EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
Manitoba Hydro has come forward with a proposal that this line, this hydro line is technically feasible.
Saskatchewan, for example, Mr. Chairman, has a hydro line that goes right to the border.
Would it be cheaper to hook up that one, we don't know.
So that is the type of analysis we want to be able to look at and see other energy, viable energy reports.
And I commit to the member just now that we will try and do that over the next three to six months given the time frame, given that we are trying to set up a whole new Power Corporation, at the same time to try and do that analysis and come back to the members and to this House with that report.
So, chairman, my next question to the minister would be, what commitment has the minister made to the Minister of the Power Corporation from Manitoba in reference to this report.
As I have indicated over the last few days, in the fall, myself and the Premier, Mr. Anawak and others were present at a presentation that involved this report and the highways report or study.
I would assume that some people are waiting for some answers or at least some direction, so my question is what have you indicated to the Manitoba Minister responsible for the Power Corporation as to what your timing is or where your thoughts are in regards to this particular proposal.
Chairperson (interpretation): Minister, would you like to respond.
Hon. Ed Picco: Mr. Chairman, as the member knows and the House, I am not at liberty to discuss the private conversations with the minister of another jurisdiction but I can say to the member that the discussions with the Minister Responsible for Manitoba Hydro have centred around the report itself and as the member knows, it’s a new government in Manitoba and it's a new minister taking over the portfolio and he's trying to get up to speed and familiarise himself with some of the other issues surrounding not only this issue but other issues I suppose within Manitoba Hydro itself.
But I did say to the member and what I did say to the minister was that the Nunavut Government wants an opportunity to analyze the report from our point of view.
And that's the commitment the member has asked for and I have already responded to the member that we will do a comprehensive review of the Manitoba hydro report and the pre-feasibility of the electrical line and would take that information over to this House and share it with the members and so on over the next three to six months.
Mr. Chairman, with all due respect to the minister and his department, I think this same situation exists in other areas within the government. It just seems to me that we are dragging our derrière on some of these projects and these proposals and I would think that we would just have to be a little more pro-active and try to kick start a lot of the projects and the issues that are before us.
The minister is obviously not going to reduce the period of time which he will review this particular proposal, so I will have to accept that but in my mind Mr. Chairman, I don't think it's acceptable.
Hon. Ed Picco: Thank you Mr. Chairman. I don't think it's acceptable that the member continues to try to raise me to the point of debate on this report, the Manitoba Hydro Report.
We are suppose to be here to study the Ikuma Report. The Ikuma Report was to take the idea to see, should we have our own Power Corporation.
It wasn't looking at alternative energy sources, it wasn't made to look at the Manitoba hydro report.
As I said earlier we constituted this working group in May of last year, we didn't even have the Manitoba Hydro report which we didn't get until this fall, officially delivered to us from the Manitoba hydro people.
Mr. Chairman, I don't have a department, I have Ms. Laura Gauthier from the Department of Executive working with me on this file with the Ikuma group, which are contract people.
Now, between now and April 1, 2001 we are going to try and get a Nunavut Power Corporation up and running.
We need to select our headquarters, we need to staff up, we are in the middle of getting the President.
And I have committed to the member that we will do the analysis that is needed so that the best choice for Nunavut can be made.
That will take three to six months to do that.
And I have also committed to bring that information back to the House for these members to see.
Mr. Chairman, I think that is quite fair.
Chairperson (interpretation): Mr. O'Brien, are you out of questions now.
Mr. O’Brien: I didn’t get the answers that I wanted, I'll have to accept what the minister said, but I still feel that this, it should have been a part of the report that was conducted.
It is unfortunate that it wasn't.
And I think in general I am talking about not only hydro but also other alternative sources of power.
And I think it should be a critical part, an extension of this report, and that's where I am coming from on this particular issue. Having said that, Mr. Chairman, it is only fair to stop my questioning and allow the other members to have their time.
I would like to ask the Minister Responsible for NTPC, if this report is approved, how much would our rates be increased and how long would it be until we get the rates increased for power.
Chairperson: Picco.
Mr. Chairman, that is an excellent question.
One of the things that the report shows is that if we move forward on our own Nunavut Power Corporation indeed, we don't see the rates going up, we see them actually in some cases going down.
And the reason for that is the differences of the economies of scale pointed out in the report itself.
That was an excellent question and maybe for the member, we don't see the prices going up, we don't see the current costs increase in the new Nunavut Power Corporation.
Chairperson: Mr. Alakannuark.
I know that you are not going to increase the rates but what I am thinking is that annually the cost of living increases each year.
I am a bit leery about increasing the power rates, especially for the homeowners.
If the rates are increased, my constituency won't be able to afford to pay for the power bills.
Since the fuel price went up us homeowners have to pay extra for our bills.
