Debates of May 10, 2007 (day 4)

Thank you, Mr. Speaker. Mr. Speaker, my questions are in relation to the Member’s statement I made today and my questions are for the Minister of Finance. Can the Minister please explain his department’s reasons for restricting fuel resellers from purchasing heating fuel? Thank you, Mr. Speaker.

Thank you, Mrs. Groenewegen. The honourable Minister of Finance, Mr. Roland.

Return To Question 47-15(6): Resale Of Home Heating Oil

Thank you, Mr. Speaker. Mr. Speaker, the work that we are doing within Finance around fuel tax collectors -- and there are about 30 of them in the Northwest Territories -- comes out of a result of a number of things that have occurred. One, in the tax administration of how we deal with home heating oil versus diesel, or motive diesel as we call it. In the Northwest Territories, there is no distinction between that. When a supplier purchases from a bulk supplier, there is no difference when it comes in the Northwest Territories. In fact, they can purchase home heating oil and motive diesel, but it is put in the same tankage. Our problem in the Northwest Territories is when it comes to reselling that. The changes that we are looking at are as a result of doing some of the work. We are realizing and having to focus on some of our collectors around the sale. We see a lot of purchases of home heating oil which doesn’t have any sales tax on it or fuel tax in the Northwest Territories, but motive diesel does have a fuel tax applied to it. We see a lot of purchases of home heating oil, but we are starting to look at it and question the fact is there that much home heating oil being sold or is it being sold as motive diesel. We have to follow up on that. That is what is happening here. We have to follow up on that and do better work on our end, and that includes involving some of the fuel tax collectors. Thank you.

Thank you, Mr. Roland. Supplementary, Mrs. Groenewegen.

Supplementary To Question 47-15(6): Resale Of Home Heating Oil

Thank you. That is a nice way of involving our fuel tax collectors. I want to ask the Minister what consultation, if any, took place between the Minister’s department and the fuel tax collectors and resellers who are impacted by this decision? Thank you.

Thank you, Mrs. Groenewegen. Mr. Roland.

Further Return To Question 47-15(6): Resale Of Home Heating Oil

Thank you, Mr. Speaker. Mr. Speaker, our normal procedures are we have contact with the fuel tax collectors around tax season or regularly as we get input. We have some good tax collectors. The status of our fuel tax collectors is good. We also have areas where we are challenged in and doing further investigation. We normally would contact them initially with written correspondence around any potential changes and inform them through that avenue. Thank you.

Thank you, Mr. Roland. Supplementary, Mrs. Groenewegen.

Supplementary To Question 47-15(6): Resale Of Home Heating Oil

Thank you, Mr. Speaker. Given perhaps unforeseen impact that this restriction on purchasing heating oil will have on small businesses and customers, would the Minister agree to rescind his department’s earlier direction? I think there must be some other way of addressing this tax issue without taking such a broad sweep approach to it. I would like to ask the Minister, does this inability of fuel resellers to buy home heating oil…Am I going to have to pay as a consumer? Am I going to have to pay the extra 9.1 cents that includes the tax for my home heating fuel if they are not allowed to buy home heating fuel? Thank you.

Thank you, Mrs. Groenewegen. Mr. Roland.

Further Return To Question 47-15(6): Resale Of Home Heating Oil

Thank you, Mr. Speaker. Mr. Speaker, this goes on from quite a long process; it just didn’t come up overnight. We have worked with our tax collectors, those that have that status, in collecting the taxes. We don’t charge home heating oil any fuel tax. The problem is, as those that purchase the bulk supply, they buy under the home heating oil banner and, for the Northwest Territories, there is no limit to that. What happens as a result of this is the federal excise tax can kick in, because what we are saying in the Northwest Territories now is that everyone purchasing fuel would purchase it under motive diesel, which then our fuel tax arrangement falls under. But if they resell it as a home heating oil and can prove it is being sold as home heating oil, then there is a reimbursement that occurs. So there is no tax there and we are not limiting the motive diesel or home heating oil. It is at the time of reselling that we have some issues with and are following up on. Again, this is not going to be a broad stroke approach. We have looked at that and heard some of the concerns. Those that are in good standing, we are not going to enforce further rigid controls on, but those that we are having some issues with, we are going to continue to pursue.

I have heard some of the concerns and directed the department to look at meeting with those that have tax collector status to try to work out some of these concerns that are being raised. Thank you.

Thank you, Mr. Roland. Final supplementary, Mrs. Groenewegen.

Supplementary To Question 47-15(6): Resale Of Home Heating Oil

So is the Minister saying that, of the 30 operators that collect tax for the Northwest Territories, this only impacts a few, this is not an across the board thing? What evidence does the department or the Minister have that this fuel that was being purchased as home heating fuel was not being sold as home heating fuel? What evidence does the government have to impose such an onerous administrative burden on these businesses? Thank you.

Thank you, Mrs. Groenewegen. Mr. Roland.

Further Return To Question 47-15(6): Resale Of Home Heating Oil

Thank you, Mr. Speaker. Mr. Speaker, in some cases, yes, there are a couple of additional steps that are required because of the federal excise tax piece of it, but a number of the companies that have tax collector status on fuel sales have already done quite a thorough job. As they supply us information, it is very clear as to what happened.

Mr. Speaker, just to highlight some of the concerns, when we have problems with the administration or the processes of change an application to rebate taxes to entities that have used fuel for purposes of having a lesser tax rate than the one that is paid, it gets complicated. But sometimes these things are re-branded, as we call it, because it is all in one tank. It can be sold from one supplier to another under different headings until the final resale portion where it goes into a tank beside somebody’s home that goes into their furnace. It can be re-branded about three times. For us to track through that and to make sure that the right tax is being paid, or no tax in the case of home heating oil, is very difficult. The fact that we have a small group going out and doing these, it is a very intensive process. Hence, the commitment I now made with my department to get out there and meet with those that have tax collector status to see if we can work out some scenarios here. Thank you.