EdinburghNLP/nunavut-hansard-plusplus huggingface dataset:
The information is accurate as presented.
Mr. Curley: Thank you. I appreciate the minister’s attempt to try and clarify the question.
But on page C-10 of the main estimates, the fuel stabilization rider, if it is a rider, has not gone through the proper process.
Because, I don’t believe the Assembly can approve the stabilization, whether it is a fuel or power rider, without having gone through the Utilities Rate Review Council. They are the only ones, with finality, that can recommend it to the minister. Unless it has gone through that cycle, it cannot and should not be called a stabilization rider.
In that respect, I believe the minister’s wrong when she says, on page C-10, the item for $10 million that she’s asking us to approve is not in fact a fuel stabilization rider.
Hon. Leona Aglukkaq: Thank you, Mr. Chairman. I had stated earlier when we were dealing with the Directorate that yes, that has confused members.
The QEC stabilization rider should have one more word added: subsidy.
Within the text in that statement it states “…domestic and commercial power subsidies to consumers of electricity, specific to the implementation of the fuel rider.”
So, for the heading itself, it just says rider. You can’t read that in isolation from the explanation that is presented on C-10.
I agree with the minister: you can’t read the title without reading the text.
The text clearly states that there’s going to be an implementation of a fuel rider, which is something that the minister and the government are saying isn’t going to happen.
I was saying, no, we’re not going to have a stabilization rider in place, but it says right here that there is going to be one, and that the $10 million is going to offset it.
If that $10 million for the subsidy wasn’t there, would the consumer see the rider show up on their fuel bills, and would their bills go up as a result? If the government didn’t have the $10 million to put in the subsidy, then would the consumer’s bills go up to make up that rider?
Hon. Leona Aglukkaq: For the interest of other members, I think we need to be clear what a fuel rider is.
A fuel rider allows an additional charge that is added to the power on consumers’ electrical bills to make up for the higher cost of oil prices.
It’s based on just using, as an example, a set benchmark of fuel prices by each community. The benchmark is a percentage or cent per litre, and the way the fuel goes up, the excess cost is recovered from the consumers through the fuel rider.
So, the $10 million that is being introduced in this document is in lieu of a fuel rider.
If, hypothetically, you ask the question, would consumers see an increase in their bills for the $10 million?
The Minister responsible for Qulliq Energy Corporation would have to direct the Power Corporation to the Utilities Rate Review Council to proceed with a rate review for recommendations to the minister.
If the recommendations are presented, then the rate rider is set.
This is not a rate rider, this is a subsidy.
I’m not arguing the fact that it’s a subsidy. I think the fact that you have to have a subsidy to subsidize the rider is saying that there is a rider that is going to be put in place.
It’s not a rate increase; it’s a tariff that’s put on, added, as the minister clearly indicated, on to your power bill to make up for the increased cost of fuel.
My point in all this is: it is something that would get passed onto the consumer, if the government didn’t have the $10 million to put into the subsidy.
Then it is a rider.
It is a tariff going onto the power bills, which is something that should go, as the minister clearly stated, to the Utility Rate Review Council. That’s something that hasn’t been done in this case, and that’s not for this minister to answer to.
My question is, then… . If and again where you are saying it is confusing to do it this way… . Basically what it boils down to is: this is a $10 million bail-out to the Corporation.
Why wasn’t a simple supplementary appropriation bill done for that purpose instead of putting it through, like we did for Health and Social Services before and for other projects that go over budget? Why wasn’t something much simpler and straightforward like that done to offset those costs to the Power Corporation?
Hon. Leona Aglukkaq: I think that in hindsight, there are always ways, different ways, we could have approached this. In this situation, prior to my time being here, I don’t know what took place; I can’t speak to that.
I’m dealing with situations and decisions that have been developed in the past. I’m working with that and have gone forward with this $10 million subsidy.
In terms of having to go to the Utility Rate Review Council, there is no requirement to go forward to that body for a subsidy, so we are basically subsidizing the fuel deficit by the $10 million.
