Nutrition North Canada update fails to make retailers accountable

“Retailers can sell subsidized food for any price they see fit. And they do.”

An Iqaluit man stands at the entrance to the Northmart store, protesting food prices. (FILE PHOTO)

By Tracey Galloway
Special to Nunatsiaq News

The Government of Canada suffers from an image problem.

It currently spends $100 million a year to subsidize shipments of staple food items to remote, northern communities, yet nearly every day, news and social media sites are bombarded by photos of high-cost food for sale in northern stores.

On Monday, the federal government announced a long-awaited update to the Nutrition North Canada subsidy program.

The update included higher subsidy rates for staple food items, support to help smaller retailers show subsidy levels on their receipts, and an improved framework for working relations with Inuit.

Sadly, none of these changes will improve the government’s image with northern consumers. The problem lies with the way the subsidy is built.

Northern retailers receive a subsidy for every kilogram of staple food they ship to northern communities. End of story. There are no rules about pricing. None.

Retailers can sell subsidized food for any price they see fit. And they do.

Prices differ between stores, between eligible communities, between provinces and territories.

Subsidized foods are sold for vastly different prices depending on where and when shoppers buy goods. There is nothing in the current federal subsidy program to prevent this from happening.

So, while this week’s changes may result in more food being on the shelves of northern grocery stores, there is no guarantee that food will have price labels people can afford.

The core of the problem is that northern markets have very few players: few retailers, few airlines, in reality, very little competition for every item or service sold.

This near-monopoly requires a different form of regulation from southern markets, one the federal government is reluctant to embrace.

There have been calls for substantive changes to Nutrition North Canada since it was implemented in 2011. This week’s announcement was a chance to address the fundamental problem with the subsidy: its failure to hold retailers accountable for the taxpayer dollars they receive.

The federal government chose instead to window-dress the problem with changes that ensure government money continues to flow into the coffers of a few retail corporations, rather than into the pockets of hard-hit northern consumers.

My message to the Government of Canada is simple: Nutrition North Canada is a public policy disaster that will have long-term consequences for the federal government across the North and among Canadian taxpayers concerned about how their hard-earned dollars are spent.

Fix this program now by regulating pricing. That will help your image.

Tracey Galloway is a professor at the University of Toronto, Mississauga. Her research examines the impact of federal policies such as Nutrition North Canada on the health and well-being of Indigenous people.

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(18) Comments:

  1. Posted by Clarity on

    There r always going to be disgruntled northerners. The thing is the public only sees what the protesters protest. I lived in nunavut for a decade I know how it works. Yes the prices are hefty however, all northerners receive federal tax deductions for living in remote isolated.comditions. this is in place to make food and housing more in line with the rest of Canada. In addition if you work for a big organization like the Government of Nunavut you are entitled to a northern allowance on top of.your salary rigs amount ranges based on which community you live in. Amounts for Iqaluit are around 16k per year. Now once all of these financial provisions are in place the cost of food is the same or lower than what you pay in southern canada. So my question is is Nunavumiut ready to five up those credits in exchange for lower prices if the answer is no which they are better off to say no I think it’s time to calm down these protests. If the problem is nortjmart hiking prices for their own benefit things need to be more transparent and based on a percentage increase in price reflective of the federal and provincial credits received. When I was up north I received 8 dollars a day credit for food and 8 dollars a day credit for lodging. Every member of my family received 8 dollars.oer person credit per day a family of 4 would get a 32 credit owe day for food allowance and 8 dollars per day for housing allowance. Very generous in my opinion

    • Posted by Consistency on

      First off yes I work for the GN (Not a lot of other options in the non-regional centers). And right now I am one of the lucky ones, I don’t need to support my nieces or nephews, but if my siblings were out of work then I would need to support more people. How many I could support on 1 GN job even with the $32/day credit would be very difficult. I bet if you had a family with you for the 10 years you were in Iqlaluit you had 2 GN salaries and maybe 2 kids in your house. Try what some families have to do with 1 hamlet salary and 6 dependents (not even shooting high here).

      • Posted by Jacob on

        @Consistency Do you realize that in the scenario you just provided, you would struggle paying for groceries no matter where you lived? The issue is not the high food prices, but the fact one has to take care of a very big family on one salary. Now whose fault is that? Clue: not the government!

      • Posted by Nevada Bob on

        ummm the whole idea is that you support yourself and your offspring, if you do not earn enough to support children, do not have them. It is not the governments job to feed you or your children.

