HONOURABLE PIERS McDONALD
                 Minister of Finance

                at the First Session of the
             Twenty-ninth Legislative Assembly
            WHITEHORSE, YUKON · FEBRUARY 23, 1998



Introduction

Mr. Speaker, Honourable Members, this afternoon it is my honour to present our government's budget for capital spending and for operations and maintenance during the 1998-1999 fiscal year.

This is a budget about jobs, about balancing priorities, and about a vision for the future.

It demonstrates that thoughtful choices made now can provide substantial benefits for Yukon people and their communities, both today and tomorrow.

This budget allows us to create jobs now through community projects, school construction, road building and land development. And it helps establish a climate for job creation in the private sector.

It also sets a direction for the future, as we approach the end of the century and the beginning of a new millennium.

This is a pay-as-you-go budget that maintains an accumulated surplus of approximately $15 million. Our government believes it would be unwise to draw down our reserves below that level.

Our government is determined not to leave a legacy of debt to our children and grandchildren. Our legacy should be one of solid foundations for the future.

When we were sworn into office 16 months ago, we promised to protect public services, particularly in the vital areas of health and education.

We are doing this. And we're doing it without raising taxes or imposing health care premiums. Given the difficult choices we face, this has not been an easy task.

Mr. Speaker, the recent shutdown of the Anvil Range mine in Faro leaves the Yukon once again confronting the boom-and-bust risks involved in an economy that is subject to market forces over which we have little direct control.

Our government is acting in a responsible manner to address the current situation, and is taking thoughtful measures to broaden the territory's economic base in the long term.

In keeping with the need to look forward and plan for balanced growth, we are increasing our commitments to economic diversification, protected areas, health care, education, training, programs for young people and measures to combat poverty.

Yukon people want a balance between economic programs and social programs, just as they want a balance between resource development and environmental protection.

They want government to provide leadership and to work with them in respectful partnerships.

Mr. Speaker, I am pleased to present a budget that meets these expectations.

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Living Within Our Means

The budget I am tabling today shows projected income for the coming fiscal year of $437 million dollars. This is a decrease of over $10 million from last year's main estimates.

While this is not a crisis, it does present a serious challenge in terms of maintaining services and creating jobs, yet still living within our means.

This decrease in income results from reduced transfer payments for social programs, combined with the closure of the Faro mine.

A further constraint is the lack of revenue recoveries from major construction projects such as the Shakwak Highway reconstruction that provided a stimulus to the Yukon's economy in previous years.

Along with the Minister of Community and Transportation Services, I have actively sought support from the Governor of Alaska and others for the completion of the Shakwak Highway project.

While we look forward to a positive decision, the matter is currently tied up in the complex budgeting process of the United States Congress. As a result, we are not planning to receive any new revenue from that project at this time.

Offsetting the decrease in the transfer from Canada resulting from the mine closure is an $8 million increase under formula financing, which we expect to receive as a result of growth in the Yukon's population.

This is expected to show up in official census figures to be released later this year.

Half of this sum is likely to be on-going, while half is a one-time 'catch-up' payment, which we have shown separately in our budget documents.

These figures should not be considered definitive, and the final census adjustment could result in increased revenue to be addressed in a Supplementary Estimate.

The 1998-1999 estimates are also based on an assumption that the Anvil Range mine in Faro will not be in operation during the coming fiscal year.

Although our government still believes in the potential of the Faro mine property, the collapse of Asian markets and the decline in base metal prices suggest that it would not be
prudent to budget for a resumption of mining activity at the Faro mine.

At the same time, we are working with the mine's owners and investors, with labour and the community.

We are willing to explore reasonable avenues to get an economically-viable mine back into operation as quickly as possible.

Our government remains confident about the long-term potential of mining in the Yukon.

We will provide a supportive climate for responsible mineral development, as we have done all along. Mining companies continue to say they consider the Yukon a worthwhile place to invest and operate, once world metal prices and the climate for raising exploration capital improve.

Mr. Speaker, on the expenditure side, we are seeking authority for total spending of just over $441 million, in addition to $4.5 million set aside to meet contingencies.

This is $11 million less than last year's main estimates. It projects an operating deficit for this fiscal year of $8.7 million.

Even before lapses from the current year are taken into account, this will leave an accumulated surplus of $15 million at the end of March, 1999.

This is consistent with the pattern of sustainable spending outlined in last year's Budget Address. It also reinforces our government's commitment to thoughtful, responsible stewardship of public funds.

In the estimates for operations and maintenance, this budget seeks authority for total spending of $370.4 million. This allows us to maintain services to Yukon people.

As members realize, last year we faced a sizable increase in health and social services costs. This called for a careful rebalancing of priorities by all departments.

The increase in this year's O and M budget over last year's main estimates reflects decisions already made to support priority areas.

Mr. Speaker, we are also seeking authority for $70.6 million in capital spending, of which $22 million is recoverable.

While it should be acknowledged that this is the lowest level of capital expenditure in some time, it reflects the reality of preserving health and education services with reduced overall income.

