Brent Reaney
Northern News Services

Rankin Inlet (July 13/05) - The results of a federal government review of the subsidy system used by many Kivalliq retailers to ship food into the region's communities could lower consumers' grocery bills.

Ellie Cansfield of the Kivalliq Chamber of Commerce makes suggestions about changes to the Kivalliq's food mail delivery system during a public meeting in Rankin Inlet, July 4.

According to surveys done by the Department of Indian an Northern Affairs in 2003 and 2005, Kivalliq grocery prices are significantly higher than in other Northern communities.

Now, after a 2002 recommendation by Canada's auditor general, DIAND representatives are visiting the region to discuss potential changes the Food Mail program.

"Our objective is to try to improve quality and reduce prices," said DIAND's Fred Hill after the Rankin Inlet meeting.

Under the program, a large portion of the cost to ship nutritious foods such as fruits and vegetables or dairy products from a certain point is subsidized by the federal government. Food such as pop and chips do not qualify.

This year, the federal government expects to spend $36.5 million on the program, and more than half of that amount in Nunavut.

Since 1991, Kivalliq retailers have been able to order food shipped at the discounted food mail rate of 80 cents a kilogram from Churchill. By comparison, 500 kilograms of cargo shipped by First Air from Edmonton to Rankin Inlet is $2.84 per kilogram.

But retailers have to pay to ship the food to Churchill from Winnipeg - a process which can take more than two days before it boards a plane to a Kivalliq community. The long delivery time has raised concerns about the freshness and quality of perishable goods.

Because of the high cost to get food to Churchill, retailers in Rankin Inlet and Arviat are opting to pay the full freight charge to order food directly from Edmonton or Winnipeg.

Jim Huggard of Arctic Co-operatives Ltd. said paying full-freight to those communities actually costs about the same as using the food mail program.

"We can save about three days in transit," he said.

The time saved makes a big difference for products with a short shelf life, such as milk.

Huggard said the co-op plans to submit a proposal to DIAND outlining potential changes to the food mail entry point, but was not ready to discuss the details.

A number of options

One scenario presented at the Rankin Inlet meeting involved moving the point where the food mail subsidy takes effect to Thompson.

This would likely both lower prices and increase quality, but the move is estimated to cost up to $2.5 million more per year -- a lot of money for a program which routinely runs over-budget.

Another option includes making improvements to refrigeration and handling facilities in Churchill.

Or perishable goods could be shipped from Thompson to improve the speed of delivery, while non-time sensitive items would still go through Churchill.

More than one Rankin resident worried about the potential for shipping costs to increase even more because of the rising costs of fuel.

"Our freight rates are going up, our utilities are going up, but salaries are staying the same," said Ellie Cansfield of the Kivalliq Chamber of Commerce.

Retailers may be willing to pay some of the increased costs brought about by changes to the program, she said, because of the benefit derived from faster delivery of perishable goods.

Hill said he will accept be accepting feedback and suggestions until July 31.

Any changes are expected to be implemented by May 2006.

Meetings are still scheduled in Whale Cove on July 19, in Baker Lake on July 20, and in Chesterfield on July 21.

Anyone who still wishes to comment can e-mail foodmail@inac.gc.ca.