When Yukon’s legislature reconvenes in two weeks, expect Dennis Fentie to announce another deficit for this fiscal year, followed by a pre-election spending splurge funded by a windfall of federal cash.
This much can be gleaned from an announcement made by Fentie, premier and finance minister, that he would reconvene the legislature a month earlier than usual, on February 3.
This fiscal year “the savings account will be reduced,” according to a government news release. Translation: the government has spent more money than it’s taken in, so it’s looted the piggybank, as it’s done for the previous two fiscal years.
But don’t expect Fentie to admit as much. He’s always treated “deficit” as a dirty word. Opposition members spent much of the 2010 spring session trying to goad Fentie into admitting he had run up a deficit. He never did.
The Yukon News asked him yesterday whether the territory was headed for the red again. He changed the subject.
“The bottom line is, the Yukon Party created a savings account,” said Fentie.
Opposition members see this claim as being a bit rich: Yukon’s recent wealth is overwhelmingly thanks to larger transfers from Ottawa.
Fentie conceded “we did expend a great deal” of that savings. But there’s good news: the Yukon expects to receive another big windfall of federal cash - enough to “significantly replenish” the Yukon’s piggybank, according to Fentie.
Also, expect another big budget, “in the billion-dollar range,” stuffed full of spending announcements. It’s an election year, after all.
This year’s deficit is largely because of “physician and hospital claims, social assistance, employee future benefits and environment liabilities,” according to the release.
The release also suggests there are “issues” with the solvency of the pension funds for Yukon College and the Yukon Hospital Corporation, and that big construction projects, such as the new jail and the Whitehorse waterfront project, “have progressed more quickly than anticipated.”
Opposition treated Fentie’s announcement with skepticism.
The 2011-12 budget is touted as being “balanced,” but Liberal Leader Arthur Mitchell noted that “we won’t get to see whether the premier misses for the third time in a row before the election.”
The budget for 2011-12 will also be “balanced,” said Fentie. But Fentie promised surpluses in his last two budgets. He delivered deficits instead.
The 2010-11 budget predicted a $2.9-million surplus. But, by the autumn, the forecast had turned into a $2.4-million deficit.
Since that time, the territory appears to have resorted to sleights of hand to keep costs down. For example, in the winter it announced it would suspend demolishing of the old Whitehorse Correctional Centre while it studies whether the condemned building could be used for something else.
“What are we planning on using it for now?” asked Mitchell. “Didn’t we just spent $70 million to replace it, because it can no longer function? Now we’re going to have the old one and the new one side by side? Or is this just another way to get farther along in the budget cycle without spending money?”
Elizabeth Hanson, leader of the NDP, was especially puzzled by news the hospital corporation’s pension fund was a concern. She asked about this very thing at the hospital corporation’s annual meeting in September.
“I was told point blank, by the board, president and CEO, that there was no issue. So I’m very interested in what these sudden pressures are.”
Until now, Fentie has always called the spring sitting of the House in late March, or, in one case in 2007, late April.
Fentie insists it’s simply time to get back to work. He dismissed a suggestion the early sitting may be influenced by a forthcoming Yukon Party leadership election, which Fentie has promised to hold sometime in early 2011.
“I’m sure there will be all kinds of speculation,” said Fentie. “I’ll leave that to those who want to speculate.”
Brad Cathers, who quit his cabinet post to sit as an independent to protest Fentie’s handling of the ATCO energy-privitization scandal in the autumn of 2009, said he knows “at least three people” who plan to challenge Fentie in a Yukon Party leadership race, “and possibly more.”
“Phonelines around the territory are burning up as people are gauging support,” he said. “They’re aware how public sentiment towards him has gone downhill.”
Cathers said he doubts Fentie could win another general election. And he maintains “the majority” of the Yukon Party’s members feel the same way.
But Fentie doesn’t sound like someone who’s ready to leave.
“All and all, we’re in good shape, and looking forward to the debate,” he said.
“It’s the first time I’ve heard Arthur Mitchell and the Liberals actually say they’re going to present Yukoners with some kind of plan. We’re interested to see what that one is.
“And, of course, I’m waiting with bated breath to hear the new NDP leader explain why she thinks the Yukon’s in a deficit. That’s something that’s so far away from the facts.”
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