Nutrition North contains a fatal flaw?

The proposed Nutrition North Canada program contains a serious “fatal flaw.”

A lot of thought by a lot of people has obviously gone into the creation of this program. The intentions are honourable and are aimed to benefit us in the North.

However, without being too cynical, there is basic flaw in the new system.

For comparison, the old food mail system, currently in place until March 31, subsidizes the freight costsof nutritious perishable and non-perishable food items, plus some essential non-food items.

The freight costs for each package of perishable items is exactly the same for everyone and every retailer: 80 cents per kilogram plus 75 cents per package.

The new Nutrition North program subsidizes similar items. As freight costs for individual communities vary from place to place, these differences are factored into the new subsidy in an effort to be fair to everyone throughout the North. These calculations are based on the different shipping rates to communities.

The actual shipping costs of these goods are in addition to what a retailer pays for the goods. These rates are based upon whatever the retailer or we can negotiate with the air carriers.

This system favours food distributors who are able bring in their goods at greatly reduced freight costs by virtue of the amounts they ship. The larger the quantity of goods shipped, the lower their air cargo shipping costs.

Herein lies the major underlying flaw.

Under the food mail system an individual or retailer who purchases a relatively small supply of food items will pay the same subsidized postal costs as a retailers who purchases a larger supply of the same goods.

However:

Under the Nutrition North program, an individual or retailer “A” who purchases the same supply of goods will pay regular shipping costs while retailer “B”, who again purchases the same goods but in much greater quantities, will pay less in shipping costs.

Both will receive subsidies based upon exactly the same rates for each item; in other words, both will receive the same subsidy in terms of the subsidy rate.

But as stated, retailer “B” further benefits with lower freight rates by shipping larger amounts. The system therefore favours retailer ”B” over retailer “A” or any individual.

If retailer “B” lowers prices in relation to the lower freight rates, as noted above, and thereby attracts more customers, then it is possible “B” will end up increasing their orders, which, in turn, may translate into even lower freight rates.

One of the more dramatic effects of this flaw is when comparing the two systems the Nutrition North is open to greater abuse and possible increases in nutritious food products rather than decreases.

The food mail program provides the greater subsidy to individuals and to retailers. It is also the fairest system. However, since the freight rates under the Nutrition North program will vary considerably, several ramifications are possible.

Without proper and effective monitoring system this program leaves the door open for some retailers to benefit much more than others at the expense of those for whom the system was designed in the first place – you and me.

The aim of both systems is to bring down the costs of nutritious food items in the north. My suggestion is to revisit the food mail system but to tweak it to save costs while maintaining the integrity of the system as best as possible.

It must be remembered that poor nutrition will cost the taxpayers, you and me, more in the long run through medical and public health intervention in one form or another. Spending money now on a well-run subsidized system is a win-win situation as long as there is a concurrent healthy eating education and awareness program.

All processed foods are suspect, especially so called fast foods and junk foods.

But, as in life, there are wise choices and poor choices. We need the guidance to make the wise choices.

Frank Pearce
Iqaluit

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