Indigenous and Northern Affairs Committee on Nov. 17th, 2009

[The Chair, Conservative, Bruce Stanton]

We'll go back to Mr. Payne for the last question. Go ahead, Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chairman.

I'd also like to thank all the witnesses for coming. It's certainly late in the day for you, but we have another panel to go through yet.

I want to read something from The Economist magazine from August 29. It says: “Mr. Harper's government has paid more attention and allocated more funds to the Arctic territories than the two previous Liberal governments managed during a dozen years in power.” As part of that announcement, I understand that there was something like a historic labour agreement for $22 million for the territories. Of that, about $12.5 million was for the Yukon.

I wonder if Mr. Curtis and Mr. Furlong can make some comments on that.

[Dan Curtis]

I know that Skills Compétences Yukon has been a beneficiary of the generosity of the federal government for 12 years. Although we're very grateful and appreciative, it's been kind of the status quo for the last 12 years.

Our working relationship within Service Canada has been wonderful. I think the Yukon is the only region in all of Canada that has been offered and has received a three-year contribution agreement. Certainly, from a personal point of view, our organization is very appreciative of the support we've received from the federal government.

I must add that locally it hasn't just been the financial aspect of it. We've received a tremendous amount of support from the local Service Canada office. The participants who are working there have been very good at ensuring that we have everything we need to facilitate the needs of northerners and Yukoners.

[Alex Furlong]

I think past governments, the current government, labour, community members, and first nations all share a responsibility. I don't think anybody would argue the dollar-and-cents side as governments put investment into first nations or communities in general. I think what we really need to see is a commitment from all levels of government--municipal, territorial, provincial, and federal. The situations that we've seen and that are described across Canada need to change.

To go back to a previous committee member's statement, it's not all about money; money plays an integral part in laying the foundation, but we all share the responsibility. It's not the current federal government or the past Liberal government. We need to move forward on that basis, on the basis that it will take everybody's efforts. I learned a long time ago in the labour movement never to argue with an economist.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thanks for that. I understand what you're saying in terms of cooperation.

One of the things we have heard over and over, of course, is an ask for funding, and there's no question around that. I think that we've done pretty well.

There's also another one here. The Yukon Mine Training Association has received about $640,000 for training and skills development. How does that fit in with Skills Canada as far as the labour movement goes?

[Dan Curtis]

They've been a huge partner within the Skills Canada movement of getting people engaged in trades and technology. That's been another big benefit to the participants and competitors we have throughout the north. Not indirectly, but very directly, the Yukon Mine Training Association has been a fantastic partner in helping to get people in the communities engaged and ready for mining, as Ron was saying as well. They've been a big help for that.

[Alex Furlong]

From the labour perspective, I would certainly view the YMTA as a success story. The program they have coupled with Skills Canada here in the Yukon can only go to enhance opportunities for aboriginal people. It's a great program, and we would like to see more programs of a similar type in the north.

[The Chair, Conservative, Bruce Stanton]

You've got 15 seconds left. Do you have one more quote that you'd like to get out?

[LaVar Payne, Conservative, Medicine Hat, AB]

Perfect. No, I want to make a statement.

In terms of Skills Canada and the competition in Calgary, that was absolutely fantastic, and it would be really nice if you could get that here in Whitehorse. It would do great things for the Yukon in terms of getting that message out on training as well as tourism.

Thank you.

[The Chair, Conservative, Bruce Stanton]

Very good. Thank you, Mr. Payne.

Of all the five panels we've heard from today, I must say to our witnesses that you certainly represent the broadest range here, and in a very important area. We know that the skills, the human resources side, and the arts and culture side are incredibly important to the success of our economy here in the Yukon in the future. We appreciate your thoughts and your thoughtful responses here this evening, and we wish you well.

Members, we're going to suspend for approximately ten minutes. Then we'll resume with our last panel.

[The Chair, Conservative, Bruce Stanton]

Order. Members, we'll get under way with our last panel today.

I'd like to thank you all, by the way, for your patience today--and your perseverance, I guess I should say. It's been certainly a long day but a very fruitful one from the standpoint of informing our study.

We're delighted to welcome back Mr. Richard Runyon, who was here earlier today with the Yukon council, and also Mr. Rick Karp, who is the president of the Whitehorse Chamber of Commerce.

We're delighted to have you back. You may see from the agenda that we were also awaiting a representative from the Dawson City Chamber of Commerce. It would appear that we don't have that person in the house tonight, so we will have just the one presentation.

Mr. Karp, I'm assuming that you will be giving that presentation. We normally allow five minutes, but since you're our only witness in this last panel, if you want to take a little bit more than five minutes, then please do so. Later we'll go to questions from members.

We were just saving the best for last, Mr. Karp.

[Rick Karp, President, Whitehorse Chamber of Commerce]

Absolutely.

Thank you for the opportunity of being a witness this evening. I will do a brief introduction, and then Mr. Runyon will read through our presentation.

