Mr. Speaker, I have a return to written question asked by Mr. Yakeleya on October 24, 2006, regarding the seniors' home heating subsidy.

As well as answering the questions, general policy information is also provided in this response. The calculation of the SHHS involves a net income threshold and fuel consumption threshold. It does not include a fuel cost threshold. Senior homeowners' fuel subsidies are based on the actual cost of the fuel up to the established consumption limits. For example, where 4,000 litres of propane is proposed under the program, the SHHS program, not the senior, assumes the increased cost for fuel as the price goes up. The budget for the SHHS has been $525,000 and actual expenditures have recently exceeded the budget to the program. In 2005-06, we spent $1.1 million for SHHS resulting in an expenditure of $586,000 over the initial budget. We anticipate that we will again expend a similar amount on the SHHS in 2006-07.

The Member asked how the maximum amounts were developed for the subsidy, and how these amounts compare to the actual cost of heating the seniors' homes, including older and less efficient homes.

Fuel consumption thresholds were determined by a review of specific fuel types such as wood costs and propane costs. Thresholds were also determined by the average consumption in households located in three geographic zones within the Northwest Territories. For example, fuel consumption is less for Yellowknife, in zone 1, than the community of Fort McPherson, in zone 2. Older homes with greater consumption are factored into the average costs determined for the specific geographic zone, but are not considered in the calculation of individual subsidies. The actual management of fuel consumption is determined by the homeowner(s). The SHHS is intended to subsidize the cost of the home heating, but not to cover full costs. Covering full costs may mean that the program would not encourage energy efficiency.

The Member also asked about the rationale for rolling off the assistance by 25 percent as household income increases. Senior homeowners' fuel subsidies are determined by an assessment of net income. A lower income means residents need greater subsidy and support. To be fair, a formula is used to determine the relationship of subsidy to income. For example, senior homeowners in zone 1 with an income of $36,249 or less would receive 100 percent of the established subsidy threshold. A homeowner with an income of $37,499 would receive 75 percent of the threshold. Previously, the program provided the same subsidy to all seniors up to a single household income cutoff. A graduated reduction in the subsidy was recommended by Members of the Assembly.

You also asked about how the income thresholds were arrived at and how they compare with the actual incomes of the seniors. An income threshold based on cost of living data was set in 1992, with the initiation of the Seniors' Home Fuel Heating Subsidy Program. Initially the program was designed only to supplement the purchase of firewood so seniors could continue to stay in their homes during the winter season. The program was adjusted over the years in recognition that there are other heating sources used by seniors and to deal with the fact that the initial focus on firewood restricted the benefit to people living below the treeline. Most recently, for example, wood pellets were added to the list of heating fuels under the program subsidy. Education, Culture and Employment continues to review the SHHS on a regular basis to ensure fuel sources are kept current. Thank you, Mr. Speaker.