Finance Committee on Oct. 25th, 2011

[Tara Christie]

Yes, absolutely. Without the extra 15%, a lot of investors will pick other sectors. It's a hard market in which to raise money, especially right now.

You can look at the junior exploration market and see the value of people's shares without the mineral exploration tax credit. Those companies won't be raising money.

[The Chair, Conservative, James Rajotte]

I appreciate that.

The last comment I'll make is this. The linkage among the mineral sector, the natural resource sector, and the financial sector has been driven home to me in the last few years. There's a relationship between that sector and every other Canadian.

My time is up. We will have another few rounds.

We'll go to Ms. Nash, please.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you, Mr. Chair.

When coming here even briefly, you appreciate that it's a challenging place, with a relatively small population and a massive geography.

Given that the mining sector is such a large part of the economy here, can you very briefly describe some of the challenges you face when world commodity prices decline? We've seen some softening, but it's been up and down. Can you describe what that means? You described your sector as the R and D part of mining. What does it concretely mean for you?

[Tara Christie]

Concretely, it means that there's less money available to fund our exploration. In certain sectors, such as the base metals, it's been really hard to raise money at all for those projects.

I'll ask Philip to take over; I need a drink of water.

[Philip Bousquet]

On the exploration side there is, of course, no production revenue. Companies such as Tara's and other exploration companies rely solely on investor confidence. The past few years, as you've seen such market instability and recession, have affected individual investors' investment decisions, which brings us back to having incentives such as flow-through share financing and mineral exploration tax credits, which provide additional incentive for an individual investor to consider exploration projects even when markets are unstable.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.

Ms. Babcock, I heard you talk about there being ups and down in the mining sector, in any natural resources sector, and you said you were looking to add, through economic development, other kinds of jobs that would help buffer the ups and downs of that sector.

Can you give us an example of some of the jobs that, through an economic strategy, you anticipate might be available here in the Yukon?

[Sandra Babcock]

I think we have a great opportunity to develop in the information technology sector. We currently have a number of people who live in the Yukon whose business, however, is done all over the world and none of it in the Yukon. So through information technology—

[Peggy Nash, NDP, Parkdale—High Park, ON]

They choose to live here because it's so beautiful.

[Sandra Babcock]

It is; it really is.

I think some investment in education, moving our college from a community college to a university, is a possibility. Our young people have to leave the territory to get their university education, and often they don't come back. They find employment elsewhere, and we don't see them back.

We're currently an aging population in the territory. I can't remember the statistics, but just within the levels of government alone a staggering number of people are expected to retire within the next five years, and it's going to create a whole new challenge for us in the territories. Continuing education is.... You could actually call education a sector, I think, because it brings in people, it brings in skills, and it has service and supply needs.

[Peggy Nash, NDP, Parkdale—High Park, ON]

It might help with some of the outreach to first nations as well, because it sounds as though there are very high needs there.

[Sandra Babcock]

Yes. The cultural industries are a growing sector in the territory, and their development is another possibility. First nations culture is very definitely included within our cultural industries.

[Peggy Nash, NDP, Parkdale—High Park, ON]

We've talked about some of the infrastructure needs in the Yukon and the role the federal government could play in this regard. It seems an opportune time right now, given low interest rates, to get access to lower-cost capital to make those investments. But there was discussion earlier about the lack of territorial taxes, about there being no equivalent of a sales tax here. Do you see any link between not having any sales tax here and having a big infrastructure deficit?

I guess that's a question for the territorial politicians, but I ask you that.

[Sandra Babcock]

I don't see it as significant. With a population of 36,000 people, I really don't see any significant contribution coming from that area.

[Peggy Nash, NDP, Parkdale—High Park, ON]

You're going to need the federal investment, then.

[Sandra Babcock]

Yes.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

Mr. Leef, we'll hear from you again, please.

[Ryan Leef, Conservative, Yukon, YT]

Thank you.

This one will be for the Chamber of Commerce; it's just an opinion-based question.

We've seen an increase over the last five or six years in the territorial transfer payments. I think now we're at something in the neighbourhood of $745 million, about an additional $55 million above the transfer payments from previous years. This summer was wonderful for me, with a lot of additional non-targeted funding coming from the federal government in such programs as Skills Canada. I think we announced $220,000 for a three-year project with Skills Canada.

On top of those kinds of announcement and the $77 million from the green infrastructure fund with the Mayo B project, how important are the transfer payments the territory is receiving, which are dealt with by the territorial government for the business development of the territory?

[Sandra Babcock]

They're important. It's not only business development and health care. We've really enjoyed the support of the federal government in financial support for delivering health care services, and when you're trying to attract your labour force, you need a solid health care system in place. You need a solid education system in place. It's reaching far beyond economic development. We like to say the Yukon is a fun place in which to live, work, and play. So how do we keep that, and how do we support the type of infrastructure that's involved? Otherwise we are not going to attract people here. People are not overly attracted to 40 below.

[Ryan Leef, Conservative, Yukon, YT]

Now we'll jump from transfer payments to cruise ships. You mentioned the cruise ships, and I don't know if a lot of people realize we're only about two hours away from the port of Skagway.

Do you have numbers on the cruise ship volumes coming into Skagway, to maybe help us illustrate the importance of the Canada-U.S. border relations, and the need for red tape reduction so businesses in the Yukon can maximize the volume coming in on the cruise ships to the port of Skagway?

[Krista Prochazka]

I'm going to apologize. My mind is going to draw a blank on the exact numbers coming into Skagway, but to give you some indication, Carcross, which is our community closest to the Skagway border, is a town of 850 people with very limited industry. It receives 100,000 visitors a year out of the port of Skagway. It's astonishing and somewhat overwhelming, and that's a very small fraction of the visitation that comes in, particularly this past year. I don't think we have the final numbers, but the addition of the Disney cruises to Alaska certainly upped the number of visitors coming in.

Yukon itself and Carcross, which is one of these communities we've been talking about, is largely a first nation community. It's very small. They receive 100,000 people every day throughout the summer, with visitors getting their Canadian adventure every day. Many of those people are there for the day, but quite a number continue on to Whitehorse and up to Dawson for their Yukon experience.

[Ryan Leef, Conservative, Yukon, YT]

Are we doing a good job as a territory or as a government in marketing that, or are we really riding the coattails of the cruise ships, and having them market it on our behalf? Is there a way we can maybe improve? I mean, 100,000—I guess we shouldn't be complaining too much about 100,000 people coming over the course of the summer to a town of 800 people. It seems there's obviously a percentage that we're not capturing.

[Krista Prochazka]

We're not capturing a tremendous number of them. I think we can.

For context, Holland America spends more to market Alaska and Yukon than the Yukon government does. Their budget is bigger, and they're all over the globe. That's their budget just for our region. We partner with them extensively. I think absolutely we could do more. Part of it would be—and this is where we talk about the opportunity for investment—investing in communities like Carcross and other smaller communities to create reasons for people to come. In terms of economic investment, it is a place where the governments, those of Yukon and Canada, can play a role, because for an investor to come in—at least for the first five or ten years that he is going to be there—the cost of building in the territory and the cost attached to creating a local workforce is a tough sell.

[The Chair, Conservative, James Rajotte]

Thank you.

We go to Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

On the whole issue of energy infrastructure, in terms of transmission, modernization, and energy production as well, has there been much discussion of a regional north-south energy strategy, U.S. and Canada, in terms of region? What are the types of infrastructure investments and proposals out there that have been presented or are being developed?