So much for the surplus

The budget is bunk. The Yukon government projects a surplus of $.29 million for 2010-11, but it's becoming clear this figure omits expenditures likely to sink the territory into the red.

The budget is bunk.

The Yukon government projects a surplus of $2.9 million for 2010-11, but it’s becoming clear this figure omits expenditures likely to sink the territory into the red.

Take the Thomson Centre. The continuing-care facility adjoining Whitehorse General Hospital needs $2 million in repairs before it can be occupied by the elderly.

In December, the territory committed to open 29 beds there by autumn. Health Minister Glenn Hart repeated the promise this week.

But there’s nothing budgeted for its repair.

Asked in the house how they’ll be paid for, Hart ignored the question and changed the subject.

Similarly, several calls to Patricia Living, Health spokesperson, about the project were not returned. Finance officials won’t touch the subject, either.

The money will be ponied up by the Yukon in a forthcoming contribution agreement, Craig Tuton, chair of the hospital corporation, said in a recent interview.

In other words, this spending will crop up in a supplementary budget later in the year.

That item alone would whittle down the surplus to $900,000. And that’s just the beginning of the unaccounted-for expenses.

There’s also no money in the budget for the new collective agreement being struck with the union that represents roughly 4,000 government employees.

For now, it’s hard to say how much this will cost: details of the agreement are being kept secret until workers are ready to vote in early May. But it’s fair to expect rising wages to take another bite out of the surplus.

Skeptics will also wonder how the territory plans to keep departmental spending below inflation, as the budget proposes.

Projections for the Health Department look especially improbable: it is forecasting a decline in spending, which would buck the department’s recent trend of spending more each year.

In fairness, Finance officials say there’s more money for health spending than the main estimates reveal, thanks to a windfall in federal cash that wasn’t spent last fiscal year.

Even so, the territory has consistently lowballed Health’s spending needs in recent years, requiring the department’s coffers to be refilled mid-year with supplementary spending.

The accuracy of last year’s budget doesn’t inspire much confidence. It missed the mark by $42 million.

The government predicted a $19-million surplus. It posted a $23-million deficit.

And none of this is mentioning the accounting sleights-of-hand used by Premier Dennis Fentie last year to load up on debt that doesn’t appear on the main books.

Yukon Energy will borrow $100 million to expand the Mayo hydroelectric project. The Yukon Hospital Corporation will borrow $67 million to build a new medical residence in Whitehorse and new hospitals in Watson Lake and Dawson City.

Who knows what new borrowing may be in store? Just last week, Tuton indicated Whitehorse General Hospital needs $50 million for renovations.

The corporation is currently in talks with the territory about how to pay for this. Seeing as there’s no money in the budget for this work, either, if it proceeds this year, it’s likely to be financed with borrowed money.

Don’t expect Fentie to shed light on any of this. He refuses to admit the territory’s just posted a deficit.

And for the past sitting, he’s shown his usual preference to hurtle muck across the legislature floor rather than answer questions about the territory’s finances.

When Liberal Leader Arthur Mitchell expresses doubts over whether the territory is able to post a surplus this year, Fentie claims this means that Mitchell has attacked the reputation of Finance officials and Canada’s auditor general, who inspects the government’s books.

And when the NDP’s members ask about the Yukon Party’s scheme to offload debt on to Crown corporations, Fentie responds by noting how past NDP governments made the mistake of investing in companies that later failed, such as Watson Lake’s sawmill.

Contact John Thompson at

johnt@yukon-news.com.