Yukon small businesses will see a 25 per cent reduction in their small business tax rate this year, Premier Darrell Pasloski announced Friday afternoon during a lunch-time speech hosted by the Yukon Chamber of Commerce.

The small business tax rate will drop from four to three per cent, Pasloski said during the speech, which offered advance highlights of the 2014/2015 fiscal year budget to the business community.

"Successful, prosperous businesses make for successful, prosperous communities. Reducing the burden on Yukon's business community will resonate throughout the territory,” he told the audience at the High Country Inn.

The premier explained the government is focused on growing the economy, noting this year's budget includes the largest capital investment in the territory's history, while still retaining the territory's surplus.

"We need a strong private sector if we are to reach our goal of becoming a net contributor to Canada. We know that the economy over the past years has presented some challenges but challenges can also be opportunities.

"It's how we choose to deal with them that can determine our future,” he said.

The budget he tabled a year ago was worth $1.23 billion.

The premier announced the government, in partnership with the chambers of commerce, will review the Yukon's regulatory regime for small businesses and create targets to reduce the burden of red tape. The business incentive program is also slated for review.

"Our goal is to make Yukon an even better place to start and to operate businesses,” he said.

Moving on to highlight good news items for the mining industry, "a cornerstone of our Yukon economy,” the premier announced a 40 per cent increase to the Yukon Mineral Exploration Program, bringing the investment in 2014/2015 to $1.4 million.

The government has also allocated $700,000 to develop an investment attraction strategy, $1.9 million to the Yukon Research Centre to encourage further collaboration with the mining industry, and $2 million to begin planning for a new hydro project that would provide "price-predictable” energy to industry.

In a follow-up interview Friday afternoon, the premier explained that the $2 million would be used for site identification and some initial engineering work.

"I know that we're not going to get this done in this mandate but this is a legacy piece; this is something that's much bigger than a mandate, this is something that Yukon will benefit from for decades, truly for generations,” the premier said.

Liz Hanson, the leader of the official Opposition, said she's keen to hear more details of the $2-million hydro investment in the premier's budget speech tomorrow afternoon. She noted that it's a relatively small investment in a project that would cost billions and take 10 to 15 years to complete.

Continuing to outline investments of interest to the mining industry, the premier said the government will be spending more on the territory's road network than ever before, including $600,000 to carry out functional planning for key access corridors including the Freegold Road, the Nahanni Range Road and the Klondike Highway.

During a question and answer period following his speech, the premier was asked about investments in upgrades for remote airstrips. He responded that this budget includes a sizable investment in airport infrastructure, but didn't outline which airports would receive funding.

It appears the budget will not include the $5 million over two years for a national television advertising campaign as the Tourism Industry Association of Yukon requested earlier this year.

The premier didn't provide any details about the status of that request, noting only that the association works closely with the department and the minister on a regular basis.

But Pasloski did announce more than $590,000 for the overseas marketing budget to make up for the loss of $2 million in funding from the Canadian Northern Economic Development Agency, which comes to an end this month.

"Due to the success of this project, our government has decided to maintain that enhanced level of investment in overseas marketing,” the premier said.

Hanson, who was in the luncheon audience, called the announcement a "slap in the face to the tourism sector.” TIAY's request was "fairly-reasoned and reasonable,” she said.

But Neil Hartling, TIAY's chair, said he wasn't surprised nor discouraged that the premier didn't announce funding for the national ad campaign Friday.

"We worked closely with the government last year for the increase of $590,000 for the European market, covering the lapse of the CanNor funding,” he said in a statement today.

"This very recent ask of $2.5 million per year is in a strategic response to the slowing Yukon economy and a wise business case to bring an immediate increase to economic performance.

"The immediate benefits to hotels, Air North – Yukon's Airline and businesses throughout the Yukon's economy will be many times more than the $2.5-million investment and will come at a time when it is badly needed,” Hartling continued.

"We are confident the government will work with us to make this happen this year.”

Another $500,000 in tourism funding will be allocated to support operations and programs at seven First Nations cultural and heritage centres, the premier announced.

Pasloski also announced a further $600,000 to plan a fibre optic line south through Juneau.

The funding will allow First Nations development corporations to establish the business entitiy needed to help construct the link, he said.

During the question and answer period following his speech, the premier said he expected the whole project to cost around $25 million and hopes to see it completed by the end of next year.

"Over the course of the territory's history, governments have invested in building roads to help grow our economy. Today, fibre optic cable and communications infrastructure are the roads of a digital economy.

"All sectors are reliant on this new kind of road. Our investments in this area will go a long way to ensure diversification of our economy,” said Pasloski.

Further improvements to communications technology will see 4G access in all Yukon communities by 2017, he added.

During an interview today Hanson called the speech "uninspiring.”

The premier's last few speeches, she noted, were focused almost exclusively on the resource sector.

"This seems to be a grudging acknowledgement that the boom time on that side is over and that we need to be diversifying,” she said.

Still, the NDP leader was hoping for more information on the government's long-term economic vision for the territory.

During his speech, the premier also listed numerous capital projects that are expected to begin construction this year, including:

• the new F.H. Collins Secondary school;

a 48-unit seniors' residence in Whitehorse, in addition to the Alexander Street project currently under construction;

• new commercial and private lots at the Whitehorse airport;

• a seniors' residence in Mayo;

• the replacement of McDonald Lodge in Dawson City;

• a new Environment Yukon district office in Watson Lake; and

• a new firehall in Beaver Creek.

Planning and design dollars for projects set to begin next year are also included in this year's budget, the premier announced.

Those projects will include a new long-term care facility in Whitehorse that will include 150 beds, with the capacity to be expanded to include 150 more in the future, the replacement of the Sarah Steele building, and a new firehall in Carcross.

Pasloski said the government will release tenders for several projects to begin in 2015 during the fall legislative sitting, which will "give contractors certainty for the 2015 season.

"It will allow them to purchase and move equipment and supplies earlier and it will also ensure that the government gets the best available pricing,” he said.

The premier will deliver his budget speech tomorrow in the legislature following question period.

See letter.