Well, I would like to ask a question and I’d hate to think we’re stifling public debate and democracy here, and shame on those who groan if we ask some questions. The petroleum products division, would they be able to talk about what resources they have here, what resources they use in human capital and certainly in the context of financial resources they spread out and to what communities? As of recently, I’ve clearly been raising the issue of gas regulation and I’ve likened it to some of the work we do under petroleum products division already. So I’m curious on the

human capital we have invested and working for us, as well, and where they’re located. Thank you.

Thank you, Mr. Hawkins. Minister Abernethy.

Thank you, Mr. Chair. Give me a second here and I’ll get the breakdown of positions. As we’re looking for the actual specifics, we’ve got a number of petroleum products division staff. We’ve got a couple located here in Yellowknife, including the director, but the vast majority of the staff in the petroleum products division is located in Fort Simpson, in the Deh Cho. We’re still looking for the exact numbers. Once we get that, we’d be happy to provide that to you.

As Members know, when it comes to the petroleum products division, we work on a cost-recovery basis, not a profit basis where the price of fuel in each of the communities is determined by what we’re able to purchase it for and we’re always looking for the lowest price, what it costs to ship it to whichever community it happens to be going into – we provide it in 16 communities – applicable taxes, some evaporation rates, which are quite small, and then there is a little bit of an operations cost that we put on to provide money to provide to a community vendor who is providing the distribution of the fuel, whether it’s home heating diesel or whether it’s fuel for vehicles in the community. So we work completely on a cost recovery.

We do have some prices here, if the Members are interested in that, on what it actually costs us in each community. Those prices usually change once a year based on the price of fuel when we bring it in. So we do have all the price information, I’m happy to share with the Member, as well, but as far as staff, a few of them are here in Yellowknife, the vast majority are in Simpson. Sorry, I don’t have the exact information. I will get the exact information on number of employees and where they’re located to the Members.

Thank you. And at the same time if he’d provide the breakdown of the pricing information, he doesn’t have to read it here today, but if he could attach that information and I’ll look forward to him saying that he will do that.

At the same time, what does Public Works and Services do for fuel stabilization to avoid rate shock? What is the program or policy that we have? Do we build a bit of – I hate to use the word profit – but do we build a bit of a profit scheme into it to balance that out?

Yes, we will provide the rates in every community to the Member and committee. We will provide the list of employees in PPD. I do have the numbers in front of me now. We’ve got five PPD positions in Yellowknife, seven in Fort Simpson and three in Inuvik.

With respect to rate shock, as I’ve indicated previously, we work on a cost-recovery basis. Everybody knows when we bring the fuel in. It’s pretty obvious, depending on the community. Some of it’s barge haul in the summer, depending on the location of the community. Others we do by winter road. We’ve got a number of communities where we’re currently hauling fuel in. Once it’s in and we can determine the actual cost plus the markup for the local vendor, then we’re able to determine the costs. We’ll be there soon. By the end of the winter road season we’ll have a sense of what the price will be in those communities.

As always, we’re looking for ways to keep those costs as low as possible, and we will provide the current rate in the 16 communities we’re responsible for to Members and committee. We’ve got the information, but we’ll give the Members and committee a paper copy. We’ve worked really hard to keep those rates as low as we can. Because we only provide fuel once a year, basically it doesn’t change over the year. We only bring it in once.

How does the department determine the markup rate for local vendors to supply that? What is it based on? Is it based on a percentage of usage? Is it a flat rate? Could they explain it and perhaps provide some ranges? I don’t know if it’s proprietary information or if it’s negotiated. Maybe he could answer and explain how they get to these rates and where is it publicly disclosed.

In the 16 communities where we’re responsible for fuel, we own the tanks, facilities and fuel itself. As far as the delivery agent, the person in the community who is going to deliver it for us, we do a request for proposal and have community representatives and people from the North submit proposals on the price that they feel they can be the distributor of this product using our facilities for it. It’s basically coming from an RFP open, competitive, public process.

So it’s determined by the winning vendor in a competitive process. Okay. Is that publicly disclosed in some manner or form?

The end results and commissions are, yes.

I think my last question, assuming it’s a favourable answer obviously, is, can I get a copy of this detail?

Yes, I will get that information to the committee and the Member.

Thank you, Mr. Abernethy. Moving on with questions I have Mr. Menicoche.

