The mystery of Yukon's vanishing financial surplus
Yukon NDP leader Liz Hanson and MLA Lois Moorcroft asked the following questions about the Government of Yukon's annual budget surplus on Wednesday, April 13 2016.
Hanson (Whitehorse Centre): When the Premier tabled his first budget in 2012, he forecast an $80-million surplus. He touted strong Yukon Party economics and values to justify his agenda. Four years later, as he stood here in the Legislative Assembly, his surplus had dwindled down to $1.25 million, almost $79 million less than when he took office. The money went down the drain thanks to poor fiscal planning. We all know that Cabinet gives direction on the budget’s political priorities and, each year, the Yukon Party Cabinet has come up short-sighted and uninspired. We also know, thanks to indexed transfer payments from the federal government, how much money Yukon can expect to have several years in advance.
Mr. Speaker, what does the Premier have to say to Yukoners, whose $80-million surplus he drained away?
Premier Darrell Pasloski (Mountainview): Mr. Speaker, this gives me an opportunity to talk a little bit about the recent statement by the Yukon Chamber of Commerce. This is regarding our 2016-17 budget, a budget that is a result of 60 community meetings in all communities across this territory, talking to hundreds of Yukoners. I want to thank those Yukoners for providing their input to help us with this budget. For example, investments in infrastructure — the chamber gives us a grade of A, saying that improvements to roads, airfields, and fibre optic and cellular infrastructure are excellent. Investments identified are all beneficial to the economy and the prudence of the government in both identifying and investigating capital expenditures should be commended.
Mr. Speaker, we are very proud of this budget.
Hanson: Mr. Speaker, this spring the Conference Board of Canada reminded all Canadians that Yukon’s gross domestic product shrank for the third straight year. Yukon is facing hard times, despite the Premier’s glossy glow. Those hard times are a direct result of this government’s inability to plan for the future and, in the process of not being able to plan, they have dwindled our territory’s $80-million surplus.
How can the Premier claim to have any credibility on economic issues when he took office with a large surplus and stable revenue and is now leaving it with no surplus and three years of recession?
Pasloski: We continue to hear that both the NDP and Liberals are living under a rock. This government continues to invest during this economic downturn. We continue to keep taxes low for Yukoners, keeping more money in their pockets.
To go back to the Yukon Chamber of Commerce — when they talk about investments in community, it is another A grade. The Yukon Chamber of Commerce is pleased with the level of capital investment in Yukon community facilities from water and sewer systems to subdivision planning and to fire halls. When it comes to taxation — another A; no tax increases for families or businesses. The Yukon currently has some of the lowest corporate tax rates in the country, which is positive for attracting and retaining business. We are listening to Yukoners and we are delivering for Yukoners.
Hanson: Mr. Speaker, I note he did not read the grade for procurement.
You know, we aren’t the only people with questions about the Yukon Party government’s strange approach to budgeting. The C.D. Howe Institute gave Yukon a failing grade in 2014 for consistently mismanaging the territory’s finances. The Auditor General has accused the Yukon Party government of lacking strategic planning and poor implementation of budget policy. These are well-respected and impartial economic bodies.
Will the Premier take the C.D. Howe Institute and the Auditor General’s words to heart and admit that the Yukon Party has failed to deliver an economic strategy for Yukon?
Pasloski: Mr. Speaker, I am glad that the Leader of the NDP has brought up procurement because that was in fact the lowest mark that we had — an overall grade of B-plus, but we did get a C in procurement. Let me quote the chamber. It says that the government has recognized it has a problem here and is undertaking to do something about it.
When it comes to the C.D. Howe report, let me just tell you that they acknowledge the recent change in processes made by Yukon by stating — and I quote: “Yukon also deserves a compliment. Its budgets are now consistent with public accounts, making it the one territory where our reader would be able to find the comparable numbers.” Those are changes that have occurred since I became Premier and Finance minister. At the end of the day, our fiscal position, our strong fiscal position, the envious position of this entire country, ultimately is the statement of our financial position. That continues to be very strong.
Yukon NDP MLA Lois Moorcroft (Copperbelt South): In his budget speech, the Minister of Finance announced he had discovered the concept of innovative budgeting. Interesting.
When this version of the Yukon Party took responsibility for Yukon’s financial well-being in 2012, the forecasted surplus was $80 million. Now the 2015-16 supplementary budget forecasts our budget surplus at just $1.2 million. Apparently, the idea behind innovative budgeting is to introduce ideas and concepts to make government more efficient in its use of public funds and allow for cost savings. This sounds a lot like results-based management, a concept being practised by many organizations and governments across Canada for years.
Mr. Speaker, why did the government wait until now, months before an election, to introduce the concept of results-based management?
Premier Darrell Pasloski (Mountainview): Mr. Speaker, what I noted in my Budget Address is that we are seeing governments almost entirely across this country tabling deficits. I also took note to state that the net debt of the provinces and territories in this country is approximately $600 billion. This territory has no net debt. We have money in the bank and, in fact, are the envy of this entire country.
Moorcroft: Mr. Speaker, in his speech, the minister indicated this initiative would not result in layoffs or cuts in the level of services. Innovative budgeting is meant to be a process led by the public service to find efficiencies and reduce costs; however, the Premier did indicate that the government would be looking to save $2 million in this fiscal year, but beyond this very few details seem to be available at this time.
Mr. Speaker, how did the Premier arrive at the $2 million figure?
Pasloski: Mr. Speaker, this budget commitment on innovative budgeting is really a public service-led initiative aimed at fostering innovation in the Government of Yukon. We believe that innovation can improve services to Yukoners and save taxpayers’ money without cutting any jobs or services. $2 million is a very modest goal at this point when we look in the context of a budget that exceeds $1.3 billion. Every dollar counts for this government and we are confident that the public service-led initiative will be successful.
Moorcroft: Well, Mr. Speaker, this is another vague non-answer.
As part of the innovative budgeting initiative, this government indicates that they will access any third-party funds available to carry out important infrastructure or other projects in Yukon. This government always communicates the contributions it receives from Canada and the financial partnerships with other third parties whenever a project is announced. Isn’t this something the Yukon Party should have been consistently doing to aid in the development of projects that benefit Yukon and Canada as a whole?
What’s new and innovative about accessing third-party funds?
Pasloski: Mr. Speaker, we continue to partner with the federal government and continue to partner with First Nations and we will always continue to do that. This is an initiative to look to innovation to create some savings without cutting jobs, without cutting services and that is the commitment that is done. We are very confident in the public service and being able to do this.
Of course, we again hear the NDP — but of course the Liberals as well — try to interpret this and try to create what I believe is misinformation for members of the public. Sadly, we’ve heard it many times. Let’s look back at F.H. Collins, which wasn’t going to have enough insulation. It was going to be built for 400 students. Mr. Speaker, it goes on and on and on.
We’re very proud of our accomplishments. We are focused on the territory. We know — Yukoners know — there is only one party in this territory that is not encumbered to be affiliated with a federal party. It is the Yukon Party.
While the NDP and the Liberals will continue to stand up for such things as a tax on carbon, we will be there to stand up for Yukoners.