Premier Dennis Fentie and one of his ministers politically interfered in the Yukon Development Corporation’s operations, forcing its chair and three board directors to resign Monday.
Former premier Willard Phelps resigned as chair of both the Yukon Development Corporation and its subsidiary Yukon Energy Corporation just as the corporations were assembling a $160-million power project into high gear.
Directors Greg Hakonson, Paul Hunter and Martin Allen also resigned.
“I really regret it,” said Phelps. “We reached a point where we couldn’t justifiably continue.”
The defections come at a critical time for Yukon Energy. The government-owned corporation is currently negotiating a power pricing deal with potential mines, financing the most expensive capital project in its history and retooling its aged infrastructure.
Now the twin Crown corporations have no leader and crippled boards.
Three days after the defection, the government hasn’t answered a single question. In a terse, three-paragraph release, Premier Dennis Fentie immediately accepted the resignations and thanked Phelps and his cohorts for their service.
“(Our departure) was a fundamental disagreement on our role as a board and how much government interference was acceptable,” said Phelps. “We have to take our obligations very seriously with the board. We make big decisions in terms of money and the consequences.
“If we’re going to be taking responsibility for those things, then we should be the ones making those decisions.”
The chasm had “been growing for months,” said Phelps, but, citing board confidentiality, he refused to elaborate.
The disagreements did not stem from the Mayo B hydro project, said Phelps. That project received a $71-million funding promise from Ottawa two weeks ago,
“I can tell you, from a general perspective, that Mayo B makes sense,” he said. “It’s doable. The environmental hurdles aren’t too great.”
“But you get down into the details and what our roles are in sorting some of the details and the role of government, we get back into what I said in my press release,” he said.
The project, which will connect the Yukon’s northern and southern grids and expand the Mayo dam, still needs $89 million to go ahead.
Asked if the “government interference” related to whether ratepayers were going to pay for Mayo B or not, Phelps grew coy.
“All this leads to a system that we have and most places have in North America where rates are regulated by a public utilities board,” he said. “It’s to take politics out of decisions like that.
“It comes down to our role and what constitutes government interference and how much political direction is too much.”
The situation will hurt the utility customers, said Phelps.
“What I feel bad about is the Yukon ratepayer losing this experience,” said Phelps. The board members trained and took courses on managing a power company together, he said.
Martin served on the board for seven years, Hunter for five, and Hakonson for four, said Phelps.
Their resignations leave both corporations with just four board members apiece, down from seven and a chair.
“They wouldn’t let politics dictate this thing,” he said. “It was just a sincere belief that all of us had that we reached a point where we couldn’t do our jobs.”
The independent, arm’s-length corporations share the same board members, who are appointed by the Yukon cabinet.
The Yukon Development Corporation chair is meant to run the show and reports to cabinet via a minister.
The political interference may have come from cabinet-issued orders-in-council or through directives from the minister responsible for the corporations, Jim Kenyon.
Kenyon’s SUV was parked outside the legislature Tuesday morning. He would not leave his office to answer questions.
“Premier Fentie is taking all questions on this issue,” said cabinet spokesperson Roxanne Vallevand.
“(Fentie) won’t be available until probably later in the week,” she said.
The Yukon Energy and Yukon Development corporations are in crisis, and the government is hiding, said New Democratic Party Leader Todd Hardy.
“We have one of the most important corporations for the future of the Yukon (Yukon Energy Corp.) and it’s one of the most secretive,” said Hardy. “That mentality is coming from the Yukon government.”
Hardy had a word or two about the minister hiding behind the premier, too.
“Fentie is running the show,” said Hardy. “Kenyon has been overrun.”
The NDP recently filled an access-to-information request from the Yukon Development Corporation and received nearly 30 blacked-out pages in return.
“We have layers and layers of secrecy with one person controlling the show,” he said.
Hardy sat on the boards between 1990 and 1992, he said.
He was kicked off along with another New Democratic Party member when a Conservative government came to power.
“The board is looking at it and saying, (the Yukon government) is lessening our responsibility and power,” he said. “Nothing will drive a board out faster than limiting their role.”
But what’s strange about Monday’s defection is that, politically speaking, Phelps and Fentie have been on the same team for years, said Liberal Leader Arthur Mitchell.
“As a former (Conservative) Party premier, that’s saying a lot,” said Mitchell.
“(Phelps) is the third generation in a family that founded the Yukon Electrical Company,” he said. “It’s something that’s very close to his heart.”
The Yukon government had begun “rationalizing” the relationship between the Yukon government and the corporations, Fentie said in the legislature late April.
“These were discussions going back 10 years about (streamlining the relationship),” said Mitchell, adding that he could only speculate as to why Phelps and friends left the board.
“My big questions is, who’s in charge? This is too important for the minister to not be forthcoming,” he said.
Kenyon is “cowardly” for not taking questions when the Yukon’s economic stability is at stake, he said.
But ultimately, it was Fentie’s micromanaging that spurred the turf war, said Mitchell.
“This is a centralized, controlling government that centres on one person,” he said. “And he’s not answering questions.”
Directors Paul Birckel, Barb Joe, Luke Johnson remain on the board. Vice-chair Pat Irvin will run things until a replacement for Phelps is named.
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