I would like to get adequate response to my question.
Hon. Ed Picco: The member is correct in his comments.
Now, this will give me an opportunity to explain the earlier statement that I made.
Creating the Corporation, the new Nunavut Power Corporation, won't cause rates to increase.
However, as the member pointed out and rightfully so, there are other inflationary factors, for example, if fuel increases and so on that may cause these rates to increase.
Having our own Nunavut Power Corporation, Mr. Chairman, gives us the advantage of ownership and the ability to control more of our destiny.
And when I say that Mr. Chairman, I should point out what I mean.
Many of the members in the House will remember a couple of years ago, we used to pay a low water rider charge or surcharge on our power bills, because of the low water in Yellowknife. Even though the member was living in Pelly Bay, he had to pay for low water in Yellowknife. Only if we have our own Nunavut Power Corporation we won't be paying for low water rates in Yellowknife.
So I can't rule out increases because of inflationary factors, the price of fuel.
But what I can say, is our own Nunavut Power Corporation gives us a better flexibility to control that destiny for us.
The Ikuma Report, I think perhaps the minister could give us more time to read the report.
That's what I was suggesting, if it's not urgent that you give us more time to read the report.
Chairperson (interpretation): I do have authority to defer this, but we would have to do this by way of motion.
Mr. Chairman, the major recommendation of the report as the members know is to set up our own Nunavut Power Corporation.
That's what we're moving forward on as I have already presented that to the standing committee and so on.
But I agree with the member, if there is more time needed for members to read the report and digest it, I have no problem with that, I welcome that.
And, I will take direction from the committee.
But the major recommendation of the report has been followed through on already.
Perhaps once we get our own Nunavut Power Corporation then the power rates will increase and perhaps if you can notify us ahead of time, give us notice way ahead of time when the power rates are going to go up, or increase, if the public knows the rates will increase, there will be less opposition if they are notified ahead of time.
So that is my last remark Mr. Chairman.
Mr. Chairman, I thank the member for his comments.
I can tell he has done some good reading on the report, some good questions. I would commit to him that before any rate increase, again, we don’t see any rate increase coming forward and the area around rates is quite extensive.
Each community has their own community based rates. I don't think we want to go into that detail today. So I would commit to the member if any rate increase that would occur, we don't see that happening, but we would make sure that we will inform the communities, inform the members and make sure that a consultative process is there as outlined and mandated by our Premier government wide.
Mr. McLean: Mr. Chairman, I want to have a preamble.
I'll try and keep it short.
Then I want to ask questions.
But first off, I want to commend the minister for taking the initiative and going out and doing this and putting this report together, because I don't think any of us have said that.
Thanks Mr. Picco for putting this report together.
Mr. McLean: I commend the minister for doing this and showing the vision that we always talk about in the House.
The vision of Nunavut.
I hear comments from the table that power rates are going to go up, and I don't think the minister should be saying that when we create a Nunavut Power Corporation the rates aren't going to go up.
Because, if you read the report and you keep an eye on the world price of crude oil and what it costs to deliver it, there are going to be external influences on it that could create circumstances where we are going to have to increase the price of power because of what is happening outside of our control.
I know the minister has set up a Public Utilities Board, which I think is great.
We finally got it, and I am a firm believer that we move forward and I am proud that the minister and cabinet have decided to set up a Nunavut Power Corporation.
Because the thing that we are not hearing here, you know the west who is our partner right now, are they going to subsidise us.
If we stay with the existing organization we have now, oh they'll promise us the rates won't go up but if we agree to stay with them, we know the rates will go up.
So I for one support the concept of a Nunavut Power Corporation and I wish a few other cabinet people would do the same to ensure these are within Nunavut, instead of having to rely on big brother in the west.
To me it shows that we don’t have the ability to do things for ourselves and stand on our own two feet and I’m glad that Ed Picco has taken that initiative to set up the Power Corporation.
But that’s about all the praising I’m going to do with Mr. Picco at this point because I think he needs a little thing.
Mr. Chairman I’d like to ask my questions now.
Mr. Picco, looking at the report on page 44, Nunavut now pays the Northwest Territories Power Corporation in excess of 4.5 million a year for just our office costs in Nunavut and it says here that Nunavut can provide that for less than 3 million.
Is that a relatively close figure, so will it cost us 3 million dollars to run the head office in Nunavut.
So we are saving 1.5 million a year in head office costs by establishing our own Power Corporation, is this correct.
Mr. Chairman, first of all I would like to thank and sincerely thank the member for his earlier comments.
The work on the Power Corporation itself has been the work of the Cabinet and indeed the members themselves because we have been apprising them and getting their direction and so on.
I think the members themselves need some thanks for that too as well as my Cabinet colleagues.