With the federal government now projecting balanced budgets and even surpluses, the Yukon will keep up its efforts with other jurisdictions to press Ottawa to abandon policies that are eroding Canada's social safety net.

At the same time, we will continue to seek ways to deliver important public services in an effective manner, ensuring that our programs provide the maximum benefit to Yukon people and their communities.

I should also point out that this year, once again, capital expenditures comprise a much higher percentage of our total budget than they do in any other province or territory.

Our capital spending will be done in a thoughtful, balanced way to give Yukon taxpayers maximum value for their money.

For example, we have once again cut spending on furniture, equipment and systems for internal government operations. A 15.5 per cent reduction in these items this year puts more capital dollars to work in higher priority areas.

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Planning and Priorities

Mr. Speaker, this budget has had the benefit of considerable input from people in every community in the Yukon, through a series of public consultations this past fall and winter.

This process is consistent with our pledge to listen to Yukon people and involve them directly in decisions that affect their lives.

It is also consistent with our commitment to lengthen our planning framework to ensure a measure of stability and predictability in government spending patterns. One clear example on the capital side is our planning for school construction.

SCHOOL CONSTRUCTION

In this fiscal year, $5.2 million will be spent to build the new Chief Zzeh Gittlit School in Old Crow. This is in addition to almost $650,000 currently being spent for a winter road to carry in building supplies and furnishings.

Our government also intends to build a new school in Ross River in the summer of 1999, and a new school in Mayo in the year 2000.

By setting these construction targets, our government is creating jobs now, and helping to provide future stability for those who work in the building industry.

As part of its capital budget of $12.2 million, the Department of Education will spend over $1 million this year on other school improvements. This includes $450,000 to alter various school facilities, $300,000 to upgrade F.H. Collins Secondary School, and $250,000 for renovations to Christ the King Elementary School.

ROAD IMPROVEMENTS

Mr. Speaker, our capital budget will also create jobs this year through major investments to improve Yukon roads.

The Department of Community and Transportation Services will spend $3.7 million on upgrading the Alaska Highway. An additional $1.5 million in recoverable spending is projected for the Shakwak portion of the highway.

A further $2 million will go toward reconstruction and surfacing of the Campbell Highway.

Much of this work will take place on the South Campbell Highway between Ross River and Watson Lake. Besides providing jobs and other direct benefits to local people, this will improve safety and travel conditions for business, industrial, recreational and tourist travellers in east-central Yukon.

A total of $763,000 is set aside to complete work on the section of the Top of the World Highway between Dawson City and the U.S. border.

The Government of Alaska has announced that it will begin work on its portion of the highway in the year 2001. Once the upgrading is completed, this spectacular route will be even more attractive to visitors to the Yukon.

Other items, including major bridge repainting, bring total capital spending on the territory's principal roads this year to almost $9 million.

I am also very pleased to announce that we are making a special allotment of $500,000 to improve secondary roads throughout the territory.

This will create work for many small contractors and workers in rural Yukon. It will also raise the standards of local roads for the benefit of residents and visitors alike.

Capital expenditures on community infrastructure include $360,000 for a swimming pool in Ross River and $150,000 for sewage treatment facilities in Destruction Bay.

COMMUNITY DEVELOPMENT FUND

Mr. Speaker, one of the most significant steps our government took last year in putting Yukon people to work and strengthening our communities was to establish the new Community Development Fund.

People in one community after another have told us the CDF is a positive force in creating employment and helping them meet other community goals.

Some of the smaller projects already approved in Tiers 1 and 2 this year include improved ski trails for the Vuntut Gwitchin First Nation, improvements to the Yukon Transportation Museum, and interior renovations and a new roof for the Dawson City Music Festival office.

The CDF also funded a wheelchair ramp and accessible washroom for the Champagne and Aishihik First Nations, as well as renovations to the Emergency Measures Organization hall in Carcross and the White River First Nation's administration complex.

Major projects under Tier 3 of the program will be announced in the near future.

These are just a few examples of the CDF providing jobs and training opportunities year-round, and helping Yukon people improve their communities with projects they identify as community priorities.

In that light, and in order to do even more to create jobs, I am pleased to announce a 75-per cent increase in the Community Development Fund for 1998-1999. This will bring it to a total of $3.5 million.

The Department of Economic Development is also reviewing its procedures to streamline the processing of applications, so that money can be disbursed more quickly to create jobs and meet community needs in a more timely manner.

LAND DEVELOPMENT

Another area of capital spending that will help put Yukon people to work this year is land development.

Our government has often spoken about the need to provide Yukon people with a range of options in terms of residential land, to reflect both income levels and lifestyle choices. This budget responds to that need in a number of ways.

A total of $580,000 has been designated in the Community and Transportation Services budget to develop a greater supply of country residential lots in Whitehorse.

There is a further $390,000 for country residential lots in Carcross, Dawson City, Haines Junction and Ross River.

