North West Co. denies claims made in potential lawsuit
Group asks Manitoba court to certify class action lawsuit
The North West Co., parent company of Northern and Northmart stores, denies claims made in documents filed with the Manitoba courts that it misused federal subsidies meant to lower food prices in the North. (File photo)
The North West Co. has been accused of misusing federal subsidies that were supposed to bring down grocery prices in the North, which the company says isn’t true.
Last week, lawyers representing multiple current and former residents of Nunavut filed documents in Manitoba’s Court of King’s Bench asking that a class action lawsuit be certified.
The plaintiffs claim that North West Co., a Winnipeg-based multinational grocery and retail company which operates stores in northern communities, in western provinces and in northern territories, kept portions of funding that it had received from the federal Nutrition North Canada program.
According to the federal government, the Nutrition North Canada program was launched in 2011 to make perishable and nutritious foods more accessible and more affordable to residents in eligible isolated northern communities that don’t have year-round road, rail or marine access.
Through the program, registered retailers in the North can apply for a subsidy based on the weight of eligible foods shipped by air to eligible northern communities.
The feds say those subsidies are to be passed on to northern consumers by “appropriate reductions” in the selling prices of eligible foods.
The lawsuit states that between 2018 and 2021 North West received more than $163 million in subsidies from the program and that the company did not appropriately pass those savings on to consumers.
“Despite making representations that it complies with the requirement to pass through the entire subsidy to consumers, and despite making a commitment to do so as a condition of receiving the subsidy, the North West Co. has instead unlawfully retained millions of dollars of funding received through the program,” the lawsuit alleges.
The suit calls for the company to return “misappropriated” federal funding to its “intended beneficiaries.”
The lawsuit also claims that because grocery prices were not appropriately reduced as required when companies receive the federal funding, that led to poorer health outcomes in northern communities including, “increased rates of malnutrition, obesity, cardiovascular disease, diabetes and other morbidities associated with unhealthy diets, as well as increased rates of depression and suicidal ideation.”
Since being launched in 2011, the Nutrition North Canada program has handed out more than $1 billion in subsidies.
A North West Co. spokesperson denied the allegations made in the lawsuit.
“The North West Co. works with Nutrition North Canada, and fully participates with third-party audits, ensuring 100 per cent of the funds are passed along,” the spokesperson said in an email to The Winnipeg Sun. “In this, The North West Co. has passed all audits, meeting the obligation of having 100 per cent of subsidies passed onto the consumer. We remain committed to this.”
The spokesperson added, “The Nutrition North program partially offsets the costs of bringing food to the north — but on its own, it is not enough. There are still substantial cost drivers in the north due to the lack of infrastructure, the high cost of materials and operations, and inflation.
“We want Northern communities to thrive and we want to work with all parties to help make that possible.”
Dave Baxter is a Local Journalism Initiative reporter who works out of the Winnipeg Sun. The Local Journalism Initiative is funded by the Government of Canada.
Can you imagine if Northern have keep $163 million of consumers money, how much ACL have stolen from us.
For every dollar in subsidy they receive they raise their prices x3. Look at JP. They jacked prices when it became available. Sure. They may be applying it, but raising your prices and than applying it. Crooked. These guys need a full investigation. Why can Ventures sell salt beef for $29/pail but Northern is $51/pail.
Interesting item but Northern is correct, there system automatically updates there pricing, ventures is harder to update and manager has easier time overriding or controlling cost but the real answer is Northern includes there managers food in the contracts Ventures and coops make managers pay full price no discount so guess why most coops stores are underpriced, they also don’t do enough inventories to catch the problem until it’s too late!
Send Elons DOGE to go through their books.
https://web43.gov.mb.ca/Registry/FileNumberSearch/SearchResults?FileNumber=CI25-01-50330
in conjunction with…
https://www.canada.ca/en/crown-indigenous-relations-northern-affairs/news/2024/10/external-review-of-nutrition-north-canada-seeks-to-enhance-food-security-in-the-north.html
It’s going to be very hard to find guilt in something like this. If Northern is selling cucumbers for $6 each and then they get a subsidy that works out to $2 per cucumber, they could reduce the price to $5 (only $1 discount), and say that their costs went up due to inflation, or spoilage, or theft. They could also say that a lower price means higher demand for cucumbers, therefore they have to increase their base price to $7 to balance demand with their available supply, therefore they’re still giving a “discount” of $2. This is how our economy works, and this is unfortunately what happens when you blindly give hundreds of millions of dollars to a corporation.
That is spoken like a true NDPer who has never worked in a business.
Why can’t they see this. they shuffled and raised the prices of the other food items in the store to reduce the nutritious and perishable foods prices, look at the other items that are not covered in nutrition north subsidy, It’s unbelievable.
Boycott by not going to northern to go shop
Go to coop or your local store
bring back, or redesign the food mail program. it was easier to audit.
NNP was like giving the dealer the subsidy to the client, and hoping they would lower prices….IMHO
People in some locations put skidoo parts in shipping boxes and mailed them as food mail.
HHOOOWWWWW! Bert; ” I have this piece to be mailed as food mail”
MR. Post office; “We don’t have food mail prices, what’s wrong with you, did Ernie tell you that”?
Dear God no! Skidoo parts? Ever sick!
I guess handing over $163 million to shareholders of NWC is better, ensuring no one abuses the system.
Wow, no trial for Northmart, eh? “We don’t like high prices, so they must be guilty! Guilty, I say!”. A population this guillible is the reason we’ll likely get another Liberal government.
They absolutely abuse it. It’s a known scam they run in the early spring, like now in February and March that they drastically increase the prices of certain sealift items to the price they would be if they were to be airlifted in. It’s happened dozens of times in all the communities.
How do I join the lawsuit? Seriously. I live in Iqaluit and saw Northmart steadily and incrementaly raise prices on fresh salmon by 100% from November 2022 to March 2023. I took photos of the packages with the dates and price hikes too and can share them with prosecutors. Put those crooks in jail.
I hope all of this goes to court. And is made public. Because people will be given in a lesson. In what the costs are to operate. Northern stores or the Co-op.
Maybe then people will stop complaining and making uniformed accusations.
There are lots of input costs that create the cost groceries. One is theft. In Nunavut between 2.6 and 3.82. Come out of gross sales. That’s a lot of money to loose.
When you consider the volume of sales that each store does.
That’s an input cost that needs to be put back into the cost of goods sold.
I am not a fan favorite of Northern stores but I find their prices are for the most part competitive with the CO OP stores. Maybe as suggested the Program needs to be more transparent.
It’s called price fixing. It’s illegal.
Who filed the lawsuit? Was there public notice?
The Northwest Company is nothing but thieves. The amount of markup on the products they sell is outrageous. Not necessary. Complete greed! Shame on them! Getting richer while the poor get poorer!
They buy cheap “selection” food or “giant tiger”, and save money not buying more quality things and say there helping, another loophole.
The questions should be diverted to the airlines.. why are the freight costs so high, there should be an NNC for the airlines to appropriately charge fair rates to get the product to its consumer – nearly and roughly $7.50 to $9.00 a LB … that should be first on thie list of its investigations
How do I join the lawsuit? Thank you.
Where are those prices charged in Nunavut by Canadian North? Please provide your source.