Nutrition North subsidies lower prices per kilogram on some items
“It was a very quick decision made by the federal government”
A one-kilogram bag of flour at Northmart in Iqaluit is priced at $2.99 after an additional Nutrition North subsidy kicked in on some items on May 1. (Photo by Emma Tranter)
The boost given to the federal government’s Nutrition North food subsidy program during the COVID-19 pandemic has led to substantial savings for northern residents, says the Northwest Company.
On April 14, the federal government announced an additional $25 million for Nutrition North, including increased subsidies on certain items starting May 1.
The Nutrition North program has three levels of subsidy for food shipped by air.
The new money meant an additional $1 per kilogram subsidy on items such as fruit, vegetables, bread, eggs and flour.
It also included an additional 50 cent per kilogram subsidy on things like frozen fruits and vegetables, milk, infant formula and baby food.
“It was costed to provide additional savings on food and essential items that northerners depend on during the pandemic,” a spokesperson from Crown-Indigenous Relations and Northern Affairs Canada told Nunatsiaq News in an email.
People in Iqaluit noticed the additional subsidies, which are in effect until March 31, 2021.
Nutrition North expanded subsidies that came into effect May 1st have dramatically reduced milk products. pic.twitter.com/1Ns3AP2nVb
— Madeleine Redfern (@madinuk) May 25, 2020
“It was a very quick decision made by the federal government and we had one month to implement this,” Larry Fortes, the director of sales and operations at the Northwest Company, told Nunatsiaq News.
Fortes said customers quickly noticed a drop in price for certain items.
“For example in Iqaluit, we went from a 10 kg bag of flour that was selling at $21.49 all the way down to $11.49. So it was a significant savings. Milk, for example, you went from $6.99 down to $4.99,” Fortes said.
And lower prices on certain items meant customers bought more of them, Fortes said.
“What you found was for example, for milk, customers were drawn to the four litres, whereas maybe they used to buy a one litre because of the affordability,” Fortes said.
“Traditionally, we would sell the odd 10-kg bag of flour, and all of a sudden we’re selling nothing but 10-kg bags of flour. So it changed those customers’ habits.”
Twenty-kilogram bags of flour stacked high at Northmart in Iqaluit are priced at $13.79. (Photo by Emma Tranter)
Duane Wilson, vice-president of stakeholder relations at Arctic Co-operatives Ltd., said the subsidy is the same for all eligible stores, but the final prices of items depend on things like freight costs.
“It’s hard to compare market to market. Some markets it’s easier to get freight in. The NNC subsidy would have been the same on the items, but the retail [price] may not be because of the cost to get it into the markets,” Wilson said.
Other new items added to the subsidy list include canned fish and legumes, personal hygiene products, hand sanitizer and soaps.
The annual budget for Nutrition North Canada in 2018-2019 was approximately $99 million, CIRNAC said.
“The $25 million dollars was an additional annual investment in NNC, so it didn’t change the program… Looking at the different levels, Level 1 and Level 7 saw those dollars basically allocated. So that’s how they reallocated that additional investment,” Wilson said.
Don’t get too accustomed too these prices folks. Some are significantly below what is paid in the south and there will be an equalization by the Feds at some point to ensure that the subsidy equals but does not exceed what other Canadians are paying.
A store often “buys” stuff for next to nothing because it is close to (and sometimes past) its expiry or best-before date. Some firms may even pay the store to take old stuff off their hands to save the disposal costs.
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The store then ships the old stuff to Nunavut on its own airline (not Canadian North) and receives a Nutrition North freight rebate that is higher than its cost of shipping.
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If the item sells, the store gets a big profit from the sale of the item and it gets a second profit from the NN subsidy.
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If the item (bananas, for example) are too rotten to sell, the store still makes money from the NN freight subsidy. It also writes off the “fair market” cost of the bananas on its income tax.
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Essentially, Canadian taxpayers provide a second subsidy. The more the store ships to Nunavut, the more money they make, even if they cannot sell the stuff.
Where do you get this information. Not a chance this is correct. Ive worked in retail many years and never saw or heard of what your speaking of. Im just happy the prices are lower ans more affordable
Just for your info and if you had researched what you are saying, you would have found the 20 kg for at northmart has a BB date of June 2021. And, if kept in a warm dry place at home will last a lot longer. A 20KG bag with another $1.00/kg NNI is $20. reduced cost. Seems northmart has passed on the savings to me.
