New food subsidy: watch out for the details

Welcome to Nutrition North Canada. By March 31 next year, most Nunavut and Nunavik residents will rely on this program, which replaces food mail, to keep their grocery bills from ascending to astronomical heights.

So far, the program that Chuck Strahl and Leona Aglukkaq announced May 21 looks like a useful, highly promising reform.

The federal government will replace the long discredited food mail program with a new plan that focuses only on nutritious food. The northern affairs department will stop using Canada Post and will run the program directly, with some help from Health Canada.

Retailers may choose to order food from anywhere and ship it northwards from anywhere. No longer will they be constrained by the need to route their shipments through awkward access points like Val d’Or, a requirement that often turned fresh food into stale food by the time it arrived at remote northern destinations.

And airlines will now be forced to compete with each other to win food freight business. In theory, this could make the entire system more efficient and market-driven, delivering perishable food more quickly and at a lower cost.

Higher cost communities will get higher subsidies. The most nutritious foods will get higher subsidies than less nutritious foods. And retailers will no longer be allowed to subsidize the shipment of non-food items like sleepwear, truck tires and appliances.

Not only will the subsidy apply to all retailers. Individual consumers may also use the subsidy to defray the cost of ordering eligible nutritious foods by air from southern-based retailers.

And an advisory board of northern residents, chaired by Elizabeth Copland of Arviat, will give advice to Ottawa on how Nutrition North Canada is managed.

By federal government standards the new northern nutrition plan comes with a modest price tag — only $60 million a year. Given that Ottawa will likely spend a whopping $250 billion on all federal programs this year, that’s a pittance.

But this small scheme, like the food mail program before it, could have an enormous impact on the lives of most northern families, especially those who live in the eastern Arctic and those whose cash incomes are low.

Information produced by the Department of Indian and Northern Affairs shows that Nunavut and Nunavik accounted for 90 per cent of food mail spending in the past. The eastern Arctic will likely consume a similar proportion of Nutrition North Canada’s budget.

Consider the panic that broke out in some quarters after CBC’s The National reported May 17 that the new nutritious food subsidy would go to North West Co., Arctic Co-operatives Ltd. and the Fédération des coopératives du Nouveau-Québec.

The hamlet council of Baker Lake, for example, held an emergency meeting the next day, passed a resolution, then fired off a letter to just about every politician they could think of, saying “the federal and territorial government is about to make a colossal mistake which will have a devastating affect on the residents of Nunavut.”

The Baffin Regional Chamber of Commerce also held emergency board meetings, but reacted more wisely: before jumping to conclusions, they asked for clarification. Federal officials then told them that “the proposed changes to the program are not as portrayed in that report.”

All this panic, of course, was based on erroneous information. Ottawa will provide its new nutritious food subsidy to all retailers in all eligible communities.

But federal northern affairs officials had better pay attention. Nutrition North Canada is aimed at a vital bread-and-butter issue that affects the well-being of families, communities and numerous businesses. This is what eastern Arctic residents care most about: their economic interests.

That’s why even the misunderstanding of small details produces such heated reaction, because for the people of the eastern Arctic, this program matters.

To that end, Friday’s announcement, comprehensive though it may have been, lacked certain important details.

The most important of these is the means by which the northern affairs officials will police the retailers. Strahl and Aglukkaq promised a transparent subsidy, managed within an accountable system of checks and audits. They promised that retailers must demonstrate they’re passing the subsidy on to their customers.

This is crucial. Rightly or wrongly, many northern residents believe local retails stores often rip them off. This perception may be unfair and it may not be supported by any evidence. But that is the common belief.

For example, in their May 18 resolution, the Baker Lake hamlet council, referring to the North West Co. and Arctic Co-ops Ltd., said “these two stores will not pass on the government subsidy/savings to their customers.”

So it’s not only important for retailers to pass the benefit of the subsidy onto their customers. They must be seen to do so.

Another set of details concerns the actual amount of the nutritious food subsidy. Federal officials say they will calculate these community by community, with retailers in higher-cost communities getting higher subsidies than retailers in lower-cost places.

These per-kilogram amounts aren’t available yet because federal officials are still working on them.

Again, federal officials had better be careful, because any perceived inequity or discrepancy between communities could give rise to endless complaints from aggrieved hamlet councils and chambers of commerce. JB