The Public Utilities Board that the member talked about earlier is under the auspices of that wonderful man, Premier Okalik, who expediently set that up over the last couple of weeks with a lot of input from yours truly.
Now, on to the questions, Mr. Chairman, the member is right, creating the Corporation itself won’t cause rate increases but other inflationary factors may.
For example the price of fuel and so on.
So when I say the rates won’t increase I mean the rates won’t increase because we are setting up a Power Corporation, the rates may increase because there is another war in Iran or Iraq or the world price of oil and so on and those are outside of our control.
But having our own Power Corporation gives us the level of control that we don’t have now for example the low water rider in Yellowknife.
On the questions on page 44, 106, the member is correct.
Right now we pay approximately 4.5 million dollars Mr. Chairman, to Hay River for the operation of headquarters functions and yet after we did that REI all the respondents came back and gave us an average price between 1.9 million dollars, Mr. Chairman, and 3.5 million to do the same thing, over a million dollars anyway you slice it, in savings.
That’s very astute of Mr. McLean to pick that up.
Again those costs will depend on what level of outsourcing the Government of Nunavut puts in place with the new Power Corporation.
Mr. McLean: Thank you.
Enough of the niceties here.
There’s a two million dollar leaving penalty that will be incurred regardless of when Nunavut decides to go on it’s own.
Was that something that was decided before April 1, 1999 and by who.
Chairperson (interpretation): Thank you. Mr. Minister.
Hon. Ed Picco: Mr. Chairman that two million dollar leaving penalty was before this government took office.
It was part of the discussions, the on-going negotiations between NTI the GNWT, NTPC and the OIC.
And that’s correct Mr. Chairman, the western coalition was involved at that same time.
Mr. McLean: Mr. Chairman, you know, in the annual report of 1998-1999, the long term debt of the Power Corporation was 132 million and I think it’s probably increased by, whatever, 5 or 10 %.
How much long term debt are we going to assume.
Mr. Chairman, the share of the debt is based on the total ownership of the Power Corporation.
In this case the Nunavut Government owns 33 % of the Corporation and therefore and thus would share, take, 33 % of the debt on the books of the NWT Power Corporation, so we would have 33 % ownership of that debt.
Mr. McLean: Thank you Mr. Picco.
Mr. Picco in regards to 32% of the debt is there going to be an assets count on how much, like there’s liability here, what are we getting back in assets in regards to the power plants, have they been valued out what all the assets in Nunavut are worth that we are acquiring.
Mr. Chairman, there is a three-step methodology in deciding the split in assets and liabilities of the Power Corporation east and west.
For example we have what we call stranded assets and those are the physical power plants themselves on the ground.
We have the assets which would include, Mr. Chairman, the oil in the storage tanks, because someone paid for those and they have a value and those would also be there.
And then there are other assets of the Corporation itself, book assets, there may be information, technology knowledge issues that would be shared east and west and those types of things would have a price on them.
Chairperson (interpretation): Ms. Gauthier.
If the member is interested we do have a copy of the transition agreement that we can provide to you which outlines more details of that three step methodology that the minister referred to, so, if you’d like to see a copy of that I can go through and explain in more detail.
Yes, I’d like to have a copy to read that because I am on that Standing Committee and I’ve never seen that document and it would be nice if the Standing Committee could receive that document to see what we are receiving in assets and how we are being dealt with on that.
My next question is, that as the minister responsible, and I know that this would have to go to FMB, and I’m sure that the Power Corporation would have to go to the FMB for the territorial power support program, is this government and are you ministers going to continue with that subsidy.
Mr. Chairman I know that the Minister of Finance wants to weigh in on this one, but I would say that the question for the member was do we want to continue and are we going to continue with the territorial power subsidy program.
I’d say to the member that there has been no discussion at the government level about ending the power subsidy program.
That program is run through the office of finance and administration and Mr. Ng is saying no, no, no and he’s waving his little thumb, if you’d like to add something Mr. Ng by going on the mike publicly for a change, go ahead.
Since my honourable colleague asked me to weigh in on this, Mr. Chairman the territorial subsidy program is run by the Government of Nunavut and the member, my colleague, Mr. Picco is correct, there haven’t been any discussions about not proceeding with it or not keeping it in existence at this point.
Mr. McLean: Thank you Mr. Chairman. The territorial power subsidy program at this point I think is in the neighbourhood of 2.6 million.
I’m correct in saying that, that subsidy is used to bring down the power rates on all power bills in Nunavut and without this territorial power subsidy program all our power bills would go up.
Am I correct in saying that.
Mr. Chairman the territorial power subsidy program, the TPSP, was put in place by the previous government in conjunction with the NWT Power Corporation, what happens there Mr. Chairman, we could go into some detail on how power subsidies are paid out but the member is correct, if the subsidy was taken out in a way then there would be an increase in power bills because then there would no longer be the subsidy in place.
