EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
Tabled Document 128 – 1(6): Petition 008 – 1(6): Call Display Service
I wish to table a response to Petition 008-1(6) on behalf of the Minister of Public Works and Services.
Notices of Motions. Mr. Tootoo.
Motion 029 – 1(6): Member for Nanulik Appointed to the Standing Committees - Notice
Mr. Speaker, I give notice that on Thursday October 23rd of 2003, I shall move the following motion.
I move seconded by the Honourable Member from Kugluktuk that Patterk Netser, Member for Nanulik, be appointed to the Standing Committees on Government Operations and Services and Ajauqtiit and to serve as an alternate Member on the Standing Committees for Community Empowerment and Sustainable Development and Health and Education.
Speaker: Thank you Mr. Tootoo Item 14.
Item 15 Notices of Motion for First Reading of Bills.
Bill 46 – Appropriation (Capital) Act 2004/2005 – Notice
Hon. Kelvin Ng: Mr. Speaker, I give notice on Thursday, October the 23rd that I’ll move that Bill 46, Appropriation (Capital)Act 2004/2005 be read for the first time.
Consideration in Committee of the Whole of Bills and Other Matters, Minister’s Statements 164-1(6) and 167-1(6), Tabled Documents 117-1(6) and 118-1(6), with Mr. Puqiqnak in the Chair.
Before proceeding to the committee we will take a short break
>>House recessed at 15:43 and reconvened at 16:09
Chairman (Mr. Puqiqnak) (interpretation): Thank you for coming to the Committee of the Whole.
I would like to call this meeting to order.
We will be dealing with Minister’s Statement 164 – 1(6), Tabled Document 117 – 1(6) and 118 – 1(6), Minister’s Statement 167 – 1(6).
The Committee would like to begin with Ministers Statement 164-1(6), and Tabled Document 117-1(6) and 118-1(6).
If we have time to complete those three, we would like to deal with Minister’s Statement 167-1(6).
Chairman (interpretation): Thank you Ms. Williams.
Does the Committee agree that we will deal with Minister’s Statement 164-1(6) and Tabled Document 117-1(6)? Do you agree that we deal with this under the Committee of the Whole?
Chairman (interpretation): Minister Picco, you may go ahead now.
Minister Picco are you going to bring any officials?
It brings me great pleasure to bring two officials from the Power Corporation, Mr. Hawker as well as Mr. Jamie Flaherty and they will approach the bench.
Chairman (interpretation): Welcome Mr. Minister.
Can you introduce your officials for the record?
Mr. Chairman, with me today is the Chief Operating Officer of Nunavut Power Corporation, Mr. Hawker, on my immediate left and my immediate right, Mr. Jamie Flaherty, Senior Vice President of the Power Corporation.
Chairman (interpretation): Thank you. Mr. Minister.
In my capacity as chair, please address me so that the meeting conducts properly, and also make sure you say “Thank you, Mr. Chairman” at the end of your remarks.
Before we start, under our rules and procedures, each Member has 10 minutes for general comments.
Mr. Tootoo: Thank you, Mr. Chairman, Mr. Chairman, we all know that it has been over four months since the Minister announced in Baker Lake concerning the Power Corporation’s application for a rate increase.
I’ll say rate increase, I know the Minister will say it was a rider, it was supposed to be a rate increase, about a bill would’ve been up, if I can get out of calling it our not calling a rate increase.
It’s been four months since then.
I'm just wondering if the Minister can indicate to us, I know living here in Iqaluit and listening to a lot of the stuff going on that there has been all kinds of, I’ll use the word turmoil going on since then, the Power Corporation from senior officials that have left and other issues around there.
I’d like to ask the Minister if he could give us an update with the current state since then, Thank you, Mr. Chairman.
Mr. Chairman, the Power Corporation went to the Utilities Rate Review Council, URRC and requested the rate rider.
