Nunavik co-ops not ready for new food scheme

Nunavik’s 14 co-op stores want a six-month delay in the new Nutrition North Canada food subsidy program, saying they need more time to build warehouses to store non-perishable sealift goods whose air freight costs aren’t subsidized anymore.

“We will have to get new warehousing in our isolated communities in order for this new initiative to work,” Rita Novalinga, the general manager of the Fédération des coopératives du Nouveau-Québec, said Nov. 17 before a meeting of the House Commons northern development committee.

But Health Minister Leona Aglukkaq, Conservative MPs on the committee, and federal civil servants who appeared as witnesses Nov. 15 showed little sympathy for retailers who haven’t prepared for the new plan.

“Besides being the most expensive mode of transportation, air transport is often not the right way to ship foods to the northern communities. Many non-perishable items could be shipped by boat at one-tenth of the cost,” Aglukkaq said in a Nov. 15 statement to the committee.

Nutrition North, which comes into effect April 1, removes air transportation subsidies from numerous non-perishable retail goods, including many that aren’t edible, such as toilet paper and disposable diapers.

Part of the intent of that measure is to encourage retailers to use the annual sealift, which is much cheaper than air freight, for the transportation of such items to the North.

Some retailers, especially in Nunavik, have complained they were caught unawares when the new program was announced this past May 21, and that they don’t have time to build or find the warehouse space they need to hold increased volumes of sealift goods.

But Patrick Borbey, an assistant deputy minister at Indian and Northern Affairs Canada, said Nov. 15 that this is what the new program is supposed to accomplish: use market forces to reward retailers who use the cheapest transportation methods and punish those who don’t.

“Don’t buy the diapers from the retailer who didn’t manage his affairs properly…,” Borbey told MPs on the northern development committee.

“This program is about making retailers accountable for their decisions, accountable to their communities, but also accountable through the program,” he said.

Borbey scoffed at comments made earlier this month by an independent retailer in Kuujjuaq who said he was forced to raise the price of disposable diapers and other goods that on Oct. 3 became ineligible for air freight subsidies.

“The competitor for that retailer ordered through the sealift and has the same diapers at the regular price, next door. Again, the market forces should prevail,” Borbey said.

The “competitor” in Kuujjuaq, which Borbey did not name, is North West Co., which operates a Northern store in the community.

North West Co. also competes with the FCNQ in most of the remaining 14 communities in Nunavik.

Borbey said that under the food mail program, whose structure encouraged many retailers in Nunavik to ship non-perishables by air instead of by sealift, “both the retailer and the taxpayer are losers because of the less than efficient decisions made at the retail level.”

Novalinga said that in her home community, Puvirnituq, the co-op there is struggling to build a $2 million warehouse to accomodate the new rules.

In 2002, the Puvirnituq co-op built a 17,000-square-foot co-op superstore, at a coost of about $4 million, to replace an earlier facility that burned down.

Novalinga also claimed that the removal of foods high in salt and sugar from the eligibility list for subsidies is a bad health decision.

“Honey, jam, salt, and sugar that are high in calories are a few examples of food that shields the human body in extreme weather conditions,” Novalinga said.

And she also complained the co-ops in Nunavik will have to raise the price of Heinz ketchup, which is not eligible for a subsidy since it’s not deemed to be a nutritious food.

“Heinz ketchup that all of our children enjoy, the new selling price after the difference will be $13.59. That’s for a 1.5-kg bottle,” Novalinga said.