EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
Number two, we’d be more energy efficient, and number three, we would be bringing down the cost of doing business in the north. And, we need to be able to be proactive.
I have put a call into Mr. John Baird, who is the Minister of the Environment, who I know quite well actually because he served with me as the minister when he was with the Ontario Government.
I’m hoping to be in a conversation with Mr. Baird in the next week and a half to broach the subject of support from our federal partner and some ideas on how we move forward with the potential hydro projects, not only in the Baffin, but the in the Keewatin and the Kitikmeot region.
Almost every region of Nunavut, there is a huge possibility of hydro.
That in itself lessens our dependence on fossil fuels.
So that’s the direction that we’re moving with.
Hopefully, that helps answer some of the questions that the member raised and the comments that he made.
Certainly, I would like to eventually hear from experts. This is not a political issue whatsoever. I want to make that clear because it could be understood to be political.
In no way can we say that the energy situation and the energy crisis that I believe that we have is a political issue. It’s a very huge, practical problem.
I can say to you that we need to do away with what I call is “sugar coated” statements.
I’m not as optimistic as the Minister of Energy, or Ed. Picco, on this because the costs are incredibly huge.
I’m not sure the federal government will trade with a partner with a market that is so small that they want... I know the minister can do anything to wiggle something out of somebody.
But I’m not that optimistic with the minister will see a hydro project, maybe here, likely possible, but with the other communities; until we see some of the cost sharing agreements that are starting to come up, then it will bring hope.
I want to hear a practical story because you’re not just speaking or responding to me, you’re responding to Nunavummiut, and Nunavummiut are in a desperate situation.
The market is a factor, if you look at a long-term energy project like oil development; these eventually pay for themselves because the supply is delivered to the huge market.
We don’t have that; we can’t even export what we have if we develop a hydro project up here. It will depend on the local market; we’re not going to be able to export to any of them.
So if at all possible, let’s do away with these, the other day I used the phrase, ‘publicity stunts.’ Once the federal government is going to be doing a program, we try to jumpstart them and incur costs, when we could be diverting our own money to something useful and maybe directly benefit homeowners.
Again, I asked the minister, are these projects realistic? Are you realistically assuring us that you will enter into financing agreements with the federal government?
I like what the member is trying to imply. We can either sit around and throw our hands and not be able to do anything, or try to come up with a strategy.
When you look at it, just in this community alone, you’re spending money to purchase 30 million liters of fuel a year to heat that community. There are some opportunities for a cost offsetting.
The member is correct - we are not going to be able to move these projects forward, unless we have support from the federal government. Our federal partner has in the past helped step in, and as the member knows, to create opportunity with some of the hydro development sites, for example, in the Northwest Territories. That wouldn’t have been accomplished unless the federal government came in with loan guarantees and so on.
And, at that time the federal government was able to step in and brought those projects to fruition.
When we look at the offsetting costs by having the displacement of diesel fuel and so on, and amortize those costs over 25 to 30 years, when the life of the project would be considerable longer than that, it will, at the best scenario, be a good business case to bring forward.
I can’t deny that we need involvement from the federal government; there’s no way we can do it, unless we have another type of white knight out there on horse that’s going to come forward and say that they’re going to finance it for us.
I don’t think that that’s going to occur.
So we need to be able to bring the project forward, we need to be able to identify sites, and we need to be able to provide the logistic as well as administrative work to move that project forward, and that’s what we’re doing.
At the same time, we’re not just putting all of our eggs in one basket and saying there’s all going to be hydro. As the members know we can almost replace one-eighth of all of our heating fuels can be going forward with our reheat projects that we’re seeing in Rankin Inlet.
We are working on some other projects, too, to see if we can actually cut down our electrical generation cost but also looking at the environmental side of diesel generation and have that energy strategy. Energy is not just about providing electricity to a community; energy is about how we use the power and how we develop our energy sources.
For example, we have huge opportunities for oil and gas in Nunavut, which is part of energy.
All those types of things should be factored in.
Mr. Peterson: Thank you, Mr. Chairman. I thank the minister for providing that information.
I have to make a comment on wind energy - we know, as the minister says, it’s 70 to 80 cents per kilowatt hour, but as we all know that technology is always evolving.
So at some point in time, one would think that the technology has evolved to a point where it is energy efficient and it can be considered in Nunavut.
I would encourage the minister to keep pursuing the wind energy option, visit jurisdictions where they have wind energy like Kotzebue, Alaska, and I believe the Atlantic Wind Energy Research Institute in Prince Edward Island, and other jurisdictions.
I know there are countries around the world that are heavy into wind energy and making great strides forward.
I don’t totally discount the idea that wind energy can’t, at some point in the future, if not right away, but maybe some time in the next decade or two, it would contribute significantly to Nunavut’s energy needs.
