Yukon’s bloated budget tops $1B

A new jail will be built in Whitehorse by late 2011 at an estimated cost of $60 million.

A new jail will be built in Whitehorse by late 2011 at an estimated cost of $60 million.

Replacing the cramped and aging Whitehorse Correctional Centre is one of the bigger-ticket items in Yukon’s 2009-10 budget, released Thursday.

Spending next fiscal year is to top $1 billion. It’s Yukon’s biggest budget to date.

Of that, $21.6 million is to be spent next year on building the new prison, which will include an attached rehabilitation centre.

The facility’s total cost of about $60 million is twice that of earlier plans, proposed by the Liberals eight years ago.

Construction of the new prison is expected to create 350 jobs. It’s but one of many make-work projects proposed by the Yukon government.

The Whitehorse airport will be expanded. Nearly every highway will be paved. Millions will be spent promoting tourism. Dozens of community projects are to receive cash.

And it’s all to be done without raising taxes or running a deficit.

Thank Ottawa.

Only 11 per cent of Yukon’s revenues are raised locally. The rest flows from federal transfers, which next year are to increase by eight per cent, to $683,000 million.

Yukon is also reimbursed for some of its bigger projects. The tab for cleaning up the Faro mine, worth $19 million this year, is paid for by Canada, while roadwork connected with the Shakwak agreement is paid for by the US.

So the Yukon is “more dependent on Ottawa than ever before,” said Liberal Leader Arthur Mitchell.

The budget contains few surprises for government watchers. Most major items were announced in news releases that have dribbled from Premier Dennis Fentie’s office in recent weeks.

Fentie gave an abridged version of his budget speech to the Whitehorse Chamber of Commerce a day before tabling the budget in the legislature.

More than $56 million will be spent on roadwork for the Klondike, Alaska and Dempster highways, as well as the North and South Canol and the roads to Haines and Atlin.

Another $13 million will be spent on ongoing work to replace the territory’s aging emergency communications network, and to extend cellphone service to Ibex Valley and Lake Laberge.

More than $15.7 million will be spent expanding the Whitehorse airport.

Thirty units of social housing for single parents will be built in Riverdale for $11 million, to be complete by the autumn of 2010.

Designing a replacement for FH Collins, Whitehorse’s oldest school, will begin.

Dawson City’s Front Street is to be paved, its recreation centre will be made earthquake-safe, work on the community’s sewage treatment plant and prep work for a new health centre will resume.

Teslin will see its library, shuttered for three months because of mould problems, moved into a new building.

Old Crow will get a new water well. Carcross will receive sewage treatment upgrades. Carmacks will have a new wastewater treatment system built.

And work will continue on a new hospital and home for the elderly in Watson Lake.

To tackle the territory’s tight housing market, Yukon will develop new residential lots in Whitehorse, Dawson City, Haines Junction and Mount Lorne.

Whitehorse will see another 132 residential lots developed in Arkell. And $10 million is slated to begin developing the future Whistle Bend subdivision.

More money will go to Yukon’s needy, said Fentie, through increased child care subsidies, seniors’ income supplements and food allowances.

As well, social assistance is now indexed to the consumer price index every fall.

Health spending will grow by $20 million, said Fentie. But this increase compares main estimates between years, and does not reflect additional health spending made through supplementary budgets.

When actual spending for 2008-9 is compared against the budget, growth is just one per cent.

Yukon’s NDP attacked the budget for what appear to be funding freezes or cuts for non-profits.

Most dramatically, transfers to Skookum Jim Friendship Centre decline by 79 per cent under the budget.

But that money will be made up through other government sources, said Patricia Living, spokesperson for Health and Social Services.

The money is simply being moved from one pot of money to another, she said.

For good measure, Fentie threw two mega-projects into his budget speech that were not even on the government’s books.

The first is a $160-million project to upgrade the Mayo hydroelectric dam and connect Yukon’s two power grids. Money for this work has been promised by the federal government, Fentie said.

But the money is nowhere in the budget, and finance officials say a final deal has yet to be struck.

The other is a 200-person camp to be built on Yukon Zinc’s Wolverine property. Two Chinese companies purchased the land two years ago and propose to build a zinc and silver mine for $240 million, which would begin producing in late 2010, said Fentie.

But because both Chinese companies are privately held, their financial health is unknown. And the global economic downturn has created many uncertainties for mining projects.

But the mine is a sure thing according to Fentie, and proof of the success of frequent visits to China made by his minister of Economic Development, Jim Kenyon.

Contact John Thompson at

johnt@yukon-news.com.