There is also a major investment of $3 million for urban residential lots in Phase II of the Copper Ridge subdivision in Whitehorse.

Today I am announcing a major step forward in the context of our Mobile Home Strategy.

It is one result of ongoing discussions among mobile home owners and residents, the City of Whitehorse and the Yukon Housing Corporation.

Security of land tenure is one of the prime concerns of mobile home dwellers. This is particularly important for people in older units that do not meet the standards for existing mobile home subdivisions within the City of Whitehorse.

The Yukon Housing Corporation recently concluded preliminary plans for a 50-lot mobile home development in the Range Road area.

The corporation is undertaking this $2 million condominium project as part of its $13.9 million overall capital budget. Construction is scheduled for this summer.

The result will be a safe, well-landscaped residential area with wide roads and attractive recreational areas.

This new supply of strata title lots will greatly increase the options for affordable home ownership available to people who want to relocate and upgrade their mobile home units.

In addition to this project, Community and Transportation Services will spend $600,000 this year to develop affordable mobile home lots in the Whitehorse area.

On a final note about new housing initiatives, we are spending $294,000 this year to help home owners on the Whitehorse waterfront to relocate.

This is necessary for future waterfront development, and our government wants to ensure that the relocation respects the needs and dignity of the people involved.

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Foundations for the Future

Mr. Speaker, my remarks so far have concentrated primarily on how our government's spending priorities for this year will create jobs and economic benefits in the short term.

For the remainder of my remarks, I would like to turn to the long-term impacts of the decisions we are making now.

These decisions reflect our commitment to providing an economic vision, a social vision and an environmental vision for the territory as we approach the third millennium.

With respect to the economy, the shutdown of the Faro mine once again reminds us how important it is to counteract the boom-and-bust cycles that have traditionally characterized the Yukon's economy.

We need to foster and enhance our traditional mineral resource sector, but we also need to take creative steps to diversify our economy.

In areas such as forestry, oil and gas development, and agriculture, for example, we must seek opportunities to add local value to our resources in the form of jobs and other economic spinoffs.

DIVERSIFYING THE ECONOMY

Broadening the Yukon's economic base is not something that can be accomplished overnight, but our government is working hard to prepare the groundwork for a more stable, balanced and diversified economy.

In last year's Budget Speech, we promised to expand the role of the Yukon Council on the Economy and the Environment.

The recommendations the council brings forward from Yukon people should suggest practical ways to strengthen and diversify the economy.

During the past year, the Department of Economic Development has been implementing our government's Trade and Investment Diversification Strategy.

This has involved considerable cooperation with the business community and Yukon First Nations.

Our efforts in this area reflect an awareness that we cannot continue to rely so heavily on mining and government spending as the principal means of maintaining our standard of living.

We need to look forward and outward to pursue ways to broaden our local economy.

Today I am announcing a substantial increase of $500,000 in the budget for the Trade and Investment Diversification Strategy.

Trade

One goal of this strategy is to help local businesses develop the capacity to sell their goods and services outside the Yukon. We believe this will make Yukon companies stronger financially and create more Yukon jobs.

An example of how we are doing this is our participation in trade missions. The business people who took part in this year's Team Canada trade mission to Latin America have spoken highly of the long-term opportunities such activities present.

The Yukon's involvement in future trade missions should expand to include representatives of labour and First Nations, as well as more local business people.

At the same time, we believe that economic benefits here must not come at the expense of decent labour, health, safety and environmental standards in other parts of the world.

During last month's Team Canada mission we spoke out in favour of fairer trade, and we will continue to do so.

In the debate on the Multilateral Agreement on Investment last fall, our caucus also took a stand against any international arrangements that would limit our ability to enact measures to protect our people and our environment.

The Trade and Investment Diversification Strategy also involves taking advantage of investment and trade opportunities closer to home.

Our government will continue to be well-represented at industry conferences and other activities, and to pursue new partnerships with our neighbours in Alaska, the provinces and the Northwest Territories.

We recognize that achieving success in international and interprovincial trade takes time. Our government is committed to the long haul.

Investment

Another goal of the Trade and Investment Diversification strategy is to identify ways that government can help Yukon entrepreneurs gain access to the capital they need to establish, expand, or diversify their businesses.

Small business owners, especially those in rural communities, or those who operate from their homes, often find it difficult to secure even modest financial support.

During this sitting, the Minister of Economic Development will announce steps his department is taking to follow up on recommendations from the Access to Capital Forum held in Whitehorse last fall.

His officials are also working to set up an Immigrant Investor Fund, to attract investment from outside the territory that is appropriate to the goals and values of Yukon people and will help create jobs here.

One potential area for outside investment is the development of the territory's petroleum resources under the new Yukon Oil and Gas Act.

The department will be launching a major marketing campaign this spring to raise awareness about the Act and the Yukon's oil and gas potential.

Responsible development of these resources could go a long way to create employment, reduce energy costs and generate revenue for health, education and other public services in the Yukon.

