On Dec. 17, 2014, CBC News reported that the Conference Board of Canada was projecting 6 per cent economic growth in Yukon for 2015. However, they did not take into account Yukon’s public debt.
The Yukon Party government has been in power for 12 years and, from our estimation, Yukon now has a debt of around $400 million, all of which has been accrued under their watch. How has this game of smoke and mirrors been accomplished? Under the previous Yukon Party premier, Dennis Fentie, the debt owed by Crown corporations was not included in budget calculations. But, ultimately, who is accountable for this debt, Crown corporations or the Yukon taxpayer? As we all know, Crown corporations belong to the taxpayers, making Yukoners responsible for this debt.
Here is a review of what we Yukoners now owe and what we are likely to owe:
The primary debt holder is Yukon Energy, which took out a $100-million, 30-year bond to construct the Mayo B generating station, a hydro facility whose power generation is frequently disrupted by problems with water flow. Joanne Fairlie, chair of Yukon Development Corporation’s board of directors, has revealed to the Yukon legislature that the 30-year bond pays interest to bondholders of five per cent per year, making the interest alone on the original loan $150 million.
Together, interest and principal give Yukoners a debt of $250 million. That’s staggering debt for a population of 37,000 people. Then there is the cost of the Whitehorse liquefied natural gas plant. More than $42 million has been borrowed to finance the back-up generators.
The Yukon Hospital Corporation also has a debt of close to $75 million, plus interest, for the hospitals in Dawson City and Watson Lake. The hospital corporation was criticized by Canada’s auditor general in 2013 for having embarked on a building program without having done a proper needs assessment to determine beforehand what these communities actually required. Added to these costs, another $75 million is projected for a new emergency services wing at Whitehorse General.
As well, the Yukon Party government now proposes to build a 300-bed extended care facility in Whistle Bend. The size and scope of the project are based on a report by local architects Kobayashi and Zedda. While we may admire their architectural work, what expertise does this firm have in either determining medical needs or appropriateness of care? Was there any consultation with Yukoners? Moreover, so hazy is the planning for this project that Health and Social Services Minister Doug Graham threw any pretense of caution to the wind, telling CBC listeners on Sandi Colman’s morning show that the extended care facility could cost from $100 million to $500 million.
We do not take issue with the need for infrastructure (green energy, emergency services and extended care are required) but we question the methods of accounting for expenditures and the offloading of costs for public infrastructure to Crown corporations in order to make it appear that Yukon is balancing its books.
We also question the rush into megaprojects without proper needs assessment beforehand and the lack of oversight by which the rapidly expanding debt of our Crown corporations will entrap Yukoners in a financial quagmire for generations.
Don Roberts and Rick Griffiths