EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
This is what I am asking you now.
Hon. Louis Tapardjuk (interpretation): We are always looking for ways to buy fuel at the cheapest price so that the people, who purchase the fuel, including homeowners, are not adversely affected. We are in full agreement to deliberate on making improvements.
This has to be understood: the fuel purchased by the government is not used to make any profits.
As an example, we paid the fuel costs at this price per unit, the shipping costs, the fuel tank farm storage costs, and fuel contracts are all included in this price and the government does not include any additional costs.
However, we will continue to search for ways to lessen our usage of fuel, whether it’s the private homeowners or the power bills we all have to pay, including our hunters. So we continue to looks for ways to help lessen the impacts on Nunavummiut, Mr. Chairman.
I want to ask the minister in regard to the increases in fuel prices. It’s clear that annually, the people contracted to be the fuel contractor at the pumps have to maintain the equipment, they need staff, and in the larger communities, they require more workers.
In the smaller communities, they create part-time positions or just one position.
Has the minister considered whether they can put forward an initiative whereby all the fuel in Nunavut costs the same and if this would provide some assistance?
On a personal note, this summer, we left on a boat trip to a community that’s higher up the Kivalliq region and we bought less expensive fuel than we had bought down in Arviat.
I don’t know why it was more expensive in Arviat because it’s at lower latitude, so the distance is shorter. Perhaps it was due to the shipping costs that our community’s fuel prices were much higher than that community.
It’s obvious, at least to me, having experienced different costs in these two communities, that there are other cases where one community pays higher prices for fuel. I believe that each community has different prices.
Some may be due to the contractors and perhaps the example that was used is when you have to buy fuel and it’s the only place to buy it, then you have no choice but to buy it.
I wonder if this has been considered by your department and if this can be looked after by PPD.
Perhaps I will ask the Deputy Minister of Petroleum Products Division to respond to that question, Mr. Chairman.
We review all of the issues facing us since we have different contractors in the communities.
We identify the number of staff applicable to the contract and include all the expenses in the final costs.
We do this for all of Nunavut and some communities do cost more than others.
We continue to look for any area that we can improve and via this setup, fuel and gas prices are usually reviewed so that there’s not so much disparity in costs.
We try to add all of the costs associated with the fuel we purchase and the different prices for landing the fuel in our communities.
If I understood the question, we try to keep the prices uniform in every community.
Although it may be that way, the real hunters are the ones with low incomes in the communities and it’s hard to imagine their struggles. As the Member for Hudson Bay stated yesterday or a couple of days ago, even when the water was calm, there was no one out hunting because they didn’t have any money for gasoline.
The price of fuel was raised not too long ago even though the gasoline was already paid for and we still had the old gasoline from the previous sealift. I can understand that this was to offset what they felt would be a sticker price shock after the upcoming sealift in November.
Although this is the case, we cannot control the price of petroleum products when we have to follow the world price as it’s obvious that the free market sets the price.
Due to all of the concerns, it became apparent that this spring, the government planned on raising fuel prices to see how they could resolve this without impacting too many people.
In that case, is there any possibility that they could provide some sort of assistance to lower costs for the hunters?
With respect to the GST on fuel purchases, hunters would not have to pay the GST and they would try to complete the forms to receive tax rebates, although some of the tax rebates totalled only $3.
The way the tax rebate is structured is totally useless and an empty gesture. Many hunters didn’t want to fill out the forms for such minimal amounts and many people couldn’t get assistance to complete them.
It seems that we could create a visible program to lower the costs of fuel and it would assist those people with limited incomes, even improvements to our rebate program would be welcomed. Even though PPD is a government department responsible for purchasing fuel, I think there should be a recommendation to lower prices.
There are many government staff who are earning big salaries while doing very little work and we expend millions of dollars just on that. We should be able to divert some of the funds from useless staff, at least in my opinion.
Is this something that the minister has taken into consideration?
Hon. Louis Tapardjuk (interpretation): Indeed, the tax rebate program that the member is referring to is an assistance program.