Another area for potential investment is forestry. The Yukon Forest Commission has held extensive consultations on a made-in-Yukon forest policy to prepare for the transfer of responsibility for lands and resources from the federal government to Yukon control.

Responsible, sustainable management of the Yukon's forest resources could help add value to the economy by creating jobs in local manufacturing.

The steps we are taking now to promote sustainable economic development are part of a multi-year approach to broaden the Yukon's economic base and provide security for the future.

Tourism

The current uncertainty about the mining industry and metal markets serves to highlight the importance of tourism as another major component of the Yukon's private-sector economic activity.

Recent efforts by the Department of Tourism have resulted in significant developments to increase the number of visitors to the Yukon. One example is the deal signed last year with Air Transat, which will see regular direct flights from Frankfurt, Germany to Whitehorse starting this summer.

This year's capital budget for Community and Transportation Services includes $70,000 to study options for runway expansion at the Whitehorse Airport to accommodate larger aircraft.

I would also like to acknowledge the work done by the people of Watson Lake to attract winter visitors from Taiwan. This is the kind of initiative that other communities could pursue, to help raise awareness of the Yukon as a year-round tourist destination.

This year the Department of Tourism will spend an additional $200,000 on marketing initiatives. Next month, the Minister of Tourism will travel to Europe to continue his efforts to attract visitors to the Yukon.

As Members know, Mr. Speaker, this is the year Yukon people look back and celebrate our first 100 years of membership in the Canadian family.

It also marks the centenary of the famous Klondike Gold Rush that brought our territory to the world's attention.

I am pleased to announce that this budget provides funding of $150,000 this year for community activities to celebrate the centennials.

As we play host to people from every corner of the globe, I am sure the pride and enthusiasm we feel as Yukoners will rub off on all of them.

While we celebrate the past 100 years, it is equally important to set our sights on the next 100 years.

The Speech from the Throne in December, 1996 spoke of the need to present the territory's natural beauty and cultural heritage to the world in a positive, respectful and sustainable way.

We also made a commitment at that time to work with industry, communities and First Nations to develop a tourism plan for the future. This budget sets aside $50,000 for consultations on a long-term Tourism Strategy.

As Members are aware, a draft Wilderness Tourism Licensing Act is now being reviewed by interested groups. Our government expects adventure tourism that respects our majestic landscape and pristine environment to play a positive role in our future economic development.

The Protected Areas Strategy, which is one of our government's major environmental initiatives, can also make a significant contribution to diversifying the economy.

By identifying and setting aside representative areas of the territory's 23 distinct ecoregions, the Protected Areas Strategy will provide an additional incentive for visitors from around the world to experience and learn from the Yukon's unique outdoor opportunities.

Training

Mr. Speaker, as we look ahead to a more balanced economy with new jobs and economic opportunities, it is essential to take steps now so that Yukon people will be in a position to benefit from those opportunities.

Training Yukon workers for the specific needs of a changing labour market is a high priority for our government.

During our pre-budget consultations, many people stressed the importance of training. I recall one man in Carmacks emphatically stating that what his community needs most is "training, training and more training."

Last year's capital budget for the Department of Education set aside $1 million for training trust funds, including Youth Works and mine industry training.

This year we are increasing that commitment by 50 per cent with an allocation for training trust funds of $1.5 million.

Of that amount, $200,000 is being earmarked to design and deliver training programs for jobs in the forest industry.

The Minister of Education will provide details about other trust funds, such as training to support non-governmental organizations, once negotiations are concluded.

The increased funding will make it possible to design training programs that address the particular needs and goals of Yukon workers and employers.

The Yukon government recently concluded a labour force development agreement with the federal government that outlines how our two governments will share responsibility for training.

In order to ensure that these efforts meet local needs now and in the future, Advanced Education has been revising the Yukon Training Strategy. Final consultations will take place this spring.

Yukon Hire

When our government took office just over a year ago, we made a commitment to increase opportunities for Yukon workers and businesses. We said we would take steps to ensure that local people would be the first to benefit from publicly-funded projects.

The Yukon Hire Commission did an excellent job of listening to the views of hundreds of Yukon people about how government spending could have a more positive impact in the Yukon.

The commission concluded its work by making many practical suggestions about how to achieve the goal of putting public funds to work in the community.

The Department of Government Services has been working with other departments to develop a coordinated response to the commission's recommendations.

In the next few weeks, the Minister will outline that implementation plan in the House.

This is another example of foundations being built now to benefit Yukon workers and businesses for years to come.

ENERGY ISSUES

Mr. Speaker, another economic planning issue I want to highlight is what our government is doing now to stabilize electricity rates in future for Yukon residents and businesses.

The shutdown of the Faro mine has increased public concern about electricity costs.

As Members are aware, whenever the Yukon Energy Corporation's largest customer goes off the system, the result has traditionally been a substantial rate increase for other ratepayers.

This is because the fixed costs, or mortgage, associated with the Yukon's electricity assets must be paid whether the mine is operating or not.