Thank you very much, Mr. Chairman. I think I’d done a Member’s statement on fuel delivery to the communities and trying to

evaluate the best way to lower the cost of living. Because that’s one of the biggest single factors in the communities, is people depend on the heating fuel and the gasoline and the mode of diesel as well.

So I did ask some written questions, as well, and I’m kind of waiting on those responses. I’m just wondering if this department looked at alternative ways of getting fuel to the communities. I was kind of leaning towards exploring a subsidy so that the cost of the fuel is lower in the communities. I’d just like to know if the department has explored alternative ways of delivering and even lowering the cost of delivering fuel to the communities.

Thank you, Mr. Menicoche. Mr. Abernethy.

Thank you, Mr. Chairman. We’re always looking for ways to reduce the cost of fuel in the communities. We’re always looking for the lowest priced vendor. We’re open to exploring options for delivery. For some of our communities, we do a fuel barge. We’re always looking for creative solutions to reduce our costs, be it where the fuel comes from might help us reduce the costs.

As far as subsidies, some concerns about that because if we put in a subsidy within PPD itself, the difference would have to come out of the revolving fund. If we start taking money out of the revolving fund in one area, it could end up, and possibly would end up, with some getting lower but the prices in other areas being jacked up at the same time. We have to make sure that we have a fair process that isn’t putting any additional burden on any community.

We want to keep the prices low. We’re always open. If the Member has some suggestions, we’re willing to hear them. If communities have suggestions, we’re willing to hear them.

Of course one, of the ways that we could explore other ways of doing it is… Because I know that each community has a different rate for the fuel that’s delivered to the community, which is kind of like the experience we had with NWT Power Corporation where we had specific community-based rates.

Is there a way to spread this cost out over all the communities where we have economies of scale so that the delivery costs are spread out throughout the whole remote communities that we serve?

Just by way of example, automotive gasoline in our 16 communities ranges right now, based on our current pricing structure in place, from $1.48 per litre up to and including $1.80 per litre. If we were to attempt to do some levelling there, we would see some communities go up noticeably. We would see other communities go down significantly. With our

revolving fund to cover those types of differences to level things out, we would start to eat through our revolving fund, which is dangerous. We have to make sure we keep a certain amount in that revolving fund to cover our costs as costs change.

There are market conditions that affect us as well. We do buy our fuel and try to get it from the lowest vendor. I hear what the Member is saying about trying to find ways to keep the costs down, but some communities, including communities in the Deh Cho, would likely go up with levelling, not down. The Deh Cho has some of the lowest prices in the Northwest Territories for the 16 communities that we are responsible for.

Like I said, I had done a Member’s statement and had provided written questions to the House and upon receipt of the information as well as the commitment to share whatever information I had to my colleague Mr. Hawkins. I look forward to these details and trying to come up with some ideas of how to do things differently in order to achieve one of the priorities of our Assembly, which is to lower the cost of living in all our communities.

Thank you, Mr. Menicoche. We’ll take that as a comment. Moving on with questions on this page I have Mr. Bromley.

Thank you, Mr. Chairman. I notice that environmental management is part of the responsibility of the division and I’m wondering what sort of costs we encounter. Or do we have a few years of information on the sorts of costs that we encounter for environmental management? I assume that would include things like proper storage of fossil fuels, cleanup of fossil fuels, transportation. Let’s start with that one.

Thank you, Mr. Bromley. Mr. Abernethy.

Thank you, Mr. Chairman. As far as costs on that, I don’t have the specific details right in front of me, but I can promise to get that to the Member. We could also, because we know what the transportation costs are, and we know what the purchasing costs are, and we know what the criteria are for the communities, we can get the detail on the specific communities as far as what it’s costing us to get the fuel there, which is part of the information we use to determine the price of fuel per community. We can get that information for the Member and committee.

I’m not really asking for transportation costs unless there’s an environmental management aspect to that. The rest of it, in terms of meeting the standards for fossil fuel storage and what cleanup costs we have, what is our cost to replace the proper storage equipment for fossil fuel storage and so on? I appreciate the Minister’s commitment there, I just don’t want him

to do more work than I’m asking for necessarily. Liabilities, what are our current and anticipated environmental liabilities within this division?

We’ll go to Mr. Guy for some specifics on that and the criterion conditions.