As long as the people retain their receipts from fuel purchases, then they could send them out and we would rebate the taxes.
The amounts are not very large, but it helps some people out and it’s still a program where we are trying to provide assistance to our people, but we continue to monitor the situation.
We conducted a review of the fuel price increase in July to see how we could best ease the transition to a more expensive price of fuel, which is part of the member’s question.
It seems obvious that the price increase of 22 cents per litre in July was fairly high, but if we didn’t increased the price, then we would have been socked a larger increase, in the neighbourhood of 35 to 40 cents per litre, once our latest fuel purchase was offloaded.
It was due to this small increase that we were able to offset the jump from the previous price.
We will continue to conduct reviews, I mean the new government that is elected and the new Executive Council would be tasked to look at this.
The price of fuel is indeed a fairly large concern. Perhaps some of us should consider returning to using dog sleds.
I’m not sure, but it’s clear that we have to brainstorm for ideas to deal with this matter, Mr. Chairman.
Indeed, if you personally wish to return to dog sledding, that’s okay with me.
I know for a fact that you would be quite slow as you are literally too old for a dog team now.
Given that there was an increase of 22 cents per litre of fuel that the people were buying last summer, I wonder why the price wasn’t increased for several months. But I know that the government was just trying to protect the residents so that they wouldn’t experience such a drastic price shock if the price jumped through the roof.
I wonder what the average fuel price increase was with the increase of 22 cent per litre because I know that some people have purchased large amounts of fuel for their homes and gas for their hunting equipment.
Is there an interest rate for that price increase to help offset the actual costs even more for the bulk fuel that we are going to purchase?
Hon. Louis Tapardjuk (interpretation): I’ll have Peter Ma respond to that question.
I will make an attempt at answering the member’s question, but basically the answer is no because that’s the purpose of the Petroleum Products Revolving Fund. As we buy fuel, we are also making sales, but at certain times of the year like right now, we are actually outputting more cash than we are bringing in, so we actually would not be earning interest at the present time.
There’s a large amount of money in this legislation being requested by the government to be set aside for purchasing fuel. Are you hoarding 25 percent of the amount as a contingency fund or as insurance against the actual costs of purchasing fuel?
The amount is rather large and not all the fuel has been purchased or even shipped up north.
Once the fuel has all been shipped and the government has all the final costs figured out, it’s obvious that this winter or spring, when our auditors have completed their audit, we will finally know how much it actually costs.
Based on that, you may have to return to this House to requisition more funds if the actual purchase price was beyond $200 million. How would you inform the people of Nunavut in regard to this scenario?
On one hand, this is a matter for the new government and I wouldn’t want to speak for that future government, but it’s obvious that they will have to deal with that issue. What we are dealing with is what the present government requires right now, Mr. Chairman.
Chairman (interpretation): Before we proceed, (interpretation ends) I would like to welcome Reverend James Barlow to the Chambers.
He’s an Anglican Minister and a former political USC worker. (interpretation) Welcome.
I’m glad that we have another James here.
(interpretation ends) Clause 2.
This is the clause that changes it from $150 million and putting in $200 million.
I would like to just ask the minister and his officials how they came up with the number.
Did they say, “I think $50 million more will cover it,” like they used to a long time ago with their budgets, just plug numbers in there.
I don’t believe they do that anymore under the guidance of the Minister and Deputy Minister of Finance. So can I just get an explanation as to how they came up with the $200 million?
Hon. Louis Tapardjuk (interpretation): David Akeeagok from the Petroleum Products Division will respond to that question.
Mr. Akeeagok (interpretation): Thank you, Mr. Chairman. (interpretation ends) With the petroleum products, for each forecast for the future years and based on the projections with estimates that were coming in, we tried our best to determine what limit it would be and the purpose for putting in that $200 million request was based on those projections, with the projections and the sales that we would get.
I would have to agree with Mr. Ma, a very good answer.
The deputy minister indicated that they look at projections and estimates. Do those projections and estimates include cost to buy and projected sales or estimated sales?