Our government is taking direct measures to reduce the potential rate shock to other ratepayers from the recent mine shutdown, and to stabilize electricity rates in future. Those measures will be announced soon.

Mr. Speaker, as Members are aware, the Cabinet Commission on Energy has been doing extensive work with stakeholders and experts in the energy field.

Starting next month, it will begin holding public consultations on a broad range of energy-related issues.

One focus of these consultations will be a set of options for an improved rate relief program that would come into effect next fall.

These options include a targeted rate relief program to help people who need it the most.

Another option the commission will present for discussion is a seasonal rate relief program to help residential consumers during the coldest and darkest time of year.

This year the publicly-owned Yukon Energy Corporation took over direct management of the territory's electricity assets. This gives Yukon people more control of their energy system.

The YEC board of directors is examining ways to reduce expenses while improving services and infrastructure.

In the meantime, our government is looking at various energy supply options that would provide reliable, lower-cost power and reduce our dependence on diesel fuel.

One option we are examining is the feasibility of interconnecting the Yukon's electrical grid with our nearest neighbours.

This would be a major long-term project that could promote sustainable development for the future by utilizing surplus hydro from British Columbia, for example.

This budget sets aside $100,000 as the Yukon's contribution toward a feasibility study. Both B.C. Hydro and the Government of British Columbia have expressed interest in pursuing this initiative with us.

SPECIAL PROJECTS

Mr. Speaker, as we turn the corner into the new millennium, it is important to consider how we can best use our limited resources to meet the major capital needs of Yukon communities in the future.

One way is to incur long-term debt, and transfer the burden to coming generations. As I said earlier, our government is opposed to this approach.

A more creative solution is to set aside money now in special savings accounts that can accumulate funds for major projects that would be too expensive to undertake in any one budget year.

I am pleased to announce the creation of two such savings accounts in this year's capital budget, as ongoing commitments for several years to come.

The first is a Canada Winter Games building fund. This would finance the territorial government's contribution toward the City of Whitehorse building requirements to host this exciting national event in the year 2007.

A total of $1 million is being set aside this year. This building fund will receive the same amount for each of the following six years.

With accrued interest, the total contribution from the Yukon government will be approximately $8.2 million. This will help provide new recreational facilities to welcome Canada's top athletes to our capital city, and create a lasting legacy for the enjoyment of Yukon people.

The second special savings account we are introducing is a nine-year commitment of $1 million a year for a major capital project in Dawson City.

On behalf of the community, the Mayor has identified a recreation centre as Dawson's top capital priority.

We also recognize that the town faces a significant capital expenditure for a new sewage treatment facility, which we are prepared to help finance.

Should the water licensing authorities decide that a sewage-treatment facility is not required by the year 2005, our government is prepared to use the special savings account for a recreation centre.

Setting our contribution aside in advance is a concrete example of planning now to meet the future needs of Yukon communities.

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A Social Agenda for Yukon People

Mr. Speaker, I would like to turn now to what our government is doing to provide social programs for Yukon people in the present, and the foundations we are building for the future.

In the first year of our mandate, we undertook a major exercise in long-term planning, involving all departments, crown corporations and agencies.

The result was an Action Agenda for the years 1997 to 2000, to meet the priorities that Yukon people want their government to address.

That agenda will be reviewed and updated regularly, to make sure it reflects the changing needs and choices of a dynamic society.

One of the five principal commitments at the heart of that agenda is to foster healthy communities.

As a demonstration of that commitment, this budget shows that spending on Health and Social Services, Education and Justice continues to account for more than half of our Operations and Maintenance spending.

Of the total O and M budget of $370 million, these three areas alone account for almost $220 million, with an additional $16 million in the capital budget.



At a time when the federal government has reduced its support in these areas, and many Canadian jurisdictions have closed hospitals and schools, we are maintaining levels of spending for these important public services.

Once again, I would like to stress that we are doing this without raising taxes or imposing health care premiums.

During my recent pre-budget consultations across the territory, some people suggested a health care premium, especially since rising health and social service costs continue to pose a major challenge.

However, our government believes universal access to high quality, publicly-funded health care should be a fundamental right for all Canadians. We will continue to resist imposing a medicare fee on Yukon families.

We are also making good on our promise to provide stable funding to non-governmental organizations for the valuable services they provide to people in our communities.

HEALTH SERVICES

This budget increases our commitment to the territory's largest health-care facility, the Whitehorse General Hospital, by $530,000. This is over and above last year's increase to the hospital's base budget of almost $1 million.

Last year the Yukon took over responsibility for community and public health programs.

This year our spending on community health programs and community nursing will total almost $14 million.

Mr. Speaker, we also recognize that hospitals and nursing stations are only part of the picture when it comes to delivering health care services. Aftercare in a patient's own home is often required or preferred.

With this in mind, I am happy to report that we are making a major investment in home care throughout the territory.

This year we will spend an additional $305,000 on this important service. This will allow many patients to leave hospital sooner and complete their recuperation in the comfort of their own homes.