      • Posted by Clarity on

        In response to your email it was more than enough to cover. What I’m trying to say is that the credits are always forgotten and the poor me poor me attitude comes out. In order for a fair debate to occur all information must be transparent no picking and choosing. You mention your nieces and nephews and you having to feed them of well we all feed people from time to time. What you did not mention is regardless of you feeding them their parents r getting the credit

    • Posted by For the benfit of all on

      You may have done well with GN or Federal employment but people in jobs that don’t provide subsidized housing and generous Northern Allowances struggle and the current Nutrition North Program does not help keep food prices affordable for them. I stress for them, not for someone earning top dollar employed by the GN. Corporations are benefitting from the subsidies provided. In order to fix this, the whole way that the program is administered needs to be called into question since it is obvious that monitoring to make sure those subsidies are passed on cannot be left to the businesses.

      • Posted by Nevada Bob on

        People who disregard the importance of education and have low paying jobs struggle all over the world to feed themselves. That is the point. Do well for yourself, stay in school, don’t get pregnant before you are educated, married, employed. It really is that simple.

        • Posted by Block Face on

          Having a government job allows many beneficial inputs when filing taxes, the return is generally pretty good, having an education, generous income and working in the private sector on the other hand is a different story. Public service work allows you subsidized housing, a stable job and allowance perks, the private sector also need educated ppl, the usual perks are less, accomplishing tasks is great benefit for future reference. The issue though is how the nutrition North program is being handled. Typically if you bid on government contracts or want money from the government a cost breakdown is required for labor, overhead, travel, shipping and sub contracting expenses, why isn’t the nutrition north mandated to follow in similar suit?

  2. Posted by David on

    This near-monopoly requires a different form of regulation from southern markets, one the federal government is reluctant to embrace.
    A different form of regulation, or an illegal form of regulation?

    This article seems to be asking for civil servants to regulate the price of goods in private stores, which would involve tremendous access to private financial information, which in this country is private.

    Terrible idea, that I can’t see being legal.

    Be careful what you ask for. Business’s are private entities that are incredibly costly to start……….. who would ever invest under these conditions? I suspect the result would be less options, not more.

    Seriously, if the locally owned COOP is cheating you, there are better ways of dealing with it than this.

  3. Posted by Knockout Ned on

    The Northmart managers are out (see above comments), but the rest of us know what’s what. There is no good reason why turkeys sell for $200 or bottles of Orange Juice sell for $30.

    It’s greed, plain and simple.

    The Liberals fooled everyone into believing they had your back. They didn’t. Not only could they have made NN more transparent, they could have dont it 3 years ago. They didn’t.

    Go and ask Megan PIzzo-Lyall about Nutrition North. That should be a fun conversation. Don’t even bother asking whoever the Cons put forth – that level of bullshit is not healthy for you.

    Remember this at election time. Oh, and just for fun, find out which powerful Federal Liberal is brothers with the NorthWest Company President…

    • Posted by Clarity on

      You r correct about the turkeys that is gauging and just unfair. If baffin has can bring up utility turkeys for a reasonable price why cant north mart. I used to bring my own turkeys up from down south when I would come back from annual leave. Preplanning can save a lot of money. For turkeys on special occasions northmart should definately lower the costs so everyone can celebrate the festivities

  4. Posted by Sharing the Blame on

    Professor Galloway is right.

    But ITK needs to take some of the blame here – months or years ago they should have said “Canada, this program is really bad – fix it.” then just walked away, and perhaps repeated the point publicly as many times as necessary. Instead they tried to fix it through working groups, the mystical Inuit-Crown relationship and soul searching consultations.

    No, that’s like the old IQ-based sewage lagoon.

    The reasons Nutrition North doesn’t work are technical – they can be understood and fixed through good old fashion micro-economics and policy analysis. No amount of posturing by Mr. Obed, nor virtue signalling by Dr. Bennett, will fix it.

    Hey, but at least there’s some vague country food program on the way. And hey… who wants some colonial glycemic comfort cakes!? (yay, bannock!)

    @#2 You are wrong, it’s a federal subsidy with a social purpose and if retailers want the subsidy they will jump through whatever hoops are put in place. (but good point about the co-ops, people really should be pushing the co-ops that they own and control MUCH harder to explain exactly how they use the subsidy, in fact they should push for internal audits)

    • Posted by David on

      It’s possible I am wrong.

