Mr. Braden.
Debates of March 29th, 2000
This is page numbers 391 - 424 of the Hansard for the 14th Assembly, 2nd Session. The original version can be accessed on the Legislative Assembly's website or by contacting the Legislative Assembly Library. The word of the day was chairman.
Topics
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
March 28th, 2000
Page 408
Bill Braden Great Slave
Thank you, Mr. Chairman. The department also advised us of the petroleum revolving fund and we have some information on how that works. The essential purpose of this, as I understand, is to protect customers from spikes, particularly the customers and the government from spikes in fuel costs and give everyone some certainty of a price regime. Given the price shock we have just recently seen, can the department give the committee some indication of how it is managing this, such as cost increases that are passed on to customers. Will that kind of thing be done in good time, to make sure that the funds are not threatened? How is the department going to go about managing this situation? Thank you.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Vince Steen Nunakput
Thank you, Mr. Chairman. Mr. Chairman, I have with me Mr. Brian Austin, who is the director for petroleum products. I will ask him to respond to the Member's question.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Austin
The petroleum products divisions operates its revolving fund as was indicated, off to the side. There is a thing called the price stabilization fund, which is a fund that absorbs losses or profits that the fund may enjoy over a fiscal year. The maximum value that the stabilization fund can carry is $5 million. At this point in time, the fund is at a negative $2.8 million. We anticipate a loss at roughly a $1 million this year, which will take it to $3.8 million.
There is still room for the stabilization fund to assume a level of loss, but only to the maximum of the $5 million. If that amount is exceeded, then an appropriation would have to make up the difference between the $5 million and the actual amount of loss. The management of the cost of fuel is something that we are focusing on to the maximum set possible, but certainly, a substantial amount of the cost is based on the wholesale price of fuel.
At this time, the wholesale price of diesel fuel is running around 34 cents a litre, where traditionally, we expect to see it around 22 cents a litre. If the prices were to continue, we would have a considerable problem in trying to deal with it, in trying to stay within the price stabilization fund.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Bill Braden Great Slave
Thank you, Mr. Chairman. What is the department's ability to pass these additional costs, if they are incurred, to the customer? In the answer to the previous question, I understand if it tips over the $5 million threshold, then an appropriation would be requested, but is there a provision within the way the fund is managed to actually go to the customer and treat this more as a user pay situation? Is that an option? Thank you, Mr. Chairman.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Vince Steen Nunakput
Thank you, Mr. Chairman. Mr. Chairman, I believe the department, as it has done in the past, has the option of going to the FMB and requesting a price increase for the petroleum products if we feel that we cannot reach the threshold. We have taken that measure and we have, in fact, in December, taken and requested the FMB to raise the price of petroleum products in the communities by ten cents a litre.
It was approved and it came into effect January 1st of this year. We have the option of raising the price of fuel in order to keep ourselves within the limits set out by the revolving fund process.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 408
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Bill Braden Great Slave
Thank you, Mr. Chairman. One more question as I see my clock running out. What would be the department's preference as it sees that $5 million threshold coming up? Would it be to go to the customer or would it be to come back to the Assembly for an appropriation? What is the preference? Thank you, Mr. Chairman.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Vince Steen Nunakput
Mr. Chairman, there are certain requirements under the revolving fund the department has to abide by. Like I said, we have a mandate to stay within the limits set by the revolving fund. If we have any indications that we are going to reach beyond the limits of that revolving fund, we do not have an option other than to take our concern to the FMB and to Cabinet for consideration as to how we would address the particular situation. Thank you.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Michael McLeod Deh Cho
Thank you, Mr. Chairman. I would like to ask the Minister, what is the strategy when it comes to Deh Cho in terms of any plans for privatization or any contracts to be let or asset transfers in the Deh Cho region?
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Vince Steen Nunakput
Thank you, Mr. Chairman. Mr. Chairman, I will pass the question on to the deputy minister to respond.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Rattray
Thank you, Mr. Chairman. There are no plans at the present time. I recall the Member mentioned asset transfers, privatizations. That is not contemplated at the present time.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Michael McLeod Deh Cho
For the record, I can read into the answer there will be cuts and no deferrals for new projects in my riding?
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409
Vince Steen Nunakput
Mr. Chairman, perhaps, I will pass the question on to Mr. Brian Austin, who is involved with petroleum products, as a director. Thank you.
Records Management
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Page 409