Thank you, Mr. Chair. Mr. Chair, I will try to respond to all of the issues that Mr. Menicoche has raised.
First off, with the petroleum products division and the stabilization fund, we used to, when the Northwest Territories was part of Nunavut or Nunavut was a part of the Northwest Territories, have a $5 million stabilization fund. What we found after division occurred was that the economies of scale had dropped significantly for ourselves here in the Northwest Territories, and we were unable to carry that fund as it had a large debt. In fact, the previous government had already taken a hit by writing off a large portion of that debt. What also occurred at that time was to drop the stabilization fund from $5 million down to $1 million. So the impact of a plus or minus could quite quickly affect our ability to mitigate any increases in fuel prices across the territory. Since then, we have done a couple of other things. One is because of the old situation of trying to deal with price changes, it had to follow a process to go from the department after refuelling, reviewing, after the final refilling had been done in all the communities, then a paper would be brought forward to the Minister who would then carry that to FMB for any changes in prices. If there were questions about it, it would go back to the department for further clarity and then back to the table again. That could provide a delay of a few weeks to a few months at times, thereby delaying the impact of any changes plus or minus.
What we have done now is, with changes coming forward, FMB has given myself, as a Minister, the authority to make changes on it by notifying them of the change and then having it put in place so the timelines between changes can be significantly reduced to the changes. But what we found last summer, was the price of products across the country was going high extremely fast. We were just at the refuelling stage with barges and by road to a lot of our communities. As a result of the fuelling, we found that we had to make the increased prices effective when we were able to bring it forward to FMB.
One of the things that we have done to try to mitigate some of the prices on communities was we had an average of 10 cents a litre for home heating oil reduced. Instead of having the full impact of...Let's just use an example of $1.50 down to $1.40. That is on the high side. Home heating oil wasn't getting high in most communities. The price of gasoline was. But the subsidy we put in place of 10 cents average was to protect those in the communities.
The policy we face from petroleum products division, or from Public Works and Services, is one of full cost recovery. That decision was made as well in the last year that we had to recover the cost of the product delivered in the community. When we say full cost recovery, we are still not adding in a cost for capital replacement of our facilities, so that part is still not covered. What we are covering is actual delivery of the fuel product into the community, the contract we have with fuel delivery services and a bit of O and M levy within the department. Those are the things that we have to have full cost recovery for. Unfortunately, once the fuel is put into the facility in a community, we are charged that price when it is delivered. When it leaves the barge or the truck into those facilities, we are tacked with the price of that day. That is going to be the price until the next refuelling happens. What occurs is there are measurements. We know the quantities that are left in the tankage in those communities. From the previous year's refuelling to the existing season when the tanks are filled up again, there is an average of what is left in that tank, and it is blended with the new products. When we top up the tanks, not everybody is paying the new price per litre of the full tankage. It is blended, so there is a formula there to take into effect the amount of old fuel in there, the amount of new fuel that goes in, and blends within that area. Nobody is paying the full price of a tankage if it was one-third full and we topped it up with two-thirds new fuel that was more expensive. It is blended.
As well, one of the other things we did within Public Works and Services was reduce the O and M levy by two cents a litre on top of the 10 cent average decrease on home heating oil. That is one of the things we have available, but, beyond that, our policy that we have to work with is one of full cost recovery.
The other area that was discussed was office space procurement. Fort Simpson, specifically, the office space, as the Member stated, we did work with him on the area of concern that did come up. Our practice will be that we will be going out in that community for RFP for office space. It still won't help the individual unless the company that was in question builds office space that would fit the criteria. When the departments come to us requiring office space, they have a design and criteria of an office that they are requesting. We would go look in the communities to see who has that available. In the case that we initially dealt with, we felt that the other space that was available didn't meet the criteria that was established. But I made a commitment to the Member that, from this point on, it would be an RFP process. It might not change the future decisions of what is required, but it still would be open to all those that would have space available.
The issue of employment in communities is one that the government has dealt with on many occasions in this Assembly, about how we spend dollars, how we either have a centralized system, or we try to regionalize or put as many frontline positions in communities. I have
corresponded with the Member on the amount of positions that we have seen developed in the community. Within the last year, we have seen a significant growth trying to just deliver services in the community. That has been one of the factors. The specific one within Public Works and Services, and specifically within PPD, was the director position, or coordinator of fuel operations is the title of that position. We had put out for an ad to hire someone to fill that position. It was identified to go into the community of Fort Simpson. We had a successful individual who applied and initially took up office there. Unfortunately, due to a number of extenuating circumstances, he felt that he could not continue on in that community. We made a change in our structure to allow him to work out of Yellowknife. Because of the work that was going on was critical, we kept somebody in that position. Further to that, as we go through this budget, we will see within Public Works and Services another creation or position within the community of Fort Simpson. Thank you.