IKPIARJUK/ARCTIC BAY - With pictures of highly priced items on grocery store shelves coming out of Arctic Bay earlier this month, many Nunavummiut are still confused as to how the federal government's changes to the food subsidy program are going to help them lower their grocery store bills.

In Arctic Bay,Ocean Spray cranberry cocktail will set you back $38.99. This photo was taken at the Northern Store in mid-February. - photo courtesy of Ron Elliott

Nunavut MP Leona Aglukkaq blames the retailers and not the federal government program for prices on shelves photographed at the Northern Store in the High Arctic community. Included were shots of Cheese Whiz at $29 a jar, bottles of Ocean Spray cranberry cocktail for $38 and $77 for breaded chicken strips.

"It has nothing to do with the Nutrition North Canada program," said Aglukkaq.

The photos were circulated by Quttiktuq MLA Ron Elliott representing Arctic Bay, Resolute and Grise Fiord.

He said what is going on is confusing.

"I want to see how savings will be passed on to the consumer," said Elliott.

The Department of Indian and Northern Affairs Canada announced in May 2010 they were replacing the Food Mail program with Nutrition North Canada. The program is designed to direct freight subsidies to retailers instead of Canada Post, and savings are supposed to be passed on to the consumer.

It is being rolled out in stages.

In October, certain products, once subsidized, were removed from the list. In December, the shipping rates were announced and vary by community.

On April 1, 2011, all the changes will be implemented and the new shipping subsidy rates will be applied to foods like milk, fruits, vegetables and bread.

Foods like Cheese Whiz and breaded chicken strips are not eligible for subsidy.

"The now non-eligible products have gone up in price primarily due to the increased shipping rates which in some cases has increased six or seven fold," said Michael McMullen, executive vice-president of the North West Company which owns Northern Stores.

The freight costs went up $3.60 per kilogram in October and he said customers are now only seeing the price increase for products because they had the items in stock before. He said an effort was also made to maximize the amount of product put on sealift.

"It's very hard on a consumer in the North to face those price jumps," McMullen said, adding the company is not making extra money off the price increase as it all goes to pay the increased freight cost.

He said, in the future, the company might have to build more warehouses to store product.

Putting the prices of Cheese Whiz and breaded chicken strips aside, Arctic Bay resident Clare Kines sent a letter to Minister of Indian and Northern Affairs Canada John Duncan.

In the letter he said Nutrition North will have an effect on what he calls "increased poverty and malnutrition" in his community.

"Already, many people, who are on social assistance or other limited incomes are forced to buy the cheapest foods available ... people are frequently doing without," Kines said.

Duncan, on Feb. 17, acknowledged the price of food is rising globally.

But this still leaves customers wondering where the savings are.

McMullen said on April 1, the price of perishable foods that are on the subsidy list, such as apples, bananas and milk, will be reduced by five to seven per cent.

He said customers will see what the freight subsidy is at the register on their receipt.

Still, a lot of responsibility lies with the consumer as to what they purchase.

Aglukkaq said there have been glitches along the way in rolling out the program. McMullen agreed with her and said communication from the federal government about the program needs to be stronger going forward.

INAC will be putting up posters in retail stores, mailings will be sent out to communities and some will receive community visits from staff to explain the changes in the program.

Another issue surrounding the pending changes is accountability and transparency for the retailers.

Duncan said retailers will be subject to auditing.

And what does the minister think of the pricy cranberry beverage and the shake-up it's caused?

"It's got people engaging in debate and discussion," he said.

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