A Yukon Party majority government was re-elected on June 7, 1982 with the Yukon Party winning 9 of the 16 seats. The Yukon Party members elected included the following: Chris Pearson, Whitehorse Riverdale North; Dan Lang, Whitehorse Porter Creek East; Howard Tracey, Tatchun; Clarke Ashley, Klondike; Bea Firth, Whitehorse Riverdale South; Bill Brewster, Kluane; Al Falle, Hootalinqua; Kathie Nukon, Old Crow; and Andy Phillipsen, Whitehorse Porter Creek West. Don Taylor, the former Yukon Party candidate for Watson Lake, was re-elected as an independent candidate who supported the Yukon Party Government. The NDP doubled their representation in the legislature by electing 6 MLA’s: Tony Penikett, NDP Leader and MLA for Whitehorse West; Maurice Byblow, MLA for Faro; Margaret Joe, MLA for Whitehorse North Centre; Roger Kimmerly, MLA for Whitehorse South Centre; Dave Porter, MLA for Campbell; and Piers McDonald, MLA for Mayo. The Yukon Liberal Party elected no MLA’s.
While the seven challenges facing the Yukon Party Government in its first term in office remained, the second Yukon Party Government was faced with an added challenge – how to contend with an economic recession brought on by the total collapse of the hard rock mining industry. In 1982, there were no operating hard rock mines in the Yukon. Clinton Creek, Whitehorse Copper, UKHM at Elsa and the Cyprus Anvil mine at Faro were all closed down. On June 28, 1982, the Board of Directors of the United Keno Hill Mines announced the closure of the Elsa Mine by the end of July. Two hundred mine workers, both union and management, were to be laid off because of falling silver prices. Earlier in March, Cyprus Anvil Mining Corporation had laid off 95 employees and had announced that the mine would be shutting down as a cost cutting measure for three weeks from July 1st to the 26th. On July 9th, however, Cyprus Anvil announced that its mining operations would not resume until October and the company was seeking financial assistance from the Minister of DIAND. Whitehorse Copper ceased production on December 22, 1982.
Upon being sworn into office, Yukon Party Government Leader Chris Pearson stated that the Yukon Government’s 1982-1983 Budget would likely have to be re-written because of rapidly declining revenues. On July 13, 1982, Chris Pearson stated in the legislature: ” Mr. Speaker, Honourable Members, the current economic recession is having an impact on Yukon and its people far beyond anything that could have been foreseen six months ago. The closure of the United Keno Hill mine at Elsa, in combination with the closures already announced at Whitehorse Copper and Cyprus Anvil, constitute a disaster to the Yukon economy as well as to the mining personnel themselves and their immediate communities. It will be no surprise, therefore, that the Government of Yukon has found it necessary to undertake a program of retrenchment in order to bring our spending plans into line with the financial resources available.”
On the same day, the Government Leader announced the convening of a conference on the Yukon economy to be held on July 26th involving a representative cross-section of Yukon interests including members from the Chamber of Commerce, the Chamber of Mines, the Council for Yukon Indians, the Yukon Federation of Labour, and other interested parties. The Leader of the New Democratic Party and the Leader of the Liberal Party were also invited to participate in providing ideas and proposals for dealing with Yukon’s serious economic crisis.
One of the innovative cost-cutting measures adopted by the Yukon Party Government on August 6th was called the “9-Day Fortnight”. Under this initiative, the Yukon’s public service union agreed to cut civil servants working hours by 10% by giving government workers every second Friday off. The program was to remain in effect until March 31, 1983 and was designed to save the government $2 Million. This measure was adopted instead of having to resort to government lay-offs in order to reduce the cost of government.
Throughout the summer and fall of 1982, various discussions took place over how to restart the Cyprus-Anvil Mine at Faro. On September 8th, Cyprus-Anvil announced that the planned reopening in October of the Faro Mine was going to be delayed until March of 1983. The closure of the Faro Mine had a devastating, “tsunami” effect on the Yukon economy. As a consequence of the mine closure, White Pass announced that it would end its rail service effective September 30th resulting in the lay off of 50 White Pass employees and a court challenge by Teamsters Local 213 for breach of contract. In order to make up for these rapidly escalating job losses, the Yukon Party Government was attempting to negotiate an aid package with the federal government that included a $10 Million job creation program and a five-year economic development agreement.
Dome Petroleum Ltd., the owner of the Faro Mine, was also attempting to negotiate a refinancing package with four of its banks and the federal government. DIAND Minister John Munro, Government Leader Chris Pearson, Cyprus-Anvil President Earl Forgues, and Local 1051 Steelworkers President Dave Powers met and outlined a four-step plan to reopen the mine which included: reopening as soon as possible, the resumption of contract negotiations between the company and the union, Cyprus-Anvil setting out an action plan identifying its assistance requirements, and the Minister of DIAND ensuring the assistance package would be presented to the federal Cabinet.
The Council for Yukon Indians also expressed an interest to the DIAND Minister at this time in investing in the Faro Mine as part of the land claims settlement. Negotiations between the Company and its two unions got off to a rocky start with negotiations breaking down the first week in November. The DIAND Minister John Munro, in early December, accused Dome of stalling the contract talks and the Canadian Labour Congress went so far as to contact the Prime Minister calling upon him to nationalize the Cyprus-Anvil Mine at Faro if it was not immediately reopened by Dome. By December 22nd,however, Faro union workers had reached a new contract with Cyprus-Anvil thus paving the way for federal assistance to the mine. On April 20, 1983, John Munro, the Minister of DIAND, announced a $50 Million aid package to the Cyprus-Anvil Mine at Faro. The money would be spent over a two-year period to put 210 employees back to work and would be used for stripping overburden from the pits. The financial assistance would come from the federal government, territorial government and Dome Petroleum.