Retailers offer competing views of Nutrition North

Arctic Ventures owner Kenn Harper puts on translation headphones before speaking at hearings on Nutrition North Canada at the Nunavut Legislative Assembly June 2. Harper defended the old food mail program, saying it should have been “tweaked, not scrapped.” (PHOTO BY CHRIS WINDEYER)

Northern retailers painted contrasting pictures of the Nutrition North Canada food subsidy program during hearing at Nunavut’s Legislative Assembly June 1 and June 2.

Representatives from the North West Co., Arctic Co-operatives Ltd. and Arctic Ventures all agreed the elimination of mandatory access points like Val D’or, QC means food gets to Nunavut stores faster and fresher.

Beyond that, assessments varied widely.

Michael McMullen, the executive vice president of the North West Company said Nutrition North has caused an average six per cent drop in the cost of healthy food. It’s more transparent, efficient and competitive, he said.

“The Nutrition North Canada model encourages all retailers, whatever size they are, to execute to the best of their abilities and utilize their strengths to lower food costs for the people in their communities,” McMullen told MLAs.

McMullen wouldn’t say how much NWC’s freight rates have dropped since Nutrition North came into effect April 1, but he said cargo makes up roughly 13 per cent of his company’s costs.

Andy Morrison, the chief executive officer of Arctic Co-operatives Ltd. said his company’s assessment of Nutrition North Canada “was both positive and negative.”

Morrison said he’s glad Nutrition North eliminated cumbersome delivery schedules and access points under food mail.

And he welcomes the introduction of a claims system where retailers can have poor service from shippers remedied.

But he said the roll-out of Nutrition North came too late for last year’s sealift season, caused inventory headaches and that there were too many changes to the list of eligible products.

Morrison also said the new reporting requirements under Nutrition North result in too much paperwork.

Morrison and McMullen also warned MLAs that any price decreases from Nutrition North will not be permanent.

They said growing worldwide demand for food will drive up commodity prices, while major hikes in Nunavut’s electricity rates will increase the cost of doing business.

But Morrison said, while imperfect, Nutrition North was a major improvement over food mail.

“The old food mail program was not just flawed, it was broken,” Morrison said.

“Major changes to the old program would not fix the problems. A major overhaul of the program was required.”

Not so, according to Kenn Harper, who owns Arctic Ventures in Iqaluit. Speaking to MLAs June 2, Harper said food mail “should have been tweaked, not scrapped.”

He said much like Canada’s postal service, which charges the same price for a stamp no matter how far a letter is going, food mail charged equal freight rates for every community in Nunavut. Nutrition North, which allows retailers to negotiate their own freight rates with airlines, gives larger companies an unfair cost advantage.

Haprer said he’s glad Ventures no longer has to ship food out of Val D’or and he shared Morrison’s concern that the paperwork required under Nutrition North is “simply unimaginable.”

But he accused the North West Co. and Arctic Co-operatives of “colluding” when the federal government was seeking input on a replacement for the food mail program.

“Although they are competitors, they have worked together to influence (Aboriginal Affairs and Northern Development Canada) in order to have this new Nutrition North Canada program designed to favour the large retailers,” he said.

Harper said remarks McMullen made to the federal Aboriginal affairs committee last November revealed the two companies made joint submissions to federal bureaucrats “as an alliance.”

“I can assure you that I was not invited to join this unholy alliance of northern retailers,” Harper said. “Neither were any other small businesses.”

Harper’s appearance ended two days of hearings on Nutrition North at the assembly, with MLAs complaining that representatives from Aboriginal Affairs and Northern Development refused to appear before the legislature’s committee of the whole.