Another important initiative is an additional $128,000 a year for a two-year pilot program for community-based mental health care. This is part of an overall commitment to mental health services of approximately $1.5 million.

This new funding is designed to help avoid unnecessary hospital admissions for mental health clients, and to ease the transition from hospital to community.

It will also help provide mental health clients with autonomy and independence in the community.

Our government's goal is to develop less expensive, less intrusive ways to provide support for Yukon people who are experiencing difficulties.

The Department of Health and Social Services is also changing the way it delivers drug and alcohol treatment services. The heart of this new approach is a 14-day medical detoxification period, followed by a 12-day therapy program and an additional 14-day community integration program. This will be part of a two-year process involving other services to prevent relapses.

The new program will allow greater flexibility in service delivery. It will also make room for some support to First Nations and other Yukon communities to deliver culturally appropriate services at the community level.

YOUTH STRATEGY

Mr. Speaker, a core element of any vision for the Yukon's future is the way we prepare our young people to meet the challenges of life and work.

The cornerstone of our commitment to Yukon youth is maintaining a high standard of public education.

This budget upholds our commitment to public education with a total O & M expenditure of $81 million and capital spending of $12.2 million.

But educational spending is only one aspect of building a solid foundation for young people. Yukon people frequently raise the social and recreational needs of young people as a top priority for their communities.

From Carcross to Old Crow, community members have said their youth need recreational activities and other programs to provide positive outlets for their energies and to help prepare them for adulthood.

This is a general concern for all young people, not just those who have been in trouble with the law, or who are at risk.

We recognize that the vast majority of Yukon kids respect the law and the rights of others. We also recognize that all young people need opportunities to take part in worthwhile activities.

Our government's Youth Strategy includes a variety of elements, such as the Youth Entrepreneurship Centre and the Youth Investment Fund.

Another component of our Youth Strategy is the major investment we made in young people last year with the creation of Youth Works. Its purpose was to involve young people themselves in making key decisions about programs that would help prepare them for work and for life.

Youth Works is up and running under the Societies Act as the Association for Community Youth Initiatives, directed by a Board consisting of six young people and four adults from across the territory.

We are continuing our support for Youth Works this year.

Last summer, our government initiated highly successful recreation leadership programs with young people in Ross River, Upper Liard and the Kwanlin Dun First Nation.

Besides providing summer job opportunities, these programs offered constructive activities that allowed young people to develop their personal skills.

This summer the youth recreation leadership program will be expanded to at least five communities across the territory, and similar programs could be developed for other times of the year.

Mr. Speaker, today I am announcing a further contribution of $200,000 toward programming for young people.

This funding will allow us to develop flexible, creative programs that will engage youth of all ages in enjoyable, meaningful activities in their own communities.

The Minister of Education will provide details about some of these program options during this legislative sitting.

Mr. Speaker, First Ministers across Canada have identified high unemployment among young people aged 15 to 19 as a priority concern.

Along with other jurisdictions, the Yukon will explore further youth employment initiatives to create work and training opportunities for young people.

An important focus of these initiatives is addressing social and cultural barriers that prevent young people from participating fully in the work force. The needs of aboriginal youth and youth at risk will also be addressed with practical help in the form of work transition and mentorship programs, for example.

CRIME AND JUSTICE

Mr. Speaker, another hallmark of how we foster healthy communities now and in the future can be seen in how we respond to public safety concerns.

Our government is undertaking a number of joint initiatives through the departments of Health and Social Services, Education and Justice, as well as the Women's Directorate, to reduce violence in Yukon schools, homes and places of work.

This budget shows our continuing commitment to work with the RCMP, parent groups, communities, social agencies and young people to reduce crime in our communities, to attack the root causes of crime, and to reduce the impact of crime on victims.

Some practical examples include family group conferencing programs, the work of the RCMP with high-risk youth and the Community on Patrol pilot project that is part of a growing emphasis on community-based policing.

We have also created a territorial crime prevention coordinator's position and seconded a victim services worker to the RCMP to assist victims of property crime.

The Justice department's O & M budget of $29.8 million demonstrates ongoing support for community-based justice initiatives and continuing partnerships with Yukon people to make our justice system more responsive to community needs and wishes.

Our goal is a justice system that promotes a strong sense of personal and collective responsibility, enhances public safety in our communities, respects the rights and needs of victims, and is effective at restoring offenders to productive membership in society.

ANTI-POVERTY STRATEGY

Mr. Speaker, our government's vision for the Yukon is of a society where barriers to full participation are lowered.

It is shameful that in a society as privileged as Canada many people, including more than three million children, continue to live in conditions of poverty.

A recent report of the National Anti-Poverty Organization points out that the richest 20 per cent of Canadians saw their average incomes increase by $2,000 between 1995 and 1996.

At the same time, the poorest 20 per cent saw their incomes actually fall by $500.

That report also pointed out that federal cash transfers for social programs fell by more than 40 per cent in real per capita terms between 1993 and 1997.