We're here to say that business in the north is not an easy task. I joined the Chamber of Commerce five years ago as its president, but I've been in business for 24 years. It's been a challenge. I continue to be in business in Whitehorse, but it has been a challenge.

It's an ongoing challenge for the business community to do well in Yukon. We have been told that we have a $1-billion budget. But that $1-billion budget is not getting down to the small business person. As you will hear, we are primarily government-run, and small businesses have a serious challenge in Yukon.

We're hoping that this panel can help make some adjustments to that, make some changes to that, and support the small business community throughout the north.

Having said that, the chamber movement throughout the north is about working together. We have a meeting coming up December 4, where the chambers from Labrador and northern Quebec, Nunavut, Northwest Territories, and Yukon will be meeting. We'll be discussing specific issues related to small business throughout the north.

This is a significant issue to us as a chamber. The Whitehorse Chamber of Commerce represents over 400 businesses in Whitehorse, and many of the challenges that we have are significant challenges throughout the north as well.

Not to take too much more time here, because I'm sure we will have some questions and answers, I'll turn it over to Richard to read through our presentation.

[Richard Runyon, Second Vice-Chair, Whitehorse Chamber of Commerce]

Thank you.

At the Whitehorse Chamber of Commerce the following questions are being asked: Are we business ready? Are we business friendly? What markets can we compete in, and when, in the global economy?

Based on a lack of outside private sector investment this past year, the answers to questions one and two are no. As do many northern regions, we continue to struggle with attracting skilled human capacity, we struggle with high housing costs, and we struggle with the high cost of transportation.

In the Yukon, our economy is government, and the majority of our private sector resources are focused on servicing this economy. We have little incentive for promoting growth or infrastructure, both human and capital, to support the larger private sector investment initiatives. Instead, we remain dependent on the financial generosity of Ottawa to continue funding our quality of life that has become equal to the bigger cities across Canada.

Our largest fear is the reduction in transfer agreement payments, which would decimate our economy. As a region, we are not focused or working together toward a common economic development plan that will enable Yukon to become self-sufficient. In many cases, our largest groups--mining, tourism, and environmentalists--work against each other. This adds to the complexity of doing business in our region and is especially true for projects like mining, which ironically for Canada, after energy projects, is our second-largest export industry.

For current outside investors in our region, it is not uncommon these days to see these investors pulling back from the Yukon as we fail to resolve our threats to business and market failures. In Whitehorse, our prime waterfront real estate remains vacant, as do large plots of commercial space and offices. The majority of our construction in the territory is focused on building more government buildings that our minuscule tax base will struggle to cover, both operational and maintenance costs.

Taxes for the city of Whitehorse alone have risen 23.4% in the past years. Although these taxes are some of the lowest in the nation, these increases show outside investors that we have no governance fiscal spending discipline.

The risks are high for successful investment in the Yukon. Our small population and our high transportation costs make it difficult for small businesses to compete against the high-volume stores, where lower prices usually win. Add together increased costs of local regulation, unreliable utilities, ever-increasing taxes, and local government competing for labour, and it equates to the extinction of our small population of commercial business owners.

In these worldwide difficult economic times, we are at a disadvantage to compete for large global investment dollars. At present, it appears we are only able to attract large private sector companies if they are able to have legalized monopolies in our regions. For those new businesses that have committed to the Yukon and are under construction, they are competing with government projects for our precious yet limited supply of skilled trade labour.

In the Yukon's current budgets for economic development dollars, INAC's contribution to this pool is 2%--which is going to be the new CanNor--which INAC strategically delivers to 14 competing communities. INAC's regional office approach to distributing their funds has been to select projects that would provide return on investment or have the greatest economic impact to a region of the Yukon. The larger pools for economic development are the Yukon government, consisting of economic development and tourism dollars at 17%, and Infrastructure Canada at 81%. These two larger pools are delivered largely not by strategic initiatives to make the Yukon a better place to attract business, but as a result of political pressure. Often these projects do an exceptional job at creating economic opportunities and wealth for locals in the region, but, like the 2007 Canada Winter Games, leave more debt once completed than economic benefit.

Over the past several years, Ottawa has invested hundreds of millions of dollars in the Yukon with very little impact to creating an environment where both business and people can flourish. This occurred largely because the moneys are not tied to specific plans for building long-term commerce. Our dollars distributed for strategic impact are too small and the politically driven dollars are too high.

To complicate the problem, federal programming is designed in Ottawa by technicians who have limited experience in rural communities. The result is often a disconnect on how program dollars can be used versus implementation that will work in our limited human resource environment. We are ever hopeful that the new Canadian Northern Economic Development Agency will help to reduce these program design flaws.