I wanted to ask some specific questions about the minister’s discussion paper. I found the discussion on the backgrounder on subsidies quite interesting. It’s on pages 15 to 17.
The comment that jumped out at me, “... the Government of Nunavut’s subsidy programs are multi-layered and complex, making it difficult to monitor and track energy subsidies. As a result of true costs to providing Nunavut’s energy requirements, it’s difficult to ascertain. Most Nunavummiut do not know the true level of subsidization because of this complexity.”
I would wholeheartedly agree with those statements.
Then the summary on page 16, where the consultant attempts to put a figure to the total on energy subsidies in Nunavut as $43,839,030.
They say it works out to $1,500 to every person in Nunavut.
I found that quite staggering.
We know that from previous studies; the Government of Nunavut’s own Ikuma Reports and the Auditor General’s Report from 2001; that subsidies are quite heavy in Nunavut.
My question for the minister: can the minister tell us what action has been taken with respect to accurately calculating the total cost of fuel and energy in Nunavut?
Just very quickly, I just want to... the first opening comment there by Mr. Peterson, and that was on the issue of alternative energy and ensuring that we just don’t say no to wind because of the costs involved and so on.
Most of the wind farms we see, for example, the North Kay Farm on Prince Edward Island, is heavily subsidized, and it wouldn’t be in place without quite a subsidy regime through ACOA, the federal government, and Prince Edward Island.
However, we are, as a corporation again, as part of the Energy Strategy, what the Power Corporation is doing is moving forward to hire a dedicated professional generator engineer to look at alternative energy sources, which includes power, solar, nuclear, and other energy sources that may be out there that we’ve discussed here today.
Quickly, on the other issue on how do we ascertain what those costs are, hidden subsidies, and so on, that’s a big part of what we’re doing here today is to talk about where is this 20 percent of your budget is going and where that 20 percent is, so we could see less fuel being purchased to generate electricity, but where are the other different subsidies?
The member, for example, we have known all social housing units, for example, across Nunavut, the electrical bills are based at 6 cents a kilowatt hour, which the average should be around 37 cents, or 19 cents. So as a homeowner, you would be paying that amount.
I’ll ask Mr. Nino Wischnewski, the Director of the Energy Secretariat, just to touch base on the amounts of the Affordable Energy Fund, and what we see in some of the dollar values, and how we account for some of those subsidy values.
Mr. Wischnewski.
Mr. Wischnewski: Thank you, Mr. Chairman.
Right now, as the minister has pointed out, our subsidies are multi-layerered and are generated by several places.
As a first step, I guess, what we did was to try and pinpoint exactly what is our total dollar amount for energy subsidies, hidden and direct subsidies.
So recently we came up with that number and we realized that this is an opportunity to find ways of assuming we know what the amount is... how do we manage that better, and can we start thinking about using that amount in a more innovative way, to move the mindset and the intent of some of these subsidies, start de-emphasizing the subsidy component a little bit and emphasizing the incentive component a little more.
One way that other jurisdictions have done this, and the Northwest Territories comes to mind, is something called an Affordable Energy Fund.
That would include, if we do go down that road, it would include quite a few changes in how this money is managed and how this legislature allocates that money.
So it sounds simple but it’s quite a complex issue. So we’ve started work on that in the government.
The Deputy Ministers’ Committee on Energy that the minister alluded to earlier is involed, the Energy Secretariat is involved in this, and the Department of Finance is very involved in this.
We hope to have some recommendations and options available before the Cabinet Retreat on how to use this money, where to put it, and how they can maybe better use this money.
I thank the minister and his official, Mr. Wischnewski for that information.
I was leading up to some questions on the Affordable Energy Fund, and maybe I’ll just ask them here while we’re on that subject.
The Ikuma II Report: Meeting Nunavut’s Energy Needs was mentioned. One of the recommendations was to create an Affordable Energy Fund, and then you just mentioned it.
It hasn’t been created yet but is that something that’s coming forward very soon?
Can the minister answer that?
The legislation has already been put in place, as the members know. That bill has received assent.
Within the bill’s framework, there are opportunities to be able to proclaim certain items under the respective bill. In this case, I believe it’s November that the proclamation for the Affordable Energy Fund could be made, or not made.
That will depend on some of the information that we will bringing forward at the Cabinet Retreat in September to see if we have the support to be able to do that for the proclamation date which would be in November.
I would like to take this opportunity also, Mr. Chairman, just to ask Ms. Crawford, who has been working for several years now on the Affordable Energy Fund, not only the financial aspects of it, but the logistic aspects of it within her role as a senior deputy minister but also now in her new role with the Power Corporation. Ms. Crawford.
I will now recognize Ms. Crawford.
Ms. Crawford: Thank you.
I would reinforce what the minister said. The Affordable Energy Fund in Nunavut has been in our legislation since 2003.
