Thank you, Mr. Chair.
My name is Lorne Browne. I represent the Government of the Northwest Territories' fuel services division. A few speakers mentioned fuel in their addresses, and I'll talk about fuel a lot more.
The fuel services division's mandate is to purchase, transport, store and sell diesel, gasoline and, in some cases, jet fuel in 16 remote and difficult-to-access communities in the Northwest Territories. These are communities where the private sector does not operate, so the government steps in to provide those services. We also deliver diesel fuel to 20 communities in the NWT for electricity generation as a primary or backup source. The service we provide does not take any profit. It seeks only to break even and provide the service to our residents.
In most of the communities serviced, an entire year's supply of fuel is delivered in just a few weeks by tug-and-barge operation on our waterways or by tanker truck on our seasonal and winter roads. Due to the extremely remote locations of some of our communities and the cost of shipping, fuel costs in the NWT are some of the highest in Canada. We typically change fuel pricing after annual resupply, so generally speaking, fuel prices are set for the year.
The governments of the Northwest Territories and Nunavut are the only two jurisdictions in Canada to manage fuel for public use on this scale.
Since 2020, fuel prices in the communities we service have escalated quickly and considerably. On average, fuel prices have increased by as much as 50% as of last winter. Market volatility since March 2026 suggests additional and significant increases are forthcoming in many communities in the next price change cycle. Not only is it more expensive to purchase fuel on the wholesale market, but transportation costs have also escalated because, of course, transporting fuel uses fuel.
Climate-related disruptions have negatively affected the supply chains as well and exacerbated fuel costs. Events such as wildfires, increased sea ice and low river water events make it difficult to deliver fuel, risking inventory levels and forcing millions of litres of fuel to be delivered by alternative means, including sometimes by air tanker. For perspective, delivery of fuel by tanker truck or tug-and-barge operation can typically run between 50¢ and 70¢ a litre to some of our communities. By comparison, delivery by air tanker can cost upwards of five dollars per litre. That's just the transportation cost. Other cost components, of course, make up the final selling price.
The Northwest Territories has experienced several intense wildfire seasons over the last three years. One of those fires destroyed a key rail link, which impacts bulk delivery of petroleum products from the south. Now tanker trucks must be used to deliver on that part of the route. Low water events in the Mackenzie River, our main water-based transportation route, have also impacted barge operations, forcing costly supply chain rerouting.
All these supply chain impediments and resulting contingencies come at a cost.
It's important to acknowledge that high fuel costs trickle down to influence the cost of most aspects of modern living. Few things in our lives affect the cost of living like fuel does, especially in the north: the manufacture and transportation of goods, generation of electricity, heating of homes, growing and transporting food, construction activities, resource sector activities, infrastructure maintenance and operating costs, personal travel costs and even traditional activities such as fishing and hunting for food. All these activities are linked to the cost of fuel.
Since fuel is a globally traded commodity, residents of Canada's north have little to no influence on its pricing. At the same time, there is no single driver more impactful to the cost of living than the price of fuel. Some progress is being made on reducing our reliance on liquid petroleum products; however, at least for the foreseeable future, we'll continue to feel the impacts of high fuel costs and the resulting high costs of living in the north.
Thank you.