Nutrition North raises cargo subsidies in Nunavut, Nunavik

Nutrition North Canada’s Level 1 subsidy rates have risen throughout Nunavut and Nunavik. (FILE PHOTO)

(updated Nov. 8, 11:55 a.m.)

The federal government has increased food cargo subsidies for most northern communities that use the Nutrition North Canada program.

The increases have been in place since Oct. 1, a Nov. 3 news release from the Department of Aboriginal Affairs and Northern Development said.

“These adjustments reflect the advice from our NNC Advisory Board, current data from retailers and an analysis of current shipping costs,” John Duncan, minister of Aboriginal Affairs, said in the news release.

Nutrition North plans to adjust its rates twice a year, in April and October.

Level 1 subsidy rates — for foods such as fresh vegetables, milk, cheese and most bread products — rose for all Nunavut and Nunavik communities Oct. 1.

The Level 2 subsidy rates, for items like rice, pasta, butter and some juices, rose in most communities but fell slightly in Pangnirtung and Iqaluit.

In Iqaluit, for example, the Level 1 subsidy rose from $1.80 per kilogram to $2.30, while the Level 2 subsidy dropped from $0.70/kg to $0.50.

In Arctic Bay, the Level 1 subsidy rose from $7.80/kg to $8.60, and Level 2 rose from $6.70/kg to $6.80.

In Baker Lake the Level 1 subsidy climbed from $1.90/kg to $3.20, while the Level 2 rose from $0.90 to $1.50.

In Nunavik, Kuujjuaraapik went from its tiny $0.20/kg Level 1 subsidy to $2.20, and from $0.05/kg to $0.40 for its Level 2.

And just north in Umiujaq, the Level 1 subsidy went up from $1.00/kg to $2.40, while the Level 2 rate went from a slim $0.05/kg to $0.60.

On of the major northern retailers says the recent subsidy changes “are delivering significant additional savings” to northern communities.

In a Nov. 1 press release, the North West Company said the newest subsidy rate have created an additional $6 million in (annual) savings for 67 communities.

“Local shoppers are starting to see major price decreases on key, nutritious food items,” said Michael McMullen, executive vice-president for Northern and NorthMart stores.

“As an example, in Hall Beach four-litre milk has dropped in price by over six dollars, from $11.49 to $5.09,” he said. “Compared to low-nutrition beverages like soft drinks, milk is now 80 per cent cheaper on a same portion basis.”

The rates were changed to even out differences among communities that have “different market conditions for shipping,” said Geneviève Guibert, an aboriginal affairs spokesperson.

But, despite the latest subsidy increases, it’s not likely that shoppers will see such subsidies continue to rise in the future.

“Given the program’s fixed budget, if population growth leads to growing demand and higher volumes, it would be unlikely that rates would increase,” Guibert said.

But the North West Company has pledged to ensure that “program funding is not reduced in any significant way from current levels during the next federal government fiscal year,” which begins April 1, 2012.

Nutrition North, which replaced the former food mail program, launched in April 2011.

But fears that Nutrition North would hike food prices forced the federal government to apply the new subsidy rates to a wider list of products to give retailers more time to prepare.

The list of eligible products will shrink to a limited list, mostly fresh meat and produce, in October, 2012.

Nutrition North officials are in Kuujjuaq Nov. 8 for a public consultation on the program.

Nunavik leaders told Nutrition North officials in September that they’ve yet to see any benefits from the new subsidy program in local stores.

This table shows the Nutrition North subsidy per kilogram applied to eligible Level 1 and 2 food items before and after the Oct. 1 revision. The federal program plans to revise the rates twice a year. (SOURCE: ABORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT)