Chamber gets sneak peek of budget

The Yukon government will spend $.107 billion this coming fiscal year, Premier Dennis Fentie announced Tuesday. That's up $67 million from last year. That's up $67 million from last year. And if the territory continues to spend money as freely as it has in the past year, expect another $100 million in cost overruns - total spending this year is to reach $1.101 billion.

The Yukon government will spend $1.07 billion this coming fiscal year, Premier Dennis Fentie announced Tuesday.

That’s up $67 million from last year. And if the territory continues to spend money as freely as it has in the past year, expect another $100 million in cost overruns – total spending this year is to reach $1.101 billion.

As he’s done in past years, Fentie spilled many details of Thursday’s budget speech during a breakfast meeting organized by the Yukon and Whitehorse chambers of commerce.

The move drew cries of foul from both opposition parties. Liberal Leader Arthur Mitchell called the budget preview “disrespectful” to fellow MLAs. The NDP’s Steve Cardiff wondered whether the preview would give business leaders unfair trading advantages.

The message was delivered to about 30 businesspeople and Yukon Party stalwarts at the High Country Inn over plates of bacon, eggs and sausage.

The half-hour speech contained few surprises, as most of the big-ticket items are already well-known.

The most ambitious is the proposed expansion of the Mayo hydro-electric dam, which Fentie said is expected to exceed $160 million—$71 million of which will be paid with federal stimulus money.

The expansion to the Whitehorse airport will wrap up this spring. Work will continue on a new jail for Whitehorse and a new high school to replace FH Collins.

And the territory will push ahead with its controversial plans to build new hospitals for Dawson City and Watson Lake, with $50 million set aside for these projects.

There’s also $45 million for work to roads, bridges and airports; $36 million for affordable housing; $30 million for water and sewer works; and $12 million for maintaining public buildings – all good news for the territory’s contractors.

Some of the spending is old money repackaged as if it’s new. The Yukon and Canada will jointly spend $4 million to build new college campuses proposed for Dawson City and Pelly Crossing, Fentie announced – a repeat of an announcement first made in May 2009.

Municipalities will see transfers grow by $800,000, to a total of nearly $15 million. And the territory will spend $15 million to develop new residential and farmland in the territory.

Much of this spending is propped-up with contributions from Ottawa. The territory will tap more than $94 million from various federal programs this fiscal year, said Fentie.

There was little indication these generous transfer payments may soon end.

While many provincial governments are buckling down for lean years ahead, Fentie vowed the good times would continue to roll.

“This investment will reverberate around the Yukon,” he said.

As he fielded questions following his speech, Fentie acknowledged that federal money could one day dry up. But he didn’t dwell on it, or offer any hints as to how the territory will prepare for this.

“I can’t speak to what may happen in the future,” said Fentie.

The Yukon’s in good financial shape, he said. “When we came into office, there was no cash available … today we have close to $200 million in cash for this territory. So fiscally we’re in good shape – probably better shape than most jurisdictions in the country.”

Yukon has seen a 50 per cent increase in tax revenue it collects since 2003-04, thanks to a growing economy, said Fentie. He didn’t mention the Yukon’s tax base was still just $109.5 million in last year’s budget, making up a small fraction of total revenue.

Nor did he mention growth in federal spending has outpaced Yukon’s own revenues, resulting in the territory being more dependent on transfers from Ottawa now than before his reign began.

He offered other rosy numbers to support his view that the territory has undergone a “remarkable shift” over the past seven years.

Yukon’s population, at 34,000, is the largest on record.

Building permits over the last year were valued at a record high of $158.3 million, against a low of $30 million in 2002.

Retail sales are up to nearly $520 million. “That’s the second highest on record,” said Fentie, “an increase of well over $100 million since 2002.”

It all amounts to “a solid foundation for this territory to grow in all sectors in the future,” said Fentie. He promised that this means businesspeople will be “very, very busy this year and beyond.”

Fentie defended the territory’s decision to borrow $167 million, through two Crown corporations, to finance the Mayo B hydro-electric project and new hospitals for Watson Lake and Dawson City.

“Borrowing money is part of doing business,” he said. The loans would be repaid over long periods, “so taxpayers today are not paying the full cost.”

Left unsaid was how this means that future governments will be paying down the debt burden racked up today.

Fentie offered a grab-bag of explanations why new hospitals are needed in Dawson City and Watson Lake.

Building new facilities costs less in the long run, he asserted, because it cuts down on medical travel costs.

And the hospitals are needed to help these communities grow. “What happens to Watson Lake and Dawson City if you don’t have facilities like this?” asked Fentie.

“How do you attract teachers? How do you attract other professionals? How do you present to the investment community, nationally and internationally, that Dawson City and Watson Lake are a good investment?”

Besides, said Fentie, “I don’t think you can measure the cost when it comes to health care, because health care in this country is universal, and access is a right.”

“Why should Yukoners be treated different? Why should Yukoners be accessing less services than other Canadians?”

Contact John Thompson at

johnt@yukon-news.com.