(Mr. Krutko): Mr. Dent.

Thank you, Mr. Chairman. Even with that, our purchase price must have gone up more because looking at the budget books, it appears we are expected to have a $230 million deficit in the stabilization fund for this current year and we are projecting a $92 million deficit...Sorry, $92,000. It's $230,000 and $92,000 rather than millions. Excuse me, it's not quite as bad as it first sounded. I guess my question comes back to, if we are showing deficits here, why do we say we are trying to have a break-even operation? If the price of fuel in the smallest communities is so high that we need to subsidize someone, and I am assuming that's where we are delivering these products, then that should be part of the thing we look at through the budget process as well. I think Members expect, this being an essential service, that there may be grounds for a subsidy and I think it should be presented as that and not presented to us as a break even if it's not. Thank you, Mr. Chairman.

Mr. Aumond.

Petroleum products revolving fund, information item. Mr. Braden.

Thank you, Mr. Chairman. I would like to follow up on Mr. Dent's line of questioning. The assumption is that we want to try to recover the cost of the product from the user, but the numbers are showing that we're not. Under what policy or mandate or legislation does the petroleum products fund collect money? What drives pricing policy? Thank you.

Mr. Minister.

I will ask the deputy minister to respond.

Mr. Rattray.

Mr. Braden.

The point that Mr. Rattray mentioned, that when the pricing can't break even then the stabilization fund kicks in, that's the point I am looking at. If the fund or if the pricing can't break even, what kind of problem or barrier or difficulty does the department have in making sure that it breaks even? Is there something that's lacking or is there a gap in our policy that says we can't break even? That's what I am trying to dig at here in this pricing policy.

Mr. Rattray.

Mr. Braden.

Thank you, Mr. Chairman. I appreciate Mr. Rattray's answer to my rather fuzzy question. I will see if I can be a bit more precise. According to the information before us, Mr. Chairman, we are anticipating a closing balance after the coming fiscal year, a deficit of $4.5mllion. We have a limit of $5 million. What then are the options for restoring or balancing the fund? Thank you, Mr. Chairman.

Mr. Steen.

Mr. Chairman, the options are limited. We have the option of recommending to FMBS an increase in petroleum products, which could see a reduction in the deficit over a year or a number of years or like we've undertaken is we recommended to FMBS that we write off the $4.5 million deficit and start new. One of the problems we are experiencing, and this probably was expected, we don't have the same economies of scale we had before division. That's playing a major part in our ability to break even. We also have to keep in mind that this is an essential service and we have to keep the product affordable in the communities, otherwise we may have a serious problem.

Right now, there is no doubt that, even though we may have the same priced product this year as we had last year, obviously that's not going to be the case if the price of petroleum products keeps increasing. So it will probably be reflected in the summer barge product and in the winter road product next year. The only way to address that would have been to increase the cost to the communities to break even.

There is another aspect of this. The $4.5 million is applicable to all the communities that were on the system at the time of division, for instance. Since then there are some communities that are off the system. Therefore, other communities would be paying for something that may have been looked at as the deficit applicable to a different community. That's one of the reasons why we recommended to FMBS that we just write off the $4.5 million because it's money spent. Nobody really owes us this money, it's just money spent. The only way you can say somebody owes you is if we try to make it apply to all our customers. Thank you, Mr. Chairman.

Mr. Braden.

I guess we are getting into an area that is before committee and another bill, Mr. Chairman. There is, in fact, an item in the supplementary about writing this off and we should be taking that up at that time. What I wanted to do in this discussion is try to find out more about the policy approach that we have. It seems where we want to make sure petroleum products are still available, as the Minister says, it's an essential service and I don't want to see any community restricted in its ability to get a fuel product when it needs it. However, if there are going to be these kind of financial supports or backups to communities, it's something I would like to see better supported in policy and approach so we all have a sense of how this is managed and what we have to anticipate in it.

I understand the government already carries the cost of the tankage, the liability and the management of the infrastructure in communities. None of that cost is passed on to the consumer. We are only trying to collect the cost of the product. In a year, we are seeing over time we've amassed a deficit of $4.5 million over 15 communities. We just don't have much of a base for it. I am not going to carry on the discussion on this page anymore, Mr. Chairman, other than to anticipate the discussion we are going to have under the supp. Thank you, Mr. Chairman.

Mr. Steen.

Thank you, Mr. Chairman. I agree with the Member that we should have a policy to guide us. Right now, the policy that Public Works follows is, when we have a need for a price change, we inform FMBS which is the only practice we have been using up to now. FMBS decides whether we have a price increase or not. A policy would definitely give better transparency to the whole thing.

At this time, I would like to ask the Member for Thebacha if he can remove his gum. We are not allowed to bring any food or anything into the House. We are only allowed to have water to drink, so can you remove your gum at this time? Mr. Nitah.