Yes, I will, Mr. Chairman.

Thank you, Mr. Handley. Does the committee agree?

We will have the Sergeant-at-Arms escort the witnesses in. Mr. Handley, we could proceed with general comments from the committee while waiting for your witnesses, or we could take a break to wait for your witnesses, whichever you would prefer. Mr. Handley.

Mr. Chairman, I am prepared to proceed. I am sure they are on their way and not far along outside. Thank you.

Thank you, Mr. Handley. We are dealing with Bill 14, Supplementary Appropriation Act, No. 2, 2001-2002. General comments. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, in this particular supplementary appropriation, there are a number of areas and departments that have addressed some of their increases in the area of higher costs of energy and fuel for departments specifically. I would like some information as we go through this because it does go across pretty well all departments that have put in for increases. There are examples of the amount of increase they are looking for and I will question when they get to the specific areas how they came up with their numbers.

Mr. Chairman, I say this because I am aware that in the previous budget, the government did include increases to departments to cover increased energy cost, fuel cost being one of the main areas. We have heard the Minister in this House state a number of times how, in fact, the fuel costs have been dropping. So I question at this time in our fiscal plan or in the year, when we are just getting into the beginning of the winter season, that we are already putting in for higher costs of heating fuel when I do not think we have actually entered into that season. Is this going ahead and guesstimating we will be in some problems here?

Tied to that, Mr. Chairman, is the fact that through POL -- the Public Works department, petroleum products division -- in a number of communities, they are on a system where the prices are fixed because the contract is let over a number of years and they do not change, that I am aware of. The only changes that would come out of those communities would be one that is imposed by this government to try to make up any shortfall that would be seen in their revolving fund, which has been in a number of years previous, they have gone up a number of times to try to make up that difference.

Specifically to this supplementary appropriation, again a number of departments have put in for forced growth or are in that area of requiring new dollars. Hopefully, we will have some explanation as we go through the specifics here. I find it is hard at this time, unless they can come up with some reasons as to why at this time of year they are going for an increase in heating supplies, fuel particularly.

Part of the areas they have come back with for information is it is an increase in energy costs as well. Again, knowing that in the smaller communities, fuel is purchased in bulk and locked in for a number of years, I find it hard to try to put the numbers together as to why we are having to deal with each of these at this point. Why would they not be coming in closer to the end of this fiscal year in that sense? Thank you, Mr. Chairman.

Thank you, Mr. Roland. Mr. Handley.

Mr. Chairman, since the budget was prepared for the 2001-2002 fiscal year, they are having a number of changes that have resulted in increased costs. Let me say, first of all, there is the fuel rate rider of ten cents that was brought in this spring, the spring of 2001, well after the budget was prepared.

As well, there were fuel price increases that impacted us during the 2000-2001 year that occurred after we had prepared the main estimates and the budgets for this year. So what we are doing here is we have to go back to the time late last year or about a year ago and look at what impacts we have faced.

I should also have mentioned, Mr. Chairman, that with many of the communities being supplied through the winter road system, some are supplied by barge, the POL buys their fuel once a year. Their fuel prices can impact on the cost of delivering the fuel, so that has to be added in as well.

There is also the issue around the retail price stabilization fund, which has seen a deficit of about $4 million. That fund is meant to operate at a cost-neutral basis. So when we have a deficit of $4 million, we have to somehow try to bring that back to a more neutral position.

So, Mr. Chairman, there were a number of things that happened too late in the year after we had prepared or, in some cases, approved our budget that have impacted departments. We have had to come back for the supplementary money to enable these departments to reap their costs.

Thank you, Mr. Handley. Mr. Handley, could you, for the record, introduce your witness as well?

Thank you, Mr. Chairman. With me is Lew Voytilla, secretary to Financial Management Board. Thank you.

Thank you, Mr. Handley. Mr. Roland.

Thank you, Mr. Chairman. Mr. Chairman, I am aware that, for example, in January 2000, speaking of this retail price stabilization fund, communities have their petroleum products delivered by Public Works and Services through this multi-year contract, increased by ten cents and then another 15 cents per litre in September of 2000. That again was the previous fiscal year and these business plans were being put together. That would have been the time they were being put together for this fiscal year and the price increases at that time were rather high.

I believe they were addressed as it was already targeted as an area of high cost and there was relief for high fuel costs that was put forward. A number of departments had put in for that and addressed that.

So during this fiscal year, during the business plans that were put head, we have seen a reduction in communities that are impacted by, as they call it, "rack price." There would be some immediate changes, either up or down.

However, those communities that are on the petroleum products contract that is put forward by Public Works and Services, would those not be fairly stable besides the specific areas the Minister mentioned, where some communities have it trucked in? Now that can be a whole number of communities, can it not? Why would it not be broken down in those areas or the communities that saw specific increases? Thank you.

Thank you, Mr. Roland. Mr. Handley.

Mr. Chairman, the rack price is known well in advance. We know what the price is. That is the price that is paid, not considering the transportation of that product. So even though we know the rack price, the delivery price also goes up. I believe it was something like seven cents a litre increase in the delivery price on top of the rack price. We knew about that too late to build it into last year's main estimates.

We did catch a number of rate increases that we were able to build into the budget but we were not able to build all of them in there. So that is only one. Of course, the fuel rate rider of ten cents has to be added in, which would be the other big component. Thank you.

Thank you, Mr. Handley. Further, Mr. Roland?

Thank you, Mr. Chairman. As I recall in the Finance Minister's budget address made in this House, Thursday, February 15, 2001, there were references to a number of times where the budget -- I refer to page 1014 of Hansard, February 15, 2001:

In fact, this budget includes almost $1 million in additional funding to the Housing Corporation to pay the increased fuel cost for public housing and $1 million to maintain the power subsidy program.

Again, a little further down there, this still talks about the one-time fuel rebate to eligible households, so that is outside of what we see here. Again, there were enough numbers to address concerns in the area that would deal with housing, for example, or power, that the government saw that they needed to increase it. It was addressed at that time. Have we seen, since this was put into place, such an increase that all departments have had to address this concern? Thank you.

Thank you, Mr. Roland. Mr. Handley.

Mr. Chairman, that is correct. Last year we were able to add in what we knew. In the case of the Housing Corporation, it was a bit under $1 million that was built into the budget.

In total for the current fiscal year, 2001-2002, we were able to have approval for almost $1.7 million in fuel price increases. In addition to that though, we had other increases we were not able to capture within that time frame. The total amount that we need in addition to the $1.7 million that was included in the plan was roughly $910,000 for the health and social services boards. That was in supp 1. For the 2001, supp 2, we are looking at another $2.74 million, a total amount of $5,326,000 for fuel and energy price increases. Thank you.

Thank you, Mr. Handley. Any further general comments? What is the wish of the committee?

We will go to our grey binders, tab 14. We will go to detail. Mr. Handley, I might just bring to your attention that the pages on this detail of this bill are not numbered so it makes it a little hard to follow, if you could make a note of that. We will go to Legislative Assembly, operations expense, expenditures, not previously authorized, office of the Clerk, $19,000. Mr. Roland.

Thank you, Mr. Chairman. Can the Minister inform us as to what portion of the year this would cover?

Thank you, Mr. Roland. Mr. Handley.