Subsequently when the URRC came back and actually suggested the 7.5 and then it was renewed and reviewed by the Cabinet and it was rejected based on our understanding of what was occurring at the Power Corporation at that time.
It is very important to point out, Mr. Chairman, that the Power Corporation has only been in operation for a little over 2 years now.
And that’s to take the corporation, set it up, put all the management, the logistic, the administrative, as well as the financial aspects of the corporation in place, and then Mr. Chairman, to continue with the energy policy.
Over the past four months since Mr. Tootoo has announced, I, in accordance with the tabled documents, in Baker Lake, I announced that over the next year, the Power Corporation would become a fully functioned subsidiary of the Qulliq Energy Corporation.
We would freeze all the discretionary capital and operating commitments and the expenditures, general rate applications, develop an affordable energy policy and implement a plan for affordable and predictable rates.
The concern has always been, Mr. Chairman, is the depth of some of the losses that we were sustaining in year one were the results of the revenue side of the Corporation or the expenditures side of the Corporation.
Mr. McLean on many different occasions articulated concerns with the expenditures side of the equation.
We have changed several of the senior management people in the Power Corporation, number one.
The president as well as the chief financial officer and I believe the Human Resources person have all left the Corporation over the last couple of months.
We have put in place an aggressive review of all non-monetary and monetary issues surrounding employees and staffing outside the collective agreement.
We have tightened up the fiscal and financial control and I can say without fear of contradiction last week I met with the Auditor General of Canada.
As you know, Mr. Chairman it is rare when a Minister is actually asked to meet independently with the Auditor.
I had a good frank discussion with the Auditor General of Canada concerning the operational role of the Power Corporation and I can say without fear of contradiction that the Auditor General agrees with the direction that we’re moving in is the correct one.
It is aggressive.
There are concerns at the end of the day that this Power Corporation belongs to us and we have to make sure that it returns the investments that we have put into it as taxpayers.
That’s what we’re trying to do, that’s why you’ve seen all the senior management changes, that’s why we’ve frozen the discretionary capital and so on that we’ve talked about since June.
So, anything that we are proceeding to do we have done and we’re moving forward in that direction.
Chairman (interpretation): Thank you, Mr Minister.
Mr. Chairman, one of the things, as the Minister has indicated that it’s rare for a Minister to be called before the Auditor.
It’s probably a good thing that it’s a rare occasion that the Auditor General might feel it necessary to call in the Minister and meet with him and I think there is probably a lot of questions that can be asked around those and I’m sure that we’ll probably have to wait until the Auditor General’s report on that without look forward to seeing that and questioning the Minister at the appropriate time on that and I think it is pretty surprising that any Minister would be called before the Auditor General unless they had some major concerns with what was going on there.
The Minister had gone on a little bit here, he talked about a bunch of commitments and stuff that were made that they are looking at and what they have done over the last four months and I know over the Summer, some time I believe, four months ago, they were looking at I believe the figure was a $15 million dollar deficit.
Over the summer there was a report, and it’s now down to the $3 million dollars.
I would just like to ask for the information or if the Minister can clarify the status of the financial position in the Power Corporation.
Mr. Speaker, I have not signed off the Financial Reports for this year yet.
So, I am not in the position to say what the deficit is.
There were forecasts originally as high in June that we were looking at between $10 to $15 million dollars deficit this year of the operation of the Power Corporation and the accumulative debt of the Power Corporation in the first two years of operation could exceed $27 million dollars.
That is inclusive of the cost from division.
So, you would not actually count those in the operating costs.
I believe that we are going to be able to do a little better than that.
We have taken some aggressive steps that we have just spoken about, coming out of the meetings in Baker Lake in June.
We also stated at that time that we need to get a fuller picture of the true cost of electricity before approving any new power rates and one of the reasons we are seeing right here, any person who is a business person out there listening when it is on TV or here in the room today knows it cannot continue to sell a product for the same price you were selling in 1998 and still make a profit.