In closing, Canada and the Yukon need to strategically identify specific industries in which the Yukon can compete in the global marketplace. It needs to be one or two industries. Once identified, we need to build an environment that will attract investors from these industries, yet look out for the long-term interest of the nation—i.e., environmental issues. An economic development plan needs to be developed that focuses on building this environment for business. Economic development dollars would be strategically assigned for implementing each element of the plan and not allocated by political whim.

For the city of Whitehorse, we as a community need to focus on building efficient government and manage our tax base cost, keep housing affordable, and then create an environment where we are able to attract and retain the right skill sets and businesses to implement both Canada's and the Yukon's plans. Most importantly, as a city, we must create an environment where small and large commercial businesses can flourish and grow, as these are the businesses that will create greater wealth for Canada's future. As our main source of revenue, though—transfer payments—Canada needs to create funding requirements that ensure we as a city live up to our commitments to the nation.

Thank you.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Runyon and Mr. Karp.

Now we'll go to our first round of questions, beginning with Mr. Bagnell for five minutes.

[Larry Bagnell, Liberal, Yukon, YT]

Thank you for your presentation. I know you're a very vibrant organization in the Yukon.

One of the comments you made was that small businesses are competing for labour. Could you elaborate on your labour challenges and problems and the whole labour field for small businesses?

[Rick Karp]

Absolutely. In the labour market here, we have at this time over 1,100 people on EI and about 850 people on social assistance. The SA wall in Yukon is around the $40,000 to $42,000 mark. It's very difficult to get these people back into the workforce. The chamber has been working with Yukon Health and Social Services and attempting to create some programming to get these people back into the workforce. Because we have seasonal labour markets up here, we've made recommendations several times for EI programming to create some incentives for seasonal workers to continue in the workforce during the off-season times.

What the small business community has done to compensate for the lack of labour here in Yukon is to bring in foreign workers. We now have several businesses where foreign workers constitute upwards of 90% of their labour force. Many businesses have brought in foreign workers and continue to bring in foreign workers for the labour market.

Does that answer your question?

[Larry Bagnell, Liberal, Yukon, YT]

Yes.

In terms of the strategy to get the people on SA or EI to work, you believe some of them could work in your businesses to solve that need. I know we had a program to give an incentive to get off EI when we were in government, but do you have other things that the federal government should do that would help those people get into the labour force to fill some of those needs that you have?

[Rick Karp]

Yes, the program we've been trying to work on with the Yukon government uses the head start program, which provides top-up funding for social assistance clients. We have several that we're experimenting with right now where a social assistance client would be partnered with a business. They would stay on full SA money, which they would get on a monthly basis for about six months or more. During the time they would be working in the business, they would be able to keep the money they would be making as an employee and they would build a bank. During that time as well, not only through the training department at Health and Social Services but through the business employer as well, they would learn budgeting and all the things they get from social assistance. Right now, they're getting rent rebates, bus fare, and all sorts of day care, everything they would get that they wouldn't get if they were just in the workforce.

What we are working on doing is having a transitional program so they stay on SA for a period of time, they work, they gain a bank, and then when they're ready--whether it's six months or a year--they start phasing out of social assistance and they stay in the workforce.

We have arranged for several businesses in Whitehorse to take on social assistance clients, and they guarantee them the job for a minimum of six months to a year. Social assistance has been helpful in that attempt.

We at the chamber have said all along that we feel that we could solve our labour market problems right here through EI if there were proper incentive programming, through social assistance, and through first nations training and development.

[Larry Bagnell, Liberal, Yukon, YT]

How is the time?

[The Chair, Conservative, Bruce Stanton]

You have 45 seconds.

[Larry Bagnell, Liberal, Yukon, YT]

I think we heard several times in our hearings, and also from you, that there may be some good programs or projects here and there, but it's a bit random, a bit shotgun, and there's not a thoughtful overall economic strategy for the Yukon involving all governments. Do you want to comment on that again? I think you referred to it in your presentation.

[Richard Runyon]

I wanted to comment on the previous one, actually.

[Larry Bagnell, Liberal, Yukon, YT]

Go ahead on the previous one too, if you want.

[Richard Runyon]

Let me give you a real-world example with this labour issue.

We've got some mines going into operation here. They need electricians because they've got to do all the electrical work at the mines. I talked to the people at one of the mines, and they need 60 electricians on site. We've got maybe one company that could provide 60 electricians to this mine, but then they've got to get in another 20 guys because you're going to have turnover and everything else, and they've got to send these guys out into the bush. The problem is that with all this low-lying fruit--these government projects such as the new fire hall and the library and all this other kind of stuff--there's no incentive for this company to actually go out and work at the mine, because there's easier money to be made in town. You don't have to send your people out of town and that kind of thing.

Does that answer your question? It's a real-world example of a foreign investor trying to start investment here, and the investor can't get the resources locally to do it. I can assure you that as part of their equation, they didn't think they would have to import labour to get their facilities up and running.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Bagnell.

You may want to put your headsets on for interpretation.

Mr. Lévesque, you have five minutes.