Chairman: That would have saved a lot of headaches.
My final.
Why didn’t it just go… . I appreciate that the minister is new, but I think her staff has been around.
I think Mr. Vardy, probably one of the longest serving deputies and the only deputy minister of finance that we have had, could explain why this was chosen, over just a straight sup, to offset the operating deficit as a result of the higher cost of fuel instead of putting a rider in and subsidizing it.
The $10 million is an additional appropriation.
Chairman: Thank you Ms. Minister.
We spent half an hour on this page and it’s upsetting.
It is upsetting I know. When we are in committee meetings we seem to get different answers than we do now.
My understanding is that there were reasons why this route was chosen over a straight sup. Maybe I could ask the minister or her staff if they could explain exactly what those reasons are.
We get criticized for submitting supplementary appropriation and now we get criticized for going through the process …  Chairman: You never win.
Hon. Leona Aglukkaq: I am trying to explain the $10 million; I think I have tried to cover that, but I am going to ask the deputy minister to respond to his earlier comment on this. Thank you, Mr. Chairman.
(Interpretation ends.) Mr. Vardy.
As the member pointed out and as was pointed out in the standing committee, the fuel rider is just a basis of calculation in order to enter into the contribution agreement with the Qulliq Energy Corporation.
There will be a contribution agreement from the Department of Finance and the Qulliq Energy Corporation to give them this money, and whether you refer to it as a bail-out or whatever, it is a direct assistance to that utility.
Back to Member Curley’s comments about the $14 million in the Auditor General’s report: the $10 million that we are proposing right now, plus the $4 million that was approved in March, would cover off that $14 million.
So, the member was correct.
Those two amounts add up, and we will put that utility on a stronger financial footing.
Whether it needs other assistance, that will come out as part of the general rate-application process.
We could have just given them a straight $14 million when we were dealing with them last March.
At that time, we did not have the detailed financial statements from the utility, and we were waiting to get those audited statements before we gave them the other $10 million.
We have that information now. We think they need the $10 million right now and that will get them up to a certain period.
But the utility has in place a lot of expenses that are beyond their control, including the high energy cost, the high petroleum-product prices. There is a 50 percent increase since last year, and we need to monitor that utility.
The way that we thought we would get the best cooperation from the utility is by structuring the arrangement in this particular format.
As the fuel stabilization rider was in effect and… . They have a lot of reporting to do on a regular basis to the Department of Finance.
We want to make sure that we were shored up by the Crown Agency Council, that we start reigning in Crown agencies and treating them very much like government departments.
So, it is part of the overall effort to increase financial management, financial accountability, and assist them.
It was our recommendation in Finance to structure it this way.
There is nothing unusual with that; it is an appropriation, just a mechanism for getting increased reporting from the utility, nothing else.
Wouldn’t it have been a lot easier just to give them the money and say… ? Or, tie it so they have to provide us with monthly financial statements or recordings or something like that?
There is a subsidy, but there isn’t. There is a rider, but there isn’t a rider.
It says right here in the main estimates, implementation, specific to the implementation of a fuel rider.
It says right there, right in the main estimates, under the $10 million, and then between that and the comments, that it is in lieu of a rider.
So, there isn’t a rider, but there is a rider; it is really confusing. I do not know if, as the deputy has indicated, it is going to be tied to reports by the Corporation to the Department of Finance.
Is he, then, indicating that once this is approved and the power bills are issued, on the power bill there is going to be a line item that says, fuel stabilization rider, $100, for example, and then right underneath it another line saying, fuel stabilization rider subsidy, $100, so that it balances out to zero?
Was that the plan that the Department of Finance had of showing that, in order to get the Power Corporation to have some more accurate billing information for the Department of Finance?
In terms of how they appear, it can go either way; they are administrative details. I don’t know how they have their system and that all set up. I can’t speak to that.
I don’t know what the format looks like, what the system looks like, or how it will appear.
I don’t know if that answers the question.