So, in this case, the rates that we are charging for electricity have not increased in five years and if that is the case, then what does that mean for the cost of oil, for example, that we have debated in the House that has increased over the last four years and so on and so forth.
We do not make this stuff up.
What I can say and the Member is correct, I was not called before the Auditor General for Canada, I want to make that clear, I was not called before the Auditor General for Canada in any formal way.
The Auditor General for Canada, the principle is Mr. Simpson, I have known him since 1995 and indeed, I was Chairperson for the Standing Committee of Finance and met with him several times.
He was here reviewing the report for the Power Corporation and it was an opportunity for me to sit down in a private discussion with Mr. Simpson on some of the issues that will be coming out of his report on the Power Corporation and an opportunity for me and to question on some of the issues and the direction that I was taking as Minister and I was quite pleased with that.
So, let me say that basically was in concurrence with what we have heard and so on.
And again, I have to reiterate, Power Corporation has only been in place for two years. We have only got one Financial Statement from the Corporation that the Members are aware of, that has been signed off and so on, for the first year of operation.
We are only a little over three months passed the second year of operation for the Financial Statements and I am hoping to be in a position to table those either at the end of this Session or at the beginning of the next Session of the House once the report is completed.
Chairman (interpretation): Thank you. Mr. Tootoo.
I guess if you look at one of the things Mr. Picco has mentioned is the fact that the price has not gone up in a number of years.
Looking at how we dealt with the Fuel Subsidy as well, for the price of gasoline, if the Government determined that this is maximum that we feel our residents should pay for this service and that the rest of it is subsidised by the Government, the fuel.
Even as a comment, maybe that’s something that should be taken into consideration and looked at, instead of increasing the cost of fuel and looking at the overall cost of the increase to the Government as opposed to leaving it the same and increasing the subsidy; whether it’s more effective or not to do I think is something that should be looked at before coming forward with any rate increase.
Going back to the finances and the deficit, can the Minister indicate how much does the Government guarantee to date on behalf of the Nunavut Power Corporation?
Mr. Chairman, first of all, I think the idea of a coordination of the pricing regime of fuel and so on that would be put in place as well as the literal rate would be the way to go and that’s what we announced in June when we talked about the affordable energy fund.
The whole idea of taking the Power Corporation, and the subsidiary corporation, the Qulliq Fuel Corporation, and leveraging out the POL, to actually account in a full way for the cost of the generation of energy, which came out in Ikuma II.
So, that’s part of the affordable energy fund and it makes it transparent.
On the second point, in the first year of operations, we’ve only been in operation for two years; we had a deficit of $5.5 million as a corporation.
The Members are aware of those because it was in the audited financial statements that were tabled in the House and so on; we lost $5.5 million.
However, in that year we still are owed, we believe between $4 and $6 million from the Northwest Territories Power Corporation and we’re in arbitration right now on that debt.
So our bottom line will actually improve quite a bit.
For this year, for March 31, 2003 year end, the second year of operation for the corporation, we had thought at some point, and Mr. McLean had talked about it before in Baker Lake in June, that we were looking at anywhere between $10 and $12 million loss for the second year of operation.
We’re hoping that we’re going to be able to bring that in a lot better than that, when I say a lot better I would hope to be able to bring it in under $8 million if that was possible.
I don’t have the final figures yet; they haven’t been signed off.
That’s where we are on that so instead of an accumulative loss of about $27 to 29 million in the after including the division of assets and liabilities we would hope that we could bring it in a lot less than that.
If you take out the cost of division, after the transfer of liability, after the division which are in accounting numbers, Mr. Chairman, we would hope that we could bring in the cumulative loss over two years to less than $15 million, that would be the plan.
That’s why we have put since June, the cost cutting measures in place, and the aggressive look at the capital funds and so on.
So we hope to clarify those issues.
On the actual accumulated deficit, or notes that are guaranteed by the Government of Nunavut, as of March 31, 2003, which is the second year of operation of the corporation, it was about $78 million.