Do they look at projections for both the cost to purchase and the sales in both of those cases?
Hon. Louis Tapardjuk (interpretation): Perhaps David Akeeagok will respond to that question, Mr. Chairman.
Mr. Akeeagok (interpretation): Thank you, Mr. Chairman. (interpretation ends) Yes, we do look at both and we project on the month as to how much our projections would be. And as we have indicated, we’re at the buying stage from July to October/November, September is the time we buy the majority of our fuels, and then we’ve got to sell all of that for the year.
So we take those sales and the revenue that we receive and try our best to project what the limit is.
With this legislation, the legislative limit currently is $150 million.
For the projections that we have done, the request is for the $200 million because based on those and especially this month and next month are the crucial ones where we do more buying than selling of the products. (interpretation) Thank you, Mr. Chairman.
Given the full assurances and I totally understand, as Mr. Akeeagok had indicated they’re projections and estimates, but could he give an indication of what the department’s projections or estimates are for costs, given that they’re just projections that they’re looking at, for this current year?
Hon. Louis Tapardjuk: Perhaps you can clarify your question again, please.
They had indicated that they look at the projections and estimates of the cost to buy the fuel and also the revenues to sell it.
I’m just wondering if they could give us an indication, with full recognition that they are just estimates and projections, what number they used to look at for the cost for this year’s resupply.
Hon. Louis Tapardjuk (interpretation): David Akeeagok will respond to that question.
Mr. Akeeagok (interpretation): Thank you, Mr. Chairman. (interpretation ends) Minister Tapardjuk’s and Minister Brown’s spring projections were in the range of $230 million to $240 million for the purchase of all the products for diesel.
Those are the projections that we did use to base our request to bring forward for the $200 million increase for the revolving fund. (interpretation) Thank you, Mr. Chairman.
Again, I recognize that those are just projections and estimates and I don’t want to send off any alarm bells anywhere. It could be more, it could be less.
Given that projected number of let’s say $240 million, how much more is that than we actually spent last year?
Hon. Louis Tapardjuk (interpretation): Thank you, Mr. Chairman. Last year, we spent $138.5 million.
We purchased 170 million litres of fuel for $138 million last year, Mr. Chairman.
I just want to get a confirmation. I heard numbers, as far as dollars and litres, and I just want to confirm that last year, the total expenditure was $138.5 million.
Hon. Louis Tapardjuk (interpretation): In 2007, we spent $138.5 million in total on gasoline, diesel, and aviation fuel.
I thank that minister for response.
So it looks like, even based on your projections and estimates, we’re going to pay a little over $100 million more this year for fuel.
I just want to ask this question.
That $240 million that you’re project or estimating, does that include all the freight as well for the delivery, so that’s an all-in landed cost?
I think last year, it was $10 million more than we paid from the previous year.
This is 10 times as much if those projects are accurate.
I’m just wondering if the government has any preliminary plans on how to deal with such a huge significant increase.
Hon. Louis Tapardjuk (interpretation): Yes, we have a plan in place and that’s why we increased the prices in July.
We will know for sure when all the petroleum products are brought to the communities, Mr. Chairman.
Clause 2. Does the committee agree?
Mr. Arvaluk (interpretation): I’m sorry, Mr. Chairman.
When we were dealing with the supplementary bill, the minister stated that half of the petroleum products are brought in to Nunavut now.
I think the price of barrel was $91.
Iqaluit usually needs a lot of petroleum products, so what state is it at now? Did you include Iqaluit?
Hon. Louis Tapardjuk (interpretation): David will respond to that question, Mr. Chairman.
That’s the only one going to Iqaluit.
The gasoline that we buy for Iqaluit includes delivery costs to private retailers and that’s what the allocation is for.
The price of crude oil increased dramatically, but has steadily decreased since then.
The home heating fuel that we buy in bulk is also seeing a similar decline in price, but it’s still considerably higher than the prices we paid last year.
