Question Period: Heating Oil Pricing – February 11, 2015

Home Heating


Mr. Coon: Despite our province being home to the largest oil refinery in all of Canada, New Brunswickers are paying the highest cost for home heating oil in Atlantic Canada, to the tune of hundreds of dollars per month. Why? It is because, last August, a regulatory change was made in the Petroleum Products Pricing Act to give Irving Oil more money. Incredibly, now, our heating oil prices are set by the price of kerosene and diesel fuel, not by the price of heating oil.

My question is for the Minister of Energy. Why is he waiting until August to decide whether to reverse the changes made last August when New Brunswickers who heat with oil are being ripped off right now?

Hon. Mr. Arseneault: I appreciate the question being brought forward. There is no doubt that this is an issue that has been raised publicly recently and also over the last couple of years. It is such a serious issue that the former government hired MJ Ervin to look at this issue and to provide recommendations to the government. It has been a concern not only for consumers but also for the retailers and the wholesalers as well.

Having said that, when the recommendations came forward, the government of the day implemented them back in August of last year, 2014. What I want to do is to be responsible. Let’s look at a full year with this new formula in place. At that time, we will look at how we compare to other jurisdictions to make sure that there is a balanced approach as well, one that not only benefits the wholesalers and the retailers but also benefits the consumers. I made that commitment, and I will see in August, to make sure that those recommendations are looked at.

Mr. Coon: We are more than halfway through the home heating season in New Brunswick now. By now, the minister surely understands that the changes that have been made are harming New Brunswickers and are unfair. The problem needs to be fixed now. Will the minister require the Energy and Utilities Board to regulate the price that wholesalers charge the retailers, as is done in Newfoundland and Labrador, so that heating oil retailers are not forced to pass on inflated oil prices to their customers?

Hon. Mr. Arseneault: I looked at some of the numbers as well—all the rates throughout the Atlantic Provinces for the past year. When I looked at just the January rate, in Saint John, New Brunswick, it was 102.8. When I looked at August 2014, the rate was 122.7. Back in January, it was 129.3, so consumers are paying a lot less. I understand that the price of oil has gone down, but they are paying a lot less.

Having said that, I do appreciate that some families are quite concerned. It is a heavy financial burden for them. That is why, for people on low income, we do have programs like the fuel supplement program in Social Development, where they can access, from November to April, $145 per month, up to $870. As well, come April 1, in the new budget, there will be the home retrofit program, a program that the former Conservative government cut. These consumers will be able to access those programs as well.

This does not alleviate all the problems, but, definitely, our government is listening to the people of New Brunswick.

Mr. Coon: In fact, heating oil is used disproportionately for home heating by low-income families, seniors living in big, old family homes, and rural New Brunswickers who lack the capital to replace their heating system or even to insulate their homes to cut their costs. The government intends to dismantle the very agency, Efficiency NB, that could help families. The government has a bill before this House right now that will transfer staff from Efficiency NB to NB Power, whose customers heat electrically, not with oil. How does the minister intend to ensure that these vulnerable New Brunswickers can cut their oil heating costs?

Hon. Mr. Arseneault: I can assure the member opposite that the home retrofit program . . . People who heat with oil will have access to those programs as well. Again, the programs offered by the Social Development Department also help those individuals, and I will repeat this. From November to April, it is $145 per month, up to $870. I encourage people on low incomes to access those programs as well.

There are various reasons that there is a divergence in some of the rates in other jurisdictions. For example, in P.E.I. alone, 83% of consumers heat with home heating oil. In New Brunswick, it is only 21%. Those are some of the reasons. In P.E.I., they charge a 5% tax rate. We have a 13% rate. Those are some of the reasons that there is a price differential.

However, I did commit that, after one year, in August 2015, we would review the whole thing to make sure that it has been a fair, balanced approach. If I have to ask the EUB to review the margins, I will.