In an economy like the Yukon's, with many jobs being seasonal in nature, the recent changes in Employment Insurance have also had a negative impact on income.

In this territory, as elsewhere, many people who struggle daily to make ends meet live in single-income families, or could be described as working poor.

Our government is determined to address the needs of low-income Yukon people by continuing our efforts to create jobs and economic opportunities, and by expanding our Anti-Poverty Strategy.

We recognize, for example, that many Yukon people work at the minimum wage. This year the territory's minimum wage will increase in two stages, to make it the highest in Canada.

Recently we took measures to replace the services formerly provided by Maryhouse and the St. Joseph's Shelter, by establishing a transient shelter for men and women in downtown Whitehorse. The new shelter will open April 1.

At the beginning of the current school year, we implemented a school nutrition program. This has been very successful in many schools and will continue this year.

Last month we introduced a pilot project to provide free optical care and prescription drugs for children of families with low incomes.

I am pleased to advise Members that we have set aside nearly $300,000 to implement this program fully in the coming year.

As Members know, the new National Child Benefit comes into effect this year.

As savings from that program become available, we expect to invest an additional $200,000 to augment the Yukon's Anti-Poverty Strategy.

The Minister of Health and Social Services will be making a statement about this increased support for low-income families during this sitting.

Our planning for the future must also take into account the fact that the Yukon's population consists of a growing number of older people. This trend will continue as the Baby Boom generation approaches retirement age.

The Department of Health and Social Services will begin work this year to develop a long-term Seniors Strategy for the territory.

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Environmental Action for the Future

Mr. Speaker, I have referred to this budget as an instrument that provides balance and vision as we build foundations for the Yukon's future.

Nowhere is it more important to take a long view than in protecting our natural environment.

Indeed, respect for our environment is one of the principal commitments on which we are basing all our long-term strategic planning.

Early in our mandate, we announced that the Aishihik Caribou Recovery program would be concluded by an independent scientific evaluation of the results.

Renewable Resources will spend $134,000 this year for the final field work on that program.

Solid waste management is a major component of environmental protection. This year alone, the Department of Community and Transportation Services will spend $290,000 on dump facilities around the territory.

At the same time, Renewable Resources has been consulting Yukon people on regulations to encourage environmentally-responsible solid waste disposal.

We are also seeking public comments on draft air emission regulations.

Our government's emphasis on low-impact wilderness adventure tourism and preservation of heritage resources also demonstrates awareness of the need to protect our priceless environmental and cultural inheritance.

Mr. Speaker, the Tombstone area along the Dempster Highway is without doubt one of the most scenic wilderness areas in the world. It has the potential to be a major recreational attraction for Yukon residents and visitors.

Our government moved decisively to ensure interim protection of that area from development while boundaries for an expanded Tombstone Park are determined.

Future consultations on park management and final boundaries will include input from many individuals and groups representing a broad spectrum of interests. This will help us find an appropriate balance between preservation and development.

The expansion of Tombstone Park is a major element in the Yukon Protected Areas Strategy.

This is one of our government's most important initiatives. Along with the designation of Special Management Areas under the Yukon First Nations Umbrella Final Agreement, it is a key element of the environmental legacy we will leave for generations to come.

Protecting representative areas of our 23 distinct ecoregions will bring many economic benefits to the territory.

Public consultations on the draft Protected Areas Strategy will continue this spring.

I am pleased to announce that the O & M budget for Renewable Resources this year includes an additional $500,000 for this important initiative.

Mr. Speaker, decisions about protecting wilderness areas must be based on solid scientific data.

We also recognize the important contribution of resource development to the Yukon's economy.

To that end, this budget provides $400,000 for land and mineral assessments associated with the identification of protected spaces and special management areas.

This commitment is in addition to our ongoing support for the Yukon Geoscience Program.

We intend to engage a variety of partners in conducting these assessments, to help make the best decisions regarding future use of our wilderness resources.

These partners include federal, First Nation and municipal governments, conservation organizations and development interests such as the Yukon mining community.

Mr. Speaker, the work of the Cabinet Commission on the Development Assessment Process provides another example of how we are striving to balance a variety of interests.

This work will result in a process for assessing social, economic, environmental and cultural impacts of proposed developments.

For potential developers and all Yukon people, it will provide one clear, predictable process for determining the conditions under which projects will proceed.

The work of the Yukon Forest Commission demonstrates a similar need for balance. It addresses the needs of local industry in creating jobs and adding economic value to forest resources. It also recognizes the wide range of other forest values that we need to protect for the future.

Another important environmental issue our government takes seriously is climate change.

The Minister of Renewable Resources recently attended the world summit on this topic in Kyoto, Japan.

This budget reinforces his efforts to bring national and international attention to the potential impact of climate change on northern regions.

We are setting aside $50,000 this year to initiate a multi-year analysis and action plan to deal with the Yukon implications of global climate change.

This project will be undertaken in partnerships with interested governments, non-governmental organizations and technical and scientific communities.

Using reliable analytical techniques, this work will provide a solid basis for practical strategies the Yukon can employ to reduce the effects of climate change on our environment.