While I did notice the lowering of some prices recently, I also noticed a significant increase in non essentials so you can’t win and the stores just get to pocket the extra subsidy. This program really needs to change. Stop giving the money directly to the retailers! It’s not even logical.
I agree, it’s just that everyone wanted the program changed,so the feds did and this is what we get.and we have northerners on the board,and the are suppose to listen to us northerners,and the feds pump more millions into it.and where is our senator and mp not a word.
Little bit of clarification, after the elections and the change in government, the new government thought the FOOD mail program was too expensive and as the new government was making cuts right across the board they cut the food mail program and installed the Nutrition North program that was supposed to be cheaper and more focus and making healthier food cheaper.
Fast forward to today, this NNP is much more expensive, for everyone, airlines also took a hit. The subsidized food cargo meaning having the same price for food from southern stores was no longer there, the two main stores mainly the Northwest company and ACL benefited greatly.
Northwest company even purchased cargo planes to fly their products north.
The changes that we wanted to see in the food mail program was to expand on the places where we could place a order and make it easier for people to place orders that do not have credit cards, not replace it completely for this inferior and more expensive one.
The food mail was less complicated to administer not requiring a token board to make sure the stores are passing the savings.
Today we have the Northwest company making record profits off the poorest people all the while taking advantage of this program.
Liberals please bring back your food mail program with some minor changes to make it easier to everyone to use.
I wonder how much of that subsidy the stores will eat up? When the stores can manipulate the price of goods and then show a savings the costumers don’t really benefit from this subsidy.
Larry,I am no fan of nwc,or coop,but to call. The board tokens is just plain stupid ,they are all experienced northerners,and as far as cutbacks to the food mail look how many more dollars the feds pumped into it.and I agree it’s not a good program,but needs tweaking,and yes the two major retailers are making big profits and the nwc bought an airline to haul their own freight.that almost sunk the airlines and as we all know what’s left of the airline industry here in the north.and I see a trend in Nunavut setting up personal shopping company’s in the south.for nn
Yes they are experienced northerners, nothing against them but this board has very little oversight in how the companies are administering this program, how are they able to review the store companies numbers on the actual cost of items and not the inflated numbers?
What has this board done since it came to being?
When the last government was making all kinds of cuts to federal programs and budgets then why did they start pumping more dollars into this NNP when the food mail program according to them was too expensive.
These many more dollars are not benefiting the people that need it most, Northwest company and ACL are benefiting the most.
At least with food mail we had southern prices on a lot more items and in turn the two retailers up here had weekly sales to try and match prices.
So the food mail program got cut because it cost too much instead of making some tweaking it got replaced with a more expensive program that doesn’t promote competition but record profits for Northwest company and ACL, all on the backs of the most poor people in the north and in Canada.
Time to scrap this NNP and bring back the food mail program with some twicking
Larry if you understood the north and were around during the old food mail program and heard the outcry about the program you would truly understand, the two only retailers in the North were taking it in big time, and Canada post was charging 20 percent and people did not have the option to order from the south and when the food mail program changed because people with credit cards could order their groceries from the south it was great but the airlines did not want to deal with thousands of personal so it was revamped again because of the outcry and tried to cut out Canada post and we have this program where the retailers are self regulated and making record profits and the board may be trying so the food mail program is what us northerners have asked for and it needs tweaks but I remember when a 2 LTr jug of milk was 12.00 and I am not an airline guy or retailer just a family man trying to feed my family
I am from the north and still live in the north. I remember that the food mail need some changes not replaced completely.
There was a lot of outcry too when the new NNP started, they cut many things that were covered under the food mail program and that we did not see much of a savings in the stores up here, 5 cents here 10 cents here for certain items and the rest of the other items were not covered in the NNP.
So going back to the Cons that cut the food mail program because it was too expensive and today this program cost 3-4 times more then what the food mail program cost it does not make any sense.
With some minor changes to the food mail program, we could get a better price for more items and at the same time create more competition for the two main stores up here. The two main stores up here would not make to record profits that they do today but would still make a profit on the poorest people.
This NNP we are using today does not benefit the people but the stores, it continues to operate this way even with a board to oversee its program.
Even with the issues we had with the food mail program it was way better then this NNP.
Bring back the food mail program and make it work for everyone, the people not the two main stores.
Dreaming Larry,not going to happen,lobbyMp,senator,premier,Mla,mayor,and that saying is a broken record,I want the old food mail back.good luck in your quest.
I have much more faith in this government then the previous one, with enough support and lobbying it can be changed and improved.