So, in an essence the statement by the member is correct.
So you are saying that what you have told me is that the subsidy rate subsidises the power bills for all of us.
Now on that topic how do you, how does FMB figure out what kind of a subsidy they are giving us.
Is it based on a power rate in Yellowknife.
Or is it going to be based on a power rate in Iqaluit or is it going to be based on a power rate in Arviat.
Mr. Chairman we will be continuing the territorial power subsidy program based on the Yellowknife rate up until the point we have an opportunity we have to re-evaluate the TPSP.
The TPSP, as most members know, was put in place almost 21 years ago.
The GNWT inherited the program from the NCPC which used to be the old Northern Canada Power Commission or NCPC in 1988 and the objectives and everything are spelled out in the Ikuma Report, if the members would like to look at it it’s on page 99 and 100 of the report.
Mr. McLean: I don’t want to sound like I’m belabouring a point but as minister responsible, you are going to try and make sure that the TPSP stays in place and if due to unforeseen circumstances with the world price of crude plus other options like capital expansion that you are going to try and keep the power rates maintained at a responsible level and I know that we have the Public Utility Board but as minister responsible you are going to make sure that the territorial power subsidy program will be kept.
Thank you. That’s all the questions I have Mr. Chairman.
Mr. Chairman almost 80% of all revenue generated by the Power Corporation comes officially or unofficially from government and if we increase the rates then that means the government would be paying more and then we would have to find the money from programs or services or so on.
The rate subsidy will continue at the same levels for at least the next fourteen months, so it’s going to take us a year, the next twelve months just to get the Nunavut Power Corporation up and running and then the cabinet would have to re-evaluate what the programs are that are in place and some of the other advantages that may come to be.
In the report itself on page 22 of 106 you can see how that paying for power and a nice flowchart that has been developed by the Ikuma Report, the working group works.
So for the next fourteen months we see no change Mr. Chairman, by that time with the co-operation and the support of the members we would have an opportunity to re-evaluate the territorial power subsidy program.
Mr. Chairman one of the recommendations of the report is that the Government of Nunavut continues some form of rate subsidy which Mr. McLean was just talking about I believe for the short term future, but only the short term future.
Mr. Chairman is it the goal to reduce the total subsidy cost or reduce the rates being passed onto the customers.
Mr. Chairman, the member is correct.
The Ikuma Report actually went into some detail on the territorial power subsidy program and so on.
As I just said to the member from Baker Lake, for the next fourteen months we don’t see anything happening, we have to get the new Power Corporation up and running first and then analyze what is in place.
I can say with some authority that when 80% of the revenue generated by the Power Corporation comes officially or unofficially from the government if we increase the rates we ourselves are paying the rate increase so that wouldn’t make any economic sense, but again I can’t say what the judgement will be down the road fourteen, sixteen or eighteen months and as Mr. McLean pointed out there are external factors out of our control.
Mr. Chairman the minister indicated they are looking at it fourteen, sixteen months down the road to review the subsidies.
I’m just wondering what process will be used in reviewing the rate subsidies between now and then.
Mr. Chairman, the Ikuma Report really didn’t detail, I guess what the member may be asking for but the cabinet hasn’t really decided what to go for on this.
You know we want to get the Power Corporation up and running and that was the major thrust of the report and that was the recommendation that we accepted.
But the government choices will be difficult and there will be some crucial decisions that the Government of Nunavut will have to look at and I guess Mr. Chairman, you’d have to look at it would we put in an annual subsidy rebate, can we look at a change from the Yellowknife based rate to an Iqaluit based rate, will we look at adjusting the territorial power subsidy program compression bench mark and make that a lower value.
There’s all kinds of different scenarios, but we haven’t looked at them because the thrust of the report is to set up our own Power Corporation but that’s the type of discussion that we need to take place with the members and with the public frankly on the directions we go in the next fourteen months that the Power Corporation is up and running and has some capacity.
Mr. Chairman, I guess as you know that is one of the things I look at in this report and the recommendations that are in there.
If fourteen or sixteen months from now all of a sudden the government decides that they’re no longer to have the subsidies in place and if we say everything’s fine and this report should go ahead with the recommendations, basically right now we’d be saying that it’s ok to go ahead and do that.
So, I guess that’s why I’m glad to hear the minister say that there will be some consultations prior to that happening and it just re-affirms that the minister committing that prior to anything being done to the rate subsidies whether they be phased out or whatever, that there would be some public consultation on that.
Mr. Chairman, courtesy of the good offices of the Premier, he has mandated and set up the Nunavut Public Utilities Board.
I believe the Chairperson of that Board is actually from here, in Rankin Inlet, Mr. Mercer.
So any move by this government to increase the rates or indeed eliminate the territorial power subsidy program would have to go before the Public Utilities Board.