In essence, after having increased, the price has declined much more slowly and is still higher than they were last year.
You stated that we had $5 million there for the stabilization fund, but now, we want it increased to $10 million just in case we end up owing more than we projected.
Are you not expecting that it will cost more than say $200 million for example?
Hon. Louis Tapardjuk (interpretation): We won’t know until some time in November when all of the petroleum products have been shipped to Nunavut.
We will know after the resupply has been completed.
We want to ensure that we have the coverage; it could more or less than $10 million.
We will find out for sure in November and we need have sufficient funds because of the constant fluctuation in the price of oil.
I don’t think I received a proper reply to my last question with regards to the increase to O&M. They stated that they have already purchased 49 percent or so.
Now, with the declining price of oil, what percentage of the petroleum products for delivery to the communities have you bought to date?
Hon. Louis Tapardjuk (interpretation): At the end of September, it will be at 75 percent, so another 25 percent will have to be brought in, Mr. Chairman.
There’s something I would like to hear a little more about and I understand that they already purchased 75 percent of petroleum products for Nunavut.
You already bought the petroleum products some time in June and I believe those were purchased at world oil prices.
Can you provide information on what quantities were bought at world market prices and secondly, how many times you made those purchases?
Hon. Louis Tapardjuk (interpretation): David Akeeagok will respond to that question, Mr. Chairman.
What we bought last spring was gasoline only.
This fuel is not for heating purposes and the gasoline we buy are among the smallest quantities obtained.
The petroleum products we obtained were 16.5 million litres for the Kivalliq and the Baffin regions.
We checked last week that if we purchased fuel this month, it would be $2.3 million in world prices.
In other words, we saved $2.3 million in gasoline purchases.
That’s really clear and I would like to thank the witness.
I would like to ask you about when you first purchase heating fuel... I don’t know how many times you have purchased that fuel.
What was the world price for it at the time you bought it?
Hon. Louis Tapardjuk (interpretation): Peter Ma will respond to that question, Mr. Chairman.
Hon. Louis Tapardjuk (interpretation): Sorry, but we’re trying to look for the information.
There is a range of prices because the prices are different, depending on the regions, but the range is from about 99 cents per litre to about $1.14 a litre.
Mr. Chairman, I will make my question quite simple.
Obviously, when you buy them from the supplier, he actually had based his price on, at that time, the current world prices when he went into the market to purchase in bulk.
Does he supply you with a particular world price range than if the supplier bought the fuel from you? If so, could you provide that information to us of when the first bulk of diesel fuel was bought, what was the world price standing at that particular time and subsequently, the second or third, if any, delivery?
Hon. Louis Tapardjuk (interpretation): Mr. Ma.
Perhaps it would help if I explain the actually pricing mechanism and the way the purchases are done.
We pay based upon what’s called the spot market price at the time that we take delivery of the fuel.
So let’s say the fuel is coming from Montreal, at the time that the fuel is loaded at the port in Montreal, whatever the spot price of the particular product we’re buying at that point in time, that would be the price we pay, so let’s say it’s diesel.
I think the member was using diesel as the example. So let’s say on July 1, we took delivery of diesel at the port in Montreal and the market price at that time was still 99 cents, that would be the price that we would pay.
Obviously, we have seen the spot market price of oil move throughout the summer. It obviously reached a peak in the summer and now, it’s starting to come down.
Where we are now is almost where we were I think in early February to March, if my memory is correct. So hopefully we will benefit from the fact that the prices have dropped down significantly from the summer to now.
Chairman: Thank you. (interpretation) Is that it?
Just one question that goes back to projections and estimates that were mentioned earlier, do either the Department of Finance or CGS officials have a projection? I know it was mentioned earlier that the increase was done earlier this summer.
Do they have the projections on how much additional revenue that will save us that we made as a result of that increase at that time?
I think the member is looking for a specific number; I unfortunately can’t give him a specific number.
What I can tell him is the work that CGS has done or our colleagues have done is that we factored in the price on the increase that we did on July 1 and how that would move throughout the rest of the fiscal year.
