Mr. Chairman, when you add in all of our costs, then in most communities, there is a subsidy. We sell it for significantly less than what we get it for. As we mentioned a moment ago, there are a couple of communities where our operating costs -- I am talking operating costs here, I am excluding the capital and the financial charges -- the biggest portion of that is the cost of actually purchasing the fuel and delivering it to the site. On top of that, you have commissions for contractors that deliver it for us, you have losses as a result of evaporation, you have the various taxes that kick into play. Adding all those together, as I say, in most communities we sell it for less than it costs us.
Debates of March 6th, 2001
This is page numbers 1543 - 1596 of the Hansard for the 14th Assembly, 3rd 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
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Rattray
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Charles Dent Frame Lake
Thank you, Mr. Chairman. Does the department watch to compare prices in the communities where you have a market and where you do not have a market, to see whether or not there is a differential? What I am interested in finding out is, are we ever in a situation where the government is selling fuel at prices below what the private market is charging for fuel in a community relatively close?
Pol And The Business Incentive Policy
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Pol And The Business Incentive Policy
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Rattray
Mr. Chairman, I think for a short period of time we actually found ourselves in a strange situation up in Tuktoyaktuk and Aklavik, whereby we were selling it for a lower cost in Tuktoyaktuk than it could actually be bought in Inuvik. I think that was a relatively short-lived situation. I do not recall all the details on it. It is certainly not an usual occurrence. It is difficult to compare one community to the next. Again, in Tuktoyaktuk for a short period of time, there is a road that connects, but most communities do not have an opportunity to shop around.
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Pol And The Business Incentive Policy
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Charles Dent Frame Lake
Thank you, Mr. Chairman. No further questions on this, just a comment. Earlier this afternoon when we were talking about licence fees, particularly the safety division, we talked about full cost recovery and the need to move to that. I would like to point out that I think it is important that if we are going to get full cost recovery in one area of the department and justify that as being reasonable, it is entirely reasonable to say we should get full cost recovery in this area of the department as well. I would hope that they would move to make sure that, at least on full cost recovery, they are working on a plan to eliminate the deficit over a reasonable period of time. Thank you, Mr. Chairman.
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The Chair Paul Delorey
Thank you, Mr. Dent. We are on general comments, page 5-23, petroleum products revolving fund, information item. Mr. Braden.
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Bill Braden Great Slave
Thank you, Mr. Chairman. We are just in the middle, if not the final few days, of winter resupply. Those communities that get their year's supply of fuel will also be looking at the prices set according to the cost of the fuel that is being delivered now. Can the department give us some sense for those communities, at least on winter resupply, what kind of a price increase are they looking at for those communities given that things have skyrocketed over the last few months? How much of a difference is there between last year's inventory and the new inventory? Thank you.
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Pol And The Business Incentive Policy
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Chamberlin
Thank you, Mr. Chairman. There has been a little bit of stabilization in the bulk cost of petroleum products of late and we are able to secure product for about the same price as we paid for the summer barge resupply product on a litre-by-litre basis. Depending on that, and then the transportation component will come into effect, I do not see any reason why we would need to increase the price right away. We would simply need to asess the price during our normal period, which is in October of every year.
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Bill Braden Great Slave
Thank you, Mr. Chairman. For clarification, fuel bought now is about the same price as fuel bought in the summer of last year? How about those communities that are working on last year's inventory? In other words, fuel that was bought a year ago for those communities that only get winter resupply? What is the difference in a year's pricing? Does that question make any sense?
Pol And The Business Incentive Policy
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Pol And The Business Incentive Policy
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Chamberlin
Thank you, Mr. Chairman. The question makes perfect sense, but unfortunately I do not have the data at my fingertips to be able to tell you about last year's prices.
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Pol And The Business Incentive Policy
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Leon Lafferty North Slave
Thank you. A question regarding when they privatized Tuktoyaktuk. Would that be the reason there is a difference between 1999-2000 actuals and the main estimates? Thank you, Mr. Chairman.
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Pol And The Business Incentive Policy
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Rattray
No, Mr. Chairman, the largest part of that difference relates to the change in the pricing for fuel. We raised the prices twice over the past year, which increased significantly the amount of revenues that we came in with. That reduced the projected overexpenditure, or the problem that we were going to run into with the revolving fund.
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The Chair Paul Delorey
Thank you, Mr. Rattray. Page 5-23, information item, petroleum products, revolving fund.
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Some Hon. Members
Agreed.
Pol And The Business Incentive Policy
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Pol And The Business Incentive Policy
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Some Hon. Members
Agreed.
Pol And The Business Incentive Policy
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Pol And The Business Incentive Policy
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Some Hon. Members
Agreed.