Chairman (interpretation): Thank you, Minister.
Mr. Chairman, I am going to go back to something that I had mentioned earlier.
The Minister had indicated that the three senior officials, from the present Chief Financial Officer to the Director of Human Resources, I believe, have all left.
I know many of these people who work for the Power Corporation and within the community here and all of them who I talked to did not have a clue what was going on.
They were very surprised that all of sudden someone was not at work anymore.
Have you done anything to put the remaining employees minds at rest thinking that it is not going to be me next after what has happened there over the last few months?
Is there any type of information going down to the employees to keep them informed from what is happening, or are they just left out of the loop?
Mr. Chairman, several meetings have taken place between the senior staff, and so on, at the Power Corporation.
Indeed, Mr. Chairman, I have actually had lunch with the majority of the employees based right here in Iqaluit, right in the Parnaivik Building in early July to talk about some the changes that have taken place and that are occurring.
The Power Corporation, based on what we have heard here in this Assembly, based on some of the financial statements that came out, needed to move in a different direction.
And therefore and thus some of the changes that you have seen in the senior management of the Corporation.
That is fair to say.
At the same time some of the positions, for example, they announced decentralization, since decentralized positions were not met with, I would say, with a lot of happiness from the staff who would have to move from their positions to Baker Lake.
That has caused some consternation.
And that is to be expected.
So I believe, Mr. Chairman, there has been a lot of work done and with the current staff meetings and so on, but I can ask Kate and maybe and Jamie can speak about the ongoing work that has occurred with the staff on the personnel issues as well as meetings to keep the staff informed of what is occurring.
Again, the Power Corporation realized very heavily, it is staff that keep the power on and it is important it keep the morale up.
I will ask Mr. Hawker, first of all, to give you an idea of some of that stuff.
And then maybe Mr. Flaherty can give you another overview on some of the work that have taken place, the meetings held with staff to make sure that the people are up-to-date.
Mr. Hawker.
Mr. Hawker: Thank you, Mr. Chairman.
Immediately before the announcement of decentralization, all of the staff who were affected, were met with and provided with a notice letter.
Subsequent to that, they were met with by myself and the CEO of the Qullik Energy Corporation, Jack Evalik.
We then gave them the opportunity to visit Baker Lake to look at what the opportunities were for housing, where the office space was going to be.
I have sent a schedule of the decentralization based on the availability of that housing and based on the availability of the office space.
We are presently planning to continue with that schedule on an ongoing basis until it is complete.
Chairman (interpretation): Thank you, Mr. Hawker.
I am going to give Mr. Flaherty an opportunity now also.
Mr. Flaherty: Thank you, Mr. Chairman.
On the Qullik Energy front on the staff morale, it is very comforting right now.
Even though we have a small core staff at Qullik Energy we work well with the Nunavut Power Corporation as far as Hayden’s group and that based out of Baker Lake.
As Mr. Picco said, there have been a number of meetings with staff.
We basically have the open-door policy with the employees and that is with the senior management and during the Board Meeting that Qullik Energy and Nunavut Power Corporation Board, the Chairman and the Board thanked the employees of the Qullik Energy and Nunavut Power Corporation and they really appreciate the work that the employees have been doing to date and they really do feel comfortable with the things that are going to get better as time goes along.
Chairman (interpretation): Thank you, Mr. Hawker and Mr. Flaherty for giving us an update.
Mr. McLean, just a minute; Mr. Tootoo.
One of the things that the Minister had indicated that they have done was a freeze on discretionary capital and I want to go back before that and I know that there has been some cases of things that have happened that probably should not have happened and I am sure that they are more of those things than I am.
But not only it was capital, but on how things were dealt with on paper, whether they were capital or operations and maintenance expenses, one is the policy that they have in place that the Corporation has to follow in that area on how funds are to be allocated whether their actual capital expenditures being put down as Operations and Maintenance cost.
I understand that there had been incidences of this happening in the past.