Just to the deputy or the minister: if this $10 million isn’t approved, will it show up on people’s bills as an increase?
If that is not approved then we have to go back to the Financial Management Board in terms of how we are going to deal with Power Corporation issues.
In terms of the earlier question, why does this not go directly to the corporation concerned… . The other concern, particular information in light of the outline in the Auditor General’s report… .
It’s an accountability issue as well. On a monthly basis, the Corporation would provide information to substantiate requesting the $10 million, before the dollars are issued.
So, there are a number of issues. It is not as straightforward as it should be.
I would like to ask: are any issues around the rationale for going this way for the Corporation, at some point, to be able to show and justify that expense?
At some point, if necessary, if the subsidy levels weren’t for the Corporation to be able to pass some of those costs on to the consumer.
I’m just wondering if that was one of the factors taken into consideration and why this method was used, as opposed to just a straight-up and just give them the money.
This method was used to allow for more financial accountability.
I think members all know the concerns that are raised in the Auditor General’s report.
We need to get a handle on that.
There are a number of issues around the Power Corporation that are outlined, aside from this particular subsidy.
It just allows more of an accountability for them to get the dollars on a monthly basis, provided it is substantiated.
Just for the record, the minister is indicating that no, those were not factors taken into consideration when choosing this method?
I don’t understand Mr. Tootoo’s question.
Chairman (interpretation): Please make it simpler, Mr. Tootoo.  Mr. Tootoo: I’m trying Mr. Chairman.
That is a very complex issue.
Was one of the factors or a couple of factors taken into account when choosing this structural method of influxing their money into the Corporation?
The fact that if it was done at this straight up and given the money, they wouldn’t be able to at some point… . Like through a stabilization rider, they can show that expense for what it actually is.
Then, at some point, have the ability, if necessary, to pass some of those costs on to the consumer as a result of showing it that way, as opposed to just handing them a check for $10 million.
Mrs. Minister.
I’m going to ask the deputy minister to respond to that.
Mr. Vardy: There’s a $14 million problem in the Power Corporation identified in the AG report; it’s linked to… . Petroleum was one of the major causes.
The utility had requested the Financial Management Board, on various occasions, to introduce a fuel rider.
A fuel rider is intended to bring the fuel stabilization reserve back to an acceptable balance, which for Nunavut is deemed to be $2 million.
It was up around $14 million, so this particular mechanism… . There was some value. So, the answer to your question is, yes, there is some logic in going to this particular method, from the uitility’s perspective, because they can demonstrate what the situation would have been if they had been allowed to introduce a fuel rider, which is what the legislation guiding that Corporation allows to happen.
What we were doing was going through that mechanism by giving them a subsidy to offset the impact on consumers.
And so, for people out there, whether they are residential consumers, there is no additional rate impact from this measure.
There is no stabilization rider that will actually be charged to consumers.
So, the minister in charge of energy, from my vantage point, has no need to go the URRC to see if that mechanism is supported.
Also, that same question was asked directly by Power Corporation people to the URRC, the Chair, and the answer back was, if you wanted to go that particular route, even without a subsidy, there’s no need to come forward with the request.
But to answer your question, there is logic from Finance’s perspective, there’s logic from Power Corporation’s perspective, to deal with the way we are doing it.
I think there are other ways, simpler… . It could have taken a lot less time in the Legislature if we had just given them the $10 million like we gave the $4 million in March.
But, for financial management accountability reasons and from the utility’s interest, as well as in their dealings with the Auditor General, we recommended that we go this route, and that’s what the Financial Management Board approved.
I guess I’m saying there’s a virtual rider in place; he did indicate they are going this route of putting in the rider and subsidizing it.
So, there is, but there isn’t: a sort of catch-22 situation.
I’ll still have to wait to deal with the appropriate minister on the actual rider itself.
But, virtually, I think I’ve exhausted… . I’m a little more confused than when I started asking questions.
I’ll quit for now.