The work of the Cabinet Commission on Energy will also make a positive contribution. Its public consultations will promote discussion and public awareness about energy conservation.

It will also present alternatives for community energy management and for methods of generating electricity that reduce our reliance on fossil fuels.

This budget continues to support the Yukon Housing Corporation's home-improvement programs to make buildings more energy-efficient, and to help people replace electricity with other methods of heating their homes.

Government Services is also playing a role by adopting new design and construction standards for public buildings, and pursuing other ways for the Yukon government to reduce energy consumption.

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Building Trust in Government

Mr. Speaker, this budget reflects our fundamental belief that government can be a positive and stabilizing force in society.

During our pre-budget consultations, many people told us they share this view.

Their message was clear: "Listen to us, work with us, and provide responsible, balanced leadership for the future."

We have been actively consulting Yukon people about decisions that affect them, and have listened to their advice.

We will continue to respect the partnerships that good government requires.

For example, this budget maintains our commitment to the operations of Yukon College, as well as the current level of block funding to municipalities.

Our partnership with the City of Whitehorse can be seen in the two-year commitment we are making to help it host the Arctic Winter Games in the year 2000. This year's contribution is $200,000.

We have respected our partnerships with First Nations and the federal government.

This budget shows our determination to settle outstanding land claims and self-government agreements.

It is essential to bring clarity and certainty to the new relationships among governments in the territory far into the future.

We have made considerable progress, and we expect several new agreements to be completed in the near future.

With this budget, we are stepping up our efforts to meet the challenges of implementing First Nations' Final and Self-Government Agreements.

We will also continue to work with federal and First Nation governments toward the transfer of Northern Affairs programs from the federal government to the Yukon.

It is important for all Yukon people that their public government hold firm to the principle that appropriate funding to maintain those programs must be part of any transfer.

I would also like to mention that the Public Service Commission budget includes an additional investment of $200,000 to make the public service more representative of Yukon society as a whole.

This is an obligation under the Umbrella Final Agreement.

This funding will also provide training for government employees in all departments to increase awareness of the impact that land claims and self-government agreements will have on the provisions of public services.

We will also encourage the exchange of skills and knowledge among employees of territorial, municipal, First Nation and federal governments, as well as non-governmental organizations.

Mr. Speaker, these are just few examples of the bold, positive steps we are taking to build public trust in government.

We recognize that good government does not come from impulsive decisions based on political expediency.

It comes from calm, deliberate decisions that address current challenges realistically, and help prepare solid foundations for the future.

The budget that I have outlined briefly in these remarks meets those criteria.

As I said at the outset, Mr. Speaker, this budget is about jobs. It is about balancing priorities. It is about articulating a vision for the future that is shared by Yukon people.

We will continue to work with Yukon people to develop balanced policies for social programs, for the economy, and for the environment.

Mr. Speaker, I commend this budget to the Members of this House and to the Yukon people for their approval and support.

I look forward to a positive and constructive debate about the details over the weeks to come.

Thank you.

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FINANCIAL SUMMARY
($000'S)

1998-99
Estimate
1997-98
Forcast
%
Change
1996-97
Actual

INCOME

Territorial Revenue

80,610

74,248

9%

81,654

Canada Health and Social Transfer

15,908

16,731

-5%

18,709

Established Programs Financing

0

0

0%

(651)

Transfer from Canada

277,861

281,937

-1%

268,028

Transfer from Canada - Census (One-Time)

4,000

0

100%

0

Other Transfers from Canada (Health Phase II)

0

4,804

-100%

0

Recoveries

58,773

76,274

-23%

93,324



TOTAL INCOME

437,152

453,994

-4%

461,064



LESS EXPENDITURES

Operation and Maintenance

370,360

369,615

0%

351,503

Capital

70,598

106,578

-34%

119,801

Loan Interest

429

439

-2%

495



TOTAL EXPENDITURES

441,387

476,632

-7%

471,799



UNADJUSTED SURPLUS (DEFICIT) FOR THE YEAR

(4,235)

(22,638)

(10,735)

ADJUSTMENTS

Plus: Recoveries of Prior Years' Expenditures

0

0

521

Plus: Items Transferred to Balance Sheet

0

0

(1,470)

Less: Contingency

4,500

0

0



SURPLUS (DEFICIT) FOR THE YEAR *

(8,735)

(22,638)

(11,684)



*The estimated unconsolidated accumulated surplus of the Government for March 31, 1999 is as follows (in thousands):

Accumulated Surplus, March 31, 1997 (excludes Special Operating Agency income)

46,519

Plus: Forecast Annual Deficit for 1997-98

(22,638)


Forecast Accumulated Surplus, March 31, 1998

23,881

Plus: Estimated Annual Deficit for 1998-99

(8,735)


Estimated Accumulated Surplus, March 31, 1999

15,146


In the 1997-98 Estimates, the estimated accumulated surplus at March 31, 1998 was $15.31 million.

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