Thank you, Mr. Yakeleya. Minister Abernethy.
Mr. Chair, the lead on the Mackenzie Valley fibre optic link is actually the Department of Finance. We see ourselves as being a potential client. Right now, actually it was late in the life of the 16th Assembly, early in the life of the 17th Assembly, the department managed to obtain an agreement on a more formal and greater degree of bandwidth, which I think has helped a lot of the GNWT programs and services. Different departments have different requirements for bandwidth based on the programming they have in place. We have all heard about the challenges the health system is facing with respect to bandwidth for some of the medical health records and medical tools that are available.
We would be a client just like everybody else. It’s when we see opportunity here to increase bandwidth speed and efficiency of our programs that it will give us opportunities to have greater degrees of teleconferencing and other tools that are available. We are with you. We are a client on this one as well. We see much opportunity should this and when this goes ahead.
Thank you for clarification, Mr. Minister. As a client, what does it cost for a community of Deline to be clients that will now operate with the bandwidth? What is it costing our government now to have that service in that community to deliver our programs and services such as telehealth or Education? Do you have some kind of number?
Thank you. Some of that falls into other departments, like Education, Culture and Employment has some agreements for bandwidth so that they can run some of their school programs, and Health and Social Services is often in the same boat. With respect to the Technology Service Centre and offices that we’re responsible for, I don’t have that specific detail in front of me, but I will look to see if we can break it down to that degree. I’m not actually 100 percent sure that we can break it down to that degree because we’re buying bandwidth in a fairly large scale, but I will attempt to get that detail for the Member and committee.
Thank you, Mr. Abernethy. Committee, we’re on page 7-21, Public Works and Services, activity summary, Technology Service Centre, operations expenditure summary, $1.282 million.
Agreed.
Thank you, committee. Pages 7-22 and 7-23, Public Works and Services, activity summary, petroleum products, operations expenditure summary, $1.894 million. Mr. Hawkins.
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.
Thank you, Mr. Abernethy. Mr. Guy.
Thank you, Mr. Chairman. We have a process in place where we do regular environmental site assessments of all of our PPD facilities. We regularly update those so we have a systematic plan where we go through, do an environmental assessment, and then we’ll do a phase 2, if we need to, and get detailed estimates of what any of the liabilities are. Then we book those through the general Environmental Liabilities Fund with the Department of Finance.
So we would have to go back and get the total that’s in there broken out. Then, of course, if there’s any work that needs to be done, we have access to funding through the Environmental Liabilities Fund to do that. I think we did some cleanup in the last few years of some of our PPD sites, so we’ve been making some progress on that. I would have to get back with the current total of known environmental liabilities for PPD.
Thank you, Mr. Guy. Mr. Bromley.
I appreciate that information and commitment. I think the Minister and deputy minister have got where I’m coming from and I’d appreciate that information. What’s the Environmental Liabilities Fund? I’m afraid I’m ignorant of that. Is it just within this department or is it a government-wide fund? Where does it lodge itself? How much is it?
That resides with the Department of Finance.
I think that’s it. I will look forward to that information, and I will be prepared to ask questions on the Environmental Liabilities Fund when the Department of Finance comes up.
Thank you, Mr. Bromley. Page 7-23, Public Works and Services, activity summary, petroleum products, operations expenditure summary, $1.894 million.
Agreed.
Page 7-24, Public Works and Services, information item, lease commitments - infrastructure.
Agreed.
Page 7-26, Public Works and Services, information item, Technology Service Centre (chargeback). Mr. Hawkins.
Thank you, Mr. Chairman. Just in the context of full-cost accounting, and if I may call it an obvious technicality that I’m seeing, why do we charge back on TSC services but we don’t charge back on costs for utilities?
Thank you, Mr. Hawkins. Mr. Abernethy.
Thank you, Mr. Chairman. For some specifics on that I will go to the deputy. With respect to the Technology Service Centre, we are providing a service to departments whereas with utilities we have management responsibility of the asset. There are some slight differences in the two.
Thank you, Mr. Abernethy. Mr. Guy.
Thank you, Mr. Chairman. I guess I would agree with the Minister’s assessment on that. When we look at utilities, it’s a cost associated with operating the building or maintaining the building. That falls under our mandate to operate and maintain the buildings.
The Technology Service Centre is a service we provide to other departments on really a consumption basis. The utilities, for example, of the TSC are in Public Works and Services’ budget. They are not charged back in that way. But the service that we provide for desktop support and computers, hardware, access to Internet, digital communications network are charged back based on consumption.
Thank you, Mr. Guy. Mr. Hawkins.
Is there a clear distinction as to why we would just not bother with the chargeback at all and just get FMB to fund, for example, Public Works an additional $20 million and avoid the additional, sort of, paperwork and the flow to each individual department and the accountability on that sense?
Because in some respects, I heard the Minister’s point. I realize it, which is it’s just a direct flow-through of payment schedule when it comes to, say, the power bill or the fuel bill. But in this one, what about maintenance? The department, say, maintains, I’ll say a school. That might not be the best example, but it is an example. But we don’t do a chargeback for that. Public Works is expected to absorb that cost as part of their mandate.
Wouldn’t one then be able to derive that providing technical services through our system – outside of maybe hardware, that is, because each individual department can prescribe or demand their own services as necessary – wouldn’t it then seem logical that we would do a consistent pattern with computer services?
Thank you, Mr. Hawkins. Minister Abernethy.