It hasn’t yet been proclaimed. Obviously, a lot of things have to be put in place in financial terms.
A lot of the coordinating between the eight departments, which you discussed, has to occur for that fund to be effective. We’re much closer to being able to do that than I have seen previously, and the target date, which the committee working under Mr. Wischnewski has said, is November of this coming year.
That proclamation depends on a recommendation from Cabinet to the commissioner that the legislation actually come into effect. And, that will depend on how the work of the committee proceeds.
Mr. Peterson: Thank you, Mr. Chairman. I thank the minister and Ms. Crawford for that answer.
Could the minister... I don’t know if he can explain to us or clarify, but it seems to me that we already have a convoluted and complicated system, and now we’re adding the Affordable Energy Fund.
I’m hoping that that is going to streamline it and make it more efficient. I think that’s what Mr. Wischnewski was alluding to.
I don’t know if it all has to go through the Cabinet Retreat in September.
Can the minister clarify how the Affordable Energy Fund will be managed once it is proclaimed possibly in November 2007?
There has been, I think, extensive work done interdepartmentally on how to formulate and put in place, administratively, the Affordable Energy Fund.
I know that Mr. Ma has been working on the finance side on how we would administer such a fund, how that would be voted within the House under the Financial Administration Manual, as well as under the Financial Administration Act, if there is a clarification needed from the Auditor General, and so on.
That type of financial work needs to be done. Mr. Ma has been working on that.
On the directorate side, Mr. Wischnewski has been looking at what should be part of the Affordable Energy Fund and how can you make it more transparent. The idea is to do exactly the opposite of what Mr. Peterson is saying, and that is to move it away from the convoluted process of where it is right now and make it more transparent.
There are different ways of doing that, so I’m going to ask Mr. Wischnewski, some of the ways that he’s been looking at it under the Energy Secretariat to explain the transparency factor of the Affordable Energy Fund in the context to some of the things that not only the Auditor General would be doing but our own Department of Finance that has the check and balance with the fund itself.
I guess at the end of the day what we would like to achieve is moving the funding that now exists in various departments for subsidies like the Nunavut Electricity Subsidy Program, the Senior’s Program, and education, some of the monies that goes into the Petroleum Revolving Fund to make up for the difference between the price of purchase and the recovery price, the recovery on it of the cost, the price we set for retail is able to recover that cost and there’s sometimes a gap, and that would be a subsidy, obviously.
Putting all of that together from those various departments, setting up a mechanism to put it into one envelope so that you have one amount of money allocated for subsidies, and obviously, some money won’t be all drawn down, I would imagine the 12-month supply won’t be drawn down immediately.
So there will be money in that fund that can be used, for example, you can consider things like providing loans for energy efficient projects, as proposed and suggested by property management companies, for example, for government buildings.
There’s a whole range of the monies being transferred so that you can manage it. I think that’s probably what would happen. The committee is focusing on just how do we transfer this money into this one envelope, and once we’ve achieved that, how do we manage that money.
And then, at the next phase, perhaps go into some of the more innovative and creative uses of that money.
Chairman: Thank you, Mr. Wischnewski.
I thank the minister and Mr. Wischnewski for that explanation.
I’m not sure it clarifies it for me but I understand your intentions.
Can the minister or Mr. Wischnewski just clarify for me; he has mentioned the committee a few times.
Who is on the committee?
Could you explain that a little bit and what their role and mandate is?
What Mr. Wischnewski was saying, I thought it was quite a good transparent explanation of the Affordable Energy Fund.
By taking all the monies that are dedicated to our energy related matters, including the purchase outside of the Revolving Fund, and right now, the Petroleum Product’s Revolving Fund is about $125 million; however, debt replaces it, as we all know, because it’s a Revolving Fund - once we purchase the fuel, we pay back that fund.
The people on the Energy Secretariat and the Deputy Minister of Energy’s Committee consist of all the deputy ministers involved in the energy related issues. It also involves the CEO of the Power Corporation, Ms. Crawford, who would be sitting there.
We would have Intergovernmental Affairs also there, so David O. would be there, who was a witness at the table earlier with us. We would have representation from the Departments of Finance and Community and Government Services, for example.
So those key players look at the total Energy Strategy of the government in the context of purchases, as well as the supply side and management of affordable energy in Nunavut.
So hopefully that clarifies the member’s point.
The minister talked about all these people on the committee and it seems like they are all Government of Nunavut officials.
Do you have any experts outside of the Government of Nunavut who advise the committee, or who participate in some way in providing information to the committee and their experiences and knowledge from other jurisdictions in Canada?
We have actually done that.
We actually have a company now working on behalf or for us out of Manitoba, who has been working on the Affordable Energy Fund in Northwest Territories and other jurisdictions. They are providing logistic and administrative advice to the Government of Nunavut.
