Savings 'not getting to the consumer': Aglukkaq

Leona Aglukkaq, Nunavut's health minister and MLA for Nattilik, recently tabled photographs in the legislature showing one litre of milk selling for $7.69 in Taloyoak – nearly a six-fold increase over what's paid in Yellowknife, and about double the going price in most Nunavut communities.

Why, Aglukkaq asked in an interview later, is it that milk in Taloyoak is so much more expensive, especially when its price is supposed to be subsidized by a federal program, food mail, intended to make healthy food cheaper?

She went on to allege that stores are "subsidizing food it's not supposed to be subsidizing," by shifting the savings offered by food mail to make less-healthy foods cheaper, and that the intended savings are "not getting to the consumer."

But, at least when it comes to milk, Aglukkaq has it wrong.

"I'm quite sure that would be for two litres," says Fred Hill, who manages the food mail program for Indian and Northern Affairs Canada, upon hearing the $7.69 price.

The photo, Hill says, is a simple case of a milk carton sitting on the wrong shelf.

Scott Crockett, area manager for Northern stores in the Kitikmeot, confirms a one-litre carton of milk costs $4.19 at his store in Taloyoak.

Paleajook Co-op, the other store in Taloyoak, usually only sells two-litre cartons of milk, which go for $9.49.

Aglukkaq's bigger allegation, that food mail savings are not being passed along to the consumer, is more difficult to prove, or debunk.

She suggests that the price of milk may be inflated to keep the price down for less-healthy options that do not receive a freight subsidy under food mail. She gives chocolate milk as an example.

Not true, says Crockett, the Northern stores manager. He begins by pointing out that chocolate milk is, in fact, covered by food mail.

But he also objects to the allegation that his store would use food mail savings to make junk food cheaper. "That's just unethical, period. We don't do that at all," he said.

Indian and Northern Affairs Canada monitors the price of food in Nunavut's communities by collecting a standard sample of healthy foods, enough to feed a family of four for one week.

Based on this study, Hill, the food mail manager, says "generally we don't think prices are out of line with what retailers charge."

Generally. But he did notice two communities – Whale Cove, and Chesterfield Inlet – where the price of food increased in 2007, while the cost of shipping food into these communities decreased, after the food mail hub for the Kivalliq moved from Churchill to Winnipeg.

This suggests, to Scott, that "additional savings… do not appear to be passed along to consumers in those communities."

"On the surface, there appears to be a problem there."

John Sims, area manager for Arctic Co-operatives Ltd., disputes this. He visited Whale Cove in 2007, he says, and oversaw the decrease of prices.

And he says he made a point of putting up new displays that told customers the prices had gone down.

"I really don't trust the information [INAC] provided," he said.

But both Hill and Sims agree it costs a lot more to operate a store in Nunavut than elsewhere in the country.

Commercial fridge and freezer units, for example, consume a lot of electricity, and stores in Nunavut don't receive the same generous power subsidies that residents enjoy.

But Aglukkaq is not alone when she wonders if she's being gouged by stores when she sees the high prices of food in Nunavut.

She proposes a solution: she wants the food mail program changed and be made "transparent," so that customers understand how much a store is really charging for a carton of milk, and how much the government is paying in subsidy.

Give the subsidy to the stores, she says, rather than the airlines – and ensure the savings end up in consumer's pockets.

Canadian North, the airline that lost the food mail bid in 2005, wants something similar.

Currently the food mail contract, worth between $175 to $200 million, is the biggest freight contract up for grabs in Nunavut. Whoever possesses it has a big advantage. Canadian North, understandably, wants food mail broken apart.

Aglukkaq says there are other problems. Food mail may also be used by individuals to ship food up from southern grocery stores at a subsidized rate.

But, to do this, you need to have a credit card, access to a fax machine or the Internet, and be able to speak English.

That means "right off the bat it's not getting to people who need it the most," Aglukkaq says. The individuals who use food mail end up being almost exclusively professionals who already earn good incomes. Poor families get left out.

Indian and Northern Affairs is doing a big review of the food mail program. This review was supposed to be done by March 2007 – or so said Jim Prentice in November 2006, when he was minister of northern affairs.

A spokesperson with the department could not say when the review would be complete, and would offer no details into how the review is faring.

In the meantime, Aglukkaq appears to be doing all she can to shore up political support in favour of sweeping changes to the food mail system.

She recently won over Nunavut's mayors in the food mail fight. They passed a resolution at the Nunavut Association of Municipalities' annual general meeting that calls for a big overhaul of the food mail program.

And she met with Chuck Strahl, the federal minister of northern development, and Tony Clement, the federal health minister, in May, to discuss, among other things, her concerns with the food mail program. She said both were "very open" to her suggestions.