Yukon’s premier is remaining tight-lipped when it comes to talking about options for the territory’s financial future suggested by an independent advisory panel.
Sandy Silver, who is also the Yukon’s finance minister, said “all these recommendations are on the table.”
That includes suggestions that if the Yukon wants to raise more money it could implement a new harmonized sales tax (HST) or review the amount of money it collects in gold royalties, something the Liberals have previously promised not to do.
Silver insists it would be inappropriate for him to comment on hypotheticals while the advisory panel is still working on its final report.
“At this point in the process we’re not going to be commenting on the draft options that the panel has prepared and we feel that this would actually compromise the work of the panel.”
With projected deficits coming over the next few years, the Yukon Financial Advisory Panel was tasked with coming up with ideas for the territory’s financial future. The panel released its draft report this week with options to either curtail projected spending, raise more revenue or do a combination of both.
Panel members will be visiting communities around the territory until they release their final report in early November.
Silver said he wants to wait to hear from Yukoners before deciding what to do.
“I think what we will commit to is once a consultation phase is done, and we hear from all Yukoners… and they tell us what they want us to do and what they don’t want us to do, we will do that.”
If the government chose to create a new tax, the current Taxpayers Protection Act requires a referendum.
Silver didn’t rule out changing the law so a referendum wasn’t required, though he repeatedly pointed out that changing the law wasn’t part of the party’s platform or mandate letters.
“I’m not going to make any comments on the Taxpayers Protection Act based upon the Yukon Financial Advisory Panel and the good work that they’re doing,” he said.
“I don’t want to hedge any bets and I don’t want to alter the process because consultation has to happen. We did not campaign on changing the Taxpayers Protection Act.”
The draft report from the advisory panel recommends the government undertake a review of the Yukon mining royalty and tax regime. “In particular, explore the possibility of increasing the royalty rate on placer gold mining operations.”
From devolution in 2003 to the beginning of this fiscal year, the Yukon government has only collected $316,621 in placer mining royalties, according to the Department of Energy, Mines and Resources.
Placer mining royalties apply on gold shipped from Yukon. They’re calculated at 2.5 per cent of gold’s value. But Yukon’s current rules set the price of gold $15 per ounce.
As of this morning, the market valued gold at about $1,600 an ounce.
Jonas Smith, the executive director of the Klondike Placer Miners Association, acknowledged that the topic of royalty rates is a popular one.
“But we do not think that it is reasonable or responsible to talk about solely raising the royalty without having that discussion in the broader context of the entire tax regime.”
Royalty rates pre-date the income tax. Currently, most miners pay 50 per cent of their income to income tax, Smith said.
Miners create work, he said, not only for their employees but also for the other businesses that they use.
“All of that tax revenue, both personal and corporate, would not happen if placer miners were not generating this wealth out of literally nothing,” he said. “That’s a concept that is often lost in the city of Whitehorse. I think people in Dawson appreciate it better.”
Smith said he thinks the government should be looking at its spending as a way to improve the financial picture.
“Most Yukoners, especially those on fixed income, if they realize that more money is going out than is coming in, they don’t have the option of just asking for more money, they have to control their spending.”
Ahead of last year’s territorial election the Liberals were asked about their plans for the placer royalty regime as part of a KPMA survey. The party promised “a Yukon Liberal government will not increase the gold royalty.”
If the government changes the royalty regime in isolation of the rest of the system, Smith said he would “absolutely” consider that a broken election promise.
The advisory panel said that in the long run, “the primary challenge for Yukon’s government will be growing health-care spending resulting from an aging population.”
It suggested a review of the health care system “focusing on the factors driving costs and on the quality of the outcomes being delivered to Yukoners.”
Yukon Employees Union president Steve Geick said he’s concerned about some of the examples the panel provided such as contracting out some diagnostic work to mobile labs or clinics or having privately operated but publicly funded surgical facilities.
Echoing the opinion of the NDP, Geick said that would be tantamount to privatizing healthcare.
“We have our members doing lab work both in the communities and at the hospital. We have members at the hospital that work in the specialty clinics, the ORs and everything else. So that is a major concern.”
For its part the Yukon Hospital Corporation agrees with the principle that the territory should review the health-care system, said spokesperson James Low.
“As long as health services can be sustainable, safe and quality, we as a territory should be open to options on how health services could be delivered.”
Low said some of the examples provided in the report work in other jurisdictions, but whether they would work here is something that still needs to be looked at.
As for money spent on the government’s sizeable public sector, Geick said he wouldn’t support a wage freeze.
“Any negotiation, with any employer, the first thing we say is we do not participate in concession bargaining. So we’re not giving up anything we have.”
Much of the government’s workforce is set to retire in a few years, Geick said. Their replacements are normally brought in at a lower starting wage.
“Typically those positions are the highest paid in government. They’ve been there a long time, usually they’re professionals. That’s where the money is.”
If the government were to shrink the size of the public service, Geick said they could start by looking at upper management.
He suggested the government could consider hiring fewer people at the top tier of the salary scale.
“That kind of thing is where I see, if they want to save money, that’s where they can save money.”
Yukoners can offer their opinions on the territory’s financial future through the community meetings or online. More information is available at yukonplans.ca.
Contact Ashley Joannou at ashleyj@yukon-news.com