On the private sector side, we just had a review done last year on the Power Corporation itself and two private sector individuals who were going to join us as witnesses earlier this week but were not able to stay around while we finished the debate on some of the supplementary bills; that’s an opportunity where we could bring them back to the committee in the fall.
We have done what the member has suggested and we have gone out and got some private sector involvement in the development of some of these affordable energy strategies.
That’s good to hear that there are other people involved besides the Government of Nunavut. It’s good to get a broad range of experience and knowledge at the table that brings different perspectives to the issues.
Mr. Wischnewski mentioned bringing all the resources together into one envelope. The question on that is, if that eventually happens: can the minister indicate what he thinks the approximate annual appropriation would be to support that fund?
If you turn to page 16 in the strategy, you will see an amount of a little over $43 million.
That would be the basis of the starting point of the Affordable Energy Fund at the first go around.
There are some other issues that we would have to look at. The total costs to purchase fuel, for example, and if the amortization and O&M cost of the upkeep of storage tanks and fuel tanks in communities, for example, that type of physical and capital asset would be inclusive of those amounts. It would also be the dividend payment from the QEC that could be paid into the Affordable Energy Fund, and we had some discussion on that earlier.
He gave me a substantial number, almost $44 million. That’s based on 2005-06 and it will probably be higher than that amount.
Can the minister indicate, in addition to the Affordable Energy Fund that they have been working on, and hopefully be proclaimed in November, I don’t know if it will happen, but if it does, it will probably be good for him; but can he indicate if the government is currently supporting other energy subsidy options aside from the Affordable Energy Fund?
Just very quickly again, Ms. Crawford had some ideas of possible ways of alleviating some of that pain that the wallet as it were, for many Nunavummiut on subsidy programs, and she’ll have a chance to speak that in a second.
I just want to say that the Affordable Energy Fund itself is not a subsidy, it should be a pool.
It’s actually a catchment of the different subsidies that are in place across the government departments and Government of Nunavut when we look at the energy sector area and that includes the purchase of oil and fuel, generation of electricity, and so on.
If I could, I’d ask Ms. Crawford just to elaborate a little bit on the first part of the question and that was on the subsidies in place across Nunavut and what that amount would be.
Ms. Crawford: I was present when they were calculating the various subsidies.
Obviously, the ones we’ve been able to capture in the report that’s presented, the $43 million, is in old year dollars, and there have been significant increases in the cost of energy over that period of time, as well as some of the subsidies have moved up.
For instance, the electrical subsidy is based on 50 percent of the cost in Iqaluit. So as the cost in Iqaluit has moved up, the government has moved the subsidies for all communities all across the territory, correspondingly.
So those things have resulted in changes in how the subsidies... not the nature of the subsidies, but the amount of the subsidies that are being paid. Obviously, as our fuel prices increase, the total cost to the government increases.
There are subsidies built into fuel cost, which the corporation, at the current time, benefits from, which is passed along to consumers through the Fuel Stabilization Rider. That’s because our fuel comes from the Petroleum Products Division and the government contributes to the operation of that division.
Minister Picco had asked me if we could think of a project where we could clearly identify how an Affordable Energy Fund would be beneficial. I had just indicated to him that residual heat would be a good example to demonstrate how the Affordable Energy Fund might work.
When the corporation puts in a residual heat project, instead of fossil fuels being burned to heat buildings, the heat from the plant is used to heat buildings. That means that PPD doesn’t have to import into the community that million or two million litres of fossil fuel.
That means that the 10 cent per litre subsidy on fossil fuels that the government would have paid as part of the PPD process, doesn’t have to be paid. So that money stays in the budget. The new tank fund might be built and the tanks that have to be built to hold the fuel that would’ve been used to heat those buildings, that tank farm doesn’t have to be built, or those tanks don’t have to be built.
So that each time we make a positive step, in terms of conservation in the energy infrastructure, it rolls back to all the other sources of energy, and potentially, it puts money into other pockets. In an Affordable Energy Fund you would be able to tag those savings and be able to reinvest them in other energy investments.
Chairman: Thank you, Ms. Crawford.
Mr. Peterson: Thank you, Mr. Chairman. I thank the minister and Ms. Crawford for that information.
I’m familiar with what Ms. Crawford has just outlined. We do have a residual heat system in Cambridge Bay.
I think the power plant there provides additional heat to the hamlet office and there might some other buildings in the community. It does provide substantial savings to the hamlet.
Those are good examples of how we can save money. My colleague from Rankin Inlet mentioned, $400 million to $500 million would required for all these energy projects, but if the federal government doesn’t come on board and help us out, we’re going to be left to our own devices.
And, it seems to me that saving... like there’s nothing in our current infrastructure, in terms of public housing and the Government of Nunavut’s own buildings. There should be a heavy emphasis on conserving energy.