I just wanted to ask for clarification on behalf of the Minister as to what kind of guidelines that they follow for that.
Mr. Chairman, originally, the Power Corporation had budgeted about $12 million dollars for the upcoming fiscal year for capital.
Based on the review and recommendations coming out of the Baker Lake Session, I directed the Power Corporation to freeze all discretionary capitals and decrease the capital budget.
Indeed, the capital budget went from $12 million dollars down to $4 million dollars.
This was again, to improve the cash flow situation of the Power Corporation.
The situation with the way expenses are maintained and recorded, for example, Operation and Maintenance and Capitals, those follow generally given principles and guidelines of the standards of accounting and practises as audited by the Auditor General for Canada, following the principles of such Legislation and Acts that are necessary, for example, the Financial Administration Acts.
But specific to the point on the financial control, Mr. Hawker may be able to give a little bit more light on it because he is currently our Chief Operating Officer for the Corporation as well as having the Certified General Accountant (CGA).
I will ask Mr. Hawker to answer more elaborately that question from Mr. Tootoo. Mr. Hawker.
Chairman: Thank you, Minister.
Mr. Hawker: Mr. Chairman.
There is criteria in place to determine whether an expenditure is calculated and recorded as an operating expenditure or a capital expenditure.
The auditors regularly review all of our expenditures in relation to whether they are operating our capital and they determine that we have properly recorded the expenditures as operating our capital during the previous year.
They would not allow us to record that capitalized expenditure as an operating expenditure.
Chairman (interpretation): Thank you Mr. Hawker.
Mr. Tootoo: Thank you, Mr. Chairman Mr. Chairman, I just want to ask, would the garage, a sizable garage addition to a house be considered O and M or Capital.
Mr. Chairman, in that case, in that hypothetical situation that was to occur, then we would suggest that would probably be a considered a capital project.
If I ask the Minister in the House for a list of capital projects, I might hypothetically see something like that on there, I guess.
The other question I have is in relation to housing, I know that government wide we have a huge staff housing crisis.
I’m just wondering if the Corporation had any type of staff housing policy that it follows for its employees and the acquisition of staff housing units.
Chairman (interpretation): Thank you Minister Picco.
Mr. Chairman, the Nunavut Power Corporation, the genesis of the Corporation is it came from the NWT Power Corporation and then of course the Northern Canada Power Commission.
Because of those in the genesis it holds its own stock of staff housing and in deed, through the procedure and so on of the Corporation as well as the usual corporate development aspects of policies and so on; here indeed is the policy which outlines the employee housing situation.
I believe at the present time the Corporation owns about 27 units directly and leases about 32 units in total in Nunavut and recovers in rent from 59 employees over 50 thousand dollars a month for the Corporation.
Mr. Tootoo: Thank you, Mr. Chairman Again I want to ask the Minister in the House, if he would table a copy of the housing policy and guidelines that they use for acquiring the leasing, I think he said 32 leases, they must have guidelines that they are following if he’d be more than willing to do that, I look forward to that.
I want to go back to some of the things that were said in Baker Lake, at the session there, I thought the Minister was reading from the Hansard, I was going over that, but I’ve been saying it has been in operation for only 2 years, it is, almost identical to what is in the Hansard from Baker Lake.
One of the things that was raised then, as an issue that we were saying that out of that, the Minister was indicating that about 80% private consumers did not exceed the subsidy level out there for the power subsidies.
I would like to ask the Minister, I know he mentioned it, on page 40 of the Hansard, if you can go back and check it out, I wonder of that 80% of private consumers, how many of those are actual homeowners and how many of those are living in apartment buildings or mutiplex unit staff housing units who don’t pay the same rate as a homeowner.
I think that has a huge impact because I know a lot of home owners who I talk to that own their own home and live in their own home and have invested in the home in Nunavut all said that they exceed the subsidy and they were wondering where the heck did you get this information that said 80 percent of them didn’t pay over the subsidy.