Thank you, Mr. Braden. Mr. Minister.

Thank you, Mr. Chairman. I believe we do resupply by barge to six communities. Thank you.

Thank you, Mr. Minister. Mr. Braden.

Thank you, Mr. Chairman. I don't have any further questions.

Thank you, Mr. Braden. General comments from Members? Mr. Yakeleya.

Thank you. Just a comment here to the Minister in terms of the surplus that is projected in this department. Is there any type of assistance in helping with the high costs of fuel in the communities in the Northwest Territories? Because of this surplus we have projected here, is there any type of discussion going on in assisting the people like granny from Nahanni, in terms of the high costs of fuel and the amount of money we get in this department? Thank you.

Thank you. Mr. Minister.

Thank you, Mr. Chairman. As I stated in my opening comments, the initial surplus of the fund that we identified was $472,000. To help offset the increased price of product in communities, we've dipped into that fund and that's the $230,000 we earmarked as a loss. We are offsetting the cost of home heating oil by 10 cents per litre in the communities we service. So in a way, we are trying to help those in the communities we service. We can only do this because we have that small surplus there. Once that surplus is gone, we are at the full cost of product price that will be charged in each community. Thank you.

Thank you, Mr. Minister. Mr. Yakeleya.

Thank you, Mr. Chairman. The concern I had is he just indicated that the long-term plans is when we run out of the funds. What then? What are people to expect and what type of assistance will this revolving fund do to help the people? Thank you.

Thank you, Mr. Yakeleya. Mr. Minister.

Thank you, Mr. Chairman. The stabilization fund is to do what we just spoke of, to try to offset some of the sharp increases. As well, it can provide for decreases in prices if there was surplus there. The way we are going now, we would find if we kept up the practice that we had in the past, we would be in a deficit position of close to $1 million if we didn't make some of the changes that we had in the last year. Because of the act and direction given of full cost recovery, we would have to come in for some drastic increases. These latest increases are part of a result of going full cost recovery on the product, as well as the increased price of the product that we have had to pay from the distributors. Thank you.

Thank you, Mr. Minister. Mr. Yakeleya.

These are my final comments to the Minister. The surplus is also going to be credited to the consolidated revenue fund. Why are we throwing this into this huge fund where it will be distributed across the board? Can't we help people with their home heating costs rather than distribute it right across the board? Thank you.

Thank you, Mr. Yakeleya. Mr. Minister.

Thank you, Mr. Chairman. The dollars that are identified as surplus would stay within the stabilization fund until they exceed the amount of the stabilization fund. So with this amendment we are proposing, our stabilization fund would be set at $1 million. If our surplus was to grow beyond $1 million, anything over $1 million would go into the consolidated revenue. We would keep up to that maximum amount. The same would go the other direction. If we were to go in a deficit of more than $1 million, then we would have to adjust our prices to come back up to offset that deficit.

So with the maximum allowable amount that we are proposing here, we feel we would be able to maintain that or stay close to neutral on the amount without having to

drastically make changes to prices or to be putting money back into the consolidated revenue fund. If we had so much surplus that we went beyond the maximum allowable here, we would have to look at reducing our prices. Thank you.

Thank you, Mr. Minister. Mr. Yakeleya.

Mr. Chairman, can the Minister advise me how the revolving fund will be impacted by the contractual arrangements we have with the small communities I serve in the Sahtu and assist them in the operations?

Thank you, Mr. Yakeleya. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, the contractual arrangements we have for dispensing of fuel in the communities is done on a community-by-community basis and seeing who would be interested when we put these packages out for response from the public. The fund isn't set up to affect the price of those contracts for delivery. What the fund is there to do is mitigate the increase that we would have to go forward with if the price of the product has climbed as much as it has. From last winter's resupply through to this summer, there's been a drastic increase in the price of product. By example, we have lowered the impact on communities with home heating oil by 10 cents because we are in a positive situation in this fund. At the same time, we have to ensure that we don't go into a negative side of the balance, and the directive now given is that all communities would be very close to 100 percent cost of the product being delivered to the community. Thank you.

Thank you, Mr. Minister. Mr. Yakeleya, thank you. General comments. Clause by clause. Mr. Villeneuve.

Thank you, Mr. Chairman. I just have a quick question on the stabilization fund, also. Just getting back to what the Minister was saying that communities are going to start paying 100 percent of what the actual product is to deliver to the communities, the stabilization fund that offsets projected losses and is not offset by revenue...It's to offset any changes to the cost in the communities. How would that happen in the first place? If you buy a product and you ship it to the communities and you put a price on it that's going to recover the cost or hopefully most of it, how would the price get changed? Even if the market changes, there was a cost that was incurred and the market really doesn't have any effect on the communities that are annually supplied unless the cost changes from year to year. How would that stabilization fund offset any changes that could happen during the middle of the year? I just don't see how it works. Maybe the Minister can clarify that for me. Thanks.

Thank you, Mr. Villeneuve. Mr. Minister.

Thank you, Mr. Chairman. Mr. Chairman, before we went to a full cost recovery model for the pricing of the products, there were some communities that were paying more than the actual cost of product in that community and helping some of the smaller communities. We've had to make the change because it was deemed not to be fair to those communities that would have to pay more than what it cost for them to get that product to the community. The stabilization fund itself would come into impact in the areas and times when refuelling does happen. So there would be no changes throughout the year as long as we did not run short of product and resupply at another time of the year. The goal is with our tankage in the communities and with the expected usage of the fuel that we have in those communities, we should not be running out of product. So there wouldn't be an impact until the following resupply time.

It was asked earlier how many communities are serviced by barge. We have six communities serviced by barge alone. There are two other communities who receive barge shipments along with winter road shipments. So there are eight communities by barge, but they also receive winter shipments and that can change the price, so it wouldn't be on an annual basis. So the communities we serve through the petroleum products division are somewhat protected from the day-to-day fluctuations that we feel in the larger communities where it is serviced by the private sector. That is both a good thing and a bad thing, because through a community in the private sector, the price of the product would climb and be adjusted monthly or daily, in some cases, whereas in our case, the price would not be adjusted until we had a resupply and there could be a significant difference between a previous year's product price and the new price we pay on the same product. That's what we found ourselves facing this summer. Thank you.