Food mail contract up for grabs

When the winning bid on the $200-million, five-year food mail contract is announced today, only one of the North’s two major airlines — First Air or Canadian North — will be happy.

Under the food mail program, the federal Department of Indian and Northern Affairs gives Canada Post a subsidy to offset the high cost of bringing nutritious food and essential non-food items north.

This airlift of cargo is the largest contract in the North, after those of The Northwest Company and Arctic Co-operatives Ltd.

First Air has held the food mail contract for 15 years.

And the last time a request for proposals for the food mail contract came up, Canadian North was just beginning to expand its operations in the North and made only a partial, and ultimately unsuccessful, proposal.

Norterra, which is owned on a 50-50 basis by the Inuit of Nunavut and the Inuvialuit of the western Arctic, bought Canadian North in 1998.

This time, Canadian North has considered all the infrastructure and logistics needed to fulfill the RFP requirements.

“Canadian North put in a comprehensive bid for the food mail contract, which includes all the food mail areas in the current RFP,” said Carmen Loberg, past president of Canadian North, who now heads Norterra, in an interview from Yellowknife.

Canadian North even ordered enough material, shipped up on the last sealift, for a warehouse in Kuujjuaq, so the airline can meet the December start-up date for the food mail contract, if it’s successful.

All food mail cargo is sent up from Val d’Or, Quebec. Northbound, airplanes carry only food, although there can be passengers on the southbound flights.

For residents of Nunavik, a win for Canadian North opens up the possibility of another carrier servicing the region.

First Air, owned 100 per cent by the Inuit of Nunavik through the Makivik Corporation, ended up with a monopoly on eastern north-south routes in the mid-1990s after Canadian Airlines dropped out of the Iqaluit-Kuujjuaq-Montreal market, and then out of Monteal-Val d’Or-Kuujjuaraapik market. Air Inuit, also owned by Makivik, now flies from Montreal to Kuujjuaq as well as to Kuujjuaraapik.

Competition helps consumers. Ticket prices on the Ottawa-Iqaluit route dropped 25 per cent since Canadian North re-entered that market, Loberg said in an earlier interview with Nunatsiaq News.

But Canadian North’s director of cargo services, Ryan Fawcett, acknowledges First Air is a strong incumbent with respect to the food mail contract, and said whoever wins the lucrative contract “it’s going to be very, very interesting.”