Page 5-21, activity summary, budget, treasury and debt management, operations expenditure summary, Mr. Jacobson.
Thank you, Mr. Chair. My colleague Ms. Bisaro has always been asking about other. So I see other for $3.7 million. Why is that still being put like that and not into the explanation? Thanks, Mr. Chair.
Minister of Finance.
Thank you, Mr. Chairman. Under program delivery details it’s characterized as interest expense.
Maybe next time we could move it up. It’s better to understand than other. Thank you.
We’ll make note of the Member’s wise counsel.
We’re on page 5-21, activity summary, budget, treasury and debt management, operations expenditure summary, $9.850 million.
Agreed.
Page 5-22, activity summary, budget, treasury and debt management, grants and contributions, contributions, $20,000.
Agreed.
Moving onto page 5-23, information item, budget, treasury and debt management, active positions.
Agreed.
Page 5-25, activity summary, office of the comptroller general, operations expenditure summary, $21.679 million.
Agreed.
Activity summary, office of comptroller general, grants and contributions, contributions, $14.085 million.
Agreed.
Information item, page 5-27, office of the comptroller general, active positions.
Agreed.
Agreed?
Agreed.
Page 5-29, activity summary, office of the chief information officer, operations expenditure summary, $1.844 million.
Agreed.
Agreed? Moving on to page 5-30, information item, office of the chief information officer, active positions.
Agreed.
Agreed. We’re on page 5-32, information item, Mr. Bromley.
Thank you, Mr. Chair. I wonder if we could get the okay to go back to page 5-26.
The Member is requesting to go back to page 5-26. Committee agree?
Agreed.
Agreed. Mr. Bromley.
Thank you, Mr. Chair. I just want to be clear on how we’re supporting the reduction in power rates here. I see there is a total increase of about $4 million in our subsidy to power rates as a result of our so-called reduction in costs. How is the Power Subsidy Program commercial? Is that a new subsidy that’s somehow used to reduce power rates to the commercial enterprises above and beyond the reduction of the rate riders and is that expected to be a permanent expenditure from now on?
Mr. Miltenberger.
The Commercial Power Subsidy will cease to exist as it’s currently structured. What was the number for $267,000 back in 2009-2010 under the actuals was how much we were actually spending at the time. It was an undersubscribed program for a number of reasons and when we looked at the new electrical rate structure there was a clear recognition that we would want to come up with a different way to provide some type of support in the smaller communities and the thermal communities for the commercial power rates, because this particular way that it was dealt with wasn’t that effective, hence what now exists today which has been a significant improvement for commercial power rates.
So just for clarification, the $6.444 million in expenditures here over the two fiscal years, this year and next, is a one-time cost that won’t be needed in the future? Or a two-time cost that won’t be needed in the future? Is that right?
Ms. Melhorn.
Thank you, Mr. Chairman. When we are going into the 2011-2012 fiscal year it’s the first full year under the new power rates and we will be getting more information about exactly how the TPSP payments are being made. We’ll be readjusting our budget to reflect the actual payments under TPSP. We want to have some more information about how the subsidy is being paid before we make those changes.
I didn’t understand any of that. I wonder if I could get a more plain language explanation there. Territorial Power Subsidy Program. I guess I want to know what are in those statements. How do we decide what to pay out? They’re identical numbers here between the two fiscal years. I guess I need to understand that more.
Mr. Miltenberger.
Thank you, Mr. Chairman. The fundamental approach was that the current... Before we implemented the changes, there was a commercial power support subsidy that was not being used that the commercial businesses were paying the fully burdened cost with no subsidy in the communities, hence some of the power rates in stores and such of $10,000, $15,000, $20,000, $30,000 a month. What we’ve done now by setting rates for the thermal communities is we’ve lowered the cost per kilowatt and the benefit now to power commercial businesses is significant and fairly applied and they don’t have to ask for it. It’s just built into the rate structure is the way I understand it.
Ms. Melhorn.
Thank you, Mr. Chairman. Yes, the Minister has outlined the change in the way the commercial entities will benefit from the lower rates. Just to clarify, the current TPSP budget of about $14 million, we’re projecting that the total TPSP expenditures under the new rate system will be in the order of $8 million, but again that’s just based on the forecast. Then we have to factor in the payments to NTPC and NUL to reduce the rate riders and then to allow for the foregone dividend revenues by the GNWT. That nets out to the $14 million.
Mr. Bromley.
I appreciate that. Can we expect this amount to go up the following fiscal year? Are we projecting it to go up based on what we know now? Are there programmed increases expected the following fiscal year related to the changes we made in 2011-2012?
Mr. Miltenberger.
Thank you, Mr. Chairman. At this point we’re budgeting with the numbers that we do have recognizing, for example, that the price of fuel is now back over, depending where you look -- either the Brent Crude or the West Texas -- it’s either $100 or over $110 a barrel. We anticipate that there’s going to be upward pressure in costs in everything we do, including the provision of diesel generated power.
I don’t have any more questions here. As the Minister has pointed out, I see this as a misallocation of dollars. We know that costs are going up rapidly. We need to be putting these dollars into ways of actually reducing costs for our people rather than hiding costs so that the taxpayers take on what the ratepayers have in the past. I’d much sooner see us reduce the real costs of power so that the ratepayers are paying lower costs and everything’s aboveboard. That’s just a comment. I think we all know that these costs are going to soar as our fossil fuels increase. I know that the government’s working on that. I think what we can understand here is that we’re not working fully in cognizance of that by engaging in these incredibly consuming activities to hide subsidies and increase subsidies when we should be putting that into actually reducing real costs. Just a comment.
Mr. Miltenberger, if you want to respond to the comment, have at it.
Mr. Chairman, we have to do both, which is what we’re doing. We have to make the long-term commitment to change how we generate, distribute and deliver energy, electricity, heat. We have to minimize our reliance on fossil fuels. In the meantime, after 16 years, as you will well recollect the discussion in this House of coming up with a fair rate structure for Northerners that doesn’t in many cases cripple small businesses. It’s something that is an interim measure as we take these longer-term steps to restructure and rebuild our infrastructure in terms of the generation and delivery of electricity and energy.
Once again the Minister builds my case for me. We have done very little for at least 12 of the last 16 years. I think in the last four years we’ve started to move on these things. That’s a disappointment, I suppose, in government, that the public justifiably has. I appreciate the remarks from the Minister.
I appreciate the Member’s comments.
Okay. If we can go back to the summary. Page 5-26, Finance, activity summary, office of the comptroller general, grants and contributions, contributions, $14.085 million.
