NUNAVUT
Communities in the Baffin region will be getting generally higher subsidies on shipping rates for healthy food compared to the Kitikmeot and Kivalliq regions under the new Nutrition North Canada program.

Nutrition North will replace the food mail program starting April 1, 2011. Under the new program, the shipping subsidy that formerly went to Canada Post will now be offered to retailers and individual consumers. The newly-released introductory subsidy rates apply to communities in northern regions of Labrador, Quebec, Ontario, Manitoba and Saskatchewan. In Nunavut, the subsidy rates range from $0.20 per kilogram in Arviat to $11.30 per kilogram in Grise Fiord.

The federal government determined the rates by analyzing the actual market shipping rates by community and the estimated weight of eligible goods that would be shipped to each community under the program, said Dominique Demers, the program's manager.

Under the new rates eligible food shipped to Sanikiluaq will have a subsidy of $1.10 per kilogram while Kimmirut will get $4 per kilogram; Whale Cove gets a rate of $0.70 per kilogram while Rankin Inlet gets double that at $1.40 per kilogram.

"Sanikiluaq, for example, is much closer to Ottawa, Montreal or Winnipeg than Kimmirut," said Demers. "Even if Kimmirut is closer to Iqaluit, everything comes from the south. Maybe things go through Rankin (Inlet) but the rates that are negotiated in the market, it's actually cheaper to ship to Whale Cove than it is to Rankin Inlet."

Demers said they've received "very little feedback" so far.

The subsidy rates for the majority of the communities the North West Company services is in line with its expectations but for the minority, the rate should probably increase or decrease by a dime, said Michael McMullen, the company's executive vice-president.

He wondered, for instance, why Pangnirtung has a subsidy rate of $3.50 per kilogram while Qikiqtarjuaq's is $3.40 per kilogram, a dime difference when the communities are relatively close.

"I don't think that's going to be a deal breaker at the end of the day. We don't quite understand that but it's not crazy. It's not way out of whack," he said.

He added the company recognizes the government will have to recalibrate and fine tune the rates for some communities before next April 1.

The company's head office in Winnipeg will negotiate the freight rates for all its stores in Nunavut. The North West Company operates one NorthMart store in Iqaluit, 20 Northern stores and a number of Quickstop convenience stores across the territory.

"We should negotiate better rates with our freight companies, no question," he said, adding they will negotiate their rates "aggressively" with the carriers.

Under the old program, Canada Post negotiated fees with freight carriers for items under the food mail program, while the retailers, such as North West, negotiated their own air freight carrier fees for the rest. Now, the two streams are combined into one, said McMullen.

"That should be the efficiency that we gain in negotiations - that we're only negotiating once with the air carriers on a bigger package, not two separate negotiations, one based on food mail, one based on the rest of the stuff. But it's going to take time to work those relationships out," he said.

Inside North West's stores, McMullen said they will post the community's subsidy rates and clearly state for key products such as milk or produce how much the subsidy is per pound or kilo and the difference the subsidy makes on the cost the customer pays.

"We are bound and determined to have a lower cost on key items, the core items that are on the Nutrition North list, but that process has just started. We expect lower retail prices in the North but we are not going to commit today to what percentage that is."

The federal government recently appointed a six-member advisory board of Northerners and nutritionists, including Cambridge Bay's Wilfred Wilcox who will represent Nunavut, to oversee operations of the service. The board members are appointed on a three-year term, renewable yearly after the initial three years.

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