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Debt is never a good investment

There are good investments, and there are bad investments. People must start asking themselves which ones the Yukon government is making. No, we are not referring to the $36-million asset-backed commercial paper fiasco.

There are good investments, and there are bad investments.

People must start asking themselves which ones the Yukon government is making.

No, we are not referring to the $36-million asset-backed commercial paper fiasco.

Nor are we alluding to the $31 million the Yukon government spent fixing up a remote stretch of the Robert Campbell Highway that, according to government statistics, sees an average of 17 cars a day.

No, we’re talking about the estimated $50 million they’re going to spend building new hospitals in Watson Lake and Dawson City.

The Yukon Hospital Corp. is assuming a 15-year debt to build the complexes - increasing their total cost to more than $80 million once interest is factored in - and it has launched an ad campaign to justify the decision called Expense? Investment.

Now, for the last six months people have been trying to get Health Minister Glenn Hart to make the case for building acute-care rural hospitals. He has failed to provide anything compelling.

In fact, he’s failed to produce anything at all.

Now the Hospital Corp. is spending more money on an ad campaign to make the case for him. But the 100-word spiel, which is oddly political coming from a Crown corporation, is far from convincing.

It suggests the Yukon’s population is growing two to three per cent a year. However, that’s a manipulation pulling on just two years of the most optimistic data.

In fact, the average population growth in the territory between 1998 and 2008 was just 0.4 per cent, according to the government’s 2008 statistical review.

While the Yukon’s population hit a historic high in August - with 34,264 people - they started to drift away starting in September.

By December, 34,157 people lived here, just 229 people more than the previous December, which represents just 0.7 per cent growth, about one-third the growth suggested in the ad.

“Looking at the last 12 months, the Yukon’s population has remained relatively stable,” according to the stats branch document.

And visits to the existing hospital in Watson Lake have been steadily dropping, to 976 in 2008 from 1,188 in 2006.

It seems more prudent to wait for a sustained boom before saddling the territory with expensive hospitals in rural towns.

Or, perhaps, given that it is running short of beds, Whitehorse hospital should be expanded, improving acute-care access to all communities.

Watson Lake might better benefit from better alcohol and drug treatment facilities. Doing so could both improve the health of the community and, in turn, make the place a more attractive place to live and raise a family.

At the very least, all options should be examined.

But there’s no evidence this type of study has been done.

Take the Watson Lake hospital. This is not a project based on sound planning and execution.

Not to put too fine a point on it, the massively expensive project is being done to fix something the government badly botched earlier.

The hospital project was initially to cost $4.8 million, and wasn’t to be a hospital at all. It was to be a long-term care facility for the elderly that would complement the existing cottage hospital that had been built in the 1970s when Watson Lake was booming. That hospital was to be renovated.

But, for reasons that still have not been properly explained, the seniors’ complex ran out of money before it was finished.

After the $4.8 million was spent, all the government had to show was a half-finished structure that, exposed to the elements, soon went mouldy.

And then to compound the problem, officials figured out renovating the existing cottage hospital would cost more than building a new one. Why that wasn’t pinned down before the initial plan was hatched is another mystery that hasn’t been explained by any politician in the Yukon Party government.

Stuck with a mouldy half-finished seniors’ complex and an old hospital that could no longer be renovated, the government announced it was now spending another $25 million on a new hospital. And here we are.

Was it well planned or thought out? Is it the good investment the Yukon Hospital Corp. says it is?

All we know is that Hart steadfastly refuses to answer any questions about it. And now the hospital is spending money to deliver lines like, “Sure, it’s expensive, but if we put it off, the costs will be even greater, both in dollars and Yukoners’ health.”


That assumes there will be a future need. And officials should provide information to back that assertion up.

They should provide a cost-benefit analysis - some tangible information that shows building and operating hospitals in Watson Lake and Dawson City will improve health and, over time, reduce costs.

But the government refuses to.

And so the Yukon News launched an access to information request to root out some answers. At considerable expense, the paper bought more than 800 pages of information about the hospital decision.

There’s no cost-benefit analysis there. Nothing.

Would any rational person invest huge sums of money under such circumstances?

Is it a sound use of the territory’s money?

Nobody seems to know.

And that’s a problem - one we’ll face every year as we pay down the territory’s rapidly accumulating debt.