I want to switch the subject for a few minutes, to ask about the Government of Nunavut leasing policy. Last week, we asked the minister if she would table a copy of the Government of Nunavut leasing policy for us to review.
I’m wondering if she could give get us an update on the status for that leasing policy.
Chairman: Thank you for the breather, Mr. Peterson.
A point of order has been raised.
She apologizes.
Am I responding to Mr. Peterson’s question?
Has that been settled?
Could you please repeat the question, Mr. Peterson.
Mr. Peterson: Well thanks, Mr. Chairman.
That’s the second time I’ve had a point of order.
Last week, we asked the minister if she could table a copy of the Government of Nunavut’s leasing policy and she indicated she would.
Could she update us on where that policy is. Will we be getting it soon?
Hon. Leona Aglukkaq: Yes, thank you, Mr. Chairman.
Yes, I agreed to table that policy.
I hope to have it tomorrow.
There have been some delays in the translation and I apologize to the member for that. As soon as I have it, I will forward it.
The department, again, this morning, followed up with Culture, Language, Elders and Youth’s translation bureau as to where that was.
Chairman (interpretation): Thank you, Ms Minister.
That’s good to hear, because we will probably be finished by the end of this week. I would like to have the policy.
The budget for commercial leases has increased by almost $900,000 over the last year.
Could the minister indicate why that budget is increasing?
From what I understand, that has been the result of inflation.
Chairman (interpretation): Thank you. Anything else, Mr. Peterson?
Mr. Peterson: I read, on the business plan page, C-22, the projected increase is $869,000. Can the minister give us clarification on what she means by inflation clauses.
It’s built into the agreement, I believe with NCC, but I’ll get the deputy to explain what is in that agreement.
As the minister said, there is inflation built into the long-term leasing arrangements with NCC for the commercial buildings that were built by NCC, including the Legislature building. There’s also… . That arrangement was developed prior to the Government of Nunavut being established.
The federal government has committed, through the forum of our formula financing agreement, to offset, at 100 percent, the cost of those leases.
So, there’s no net impact on the Government of Nunavut.
Mr. Peterson: That’s good to know.
For the three regional health facilities… . I’m wondering if a decision has been made to purchase or lease the three facilities.
I understand that last fall a decision had not been made. There are at least one or two getting close to completion, and I’m wondering if a decision has been made.
The response to the question overall is, no; but, the Rankin Inlet one, we are constructing ourselves.
So, your plan is to lease it, the one in Cambridge Bay; you are not going to purchase.
We have that option.
No decisions have been made at this point.
You must be paying some money for the building lease if you aren’t purchasing it.
We’ll do one or the other when the project is completed.
It’ll probably be completed by the end of August, so we’re only a few months away.
I think it will be finished within a few months, so I think a decision is going to have to be made fairly soon, within this current fiscal year.
Hon. Leona Aglukkaq: I agree with the member.
Chairman: Anything else, Mr. Peterson?
Mr. Peterson: If we’re not going to purchase it but we’re going to lease it, then we should be budgeting or something.
Purchased or leased, I don’t know if that’s occurring in this budget.
Are we going to set aside funds to deal with the eventual ownership or lease of the health centre?
Yes, I do agree with the member on that.
We have that option through our capital.
I probably agree with her, that we have some concern with the way in which these Crown corporation are operated.
So, I want to thank the deputy minister, really, for getting quite close to what my view was about the other two items on C-10: one for $10 million and the second one for $4 million.
I believe these two reflect the concerns of the Auditor General.
By March 31 the total losses at NPC will probably total $14 million.
Having said that, if that is the case, if the two items, even though they are itemized differently… . Are we to offset the single fuel escalation losses at NPC?
They are not and will not be subsidizing fuel for 2004-05.
Am I right in that, Minister?
Yes, he is correct.
Mr. Curley: I think that would have been much more simpler: to provide information accurately, correctly, openly, and transparently to the people of Nunavut.
