Nunavut MLAs delay bill to increase fuel spending, say process ‘shrouded in mystery’

Government wants to be able to buy more fuel while prices are low

Nunavummiut still don’t know whether gas prices will go up or down in 2021 since the announcement of the new prices, which is usually made in December, was delayed this year. (File photo by Emma Tranter)

By Mélanie Ritchot

A bill to increase how much the Government of Nunavut can spend per year on petroleum was delayed last week after a vote in the legislative assembly.

If passed, Bill 54 would raise the spending limit from $250 million to $350 million. Nunavut’s finance minister says this change would give the government more leeway to buy when prices are low, which he says would translate to cheaper gas and heating oil for Nunavummiut.

“We want the ability to strike while the iron is hot,” Finance Minister George Hickes said on Friday, describing savings in the tens of millions of dollars if the government is able to buy more fuel in bulk at cheaper rates.

The territorial government’s petroleum products division buys various fuels, such as gasoline and heating oil, and controls their prices in the territory. Those prices depend on how much it paid the year prior, and are typically set during the winter months, according to the division’s website.

“We’re missing out on opportunities to save money and creating ones that will cost Nunavummiut more,” said Hickes, adding he felt MLAs have had “more than enough time” to consider the bill.

Adam Arreak Lightstone, the MLA for Iqaluit-Manirajak, had the opposite opinion.

“I think it is unfair for the government to push this decision on us,” he said about the bill, which was introduced in October.

“There are still a number of unknowns.”

He critiqued the petroleum products division for not being transparent enough. For example, he said, the division has only tabled one annual report since 1999 – that was in 2019. These reports include financial statements and details on the division’s performance.

“The Government of Nunavut’s petroleum products division is a public entity which is shrouded in mystery,” he said.

The 2019 report was tabled after MLAs called for more transparency, according to Community and Government Services Minister Jeannie Hakongak Ehaloak. She said another report is coming in the next legislature sitting.

Typically, the upcoming year’s prices are announced in December, but as of March 2, that announcement hasn’t been made.

Throughout last week, MLAs expressed concern for the delay.

Ehaloak said the COVID-19 pandemic has complicated the division’s price forecasting, and this year’s prices will be announced soon.

She said the division lost money during the pandemic because people were buying less gas, but the low cost of fuel last year also translated into a savings of $15.6 million. This makes it unclear whether prices will go up or down in 2021.

The government has purchased bout 70 per cent of the supply needed for 2021, according to Ehaloak, but she added the spending limit stopped the division from buying more when prices were low.

Bill 54 will be revisited in 120 days.

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(8) Comments:

  1. Posted by pissed off on

    When the GN decides that they are ready to purchase the fuel, do they get advise from professionnals in that sector ?

    It is not like watching the Canadian Tire flyer to see when something is at the right price.
    to make a decision on buying.

    If they buy do they have to take possession and pay storage fees until ready to ship. ?
    We heard last fall in the media about producers paying companies to get rid of their product for lack of storage. This is called“ negative pricing“

    Who is reaslly making these crucial decisions at the GN ?

    Thanks

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  2. Posted by Northern Inuit on

    Great, wonderful job guys. Nunavut has some of the cheapest fuel in Canada……

    But thanks to your delay and not taking time to read the reports provided it seems the cheap fuel may be going up in price thanks to you.

    Way to go. Yay, as if we don’t pay enough in the north

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    • Posted by Northern Inuit on

      I guess when you make the MLA’S salary an increase in heating fuel pr gasoline doesn’t affect you

  3. Posted by Frosty on

    Cheap fuel can suddenly become very expensive if you don’t have anywhere to put it. The GN cannot take advantage of low prices because it does not have place to put all the fuel it would usually buy. It does not have enough storage space because Nunavut does not have much extra storage capacity and because we have not used as much as we typically use.
    .
    The solution is for us to all get on our snow machines and drive in circles all day, using up fuel, buying more, and using up that fuel, too.
    .
    Then PPD would have both the money it needs to buy low priced fuel and storage space to put it.
    .
    It seems to be way past time to look into the operations of PPD. They have been providing a good service the Nunavut, but they have operated with essentially no oversight. They are not funded by the GN. They are funded by all of us who purchase fuel or electricity.

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  4. Posted by Northern Guy on

    This a prime example of MLAs with little to no knowledge of the process of procuring and distributing petroleum products getting in the way and messing things up for average Nunavummiut. The MLAs don’t need to know how the Petroleum Products Division operates. Its one and only job is to procure and distribute fuels to communities. So Lightstone et. al. need to get out of the way and let them do their jobs!

  5. Posted by Kivalliq on

    “I think it is unfair for the government to push this decision on us,” It is literally your job as MLAs to review bills and make decisions on their merits.

    “He critiqued the petroleum products division for not being transparent enough. For example, he said, the division has only tabled one annual report since 1999 – that was in 2019. These reports include financial statements and details on the division’s performance.”
    I watched the assembly. They aren’t required to do annual reports but it looks like they started doing them anyway just to be more transparent? They have a website too Adam.

    “The Government of Nunavut’s petroleum products division is a public entity which is shrouded in mystery,” It’s a division in government that buys and sells fuel to everyone. The only thing mysterious is how they keep prices low… literally nothing here is cheaper than the south except fuel.

    MLAs don’t believe in Qanuqtuurniq? Is buying fuel when it’s really low being too innovative or resourceful

  6. Posted by Caribou Hunter on

    As a consumer of a lot of gas mainly for hunting I prefer the quality of gas and not the time of the lowest price available because once we get our annual gas supply we are stuck with it for the rest of the year and believe me if gas had expiry date the PPD has bought gas that has expired we know this by the smell of the gas because some seasons we get really bad stinky gas probably by the price of the gas when its lower during the time of the purchase.
    So please observe the smell and the clour of the gas in the fall and spring because there is a huge difference probably by age and quality of the gas when purchased because of the price.
    We want quality before the cheapest price because our outboards and snow machines have caught up the to the prices of our vehicles.

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