We could go back and try to isolate that, and I would be willing to provide that information at a subsequent date.
Well, you’re running out of time, Mr. Ma.
I need it by Sunday.
Based on your projections, you’re projecting it’s going to cost us a little over $100 million more this year and I guess I was just looking at how much that increase will offset that $101.5 million in additional costs over last year that we’re projecting to have.
Chairman: Thank you. Mr. Ma.
Based on the number that we had in May and June that we’re talking about here, the 22 cents would go a long ways towards recovering the projected cost.
I think, based on those projections that were done in May and June, we actually figured that we would probably need about 35 cents a litre to fully recover everything.
Like I said, we will probably benefit from the lower prices that have happened over the last couple of weeks and we will see what happens when we get to the end of October.
Chairman: Is the committee agreed to Bill 40 as a whole?
Do members that pursuant to Rule 62(2) that Bill 40 can immediately be placed on the Orders of the Day for third reading?
Chairman: Thank you. (interpretation) Bill 41 and it’s with the same minister.
Minister, you don’t mind if you stay where you are to make your opening comments?
Hon. Louis Tapardjuk (interpretation): No problem.
Bill 41 – Forgiveness of Debts Act, 2008-2009 – Consideration in Committee
Hon. Louis Tapardjuk (interpretation): Thank you, Mr. Chairman and Members.
The purpose of the Forgiveness of Debts Act is to clean-up our books of account.
This Act will remove from the records of Nunavut Development Corporation both a loan receivable and an allowance for loss for the same amount of $679,000.
As a result, there is no net financial impact to either the books of Nunavut Development Corporation or the Government of Nunavut.
The loan receivable was issued in 1991 by the NWT Development Corporation and carried over to Nunavut Development Corporation as part of division.
The loan receivable was issued to the Uqqurmiut Inuit Artists Association in Pangnirtung and was forgiven at a rate of 10 percent per annum, provided that certain conditions were met.
The loan receivable was completely forgiven by Nunavut Development Corporation in its 2000-01 fiscal year.
Section 83 of the Financial Administrations Act stipulates that before a debt or obligation owed to a public agency is forgiven, an Act is required.
That’s why we have Bill 41 which forgives the loan receivable issued to the Uqqurmiut Inuit Artists Association in 1991, Mr. Chairman.
Minister, please introduce your officials.
Hon. Louis Tapardjuk (interpretation): We’re the same people. On my left is my Deputy Minister of Finance, Peter Ma, and David Akeeagok, the Deputy Minister of Community and Government Services, Mr. Chairman.
Does the Chair of the Standing Committee on Government Operations have comments?
Mr. Tootoo: Yes, I do, Mr. Chairman and please bear with me.
I think this is one of the more lengthy opening comments that I’ve had to do as the Chairman of Government Operations and Accountability.
Mr. Chairman, as Chair of the Legislative Assembly’s Standing Committee on Government Operations and Accountability, I would like to make some brief opening comments concerning the standing committee’s review of Bill 41, Forgiveness of Debts Act, 2008-2009.
The standing committee is in support of the principle of the bill. During the minister’s appearance before the committee, members were pleased to be advised that the government will work to ensure that future measures of this nature are brought forward in a timely manner.
Mr. Chairman, this concludes my opening remarks and the committee recommends the passage of Bill 41 to all members.
There being none, Bill 41 should be in your legislation binder.
Bill 41, Forgiveness of Debts Act, 2008-2009.
Uqqummiut Inuit Artists Association. $679,000.
Chairman: Is the committee agreed to Bill 41 as a whole?
Chairman: Do members agree that pursuant to Rule 62(2) that Bill 41 can immediately be placed on the Orders of the Day for third reading?
Chairman: Thank you. (interpretation) Thank you, Minister.
Thank you, Mr. Akeeagok.
Thank you, Mr. Ma.
We will go on to another bill.
I’ll give you the discretion to return to your seat, Minister Tapardjuk.