      That said, it is a Federal subsidy and that means the Federal Privacy Act applies. I think NorthMart and COOP have a lot of protection here. Government already provides plenty of subsidies all over Canada, I have never once heard of this level of intrusion to receive a subsidy and you’re right, it is a social subsidy designed to help people, not the business. So that lowers the bar for intrusion, it doesn’t raise it.

      COOPs are locally owned and accountable. Because of that, I really don’t believe the gouging argument. I think a lot of people grossly underestimate the cost of doing business in the Arctic. Even if shipping were free, prices still couldn’t be comparable to the south.

      • Posted by John Ellis on

        David, you are probably right that people grossly underestimate the total cost of doing business in the Arctic. Freight cost is only one factor.

        But the federal government does have the right to audit any business or organization that receives federal government funds.

        The Federal Accountability Act, brought in by Mr. Harper’s minority Conservative government in 2006 and passed with votes from the NDP, allows the federal government to do just that, audit any business or organization that receives federal contributions. For NNC that includes profit margins, which CIRNAC is already auditing for.

        Grocery stores carry thousands of items, so it may not be realistic to track profit margins on every item a store carries, but government does have the right to engage in price regulation, and has done so in the past. Airline fares used to be regulated, the phone company prices in the south used to be regulated and the power utilities are still regulated by public utilities commissiosn.

        Governments could certainly regulate the northern grocers on a rate of return basis, which means allowing them a certain maximum rate of return on invested capital, with penalties for exceeding the limit. This is how Northwestel is still regulated in our three territories.

  5. Posted by Another Northern Guy on

    The subsidy is provided to the retailer much after the fact. Initially the retailer pays full price for the freight and for shipping cost. The subsidy is a freight subsidy. Market size causes higher cost as well. What do I mean. Well take a case of coke. You can buy this down south for $3.99. Retailers in Northern Canada do not get those prices from Coke. They pay closer to $6.00 for the same product that Coke sells to Southern retailers for $2.25. Why…supply and demand. Walmart is buying millions while the Northern stores are only buying thousands. There are many things that impact price. Here is another thing. To have a store in Northern Canada is much more expensive then the same store in Southern Canada. Heat, Electricity, Cleaning cost, maintenance cost all of those things are 300% and more greater then the cost down south. How can you expect a Northern Retailer to charge the same as down south. I should mention that retailers are businesses. The point of a business is to make money. If it is so easy, don’t you think more people would do it? Nutrition North subsidizes healthy food. The price of Meat and Vegetables is a bit more then down south but not crazy. The price of candy and pop, yes, much more expensive. My final point………people are suggesting that the subsidy should go to the northerners……I wonder how that would work? So prices should increase, and Northerners would get more money. They would spend that on food right? Not cigarettes or alcohol….. Have a look at social assistance and see what people are buying. They get their cheques, buy cartons of cigarettes then start selling those for much less, just to get cash so they can buy drugs and alcohol… yes give the northerners more money and increase all the prices in the stores……that makes sense!

  6. Posted by Qiruaqruq on

    I’d say we need more roads and/or trains to lower the cost of living in the north. Why not sell the land to a rail company who in turn sells it to people who want to start new communities along the rail way, at the cost of building the rail plus profit? We’d need more immigration. How about the Government of Canada building the rail and getting the money back through the land sale, plus taxes, something like that.

  7. Posted by Rob M Adams on

    It’s good to see comments here, regardless of one’s status or circumstance.

    Food prices and availability are not a problem in Nunavut, at least not any more so than in Kingston or Edmonton. There is no gouging by retailers. If there was, locals wold be opening their own stores in droves. The problems with regard to nutrition in Nunavut are the same as anywhere else.

    Even wealthy people in southern cities have poor nutrition – either because of deliberately poor choices (spiritual illness, say) or ignorance (mental illness, say). Poor people have poor nutrition for the same reasons, of course, regardless of where they live. They also have the complicating factor of lack of material resources, some of which comes down to a place to store or prepare food.

    Currently, $92,000 of tax dollars per year is spent on each person in the north. That compares with $21,000 per person in the south. Money is not the problem in the north. We all know what the problem is, but no one wants to acknowledge it.

    • Posted by Clarity on

      Righr on finally someone who gets it…I think you need to redo the math on tax dollars spent in the north though…its a lot higher that 92k per person if you calculate from the transfer payments

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