I think that if we do that we would have gone by the item probably a little bit quicker, because even the Auditor General is really quite serious, I think, looking at the viability of these Crown corporations.
If they are to operate independently, they must make revenue.
I believe these two items, in total $14 million, are revenues that will offset, in short, the losses that were incurred through the previous year, not for the coming year.
I apologize for confusing the members.
We did try and present the information as accurately as we can.
It is a complex issue and process.
In response to these questions, yes.
Mr. Curley (interpretation): Yes, my last point is that it would be somewhat misleading to vote on the item that is not really what it says it will do; $10 million for two subsidized fuel and power rates, or whatever, for the coming year, because when you look at it, you have $10 million for the fiscal year 2004-05.
I think the ministers, or any one of them, should state tomorrow that that particular item is to cover the losses of the previous year, not for the coming year.
If we did that, then we would be a lot less confused.
I want to add one more point.
The Auditor General, understanding that the stabilization of the power rates rider is normally to cover a certain period of time to raise some money… .
For that reason, Madam Minister, you and your officials should be very careful that we do not label that bail-out package as a rider, because that is not what it is.
It may achieve the same goal, but from my point of view, it is a complete bail-out package for the previous year’s expenses, not for the coming year’s.
I believe if you were to make a statement tomorrow, Finance Minister, confusing us and the public, that this item will be buried once and for all.
I believe it is all in the wording, and I apologize to the House and to the members for confusing them in regards to this.
Believe me, I had to get my own head around how it pulls in history and on all that has occurred and how we got here. It is a complex issue and it involves not just Finance, but Qulliq Energy Corporation and a number of other departments.
So, it is a bit of a confusing matter, and I can issue a statement in the House to clarify that to the members as well as to the public.
Chairman: Thank you, that is good.
Do you have any more questions on page C-9?
So, we are going to get information tomorrow on the fuel stabilization rider, and expect that tomorrow morning.
Finance branch summary. Central administered funds. Total, operations and maintenance, is $34,586,000.
“Angiqpisiuk?”
Chairman (interpretation): All agreed?
(Interpretation ends.) C-11 and C-12 are information items.
So, we go back to C-11: are there any questions regarding the Liquor Revolving Fund?
Okalik says no.
How much is it costing us to establish the liquor operation in Rankin Inlet?
At this moment, we do not have that detailed breakdown, until about September. This is still being handled through the Hay River office.
We are looking at transferring that full responsibility to Nunavut. Yesterday, I believe, I mentioned or responded to a question that the operations will be in Rankin Inlet, and some in Iqaluit, to manage the liquor warehouse.
I am wondering if I could ask the minister if she could bring that information to the House tomorrow and provide it to us, if possible.
Chairman: Can you provide that tomorrow morning?
Hon. Leona Aglukkaq: If I ever get out of here, maybe I can look into it.
Mr. Chairman, I’m prepared to put the information forward once I have it.
I have to contact the Hay River office as well, so bear in mind that it’s two different jurisdictions. But, I will try and provide the information for tomorrow or in the next couple of days.
Chairman: Thank you, Ms. Minister. Mr. Peterson.
Tomorrow or Thursday would be good. We always hear rumours, but I’ve heard rumours of $4 million, so I’d like to see the rumours put to rest.
So, if we could do that on Wednesday or Thursday, that would be good.
Chairman: Is that a comment or a request, or could you respond?
The $4 million figure is not correct, but I’ll get the details, Thank you.
Chairman: You happy?
We’ll go back to page C-4, Finance department summary. Detail of expenditures. Total, operations and maintenance, is $52,513,000.
Is the committee agreed?
Department of Finance is concluded?
I would like to thank the minister and her officials for being at the podium.
No, except I want to thank the staff for being here with me today.
Chairman: Thank you. The Minister of Economic Development and Transportation, Mr. Simailak.
Your opening remarks, Mr. Simailak.
Hon. David Simailak: Thank you, Mr. Chairman.
I am pleased to be here today to present my new department’s main estimates for 2004-05 fiscal year.